Vanessa Wurm & Ors v Kash Amini & Ors

A freezing order may continue where the claimant shows a seriously arguable case, a real risk of dissipation and that it is just and convenient to grant relief. A Quistclose trust does not require the transferred money to have been placed in a separate account. The essential question is whether the provider retained beneficial ownership and whether the recipient was prevented from treating the money as freely disposable. The court must scrutinise the merits, dissipation risk and justice of the order separately, giving proper weight to evidence of opacity, lack of candour and possible efforts to conceal assets.

The claimants alleged that the first defendant had obtained approximately £3.7 million from the first claimant on promises to invest it in a company for her benefit or in cryptocurrency. Judgment had been entered against the first and second defendants. The third to fifth defendants, alleged to have received proceeds of the first defendant’s equitable fraud and to have assisted in concealing them, applied to set aside a freezing order.

The application challenged the seriously arguable merits of the alleged Quistclose trust and dishonesty, the risk of dissipation, and whether continuation of the order was just and convenient.

1. Application dismissed. The freezing order was continued.
2. For an application to set aside or vary a freezing order, the applicant should identify the respects in which the order is said to be defective and why. The claimant retains the overall burden of maintaining the order. The judge nevertheless assumed that burden rested on the claimant throughout.
3. The merits test for a freezing order is the same as for interim injunctions generally. The seriousness of the remedy does not create a heightened merits threshold, although the court must give anxious scrutiny to the risk of dissipation and to whether relief is just and convenient. This reflected Dos Santos v Unitel SA [2024] EWCA Civ 1109.
4. The alleged arrangements were sufficiently arguable as a Quistclose-type trust. The essential feature was that the claimant had not intended to transfer beneficial ownership for the recipient’s general use, and that the money was to be used only for specified purposes. Separate holding or segregation was relevant evidence and might be determinative, but was not a necessary precondition. The allegation that the money had been misappropriated for the recipient’s own purposes strengthened the fiduciary analysis.
5. The claimant had a seriously arguable case that the applicants had dishonestly assisted, or knowingly received, misappropriated funds. The evidence concerning payments, unexplained increases in wealth, inconsistent accounts, incomplete disclosure, questionable company filings and the handling of funds through the applicants’ businesses provided a sufficient factual platform for adverse inferences at the interim stage.
6. There was a sufficient real risk of dissipation. The applicants’ lack of frankness and candour, their approach to disclosure and court orders, and evidence suggesting a willingness to move money to create or protect apparent cash flow supported that conclusion. The existence of a flat with substantial equity did not outweigh the risk.
7. It was just and convenient to continue the order. The potential harm to the claimant if assets were dissipated outweighed the interference with the applicants’ property, particularly given the cross-undertaking in damages and the enforcement principle.