PANKIM KUMAR PATEL v MINERVA SERVICES DELAWARE INC & Ors

A freezing order requires a good arguable case, a real risk of unjustified dissipation which is established by solid evidence, and it must be just and convenient to grant relief. The risk must be assessed objectively and separately against each respondent. A proprietary injunction requires a serious issue to be tried and application of the balance of convenience. Delay is relevant to both remedies, although it is not automatically decisive. A party cannot avoid the abuse of process doctrine by using a new assignee or litigation vehicle to repeat an application after an earlier failure, where the underlying omission could and should have been remedied originally. Information orders under Senior Courts Act 1981, section 37(1), are ordinarily ancillary to an injunction or available in aid of execution, rather than free-standing orders supporting an unestablished claim.

Minerva Services Delaware Inc applied on notice for freezing, proprietary and information orders against Pankim Patel. The application concerned approximately £9.4 million which Minerva alleged Patel had received under deeds of fiduciary declaration and held on trust. The alleged rights had been assigned through several companies to Minerva.

A previous freezing-order application by Bay Mining Consultants Ltd, an earlier assignee, had been dismissed by Tipples J, including because the assignment was defective and there was no evidential support for the cross-undertaking in damages. The central issues were whether the new application was abusive, and, if not, whether the requirements for freezing or proprietary relief and information orders were satisfied.

1. Application dismissed. The application for freezing, proprietary and information orders was an abuse of process. The previous application had failed on a ground which was independently sufficient. A party could not discontinue, use a new assignee, and repeat substantially the same application after merely putting its litigation arrangements in order.
2. For a freezing order, the applicant had to establish a good arguable case, a real objectively judged risk that a future judgment would be defeated by unjustified dissipation, and that relief was just and convenient. Dissipation required solid evidence. Generalised assertions and mere proof of dishonesty were insufficient. The assessment was fact-specific and cumulative, with the risk considered separately against each respondent.
3. There was a good arguable case that monies received by Patel were trust monies and that the relevant rights had been assigned to Minerva. However, there was no solid evidence of a risk of unjustified dissipation. Significant delay, absent other evidence, indicated that no such risk existed.
4. A proprietary injunction required a serious issue to be tried and application of the balance of convenience. The evidence did not establish a serious issue that Patel’s remaining assets were trust property. In any event, the balance favoured allowing him to meet a substantial tax liability to HMRC. Preventing payment could expose him to interest, penalties and insolvency consequences which might not be compensable.
5. The duty of full and frank disclosure applied despite short notice and the presence of the respondent’s lawyers. The limited investigations undertaken by Minerva would have required careful scrutiny had relief not already been refused.
6. Information orders under section 37(1) of the Senior Courts Act 1981 were generally ancillary to freezing or proprietary injunctions, or could be made in aid of execution. No such ancillary order was justified here, and there was no jurisdiction to grant the requested free-standing information order.