David Victor Garofalo v David Adrian Crisp & Anor

The court considered an urgent interlocutory application made by a s.994 petitioner seeking proprietary injunctive relief, a freezing order and wide-ranging disclosure and preservation orders in relation to the monetisation of a perfume brand called Seboni and related trading entities. The court held that interim proprietary relief preserving profits and related intellectual property in respect of Seboni was available under s.994 and should be granted on the American Cyanamid test because there was a serious issue to be tried, the balance of convenience favoured preservation and it was just and convenient to do so. The court declined to make the proposed partial worldwide freezing order, accepting instead undertakings from the first respondent, because the quantum was uncertain, the costs element was disproportionate and adequate protection was offered by undertakings.

The court made a series of targeted disclosure and documentary production orders ancillary to the proprietary injunction and the earlier 2023 order: disclosure of Seboni product proceeds and related bank statements (by specified dates), disclosure of certain bank statements for identified additional trading entities, delivery up of documents from specified email accounts up to 10 October 2023 and preservation orders preventing deletion of specified emails and documents. The court refused other wider documentary and bank-account orders as disproportionate or duplicative of the formal trial disclosure timetable.

Background and parties. The petitioner, Mr David Garofalo, and the first respondent, Mr David Crisp, are substantial minority shareholders in Valorem Holdings Limited. The petitioner issued a s.994 petition and had previously obtained extensive interim injunctive relief in October 2023 (the 2023 Order), which was continued by Freedman J. The application before the Deputy Judge was brought urgently on notice and sought proprietary injunctions in respect of the Seboni brand and its proceeds, a freezing order, detailed disclosure relating to purported additional trading entities ("ATEs"), bank account statements (including for a "Chase Account"), production of emails and preservation orders.

Nature of the application and issues. The application sought: (i) proprietary injunctive relief over Seboni profits and the trademark; (ii) a freezing order limited to £300,000; (iii) ancillary disclosure of proceeds, bank statements and documentation for ATEs; (iv) delivery up of emails from specific accounts and communications with named individuals; and (v) preservation injunctions preventing deletion of relevant material. Central contested issues were whether a proprietary claim was sufficiently pleaded to support interim proprietary relief under s.994; whether a freezing order was justified; the scope, proportionality and timing of the disclosure orders; and whether preservation orders were necessary and appropriately limited.

Court's reasoning and orders made.

• The court accepted that interim proprietary relief is available in s.994 petitions and that the American Cyanamid test applies. The pleadings, taken with the petitioner’s further affidavit evidence, disclosed a sufficiently pleaded proprietary claim in relation to Seboni (an alleged corporate opportunity/misuse of company resources) such that there was a serious issue to be tried. On the balance of convenience and justice the court granted a proprietary injunction limited to the profits derived from sales of Seboni products and included the second respondent (the first respondent’s wife) insofar as she or entities she controls may hold or control proceeds.
• The proposed freezing order was refused. The court found the proposed quantum inherently uncertain, considered the costs estimate disproportionate, and concluded that the undertakings offered by the first respondent provided sufficient protection such that a separate freezing order was not just and convenient.
• The court granted targeted ancillary disclosure: Seboni product proceeds and related bank statements (to be provided by a specified date), bank statements for the identified ATEs (to be provided with disclosure), and production of account statements for the Chase Account by the disclosure date. The court limited broader disclosure and refused duplicative or excessively wide orders where the formal disclosure timetable (disclosure due 28 April 2025) would address the matters, and where proportionality concerns arose.
• The court ordered delivery up of documents from three specified email accounts for documents up to 10 October 2023 under the imaging/search process used in 2023, and made preservation orders preventing deletion of the specified emails and documents, and requiring preservation of documents of the ATEs. The court declined demands for additional sweeping personal bank-account disclosure and for the paragraph 27 communications order which would have required extensive document-by-document review ahead of the agreed disclosure timetable.

Procedural note. The court emphasised that these interlocutory decisions do not determine final facts at trial and encouraged the parties to agree a draft order consistent with the judgment. Costs were reserved for separate hearing.

The application was allowed in part. The court granted an interim proprietary injunction over profits derived from the Seboni brand and ancillary disclosure and preservation orders limited to what was proportionate and necessary (including production of Seboni proceeds, certain ATE bank statements, Chase Account statements and delivery up of specified email account material up to 10 October 2023). The court refused the proposed £300,000 freezing order as unjustified and disproportionate, accepting instead undertakings from the first respondent, and declined other wide-ranging disclosure orders as duplicative or disproportionate in light of the upcoming disclosure timetable. The reasoning focused on the availability of proprietary relief under s.994, the American Cyanamid test, proportionality of disclosure, and the adequacy of undertakings in place of a freezing order.