FM Capital Partners Ltd v Marino & Ors

A post-judgment freezing order may be granted where the claimant has a good arguable case, there is solid evidence of a real and objective risk that the judgment will be frustrated by unjustified dissipation, and relief is just in the circumstances. A finding of dishonesty does not automatically establish that risk. The court must examine whether the particular dishonesty, together with the respondent’s conduct, experience, use of corporate structures and treatment of assets, supports the inference. Delay in seeking relief is relevant but is not generally a bar, particularly where judgment has already been obtained and no prejudice is shown. The purpose of the order is to prevent evasion of enforcement, not to provide security or restrain legitimate business or personal dealings.

The claimant obtained judgment against the third defendant for dishonest assistance in breaches of fiduciary duty and bribery. A worldwide freezing order was subsequently granted without notice. The third defendant applied to discharge it, arguing that the transfer of a Swiss property to his former wife was legitimate, that the claimant had delayed in seeking relief, and that the order adversely affected his companies. The claimant relied on the judgment findings of dishonesty, the defendant’s use of fronting companies and sham documents, his disclosure of assets, and the risk that enforcement would be frustrated. The central issue was whether there remained a real risk of unjustified dissipation sufficient to justify continuing the order.

1. Principles. A freezing order requires a sufficiently arguable right of action, a real risk that a judgment will not be satisfied because of unjustified or unjustifiable disposal or dealing with assets, supported by solid evidence, and a just exercise of the court’s discretion. The risk must be assessed objectively and separately against each respondent. The order is directed to unjustified dissipation and does not require a defendant to alter legitimate conduct.
2. Post-judgment relief. The judgment obtained against Mr Ohmura satisfied the first requirement. A post-judgment order serves as an aid to execution, and the risk of dissipation may be more readily established after judgment. Where judgment has been given and solid evidence of risk exists, particularly strong grounds would be required to refuse relief, as explained in Great Station Properties SA v UMS Holdings Ltd [2017] EWHC 3330 (Comm) and Orwell Steel (Erection and Fabrication) Ltd v Asphalt and Tarmac (UK) Ltd [1984] 1 WLR 1097.
3. Dishonesty and risk. Dishonesty alone is insufficient. The court must scrutinise whether the particular dishonesty points to a likelihood of dissipation. Here, the findings that Mr Ohmura had secretly transferred property through fronting companies, used sham documents, possessed financial sophistication, and gave deliberately evasive evidence collectively established a real risk that he would dissipate assets to avoid enforcement. This was consistent with Thane Investments Ltd v Tomlinson [2003] EWCA Civ 1272, properly understood, and with SPL Private Finance (PF1) IC Ltd v Arch Financial Products LLP [2015] EWHC 1124 (Comm).
4. Other matters. The transfer of the Swiss property was found legitimate on the evidence and did not itself establish dissipation. The failure to provide estimated values for shareholdings breached the disclosure order, but was not relied upon in reaching the conclusion. Delay did not negate the risk or justify discharge, and no prejudice was shown. Any effect on the companies’ bank accounts was a matter potentially relevant to variation, not discharge.
5. Order. The application to discharge the worldwide freezing order was dismissed. The order was continued until further order. Submissions on consequential matters and variation were adjourned.