Mohammed Saleem Khawaja v Stela Stefanova & Ors

An application to discharge an injunction should ordinarily be made only where there has been a material change of circumstances or significant new evidence. Re-litigating matters already decided without either may constitute an abuse of process.

An assertion that assets have been exhausted requires reliable evidence, particularly where the applicant has a history of non-disclosure or dissipation. Delay may in principle justify discharge, but the question is fact-dependent.

An application is totally without merit where it is bound to fail; abusive or vexatious conduct need not also be established. Repeated meritless applications may justify an extended Civil Restraint Order.

The petitioner had previously obtained findings in County Court proceedings that he was entitled in principle to specific performance concerning a 50 per cent interest in Dermamed Solutions Limited. A freezing injunction was subsequently made against the first and second respondents.

The first respondent applied to discharge the injunction, arguing that the assets had been exhausted and that the petitioner had delayed prosecuting the underlying proceedings. The application was made against a background of repeated alleged breaches of the injunction and numerous applications certified as misconceived or totally without merit.

The issues were whether there had been a material change of circumstances, whether the application was totally without merit, and whether an extended Civil Restraint Order should be made.

1. The application to discharge the freezing injunction was dismissed. The governing principle, drawn from Thevarajah v Riordan [2016] 1 W.L.R. 76, was that an application for release of an injunction requires a material change of circumstances or significant new evidence. An application made without either is an abuse of the process.

2. The exhaustion argument failed. No reliable evidence established the position of the relevant accounts or the company’s assets, and there was no complete account of the relevant cash flows. In light of the respondent’s history of non-disclosure and moving funds between disclosed and undisclosed accounts, the asserted emptiness of disclosed accounts did not remove the risk of dissipation and supported maintaining the injunction.

3. Delay could, in an appropriate case, amount to a material change of circumstances justifying discharge. That issue was highly fact-dependent. On the evidence before the court, the petitioner’s progress could not fairly be assessed without regard to the respondent’s numerous applications, and no sufficient delay was established.

4. The application was totally without merit because it was bound to fail. Applying R. (Grace) v Secretary of State for the Home Department [2014] EWCA Civ 1091, it was unnecessary to establish that the application was abusive or vexatious.

5. Under CPR 23.12, the court had to consider a Civil Restraint Order. The respondent’s repeated misconceived or totally meritless applications, unsupported allegations and apparent use of litigation to impede determination of the underlying dispute justified an Extended Civil Restraint Order. The order was to cover applications concerning, relating to, touching upon or leading to the proceedings, for 18 months.