Perjury, forgery, freezers, and mini-trials: how to unravel the mess

There is a piece of large scale litigation making its way through the Business List in the Chancery Division in which the Court will eventually have to grapple with allegations of arson, burner phones, and cloth-wrapped shotguns at the bottom of driveways, not to mention language that wouldn’t feel out of place in a Guy Ritchie film.

Against that background, in a judgment handed down this morning (29 July 2025, under case citation [2025] EWCA Civ 986), the Court of Appeal confirmed the correct procedural approach to applications to discharge freezing injunctions, against the background of some fairly extraordinary factual allegations which will ultimately fall to be determined at the trial of the underlying claim.  Ryan represented Jeremy Hazlehurst, the Intervener who supported the successful appeal from the decision of Mr Justice Richard Smith ([2025] EWHC 962 (Ch)), having previously appeared for Mr Hazlehurst at the hearing of a similar discharge application in 2024 (the judgment in which is unreported).

Factual background

The very short summary of the background to the appeal is this: the claimant obtained a freezing order against the defendants, and the defendants said that the freezing order should be discharged because the claimant’s evidence was dishonest.  What follows is a slightly fuller account, but is still much abbreviated.

The Claimant in the underlying proceedings is Mold Investments Limited (“Mold”), a company which owns and operates a quarry in North Wales.  The crux of Mold’s claim is the allegations that two of its former directors, Mr Holloway and Mr Jacques, caused or permitted the dumping of controlled waste at the quarry, ultimately rendering Mold liable for fines and remedial costs in excess of £50 million.

Some time after originally commencing the claim only against Mr Holloway and Mr Jacques, Mold subsequently added further defendants to the proceedings who it accused of dishonestly assisting Mr Holloway and Mr Jacques in their alleged breaches of the duties owed to Mold.  For ease of reference, I will refer to Mr Holloway and Mr Jacques as ‘the Defendants’.

On 8 August 2023, Mold applied for a freezing order against the Defendants.  Mr Hazlehurst swore an affidavit in support of that application, which was Mold’s evidence of there being a real risk of dissipation.  His affidavit said that he had participated in dumping waste at the quarry in the past, and that when he heard rumours of Mold’s intention to issue the claim he felt he owed it to Mr Holloway and Mr Jacques to tip them off, which he did by WhatsApp.  Mr Hazlehurst exhibited what he said were screenshots of his WhatsApp exchanges with the Defendants.  Their responses to his tip-off were colourful, to say the least (Arnold LJ’s judgment gives them a somewhat monochrome rendering, but it does not take much imagination to fill in the blanks), and said in terms that they intended to dissipate their assets.  Mr Hazlehurst said that a mutual acquaintance with the new directorship of Mold then berated him for having communicated with the Defendants, and that once he appreciated the seriousness of the claim against the Defendants he forwarded the screenshots of the WhatsApp messages to Mold’s solicitors.

On 9 August 2023, Mellor J granted the freezing injunction.

Mold later alleged that one of its directors (Mr O’Grady) had received a number of text messages and phone calls making threats of violence and of dissipation of assets, in which the person making the threats said they would “drain every company [they] have”.   Mold also said that Mr O’Grady had been confronted face-to-face by someone he did not know on 26 December 2023, who had threatened him with violence unless he caused Mold to drop the claim against the Defendants.  On 4 January 2024 (after Vodafone complying with a Norwich Pharmacal order dated 14 December 2023), Mold applied to extend the freezing order to cover companies in which the Defendants were interested.  Richard Smith J granted Mold’s application on 5 January 2024.

For their part, the Defendants denied knowing Mr Hazlehurst at all, denied sending the WhatsApp messages exhibited to his affidavit, and alleged that they were forgeries.  They also denied having any involvement in the communications with Mr O’Grady in December 2023.  By the time of the appeal, Mr Holloway at least was expressly accusing Mold and Mr Hazlehurst of being party to a conspiracy to pervert the course of justice, amongst other things.

Mr Jacques applied to set aside the freezing order on 20 March 2024, seeking cross-examination of Mr O’Grady, Mr Hazlehurst, and Mr Whelan (the solicitor acting for Mold, who had made a witness statement in support of the original application for the freezing order) as well as expert evidence.  That application was served on Mr Hazlehurst, as well as on Mold, and Mr Hazlehurst was represented by the author at the hearing on 23 May 2024 when Richard Smith J dismissed the part of Mr Jacques’s application seeking cross-examination and expert evidence.

