Mohammed Saleem Khawaja v Stela Stefanova & Ors

The court refused to discharge the existing freezing injunction. The applicant, Ms Stefanova, lacked supporting evidence that there had been a material change of circumstances and her application was held to be abusive and totally without merit. The judge applied the principle that an application to vary or discharge an injunction requires a material change of circumstances and that applications lacking significant new evidence may amount to an abuse of process. Because the application was bound to fail, the judge concluded a Civil Restraint Order was warranted and made an Extended Civil Restraint Order for 18 months to restrain further unmeritorious applications relating to these proceedings.

Background and parties: This is a first instance hearing between two litigants in person concerning the claim of the Petitioner, Mr Khawaja, to an interest in Dermamed Solutions Limited and related interlocutory relief that followed from earlier proceedings in the County Court (judgment of 6 October 2021). The Respondent, Ms Stefanova, had previously been found in contempt for persistent breaches of a freezing order and had been sentenced to a suspended term. The present hearing concerned Ms Stefanova's application to discharge the freezing injunction and related relief.

Nature of the application: The Respondent sought discharge of the freezing injunction on grounds that it was functionless because disclosed accounts were exhausted and that there had been delay by the Petitioner in prosecuting the underlying claim.

Issues framed:

• Whether there had been a material change of circumstances warranting discharge of the freezing injunction;
• Whether the application was an abuse of process or totally without merit;
• Whether a Civil Restraint Order should be made to prevent further unmeritorious litigation.

Court's reasoning and findings: The judge declined to treat the disclosed emptiness of some accounts as a basis for discharge because, given the Respondent's record of concealing transfers and non-disclosure, that fact heightened rather than dissipated the risk of further dissipation. The contention of delay by the Petitioner was rejected on the facts; while prolonged delay can in some cases justify discharge, no such case was made here. The judge applied the test that an application to reopen decided matters requires a material change in circumstances (Thevarajah v Riordan) and the Court of Appeal test for an application being totally without merit (R. (Grace) v Secretary of State for the Home Department), concluding the application was bound to fail. Given a documented pattern of misconceived and totally without merit applications brought by Ms Stefanova across several judges and courts, the judge considered the Civil Restraint Order regime appropriate to prevent continued abuse. The judge therefore dismissed the application to discharge the injunction and made an Extended Civil Restraint Order for 18 months covering applications relating to or touching these proceedings.

The judge dismissed the Respondent's application to discharge the freezing injunction and refused to vary it. The application was found to be totally without merit and an abuse of process because there was no material change of circumstances and no supporting evidence. An Extended Civil Restraint Order was made for 18 months to restrain further unmeritorious applications relating to these proceedings.