London Capital & Finance Plc & Ors v Spencer Golding

The court may extend a receivership over assets where there is a serious risk, or reasonable suspicion, that freezing-order breaches may dissipate them and prevent enforcement. Appointment is justified where receivers are reasonably likely to assist enforcement and there is hindrance or difficulty in using ordinary execution. The court must also be satisfied that the order is just and convenient, having regard to its cost and intrusive nature.

Where receivers take control of the relevant assets, a previously ordered delivery period may be shortened if no further delay is justified. Receivership safeguards assets but does not itself have proprietary effect. Non-parties directly affected by an order retain the protection afforded by CPR rule 40.9.

The claimants sought two orders against the fourth defendant. First, they sought to extend existing receivership appointments so that the receivers could take control of all assets listed in Schedule 2 to an order dated 13 December 2024. That order had declared that the assets were held on trust for the claimants and required their transfer.

Secondly, the claimants sought to vary the December order by reducing the period for delivery of certain assets after variation of a criminal restraint order from 14 or 21 days to one working day. The applications were heard on short notice, with the claimants accepting that they were ex parte on notice and owed a duty of full and frank disclosure. The central issues were whether the expanded receivership was justified and whether the delivery period should be shortened.

1. Receivership. The application to extend the receivership to all assets in Schedule 2 was granted. The evidence established a serious risk and reasonable suspicion that the fourth defendant might continue to breach the freezing orders by dissipating the assets, making them unavailable for enforcement.
2. The court was also satisfied that appointing receivers offered a reasonable prospect of assisting enforcement of the December order and would serve a useful purpose where there was hindrance or difficulty in enforcement. The order was just and convenient, and the demands of justice supported it.
3. The court recognised that receivership may increase costs and be intrusive. Those considerations did not outweigh the enforcement risks in this case. The additional costs and intrusiveness were fully justified.
4. Delivery period. The December order was varied so that the fourth defendant was required to co-operate in handing over the assets within one working day of variation of the criminal restraint order. The variation had taken much longer than expected, and the appointment of receivers meant that there was no justifiable reason for further delay.
5. Third-party interests. The receivership did not have proprietary effect and did not vary the existing provision in the December order. Third parties claiming an interest could apply to the court. A person directly affected by the judgment or order could also apply under CPR rule 40.9 to set it aside or vary it. The court directed that such an application should be made within 14 days of notification of the present order.
6. The court considered the claimants’ submissions on full and frank disclosure under seven headings and concluded that the orders sought should be made.