In making clear that litigants who present evidence selectively to support their case will face serious consequences, the High Court has overturned an asset freezing order obtained in a debt recovery claim on the basis that relevant documents were not shown to the judge who granted it.
A property development company had launched proceedings to recover almost £1 million from an estate agent to whom it had lent substantial sums in support of a development which was ultimately sold for in excess of £6 million. The company obtained a freezing order on the basis that the loans should have been repaid from the proceeds of sale, which had been largely dissipated.
Although the estate agent did not dispute that he had borrowed large sums from the company which he had not repaid, he challenged the freezing order on the basis that the company had not made proper disclosure to the judge who granted it and that it had misled the Court.
In overturning the order, the Court found that the company had failed to make proper disclosure to the judge of certain emails and a letter which tended to weaken its case. There was no proper basis for the company’s assertion that the estate agent had refused to take responsibility for his actions and there had also been no real threat that he would dissipate his assets unless restrained.
The freezing order had also been granted against two others that had been involved in the property development. Also lifting the order as it applied to them, the Court found on the evidence that the company had no reasonably arguable case that it had a proprietary interest in the proceeds of sale.