The Law Society v Shanks

In this appeal Mr Shanks seeks to set aside a Mareva injunction which had been obtained by the Law Society. The history of the matter is this.

Mr Shanks and his wife were involved in divorce proceedings in which he was ordered to pay her costs. She was legally aided, and the Law Society, in the exercise of their statutory powers, obtained a judgment against him for the amount of those costs. It is a little difficult to put an exact figure on the liability because it has been increased substantially over a period by additional orders for costs, but the original bill of costs was for £2,744. It may well be that, with additional sums which have been addded, there is now a sum of the order of £5,000 due to the Law Society.

Mr Shanks, in common with many husbands who have been involved in divorce proceedings, has a very marked reluctance to pay any costs which have been awarded to his wife or to paying the Law Society, since he thinks, with some cause, that any payments to the Law Society will enure to the benefit of his wife insofar as she has any contribution. For whatever reason, it is quite clear on the evidence that Mr Shanks is unwilling to discharge this judgment.

All that happened originally was that an attachment of earnings order was made, but that order came to an end as soon as his employment by the Ministry of Defence came to an end. He left that employment because of injury, and upon leaving that employment he became entitled to a pension which we are told is of the order of £3,800 a year and to a gratuity of the order of £10,000.

The Law Society, appreciating that this gratuity was in the offing, became anxious that it might not be available to discharge the liability under their judgment. They therefore applied in the Plymouth County Court for the Mareva injunction which is the subject matter of this appeal. The order which they obtained is quite breathtaking in its width. It restrains Mr Shanks:

"…by himself, his servants or agents or otherwise…from disposing, pledging or transferring or dealing with any assets the Defendant may have within the jurisdiction of this Court and, in particular, any gratuity or lump sum received or to be received from the Ministry of Defence and/or the civil service in respect of the Defendant's retirement or termination of service as a Ministry of Defence Policeman or removing or taking any steps to remove the same out of the jurisdiction until the Judgment debt herein is paid in full together with the costs of this application or until further Order."

Read literally—and injunctions are meant to be read literally, particularly when they have a penal notice attached saying that he will be sent to prison if he does not comply—this would have prevented Mr Shanks from buying himself a loaf of bread or indeed incurring any expenditure at all in the course of his ordinary life. It is plainly wrong in that respect. Mareva injunctions addressed to natural persons should always make provision for the defendant's living expenses unless there is reason to believe that the defendant has other assets to which the order does not attach and which would be available for that purpose.

Furthermore, there should always be provision for the payment of ordinary debts as they become due, because the purpose of a Mareva injunction is not to establish a potential or actual judgment creditor as a priority creditor....