In Emmott v Michael Wilson & Partners Ltd  EWCA Civ 219, a freezing injunction had been obtained following an arbitration award which had been unsuccessfully appealed and which had been converted into a judgment of the court. Originally, the injunction contained what is known as an Angel Bell exception, which meant that the debtor company was not prohibited from ‘dealing with or disposing of any of its assets in the ordinary and proper course of business’. In 2017, the injunction was varied to remove the exception, and the Court of Appeal upheld this decision.
In Emmott, the Court of Appeal held that although a freezing injunction would, as an unavoidable result of their design, put pressure on a Defendant to pay a judgment, this did not, by itself, make the injunction illegitimate. Further, the court did consider that it would sometimes (and perhaps usually) be inappropriate to include the Angel Bell exception in a post-judgment freezing injunction, since to do otherwise would permit the judgment to be ignored, whilst the debtor continued to carry on business. Of course, anybody applying for a freezing injunction must take account of the fact that it is already a draconian step, and the more draconian the relief, the greater the need for its justification. However, the check on the potential damage to the debtor’s business was that a risk of dissipation had to have been demonstrated, for the injunction to have been granted in the first place.
The court was unwilling to lay down a rule that refusal of the Angel Bell exception in such circumstances was either the starting point or a presumption, but neither was it “a remedy of last resort”. Thus, although the appropriateness of the Angel Bell exception in a post-judgment freezing injunction is a question turning on all the facts in the case, and a discretionary exercise on the part of the judge, creditors should now be confident that the debtor will have fewer ways to hide its assets from enforcement.