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I

n a judgment that will be

of interest to judgment

creditors and debtors

alike, in

Marex Financial Ltd v

Sevilleja Garcia

[2017] EWHC

918 (Comm), Mr Justice

Knowles considered whether

a shadow director who had

allegedly dissipated the

companies’(debtors’) assets

had committed the tort of

inducing or procuring the

companies to act in wrongful

violation of the claimant’s

rights under an existing

judgment.

In 2013, the claimant (Marex)

brought claims against Creative

Finance Limited and Cosmorex

Limited. In the usual way, the

judge released a draft of his

ruling on 19 July 2013, awarding

judgment in favour of Marex in

excess of $5m. The judgment in

final formwas handed down on

26 July 2013. A freezing order

was obtained by Marex against

the companies on 14 August

2013. The companies made

disclosure of their assets

pursuant to the freezing order,

stating assets of only $4,392.48.

Marex alleged that, after the

draft judgment was released,

the defendant (Sevilleja), who

himself described the companies

as his principal trading vehicles,

and who Marex alleged was

the ultimate beneficial owner

and shadow director of the

companies, stripped assets from

the companies so they would be

unable to pay the judgment.

In particular, Marex claimed

damages against Sevilleja for:

(1) inducing or procuring the

violation of Marex’s rights under

the judgment, and/or (2)

intentionally causing loss to

Marex by unlawful means.

In opposition, Sevilleja

challenged the court’s

jurisdiction on the basis that: (1)

the tort of inducing a breach of

Marex’s judgment rights does

not exist; (2) the unlawful means

were not in reality unlawful; and

(3) the rule against reflective

loss precluded Marex’s claim.

Knowles J dismissed the

jurisdiction challenge, and held

that Sevilleja’s actions amounted

to a wrongful violation of Marex’s

rights under the judgment.

Typically a party making itself

judgment-proof by dissipating

assets before a freezing order

is obtained does not commit

an actionable wrong in and of

itself (

LawDebenture Trust

Corporation v Ural Caspian Oil

Corporation Ltd

[1995] Ch 152).

However, Knowles J concluded

that, whereas in

LawDebenture

Trust

the claimant had no right

to payment prior to the granting

of the injunction, here Marex

had a right before judgment to

be paid a contractual sum, and

after judgment to be paid the

judgment sum.

Further, and having regard

to the level of control the

12

www.solicitorsjournal.com

23 May 2017

SJ 161/20

COMMENT

MENTAL HEALTH

Asset-stripping and judgment avoidance

I

n 2012, a month after the

birth of her child, Alice

Gibson-Watt, 34, was

restrained by emergency

services in response to an

episode of severe postpartum

psychosis at her London home.

Alice was later transferred to

the Lakeside Mental Health Unit

inWest Middlesex Hospital,

where she suffered a cardiac

arrest. An inquest recently

concluded that Alice died from

a brain injury caused by cardiac

arrest. The use of restraint was

found not to have contributed.

There had, however, been gross

failures surrounding her

resuscitation, which led to

her brain injury.

The inquest concluded

that Alice would have survived

if CPR was given promptly

and effectively. Alice’s inquest

has raised concerns about

treatment of physical conditions

in a mental health setting.

Alice’s case will strike a

chord with many. She was a

newmother, with no previous

mental health concerns.

Postpartum psychosis can

appear out of the blue in

women with no previous

history of mental illness. If

acted upon quickly it can be

treated, otherwise symptoms

can escalate drastically,

which can result in serious

consequences. Symptoms vary

fromwoman to woman but

they will often experience

delusions or hallucinations

coupled with depression,

mania, or confusion.

So how did postpartum

psychosis lead to Alice’s

untimely death? The most

distressing conclusion of the

inquest is that Alice’s death was

avoidable. The inquest found

that there was a distinct lack of

basic care provisions available

in the mental health unit. Why

should Alice’s care for her

physical injuries have been

responded to any differently

because she was in a mental

health setting? Basic CPR

training and robust emergency

procedures should surely be

standard for all medical staff

where they are responsible for

patient wellbeing.

The inquest found that it

took nearly 25 minutes to begin

CPR and the crash team then

had difficulty accessing the

mental health ward due to the

entrance being locked and no

member of staff being available

to allow them entry. This would

not be acceptable in A&E or

any other ward, so why was it

allowed to happen here?

Mental health units need

to have staff with sufficient

training in identifying and

treating the physical needs of

patients, not just mental health

Preventing tragic outcomes

Hannah Travis is a medical

negligence solicitor at

Bolt Burdon Kemp

@BoltBurdonKemp

www.boltburdonkemp.co.uk

Leigh Callaway is a senior

associate in the commercial

litigation team at Fladgate and is

president of the Junior London

Solicitors Litigation Association

www.lsla.co.uk/junior