Shepherd Construction Ltd v Berners (BVI) Ltd and Another: TCC 25 Mar 2010

The defendants sought a release from an asset freezing order, saying that there was no good reason to anticipate any dissipation of assets. An action between the parties had been settled on terms, but the defendant had not met payments. The defendant objected to the admission of certain correspondence saying that it had been without prejudice.
Held: The application failed, and the order should continue.
The correspondence was not without prejudice: ‘The communications, in which payment of the agreed and overdue sums was repeatedly promised, were not offers; neither were they made in the course of negotiations for settlement. There was nothing to settle. They are certainly not being relied on by the claimant as an admission of liability, since there already was a full admission of liability, both by way of the Tomlin order and as a result of the subsequent judgment. These communications were being relied on by the claimant because they demonstrated the ongoing failure on the part of these defendants to pay the sums otherwise due, despite promises to the contrary. In those circumstances, it seems to me that these communications are not ‘without prejudice’ and are properly before the court.’
The history of repeated and broken promises was sufficient to justify a finding that there was a risk of dissipation. The defendant companies fell foul of the criteria set out in Iambic.
The order relating to the second defendant was relaxed but not removed.

Coulson J
[2010] EWHC 763 (TCC)
England and Wales
CitedCommissioners of Customs and Excise v Anchor Foods Ltd (No 2) ChD 24-Mar-1999
The claimant intended to seek recovery of a very substantial sum from the defendant. On learning of the defendant’s intention to sell its assets, it sought an order freezing them.
Held: The court has the discretion to order a freezing of a . .
AppliedBradford and Bingley Plc v Rashid HL 12-Jul-2006
Disapplication of Without Prejudice Rules
The House was asked whether a letter sent during without prejudice negotiations which acknowledged a debt was admissible to restart the limitation period. An advice centre, acting for the borrower had written, in answer to a claim by the lender for . .
CitedNinemia Maritime Corporation v Trave Schiffahrtsgellschaft MbH 1983
A claimant seeking an asset freezing order needs to identify ‘solid evidence of dissipation’. . .
See alsoChorus Group v Berner (BVI) Ltd and Another TCC 1-Nov-2006
Application to continue a freezing injunction.
Held: The order should continue. The defendant companies were registered in countries where enforcement would be more difficult, one of the defendants was a single purpose vehicle,and there was . .
AppliedO’Regan v Iambic Productions 1989
The court set out a series of elements to be taken into account when making a Mareva asset freezing order: ‘1. The nature of the assets and the ease with which they can be dissipated.
2. The nature and financial standing of the defendant . .
CitedThe Niedersachsen ChD 1983
In order to obtain, or to enlarge a freezing order, the applicant must show that in considering the evidence as a whole he has, at a minimum, a ‘good arguable case’, and also the existence of a real risk of dissipation or secretion of assets. . .
CitedLinsen International Ltd and Others v Humpuss Sea Transport Pte Ltd and Another ComC 19-Feb-2010
The net book value of a company’s assets is not the appropriate figure for the court to consider when considering whether or not there are assets sufficient to meet a potential claim. . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice

Updated: 01 November 2021; Ref: scu.412286