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Guidance on “real risk of dissipation”: Les Ambassadeurs Club Ltd v Yu

In Les Ambassadeurs Club Ltd v Yu, the Court of Appeal had to determine what is meant by “a real risk of dissipation”. It also had to consider whether the Deputy High Court Judge misunderstood the test by applying too high a threshold when refusing to grant a post-judgment freezing injunction.


Les Ambassadeurs Club Ltd (the Club) operated a casino in Mayfair, London.  In 2014, Mr Yu became a member of that Club.  When he first became a member, he and his family were ranked by Forbes as number 149 on China’s Rich List, with a net worth of $1.3 billion.

Between April and May 2018, Mr Yu used a cheque cashing facility granted to him by the Club and purchased £19 million worth of chips using a series of cheques.  All the cheques were subsequently dishonoured.

In November 2018, the parties reached an agreement whereby Mr Yu agreed to pay the Club £16.54 million by instalments. Mr Yu failed to pay the first instalment when it fell due and under the terms of the agreement the full amount became payable immediately.

On 21 December 2018, the Club issued proceedings against Mr Yu in the Queen’s Bench Division. After proceedings were served, Mr Yu made a number of payments to the Club. By the end of December 2019, the principal amount outstanding was just under £6.54 million.

In August 2020, the Club decided to pursue the proceedings. It amended the claim, which took into account the payment made by Mr Yu, and applied for summary judgment. On 19 November 2020, Master Thornett gave summary judgment for the principal sum outstanding plus interest and costs. The judgment was for just over £10 million. The order of Master Thornett was served on Mr Yu both in its original form and in translation.

Mr Yu did not pay the ordered sum. On 20 April 2021, the Club applied for a post-judgment worldwide freezing order. The application and evidence in support were served on Mr Yu, together with translations.

High Court decision

The application was considered by Mr Peter Marquand, sitting as a Deputy High Court Judge (the judge), at a remote oral hearing.

The judge identified four requirements which the applicant needed to demonstrate for a freezing order:

  • A good arguable case on the merits.
  • A real risk of dissipation.
  • Assets were held by or on behalf of the respondent within the (geographical) scope of the proposed injunction.
  • In all the circumstances, it would be just and convenient to grant the order sought.

As the Club had already obtained summary judgment, the first requirement was met. As to the third, the judge was satisfied on the evidence adduced by the Club that it was likely that Mr Yu has assets in this jurisdiction and in other parts of the world, including Hong Kong, which would be covered by a worldwide freezing order.

The real issue in this case was whether there was a real risk of dissipation of those assets.

The judge considered each of the nine factors relied upon by the Club as demonstrating that risk, before concluding that he was not satisfied on the evidence when viewed as a whole and looking at all the features cumulatively, that a real risk of dissipation had been established. There was no more than a suspicion or a fear of a risk that Mr Yu would dissipate his assets. The judge refused to grant the injunction and refused permission to appeal.


The Club appealed the judge’s decision on two grounds:

(1) That the judge misinterpreted the phrase “real risk of dissipation” and thereby erred in law. Had he interpreted the phrase correctly he would (or should) have found that there was a real risk of dissipation, and therefore would (or should) have granted the injunction sought; and

(2) Even if the judge did not misinterpret the phrase “real risk of dissipation”, he erred in finding that was not a real risk of dissipation on the basis of the evidence before him. But for that error he would (or should) have granted the injunction sought.

Permission to appeal was granted by Singh LJ on 24 June 2021.  Mr Yu took no part in the appeal.

Before considering submissions made in support of those grounds, the Court of Appeal explained that the purpose of a freezing injunction is to ensure that assets were not dealt with in a way which made them unavailable by the time the judgment comes to be enforced.

The Court of Appeal recognised that as a freezing injunction interferes with a person’s right to do as they please with their own property, the courts must ensure that such orders will only be granted in cases in which there is sufficient evidence to establish a real risk of dissipation. It was important to draw the distinction between a party who can pay but refuses to pay until he is forced to do so, and a party who is so determined not to pay that he would take active steps to frustrate the recovery of sums due to his creditors by transferring or concealing assets or by some other form of unjustified dissipation.

In considering whether the evidential threshold as to the meaning of “real risk” applied by the judge was too high, the Court of Appeal rejected the submissions that a “real risk” means a risk that is “more than merely fanciful”, which sets a relatively low threshold.  The test is a simple binary test to be applied in all cases. The Court of Appeal said that:

The focus should be on whether, on the facts and circumstances of the particular case, the evidence adduced before the court objectively demonstrates a risk of unjustified dissipation which is sufficient in all the circumstances to make it just and convenient to grant a freezing injunction. Plainly a risk which is theoretical, fanciful or insignificant will not meet that threshold; but the judge should be addressing the question whether he or she is satisfied that the alleged risk is real, and that does not require any comparative exercise to be carried out, or the attaching of some other label to a risk which falls short of the threshold.” (Paragraph 36, judgment.)

In dismissing the first ground of the appeal, the Court of Appeal held:

The judge was not satisfied that the evidence demonstrated that Mr Yu fell into a different category from any other debtor who does not want to pay his debts. He held that there was no more than a suspicion or a fear that there was a risk that Mr Yu would dissipate his assets. That is another way of saying that, on his assessment, the evidence established no more than a fanciful or insignificant risk. He plainly understood the test. I would therefore dismiss the appeal on Ground 1.” (Paragraph 38, judgment.)

In relation to the second ground of the appeal, the Court of Appeal found that the judge had taken the correct approach by addressing each of the nine factors in support of the proposition that there was a real risk of dissipation, but had reminded himself that he should consider them cumulatively.

The question for the Court of Appeal was whether the judge, on the proper application of the test, had reached a conclusion that was open to him on the evidence.  The court concluded that:

“When one reads the judgment as a whole, and particularly the conclusion at [35] and [36], it is readily apparent that what the judge was really saying was that on the evidence taken as a whole, the factors he had identified in favour of a risk of dissipation were insufficient to satisfy him that there was a real risk of dissipation in this case, and there were none of the other sorts of factors that one sometimes sees in other cases that would have carried this case across the threshold. That is why he describes the factors that he had identified in favour of a real risk as “not very convincing”. In this case, the judge took the view after carrying out a meticulous balancing exercise that the evidence relied on was not strong enough to establish that the risk was a real one. It was a view that he was entitled to reach and for that reason, the appeal cannot succeed on Ground 2. (Paragraph 59, judgment.)

Accordingly, the appeal was dismissed on both grounds.


This judgment provides guidance on the meaning of a “real risk of dissipation” and the court’s approach when dealing with a freezing injunction application.

As freezing injunctions have the “nuclear effect” of prohibiting the debtor from dealing with his assets, the courts will closely examine all the facts and only make such orders where there is sufficient evidence of a real risk.

The court will not allow a creditor to use it to safeguard against insolvency, obtain security for a claim, nor allow it to be used as a standard means of securing enforcement of a judgment, like a charging order or third party debt order.

It will make no difference in terms of the “risk” to be established whether the order is sought before or after judgment.

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