Edhem v Mehmet Edhem & Anor.

A freezing injunction requires a good arguable case, assets against which the order can operate, a real risk of dissipation, and justice and convenience in granting relief. Under the Chabra jurisdiction, relief may extend to a person against whom no substantive cause of action is advanced where there is reason to believe that the person holds assets amenable to enforcement of a judgment against another defendant. The court must exercise particular caution where the additional respondent has not participated. Alleged misconduct engages the clean-hands principle only where it has a sufficiently close connection with the relief sought. An appeal does not itself stay enforcement of a tribunal decision.

The Applicant sought continuation of freezing injunctions against her son and his former wife. The application was made to enforce a First-tier Tribunal costs award under section 27 of the Tribunal Courts Enforcement Act 2007, rather than through substantive Part 7 or Part 8 proceedings. The tribunal had found that the Applicant’s signature on a property transfer was forged and had ordered payment of £238,955.27 on account of indemnity costs.

The issues were whether the ordinary requirements for freezing relief were met, whether relief could continue against the First Respondent’s former wife under the Chabra jurisdiction, and whether alleged failures of disclosure or lack of clean hands defeated the application.

1. The application was allowed against both respondents. The freezing order ceiling was reduced to £450,000 because the claim was limited to enforcement of the tribunal award under section 27 of the Tribunal Courts Enforcement Act 2007. Any claim for rents, profits or dilapidations would require substantive proceedings under Part 7 or Part 8 of the CPR.
2. The Applicant had a good arguable case. The tribunal had found that the First Respondent forged her signature on the transfer, and an unpaid costs order remained in force. The fact that an appeal was contemplated did not operate as a stay. The appellate tribunal would generally require an error of law or conclusions unavailable on the evidence, rather than merely reassessing the merits.
3. The evidence established assets within or outside the jurisdiction, a real and substantial risk of dissipation, and that it was just and convenient to grant relief. The unexplained disposal of property proceeds, transfer of funds abroad, overseas connections and the tribunal’s findings of serious dishonesty supported that conclusion.
4. The clean-hands objection failed. The alleged misconduct was disputed and, in any event, lacked the sufficiently close connection with the property and costs claims required to refuse equitable relief.
5. Relief against the Second Respondent was available under the Chabra jurisdiction. There was reason to believe that property had been transferred to her for no consideration and that assets in her name, or held for the First Respondent’s benefit, might be deployed to defeat enforcement. The court nevertheless recognised that she could apply to set aside the order because she had not participated in the hearing.

The judgment records a First-tier Tribunal determination dated 19 November 2021, followed by a costs order and an order for payment on account. No appeal had been determined when this application was heard.