Exact change only – Discharging freezing and receivership orders on the grounds of a material change in circumstances
On 24 March 2021, the Court of Appeal handed down judgment in Mitsuji Konoshita and A.P.F. Group Co Ltd v JTrust Asia Pte Ltd (BVIHCMAP 2020/0017). The Court provided helpful guidance on the discharge of freezing and receivership orders in light of material changes in circumstances (please see our earlier article in the same case on the Court’s guidance in granting freezing and receivership orders here).
In April 2019, Justice Adderley stayed the Claimant’s BVI claim favouring ongoing proceedings in Singapore and Thailand as the more appropriate fora but kept in place the freezing and receivership orders in the BVI claim (the BVI Orders). In January 2020, the Singapore Court dismissed the Claimant’s Singapore claim. The Claimant appealed this decision to the Singapore Court of Appeal and, the Defendants in the BVI applied to discharge the BVI Orders. That application was dismissed, and the Defendants appealed.
The Defendants’ appeal was dismissed. The Court of Appeal held:
- The Learned Judge did not err when he considered ongoing Thai Proceedings when refusing to discharge the BVI Orders. The Defendants had wrongly argued that those proceedings were irrelevant when the BVI Orders were continued after the stay in favour of both the Singapore and Thai Proceedings.
- In determining whether to discharge the freezing order, the correct approach is whether it would be just and convenient to continue the order. There is no need to revisit the ‘good arguable case’ threshold requirement.
- The Learned Judge’s refusal to discharge the freezing order on the basis that the service out order was set aside as a result of the stay, was correct. That order was set aside because the BVI was not the more appropriate forum; it did not mean the BVI Court lacked personal jurisdiction over the First Defendant, Mr Konoshita.
- The Learned Judge erred in not considering the Singapore Court’s decision as a ‘material change in circumstances’. However, the Court affirmed the Learned Judge’s decision as he did not base it solely on this development and had considered other factors, including a pending appeal of that decision in Singapore.
- The then-recent Court of Appeal decisions in Convoy Collateral and Broad Idea did not materially change BVI law but were merely affirmatory of well-established principles and therefore did not amount to a material change in circumstances.
The case provides helpful commentary from the Court of Appeal on what constitute material changes in circumstances warranting the discharge of freezing and receivership orders.
It is also worth noting that in October 2020, the Singapore Court of Appeal allowed the Claimant’s appeal of the Singapore High Court’s decision and entered judgment in its favour.
Vernon Flynn QC of Brick Court Chambers, instructed by Harneys, appeared for the successful Respondent in the Court of Appeal.