MHP Food UK Limited v Sanson Foods Limited & Ors

For interim proprietary and freezing relief, the merits threshold is a good arguable case: the claim must be more than merely arguable and carry some degree of conviction. The threshold remains low. A real risk of unjustified dissipation may be inferred from solid evidence or objective facts; direct evidence is rarely available. A good arguable case of relevant wrongdoing can powerfully support that inference, but dishonesty alone is insufficient without considering whether it points to dissipation. Applications to discharge without-notice relief should identify clear and important failures of disclosure or fair presentation. An unfocused attack inviting a mini-trial may be declined altogether. A potential defence, such as an alleged side agreement, does not establish non-disclosure unless it is shown that the applicant knew of it.

On 30 July 2025, a Deputy Judge granted MHP a freezing order and proprietary injunction without notice against Sanson Foods Limited and two individuals. The orders were continued on 15 August 2025.

The Second Defendant applied to discharge the orders. He alleged that the merits threshold was not met, that there was no real risk of dissipation, that MHP had failed in its duties of full disclosure and fair presentation, and that subsequent conduct justified discharge. He relied in particular on an alleged concealed side agreement concerning the stored goods.

The central issues were whether the original orders were justified and whether any later matter required their discharge.

The application to discharge the freezing order and proprietary injunction was dismissed. The court held as follows.

1. Merits threshold. The correct test for freezing relief was the good arguable case test, not the more demanding service-out test. The claim had to be more than merely arguable and carry some degree of conviction. The Deputy Judge had been entitled to find a good arguable case against all defendants. Evidence that the goods had been delivered, remained unreturned after the storage period, had been sold to meet SFL’s cash-flow deficit, and that the Second Defendant was sole director supported the conclusion.
2. Risk of dissipation. The claimant had to establish a real risk that a future judgment would be defeated by unjustified dissipation. Solid evidence or objective facts were required, but direct evidence was uncommon. Relevant wrongdoing may powerfully support the inference, although a good arguable case of dishonesty alone was insufficient. The evidence concerning the misappropriated stock, the use of proceeds for SFL’s cash flow, the Second Defendant’s position as sole director, his lack of useful explanation, and the incorporation of new companies justified the inference.
3. Full disclosure and fair presentation. A discharge application should be brought with restraint and proportionality, identifying clear-cut and important allegations. The Second Defendant’s broad and unfocused complaints failed to identify such matters and invited a mini-trial. The court was entitled to decline to consider them. In any event, the alleged side agreement was only a potential defence. Unless it were established that the agreement existed and that MHP knew of it, its omission could not amount to a breach of disclosure or fair presentation. The messages did not provide positive evidence that the Second Defendant was uninvolved.
4. The balance of convenience and the just-and-convenient test favoured continuation. If the orders had been discharged, the court would have remade them because later evidence heightened the dissipation concern and did not weaken the merits case.