“Mareva Light”: how useful are freestanding Notification Injunctions in practice?

“Mareva Light”: how useful are freestanding Notification Injunctions in practice?

Holyoake v Candy [2016] EWHC 970 (Ch)

Freezing injunctions generally

Formerly known as a “Mareva Injunction” following the case of Mareva Compania Naviera SA v International Bulk Carriers SA (The Mareva) [1980] 1 All ER 213, the English courts’ wide general power to grant an injunction to preserve a defendant’s assets (a “freezing injunction” or “freezing order”) is long established.

To succeed in an application for a freezing injunction a claimant must demonstrate a cause of action, a good arguable case and risk of dissipation of assets. The English court must also have jurisdiction to grant the order and the claimant must be able to provide a cross-undertaking in damages to compensate the defendant for loss should it later transpire that the claimant was not entitled to the relief granted. Often a cross-undertaking is required to be “fortified” by the provision of security or the payment of money into court, an onerous requirement on claimants.

However, the need for a substantial cross-undertaking may be obviated by an injunction that is less burdensome on defendants. In Holyoake v Candy the court recently granted an injunction requiring the Defendants to notify the Claimants in advance of entering into any substantial transactions.  This “Mareva Light” approach is the first time a freestanding notification injunction has been granted and may serve as a useful alternative to claimants.

Holyoake v Candy – the facts

In 2011 Mr Candy, a well-known UK property developer, loaned Mr Holyoake £12 million to help him fund the purchase and redevelopment of Grosvenor Gardens in London’s Belgravia. Mr Holyoake subsequently claimed that he had been the victim of a conspiracy perpetrated by Mr Candy and others (including Mr Candy’s brother), had been coerced into entering into further agreements, and had suffered intimidation, and “mafia-style” threats from the businessman.  

Mr Holyoake sought an interim injunction to restrain Mr Candy and the other defendants from disposing of or dealing with assets up to the value of £1 million without first giving Mr Holyoake’s solicitors seven days advance notice in writing.

As well as assessing whether the court had jurisdiction to grant a freestanding notification injunction, Nugee J considered the threshold and level of risk the claimant must demonstrate to be granted a notification injunction.

Threshold Test

Nugee J held that the proper test was the same as that for a freezing injunction, being the test laid down by Mustill J in The Niedersachsen [1983] 1 WLR 141 not simply a “serious issue to be tried”, (the usual threshold test for interlocutory injunctions as set out in American Cyanamid (No 1) v Ethicon Ltd [1975] UKHL 1), as argued by Mr Holyoake.

Accordingly, although a notification injunction is less invasive than a freezing injunction, the initial hurdle to obtain such injunction is the same.

Risk of dissipation

Nugee J confirmed that objective facts are required to infer a risk of dissipation and that importantly, the fact that a notification injunction was less intrusive than a freezing order, was relevant to the degree of risk required to be demonstrated.

Evidence of use of complex and opaque offshore structures is a factor that can legitimately be taken into account when assessing risk. It transpired that Mr Candy had purchased a £26 million yacht in his wife’s name and in the absence of any explanation, this was precisely the sort of circumstance which would give rise to a risk of dissipation.

Fortification and convenience

Although a notification injunction is plainly less invasive than a full freezing injunction, the defendants in Holyoake argued that the notification requirement put the defendants to significant expense and also risked real prejudice.

The level of fortification was therefore fixed at £5m; not an inconsequential sum.


There has been much speculation about the usefulness of the “Mareva-light Injunction”.  

Whilst the court accepted that a notification injunction is a less invasive option than a freezing injunction, the threshold for obtaining such an injunction will be the same as that of a freezing injunction with the claimant still having to show a “good arguable case”.

The distinction in terms of invasiveness therefore appears to only be relevant with respect to the level of risk of dissipation which must be shown. The level of risk that needs to be shown to obtain a notification injunction will generally be lower than that of a freezing injunction.

Another advantage to claimants that may stem from a notification injunction is the expectation that a limited cross-undertaking will be required. This can also be mirrored as a benefit to defendants who find that the level of loss is likely to be more limited with a notification injunction than a freezing injunction. However, as seen in the case of Holyoake, a cross-undertaking and fortification may still be substantial and, depending on the facts of the case, a notification injunction may still cause significant inconvenience to a defendant.

Nevertheless, there may be some cases where the moderate distinction in the process of obtaining a notification injunction means that a notification injunction is more appropriate in the circumstances. It remains to be seen whether there will be a notable uptake on freestanding notification injunctions in lieu of freezing injunctions.