AB and Ors v CD and Ors
[2023] EWHC 2419 (Ch)
China Evergrande Group v Ding Yu Mei
5 August 2024
[2024] EWHC 2100 (Comm)
High Court
A company sued someone for receiving millions in wrongly-paid dividends and froze their money. The accused wanted to use the frozen money for lawyers and living costs but didn't prove they had no other money, so the judge mostly refused, only allowing some money for lawyers for a short time.
Key Facts
- •Application for variation of a proprietary freezing order and worldwide freezing order.
- •Claimant (China Evergrande Group) alleges the defendant (Ding Yu Mei) received ~$350m in dividends resulting from fraudulent financial statements.
- •Claimant asserts a proprietary interest in the dividends.
- •Defendant seeks permission to use the frozen funds for legal costs and living expenses.
- •Limited evidence provided by the defendant regarding expenses.
- •Disagreement on whether to allow unlimited or capped legal expenses from the proprietary funds.
Legal Principles
Principles governing applications to vary proprietary freezing orders.
Kea Investments Ltd v Watson & Ors. [2020] EWHC 472 (Ch) at para.22
Different principles apply to exceptions for legal fees and living expenses in proprietary vs. non-proprietary freezing orders.
This case's judgment
Onus on the defendant to show no other funds available before drawing on proprietary funds.
This case's judgment
No one has a right to use someone else's money to defend legal proceedings.
Ostrich Farming Corporation Limited v Ketchell (cited in this case)
Outcomes
Application for variation largely denied.
Insufficient evidence provided by the defendant regarding lack of alternative funds and detailed expense breakdown. The court prioritized the claimant's arguable proprietary claim.
Partial concession granted.
Claimant conceded to allow a reasonable uncapped sum for legal costs until 9 August 2024 and £350,000 for legal costs related to specific order compliance until 27 August 2024.
Application adjourned.
To allow the defendant to provide sufficient evidence of lack of other assets before further consideration. Liberty to restore the application was granted.