Party using freezing order as “means of oppression”, High Court says

Bacon: Claimant’s approach “unnecessarily heavy-handed”

A High Court judge has condemned a claimant’s “oppressive and disproportionate” approach to enforcing a defendant’s obligations under a freezing order.

Warning that the court would consider whether the freezing order “should now be varied”, Mrs Justice Bacon said its purpose was to ensure the protection of assets, not to be used as a “means of oppression”.

Olena Tyshchenko and her ex-husband Serhiy are accused of conducting a major fraud on collapsed Ukrainian bank JSC Fortuna. They are being sued by WWRT Ltd, represented by City law firm Rosling King.

In 2020, the High Court issued a worldwide freezing order against the pair and in the latest hearing WWRT applied to debar Ms Tyshchenko, a Ukrainian lawyer, from defending her claim for “repeatedly” breaching the freezing order.

Alternatively, it sought an unless order requiring her to comply with certain orders or her defence would be struck out.

Bacon J said she rejected WWRT’s description of Ms Tyshchenko as a “litigant in person by choice”, and instead accepted that she was financially dependent on her ex-husband and his mother and did not have “significant income” of her own.

“It appears that at Ms Tyshchenko’s recent bankruptcy hearing, funds were made available for her to be represented by solicitors and counsel. She said, however, that this had not been extended to the present hearing, and I have not seen anything to cast doubt on the veracity of that statement.

“It is also inherently unlikely that Ms Tyshchenko would choose to defend in person the present very serious application, if she did in fact have the means to obtain legal representation.”

Bacon J said WWRT’s “overarching submission” was that Ms Tyshchenko breached the freezing order to retain “full use and control” of her assets while maintaining a “lifestyle untrammelled by the possibility of effective enforcement post-trial”.

The judge rejected this allegation, saying there was “no evidence of substantial assets of any kind that are owned or controlled by her, other than the family house”.

The judge said that “most importantly”, nothing in any of the material suggested that “any of the various breaches identified by WWRT might in any way hinder effective enforcement of a trial judgment in WWRT’s favour”.

Rejecting leading counsel’s accusation that Ms Tyshchenko showed “wholesale disregard” for the orders made, she had instead “sought to provide considerable disclosure of her assets” and in general sought to comply with the other orders made.

“She has been hampered by the volume of information sought and the fact that (for the reasons which she has explained) she has tended to use multiple bank accounts and cards in order to get funds out of Ukraine.

“She has also, on occasions, been unclear as to the extent of her obligations under the orders. Those difficulties have been exacerbated by the volume of correspondence and witness evidence served by WWRT, which Ms Tyshchenko has said she found overwhelming.”

Dismissing WWRT’s applications, Bacon J said the company’s approach to Ms Tyshchenko’s disclosure under the freezing order had been “unnecessarily heavy-handed”.

She went on: “The purpose of a freezing order is to ensure protection of assets; it is not appropriate for it to be used as a means of oppression.

“In my judgment WWRT’s approach to the enforcement of Mrs Tyshchenko’s obligations under the freezing order and the cross-examination order has been both oppressive and disproportionate.”

It was “necessary to consider whether the freezing and cross-examination orders should now be varied”, both to ensure clarity and “that any further obligations imposed by those orders are proportionate in the context of what has been provided and what is reasonably necessary to protect the interests of WWRT up to trial and thereafter”.

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