Factual and Procedural Background
This appeal concerns a claimant's challenge to a decision by a Deputy High Court Judge to set aside a worldwide freezing order made without notice against certain defendants (the respondents). The freezing order was granted under section 25 of the Civil Jurisdiction and Judgments Act 1982 (CJJA) in aid of substantive proceedings in Scotland alleging conspiracy by all defendants.
The freezing order was originally made by a High Court judge but was set aside on grounds including insufficient risk of asset dissipation, inexpediency due to lack of connection with England and Wales, and failure of full and frank disclosure by the claimant. The order remains in place against other defendants not involved in the appeal.
The claimant sought to adduce new evidence obtained from Scottish proceedings, including judgments and documents from a Scottish search order. The appeal court granted permission to appeal and to rely on this new evidence, suspending the setting aside of the freezing order pending determination of the appeal.
The substantive Scottish proceedings involve claims for conspiracy to injure the claimant’s interests by causing a company to renege on a settlement and consent order made in the British Virgin Islands (BVI). The background involves complex multi-jurisdictional litigation, including adverse findings of fraud in the BVI and conflicting claims about ownership and control of companies involved.
The respondents have no assets or presence in England, Wales, or Scotland. The claimant's case relies on documents and evidence suggesting wrongdoing by the respondents, including false statements and concealment of interests.
Legal Issues Presented
- Whether the claimant has established a good arguable case for the grant of a worldwide freezing order under section 25 of the CJJA in aid of substantive Scottish proceedings.
- Whether there is a sufficient risk of unjustified dissipation of assets by the respondents to justify the freezing order.
- Whether it is inexpedient to grant a freezing order under section 25 due to lack of jurisdictional connection with England and Wales.
- Whether the claimant failed in its duty of full and frank disclosure in the without notice application, justifying setting aside the freezing order.
- Whether new evidence obtained from Scottish proceedings should be admitted on appeal.
Arguments of the Parties
Appellant's Arguments
- The claimant contends that the judge erred in finding no sufficient risk of dissipation and that it was inexpedient to grant the freezing order.
- The claimant argues that new evidence from the Scottish proceedings supports a good arguable case and risk of dissipation.
- The claimant submits that the English court has broad jurisdiction under section 25 to grant freezing orders even absent a connection with England and Wales, especially in aid of proceedings in another part of the United Kingdom.
- The claimant challenges the finding of failure of full and frank disclosure and seeks to rely on the new evidence to bolster its case.
Respondents' Arguments
- The respondents argue the judge was correct to find no sufficient risk of dissipation and that it was inexpedient to grant a worldwide freezing order given the absence of any connection with England and Wales.
- They contend the claimant had no good arguable case on the merits.
- The respondents rely on the rule that findings of fact from other courts, such as the Scottish court, are inadmissible and irrelevant in these proceedings.
- They maintain the claimant failed in its duty of full and frank disclosure, justifying discharge of the order.
- The respondents resist the admission of new evidence obtained from the Scottish search order, arguing it causes disruption and may be selectively presented.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Refco Inc v Eastern Trading Co [1999] 1 Lloyd's Rep 159 |
Approach to applications under section 25 CJJA: consider if facts warrant relief if substantive proceedings were in England, then consider inexpediency due to lack of jurisdiction. |
Adopted as the framework for assessing the section 25 application. |
| Ladd v Marshall [1954] 1 WLR 1489 |
Test for admitting new evidence on appeal: evidence must not have been obtainable with reasonable diligence, must probably influence the outcome, and be credible. |
Applied to admit new Scottish documents on appeal. |
| Hollington v F Hewthorn & Co Ltd [1943] 1 KB 587; Rogers v Hoyle [2014] EWCA Civ 257 |
Rule that findings of fact from other courts are inadmissible in subsequent trials. |
Considered but distinguished as the present case is interlocutory and ancillary to Scottish proceedings. |
| Motorola Credit Corpn v Uzan (No. 2) [2004] 1 WLR 113 |
Weight to be given to foreign court's interlocutory judgment on good arguable case; factors for inexpediency under section 25. |
Used to guide assessment of good arguable case and inexpediency. |
| Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203 |
Principles for establishing risk of dissipation for freezing orders. |
Applied to assess risk of dissipation in present case. |
| Crédit Suisse Fides Trust SA v Cuoghi [1998] QB 818 |
Section 25 CJJA allows interim relief in support of foreign proceedings; importance of connection to jurisdiction. |
Discussed in relation to necessity of jurisdictional connection. |
