Freezing Order Against Third Party

C Inc Plc v L and Another (Com Ct NLJ 13 April p535)

Mrs L (the report does not disclose why she was allowed anonymity) failed to pay £364,000 in respect of ‘no-paid’ convertible loan stock when called upon. The claimant obtained judgment in default and a freezing order against Mrs L’s assets. When Mrs L swore an affidavit stating that she had no assets of her own and was entirely dependent on her husband, the claimant obtained a freezing order against Mr L on the grounds that Mrs L had been acting as his trustee or agent in entering into the share and loan stock agreement; therefore the loan stock was held on trust for him; if so, then as trustee or agent Mrs L had a right of indemnity against Mr L, enabling a freezing order to be extended to all the assets held on trust for Mr L. Even though the assets of the third party, Mr L, were not, even arguably, beneficially owned by the defendant, so long as the claimant’s right against the defendant itself gives rise to a right that the defendant could exercise against the third party, the court has power to grant a freezing order against the assets of the third party.