Yossifoff v Donnerstein

Section 25 of the Civil Jurisdiction and Judgments Act 1982 permits interim relief in support of foreign proceedings, but the jurisdiction remains ancillary and subordinate to the primary court. The court should first ask whether the relief would be justified if the substantive proceedings were in England, and then whether granting it would be inexpedient.

A freezing injunction requires a prospective monetary judgment and ordinarily concerns assets beneficially owned by the defendant. A proprietary injunction engages the ordinary interim-injunction principles, including a credible threat to the claimant’s rights and the balance of convenience. A claimant cannot establish such a threat merely by relying on the defendant’s refusal to give an undertaking.

The applicant and respondent, both Israeli citizens, were litigating in Israel concerning an alleged trust over one share in a British Virgin Islands company. That company owned all the shares in a Cayman Islands company, which owned a London apartment-hotel property. The respondent had contracted to sell the property.

The applicant sought interim injunctions under section 25 of the Civil Jurisdiction and Judgments Act 1982, including freezing relief over the respondent’s assets and proprietary protection for the alleged trust share and the sale proceeds. The Israeli proceedings principally sought an account and information, without a monetary claim or specific allegation of breach of trust beyond non-disclosure.

1. Section 25 jurisdiction. The court applied the two-stage approach in Refco Inc v Eastern Trading Co.: first, whether the facts would warrant the requested relief if the substantive proceedings were in England; and second, whether the absence of jurisdiction apart from section 25 made relief inexpedient. The court’s role was ancillary and supportive, and relief had to respect the primary court’s jurisdiction and process.
2. Freezing relief. The merits of the alleged trust claim were assumed, without deciding them. A freezing injunction could not be granted because the Israeli claim contained no claim capable of producing a monetary judgment. The proposed relief also targeted shares and property beneficially owned by separate companies, not by the respondent. Mere practical control was insufficient. The extended form of freezing order used in cases involving concealed ownership was inapplicable because ownership here was not uncertain.
3. Proprietary relief. The applicant could in principle seek protection for the share over which he asserted a proprietary claim. The applicable approach was the ordinary interim-injunction test in American Cyanamid v Ethicon Limited. However, there was no pleaded threat to dispose of the share or to sell the property at an undervalue. The balance of convenience also favoured allowing the respondent to use the sale proceeds to meet his contractual obligations, particularly because the applicant could not provide a credible cross-undertaking in damages.
4. Relief concerning Israeli assets. Any protection concerning shares to be acquired in Israel by a person resident there should be sought from the Israeli court, which was best placed to make effective orders. It was manifestly inexpedient for the English court to intervene.
5. Temporary status quo relief. The respondent’s refusal to give an undertaking not to accelerate completion was not evidence of an intention to do so. An injunction could not be granted without credible evidence of a real and imminent threat to the applicant’s alleged rights. The application was dismissed.