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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Thane Investments Ltd & Ors v Tomlinson & Ors [2003] EWCA Civ 1272 (29 July 2003) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2003/1272.html Cite as: [2003] EWCA Civ 1272

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(Mr Justice Neuberger)

		Royal Courts of Justice Strand London, WC2
		29th July 2003

Tuesday, 29th July 2003 J U D G M E N T
1. LORD JUSTICE PETER GIBSON: This is an appeal by the first defendant, Brian Tomlinson, and the second defendant, Reyall Business Consultants Ltd ("Reyall"), from part of the order made by Neuberger J on 6th December 2002 whereby the judge dismissed with costs Mr Tomlinson's and Reyall's application to discharge the freezing order made on 23rd May 2002 by His Honour Judge Anthony Thompson QC, sitting as a judge of the High Court. The appeal is brought with the permission of Carnwath LJ who ordered expedition of the appeal.
2. Mr Tomlinson is a chartered accountant of many years standing. He is resident in the Isle of Man, though his wife has a house in England. When in practice in the 1970s, his firm were the auditors of Northern Development Ltd ("ND"), a major property development company, the principal shareholder and director of which was Derek Barnes, and which then foundered, its collapse occasioning much litigation. Mr Tomlinson was one of the trustees of a settlement made by Mr Barnes for the benefit of Mr Barnes' family. The trustees held the bulk of the shares in a company which by name change became the first defendant, Thane Investments Ltd ("Thane"). Apart from holding shares in ND, which became valueless, the trustees also held a charge over land in Leeds of which it secured control and eventually sold at a substantial profit.
3. Thane had a number of subsidiaries, including the second defendant, Denbrae Ltd ("Denbrae"). In 1996 the directors of Thane and Denbrae were Mr Tomlinson and another trustee of the settlement, the former in-house solicitor for ND, Mr Bretherton. Mr Bretherton wished to retire as a director. Mr Tomlinson brought in a former colleague of his, Giles Knopp, who had been a director with him of a property company. On 4th February 1997 Mr Bretherton resigned. Mr Knopp was appointed in his place as a director of Thane and Denbrae. The next day Thane and Denbrae entered into service agreements with Mr Tomlinson and Mr Knopp, each of whom abstained when his service agreement was being considered. Each agreement gave the director concerned a salary (Mr Thompson getting rather more than Mr Knopp), a pension and other benefits and required the company concerned to give 36 months notice of termination of the agreement.
4. Mr Barnes took no interest in the settlement for 20 years, but in the late 1990s, on becoming aware that the settlement had assets exceeding liabilities, he began to take an active interest. In 1999 he started proceedings in the Chancery Division to remove Mr Tomlinson and Mr Bretherton as trustees and to appoint new trustees in their place. Mr Tomlinson applied for directions. The litigation was settled, the old trustees resigning in favour of new trustees and Mr Tomlinson resigning his directorship. Mr Tomlinson undertook to use his best endeavours to procure Mr Knopp's resignation as director, but he was unable to procure that. The new Boards of Thane and Denbrae stopped paying Mr Knopp any salary and on 30th January 2001 dismissed him without notice.
5. Mr Knopp then brought proceedings against Thane and Denbrae for wrongful dismissal. Thane and Denbrae counterclaimed for misfeasance in his conduct as director. Mr Knopp joined Mr Tomlinson as a Part 20 defendant. By the time of the hearing in March 2002 before the Judge, Mr Tomlinson and Mr Knopp had compromised the Part 20 proceedings on the basis that Mr Tomlinson accepted half of Mr Knopp's liability for any damages for misfeasance. Mr Tomlinson was never made a defendant to Thane's and Denbrae's counterclaim, although the Master allowed him to take part in the proceedings. Mr Tomlinson gave evidence at the trial for Mr Knopp.
6. Judge Thompson, in a lengthy and detailed judgment running to 65 pages, went through various transactions in which Thane and Denbrae had been involved and considered the conduct of Mr Knopp and Mr Tomlinson. The judge found that they treated the companies as "their private fiefdom", running them for their own benefit and that of their friends. He said that there was gross misfeasance and breach of fiduciary duty on the part of Mr Knopp as director of the companies. He criticised the late production by Mr Tomlinson of the Company minutes, which were only supplied one month before the commencement of proceedings in March 2002. The judge made various comments on Mr Tomlinson which were unfavourable to him. He found Mr Tomlinson not a trustworthy witness in respect of one matter, and he did not accept an excuse which had been provided by Mr Tomlinson. The judge was satisfied that there were grave breaches of fiduciary duty and misfeasance on the part of Mr Knopp which entitled the companies to dismiss him summarily. The judge therefore held that Mr Knopp's claim failed and that Thane and Denbrae were entitled to succeed on their Part 20 counterclaim. The judge also held that the service agreements of Mr Knopp were never validly entered into as the remuneration of the directors had to be fixed by the companies in general meeting. That had never happened. The incorporators never ratified Mr Knopp's service agreement.
7. The judge on 23rd May 2002 formally handed down his judgment. He was then asked by counsel for Thane and Denbrae to make a freezing order against Mr Knopp. The judge made that order in the sum of £1 million after hearing counsel for Mr Knopp arguing against any such order. Counsel for Thane and Denbrae, Mr Blackett-Ord, in the course of his submissions told the judge that the companies were intending to issue proceedings immediately against Mr Tomlinson and certain other defendants. After the judge had given a further judgment making a freezing order against Mr Knopp, Mr Blackett-Ord asked for a similar order against Mr Tomlinson, although Mr Tomlinson was not present at the hearing and no notice had been given to him. Mr Blackett-Ord also asked for a freezing order against what he called "Mr Tomlinson's company", Reyall. The judge was handed a claim form and an undated witness statement from Lesley Black, the solicitor having the conduct of proceedings in which the judge had just given judgment and conduct of the proceedings which were about to be commenced against Mr Tomlinson and Reyall. A third company has since been added, Astim Ltd, a wholly owned subsidiary of Denbrae. Similarly, a fourth company, also a wholly owned subsidiary of Denbrae, has been added. By the claim form which was shown to the judge, Thane and Denbrae claimed against Mr Tomlinson and Reyall:

