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Freezing order does not create a charge (Flightline Ltd v Edwards)

United Kingdom
07/02/2003
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The case of Flightline Ltd v Edwards & anor (reported on Law-Now on 15 August 2002) has been overturned on appeal ([2003] All ER (D) 50 (Feb)), so that the creditor of the company who had obtained a freezing order over assets could no longer claim that the order created security over those assets.

Initially, the judge had held that the creditor's freezing order gave it a valid charge over monies held in a joint account as security for costs in litigation under way between the company and the creditor.

The liquidators appealed against this decision and the court held on 5th February 2003, that a freezing order did not create a security right over the assets from time to time subject to it, because a freezing order did not impose an obligation on the part of the respondent to satisfy any judgment debt out of those assets.

For further information, please contact Sophie Elboz at [email protected] or on +44 (0)20 7367 2958 or Ruth Pedley at [email protected] or on +44(0)20 7367 2098

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