Gorbunova v Berezovsky (aka Platon Elenin) & Ors

An interim freezing order made without notice should be granted only where notice would create a real risk that the order’s purpose would be defeated, or where there is genuinely insufficient time to give notice. Evidence of a general risk of dissipation is distinct from evidence that particular assets may be dealt with if notice is given. A freezing order should be confined to assets shown to be at risk and should not impose general restraints unsupported by the evidence. Breach of an undertaking given on a without-notice application is serious, but discharge is discretionary and is not automatic. The court must consider the nature of the breach, its explanation and its consequences.

The claimant sought to maintain an interim freezing order obtained without notice against her former partner and associated companies, trustees and an individual connected with properties in France. The order froze assets up to £200 million and imposed additional restraints over specified property and proceeds. The principal defendant applied under the liberty to apply provision to discharge or vary the order, alleging inadequate evidence, failure to justify proceeding without notice, breach of the undertaking to serve the order as soon as practicable, and excessive relief. The court assumed the underlying claims were arguable but did not determine their merits.

1. Without-notice application. The governing principle was that notice should ordinarily be given. Departure was justified where delay would cause injustice or notice would enable the respondent to defeat the purpose of the order. The nature of a freezing order commonly provides a reason for proceeding without notice, but such applications are not automatic and the evidence must explain why notice was not given.
2. The claimant’s evidence did not establish sufficient urgency in the sense that there was no time to give notice. However, the affidavit’s cross-reference to the preceding evidence and its reference to dissipation were sufficient, though imperfect, to comply with the procedural requirement in principle.
3. Risk of dissipation. The evidence showed a sufficient risk that the defendant would deal with particular assets promised or represented to be available for the claimant, including the French properties and relevant litigation proceeds. It did not establish a serious and strong risk that he would generally dissipate assets to defeat any contractual claim. The distinction justified limited relief but not a general freezing order.
4. Undertaking to serve. The undertaking to serve as soon as practicable was read in the circumstances in which the order was made, namely that all defendants would be served together. The delay caused by translation, foreign service and the Christmas closure did not breach the undertaking. Even if there had been a technical breach, it was unintentional, explained, caused no material disadvantage and would not justify discharge.
5. Scope and orders. The children’s claims under the Children Act 1989 belonged in the Family Division proceedings and were unsupported by evidence; they should not have contributed to the frozen amount. General freezing relief was therefore inappropriate. The order had to be recast to restrain dealings with the assets shown to be at risk, together with appropriate disclosure. Further argument was required on the precise form of relief, undertakings and disclosure.