Sensar Ltd & Azdar Ltd v Newbury Venture Capital Ltd & Ors

This is a renewed oral application for permission to appeal in relation to a decision by the judge at first instance, HHJ Simon Brown QC sitting as a judge of the High Court in Birmingham District Registry, to discharge a freezing injunction in so far as it had been granted against Berkshire Homes (Northern) Limited and.The freezing injunction had initially been granted on an ex parte basis against Berkshire Homes (Northern) Limited, Newbury Venture Capital Limited and Hometrader Group PLC. Newbury Venture Capital Limited and Hometrader Group PLC were not discharged from the freezing injunction that had been granted.

The application under which the judge had discharged Berkshire Homes (Northern) Limited (“BHNL”) was by that company, in which it submitted that there was not a proper basis on the material then available on which a freezing injunction could be granted and continued against it. The judge found on the very limited material then available before him that there was not a serious issue to be tried or arguable case of a cause of action against BHNL (see paragraphs 6 and 7). Despite the allegations that were made against BHNL in the course of the hearing, the judge said:

“Unfortunately there is no evidence about that that I can deal with on a freezing injunction. If and when that happens [i.e. evidence becomes available] then an application could of course be made, but I am satisfied on the papers before me that upon the evidence before me there is no arguable case whatsoever against the third defendants (that is, BHNL) so far as fraud [is concerned] or, as put in the claim form which is before me, a claim of breach of contract.”

The judge also considered a secondary basis on which the application for a freezing injunction against BHNL was put, namely in reliance upon the Chabra jurisdiction, but he rejected that application (see paragraphs 8 and following), essentially on the basis that there was no significant evidence before him which would justify for the purposes of the application before him a conclusion that BHNL was in fact acting, or arguably acting, as a custodian for assets which were really and in truth the assets of either of the first two defendants.

The application for permission to appeal came before Lewison LJ on the papers. He refused permission to appeal, writing this:

“1.

PD 25A para 3.1 states that applications for freezing injunctions must be supported by affidavit evidence. Not only is there no affidavit evidence, there is not included in the appeal bundle any witness statement supporting the application against BHNL. It is impossible to tell what parts of the material were actually placed before the judge either on the original application for the freezing order or on the subsequent application to discharge it. The only evidence in proper form was that of Mr Harrison Keeley.

2.

The judge was correct to hold that there was no direct cause of action against BHNL. The only live question was whether he should exercise a discretion to freeze assets ostensibly belonging to a third party on the ground that in reality they belonged to one of the other two defendants. The judge recorded that the only ‘evidence’ which had been produced was by way of a skeleton argument. The skeleton argument plainly does not satisfy the requirements of PD 25A para 3.1 and the judge should have discharged the freezing order on that ground alone, but having considered the ‘evidence’ the judge concluded that there was no evidence of dissipation by BHNL and that its assets were their own. That was an assessment of the evidence to which the judge was entitled to come and there is no real prospect that the Court of Appeal would grant a freezing order on the basis of the materials at present before the court.

3.

Although an extension of time has been requested, it is not needed. The appellant’s notice was filed in time.

4.

There is no ground upon which the discharge of the freezing order should be stayed in view of (a) the lack of proper evidence and (b) the judge’s conclusion that there was no real risk of dissipation.”

Today Ms Ziga appears in person representing the appellants. She has compiled for the purposes of this hearing what was missing previously, a detailed witness statement explaining the basis on which she says the Chabra jurisdiction should be exercised against BHNL. She also relies on a petition of the Secretary of State to wind up Newbury Venture Capital Limited and Hometrader Northwest Limited in the public interest on the grounds that they are being operated as part of a means to conduct fraudulent activities. The petition is dated as having been presented to the court on 5 June 2015. Clearly, it was not material that was put before the judge below. In the bundle of materials that Ms Ziga has presented to the court in support of the present application there are other materials which plainly have been gathered together at some time after the application was made to the judge in the court below, for example the witness statement of Mr Mohammed Imran Javed which is dated 18 January 2016.

As I have reminded Ms Ziga on this application, the purpose of the present application is to see whether there is a proper basis on which it might arguably be said that the judge below erred in making the decision he did to release BHNL from the freezing order. The fact that new materials are now available might, as the judge himself pointed out in relation to the question of cause of action, be a basis on which a new and distinct application could be made to a judge at first instance seeking now to impose a freezing order. Obviously if that were to be done the Practice Direction would have to be complied with and either it would have to be shown that there is a good, arguable cause of action against BHNL or that there is a proper basis for exercising the Chabra jurisdiction in relation to BHNL.

As it seems to me, there may be a basis in the new materials what have been collated and placed before the court for the purposes of the present application for making a new application to the court at first instance if it could also be shown, alongside either a cause of action or a basis for exercise of the Chabra jurisdiction, that there is a real risk of dissipation of relevant assets by BHNL. I say nothing about whether that could or could not be done. For present purposes, however, I am satisfied that on the basis of the materials that were before the judge on the application which he determined there is no real prospect of success on appeal in seeking to persuade this court that the judge erred in making the decision that he did. I respectfully agree with the reasons given by Lewison LJ which I have set out above. In my view there is no real prospect of success on appeal and there is no other compelling reason to grant permission to appeal.

Accordingly this application is dismissed.