"... an account of the money removed from the Claimants by [Mr Tomlinson] when he was a director of the Claimant Companies and wrongfully paid (as to part) to [Reyall], and an account and equitable compensation for the diminution in assets of the Claimant."

There was also a claim for a declaration against two other defendants, Mr Wagner, an old friend of Mr Tomlinson, and The Grant Arms Hotel. They were involved in one of the transactions which the judge had criticised. Astim was formed or acquired to be a subsidiary of Denbrae and to take the freehold of The Grant Arms Hotel.

8. By his witness statement Mr Black said that by the judgment given by Judge Thompson the judge had found that Mr Knopp and Mr Tomlinson were guilty of massive misfeasance in their capacity as directors of Thane and Denbrae, and found them guilty of dishonesty in the manner in which they conducted the defence of the Part 20 claim that was brought against Mr Knopp by those companies. Mr Black said in paragraph 5, after exhibiting a copy of the judgment which had been handed down:

"I submit that the matters dealt with by His Lordship amply justify a suspicion on the part of my clients that neither Mr Knopp nor Mr Tomlinson will honour the judgment but they are likely to take steps to try to dissipate their assets in order to avoid execution."

Mr Black said that the value of the claim against them with costs may be as much as a million pounds. In respect of Reyall, all that is said is that in these circumstances he asked for a freezing order to be made against the assets of Mr Tomlinson and his company, Reyall, "which received money that he had wrongfully removed from my client companies".

