J&J Snacks Food Corporation & Anor v Ralph Peters & Sons Limited & Anor

A freezing order will ordinarily require prompt disclosure of assets so that the claimant can police the order. Where the order is challenged, the court retains a discretion to defer service of disclosure until the return hearing. The usual position is disclosure before that hearing, but an extension may be justified in an unusual case.

Alleged dishonesty and destruction of evidence do not, without more, establish a risk of dissipation. The court should scrutinise the maximum sum and whether disclosure is necessary to police the order, particularly where the respondent is a holding company or disclosure would significantly invade personal privacy.

The claimants sought continuation of without-notice freezing and imaging orders made on 3 December 2024. The defendants did not seek to set aside the orders or offer security, but applied to defer compliance with the asset-disclosure provisions until an adjourned return date.

The dispute concerned whether the ordinary requirement for disclosure before the return hearing should apply. The defendants relied on the passage of time since alleged dishonesty had been litigated in Ohio, the absence of evidence of asset dissipation, concerns about the maximum sum, the first defendant’s status as a holding company, and the privacy implications of individual disclosure.

1. Application granted in part. The defendants were required to swear the disclosure affidavit within the existing timetable, but were not required to serve it until the adjourned return date. The court did not finally determine whether the freezing order should have been made or should continue.
2. A freezing order will ordinarily include asset disclosure because disclosure enables the claimant to police the order and notify third parties such as banks. Where the order is challenged, the court has a discretion whether to extend the time for compliance. The usual position remains that disclosure is provided before the return hearing, applying the balance identified in Raja v Van Hoogstraten [2004] EWCA Civ 968 and the guidance in Motorola Credit Corporation v Uzan [2002] EWCA Civ 989.
3. The present case was unusual. A mere allegation of dishonesty is generally insufficient to establish a risk of dissipation. The court must closely analyse the relationship between the alleged dishonesty and the asserted risk that assets will be dissipated. The four-year delay since the relevant events, the continuing contested litigation, and the absence of evidence that the defendants’ conduct had materially changed raised serious concerns about the without-notice application and the asserted risk.
4. The court also had concerns about the £10 million maximum sum. The calculation appeared to rely on the revenues and gross profit margins of trading companies, without sufficient separate analysis of the profits attributable to the two defendants joined to the proceedings. Freezing relief is serious and requires careful analysis against the particular defendants.
5. Disclosure by the first defendant, a holding company, appeared unlikely to provide information beyond its shareholdings and was not shown to be necessary to police the order. For the second defendant, requiring an affidavit while postponing service imposed discipline and restricted dealings with assets. Immediate disclosure was not shown to be necessary and would involve an invasion of privacy.
6. The court rejected the suggested rule derived from Wild Brain Family International Ltd v Robson [2018] EWHC 3168 (Ch) that a respondent complaining about the without-notice procedure must appeal rather than seek to set aside the order. The court also distinguished the circumstances from AcelorMittal USA LLC v Essar Steel Ltd [2019] EWHC 724 (Comm), where the defendants had not been tipped off.