China Evergrande Group v Ding Yu Mei
[2024] EWHC 2100 (Comm)
UBS Switzerland AG v Anil Kumar
4 August 2023
[2023] EWHC 2041 (Ch)
High Court
A man was frozen out of his assets by a court order. He asked the court to let him sell some property to pay his lawyers. The court said no because he didn't fully explain his money situation and there were clues he was hiding money from his rich family.
Key Facts
- •UBS, as assignee of Vincom, claims against Mr. Kumar for breach of duty, alleging losses of ~$7.7 million and ~$5.6 million in improper transactions.
- •A worldwide freezing order (WFO) was in place against Mr. Kumar.
- •Mr. Kumar applied to vary the WFO to sell two Dubai properties and use the proceeds to fund his legal expenses.
- •Mr. Kumar claimed to have insufficient funds for his defence, being represented pro bono.
- •UBS opposed the application, arguing Mr. Kumar has access to other assets or funding and has been less than candid.
- •Mr. Kumar's asset disclosure showed assets totaling under £1 million.
- •UBS presented evidence suggesting Mr. Kumar and his family had significantly greater wealth in the past and that Mr. Kumar had an expensive lifestyle.
- •The main point of contention involved the existence of a family trust and Mr. Kumar's access to its funds.
- •The case included several instances of inconsistent statements by Mr. Kumar regarding his financial position and the existence of other assets.
- •A previously undisclosed ENDB account and the associated wealth management fees were also points of contention.
Legal Principles
A respondent to a freezing injunction is permitted to spend a reasonable amount on legal fees, but liquidating assets is prohibited without consent or court permission.
Fathollahipour v Aliabadibenisi [2014] EWHC 2120 (QB)
To spend frozen moneys, a defendant must show they have no other assets. The burden of proof lies on the defendant. The court may exercise healthy skepticism towards the defendant's assertions, especially if there's evidence of less than frank dealing.
JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2015] EWHC 3263 (Ch)
The court should consider not only the defendant's assets but also whether others might assist them financially.
Tidewater Marine International Inc v Phoenixtide Offshore Nigeria Limited [2015] EWHC 2748 (Comm)
If conflicting statements exist in affidavit evidence, the court usually won't resolve them without cross-examination, unless the evidence is manifestly incredible.
Coyne v DRC Distribution [2008] EWCA Civ 488
At an interlocutory stage, the court deals with risks and prospects, not certainties. There's a risk of incorrect conclusions, but this doesn't prevent the court from making the best assessment possible.
Tidewater Marine International Inc v Phoenixtide Offshore Nigeria Limited [2015] EWHC 2748 (Comm)
A defendant has an obligation to put the facts fully and fairly before the court.
Halifax plc v Chandler [2001] EWCA Civ 1750
Outcomes
Mr. Kumar's application to vary the WFO was dismissed.
Mr. Kumar failed to discharge the burden of proving he had no other assets available to fund his legal expenses. His evidence regarding the family trust and other inconsistencies were deemed insufficient.
Amendments to the trial timetable were ordered.
To account for time lost in preparing for trial.