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20 OCT 2015

C v C and Another [2015] EWHC 2795 (Fam)

C v C and Another [2015] EWHC 2795 (Fam)
(Family Division J, Roberts J, 30 September 2015)

Financial remedies – Freezing injunction – Without notice injunction granted in respect of wife and son’s business activities – Whether the injunction should be continued – Whether the court had jurisdiction to do so

The full judgment is attached below

The judge refused to continue the freezing injunction in satellite litigation to financial remedy proceedings on the basis that jurisdiction to make the order did not exist under either the Matrimonial Causes Act 1973 or the Senior Courts Act 1971 or the inherent jurisdiction.

At the commencement of divorce proceedings by the wife, she and her son on the one hand and the husband on the other sought to gain control of assets underpinning the family businesses. Satellite litigation ensued and the Family Division judge had to consider her jurisdiction to make freezing orders in respect of the family members’ operation of the family business.

The family owned three businesses: C Ltd, D Ltd and R Ltd. The husband and wife each owned 50 % of the shares of D Ltd and R Ltd and the wife and the son were directors of both companies. The husband claimed that the wife held her shares on trust for him as the ultimate beneficial owner. The husband estimated that the underlying portfolios were worth in the region of £32.2m net.

After issuing her petition the wife moved £12m into an offshore account. In response the husband removed her as a director of C Ltd and suspended the son’s employment from C Ltd. The son established Z Co which the husband claimed operated in direct competition with the family business. The husband brought proceedings against him in the Chancery Division.

The husband was granted an ex parte freezing injunction against the wife and son. Its effect was also to limit the son’s activities with Z Co. When the matter returned the Family Division judge had to consider whether the court had jurisdiction to make the orders sought by the husband under s 37 of the Matrimonial Causes Act 1973 or s 37 of the Senior Courts Act 1981 or under the inherent jurisdiction. If so, it fell to be considered whether the court should exercise that jurisdiction.

In respect of the MCA 1973, the terms of the freezing order sought by the husband which would restrict the wife’s actions might be available if it’s effect was confined solely to her capacity as director and as a party to the financial remedy proceedings but the son was not a party to the proceedings save for the purposes of the satellite litigation.

An injunction under the SCA 1981 could only have been granted if an injunction would be likely to have been available as a remedy in either the Chancery or Queen’s Bench Division. Applying R v R [2013] EWHC 4244 (Fam) the husband had to establish that there existed a cause of action against the wife and the son. In the absence of clear evidence that there was such a cause of action, the jurisdiction had not yet been made out.

The wife and son succeeded in their arguments that the court could not fall back on the residual inherent jurisdiction of the High Court. The threshold for freezing orders under the inherent jurisdiction was the same as that under the SCA 1981.

The judge held that the application should not have been made without notice. Furthermore the husband had failed to comply with his duty of full and frank disclosure in relation to the son’s activities with Z Co and the potential effect on those activities of the order. Therefore, even if jurisdiction to make the order had existed the court would not have exercised that jurisdiction to make the order sought.

Case No: ZC14D00753

Neutral Citation Number: [2015] EWHC 2795 (Fam)


Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 30/09/2015

Before :

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Between :


- and -

C and anor

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Martin Pointer QC and Michael Bradley (instructed by Farrer and Co) for the Applicant
Tim Amos QC (instructed by Charles Russell Speechleys) for the 1st Respondent
Daniel Lightman (instructed by Boyes Turner LLP) for the 2nd Respondent

Hearing dates: 19th and 24th June 2015

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C v C and Another [2015] EWHC 2795 (Fam)

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