Civil Fraud Case Update: Q1 2026

The High Court granted permission to the applicants in Preson v Preson to amend an application for committal. The amendment related to the period in which an alleged act took place, it did not change the nature of the case and whilst the amendment was made very late (2 months before the hearing of the contempt application), there was no prejudice caused.

In Midland Premier Properties Ltd v Doal the Court of Appeal set aside an order striking out a defence and debarring the defendants from defending the claim. Whilst there had been a failure to comply with a disclosure order, there had been no failure to comply with an unless order: the appellants had done what they were required to do. The unless order therefore did not take effect. The strike out of the defence was disproportionate in the circumstances: disclosure could be completed within the timetable and there had not been a deliberate flouting of court orders.

A freezing injunction made in Global Asset Portfolio Ltd v Fazriki Ltd was continued by the Court. The applicant had a good arguable case in breach of contract and fraudulent misrepresentation, the respondents had failed to explain their use of funds, or provide information as to their assets. There was a real risk of dissipation if the injunction was not continued.

The Court reduced the amount the respondent was allowed to spend on living and business expenses under a post-judgment freezing injunction in Jones v Hamilton. The respondent had already been sentenced to six months in prison for contempt following breaches of the freezing injunction. The disclosure of bank statements following his release suggested an element of luxury spending at a time when there were no payments made to reduce the judgment debt. The living expenses allowance was reduced from £7,300 to £2,000 and no allowance was allowed for business expenses: the respondent should not be allowed to carry on business at the expense of the judgment creditor. The respondent was ordered to disclose any receipt of over £300 into his accounts.

In Claim N Win Ltd v Wizz Air UK Ltd an application to continue a freezing injunction was refused by the High Court. The applicant airline had not been honest with the Court at the without notice hearing: there was no real risk of unjustified dissipation of assets. The Court also found that the applicant airline’s conduct amounted to abuse of process and its solicitor would be referred to the Hamid jurisdiction judge (a designated judge tasked with reviewing referred cases to assess conduct and determine whether a referral should be made to a regulator).

The Court refused to set aside a freezing injunction in Hassankhail v Limton. The judge at the without notice hearing was entitled to find that there was a good arguable case, the Court had not been misled, the allegations of a failure of full and frank disclosure were overstated and disproportionate and there had been an unexplained delay in making the application to discharge.

In Mex Group Worldwide Ltd v Ford (which I discussed most recently in my Civil Fraud Case Update Q3 2024) the Court granted an application for an inquiry as to damages pursuant to a cross-undertaking in damages given as part of a discharged freezing injunction. A defendant must provide some credible evidence that damage was caused by the making of the order: an inquiry will not be ordered if the claim for damages is plainly unsustainable.

A domestic freezing injunction was extended to worldwide post judgment in SJ Pay Ltd v Payroll Ltd. The Court was satisfied that there were no assets in the jurisdiction capable of satisfying the underlying claim, that there were assets outside the jurisdiction and that there was a real risk of dissipation of those assets.

In Smith v Persons Unknown, the Court continued a freezing injunction over accounts holding crypto assets where there was a good arguable case on the merits and a risk of dissipation of assets.

The Court in Gilbert v Broadoak Private Finance Ltd considered issues of service out in relation to a worldwide freezing injunction made against non-cause of action defendants based in Spain (under the Chabra jurisdiction), as well as whether there had been a failure of the duty of full and frank disclosure. The Court determined that whilst there had been a serious breach of the duty of fair presentation in relation to the service out application and more minor breaches in relation to the application for the freezing injunction, it was not sufficient to justify discharging the freezing injunction. However, the matter did not fall within any gateway for service out of the jurisdiction: permission to serve out was revoked and the freezing injunction was therefore discharged for lack of personal jurisdiction.

The Court of Appeal in James and another v HSBC dismissed an appeal against the strike out of a claim relating to the fraudulent opening of a loan account. Time started running for limitation purposes when the claimants knew that a loan account had been opened, monies drawn down and payments taken from their account to service the loan. The appellants issued their claim some nine years after they were aware of the above facts.

In THG Plc v Zedra Trust co (Jersey) Ltd (discussed in more detail by my colleagues here) the Supreme Court considered whether an unfair prejudice petition was subject to statutory limitation periods on the basis that a claim under s.994 and s.996 Companies Act 2006 were actions to “recover any sum recoverable by virtue of any enactment” or actions “upon a specialty”. The Supreme Court concluded that unfair prejudice actions were neither actions upon a specialty (meaning an action to enforce an obligation created by deed or statute) nor actions to recover a sum recoverable by virtue of any enactment (the wide discretion available under s.996 meant it was not limited to recovery of a monetary sum). There was therefore no limitation period which applied to claims under unfair prejudice claims under s.994 Companies Act 2006.

A claim in malicious prosecution was struck out in Gulzar v Castle Water Ltd on the basis that it disclosed no reasonable cause of action and was an abuse of process. There was a private criminal prosecution underway and the civil claim had been brought alleging that this was a coercive method to obtain payment. Where the prosecution had not been concluded, a claim in malicious prosecution could not be made out. The claimant had also paid the wrong Court fee, which would have itself justified the strike out of the claim.

The Court rejected a claim in deceit and unlawful means conspiracy in Jinxin v Aser & Others. The claimant had alleged that various fraudulent representations (including numerous implied representations) had been made in the course of a sale of a stake in a sports media rights agency. The Court found not only that the alleged representations either had not been made, or if they had been made were not false or, if they were false, were not dishonestly made, but also that the purchasers had not relied on the representations which had been made.

In Wine Enterprise Investment Scheme Ltd v Crowe UK LLP, the claimant company sued its auditors for failures relating to a ponzi scheme run by its directors. The claimant was refused permission to amend its pleadings to argue that the auditors had a duty to report to the shareholders of the company: limitation had expired, the proposed amendments introduced new facts and had no real prospect of success. There was no authority for the proposition that auditors should report directly to shareholders even in the event that fraud was suspected. The overwhelming cause of the company’s loss was the fraud and dishonesty of the directors, but the defendant auditors should have detected the fraud. The fact that the company was set up without corporate governance or controls meant that it had contributed to its own loss.

In Frischmann v Vaxeal Holdings the Court declined to return a defendant’s passport on the grounds that there was a real risk that he would leave the jurisdiction and not return in order to avoid disclosing his assets pursuant to a worldwide freezing injunction.

The Court ordered preservation of documents in Manolis v Citibank NA London Branch. There was an arguable case of wrongdoing and certain documents had to be preserved to enable the applicant to bring a claim as the administrator and executor of her late father’s estate. The application for disclosure of specific documents was refused: the proper approach was to issue proceedings and then seek disclosure.