Metropolitan Housing Trust Ltd vTaylor & Ors

Where a party who has lost at first instance seeks interim injunctive relief pending appeal, it must show a real prospect of success. The court must then assess all relevant circumstances and the balance of hardship, seeking the order that creates the least risk of irremediable injustice pending the appeal.

Where the appeal itself challenges whether there is a real risk of dissipation, the interim court should not prejudge that issue. A targeted freezing restraint may be appropriate where it preserves assets broadly sufficient to meet the arguable claim while avoiding the practical burden of a general freezing order.

The claimant housing association alleged that its former employee, Mr Taylor, and Mr Ladhur, a director and shareholder of a company providing Oracle-related services, had participated in undisclosed financial arrangements, including alleged bribery, fraud and conspiracy.

Freezing orders were made against Mr Taylor and Mr Ladhur. Warren J later discharged the order against Mr Ladhur. He found a good arguable case in claims totalling about £460,000, but held that there was no real risk of dissipation.

The claimant sought permission to appeal and interim relief pending the full appeal. The central issue was whether a limited freezing order should protect particular assets while the appeal concerning risk of dissipation was awaited.

1. Permission to appeal was granted because the claimant had a real prospect of showing that the judge set the threshold for risk of dissipation too high. The judge may have treated a clear case of dishonesty as necessary and may have treated departure from the jurisdiction as the only means by which assets could be put beyond reach.

2. For interim relief pending an appeal by an unsuccessful party, the court must first be satisfied that the appeal has a real prospect of success. It must then consider the circumstances following judgment, including the likely time to the appeal and the balance of hardship. The court should seek to preserve its ability to do justice after the appeal: Ketchum International v Group Public Relations Holdings Ltd [1997] 1 WLR 4 and Novartis AG v Hospira UK Ltd [2014] 1 WLR 1264.

3. Neither authority directly resolved this application because the full appeal would itself determine whether there was a real risk of dissipation. The court should not decide that disputed question conclusively at an abbreviated interim hearing. It should instead identify the order carrying the least risk of irremediable injustice pending the appeal.

4. A limited restraint was appropriate. It preserved Mr Ladhur’s interests in his family home and companies, assets approximately sufficient to meet the claims for which there was a good arguable case, while relieving him of the daily inconvenience of a general freezing order. The restraint also extended to proceeds of his shareholding, except his current salary, with continuing disclosure of salary and emoluments.

The limited freezing order was to continue until the expedited full appeal. Any application to vary it was to be made to the Chancery Division’s Interim Applications Court.

The court also observed, obiter, that a freezing order does not establish that its subject has been proved guilty of impropriety.

• Court of Appeal (Civil Division): In this decision, [2015] EWCA Civ 1595, Briggs LJ granted permission to appeal from the discharge of the freezing order against Mr Ladhur and granted a limited freezing order pending the expedited full appeal.
• High Court of Justice, Chancery Division: Warren J, by order dated 23 October 2015, discharged the freezing order against Mr Ladhur. He found a good arguable case in some claims but no real risk of dissipation.