Anglo Financial SA & Anor v Goldberg

The court considered an application to continue a without-notice freezing injunction obtained by Anglo Financial SA and Fortis Business Holdings LLC against Mr Stephen Goldberg. The central legal questions were whether the claimants had a good arguable case, whether there was a real risk of dissipation of assets, and whether it was just and convenient to continue the injunction under s.37(1) of the Senior Courts Act 1981. The judge accepted that Anglo had an arguable breach case based on personal warranties in the loan documents (notably the signatory warranties in clause 4B) but found serious doubt about recoverable loss given substantial recoveries already made from third parties (including Mr Linde and Mr Hirsch). The court had significant reservations as to whether Fortis could show a continuing duty or retainer giving rise to liability for Mr Goldberg.

The judge also concluded there was no sufficient evidence of a real risk of dissipation, having regard to the lengthy delay in bringing the present application, the claimant’s unexplained conduct, and the defendant’s disclosed assets and past conduct (including a large voluntary payment by Mr Goldberg in 2009). Material non-disclosure to the court on the without-notice application (notably failure to disclose the repayment to Mr Kestenbaum in 2009 and errors about a property purchaser) reinforced the view that continuation was not justified. The Claimants’ application to renew the freezing order was dismissed.

Background and parties: Anglo Financial SA and Fortis Business Holdings LLC (both controlled by Mr Louis Kestenbaum) obtained a without-notice freezing order for £1.6m against Mr Stephen Goldberg following loan disputes arising from several cross-border loan arrangements involving Fidex, Hirsch & Cie and others. Mr Goldberg, a solicitor, had signed loan documents containing warranties (including clause 4B) and later became the subject of claims by the Claimants. The order was made by Asplin J and returned for inter partes hearing before Peter Smith J and ultimately Roth J.

Nature of the application: The Claimants applied to continue the freezing injunction. Mr Goldberg cross-applied to discharge it (the order in any event would lapse at the hearing).

Issues framed by the court:

• whether the Claimants had a good arguable case;
• whether there was a real risk of dissipation of assets such that a judgment would be unsatisfied;
• whether it was just and convenient to continue the relief (s.37(1) Senior Courts Act 1981); and
• whether there had been material non-disclosure on the without-notice application.

Court’s reasoning and findings:

• Anglo: the court accepted there was a good arguable breach case based on the express signatory warranties (clause 4B) in the Brevard and New Sales loan agreements, but expressed serious doubt about recoverable loss because substantial recoveries (around $9.85m in total) had been made from Mr Linde and from Mr Hirsch/Hirsch & Cie and because particulars of claimed legal fees and interest were inadequately particularised or overstated.
• Fortis: the court doubted that Mr Goldberg owed any continuing duty in mid-March 2009 which would require him to warn Fortis that funds in the Clariden Leu account might become freely available; that contention would be a considerable extension of any retainer. The judge did not finally determine the point because the risk and disclosure findings were dispositive.
• Risk of dissipation: the court found no solid evidence of a real risk. Significant delay (claims and negotiations spanning 2009–2014), the defendant’s conduct (including raising funds and paying over c.$1.278m in 2009), the nature of disclosed assets (pension, pledged shares, family property subject to a development loan), and the absence of cogent evidence of concealment or flight supported refusal to continue the order.
• Material non-disclosure: the claimant’s evidence on the without-notice application omitted material matters (notably the repayment by Mr Goldberg in 2009 in related proceedings and errors as to the purchaser of 103 Bridge Lane). The non-disclosure was serious and reinforced the decision not to continue the injunction.

Procedural/postscript observations: the judge observed that the original without-notice application was of doubtful urgency and that the matter could have been heard in the ordinary list rather than as vacation business.

The Claimants’ application to renew the freezing order is dismissed. The judge concluded that, although Anglo had a good arguable case on the contractual warranties, there was no sufficient evidence of a real risk of dissipation given extensive delay, substantial recoveries from other defendants and the defendant’s conduct and assets; further, there had been material non-disclosure on the without-notice application which reinforced refusal to continue the injunction.