Summary
A freezing order requires more than a good arguable case. The claimant must also establish a real risk that a judgment will remain unsatisfied because of dissipation, and the order must be just and convenient. Alleged dishonesty may support an inference of dissipation, but the court must scrutinise the allegations and the evidence carefully. A freezing order is a nuclear remedy and should remain proportionate to the claim, the evidence and its effects on the defendant. Material non-disclosure on a without-notice application is relevant both to discharge and to the just-and-convenient assessment. Contractual pricing provisions cannot generally be supplemented by an inconsistent implied term based on an uncertain industry practice.
Factual background
The claimant housing association sought continuation of a worldwide freezing order against the second defendant and applied for relief against the second and third defendants concerning alleged overcharging, dishonest payments and breaches of contractual pricing arrangements. The order had originally been granted without notice and continued on the return date. The second defendant later applied to discharge it, while the second and third defendants also sought strike-out or summary judgment in respect of parts of the claim.
The issues were whether the claimant had a good arguable case, whether there was a real risk of dissipation, whether relief was just and convenient, whether there had been material non-disclosure, and whether the pleaded pricing and misrepresentation claims were legally sustainable.
Held
- Freezing order discharged. The claimant bore the burden of establishing, on the evidence as a whole, that the order should be granted. The earlier without-notice order did not reverse that burden.
- The good arguable case threshold is more demanding than a merely arguable case, but it is only the threshold for the jurisdiction. The court must then assess the whole evidence and the other requirements for relief. The relevant test is not the ordinary serious-question-to-be-tried test.
- Although the claimant established arguable claims concerning certain Coronet invoices, school-fee payments and some contractual matters, most allegations did not establish a good arguable case of dishonesty. Even where impropriety or overcharging might ultimately be proved, that did not establish a real risk of dissipation.
- The second defendant’s settled family and business circumstances, the nature of his disclosed assets, his compliance with court orders and the absence of suspicious use of foreign assets weighed against such a risk. The court was not satisfied that dissipation was likely.
- The order was also disproportionate. Even if a narrower order had been justified, a general freezing order would have imposed serious disruption in circumstances where the relevant claims were limited and the evidence of dishonesty was weak.
- Material omissions from the evidence presented without notice should have been disclosed. They were not, however, necessary to the decision because the order was discharged on the merits.
- Paragraph 27(iv) and Appendix 6 of the Particulars of Claim were struck out. The Master Services Agreement prescribed the applicable charging mechanism, leaving no proper scope for the alleged inconsistent implied term based on a 15 per cent industry-standard mark-up. The related paragraph 28(iv) was also struck out, while paragraph 36(iv) remained.
The court’s approach to earlier authorities
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Key cases cited
16 authorities cited.
- Fourie (Appellant) v. Le Roux and others (Respondents) [2007] UKHL 1
- VTB Capital Plc v Nutritek International Corp & Ors [2012] EWCA Civ 808
- Thane Investments Ltd & Ors v Tomlinson & Ors [2003] EWCA Civ 1272
- Memory Corpn Plc v Sidhu (No 2) [2000] 1 WLR 1443
- Dar Al Arkan Real Estate Development Company & Anor v Al Refai & Ors [2012] EWHC 3539 (Comm)
- Congentra AG v Sixteen Thirteen Marine [2008] EWCH 1615 (Comm)
- Lewis v Freighthire Ltd Lewis v Freighthire Ltd (1 February 1996)
- Polly Peck International plc (No 2) [1992] 4 All ER 769
- Behbehani v Salem (Note) [1989] 1 WLR 723
- O’Reagan v Iambic Productions Ltd (1989) 139 NLJ 1378
- Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350
- SIPOREX TRADE S.A. v. COMDEL COMMODITIES LTD. [1986] 2 Lloyd's Rep 428
- Bank Mellat v Nikpour [1985] FSR 85
- Ninemia Maritime Corpn v Trave Schiffahrtsgesellschaft mbH und Co KG (Niedersachsen, The) [1983] 1 WLR 1412
- Ninemia Marine Corporation v Trave Schiffahrtgeseelschaft GmbH (The Niedersachsen) [1983] Comm LR 234
- Orri v Moundreas [1981] Comm LR 168
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Cases citing this case
7 later cases · 4 positive · 1 neutral · 2 caution
Most senior citing decisions:
- Candy & Ors v Holyoake & Anor [2017] EWCA Civ 92 distinguished
- Dacorum Borough Council v Persons Unknown [2026] EWHC 1174 (KB) followed
- Cancrie Investments Limited v Zulfiqur Al Tanveer Haider [2024] EWHC 1876 (Comm) followed
- Harrington and Charles Trading Company Limited (in liquidation) & Ors. v Jatin Rajnikant Mehta & Ors. [2022] EWHC 2960 (Ch)
- Homes of England Ltd v Horsham Holdings Ltd & Ors [2020] EWHC 1175 (Ch)
- Ivy Technology v Martin & Ors [2019] EWHC 2510 (Comm)
- Al-Jabe & Ors vSalfiti & Anor [2018] EWHC 3038 (Ch)
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