Claimants Listed in Schedule 1 v Spence & Ors

An applicant seeking a worldwide freezing order must establish a good arguable case, an objectively assessed real risk that a future judgment will go unsatisfied because of unjustified dissipation, and that relief is just and convenient. The risk must have a solid evidential basis, be assessed separately against each respondent, and arise from the cumulative effect of fact-specific circumstances. Dishonesty alone is insufficient, although dishonesty at the heart of the claim may support an inference of dissipation where the evidence justifies it. A freezing order preserves assets; it does not provide security for the claim. Delay is not necessarily fatal where sufficient assets remain and the explanation is reasonable.

The claimants, a group of investors in holiday and student accommodation schemes, applied without notice for worldwide freezing orders against three individual defendants, together with ancillary disclosure, service and enforcement relief. Their proposed underlying claims included deceit, unlawful means conspiracy and negligence. They alleged that representations concerning fixed returns, financial substance, underwriting and occupancy were false, and that assets had been or might be dissipated through complex company structures.

The application also concerned service of proceedings on a defendant resident in Florida, permission to serve out, enforcement of the injunction in Florida, and permission to sue companies subject to insolvency processes. The central issues were whether the requirements for freezing relief and service-out jurisdiction were met and whether the ancillary orders were appropriate.

1. Freezing order. The application was granted against the first, second and third defendants. Under Senior Courts Act 1981, section 37, the court applied the established test requiring: a good arguable case; a real, objectively assessed risk that a future judgment would go unsatisfied because of unjustified dissipation; and justice and convenience in granting relief.
2. The good arguable case threshold is more than a case barely capable of serious argument, but does not require a better than 50 per cent prospect of success. The evidence established a good arguable case in deceit against each relevant defendant. The alleged representations were sufficiently identified, their falsity was supported by valuation and administration evidence, and the evidence supported knowledge, recklessness, inducement and loss. There was also a good arguable case in unlawful means conspiracy.
3. The risk of dissipation had to be proved separately against each respondent by solid evidence. Dishonesty alone was insufficient, but the alleged fraud was central to the claim and had been carried out through complex structures which arguably left investors without recourse. That evidence, together with asset movements, property purchases, transfers, resignations and unexplained payments, established the necessary risk against each of the three defendants. The court also found that assets existed against which the order could operate.
4. The court accepted the explanation for the period between finalising the claimant list and making the application. Delay per se was not a reason to refuse relief. The order was just and convenient, subject to a cross-undertaking in damages supported by insurance and safeguards enabling the defendants to seek discharge.
5. Service and ancillary relief. Service within the jurisdiction was permitted under CPR rule 6.9. Service on the first defendant at his Companies House address was authorised under section 1140 of the Companies Act 2006, and permission to serve out was considered unnecessary; alternatively it was granted. The gateways in Practice Direction 6B, paragraphs 3.1(3) and 3.1(9), were satisfied, and England was clearly the appropriate forum. Permission was granted to enforce the injunction in Florida under the principles in Dadourian Groups International v Simms [2006] EWCA Civ 399.
6. Permission to bring proceedings against the fourth defendant was refused because the court lacked sufficient information about the liquidation. Permission concerning the seventh defendant was also refused, leaving the claimants to seek permission from the insolvency court.

First-instance decision. No appellate history is stated in the judgment.