BCS Corporate Acceptances Ltd & Ors v Terry & Anor

A freezing order is personal relief against a respondent and is not proprietary relief. It should not be used to obtain security over assets or to freeze all assets of a third party who is not a party to proceedings. Assets held by a third party may be identified in an order against the judgment debtor where there is an arguable basis that they belong beneficially to the debtor. The risk of dissipation is assessed objectively from the evidence, rather than by assessing the applicant’s expressed anxiety or credibility. Where no proceedings exist against the third party, an in personam freezing order against that person is improper.

The applicants held substantial judgments against Mr Terry and obtained without-notice freezing orders against him and his wife, Ms Drewett. The orders were extended by consent pending the return hearing. Proceedings under the Insolvency Act were subsequently issued concerning transfers of assets to Ms Drewett.

The court considered alleged material non-disclosure, whether there was a real risk that Mr Terry would dissipate assets, whether continuation against him was just and convenient, and whether an order against Ms Drewett was proper despite there having been no proceedings against her when the order was made.

1. Non-disclosure. The undisclosed French criminal proceedings concerning the underlying transaction were not material once judgment had been obtained in the English proceedings. The objective assessment of risk of dissipation does not involve assessing the credibility of the applicant’s expressed anxiety about that risk. The remaining alleged omissions were immaterial or unsupported.
2. Risk against Mr Terry. There was a real risk of dissipation. Relevant circumstances included Mr Terry’s residence outside the jurisdiction, substantial earnings, an unsatisfied judgment, transfers of valuable assets to his wife after unsuccessful appeals, and inconsistencies concerning ownership and control of property and funds.
3. Continuation against Mr Terry. It was just and convenient to continue the order. Mile Oak Road, Paget and the gold Bentley could be specified because there was an arguable basis that the properties, although held in Ms Drewett’s name or jointly, were beneficially owned by Mr Terry. The Insolvency Act proceedings would determine ownership conclusively.
4. Order against Ms Drewett. Applying the principle discussed in S.C.F Finance Co Ltd v Masri and Another [1984] 2 WLR 58, particular assets apparently belonging to a judgment debtor may be identified in an order against that debtor even if held by a third party. That did not justify making the third party personally subject to a wholesale freezing order. As no proceedings existed against Ms Drewett when the order was made, there was no proper basis for an in personam order freezing all her assets and requiring disclosure.
5. The order against Ms Drewett was discharged ab initio. No fresh order was made against her because there was no current evidence of a risk of dissipation. The order against Mr Terry continued, with the specified assets remaining frozen. The existing order remained in force pending determination of its final form and effect.