Broad Idea International Ltd v Convoy Collateral Ltd (British Virgin Islands); Convoy Collateral Ltd v Cho Kwai Chee (also known as Cho Kwai Chee Roy) (British Virgin Islands)
| Jurisdiction | UK Non-devolved |
| Neutral Citation | [2021] UKPC 24 |
| Year | 2021 |
| Court | Privy Council |
2021 Feb 16, 17; Oct 4
Injunction - Freezing order - Jurisdiction - Claimant bringing claim in British Virgin Islands - Claim seeking freezing injunctions against foreign individual and domestic company - Whether court having power to grant permission to serve claim form out of jurisdiction where freezing injunction only relief sought - Whether court having power to grant freezing injunction against domestic defendant where freezing injunction only relief sought -
The claimant, a Hong Kong company, suspected that one of its former directors, C, a Hong Kong resident, had caused it to make improper investments. In anticipation of bringing proceedings against C in Hong Kong, the claimant brought a claim in the British Virgin Islands by which it sought a freezing injunction against C and a freezing injunction against B Ltd, a British Virgin Islands company whose assets, so the claimant alleged, were beneficially owned by C. The court made orders granting both freezing injunctions and giving permission to serve the claim form on C out of the jurisdiction. Subsequently both orders were set aside. The order against C was set aside on the ground that EC CPR r 7.3(2)(b)F1 did not empower the courts of the British Virgin Islands to authorise service of a claim form on a defendant outside the jurisdiction where the only relief sought was a freezing injunction. The order against B Ltd was set aside on the grounds that, under common law, a domestic court had no power to grant a freezing injunction against a party over which it had personal jurisdiction when no substantive claim had been made in domestic proceedings against that party and that, in any event, there was insufficient evidence to establish that B Ltd’s assets were beneficially owned by C.
On appeal by the claimant—
Held, (1), dismissing the appeal against the setting aside of the permission to serve C out of the jurisdiction, that EC CPR r 7.3(2)(b) had to be interpreted by reference to settled case law to the effect that similarly worded rules of court did not empower a court to authorise proceedings to be served out of the jurisdiction on a defendant where the only relief claimed within the jurisdiction was a freezing injunction; that, therefore, although EC CPR r 7.3(2)(b) allowed a claim form to be served out of the jurisdiction if a claim had been made for an “injunction” ordering the defendant to do or refrain from doing some act within the jurisdiction, the term “injunction” did not include a freezing injunction; and that, accordingly, since the only relief claimed against C within the British Virgin Islands was a freezing injunction, permission should not be granted to serve him out of the jurisdiction (post, paras 2, 66–70, 121, 190–201, 224–225).
Per Lord Leggatt, Lord Briggs, Lord Sales and Lord Hamblen JJSC. The Board will not depart from a previous decision of its own or of the House of Lords or Supreme Court without compelling reason to do so. Such a reason is unlikely to be found where the question concerns the meaning of a rule of court. Where the meaning of such a rule has already been settled at the highest level of judicial authority, litigants should be entitled to rely on that meaning in the knowledge that there is a procedure readily available for amending the rules, if necessary. The use of that procedure is generally the fairest and most efficient means of ensuring that the rules of court are kept up to date (post, para 67).
(2) Dismissing the appeal against the setting aside of the freezing injunction made against B Ltd, that, on the facts as established, the courts below had been correct to find that there was insufficient evidence to establish that C was the beneficial owner of B Ltd’s assets; and that, accordingly, it had been inappropriate to make a freezing injunction against B Ltd (post, paras 108, 121, 215, 221).
Per Lord Leggatt, Lord Briggs, Lord Sales and Lord Hamblen JJSC. A court with equitable and/or statutory jurisdiction to grant injunctions where it is just and convenient to do so has power—and it accords with principle and good practice—to grant a freezing injunction against a respondent over whom the court has personal jurisdiction provided that: (i) the applicant has already been granted, or has a good arguable case for being granted, a judgment or order, whether or not through the domestic courts or directly against the respondent, for the payment of a sum of money that is or will be enforceable through the process of the domestic courts; (ii) the respondent holds assets, or is liable to take steps other than in the ordinary course of business which will reduce the value of assets, against which such a judgment could be enforced; and (iii) there is a real risk that unless the freezing injunction is granted the respondent will deal with the assets, or take steps which make them less valuable, other than in the ordinary course of business with the result that the availability or value of the assets is impaired and the judgment is left unsatisfied (post, paras 76, 79, 82–83, 92, 95, 100–103, 121).
The following cases are referred to in the judgments:
A v B [
Algosaibi v Saad Investments Co Ltd
American Cyanamid Co v Ethicon Ltd [
Anderson (WB) & Sons Ltd v Rhodes (Liverpool) Ltd [
Ashtiani v Kashi [
Ashworth Hospital Authority v MGN Ltd
Babanaft International Co SA v Bassatne [
Bankers Trust Co v Shapira [
Barclay-Johnson v Yuill [
Bayer AG v Winter (No 2) [
Beddow v Beddow (
Black Swan Investment ISA v Harvest View Ltd (unreported) 23 March 2010,
Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corpn Ltd [
Broadmoor Special Health Authority v Robinson [
British Airways Board v Laker Airways Ltd [
Bryanston Finance Ltd v de Vries (No 2) [
C Inc plc v L [
Cardile v Led Builders Pty Ltd [
Cartier International AG v British Sky Broadcasting Ltd
Castanho v Brown & Root (UK) Ltd [
Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [
Cie Européene de Céréals v Tradax Export [
Claxton Engineering Services Ltd v TXM Olaj-és Gázkutató Kft (No 2)
Derby & Co Ltd v Weldon [
Derby & Co Ltd v Weldon (Nos 3 and 4) [
Donohue v Armco Inc
FM Capital Partners Ltd v Marino
Fourie v Le Roux
Gebr Van Weelde Scheepvaart Kantoor BV v Homeric Marine Services (The Agrabele) [
Gibraltar (Government of) v Kenney [
Gibson v Government of the United States of America
Gilfanov v Polyakov (unreported) 3 February 2017,
Global Energy Horizons Corpn v Gray
Google Inc v Equustek Solutions Inc
Guaranty Trust Co of New York v Hannay & Co [
Haiti (Republic of) v Duvalier [
Hedley Byrne & Co Ltd v Heller & Partners Ltd [
Holmes v Millage [
Horton v Sadler
JSC BTA Bank v Ablyazov (No 10)
Jet West Ltd v Haddican [
Kazakhstan Kagazy plc v Zhunus
Kitts v Moore [
Knauer v Ministry of Justice
Krohn GmbH v Varna Shipyard (No 2) (
Lakatamia Shipping Co Ltd v Su
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