Michael Wilson & Partners Ltd v John Forster Emmott
[2024] EWHC 2781 (Comm)
Hadcliffe Properties Ltd v The Rind Foundation & Anor
11 October 2024
[2024] EWHC 2587 (Ch)
High Court
A company got a court order freezing another's assets. The person with frozen assets was late giving information about those assets. The company tried to punish them for being late, but the judge said that was unfair. The judge threw out the case because the company was being overly aggressive and caused too much trouble over a small delay.
Key Facts
- •Hadcliffe Properties Limited obtained a freezing order against The Rind Foundation (TRF) and a search order against Ian Fenton (Mr. Fenton), the sole trustee of TRF.
- •Mr. Fenton failed to meet the deadlines for providing information and an affidavit as per the freezing order.
- •Hadcliffe issued a contempt application against Mr. Fenton.
- •Mr. Fenton applied to strike out the contempt application.
- •The court heard both applications together.
- •TRF's lack of legal personality created confusion regarding the proper defendant(s).
Legal Principles
Abuse of process: It is an abuse of process to pursue litigation where the value of a successful outcome is disproportionate to the cost of the litigation.
Sectorguard plc v Dienne plc [2009] EWHC 2693 (Ch)
Serious vs. technical contempt: Technical breaches are intentional acts where the defendant knew all facts but didn't appreciate the breach; serious breaches are deliberate.
Sectorguard plc v Dienne plc [2009] EWHC 2693 (Ch); Absolute Living Developments Limited v DS7 Limited [2018] EWHC 1717 (Ch)
Asset disclosure is integral to the effectiveness of a freezing order.
Akcine Bendrove Bankas Snoras v Antonov [2013] EWHC 131 (Comm); JSC BTA Bank v Ablyazov [2009] EWCA Civ 1125
Subjective motive is irrelevant in abuse of process applications; the focus is on the legitimate purpose of the proceedings.
Navigator Equities Limited v Deripaska [2021] EWCA Civ 1799
In contempt applications, the burden is on the claimant to prove, to the criminal standard, the facts establishing contempt.
Varma v Atkinson [2020] EWCA Civ 1602
Outcomes
The contempt application was struck out.
The court found the contempt application to be an abuse of process because it was disproportionate to the minimal prejudice suffered by the claimant and was not pursued for a legitimate purpose (e.g., to enforce compliance or highlight serious breaches). The breaches were deemed technical, not serious.