Partner Article

Give fraudsters the cold shoulder

With Watson Burton LLP Law FirmSo you have reason to believe that a defendant may be trying to dispose of assets to avoid paying a final judgment debt. What can you do?A Freezing Order prevents a defendant from removing anything, against which a judgment could be executed. The Order imposes limitations on what a debtor can do with his assets. Funds may be freed for ordinary living expenses and, if appropriate, business expenses. They are also allowed to spend on legal costs incurred in defending the creditor’s claim. However, to justify this release of such funds, they must demonstrate their net income accurately – a valuable lesson learned by Baron Nicholas van Hoogstraten. On 8th May 2006, a High Court judge ruled that monies involved in a Court Order, freezing £5m of Mr van Hoogstraten’s assets, could not be released to defend a lawsuit brought by the family of murdered business man, Mohammad Raja. Mr van Hoogstraten told the High Court that £5m freezing order was preventing him from instructing lawyers to act in his defence. However, in a previous TV interview, the Baron had stated that he was worth more than £100m, including overseas holdings which made him the richest man in Zimbabwe. The Baron is refusing to pay interim cost orders made against him in the proceedings, which at present stand at £535,000. The Court has considerable powers to prevent a defendant disposing of assets. An important point to note before applying for a freezing order is that the claimant must give a “cross-undertaking in damages”. This is to compensate the defendant for any harm caused by the injunction if it is discharged at a later date. For further information regarding any of the issues raised, contact Clare Fegan at Watson Burton LLP, on 0191 244 4320 or at clare.fegan@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .