Nicholas Leah successfully resists short notice worldwide freezing injunction application

In JLA 79 Ltd v Lermer [2025] EWHC 3599 (Comm), the High Court refused a worldwide freezing order sought on very short notice on the final sitting day before Christmas.  Acting for Jeffrey Lermer, Nicholas Leah successfully resisted the application of JLA79 Limited (“JLA79”) on every part of the test for a freezing order.          

On 23 December 2025, Her Honour Judge Watson, sat as a Deputy High Court Judge, dismissed the application in its entirety and awarded Mr Lermer all his costs. The judgment provides a useful and practical illustration of the pitfalls that can undermine an urgent freezing injunction application, even one brought on notice.   

Background

The underlying dispute arose out of a share purchase agreement (“SPA”) dated 29 October 2024 between JLA79 (as buyer) and Mr Lermer and two companies (as sellers). Under the SPA, JLA79 acquired 90% of the issued share capital in JLA (UK) Limited and New Thinking Leaders Limited for the sum of £1.9 million. Both target companies operate as accounting businesses, and Mr Lermer remains a director.

JLA79 subsequently alleged that the shares were worth significantly less than the price paid, and that there were undisclosed liabilities and claims. It indicated an intention to pursue a multi-million-pound claim in fraudulent and/or negligent misrepresentation and breach of warranty.

The application

JLA79 brought the application on Friday 19 December and sought an urgent hearing before Christmas. A hearing was listed on 23 December, the final sitting day before Christmas. JLA79 therefore only gave Mr Lermer only 1 clear day of notice.

CPR 23.7(1) requires that an application brought “on notice” must be served as soon as possible and at least 3 clear days before the court is to deal with the application. Anything less than 3 clear days of notice would amount to “short notice”.   

The decision

On the merits, the application failed at every stage.

As to good arguable case, JLA79 relied on a range of allegations, including accounting treatment of pre-payments, failure to discharge a property charge, undisclosed claims, and failures in customer payment advice. HHJ Watson found the alleged claims “extremely vague, unparticularised, unquantified and almost wholly lacking in supporting evidence” (paragraph 24).

On real risk of dissipation, JL79’s evidence focused on the sale of three properties. Two of those properties allegedly involved the proceeds of sale being used to pay off some family debt. HHJ Watson found that those properties were investment properties sold in the ordinary course of business. There was no evidence they were sold to put assets beyond JLA79’s reach, not least because they were sold prior to the letter of claim.

JLA79 further alleged that it owned 30% of the third property, Lytton Road, as that is building from which the accounting business operates. HHJ Watson found that JLA79’s evidence of ownership was weak, and, in fact, its own evidence appeared to accept that Mr Lermer might own the beneficial interest in Lytton Road.   

Most notably, HHJ Watson was troubled by the inconsistency between JLA79’s allegations and its own conduct. Despite alleging fraud, JLA79 had left Mr Lermer in control of the businesses it had acquired. HHJ Watson observed:

“If I thought somebody was defrauding me, the first thing I would do would be dismiss them as a director…Instead, the claimant has left the alleged fraudster in complete control…There is something about the decision to do that [which] does not sit well with asking me to conclude that the respondent is a fraudster who is liable to dissipate assets…” (paragraph 33).

The application’s procedural deficiencies

The application was also undermined by serious procedural failings, either of which alone might have proved fatal.

Firstly, JLA79 did not provide full and frank disclosure in its evidence. HHJ Watson emphasised that, even on short notice applications, applicants must present a fair and balanced account of the evidence, including being open-handed and clear about points that may assist the respondent.

Secondly, JLA79 failed to provide evidence that it had the financial means to honour its cross-undertaking in damages. Assertions made from the Bar were unsupported by documentary or independent evidence. HHJ Watson reiterated that applicants are ordinarily expected to adduce accounts or equivalent financial material to demonstrate that the undertaking provides real protection.

Practical significance of the decision

The decision offers several practical takeaways for practitioners:

• Short notice is unusual: Freezing injunctions are rarely brought on notice where dissipation is genuinely feared (paragraphs 42-43). Proceeding on short notice invites scrutiny as to whether the urgency is real or artificial.   
• Full and frank disclosure still applies on short notice: Notwithstanding the notice given, applications brought on short notice (less than 3 clear days before the hearing) still require applicants to give full and frank disclosure. The duty is not removed or diluted by the presence of the respondent or representation at the hearing (paragraph 4). The duty of full and frank disclosure requires a “fair and balanced assessment of the evidence put before the court”, including “open-handedness” and “clarity” as to the strengths of a respondent’s position (paragraphs 44 to 45).  
• Evidence of means is required for a cross-undertaking: Courts expect evidence of an applicant’s means to honour a cross-undertaking in damages. It is usual for accounts to be offered or some other evidence of the means of the company so the court can be satisfied that there is a meaningful protection for the respondent (paragraph 40).
• Evidence matters to establish a good arguable case: Although the threshold is “quite low”, evidence to support a good arguable case on the underlying claim needs to be more than just assertion (paragraph 24). There needs to be a “plausible evidential basis” as the Court of Appeal put it in Kaefer v. AMS [2019] 3 All ER 979 (at paragraphs 73-80). In other words, if the underlying claim is “unformulated and inchoate”, an injunction likely to be refused (see, Fourie v Le Roux and others [2007] UKHL 1 at paragraph 21, per Lord Bingham of Cornhill).
• Real risk of dissipation requires substance: Mere assertions without any evidence in support does not amount to a real risk of dissipation (paragraph 32). There must be “solid evidence”. There must be a real risk, judged objectively, that a future judgment would not be met because of unjustifiable dissipation of assets (see, Holyoake v Candy [2017] 3 W.L.R 1131 at paragraph 34, per Gloster LJ).   

JLA 79 Ltd v Lermer offers a cautionary example of how both evidential weaknesses and procedural deficiencies can defeat an urgent freezing injunction application. A particular takeaway from this case is that the court will test not only the allegations advanced, but whether they are borne out by the applicant’s own behaviour. Where an applicant alleges fraud or dishonesty but continues to entrust the respondent with control of valuable assets it owns, that inconsistency may undermine any assertion of risk of dissipation.  

Nicholas Leah was instructed by Mark Edmonds and Leonie Savory of Griffin Law on behalf of Mr Lermer.