Freezing Orders: Court of Appeal clarifies test for granting interim relief in support of foreign proceedings under s25 Civil Jurisdiction and Judgments Act 1982 (England and Wales)

Key Takeaways

1. Applicants seeking interim relief under s25 Civil Jurisdiction and Judgments Act 1982 (the “CJJA”) in support of substantive proceedings elsewhere in the UK or in a 2005 Hague Convention State must show that there is sufficient connection with England and Wales to obtain such relief. Neither Brexit nor recent decisions in the Privy Council or the UK Supreme Court have removed this requirement.
2. Respondents challenging an ex parte injunction based on alleged failings of full and frank disclosure should focus on ‘big ticket’ failings which are clear-cut and material to the Judge’s decision to grant the ex parte injunction. To do otherwise risks the Court declining to consider the issue at all. Respondents might, however, still wish to include other alleged failings in a schedule to their evidence / skeleton argument for the return hearing, without seeking to rely on them directly, to ensure that the Court can put the main alleged failings in context.
3. New documents obtained after an ex parte hearing can be considered in an appeal, but they will not excuse material failings in full and frank disclosure.
4. Judges on interim applications (unlike trial Judges) can consider judgments of other tribunals including those in other jurisdictions, provided that the hearing giving rise to the judgment was on notice and the relevant party could attend and make representations. The Judge will, however, need to understand what legal test the other tribunal applied if the judgment relates to equivalent interim relief, to determine how much weight to place on their judgment.

The Facts of the Case

The claimant, a Hong Kong company (“C”), applied (the “Application”) to continue ex parte worldwide freezing orders (“WFOs”) obtained from Lavender J against the defendants (the “Ds”) pursuant to s25(1) CJJA in support of substantive proceedings in Scotland (the “Scottish Claim”).

In the Scottish Claim, C alleges that it is the victim of a conspiracy by the Ds which includes sham proceedings issued against C in the BVI (the “BVI Claim”). The BVI Claim, in turn, arises from the collapse of a joint venture entered into between C and the Ds relating to gold trading. The BVI Claim had been heavily litigated and was listed for trial within months. 

Simon Tinkler (sitting as a Deputy High Court Judge) (the “Deputy Judge”) heard the Application in relation to D4 (an individual resident in Germany), D9 (a company registered and regulated in Germany), and D10 (a company registered and regulated in Luxembourg). The Deputy Judge set aside the WFOs and dismissed the Applications, finding that C had failed (i) to prove a real risk of dissipation, (ii) to prove that it was not inexpedient to continue the WFOs (i.e. the test under s25(2) CJJA) as there was not sufficient connection with England and Wales, and (iii) materially in giving full and frank disclosure which, alone, was enough to set aside the ex parte WFOs and refuse to grant their continuation. C appealed to the Court of Appeal.

The Decision

The Court of Appeal unanimously held, inter alia, that:

• C should be permitted to rely on evidence not available to it, and which it could not have obtained with reasonable diligence, at first instance, in the form of interlocutory judgments from the Scottish Claim, and documents obtained as a result of the Scottish Court granting the equivalent of a search order. Those documents supported C’s position on good arguable case and led the Court to find (unlike the Deputy Judge) that there was a real risk of the Ds unjustifiably dissipating assets.
• Suitable weight had to be given to one of the Scottish judgments as the Scottish Court was, in granting the equivalent of a freezing order, applying a lower standard of test than the English Court would do. In that regard, despite recent confusion in some first instance decisions, the test for the English Court to apply in determining whether an applicant for a freezing order has a ‘good arguable case’ is that described by Mustill LJ in The Niedersachsen [1983] 2 Lloyd's Rep 600, i.e. one “which is more than barely capable of serious argument, but not necessarily one which the Judge considers would have a better than 50 per cent chance of success.” (The Court of Appeal has since confirmed this in Dos Santos v Unitel S.A. [2024] EWCA Civ 1109: see our briefing here.)
• C was wrong to argue that it was no longer required to prove any connectivity with England and Wales in order to obtain interim relief under s25 CJJA, which C said was the result of (i) the Privy Council’s decision in Convoy Collateral Ltd v Cho Kwai Chee [2021] UKPC 24, incorporated into English law through Wolverhampton City Council and others Ors v London Gypsies and Travellers and Ors [2023] UKSC 47, and / or (ii) Brexit-related legislation. Instead, the Court of Appeal held that (i) Convoy Collateral was distinguishable as it involved a respondent subject to the jurisdiction of the Court which granted a freezing order against it and in any event did not concern CJJA, and (ii) Brexit-related legislation was irrelevant as the issue of connectivity was a principle of English law and not EU law. C had failed to show the required connectivity with England and Wales and was not entitled to the relief sought.
• The Deputy Judge was entitled to find (as he did) that three particular failings of full and frank disclosure were material and justified setting aside the ex parte WFOs and refusing to grant their continuation, and he could have reached the same decision on a fourth failing which the Court of Appeal identified. However, the Ds’ way of presenting their case on these failings lacked proportion: Males LJ reiterated a warning that parties alleging such failings should focus on the relatively few points which really matter, otherwise the Court should decline to consider the issue at all; and Coulson LJ emphasised that, no matter how big or complicated a case, a respondent’s position on such failings will usually stand and fall on a handful of ‘big ticket’ items, with the remainder incapable of bridging the gap.
• The new documents which the Court of Appeal admitted into evidence (the interlocutory judgments from the Scottish Claim and the documents from the search order) did not primarily relate to the alleged failures of full and frank disclosure. However, if they had, the Court of Appeal would have been astute not to allow such documents to obscure or reduce the significance of the original failures, and would likely have declined to grant the relief sought as a matter of public policy – to ensure that parties meet their full and frank disclosure obligations and material failings are not ‘made good’ by documents which turn up later.