Matrix Receivables Limited v Musst Holdings Limited
[2024] EWHC 1495 (Ch)
Pankim Kumar Patel v Minerva Services Delaware, Inc & Ors
10 February 2023
[2023] EWCA Civ 118
Court of Appeal
A company tried to get a court order to freeze a man's assets, but the court said no. They had already tried a similar case before and hadn't fully disclosed information, so the court felt they were abusing the system. The man didn't have to prove he wasn't hiding money; the company had to prove he was, and they couldn't.
Key Facts
- •Mr. Patel (Respondent) was subject to an arbitration in Delaware initiated by Minerva Services Delaware Inc. (MSD, Appellant).
- •Mr. Patel obtained an anti-suit injunction in the UK High Court, preventing MSD from proceeding with the Delaware arbitration.
- •MSD appealed the High Court's refusal to grant freezing and proprietary injunctions against Mr. Patel.
- •The underlying dispute concerns approximately £11 million allegedly held on trust by Mr. Patel under two Deeds of Fiduciary Undertaking.
- •The assignments of rights under the Deeds involved multiple companies (Minerva BVI, Minerva Belize 2013, MSL Belize 2018, and finally MSD).
- •A prior application for a freezing injunction by Bay Mining Consultants Ltd (assignee of MSL Belize 2018) had been dismissed by Tipples J.
- •MSD argued that the High Court erred in finding abuse of process, insufficient evidence of asset dissipation, and an improper assessment of the balance of convenience.
Legal Principles
Abuse of process principles apply to interlocutory hearings.
Koza Ltd & Anr v Koza Altin Isletmeleri AS [2021] 1 WLR 170
Henderson principle: A court will not permit relitigation of matters that could have been raised in prior proceedings, absent special circumstances or significant changes.
Henderson v Henderson 3 Hare 100; Johnson v Gore Wood & Co [2002] 2 AC 1
Freezing injunctions require a good arguable case of a real risk of assets dissipation and that granting the injunction is just and convenient.
Thane Investments Ltd v Tomlinson [2003] EWCA Civ 1272
Outcomes
Appeal dismissed.
The Court of Appeal upheld the High Court's decision on all grounds. The application was deemed an abuse of process; insufficient evidence of asset dissipation was found; the balance of convenience favoured Mr. Patel; and the judge's consideration of the factors was not erroneous.
Abuse of Process Claim Upheld
The court found that MSD’s application was an abuse of process because it followed a prior unsuccessful application by a different assignee for the same underlying claim, without significant new facts or circumstances.
Insufficient Evidence of Asset Dissipation
The court held that MSD failed to demonstrate a sufficient risk of asset dissipation, even considering the new evidence presented, because the burden of proof lay with MSD to show a risk.
Balance of Convenience Favors Patel
The court found the High Court judge appropriately considered the balance of convenience, weighing the potential prejudice to Mr. Patel from preventing payment of his tax liabilities against the potential for MSD to recover the funds.
Patel's application to adduce new evidence allowed; MSD's application refused.
New evidence from Patel revealed inconsistencies in the bank statements used by MSD, suggesting a lack of full and frank disclosure by MSD.
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