BPE Solicitors Limited v Raj Kumar Ram

A freezing injunction requires: (1) a good arguable case, understood in this context as a serious issue to be tried; (2) a real, objectively judged risk that a future judgment will go unsatisfied because of unjustified dissipation; and (3) a conclusion that relief is just and convenient. The risk need not be more likely than not, but must have a solid evidential basis. Dishonesty in the underlying claim is insufficient by itself. The evidence must connect the alleged wrongdoing or conduct to a risk of dissipation. Legitimate dealings in the ordinary course of business or personal affairs do not ordinarily justify relief. Because the remedy is severe and intrusive, the court must assess proportionality, the value of the claim and the value of the restrained assets. A freezing order is not security for the claim.

The claimant, a firm of solicitors, pursued assigned claims arising from the defendant’s sale of a property to More Homes Bromley Limited. It alleged fraudulent or negligent misrepresentation concerning an undisclosed enforcement notice and also claimed a contribution under the Civil Liability (Contribution) Act 1978. The claimant had obtained an interim freezing injunction over five properties without notice.

On the return application, the defendant relied on longstanding intentions to transfer three properties to family members and on serious ill health and anticipated surgery. The issues were whether there was a serious issue to be tried, a real risk of unjustified dissipation, and whether continuation of relief over some or all of the properties was just and convenient.

1. Thresholds. The court held that the statutory question under section 37 is whether it is just and convenient to grant relief. In practice, the applicant must establish a serious issue to be tried and a real risk that a future judgment will go unsatisfied because of unjustified dissipation. The merits threshold is low and does not require the claimant to show that it is likely to succeed at trial.
2. Risk of dissipation. The risk must be judged objectively and supported by solid evidence, although the risk need not be more likely than not to occur. The applicant bears the initial burden. If evidence raises a real risk, an unsatisfactory explanation may support an adverse inference, but the evidence must be assessed holistically. Dishonesty in the underlying claim does not itself establish a risk of dissipation.
3. Application. The defendant had recently taken steps to transfer substantial interests in three properties for no consideration, after receiving notice of the potential claim and then the draft particulars. His explanation that the transfers were prompted by an imminent, potentially life-threatening operation was materially misrepresented: no operation had been scheduled and surgery depended on substantial weight loss. The court therefore found a real risk of unjustified dissipation. It placed no weight on the financial position of the defendant’s company or on the disputed fraud allegations as such.
4. Justice, convenience and proportionality. The injunction was a severe and intrusive remedy, but continuation was justified. It was continued over the four properties with material value, but not over the adjoining undeveloped land, whose value was not established. The court considered the claim value, property values, outstanding loans and proportionality. The order should restrict disposal of the underlying assets, not receipt of rents where appropriate.
5. Costs. Applying the guidance in Dos Santos v Unitel SA, the successful applicant was entitled in principle to costs of the freezing injunction application until trial. Costs were summarily assessed at £60,000.

• High Court (King’s Bench Division): Griffiths J granted the without-notice freezing injunction on 19 February 2025. Ellenbogen J continued it on the return date of 25 February 2025, with directions. His Honour Judge Auerbach continued the injunction over four properties, excluded the adjoining land, and awarded £60,000 costs.