L & S Accounting Firm Umbrella Ltd v Idusogie Laurel Oronsaye & Ors
[2024] EWHC 2316 (Ch)
L & S Accounting Firm Umbrella Limited v Idusogie Laurel Oronsaye & Ors
2 July 2024
[2024] EWHC 2315 (Ch)
High Court
A company sued a husband, wife, and their companies for a massive tax fraud. The accused wanted more time to prepare their defense and access frozen money for lawyers. The judge said no, because they waited too long to ask and didn't prove they had no other money. The judge also said that the rules about getting money for lawyers didn't violate their rights to a fair trial.
Key Facts
- •L & S Accounting Firm Umbrella Limited (in liquidation) brought a summary judgment application against the defendants (husband and wife, and three companies they control) for alleged large-scale labour supply fraud involving over £25 million in undeclared taxes.
- •Freezing injunctions were already in place against the defendants.
- •Defendants applied for an adjournment of the summary judgment hearing and release of funds under the freezing injunctions to cover legal fees.
- •The application for adjournment was made very late, on the eve of the hearing.
- •The defendants argued that the claimant's refusal to release funds for legal representation violated their Article 6 right to a fair trial.
- •The claimant argued that the defendants hadn't met the first stage of the Marino test (showing they had no other assets to pay legal fees).
- •The defendants claimed limited financial means, citing monthly expenditure of £6000 and reliance on borrowed funds.
Legal Principles
Two-stage test for releasing funds under a proprietary freezing injunction (Marino v FM Capital Partners Limited [2016] EWCA Civ 1301): (1) Defendant must show no unaffected assets to cover living and legal expenses; (2) Court balances justice between claimant's proprietary claim and defendant's need for legal representation.
Marino v FM Capital Partners Limited [2016] EWCA Civ 1301
Article 6 of Schedule 1 to the Human Rights Act 1998 (Right to a fair trial) – the right to access legal advice and representation, even if a party may not have an arguable case, but proportionality is a consideration.
Human Rights Act 1998, Article 6; Airey v Ireland (1979-1980) 2 EHRR 305; Steel v The United Kingdom (2005) 41 EHRR 22; South Buckinghamshire District Council v Porter [2003] UKHL 26; Brown v Stott [2003] 1 AC 681; Bank Mellat v Her Majesty’s Treasury (No.2) [2013] UKSC 39
Principles governing late adjournment applications: Exceptional justification needed, particularly when a trial date is already fixed; court considers disruption to other litigants and proportionate costs.
The White Book and the Chancery Guide
Enforcing disclosure obligations: Claimant must bring an application for contempt of court, not withhold legal funds.
Isbilen v Turk [2024] EWHC 505 (Ch)
Outcomes
Defendants' application for adjournment dismissed.
Defendants failed to meet the first stage of the Marino test; application made too late without sufficient justification; the court found that the Marino test is compliant with Article 6; and overall it was not just to grant the adjournment.
Permission to appeal refused.
Case management decision with no real prospect of success on appeal; granting the appeal would effectively grant the refused adjournment.
Defendants ordered to pay claimant's costs.
Costs to follow the event.