Madison Pacific Trust Limited v Sergiy Mykolayovch Groza & Anor
[2024] EWHC 267 (Comm)
Canada Inc v Sovereign Finance Holdings Limited & Ors
26 July 2024
[2024] EWHC 2170 (Comm)
High Court
A company won a large judgment against a couple. The couple refused to pay and wouldn't tell the company where their money was. A judge decided there was a risk the couple would hide their money to avoid paying, so the judge froze their assets until the debt is paid.
Key Facts
- •Canada Inc. obtained judgment against the Makanjuolas for £3.46 million plus costs.
- •The Makanjuolas failed to pay the judgment debt and outstanding costs.
- •The Makanjuolas failed to comply with a worldwide freezing order (WFO) requiring asset disclosure.
- •The Makanjuolas did not appear in court to oppose the continuation of the WFO.
- •The court considered a history of the Makanjuolas' conduct, including attempts to delay payment and raise weak defenses.
- •The court considered the Makanjuolas' use of complex international financial structures.
Legal Principles
To justify a worldwide freezing order, the court must be satisfied there is a good arguable case, a real risk of dissipation, assets to be frozen, and it is just and convenient.
Case Law
The burden is on the applicant to establish a real risk of dissipation; this means a risk, not a probability, based on solid evidence.
Lakatamia Shipping Company Limited v. Morimoto [2019] EWCA Civ 2203
Assessment of risk involves considering multiple factors cumulatively. Analogies between cases are limited due to fact-specific assessments.
Lakatamia Shipping Company Limited v. Morimoto [2019] EWCA Civ 2203
Sophisticated financial structures (trusts, offshore companies) indicate ease of dissipation but are not inherently suspicious.
Lakatamia Shipping Company Limited v. Morimoto [2019] EWCA Civ 2203
A history of dishonesty or avoiding judgment debt is relevant, but not sufficient on its own.
The World LLC v. Dalal [2019] EWHC 2993 (Comm); Lakatamia Shipping Company Limited v. Morimoto [2019] EWCA Civ 2203
Failure to disclose assets under a court order is a relevant factor in assessing risk of dissipation.
Gee on Commercial Injunctions; Holyoake v. Candy [2017] EWCA Civ 92
Factors considered can be organized in terms of means/opportunity, motive, and propensity.
Case Law
Refusal to provide asset disclosure may indicate a risk of dissipation, even if not directly intending to dissipate assets.
Bouvier v. Accent Delight International Ltd [2015] SGCA 45
Outcomes
The worldwide freezing order was continued.
The court found a real risk of dissipation based on the Makanjuolas' pattern of evasiveness, failure to pay debts, and non-compliance with the asset disclosure order. These factors, considered cumulatively, demonstrated a lack of trustworthiness and an intention to resist paying the judgment debt.
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