Dignity Funerals Limited & Anor v Inertia Financial Consultancy Designated Activity Company & Ors

Proprietary and freezing injunctions engage different tests. A proprietary injunction requires a serious issue to be tried, a favourable balance of convenience, and that it be just and convenient to grant relief; risk of dissipation is unnecessary. A freezing injunction additionally requires a good arguable case for an enforceable money judgment, assets against which it can be enforced, and a real, objectively assessed risk of unjustified dissipation. The risk must be supported by solid evidence and established separately against each respondent. A good arguable case in dishonesty, or refusal to answer asset questions, is insufficient by itself. Under the Civil Procedure Rules 1998, r 19.9 permits representative proceedings where a class has the same interest and representation furthers the overriding objective. Knowing receipt and dishonest assistance are distinct.

This was a first-instance interim application arising from the transfer of funeral-plan customers from Pride Planning to Dignity. Customer payments were held in a trust. Pride Planning later asserted a cancellation-fee claim against the trust, and the trustees settled that claim by transferring the trust’s assets.

The applicants alleged breach of trust by the trustees and brought claims in knowing receipt, dishonest assistance, unlawful means conspiracy, unjust enrichment and under the rule in Re Diplock. They sought a representative order for customers, a proprietary injunction, a freezing injunction and related disclosure. The central issues were whether the applicants had a serious issue or good arguable case, and whether there was a real risk of unjustified dissipation.

Disposition. The court appointed Veronica Lake as a representative party for customers who had elected to transfer their rights to Dignity, subject to amendment of the Particulars of Claim. A proprietary injunction was granted against Pride Planning, Pride Planning Holdings and Inertia. The freezing injunction was refused.

1. Representation. Under the Civil Procedure Rules 1998, r 19.9(2)(d)(ii), the customers had the same interest and individual claims would be impractical and substantially repetitive. Representative proceedings therefore furthered the overriding objective.
2. Proprietary relief. The court applied the American Cyanamid principles: serious issue to be tried, balance of convenience, and justice and convenience. Risk of dissipation was not required. This distinction was supported by Madoff Securities International Ltd v Raven [2011] EWHC 3102 (Comm) and Cherney v Neuman [2009] EWHC 1743 (Ch). The applicants showed a good arguable case that the amended trust was non-discretionary, that at least some assignments were effective under the Law of Property Act 1925, and that the trustees had breached their duties by surrendering the trust assets on plainly contestable terms.
3. Knowing receipt. The applicants showed a serious issue as to trust property, transfer, breach, receipt, benefit and knowledge making retention unconscionable, applying BCCI (Overseas) Ltd v Akindele [2001] Ch 437. The evidence supported a good arguable case against the three corporate recipients.
4. Freezing relief. The court applied the requirements stated in Convoy Collateral Ltd v Broad Idea International Ltd [2021] UKPC 24 and the dissipation principles in Lakatamia v Morimoto [2019] EWCA Civ 2203. The applicants had a good arguable case in knowing receipt, but no real risk of unjustified dissipation was established. The allegations were insufficiently individualised, dishonesty was not made out, refusal to answer questions could not itself establish risk, and the respondents had engaged constructively while the application was delayed.
5. Distinct causes of action. Knowing receipt and dishonest assistance were conceptually distinct. Applying Ivey v Genting Casinos (UK) Ltd (t/a Crockfords) [2017] UKSC 67 and Byers v Saudi National Bank [2023] UKSC 51, the court found no good arguable case of dishonest assistance, particularly in the absence of evidence of collusion or dishonest belief.