9. Mr Blackett-Ord's submissions on the application for a freezing order were even briefer. Having handed up the claim form, the witness statement and the draft order, he said that the thinking behind the relief claimed in the claim form against Mr Tomlinson was:

"If Mr Tomlinson does not honour his arrangement with Mr Knopp, which I expect he will think of some good reason not to write out a cheque for half a million pounds, it will be necessary for to us claim directly against him simply on the same grounds, to try and go for summary judgment."

Mr Blackett-Ord said that the Mareva injunction only related to Mr Tomlinson and his company, and he said of Reyall that it:

"... rather oddly stepped into the shoes of Mr Tomlinson half way through, so there is a recovery claim against that company... ."

That is a fact not mentioned in the judgment. He asked for a freezing order only up to £50,000 against Reyall, which he said would amply cover the claim against Reyall. Mr Blackett-Ord then told the judge that the order which he sought was otherwise in the same form as that against Mr Knopp. The only point taken by the judge on the form of the order was that Mr Tomlinson should be allowed a small sum for travelling expenses. The judge then granted the orders sought.

10. The order was in the following form. Both Mr Tomlinson and Reyall were ordered:

(1) not to remove from England and Wales or to dispose of or deal with or diminish the value of any assets in England and Wales up to £1 million in the case of Mr Tomlinson and £50,000 in the case of Reyall;

(2) not to dispose of or deal with or diminish the value of any of their assets, whether or not in England or Wales, up to the same value. That prohibition expressly included three properties:

(a) 2 Corrib House, Douglas, Isle of Man;

(b) 38 Piccadilly Court, Queen's Promenade, Douglas;

(c) South Hill, Sonning Lane, Berkshire

or their net proceeds if sold.

