The court dismissed an appeal over serving a freezing order application on respondents in Spain.
The freezing order gateway argument has been rejected by the Court of Appeal, which dismissed an appeal concerning whether a worldwide freezing order application could be served on respondents in Spain.
Benjamin Gilbert and BG Projects Limited were seeking to enforce judgments against Broadoak Private Finance Limited for unpaid loans. Earlier disclosure indicated that substantial sums had been transferred from Broadoak, including payments to accounts linked to the respondents, Shahena Bleakley and Spanish company King Street Capital SL.
The claimants obtained a without-notice worldwide freezing order against the respondents on a Chabra basis. However, at the return hearing, David Quest KC, sitting as a Deputy High Court Judge, found that the court did not have personal jurisdiction over the respondents because no applicable gateway under Practice Direction 6B permitted service of the application outside the jurisdiction.
The appeal focused on three possible gateways. The claimants had permission to argue that the application fell within the Enactment Gateway in PD 6B paragraph 3.1(20)(a), relying on section 37 of the Senior Courts Act 1981. They also sought permission to pursue arguments based on the Injunction Gateway and Property Gateway. The Court of Appeal refused permission on the latter two grounds, finding that they did not have a realistic prospect of success.
Lord Justice Foxton, giving the leading judgment, rejected the section 37 argument. The court considered that the Enactment Gateway applies to an enactment which gives a claimant a right to bring a particular claim. Section 37, by contrast, is a general provision confirming the court’s power to grant injunctions where it considers it just and convenient to do so.
The judgment distinguished section 37 from provisions such as sections 33, 34 and 423 of the Insolvency Act 1986, which the court considered to have a more specific, “claim-conferring” character. The court concluded that a freezing order application could not be characterised as a claim “under” section 37 for the purposes of the Enactment Gateway.
The court also upheld the position on the Injunction Gateway, relying on the House of Lords decision in The Siskina and the Privy Council’s subsequent treatment of that authority in Broad Idea. The gateway does not extend to a free-standing interim freezing injunction.
On the Property Gateway, the court held that the subject matter of a freezing order is the restraint of dealings with assets, rather than the underlying judgment debt. A connection with an English judgment was therefore insufficient to establish that the claim related wholly or principally to property within the jurisdiction.
The Court of Appeal dismissed the appeal and upheld the Deputy High Court Judge’s decision. It noted that the claimants had separately brought claims under section 423 of the Insolvency Act 1986 and for constructive trust relief, which appeared capable of providing a route for pursuing their complaints and seeking freezing order relief.
The court also observed that whether there should be a specific gateway for serving applications intended to assist enforcement of an English judgment abroad is a matter for the Rules Committee.