On appeal from: [2013] EWCA Civ 928

The Supreme Court has unanimously allowed the appellant bank’s appeal, finding that the proceeds of the loan agreements at issue were to be considered ‘assets’ within the meaning of the Freezing Order.

The appellant bank had successfully obtained judgment against the respondent in four cases, with a freezing order being issued in November 2009. The respondent subsequently entered into four loan agreements, and exercised his right to draw down fully under those agreements, directing various payments for legal and corporate services and in relation to property.

The appellant sought a declaration that the respondent’s rights to draw down under the loan agreement constituted ‘assets’ for the purposes of the freezing order, meaning that any exercise of the rights had to be consistent with the exceptions in the order. Both the first instance judge and the Court of Appeal disagreed that the drawn down rights were to be considered assets.

Lord Clarke delivered the only judgement. The court considered that the sole question was what the freezing order in fact meant. The court noted that the most recent freezing order forms had extended the definition of assets in paragraph 5, and that this extension was designed to cover assets which the respondent controlled, not just assets he legally or beneficially owned. The respondent was in fact dealing with the assets of the lender as if they were his own. Therefore, the powers under the loan agreement were affected by the freezing order.

For judgment, please download: [2015] UKSC 64
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watching the hearing please visit: Supreme Court website