11. Mr Tomlinson and Reyall were required to inform Thane and Denbrae of their assets, whether or not within the jurisdiction, giving details in respect of all such assets, and to confirm the information in an affidavit. The judge gave permission for service out of the jurisdiction in the Isle of Man on both Mr Tomlinson and Reyall, that being an Isle of Man company.
12. The claim form was issued on 24th May 2002. The particulars of claim followed on 3rd July. They added a further claimant and three further defendants. In them claims were made against Mr Tomlinson on similar lines to those made against Mr Knopp in the earlier action. They included a claim that Mr Tomlinson's service agreements were void or had been avoided. Against Reyall it was pleaded that Mr Tomlinson and Reyall, which received some of Mr Tomlinson's remuneration as his purported assignee, were accordingly liable to account to Thane and Denbrae as constructive trustees for all sums and benefits received by them whether under the service agreements or otherwise for no consideration; and it was pleaded, in particular, that they were liable as such trustees for sums which were said to total some £274,000. Those details were set out in paragraph 8. But Reyall was only said to be liable for those sums it actually received, whereas Mr Tomlinson was said to be liable for all the sums claimed. It was not pleaded expressly what sums Reyall had received.
13. The order was served on Mr Tomlinson, we are told, within a few days of the order of Judge Thompson being made. Mr Tomlinson on 4th July 2002 swore an affidavit to comply with the freezing order. He said that he was a retired chartered accountant and a potential beneficiary under a pension fund established in the Isle of Man, although he had not received any payments from that fund, such payments being in the discretion of the trustees. He said that he had two bank accounts, but that they were both in overdraft to the total extent of over £30,000 at 8th June 2002. He said he had no other assets save for his personal possessions.
14. Mr Tomlinson and Reyall then applied on 9th October 2002 to discharge the freezing orders made against them on the grounds that (i) it was made on the basis of misrepresentations by Mr Black with a complete failure to establish any liability or justification for the claim that Mr Tomlinson and Reyall might seek to defeat any liability, if and when established, by removing assets from the jurisdiction; and (ii) that such order was inappropriate having regard to all the circumstances. Mr Tomlinson and Reyall had no transcript of what had been said to the judge to obtain the freezing order, nor did Thane or Denbrae supply a note of what was said. The application was supported by two witness statements. One by Mr Tomlinson complained of Mr Black's description of the judgment of Judge Thompson as finding Mr Tomlinson guilty of massive misfeasance and dishonesty, which, he pointed out, was not the judge's language. Mr Tomlinson also referred to the fact that he was never made a defendant to the proceedings against Mr Knopp. He said he had no assets. He said of the three properties mentioned in the order, 2 Corrib House was owned by Reyall, 38 Piccadilly Court had been rented by Reyall on a lease which had expired, and South Hill, Sonning Lane had been owned by his wife until sold in June 2000. He challenged the description of Reyall as his company, acknowledging only that he was a director of it. Julian Harper, the Chairman of another Isle of Man company called ECS, said that Reyall was incorporated on 6th October 1997, the directors being Mr Tomlinson and himself; that the two shares in Reyall were held by subsidiaries of ECS for the beneficial ownership of the trustees of the F Tomlinson settlement created in 1965. He said that the sole tangible asset of Reyall at 30th September 2002, other than £53 cash at bank, was 2 Corrib House, which, he said, had a value of £120,000 but was already subject to a bank mortgage of £60,000. He further said that Reyall had received fees from Thane and Denbrae for services properly rendered and remunerated at fair commercial rates and had never received monies to which it was not legally entitled.
15. Thane and Denbrae made a cross application on 17th October 2002 for further information and documents. This was supported by a further witness statement from Mr Black who complained that Mr Tomlinson's affidavit of 4th July was grossly inadequate, and he said that it was unbelievable.
16. At the hearing before Neuberger J for the discharge of Judge Thompson's order Mr Tomlinson appeared for himself and for Reyall. The judge considered Mr Tomlinson's various criticisms. But, although he accepted that Thane and Denbrae should have supplied a note of what was said to Judge Thompson and although that judge had expressed sympathy with Mr Tomlinson, Neuberger J refused to discharge the freezing order. The judge then turned to the cross application and made an order requiring further disclosure by Mr Tomlinson on a variety of matters which were there specified. The judge also directed that Thane and Denbrae should provide at their expense a transcript of what was said to Judge Thompson when the freezing order was made.
17. Mr Tomlinson for himself and Reyall applied to this court for permission to appeal. Carnwath LJ granted permission, saying that arguably insufficient attention had been given to the need to establish some evidence against Mr Tomlinson that he was going to dissipate assets. Carnwath LJ granted a stay on any further disclosure under the original freezing order or the order of Neuberger J.
18. Mr Tomlinson appears before us this afternoon in person for himself and Reyall. He submits that Thane and Denbrae in applying to obtain freezing a order against him and Reyall failed to comply with their procedural obligations owed to them and to the court, and that the judge failed to give proper consideration to the circumstances of himself and Reyall separately from Mr Knopp. He says that Neuberger J failed to treat cumulatively the various points taken singly, and so arrived at the wrong conclusion.
19. Mr Blackett-Ord, appearing for Thane and Denbrae, accepts that a note of what was said to Judge Thompson should have been provided to Mr Tomlinson, but he says in mitigation, as he puts it, that very little at all was said by him at the hearing in relation to Mr Tomlinson's freezing order because he relies upon what he says was in the mind of Judge Thompson, who had just delivered a lengthy and detailed judgment, and he pointed out that the judge was fully aware of all the circumstances relating to Mr Tomlinson, including the very serious matters alleged against him. He reminded us that the misfeasance alleged against Mr Knopp was misfeasance by the Board, consisting of only Mr Knopp and Mr Tomlinson, and that Mr Tomlinson in several instances was the instigator of the misfeasances. Those instances included, he says, the fabrication by Mr Tomlinson of the company minutes, produced (as they were) very late and used to justify payments and benefits which Mr Knopp and Mr Tomlinson and their friends had enjoyed from Thane and Denbrae. Mr Blackett-Ord also referred to Mr Tomlinson having been found by the judge not to be a truthful witness and his explanation being unbelievable in relation to his evidence that he himself prepared a lease of the Grant Arms Hotel in haste and that he by accident omitted a rent review clause. He also pointed to Mr Tomlinson indulging himself in expensive restaurants at the expense of Thane. Mr Blackett-Ord further referred to the part played by Mr Tomlinson in disposing of Denbrae's subsidiaries to an AIM company based in the Isle of Man and granting a commission in shares, worth some 2 percent of the total consideration, to a company which, Mr Blackett-Ord said, may not even exist. Certainly the judge found the evidence relating to the company receiving the commission totally unsatisfactory. Mr Blackett-Ord submitted that the judge had ample reasons to know that Mr Tomlinson was in many respects more guilty than Mr Knopp, and he says that the judge would have had all that in mind when considering whether or not a freezing order was appropriate.
20. There is no doubt that Judge Thompson had power to make a freezing order against Mr Tomlinson and Reyall, notwithstanding that Mr Tomlinson was resident in the Isle of Man and that Reyall was an Isle of Man company. The court, however, has repeatedly stressed that a cautious approach is appropriate before what has been called one of the court's nuclear weapons (see Bank Mellat v Nikpour [1985] FSR 85 at page 92 per Donaldson J) is deployed, particularly if an order is sought and obtained without notice to the person made subject to the order.
21. It is clear on the authorities that what the court must be satisfied about before making such an order is that the applicant for the order has a good, arguable case, that there is a real risk that judgment would go unsatisfied by reason of the disposal by the defendant of his assets, unless he is restrained by the court from disposing of them, and that it would be just and convenient in all the circumstances to grant the freezing order. It is important that there should be solid evidence adduced to the court of the likelihood of dissipation. Neuberger J rightly acknowledged in paragraph 14 of his judgment:

