England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURT OF ENGLAND & WALES
BUSINESS LIST (ChD)
IN THE MATTER OF SECTION 25 CIVIL JURISDICTION AND JUDGMENTS ACT 1982

		Rolls Building Fetter Lane London EC4A 1NL
		29 May 2018

MR JUSTICE NORRIS:

1. On 30 April at 20.18 Hildyard J made a Freezing Order (and an ancillary order for disclosure) in exercise of the jurisdiction conferred by s.25 of the Civil Jurisdiction and Judgments Act 1982 against Yuval Abraham: he did so in aid of proceedings that Hiscox Services Limited and its associated companies had brought in Bermuda. The Supreme Court of Bermuda had, on 25 April 2018 made on an ex parte basis a worldwide Freezing Order, which Freezing Order had been continued at a return date on 27 April 2018, attended by Leading Counsel for Mr Abraham.
2. The brief background is that Mr Abraham had been the chief financial officer of Hiscox Services Limited. According to traceable computer records he had made or procured the making of suspicious payments of some US $1.847 million, or the equivalent in Swiss francs, to two suppliers and repairers of Swiss watches, Montres Journe New York LLC and Kari Voutilainen. Hiscox had no commercial relationship with either payee. There is credible evidence - though of course the matter must ultimately be tested at a trial - that these payments were procured on the basis of false invoices, which either Mr Abraham in his own name, or in the name of another employee, had generated.
3. Hildyard J made his s.25 Freezing Order in support of the Bermudian proceedings and in support of the Bermudian Freezing Order. The question is whether I should continue that. I am satisfied that the reasons which prompted Hildyard J to make the order, apparent from an Attendance Note of the hearing that I have read, justify the continuation of the order.
4. First, I am satisfied that there is a good arguable case for breach of fiduciary duty which Hiscox might bring against Mr Abraham. Again one is not at this stage making any conclusive finding but merely assessing the strength of the case, as yet unanswered, made before the court. Secondly, there is nothing which makes it inexpedient for the English Court to support the Bermudian Court in the relief which that court is granting to the claimant before it. Thirdly, it is now apparent that there are assets within the jurisdiction. In particular there is an HSBC Bank account and there is also a pension policy with Aviva. At the time of the grant of the ex parte order, the existence of assets within the jurisdiction was only a matter of inference. Now it is a matter of established fact.
5. So in my judgment the relevant thresholds for the exercise of the jurisdiction are crossed. I am satisfied that there is a real risk of the dissipation or secretion of assets, or that Mr Abraham will use his powers of ownership or control over property to frustrate the ends of justice. I have found a good arguable case that he has fabricated invoices. The assets with which he was dealing are highly mobile Swiss watches. He has, since the discovery of the suspicious transactions, left Bermuda and travelled to the USA and the UK, and to South Africa; so he himself is therefore wholly mobile. Mr Abraham has not complied with that part of the English order that required him to swear an affidavit setting out his assets in this jurisdiction: a degree of secrecy persist. It is appropriate to prevent dealings with assets to the extent necessary to support the Bermudian Court, which has given specific permission for the present application to be made.
6. The question for today therefore is whether as a matter of discretion I should decline to continue an injunction which is otherwise good on its face.
7. In a series of emails to the solicitors acting for Hiscox in this jurisdiction, and directly to the court, Mr Abraham has asked me not to continue the injunction on the footing that the existing injunction is being misused so as to prevent him obtaining legal advice or funding a defence of his claim in this jurisdiction. It should be said that Hiscox has already consented to the release of US $20,000 from the HSBC account, (which it is known exists in this jurisdiction) specifically for the purpose of paying Mr Abraham's legal team in Bermuda. In a letter dated 1 May 2018 Hiscox's English solicitors notified HSBC of the existence of a Freezing Order and of their consent to the payment of US $20,000 for legal fees to Mr Abraham. But they said that they wanted confirmation from the bank that the bank would not allow any further transactions to be made from that account, or from any other account held for the benefit of Mr Yuval Abraham. That was understandable because they were plainly only giving their agreement to a particular payment.
8. In the usual way, the Freezing Order granted by Hilyard J provided for a weekly payment of $5,000 to Mr Abraham, the sum originally granted by the Bermudian Court to cover his rental costs in Bermuda. Mr Abraham wished to draw down further tranches of US $5,000 in subsequent weeks. The bank told him that such were not permitted unless he informed Hiscox's solicitors. He did so inform Hiscox's solicitors. They did not object to the payment. But it appears that the bank may not have permitted the payments of $5,000 per week to be made. Indeed it may be that the credit balance on the account is not sufficient to permit such payments. On the basis of that, Mr Abraham has emailed the court to say that this is a manipulation of the Freezing Order, and is oppressive conduct, which is preventing him from complying with that part of the English order that requires him to make an affidavit of his assets in the United Kingdom, or to defend the claim against him, which he says is factually inaccurate.
9. In a lengthy three page email sent to the court on 28 May, he has set out his concerns. But two points are notable in this connection. First, nowhere in the email does he attempt to address the substance of the case against him. The focus is entirely on what he thinks are the procedural obstacles being put in the way of his obtaining US $5,000 from his HSBC Bank account. Secondly, he does not explain why - given that there is also an ability under the Bermudian order to withdraw $5,000 a week for living expenses - this is itself insufficient for him to pay the very modest costs of swearing an affidavit or of setting out his case before the court. Indeed in the correspondence generated by his complaints at his inability to access $5,000 per week from the HSBS account, he has been advised that it is open to him (if he cannot afford an affidavit), simply himself to make a witness statement, or even to set out in narrative form in a letter or email, what his case is. He has declined to avail himself of this facility on the basis that this is a "lesser" form of evidence than would be contained in an affidavit.
10. It is true that a court will require evidence either in affidavit form, which can be the subject in the case of falsity to an application for perjury, or a witness statement which can, in the case of falsity, be the subject of an application to commit for contempt of court. The importance of evidence is undoubted. But the court could take into account material not in evidence but placed before the court in correspondence, as indeed Mr Abraham invites the court to do in his email complaining about the effect of the English Freezing Order. But he has declined to avail himself of that opportunity.
11. In these circumstances I see no inhibition in the way of continuing the Freezing Order and I shall do so. So as to emphasise that the breaking of the order of Hildyard J, (by not filing affidavit evidence of assets) is not discharged and has not been overlooked, I shall myself make a separate order requiring Mr Abraham to file and serve an affidavit of assets. I intend to allow him a generous time within which to do so, both so that he can raise the funding either in Bermuda or the UK, and so that he shall have full opportunity for reflection in order to produce an accurate statement, previous statements as to Mr Abraham's assets made by his Leading Counsel in Bermuda having critical errors and inaccuracies.

CERTIFICATE Opus 2 International Ltd. hereby certifies that the above is an accurate and complete record of the proceedings or part thereof. Transcribed by Opus 2 International Ltd. (Incorporating Beverley F. Nunnery & Co.) Official Court Reporters and Audio Transcribers 5 New Street Square, London EC4A 3BF Tel: 020 7831 5627 Fax: 020 7831 7737 civil@opus2.digital This transcript is subject to the Judge's approval

_________