Vestey Foods UK Ltd v Cox & Ors

A freezing injunction requires solid evidence of a real risk that the defendant will dissipate assets or deal with them so as to make enforcement more difficult. Allegations of dishonesty, commercial immorality or concealed ownership do not, without more, establish that risk. The burden remains on the applicant; the respondent is not required to explain matters unless the applicant first raises a prima facie case.

On a without notice application, fair presentation requires an even-handed oral and written presentation of evidence and arguments which the absent party could reasonably be expected to make. A proprietary injunction should not be continued where its terms do not clearly identify the conduct or assets restrained.

Vestey Foods UK Ltd brought claims against Adam Cox and others arising from alleged overcharging, breaches of duty, dishonest assistance, conspiracy and proprietary claims concerning payments made to a related packing company.

At a without notice hearing, Nugee J granted a freezing injunction and a proprietary injunction against Mr Cox. The injunctions were continued pending the return hearing. Mr Cox applied to discharge them, principally alleging that Vestey had failed to make a fair presentation. The central issues were whether there was a sufficient risk of dissipation, whether the proprietary injunction was sufficiently clear, and what consequence followed from any breach of the fair presentation obligation.

1. Freezing injunction. The court declined to continue the freezing injunction. The applicable question was whether it was just and convenient to continue the order, but the practical issue was whether Vestey had shown solid evidence of a real risk of dissipation. The burden remained on Vestey.
2. Alleged overcharging and a low standard of commercial morality did not justify an inference that Mr Cox would dissipate assets. The use of a nominee to hold shares supported an inference that his involvement in the business had been concealed, but concealment of business involvement did not itself establish a likelihood of asset dissipation. The evidence that Mr Cox remained visible at the business, did not delete relevant emails and had no significant overseas assets pointed against such a risk.
3. The applicant could not shift the burden by relying on Mr Cox’s failure to explain matters which had not been fairly raised. The court considered the nature, location and liquidity of his assets, his family circumstances, employment position and access to the assets. The fact that dissipation was possible did not show that it was probable or that there was a real risk of it occurring.
4. The court would not, had the risk been established, have refused continuation merely because of unsupported concerns about employment or reputational harm. Those matters would not have outweighed a properly demonstrated risk.
5. Fair presentation. On a without notice freezing-injunction application, the applicant must present the evidence and contrary arguments fairly and even-handedly. This normally requires oral submissions on the central issue of dissipation, particularly where the judge has indicated that the detail has not been taken on board. Vestey breached that obligation, although the breach was not intentional.
6. Proprietary injunction. The proprietary injunction was not continued because its terms were insufficiently clear and unambiguous. It was unclear what sums paid to the packing company were intended to restrain and what investigations Mr Cox had to undertake to determine whether assets were derived from those sums. The risk of committal made precision essential.
7. The injunctions were therefore not continued. Further submissions were invited on the implementation of the judgment.