"... the duty of a person seeking an order, and in particular an order which can have as substantial an effect as a freezing order, in the absence of the Defendant against whom it is sought, is strict and important. An order against a person in his absence, particularly when it is a freezing order, which is a very serious infringement of his rights and liberties, can only be justified on appropriately clear and strong facts and risks. It should only be granted in circumstances which provide maximum protection for the person against whom the order is to be made. The courts have frequently emphasised the importance of compliance with the various requirements of the Rules relating to the obtaining of without notice orders."

That is why there is a Part 25 Practice Direction specifically directed to interim injunctions. That Practice Direction contains various requirements. First, in paragraph 2.1 there is a requirement for an application notice. There was no such application notice in the present case. In paragraph 3.1 it provides that applications for freezing injunctions must -- and I emphasise "must" -- be supported by affidavit evidence. There was no affidavit evidence; there was only the witness statement of Mr Black. Paragraph 3.3 provides that the evidence must set out the facts on which the applicant relies for the claim being made against the respondent, including all material facts of which the court should be made aware. I have set out the relevant paragraphs in Mr Black's witness statement. Paragraph 5, containing his submission as to the suspicion of his clients, is plainly inadequate. That is not evidence. What is relied on by Mr Blackett-Ord is the exhibited judgment which is said to contain all the material facts needed for the satisfaction of the conditions for the granting of a freezing order.

