In this series of posts, the person or company seeking the Freezing Order is referred to as the Applicant and the person or company subject to the Freezing Order is referred to as the Respondent.
Freezing Orders generally place very onerous requirements upon a Respondent.Having gone to the time and expense of obtaining a Freezing Order, it is vital for the Applicantto ensure that the Respondent fully complies with the order and does not seek to circumvent it or evade its terms.
By ensuring full compliance with the terms of the Order, the Applicant stands the best chance of making a full recovery if judgement is ultimately awarded in its favour in the substantive proceedings. There is no point obtaining a Freezing Order only to have the Respondent fail to comply properly due to a lack of policing of its terms by the Applicant leading to the requirement to take immediate steps to seek further court orders to remedy the breach by the Respondent.
If an Applicant believes that a Respondent has failed to comply with the terms of aFreezing Order, there are a number of options available to him to assist with the enforcement of the terms of the Order.
Enforcing Freezing orders in England & Wales
1.Contempt of Court Application
The most draconian of all sanctions available to an Applicant is to issue an applicationto have a Respondent committed to prison, or fined, for what is called Contempt ofCourt.
The Court treats these types of applications with particular care, due to the very serious consequences if a finding of contempt is made. However, they are available to the Court in circumstances where a party has breached the terms of a Freezing Order, for example by failing to provide proper disclosure of documents or providing an untruthful or only partially true statement in an affidavit or other document served in compliance with the Freezing Order.
Pre requisites of a committal application
For a committal application to succeed, the original Freezing Order must have the appropriately worded Penal Notice on the front of it, explicitly stating that any disobedience of the order by the Respondent will be a contempt of Court, punishable by either imprisonment, a fine or seizure of assets.
The original Freezing Order must have been personally served, unless the Court has since made alternative orders in relation to service.
The procedures for making a committal application
The Applicant must set out in an Application Notice the full grounds upon which the application for committal is being made. In so doing, the Applicant must set out each and every alleged act of contempt by the Respondent and if known, the date of each and every act of contempt.
Theapplication notice also needs to be supported by a detailed Affidavit setting out the above information and exhibiting where necessary, relevant documentation to the statement.
Theissued application, evidenceand supporting documents need to be personally served on the Respondent unless the Court has provided alternative methods for service. In circumstances where the Respondent is a company, it must also be evidenced that the original Freezing Order was served on a director or officer of the company and,if it was, the committal application notice and supporting documentation must also be served on that particular officer ordirector.
Court discretion to make an order for committal
Orders for committal are entirely at the discretion of the Court. It is often the case that a minor breach of an order will not always be treated as Contempt and this is particularly true if compliance of a particular section of the order was impossible (for example, documents not being disclosable as they were in the possession of a third party).
Essentially, in order to commit a person to prison for breach of an Order, it has to be shown that there was a deliberate or wilful breach of the Order and this has to be established beyond reasonable doubt as it is in effect a criminal standard of proof which needs to be shown.
What actions or omission might give rise to a committal application?
Applications of this nature often arise following the failure of a Respondent to properly comply with the disclosure requirements of Freezing Order, especially in respect of a Respondent’s personal assets.
If a Respondent is seeking to conceal the truth in relation to his assets and swears an Affidavit which is only partially true or has a clear and obvious omission in it, this can provide legitimate grounds for an Applicant to make an application for committal.
Often, on a practical level, following the initial granting of a Freezing Order, the Applicant will continue making further enquiries with regard to the alleged wrongdoing which might also involve further analysis of the Respondents assets. It is often during those further enquiries that an Applicant can catch a Respondent out by discovering further information which the Respondent has failed to disclose in his disclosure Affidavits. This commonly comes about after work by forensic accountants who will examine banking records which can often reveal details of account names and numbers which the Respondent has failed to disclose.
A typical further instance which may give rise to a committal application is the disposal of assets by a Respondent in breach of the Freezing Order. It is not uncommon for assets to be disposed of before the Respondent has complied with his obligation to disclose his assets.