| Van Uden Maritime BV v Kommanditgesellschaft in Firma Deco-Line (Case C-391/95) [1999] QB 1225 |
Requirement of a real connecting link between relief sought and territorial jurisdiction. |
Referenced in debate on jurisdictional connection. |
| Convoy Collateral Ltd v Broad Idea International Ltd [2021] UKPC 24 |
Clarified the law on freezing orders, including no requirement for cause of action and jurisdictional considerations. |
Considered but held not to eliminate need for jurisdictional connection under section 25. |
| Wolverhampton City Council v London Gypsies & Travellers [2023] UKSC 47 |
Confirmed broad equitable jurisdiction to grant injunctions subject to statutory restrictions. |
Supported principle that injunctions are discretionary and subject to statutory limits. |
| Tugushev v Orlov & Ors [2019] EWHC 2031 (Comm) |
Principles governing duty of full and frank disclosure in without notice applications. |
Applied in assessing claimant's disclosure failures. |
| Derma Med Limited & Anr v Dr Zack Ally & Ors [2024] EWCA Civ 175 |
Further principles on disclosure and proportionality in complex cases. |
Applied to emphasize proportionality and interests of justice. |
| Memory Corporation plc v Sidhu (No 2) [2000] 1 WLR 1443; Behbehani v Salem [1989] 1 WLR 723; Kazakhstan Kagazy plc v Arip [2014] EWCA Civ 381 |
Authorities on full and frank disclosure and consequences of failure. |
Referenced in the detailed analysis of disclosure obligations. |
Court's Reasoning and Analysis
The court first addressed whether the claimant had established a good arguable case for the freezing order. It rejected the judge's reliance on the Scottish court’s without notice finding of a good arguable case, holding that such findings should not be given weight as they were made without hearing the respondents. The court applied the established test from The Niedersachsen requiring more than a barely arguable case but not a probability of success over 50%.
The court admitted new evidence from the Scottish proceedings, including judgments and documents, finding that the claimant could not have obtained these with reasonable diligence earlier and that they were credible and potentially influential.
Reviewing the Scottish judgments and documents, the court found that while there were difficulties and challenges to the claimant’s case, the material supported a good arguable case. The documents suggested involvement and concealment by respondents, undermining their denials.
On the risk of dissipation, the court adopted established principles requiring objective evidence of a real risk that assets would be unjustifiably dissipated, not mere allegations of dishonesty. The claimant’s case rested on four pillars, including alleged lies by a respondent, the nature of the conspiracy, untruths revealed by new evidence, and concealment of interests. The court found these sufficient to point powerfully to a risk of dissipation.
Regarding the issue of expediency under section 25(2), the court reaffirmed that a freezing order will generally not be granted absent a meaningful connection with the jurisdiction, such as residence, domicile, or assets within England and Wales. The court rejected the claimant’s argument that Brexit and recent case law had eliminated this requirement, concluding that the connection requirement is a fundamental principle of English law, not EU law.
The court also rejected the claimant’s submission that the English court should adopt a different approach when granting relief in aid of proceedings in another part of the United Kingdom, holding that section 25 makes no distinction and that the lack of connection with England and Wales renders the order inexpedient.
On full and frank disclosure, the court agreed with the judge that the claimant had materially failed to disclose important facts and documents in the without notice application. Key omissions included adverse findings in the BVI litigation, the parties to that litigation, and the timing and urgency of the application. These failures justified setting aside and refusing to renew the freezing order. The court emphasized the importance of restraint and proportionality in disclosure challenges, noting that a handful of material non-disclosures suffice to discharge an order.
The court rejected arguments that new evidence should affect the disclosure conclusion, holding that disclosure must be assessed based on what was before the court at the time of the ex parte hearing. It further emphasized the public policy against encouraging repeated attempts to obtain ex parte relief after material non-disclosure.
Holding and Implications
DISMISSED
The court dismissed the claimant’s appeal, affirming the decision to set aside the worldwide freezing order against the respondents. The order remains in place against other defendants not involved in this appeal. The decision confirms the necessity of a meaningful jurisdictional connection under section 25 of the CJJA for the grant of freezing orders in aid of foreign or other UK jurisdiction proceedings. It also reinforces the strict duty of full and frank disclosure in without notice applications, with material failures justifying discharge of such orders. The court’s ruling does not establish new precedent but applies and clarifies existing principles in a complex multi-jurisdictional context.