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

On a renewed application for permission to appeal, the Court of Appeal considers whether the first-instance discharge of a freezing injunction had any realistic prospect of being shown to be erroneous. New evidence gathered after the first-instance decision cannot ordinarily establish an appealable error. It may support a fresh application at first instance, provided the requirements for the injunction are met. An application to freeze assets ostensibly belonging to a third party requires proper evidence and either a good arguable cause of action against that party or a proper basis for the Chabra jurisdiction, together with a real risk of dissipation. Permission should be refused where there is no real prospect of success and no other compelling reason to grant it.

The applicants sought permission to appeal against the decision of HHJ Simon Brown QC, sitting as a deputy High Court judge in the Birmingham District Registry, which discharged a freezing injunction against Berkshire Homes (Northern) Ltd while leaving it in place against the other respondents.

The first-instance judge found no serious issue or arguable cause of action against Berkshire Homes and rejected reliance on the Chabra jurisdiction because there was insufficient evidence that its assets were in reality assets of the other defendants. Lewison LJ refused permission on the papers. The applicants renewed the application, relying on further witness evidence and a winding-up petition not placed before the judge below. The central issue was whether those materials disclosed an arguable error in the decision under appeal.

1. Application dismissed. The Court of Appeal refused permission to appeal because there was no real prospect of success and no other compelling reason to grant permission.
2. The purpose of a renewed permission application was to identify an arguable error in the decision below. Materials obtained after that decision could not establish that the first-instance judge had erred on the evidence then before him.
3. Those new materials might justify a fresh application to a first-instance judge. Such an application would have to comply with Practice Direction 25A, paragraph 3.1, including the requirement for affidavit evidence, and would have to show either a good arguable cause of action against Berkshire Homes or a proper basis for exercising the Chabra jurisdiction.
4. The court also indicated that, in addition to that legal basis, it would be necessary to show a real risk of dissipation of relevant assets. The first-instance judge was entitled, on the material before him, to conclude that there was no arguable direct claim, no sufficient basis for the Chabra jurisdiction and no real risk of dissipation.
5. Sales LJ respectfully agreed with the reasons given by Lewison LJ and ordered that the application be refused.

• Court of Appeal (Civil Division): Lewison LJ refused permission to appeal on the papers. On renewal, Sales LJ agreed with those reasons and refused permission: [2016] EWCA Civ 261.
• High Court, Birmingham District Registry: HHJ Simon Brown QC, sitting as a deputy High Court judge, discharged the freezing injunction against Berkshire Homes (Northern) Ltd.