22. The difficulty with that submission is that even on the assumption (which may be questioned) whether such facts found in a case to which Mr Tomlinson was not a party are indeed facts which can be held against Mr Tomlinson, the judgment is not dealing with questions such as whether there is a real risk of the dissipation of assets by Mr Tomlinson or Reyall. Indeed, there is no reference whatever to the assets of Mr Tomlinson or of Reyall to be found in the judgment.
23. I, of course, see the force of the point that when a judge has just delivered a detailed judgment it is unnecessary for an applicant for a freezing order to set out the detailed facts which the judge has found, but I repeat that the judgment was dealing with different matters. What the judgment does show -- and Mr Blackett-Ord was plainly entitled to rely on this -- is that the judge took a poor view of Mr Tomlinson, in particular as a witness and also because of the late production of the company minutes. But, in essence, what the judge was finding was that he disbelieved Mr Tomlinson as a witness on particular points. He did not need to go further than that.
24. It is plain from the order that was made by the judge that Thane and Denbrae thought that they had some knowledge of the assets of Mr Tomlinson and Reyall. The three properties which I have mentioned were identified as being their properties, and that presumably was the justification for making them subject to the injunction. But there is nothing in the judgment, nor in Mr Blake's witness statements, nor in Mr Blackett-Ord's submissions, to explain why the properties were mentioned or the facts which led the judge to believe that he should make an order in respect of those properties. We now know what Mr Tomlinson and Reyall say about them. It is not suggested that what they say about those properties is in any way false. It is particularly remarkable that the property at Sonning Lane was included in the scope of the order. One would have thought that it would have been simple to do a search at the Land Registry to find out more about who owned that property. Again, it is not now suggested that the evidence is wrong that that was the property neither of Mr Tomlinson nor of Reyall but of Mr Tomlinson's wife. Mr Blackett-Ord, in explaining to Judge Thompson the £50,000 limit on the order against Reyall, said that Reyall had slipped into the shoes of Mr Tomlinson and that there was a recovery claim against Reyall and that £50,000 would amply cover it. Again, there is nothing in the judgment to show how that figure was arrived at, and, as I have pointed out, even in the particulars of claim supplied months later there is no explanation of how the figure of £50,000 was arrived at.
25. I return then to the other requirements of the Practice Direction. Section 3.4 provides:

"Where an application is made without notice to the respondent, the evidence must also set out why notice was not given."

That requirement was again not obeyed when Mr Black's witness statement was prepared. There is nothing in his witness statement to indicate why notice was not given. Again, Mr Blackett-Ord's answer was to refer us to the judgment of the judge as an explanation. The judge does not deal with that point at all.

26. In my judgment the way the matter was presented to Judge Thompson was, to say the least, highly unfortunate. It is important on applications for so seriously intrusive an order as a freezing order that great care should be taken in the presentation of the evidence to the court, so that the court can see not only whether the applicant has a good arguable case but also whether there is a real risk of dissipation of assets. There is no evidence, and it is not suggested, that Mr Tomlinson had a poor credit record, or a history of defaulting on other debts, or had threatened to remove assets or otherwise deal with his assets. It is suggested that, because he had received large sums of money each year from Thane and Denbrae, he may have had some hoard of cash somewhere which would be easily moved or disposed of. But those monies were received some years ago, purportedly under the service agreements. Mr Tomlinson has made no secret of the fact, as he puts in his witness statements, that he has had considerable expenses in relation to the education of his children, as well as in respect of a divorce. He may or may not be wholly truthful in relation to that. What is quite plain is that there was simply no evidence to refute what he says was the position, that he has spent all the monies that he has received. He acknowledges that he has had a fairly successful career in business. Nevertheless, he submits that he is now left with no monies. There is no evidence to the contrary.
27. On those facts, in my judgment, Judge Thompson when dealing with the application for a freezing order, in particular in relation to parties who were not present or represented at the hearing, should have been astute to ensure that the requirements of the rules were met. The requirements are imposed on applicants for a freezing order in order to protect persons who are not in a position to protect themselves. I conclude that Judge Thompson was wrong to have granted the freezing order on the information that was before him, in particular because there was no evidence of a real risk that Mr Tomlinson or Reyall was likely to dissipate his or its assets.
28. The appeal before us is, of course, not from Judge Thompson's order: it is from the decision of Neuberger J, and that judge was viewing the matter afresh and had a discretion whether or not to discharge the freezing order, and, if he did discharge the freezing order, whether or not to impose a new freezing order. In my judgment Neuberger J's reasons for finding Judge Thompson's order one which should not be discharged are insufficient to justify the order which he made. First, Neuberger J said that the matters which were relied on for the good and arguable case applied in demonstrating that there was a real danger of the defendants dissipating their assets to defeat the judgment. I regret that I do not see that the judgment does support a conclusion that in the particular circumstances of Mr Tomlinson and Reyall there was a real risk of assets being dissipated. Mr Blackett-Ord submitted that it has now become the practice for parties to bring ex parte applications seeking a freezing order by pointing to some dishonesty, and that, he says, is sufficient to enable this court to make a freezing order. I have to say that, if that has become the practice, then the practice should be reconsidered. It is appropriate in each case for the court to scrutinise with care whether what is alleged to have been the dishonesty of the person against whom the order is sought in itself really justifies the inference that that person has assets which he is likely to dissipate unless restricted.
29. The judge also referred to the fact that Mr Tomlinson is resident in the Isle of Man, and presumably he relied on the fact that Reyall is an Isle of Mann company. I am not aware of any particular difficulty in enforcing judgments of the court in the Isle of Man. Certainly nothing has been shown to us to support any such proposition. I do not see that that was a good reason for refusing to discharge the order of Judge Thompson.
30. Finally, the judge said:

