Delagio & Ors v Maxwell (2009)
There was no basis for the continuation of a worldwide freezing order against a property agent where there was insufficient evidence of dishonest conduct on his part or of any likelihood that he would attempt to stymie a judgment against him.
The applicant companies (D) applied to continue a worldwide freezing order against the respondent property agent (M). M and a Bulgarian national (Y), who was also a property agent, had decided to go into business together. To that end, D were incorporated in Bulgaria. Each company entered into an agency agreement with M's company (X). By that agreement, X agreed to sell D's developments to prospective purchasers. Subsequently, Y became concerned that X was not paying appropriate sale monies to D and instigated an investigation. That investigation revealed a number of discrepancies in X's accounting showing that a large sum of money, allegedly owed to D, was missing from X's client accounts. D then terminated their agency agreements with X. Later, X was placed in creditors' voluntary liquidation and D commenced proceedings against M in his personal capacity, alleging that he had deliberately misappropriated the relevant funds. A worldwide freezing order was made by consent against M. D submitted that M was accountable to them for the money received by X which was allegedly owed to them: the relationship between D and X was predicated on Y's trust and confidence in M, and M had dishonestly assisted in breaches of trust committed by X.
(1) D had not established a good arguable case against M. The allegations of dishonesty could not be made good on the evidence before the court. There was no evidence to support the contention that there had been any special relationship of trust and confidence between Y and M such as to establish a fiduciary relationship between them or between M and D, JD Wetherspoon Plc v Van de Berg & Co Ltd (2009) EWHC 639 (Ch), (2009) 16 EG 138 (CS) applied. Even if a trustee/beneficiary relationship had existed between X and D, there was insufficient evidence to show that such trust was broken or that M had dishonestly assisted in such a breach. (2) There was no evidence that M would attempt to stymie any judgment by disposing of his assets. Moreover, D were all incorporated in Bulgaria and had no assets in the jurisdiction. Nor was it clear that they had net assets of any value in Bulgaria, rendering any cross-undertaking in damages effectively worthless. Accordingly, the interests of justice favoured the discontinuation of the injunction.
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