London Capital & Finance Plc & Ors v Thomson & Ors

The existence of criminal restraint orders does not, without more, eliminate the risk of dissipation or prevent the grant or continuation of a worldwide freezing order. The civil court must assess the position on the facts, including the orders’ scope, control, durability and the ability of the claimant to learn of changes affecting them. A criminal restraint order may theoretically be an adequate substitute, but that will be very unusual. In interlocutory proceedings, a party is not automatically barred from raising a point at a later hearing merely because it was theoretically available earlier. The court must consider practical availability, fairness, abuse of process and the efficacy of the judicial process.

The claimants sought continuation of worldwide freezing orders made without notice against five respondents. Criminal restraint orders had already been made against the third and fourth respondents under the Proceeds of Crime Act 2002. Those respondents argued that the criminal orders meant that there was no risk of dissipation and resisted continuation of the civil orders.

The court continued the orders against them. It then considered whether they could raise, at a further hearing, arguments concerning arguable case and factual risk of dissipation, despite not having raised those issues at the return hearing and despite there having been no change of circumstances.

1. The worldwide freezing orders against the third and fourth respondents were continued. Earlier authorities recognised a fundamental difference between criminal restraint orders and worldwide freezing orders: the former serve criminal or prosecutorial interests, while the latter protect the civil claimant and remain under the claimant’s control. The existence of a criminal restraint order therefore does not itself remove the risk of dissipation or preclude a civil freezing order.

2. The court accepted that, in theory, a criminal restraint order might be so comprehensive and secure that it removed the need for a worldwide freezing order. Such a case would be very unusual. Here, the claimants had no reliable means of learning promptly if the criminal orders were discharged or varied. The SFO could also permit dealings with assets for purposes different from those of the civil claimants. The risk was real and non-trivial, and had to be assessed both at the date of the hearing and over the likely lifetime of the freezing order.

3. Sections 58 and 69 of the Proceeds of Crime Act 2002 did not provide that the existence of a criminal restraint order affected the appropriateness of a worldwide freezing order.

4. The principle against taking points serially in interlocutory proceedings is directed to preventing abuse and preserving the efficacy of the judicial process. It is not absolute. A point that was theoretically available earlier may remain available where, in practical terms, the party lacked time, funding or a fair opportunity to raise it, and had not represented that it was abandoning the point. The authorities relied on by the claimants were distinguished as involving different circumstances.

5. The third and fourth respondents had not practically been able to contest arguable case or factual risk of dissipation at the return hearing. Their later reliance on those issues would not be abusive and did not require a change of circumstances. They were directed to comply with the relevant directions in the CMC Order dated 7 September in any future discharge application.

The judgment followed an ex parte order made on 24 August 2020 by a deputy High Court judge and an ex tempore return-date judgment of 7 September 2020. This court continued the worldwide freezing orders and gave consequential directions for the further hearing.