"There are reasons (which may turn out to be wrong) for thinking that he had said that he has no assets when in fact he has."

The judge does not tell us what those reasons are, and in the absence of evidence for my part I am not persuaded that that is a satisfactory ground for refusing to discharge a freezing order made in the circumstances in which this freezing order was made.

31. I conclude, with all respect to the judge, that he was wrong to take the view that the application by Mr Tomlinson and Reyall should be dismissed. In particular, it seems to me that he has not given sufficient weight to the fact that in this case the application for the freezing order was made without notice to Mr Tomlinson and Reyall and that in contravention of the Practice Direction no evidence was produced as to why notice was not given to them. In consequence there was no evidence of the existence of a real risk of the dissipation of assets by them.
32. I would therefore allow this appeal, discharge that part of Neuberger J's order which dismissed with costs Mr Tomlinson's and Reyall's application and I would discharge the freezing order of Judge Thompson.
33. I add this footnote. This order does not prevent Thane and Denbrae from making a further application to the High Court for a freezing order; but if they decide to do so, they should do so only if they can provide the court with the appropriate evidence and they should comply with the procedural requirements which are imposed under the Civil Procedure Rules. However, for the reasons which I have given, I would allow this appeal.
34. SIR ANTHONY EVANS: I agree with my Lord's judgment and add just the following. A freezing injunction is a serious matter to any person named in it, and the Civil Procedure Rules are rightly restrictive of the circumstances in which the order may be made. That is especially relevant when no notice of the application has been given to the person against whom the order is sought. Part 25 of the Practice Direction contains safeguards which serve to protect absent defendants, and paragraph 3.4 has already been quoted by my Lord. Here the application was made without notice and disregarding those rules.
35. I have some sympathy with His Honour Judge Thompson, because a parallel application was made in respect of the defendant Mr Knopp, and in that context judge observed:

"This is really the inter partes operation of an ex parte procedure."

He said that, of course, because Mr Knopp was there, or at least was represented by counsel who was there. It is, to say the least, unfortunate that the learned judge was not reminded that that did not apply in Mr Tomlinson's case. He was not there, he was not represented and he had received no notice of this application, although notice could easily have been given.

36. Counsel says that it is normal practice to apply ex parte for an order of this sort, and he said also that it is common for no notice to be given. I am sure that may be right -- I do not suggest that it is not -- because the very nature of a freezing order, for the reasons he explained, is that it may be necessary to apply without notice, hence the importance of paragraph 3.4 of the Practice Direction, which requires an explanation of the reason why no notice has been given in the particular case. I would be very surprised to hear that it is common or normal practice to make an application without notice and at the same time to disregard the rules which expressly cover that very situation. If that is common, and it appears to have happened here, then I sincerely hope that this judgment will do something to bring that practice to an end.

Order: Appeal allowed with costs to be assessed if not agreed.