In the case of John E Griggs & Sons Ltd v High Firs Penthouses Ltd [2023] EWHC 2231 (TCC), the High Court’s refusal to grant a post-judgment freezing order (PJFO) against a developer (High Firs) sheds light on crucial practice points that lawyers should consider when making such applications. This judgment serves as a pivotal reminder of the complexities involved in securing PJFOs and the essential elements lawyers should be aware of when initiating these proceedings.
Background
This case concerns a contractor (Griggs) who sought a PJFO, without notice, against a developer High Firs, following a judgment enforcing an adjudicator’s decision on 3 November 2022. The application was based on High Firs’ intention to sell a flat, believed to be its primary asset. Griggs’ application included an order preventing High Firs from “granting a leasehold interest by way of sale or disposal” in the development.
In this article, Simon Brew (Partner) and Grace Makungu (trainee solicitor) outline some of the key takeaways below.
- The Timing and Notice Consideration
One of the key points emphasised by the court was the timing of the application. It was noted that the application should have been made sooner than it was. Despite the “quite remarkable” delay in making the application, the court did not dismiss it outright. The delay did not prejudice High Firs, and Griggs’ existing judgment mitigated the impact of the tardiness. Additionally, the court acknowledged that, in cases involving interests in land, giving notice of a freezing order application might not necessarily frustrate its purpose, especially when the primary target is a property.
- Establishing the Risk of Unjustified Dissipation
Crucially, the court reiterated the necessity of proving a real risk of unjustified dissipation of assets when seeking a PJFO. While this requirement might be somewhat eased post-judgment, it remains a fundamental criterion. Lawyers must meticulously establish this risk to strengthen their case.
- Evaluating High Firs’ Intentions
High Firs’ intention to sell a long leasehold in the flat was deemed unsurprising given its purpose as a property development company. The court noted that Griggs failed to investigate whether the flat was publicly marketed and at what price. Without concrete evidence that the property was not being sold for value and at arm’s length, the court assumed, in High Firs’ favour, that the sale was legitimate.
- Considering Alternative Remedies
Lastly, the judgment emphasised that interfering in the proposed sale might not always be just and convenient. Griggs was criticised for not seeking less draconian, more focused relief, such as a charging order over High Firs’ interest in the development. This highlights the importance of exploring alternative remedies before resorting to PJFOs.
Conclusions
The Court’s judgment in John E Griggs & Sons Ltd v High Firs Penthouses Ltd [2023] EWHC 2231 (TCC) underscores the intricate nature of PJFO applications. Lawyers must be meticulous in their approach, ensuring timely applications, substantiating the risk of unjustified dissipation, and considering alternative remedies.
