Jersey: Freezing Orders: Another Cautionary Tale

An ex parte application places a weighty burden upon the court hearing it. This is why the applicant has a duty to make full and frank disclosure of material which both assists and/or hinders their case. Courts are understandably more comfortable when all parties are represented and able to put their case forward robustly and fairly. That said, two recent judgments in Sheyko v Consolidated Minerals Limited demonstrate that it is not just ex parte applicants who have a duty to place all relevant material before the court – and that the consequences of failure can be severe.

In Sheyko v Consolidated Minerals Limited [2018] JRC 236, the facts were as follows: on 17 July 2018 the Plaintiff obtained a freezing order preventing the Defendant from removing, disposing of, dealing with or diminishing the value of assets in Jersey up to a value of US$10 million ("the Frozen Sum"). The freezing order did not require the fortification of the Plaintiff's undertaking in damages and contained no exception for ordinary business and legal expenses.

The Defendant applied to discharge the freezing order and that application was listed for 3 October 2018 ("the October hearing"). The Defendant subsequently made an urgent application to vary the injunction on the basis that it needed access to the Frozen Sum to meet its ordinary business expenses. This application was heard on 23 August 2018 ("the August hearing").

At the August hearing the Defendant applied (i) to vary the order to include the exception for ordinary business and legal expenses1, which it referred to as "the standard wording" and (ii) an order that the Plaintiff fortify his undertaking by paying US$2 million into court. On the day the Defendant made a spontaneous application to have the freezing order discharged. Both applications failed.

The Defendant claimed that, contrary to the affidavit evidence given by the Plaintiff at the ex parte hearing, it did not have sufficient sums to meet its business and legal expenses without access to the Frozen Sum, and that the Plaintiff had misled the Court with respect to its monthly income. The Royal Court however found that the Plaintiff's description of the Defendant's revenue had "to a very great extent [been] proved accurate"2 by further material exhibited by him, and that by contrast the Defendant's evidence, which omitted reference to cash flow records and forecasts, did not persuade the Court that it would be unable to meet its payments3.

The Court also held4 that the standard wording relating to the fortification of undertakings contained in Practice Direction 15/04 is expressly optional and that the part relating to dealing with assets in the ordinary course of business (set out in parentheses) might also be omitted.

Very shortly before the October hearing the Defendant abandoned its application to discharge the freezing order and agreed to pay the Frozen Sum into Court. That left the question of costs (of both hearings) to be heard on 3 October 2018. The judgment can be found at Sheyko v Consolidated Minerals Limited [2019] JRC 008.

By the time the discharge application was abandoned the parties had already filed skeleton arguments and affidavit evidence. Crucially, exhibited to the affidavit filed on behalf of the Defendant was a letter of comfort from its ultimate parent company Ningxia Tianyuan Manganese Industry Co Ltd ("TMI") dated 2 June 2018 which made it clear that TMI had agreed to provide the Defendant with financial support until 31 December 20195. The Court held that it was "unlikely" that the Defendant was unaware of the existence of the letter and yet no mention of it had been made in the affidavits it had filed for the August hearing (paragraph 23), and observed that "had reference been made to that letter it would have substantially undermined the strengths of any application to discharge or vary"6.

The Plaintiff submitted that the costs of the August hearing should be paid on the indemnity basis because the Defendant had misled the Court by failing to disclose the letter of comfort. The court agreed, and held that the Defendant's failure to disclose the very evidence which would have rendered its applications "destined for failure" was "wasteful of time and costs in a manner that should be reflected by an order for costs in favour of the Plaintiff"7.

In respect of the second application to discharge, the Plaintiff argued that by abandoning its application late the Defendant had effectively conceded defeat, and that it should pay the Plaintiff's costs, on the standard basis. The Defendant argued that the appropriate order was for costs in the case, relying on Picnic at Ascot v Kalus Derigs [2001] FSR 2, confirmed in Berry Trade Limited and Vitol Energy Bermuda Limited v Moussavi and others [2003] JRC 193.

The Court considered Picnic at Ascot in detail and confirmed that while the costs of an interim injunction would normally be reserved where there has been no application to raise it, and that that may be the appropriate order even where there had been an unsuccessful challenge to raise or vary an injunction, it was within the Court's discretion to make a costs order against a party who wastes time and money by commencing an application and then concedes at the last minute.

The Defendant was thus ordered to pay the Plaintiff's costs in respect of both the August hearing and the October hearing. The Court also ordered a payment on account of £60,000 to be paid within 14 days.

These judgments, best understood when read together, offer a salutary warning for parties considering an application to vary or discharge an interim injunction. While it is natural to feel affronted by an injunction obtained ex parte, resistance at all costs can end up meaning exactly that.

Baker & Partners acts for the Plaintiff in the above proceedings.


1 RC 15/04

2 Sheyko v Consolidated Minerals Limited [2018] JRC 236 at 42

3 Ibid at 43

4 Ibid at 11

5 Sheyko v Consolidated Minerals Limited [2019] JRC 008 at 21

6 Ibid at 23

7 Ibid at 28

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions