Holyoake & Anor v Candy & Ors

A notification injunction may be granted under Senior Courts Act 1981, section 37, where the claimant establishes a substantive right threatened by disposal or a risk of dissipation sufficient to justify a freezing injunction. The claimant must show a good arguable case, meaning more than a case barely capable of serious argument, although a better than 50 per cent chance is unnecessary in a fact-sensitive case. Unsupported fear is insufficient. Complex offshore structures, unexplained asset transfers, apparent wealth discrepancies and serious commercially unjustifiable conduct may cumulatively support an inference of dissipation. A claimant cannot obtain asset information merely because it is interested in the defendant’s financial position.

The claimants brought substantive proceedings alleging that the defendants had obtained substantial financial advantages through fraudulent misrepresentation, duress, undue influence, intimidation and related unlawful conduct. They applied for an interlocutory notification injunction against three defendants, initially seeking seven days’ notice before transactions involving assets worth more than £1 million.

The application raised issues concerning the jurisdiction to grant a freestanding notification injunction, the merits threshold, the evidence required to establish a risk of dissipation, the balance of convenience and fortification of the cross-undertaking in damages. During the hearing the proposed order was substantially modified. The court determined the jurisdiction, merits and dissipation issues, but adjourned the precise form of relief and the question of fortification.

The application was adjourned as to the precise notification regime and fortification. Pending the adjourned hearing, the court granted a temporary injunction in the modified form proposed by the claimants.

1. Jurisdiction. Section 37 of the Senior Courts Act 1981 confers a broad but not unfettered power. In ordinary cases an injunction requires a threatened invasion of a legal or equitable right, or breach of an obligation owed to the claimant. A notification injunction may be granted instead of a complete restraint where it is a less invasive means of protecting that right.
2. Freezing-injunction basis. Dissipation of assets for the purpose, or with the effect, of leaving a possible judgment unsatisfied may constitute a breach of an obligation owed to the claimant. Where there is a risk of dissipation sufficient to justify a freezing injunction, the court may grant a freestanding notification injunction even though a full freezing order has not been sought. Asset information cannot be ordered merely because the claimant wishes to know the defendant’s position.
3. Merits threshold. Because the order is invasive and closely connected with freezing-injunction principles, the claimant must show a good arguable case rather than merely a serious issue to be tried. In a predominantly factual dispute, the traditional formulation applies: the case must be more than barely capable of serious argument, but need not appear more likely than not to succeed. The higher “much the better of the argument” approach was not required for disputed factual issues.
4. Risk of dissipation. Unsupported fear is insufficient, but objective facts may justify an inference of risk. Complex and opaque offshore structures were not sufficient alone, although they could contribute when combined with other evidence. The unexplained transfer of a substantial property into a non-party’s name and the apparent mismatch between a defendant’s lifestyle and disclosed means were material. Serious allegations of coercive and commercially unjustifiable conduct could also contribute to the risk assessment, even without allegations of direct threats to dissipate assets.
5. Orders. The claimants had established both the required merits threshold and a real risk of dissipation. The balance of convenience and the appropriate level of fortification required further evidence. The defendants had to provide a credible estimate of likely losses before fortification could be fixed, and costs were reserved.

This was a first-instance decision. The judgment records that Arnold J had previously refused an application for expedition on 7 September 2015. No appeal is stated.