The Chancery Division has dismissed a funding disclosure application against a firm of solicitors representing an individual subject to a Worldwide Freezing Order (‘WFO’) in Tonstate Group Limited v Wojakovski  EWHC 1122 (Ch).
The applicants sought disclosure of the source of third-party funds advanced to cover legal fees incurred by the subject of a WFO. They argued that Rayden Solicitors were in breach of the WFO and in contempt of court by failing to disclose the source of those funds on the basis that, though not belonging to the client, the funds nonetheless fell within the extended definition of “assets” in paragraph 3 of the standard WFO form as they were held “in accordance with direct or indirect instructions” from the client – who was subject to the disclosure obligations imposed by the WFO.
Zacaroli J rejected those arguments (advanced in reliance on JSC BTA v Ablyazov (No 10)  UKSC 64) as conflating a client’s ability to direct his solicitors’ work with the ability to direct the use to which funds could to be put; he also refused to make any order against Rayden Solicitors as they had already volunteered the information sought. The Court did however make an order for disclosure against a second firm of solicitors pursuant to section 37 Senior Courts Act 1981, and the judgment contains some useful remarks on the Court’s discretion to order such disclosure as ancillary to and in aid of the enforcement of a WFO.