(1) “GOOD ARGUABLE CASE”

The test for a “good arguable case” is not very high. The plaintiff does not need to prove a case against the defendant that is so strong that he is likely to obtain summary judgment under CPR Pt 24.

In The Niedersachsen, Mustill J argued that a “good arguable case” was “one that is more than barely capable of serious argument, but not necessarily one that the judge considers would have more than a 50% chance of success”.

However, it should be noted that the “arguable good case” test is a threshold test, and since the overriding test is whether or not it is “fair and expedient” to grant the injunction, even if this minimum threshold requirement is satisfied, the strength or otherwise of the applicant’s case will be a relevant factor in the exercise of the court’s general discretion.

(2) REAL RISK OF DISSIPATION

The claimant must provide “strong evidence” to support his claim that there is a real risk that the judgment or award will not be enforced. The test of the real risk of dissipation is objective, and it is an assessment of the risk by the court that a sentence will not be carried out. In general, the applicant’s unsubstantiated claim will not suffice.

If the applicant can add “strong evidence” that the defendant has acted dishonestly, there may be no need for any other specific evidence that the defendant intends to dissipate his assets.

The plaintiff must show that there is a real risk that the defendant will dispose of their assets other than in the ordinary course of business and thus render them judgment-proof.

THE FACTORS THAT MAY EVIDENCE A RISK OF DISSIPATION

The type of factors that will be relevant when assessing whether there is a real risk of asset dissipation are:

1. The nature of the assets: the easier it is to dispose of them, the easier it is to establish that there is a risk that they will be dissipated.

2. The nature and financial situation of the defendant’s business.

3. The length of time the defendant has been in business.

4. The domicile or residence of the defendant.

5. The defendant’s past or existing credit history.

6. Any intention expressed by the defendant regarding future dealings with his English assets or assets outside the jurisdiction.

7. The connections that the defendant may have with other companies that have failed to comply with awards or arbitral decisions.

8. The defendant’s conduct in response to the complaint; a pattern of evasiveness or unwillingness to participate or erect weak defenses or total silence may be relevant factors.

9. The applicant is not required to demonstrate in the balance of probabilities that the assets will be dissipated. You are only required to show that there is a real risk (as opposed to a negligible or fanciful risk) of this happening.

(3) FAIR AND CONVENIENT

The most important question to determine is whether, in the circumstances of the particular case, it is fair and convenient to grant the precautionary measure. There is an appreciation that with any interlocutory injunction there is a risk that the court may make the “wrong” decision. Therefore, an injunction could be granted and ultimately be unjustified; or the court may deny an injunction that is later shown to be essential to preserve the plaintiff’s rights. In the context of freezing orders, there is a discretion that must be exercised in all the circumstances of the case.

The court must be satisfied before granting relief that the likely effect of the injunction will be to promote the administration of justice in general, and not to act in an unjust or oppressive manner. The circumstances of the case may make it inappropriate to make a freezing order; even when the plaintiff shows arguable good cause and a risk that, without the precautionary measure, the sentence remains unsatisfied. An example may be that if an injunction were granted, it would unacceptably interfere with third parties. Another is when a court order could destroy the defendant’s business.

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