Worldwide freezing injunctions (WFIs) are powerful judicial tools that can have a grave impact on the lives of those against whom they are targeted. However, as a High Court ruling made plain, they are a necessary means of ensuring that assets are not dissipated so as to frustrate the just resolution of disputes.
The case concerned the founder of a building design and construction company, of which he was a director and 50 per cent shareholder. He asserted that his fellow director, who also owned 50 per cent of the shares, had stripped value from two of the company's subsidiaries over a prolonged period. He was alleged to have breached his duties as a director and to have dishonestly misappropriated £1.136 million from the subsidiaries.
The defendant denied those allegations but, following a without notice hearing, a WFI was issued against him, freezing his assets up to the value of the founder's claim. At a further hearing, at which the defendant was represented, the founder sought a continuation of the WFI until judgment was given on his claim.
The defendant asserted that the WFI was oppressive and draconian and posed great difficulty for him in going about his day-to-day life. The Court acknowledged that a WFI can be a powerful and intrusive measure but noted that the defendant had been able to fund his defence without recourse to frozen assets. His ordinary living expenses were being covered by family friends.
Continuing the WFI, the Court found that it was just and convenient to do so. The founder had comfortably exceeded the requirement to establish a good arguable case. In the absence of a WFI, there would be a real risk that a future judgment would not be met because of the unjustified dissipation of assets.
The Court issued a further, proprietary WFI in respect of specific assets that were said to be traceable to the fraud that the defendant was alleged to have perpetrated. They included the contents of certain bank and cryptocurrency accounts and two Porsche sports cars. The founder undertook to pay damages to the defendant if it later became apparent that the WFIs should not have been granted.