Defective freezing injunction overturned

Posted: 25th June 2013

In the context of a ‘big money’ divorce, the High Court has overturned an emergency asset freezing injunction granted to a wife after finding that she had breached her duty of candour in her application and that the order as drafted had denied the husband fundamental safeguards that should have been afforded to him.

mansionIn applying for the injunction without giving notice to her husband, the woman had failed to reveal that she had illegitimately obtained documents from his safe in the hope that she could use them against him. The order had forbidden the husband from dealing with a Spanish property, said to be worth £10 million, and froze his personal assets up to a maximum value of £20 million.

Observing that ‘things had gone seriously wrong’ in the case, the Court noted that the order did not state whether it was to have worldwide scope or was limited to England and Wales. No explanation was given as to why the matter was considered so exceptionally urgent that the husband had not been given notice of the hearing, nor was he informed of his right to challenge the order.

No exception was made from the freezing order in respect of the husband’s weekly living expenses, nor was he was granted funds to cover the costs of legal advice, and no allowance was made for the disposal of assets in the ordinary and proper course of his business. The wife gave no promise that she would pay damages if the order turned out to have been wrongly granted and she did not undertake to pay the reasonable costs of third parties required to comply with its terms.

Observing that freezing orders granted without notice to the one of the parties can have a severe and potentially unfair impact, the Court described it as 'remarkable' that the injunction 'omitted every single standard safeguard' that should have been granted to the husband.

Ruling that the wife had not told 'the whole truth' in making the application and was guilty of a 'serious breach of her duty of candour', the Court also noted that she had not provided evidence of any 'unjustified dealing' by her husband, nor that he in fact had any personal assets within England and Wales. Given the wife’s misconduct, the Court declined to issue a fresh freezing order.