UVW v XYZ (A Registered Agent) BVIHC (COM) 108 of 2016

The BVI High Court granted Norwich Pharmacal relief against a registered agent for a judgment debtor who was subject to an interim freezing order.

The judgment creditor had obtained an interim freezing order against the judgment debtor, and was seeking general information as to the assets of the judgment debtor, following a pattern of concealment of assets to frustrate enforcement of a foreign judgment. The judgment debtor had failed to comply with an overseas freezing order and had been held in contempt of court for failing to disclose assets.

The judgment creditor identified a company registered in the BVI as belonging to the judgment debtor, and applied to the BVI High Court for third party disclosure orders against the local registered agent to police the freezing order by obtaining information which could lead to the identification of assets. The order sought was for Norwich Pharmacal relief requiring the Respondent to disclose certain documents or information to the Applicant. In order to trigger Norwich Pharmacal equitable jurisdiction, there has to be something sufficiently unconscionable in the wrongdoer's conduct.

To preserve anonymity, the facts of the case were not disclosed except those that were relevant to the legal principles and would be of interest to the BVI financial services community.

The Respondent took a neutral stance but sought to test the merits of the application. The Respondent was caught between its duty of confidentiality towards its client and its duty of disclosure, such as the court might find it to be.

There was an argument that the court did not have jurisdiction to grant the order as it related to a freezing order made by an overseas court, but the judge found this not to be a factor, and stated that the court's power to grant Norwich Pharmacal orders in aid of overseas proceedings is well established.

The court also found that it was not necessary for a company to be created by a registered agent for a wrongful purpose. It might be that a company was created for a legitimate purpose but then evolved into something used wholly or partially illegitimately. The court stated that the Applicant does not have to show a particular transaction where assets have been transferred to the corporate vehicle for no other reason than to avoid execution; a general pattern of wilfully evasive conduct would suffice. The applicant must have a 'reasonable suspicion' that the third party has been mixed up in the wrongdoing.

The Respondent submitted that the Applicant was 'fishing' for information in an 'industrial trawl'. It was quoted that Norwich Pharmacal orders are rarely intrusive, in that they can usually be complied with relatively readily.

It was held that Norwich Pharmacal relief was available in principle post-judgment in aid of enforcement, where there is reasonable suspicion that a disclosure defendant is 'mixed up' in the wilful evasion of another's judgment debt. The judge also found that Norwich Pharmacal relief was available in principle to assist in securing compliance with freezing orders, including such orders made by foreign courts. 

This article was written by Olivia Reader and Alan Bennett.

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