Lakatamia Shipping Company Ltd v Morimoto

A worldwide freezing order may be granted where there is a good arguable case, a real risk that a judgment will go unsatisfied through unjustified dissipation, and it is just and convenient to grant relief. A good arguable case that the respondent committed wrongdoing directly relevant to dissipation points powerfully towards that risk. It may make significant further evidence unnecessary.

The inference is not automatic. The court must scrutinise the particular wrongdoing and evidence. Where the alleged wrongdoing itself consists of assisting an earlier dissipation of assets, particularly in breach of an existing freezing order, it may strongly support an inference that the respondent will dissipate assets to defeat enforcement of a future judgment.

The appellant held an unsatisfied judgment debt against the respondent’s son. During committal proceedings against him for breach of an earlier worldwide freezing order, he gave evidence that the proceeds of sale of assets had been transferred to, or at the direction of, his mother, the respondent.

The appellant brought tort claims against the respondent and obtained an ex parte worldwide freezing order. At the return date, Sir Michael Burton permitted service out and found a good arguable case on the merits, but discharged the order against the respondent because he was not satisfied that there was solid evidence of a real risk of dissipation: [2019] EWHC 1145 (CH).

The appeal concerned whether, given the good arguable case that the respondent had assisted the very dissipation alleged, the judge was wrong to find no real risk of dissipation.

1. Appeal allowed. Haddon-Cave LJ gave the leading judgment, with which Sir Stephen Richards agreed. McCombe LJ, despite reservations about the strength of the evidence, concurred because the judge’s unchallenged finding of a good arguable case required a finding of the relevant risk on the facts.

2. A worldwide freezing order requires a good arguable case, a real risk that a judgment will go unsatisfied because of unjustified dissipation, and a conclusion that relief is just and convenient. The risk must be supported by solid evidence and assessed separately against each respondent. It is not enough to allege dishonesty generally: the court must examine whether the particular dishonesty supports the inference of dissipation.

3. Where there is a good arguable case that the respondent committed wrongdoing against the applicant which is directly relevant to dissipation, that finding points powerfully towards a real risk of dissipation. Further significant evidence may not be needed, but the conclusion remains fact-sensitive. The present allegations concerned the respondent’s assistance in the actual dissipation of assets in breach of an existing freezing order. They therefore went directly to the risk in issue and provided a paradigm case for drawing the inference.

4. The judge failed to address the appellant’s principal submission and failed to give adequate weight to evidence concerning the respondent’s control of companies, ability to transfer substantial funds, and assets. His unsupported assumption that a judgment could readily be enforced in Taiwan was neutral and should not have been considered. The risk was plain when the evidence was assessed cumulatively.

5. The Respondent’s Notice was rejected. The Court restored the worldwide freezing order against the respondent, required worldwide asset disclosure, and made costs orders in the appellant’s favour.

• Court of Appeal (Civil Division). Allowed the appeal and restored the worldwide freezing order against the respondent: [2019] EWCA Civ 2203.

• High Court, Business and Property Courts. Permitted service out of the jurisdiction and found a good arguable case, but discharged the worldwide freezing order against the respondent: [2019] EWHC 1145 (CH).