Craig Wright v Peter McCormack (WFO Judgment)

A worldwide freezing order may be granted where the applicant shows a good arguable case for recovery, a real risk of dissipation, and that relief is just and convenient. A present entitlement to part of the claim may support interim protection while further elements require assessment or fresh proceedings. Fraud may materially change the position underlying earlier costs orders. Finality does not require a court to preserve orders obtained on the foundation of wholesale fraud. The risk of dissipation is assessed objectively and may remain real where the respondent avoids asset disclosure, relies on third-party funding, or has previously claimed to be judgment-proof.

The defendant applied for a worldwide freezing order against the claimant in the context of an earlier defamation claim. The claimant had obtained nominal damages but was ordered to pay the defendant’s costs on the indemnity basis, subject to earlier costs orders and deemed no-order provisions. The defendant also contended that later findings of fraud and forgery justified recovery of further costs and damages, including by setting aside or reversing earlier costs orders.

The application sought freezing relief of approximately £1.548 million, asset disclosure, and permission for recognition or enforcement in Australia, the Seychelles, Antigua and Singapore. The central issues were whether the defendant had a good arguable case for recovery, whether there was a real risk of dissipation, and whether relief was just and convenient.

1. Application granted. The court granted a worldwide freezing order in substantially the draft terms, in the sum of approximately £1.548 million, together with ancillary asset-disclosure and foreign-enforcement relief.
2. The defendant had a very strong, and therefore good arguable, case for recovery. His present entitlement to costs under the Chamberlain Order was effectively unanswerable subject to detailed assessment. The further costs could plausibly be pursued through detailed assessment, an application under the Civil Procedure Rules, or a fresh fraud claim or appeal seeking to set aside orders obtained on the basis of fraud. The safest course was to secure the present costs entitlement while the full claim was formulated.
3. The principles governing relief from orders obtained by fraud require conscious and deliberate dishonesty, materiality, and causation. Materiality is assessed by the effect of the fresh evidence on the original decision, rather than by asking what result might follow from a retrial on honest evidence.
4. The fact that earlier orders concerned procedural costs did not prevent reconsideration. The disclosure extension order was materially connected with the later-established forgery of documents, and the other costs order was closely connected with the abandoned truth defence and the substantive merits. It would be an affront to justice if the defendant could not recover costs incurred in defending litigation founded on fraud.
5. There remained a real risk of dissipation. The court assessed that risk objectively. Payment of sums into court to avoid asset disclosure did not remove the risk where the funding was apparently controlled by third parties, the respondent’s assets remained shadowy, and previous statements about being judgment-proof remained powerful evidence.
6. It was just and convenient to grant relief. The order included deadlines of 14 and 21 days, alternative service, and permission for recognition and enforcement in the foreign jurisdictions identified in the order. The court was prepared to consider submissions on an interim payment on account of the presently recoverable costs.

Not an appeal. The application arose from costs orders and judgments made in the earlier defamation proceedings. The present court granted the worldwide freezing order and ancillary relief.