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High Court grants Bankers Trust order (“BTO”) in relation to assets allegedly misappropriated by spouse

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management - Other

06-06-2018

Kyriakou v Christie, Manson & Woods Ltd & Ors [2017] EWHC 487 (QB)

Facts of the case

– On filing for divorce, the applicant (“Mr K”) alleged that his estranged wife (“Mrs K”) had taken a significant amount of valuable property from his family home in Greece, brought it to London and left it with the respondents. 

– Mr K applied for a BTO requiring the respondents to provide information including in respect of any valuables which Mrs K had discussed with them or which they were storing on her behalf, as well as about meetings they had had with Mrs K. 

The decision

– Warby J granted Mr K’s application. In his judgment he accepted that five principles emerged from the relevant case law in relation to BTOs: 

1. there must be good grounds for concluding that the money or assets about which information is sought belonged to the claimant; 

2. there must be a real prospect that the information sought will lead to the location or preservation of such assets; 

3. the order should, so far as possible, be directed at uncovering the particular assets which are to be traced, and should not be wider than is necessary in the circumstances; 

4. the interests of the applicant in obtaining the order must be balanced against the possible detriment to the respondent in complying with it, including any infringement, or potential infringement, of rights of privacy or confidentiality; and

5. the applicant must provide undertakings to (i) pay the expenses of the respondent in complying with the order, (ii) compensate the respondent in damages should loss be suffered as a result of the order and (iii) only use the documents or information obtained for the purpose of tracing the assets or their proceeds. 

Analysis and practical advice

– The judgment contains a useful summary of the principles which the court will follow when considering whether to exercise its BTO jurisdiction. 

– It also highlights that the court will generally take into account the rights of any third parties who may be affected by an order, and that where those rights arise under the European Convention on Human Rights, it is required to do so under section 6 of the Human Rights Act 1998. When preparing an application, applicants should therefore be mindful of the need to ensure that any interference with the rights of third parties is necessary and proportionate to the pursuit of a legitimate aim, in this instance the identification and recovery of assets or their proceeds belonging to Mr K.

– The case is also of interest because of the court’s requirement that, out of an abundance of caution, the BTO contain wording ensuring the respondents were protected against violation of their privilege against self-incrimination. For these purposes, the court adopted the wording from clause 9(2) of the standard form freezing order.1

– It is worth noting that this case demonstrates that a BTO can be sought against parties who are not actually banks or financial institutions (in this case  an auction house). 

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