Campbell v Campbell

A freezing injunction may be granted where the claimant has a good arguable case, the defendant has assets within or outside the jurisdiction, and there is a real risk of unjustified dissipation such that a judgment may go unsatisfied. Dishonesty or an intention to frustrate enforcement is unnecessary. A transfer overseas may support the inference of risk where it is outside the ordinary course of business or living. Past conduct involving the improper appropriation or concealment of assets may provide compelling evidence of future dissipation. The injunction is protective rather than proprietary and does not give the claimant priority over the frozen assets.

The claimant sought an on-notice freezing injunction over the defendant’s beneficial interest in shares in a Jersey company. The application arose from wider proceedings concerning the dissolution of a family partnership and was also intended to protect an anticipated costs order in related Jersey proceedings. The defendant conceded, for the purposes of the application, that the claimant had a good arguable case and that the proposed quantum was arguable. The central issues were whether there was a real risk of dissipation, whether any dissipation would risk leaving a judgment unsatisfied, and whether relief in aid of the Jersey proceedings would be inexpedient.

The underlying partnership dispute had been determined at first instance, with permission to appeal refused by the Court of Appeal.

1. Order granted. A freezing injunction over the defendant’s beneficial interest in the Longton shares and their proceeds was warranted, with the precise terms to be settled.
2. For an injunction in aid of domestic proceedings under section 37(1) of the Senior Courts Act 1981, the claimant must show: a good arguable case on the merits; assets within the jurisdiction or, failing that, assets outside it; and a real risk of dissipation such that a judgment may go unsatisfied. The risk of dissipation and the risk of non-satisfaction are distinct, although proof of the former will usually establish the latter.
3. A freezing injunction is not quasi-security for a claim. The threatened disposition must be outside the defendant’s ordinary course of business or living and likely to prevent satisfaction of the judgment. Dishonesty, fraud or an intention to defeat enforcement need not be proved.
4. The proposed transfer of more than £8 million to Thailand or another overseas jurisdiction was not shown to be in the ordinary course of business or living. The defendant’s past conduct, including transferring partnership assets to family members and placing them beyond the claimant’s control, provided solid and compelling evidence of a real risk of unjustified dissipation. Compliance with previous court orders did not negate that risk.
5. The defendant’s suggested ability to procure assets from third parties did not establish that a judgment would be satisfied. The evidence did not show that he could compel the transfers or would voluntarily procure them.
6. Relief in aid of the Jersey proceedings under section 25(1) of the Civil Jurisdiction and Judgments Act 1982 and the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997 was not inexpedient. The same injunction could protect the anticipated Jersey costs order.
7. The order did not confer priority or a proprietary interest in the frozen assets, including if the defendant became insolvent.

• High Court (Chancery Division): in the underlying partnership proceedings, the trial judge determined the parties’ interests and ordered an accounting.
• Court of Appeal: permission to appeal the underlying decision was refused on 26 April 2017.
• High Court (Chancery Division): granted the freezing injunction application in the present proceedings.