Pankim Kumar Patel v Minerva Services Delaware, Inc & Ors

For a freezing injunction, the applicant must establish a good arguable case, a real risk that judgment will go unsatisfied through disposal of assets, and that relief is just and convenient. The applicant bears that threshold. The respondent need not explain every asset or bank balance unless a prima facie case raises an inference of dissipation. An intended payment to HMRC is not unjustified dissipation. Delay may indicate that no real risk exists when other evidence is weak. A proprietary injunction also requires evidence linking the assets to the alleged trust. Appellate courts give substantial weight to evaluative decisions on abuse of process and interim relief, intervening only for legal or discretionary error.

Minerva Services Delaware, Inc appealed from the High Court’s refusal to grant freezing and proprietary injunctions against Mr Patel concerning alleged trust monies under a 2008 deed. The High Court decision is reported at [2022] EWHC 970 (Ch). The judge had also treated the application as an abuse of process, given an earlier unsuccessful application by Bay and successive assignments to litigation vehicles. The appeal challenged the findings on abuse, the alleged trust assets, dissipation risk, balance of convenience and disclosure. It also raised applications to adduce further evidence. The central issues were whether the injunction thresholds were met and whether the High Court had erred in its evaluative and discretionary conclusions.

Decision and reasoning

1. Disposition. The Court of Appeal dismissed the appeal on all grounds. It allowed Mr Patel’s application to adduce unredacted bank statements and metadata, and refused Minerva Services Delaware, Inc’s application concerning evidence of the sale of the property. Lord Justice Baker and Lord Justice Bean agreed with Lady Justice Asplin.
2. Abuse of process. The principles governing abuse of process apply to interlocutory hearings as well as final hearings, as explained in [2021] 1 WLR 170. The Henderson principle and its modern formulation in [2002] 2 AC 1 require a broad, merits-based assessment. A point that could have been raised earlier is not automatically abusive. A significant and material change of circumstances, or genuinely new facts, may be required where the point should have been taken earlier. The Court did not reach a definitive conclusion on this ground because the appeal failed on other grounds.
3. Trust assets and proprietary relief. The expression remaining assets included the property and the positive bank balances. Minerva had conceded that there was no evidence linking the property purchase to the alleged trust monies. A late submission concerning the bank balances gave Mr Patel no proper opportunity to respond. The judge was therefore entitled to find that there was no serious issue to be tried as to whether those assets were held on trust. The Court noted that the further evidence might have undermined the alleged good arguable case concerning the original payments, but it was unnecessary to decide that issue.
4. Freezing relief. The applicant had to show a good arguable case, a real risk that a judgment would go unsatisfied because of disposal of assets, and that relief was just and convenient: [2003] EWCA Civ 1272. Relevant factors had to be assessed cumulatively and against the totality of the evidence: [2022] 4 WLR 1. The burden remained on Minerva; Mr Patel was not required to explain every asset unless a prima facie case of dissipation had first been raised, as stated in [2018] Ch 297. The property purchase, proposed sale and payment of tax liabilities did not establish unjustified dissipation. Delay was relevant and, in the absence of other solid evidence, indicative of there being no real risk.
5. Discretion. The judge was entitled to weigh the possible consequences of preventing payment to HMRC. There was no error in the balance-of-convenience analysis. It was unnecessary to decide the submissions on clean hands or the cross-undertaking in damages.

• Court of Appeal (Civil Division) — appeal dismissed. Mr Patel’s application to adduce further evidence was allowed and Minerva’s corresponding application was refused: [2023] EWCA Civ 118.
• High Court of Justice, Business and Property Courts, Business List (ChD) — Deputy High Court Judge Lance Ashworth QC refused freezing and proprietary injunctions and held that the application was an abuse of process: [2022] EWHC 970 (Ch).