Anglo Financial SA & Anor v Goldberg

A freezing injunction requires three cumulative conditions: a good arguable case, a real risk of dissipation, and that it is just and convenient to grant relief under Senior Courts Act 1981, section 37(1). Delay is relevant because it may undermine the asserted risk of dissipation. Bare allegations, dishonesty alone, and speculative inferences from ordinary asset transactions are insufficient. An applicant must make full and fair disclosure of material facts on a without-notice application. Material non-disclosure may reinforce refusal to continue an injunction, particularly where the underlying case and risk of dissipation are weak. The just and convenient requirement is not a general balance-of-convenience exercise.

Anglo Financial SA and Fortis Business Holdings LLC sought continuation of a freezing order made without notice against Stephen Goldberg in support of claims arising from unpaid loans and an alleged breach of duty concerning funds transferred in connection with a fraudulent Rwandan mining investment. The order had initially been made by Asplin J and continued by Peter Smith J pending the inter partes hearing.

The claims were opposed, and Mr Goldberg applied to discharge the order. The principal issues were whether the claimants had a good arguable case, whether there was a real risk that Mr Goldberg would dissipate assets, and whether material non-disclosure justified refusing continuation.

1. Application dismissed. The existing freezing order lapsed under its terms, so no separate order was required on Mr Goldberg’s cross-application.
2. The requirements for a freezing injunction were cumulative. The claimants had to establish a good arguable case, a real risk of dissipation such that a judgment would remain unsatisfied, and that relief was just and convenient under Senior Courts Act 1981, section 37(1).
3. Anglo had an arguable claim based on Mr Goldberg’s personal warranties in the loan agreements. However, recoveries from other defendants appeared already to exceed the principal and interest due, and the pleaded interest calculation was materially overstated. Anglo therefore had not shown a good arguable case for further recovery.
4. Fortis faced substantial difficulty establishing any continuing duty owed by Mr Goldberg after he completed the limited due diligence work in late 2008. The court expressed serious doubt that the claim met the good arguable case threshold, although it did not decide the point.
5. The evidence did not establish an objectively real risk of dissipation. The claimants had delayed for years while pursuing negotiations with Mr Goldberg, although they knew of the alleged liabilities. His payment of more than $1.278 million in relation to another similar transaction was a strong indication against an intention to conceal or dissipate assets. The evidence concerning his shares, pension, homes and property transactions rested on speculation and unsupported suspicion.
6. Alleged dishonesty, without more, was insufficient. Solid evidence was required, and the court had to scrutinise carefully whether the evidence objectively justified an inference of dissipation.
7. There had been material non-disclosure on the without-notice application. The claimants had failed to draw attention to Mr Goldberg’s substantial payment, the true identity of a property purchaser, the significance of the prolonged delay, the possible absence of recoverable loss, and the possible absence of any continuing duty owed to Fortis.
8. The duty of full and frank disclosure protects the integrity of the court’s process. The seriousness and significance of the non-disclosure reinforced the refusal to continue the injunction. The just and convenient requirement was not a simple comparison of prejudice under the American Cyanamid balance-of-convenience approach.

The judgment describes an initial without-notice freezing order made by Asplin J on 11 August 2014 and continued by Peter Smith J on 21 August 2014 pending the inter partes hearing. The High Court (Chancery Division) refused continuation.