Greenshores Properties Ltd v Andrews & Ors

Material non-disclosure on a without-notice freezing-order application normally leads to discharge, although the court retains a sparingly exercised discretion to continue or re-grant relief where justice requires. The court assesses the breach’s culpability, the significance of the omitted material, the merits, and all relevant circumstances. A freezing order also requires a good arguable case and, where relief is sought to secure a future judgment, a real risk that the judgment will remain unsatisfied which the injunction would significantly reduce. The court should avoid a mini-trial, but may examine the evidence carefully where the order substantially affects the defendants’ lives and businesses.

The claimant obtained a without-notice freezing order against three defendants for up to £940,000. It alleged that advances made to the second defendant created personal liabilities for all defendants, a proprietary interest in development sale proceeds, and alternative statutory and equitable claims.

The defendants applied to discharge the order. They alleged inadequate disclosure, disputed the claimant’s case against the first and third defendants, and challenged the evidence of any dissipation risk. The second defendant also alleged that some documents were forged. The central questions were whether the claimant had made a fair presentation, whether it had a good arguable case, and whether continued relief was justified against any defendant.

1. Non-disclosure. The claimant failed to disclose three emails and a letter which materially affected the alleged liabilities of the first and third defendants and the proprietary claim. The documents should have been presented even though some were alleged to be forged. The failure was unexplained and amounted to improper disclosure.
2. Good arguable case. The evidence did not establish a good arguable case that the second defendant had authority to bind the first and third defendants, or that they later assumed responsibility for repayment. The evidence of a supposed joint venture was too vague and did not establish a contract. The alleged statements that the claimant would be paid from sale proceeds, the use of its money in the development, the correspondence, and the accounts did not establish a proprietary interest. The material was more consistent with unsecured loans.
3. Risk of an unsatisfied judgment. Against the second defendant, the claimant established borrowing of more than £400,000 but did not show that a freezing order would significantly reduce a real risk of an unsatisfied judgment. The absence of an explanation of how the borrowed money had been used did not justify an adverse inference.
4. The general rule following material non-disclosure was decisive. The claimant had not shown sufficient merits against the first and third defendants and had not shown the necessary risk against the second defendant. The freezing orders were discharged.