In this matter, Sophia Ng successfully persuaded the General Division of the High Court to discharge a Mareva (freezing) injunction. The Court agreed with us that the claimant had not established a real risk that the defendants would dissipate their assets to frustrate a judgment. This was because an affidavit of assets discloses a respondent’s assets as at its date and imposes no obligation to account for sums previously held. The Court also agreed with us that ordinary commercial conduct, marketing a business property already on the market before the action began, is legitimate dealing, not evidence of dissipation.
HC/SUM 1956/2026 (unreported), before the Honourable Justice Lee Seiu Kin, 17 August 2026
INTRODUCTION
A Mareva injunction is one of the “nuclear weapons” of civil litigation (Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appeal [2015] SGCA 45 (“Bouvier”) at [1]) and is granted only where the claimant shows both a good arguable case on the merits and a real risk that the respondent will dissipate assets to frustrate a judgment (Bouvier at [36]). Here, the Honourable Justice Lee Seiu Kin set aside a Mareva injunction previously obtained against three defendants, reaffirming that a real risk of dissipation must be proved by solid evidence, and that unexplained past expenditure and ordinary business dealing do not, without more, meet that threshold.
BACKGROUND
The claimant had obtained a Mareva injunction against three defendants. Resisting the defendants’ application to set it aside, the claimant relied on three grounds said to evince a real risk of dissipation: (1) a lack of forthrightness in the defendants’ asset disclosure, including as to funds received before the injunction; (2) the marketing for sale of a commercial property (the “Property”); and (3) the diversion of business revenue to another company which one of the defendants had a beneficial interest in.
THE DECISION
The Honourable Court discharged the injunction, finding no real risk of dissipation.
First, on disclosure, the Judge found that an affidavit of assets is meant to disclose the assets a respondent holds as at the date of the affidavit. It is not a historical accounting, and imposes no obligation to explain sums the respondent previously held but no longer has.
Second, on the Property, the Honourable Court accepted the defendants’ evidence that the property had been marketed before the action was commenced. The claimant’s evidence went no further than an advertisement appearing four days after the writ was served, and the claimant had no evidence that this was the first time the property was marketed. The premise that the sale was a reaction to the suit therefore fell away.
Third, on the alleged diversion of funds to another business entity, the Judge was satisfied that the defendants had provided sufficient explanation. The defendants had taken the position that funds due to the third defendant were paid to the bank account of the other business entity as the defendants’ bank accounts were frozen due to the injunction.
The injunction was accordingly discharged, and costs of S$20,000 (all in) was fixed against the claimant.
KEYPOINT
A real risk of dissipation must be proved by solid evidence; unexplained past spending and ordinary commercial dealing do not, without more, justify a Mareva injunction.
COMMENTARY
First, an affidavit of assets speaks as at its date. A respondent who no longer holds sums he once had is not obliged to account for where they went in order to resist a freezing order; gaps of that kind are properly explored in cross-examination and do not, by themselves, establish a real risk of dissipation.
Second, timing and the evidential burden matter. Where a claimant says a sale or transfer is a reaction to the suit, it must have evidence to that effect. An advertisement appearing shortly after the writ, without evidence that the asset was not already on the market, proves nothing. There is nothing which obliges a respondent to halt a bona fide, pre-existing intended dealing simply because he has been sued.
Third, a respondent may continue to run his business. Steps taken to perform existing contracts after accounts are frozen are ordinarily legitimate. A claimant troubled by such steps should seek appropriately framed carve-outs rather than treat continued trading as dissipation. Consistent with Bouvier, allegations of dishonesty that do not bear on the risk of dissipation add nothing to the analysis.
This decision is a useful reminder that a freezing injunction targets the risk of dissipation, not the adequacy of a defendant’s assets, and will be discharged where that risk is not made out on solid evidence.
See also:
Sophia Ng
Associate Director