Canada Inc v Sovereign Finance Holdings Limited & Ors

To continue a worldwide freezing order, the applicant must establish a good arguable case, assets within the order’s reach, a real risk of dissipation, and that relief is just and convenient.

The risk must be supported by solid, objective evidence. It need not be more probable than not, and the applicant need not identify a completed act of dissipation. The court must assess the cumulative effect of fact-sensitive factors. Sophisticated offshore structures, non-payment of a judgment debt, dishonesty, or non-compliance with disclosure obligations are not ordinarily sufficient alone. They may be significant when combined with evidence of evasiveness, deliberate resistance to clear liabilities, or an intention to frustrate enforcement.

The claimant sought continuation of a worldwide freezing order against two respondents following judgment for approximately £3.46 million, interest and costs. An earlier without-notice application had been refused for insufficient evidence of dissipation risk. A later order was granted after evidence emerged concerning the respondents’ conduct, but the suspected property transaction proved not to involve dissipation.

The respondents failed to comply with asset-disclosure obligations and did not attend the return hearing. The central issue was whether the evidence, viewed cumulatively, established a real risk that assets would be dissipated and whether continuation of the order was just and convenient.

1. Test. The court continued the worldwide freezing order. The claimant had an irrefutable case on the merits following judgment, and there was sufficient evidence that assets existed which could be caught by the order. The decisive issue was risk of dissipation.
2. The burden remained on the applicant to establish a real risk of dissipation. Dissipation involves putting assets out of reach by concealment or transfer, unjustifiably and outside the ordinary course of business. A real risk is a risk, not a probability, but it must be demonstrated by solid evidence rather than suspicion, fear or speculation ([2024] EWHC 2170 (Comm), paras 19–24).
3. The assessment is fact-sensitive and requires consideration of the cumulative effect of relevant factors. Sophisticated trusts and offshore companies may demonstrate ease of dissipation, but are not inherently suspicious. Dishonesty is more probative where it relates to previous dissipation or similar conduct. Non-payment of a judgment debt is insufficient by itself, since it is a common feature of post-judgment cases (paras 25–30).
4. Failure to comply with an asset-disclosure order is a relevant factor. It may support an inference of dissipation risk, particularly where the refusal is deliberate and unexplained, although the burden does not shift to the respondent and non-engagement does not automatically establish the risk (paras 30–31, 43–47).
5. The most persuasive evidence concerned an actual plan or propensity to dissipate. The court organised the factors as means and opportunity, motive, and propensity, while emphasising that the inquiry must focus on concrete facts and avoid generalised allegations or stereotypes (paras 32–34).
6. Here, internationally held financial structures, a pattern of evasive conduct and resistance to clear liabilities, and deliberate failure to provide any asset disclosure combined to establish an objectively verifiable real risk of dissipation. It was therefore just and convenient to continue the order (paras 35–50).

This was a first-instance return-date hearing concerning a worldwide freezing order. An earlier without-notice application had been refused by Foxton J. A subsequent order was granted by HHJ Bird and continued on an interim basis before this hearing.