VB Football Assets v Blackpool Football Club (Properties) Ltd & Ors

A freezing order made after judgment should not be reviewed as if it were a fresh application. The court may vary or discharge it where circumstances have materially changed, but must continue to police whether the order remains necessary.

A judgment debt does not itself establish a risk of dissipation. That risk may be inferred where a debtor with, or apparently having, sufficient assets takes steps to avoid payment. Alternative enforcement measures may be inadequate where asset values are uncertain, a charging order does not reach company assets, or competing claims may rank ahead of the judgment creditor.

The petitioner had obtained judgment under section 994 of the Companies Act 2006, reported at [2017] EWHC 2767 (Ch), ordering the respondents to buy out its shares for approximately £31.27 million. The court granted a limited stay of enforcement and imposed a freezing order over the respondents’ assets, including assets controlled through the Oyston Group.

After staged payments were not made, the petitioner pursued enforcement. The respondents applied to discharge or vary the freezing order, arguing that there was no evidential basis for a continuing risk of dissipation, that charging orders provided sufficient protection, and that the order improperly extended to non-party companies.

1. The application was dismissed. The court rejected the submission that the freezing order should be discharged because no affidavit evidence had been filed on dissipation. The order had been made at an inter partes hearing at which the respondents were represented, and its original propriety should have been challenged by appeal. The present application concerned whether a properly made order remained appropriate in changed circumstances.
2. The court retained power to vary or discharge the order, and had to remain alert to the continuing need for freezing relief. The principles described in Tibbles v SIG plc [2012] EWCA Civ 518, Detect Sea Enterprises Ltd v O’Connor [1997] All ER (D) 13 and Speedier Logistics v Aardvark Digital [2012] EWHC 2776 (Comm) were applied.
3. Although the petitioner no longer needed to establish a good arguable case on the merits, the judgment debt did not itself trigger the freezing-order jurisdiction. There had to be a real risk that refusal or discontinuance of the order would leave the judgment unsatisfied. That risk was established by the respondents’ failure to realise assets despite asserting that they were asset-rich, their limited progress in payment, opposition to sales, opaque financial affairs and non-disclosure of assets. A debtor’s use of legitimate enforcement safeguards was not itself blameworthy, but the evidence showed conduct directed towards making enforcement difficult.
4. Charging orders did not provide adequate protection. They did not reach assets of companies whose shares were charged, private-company valuations were uncertain, and a freezing order conferred no priority over rival claims. The valuation difficulties identified in Versteegh v Versteegh [2018] EWCA Civ 1050 were relevant.
5. The order did not pierce the corporate veil. Following Lakatamia Shipping Co. Ltd v Su [2014] EWCA Civ 636, it restrained the respondents from using their controlling interests in group companies to diminish the value of their shares. The absence of a standard-form order was not a sufficient reason for variation, and any cross-undertaking in damages remained a discretionary question of fairness.

The judgment itself records an earlier first-instance judgment in the same proceedings, in which a buyout order was made: [2017] EWHC 2767 (Ch). The present judgment dismissed the respondents’ application to discharge or vary the freezing order.