Unknown to Mr Hazlehurst, Mr Holloway then made his own application to set aside the freezing order dated 6 December 2024, likewise seeking cross-examination of Mr O’Grady and Mr Hazlehurst and expert evidence as well as declarations that a number of matters alleged in Mold’s evidence were false.  That application was listed for directions on 4 and 5 March, again before Richard Smith J, who handed down judgment and made a directions order on 18 March 2025, which was subsequently served on Mr Hazlehurst.

The order under appeal

The directions order made by Richard Smith J was fairly detailed and dealt with a number of different matters.  Insofar as it related to Mr Holloway’s application to set aside the freezing order, the essence of it was that the application would be listed for a 5-day hearing at the end of June 2025 (i.e. in less than 3 months’ time), at which the expert witnesses and all witnesses of fact save for solicitors instructed by the parties (including Mr Hazlehurst, who was specifically named) would attend for cross-examination.  Materially, the order also provided for Mr Holloway to serve upon Mold a document particularising the allegations made against Mr O’Grady, Mr Hazlehurst, and any other third party, and the facts and matters relied upon in respect of such allegations.

Mold appealed the order in part, initially arguing that there ought to be no cross-examination at all, but ultimately relying on its alternative argument that the set-aside application ought to be determined at the trial of the underlying claim.  Mr Hazlehurst applied for, and was granted, permission to intervene in the appeal.

At the appeal hearing, Mold pursued three grounds of appeal, which were endorsed and supported by Mr Hazlehurst: (1) directing a hearing with oral evidence, including expert evidence, was wrong in law as contrary to the settled practice of the court; (2) it was wrong to order such a hearing on the facts, given the overlap with issues in the underlying claim, the undesirability of trying relevant issues of fact in advance of the substantive trial, the absence of exceptional circumstances, and the impact on third parties; (3) it was wrong in law not to have sufficient regard to the procedural unfairness arising from the lack of statements of case, the lack of disclosure, and the lack of restrictions on topics available for cross-examination.

The Court of Appeal judgments

Arnold, Nugee, and Snowden LJJ were unanimous in dismissing the first ground of appeal, allowing the appeal on the second ground, and declining to determine the third ground.

Ground 2

It is convenient to deal with the second ground of appeal first, given that this was the basis on which the appeal was allowed, and on which all of the Lord Justices were agreed.

Arnold LJ gave the lead judgment, in which he set out his reasons for allowing the appeal on the second ground, with which both Nugee LJ and Snowden LJ agreed.  The Court of Appeal agreed with Mold that the Judge below had not addressed the question of when any hearing with cross-examination and expert evidence should take place – before or at the trial of the underlying claim.  Arnold LJ reasoned that the latter option would be preferable as: (i) it would be more efficient and less costly; (ii) the evidence at any satellite trial would be incomplete, not least because of a lack of disclosure; (iii) there was considerable overlap with the matters in issue at the substantive trial, and any attempt to limit the scope of cross-examination would not be feasible for that reason; (iv) it would be more difficult proportionately to ensure procedural fairness to non-parties such as Mr Hazlehurst than it would be at trial.  The Court also accepted Mold’s submission that the Judge below should not have ordered the satellite trial to take place before having sight of full particulars of the allegations made by Mr Holloway, and was wrong to say that there would be limited overlap with the matters in issue at the substantive trial (not least because credibility was at the heart of the dispute, that being a matter better determined on the basis of the evidence as a whole, including evidence on the matters in issue on the substance of the claim).  Finally, Arnold LJ also agreed that there had been no material change in circumstances since the same Judge below had dismissed Mr Jacques’s earlier application for substantially the same relief.

As to the Respondent’s submissions on the second ground of appeal, Arnold LJ was unpersuaded.  He reasoned that the question was not whether Mr Holloway’s allegations were serious (they undoubtedly were), but how best to determine if they were correct; to say that cross-examination ought to take place before trial because there were allegations of perverting the course of justice was to beg the question.  Arnold LJ also pointed to a lack of urgency on Mr Holloway’s part in making his application, the fact that Mr Holloway had not applied for an inquiry of damages pursuant to Mold’s cross-undertaking, and that in his view robust case management ought to be capable of bringing the claim to trial sooner than suggested by Mr Holloway.

Ground 1

Whilst the Lord Justices all reached the same conclusion on the first ground of appeal, they applied different reasoning.

First, Arnold LJ agreed that the principle that the court should not resolve disputed question of fact or difficult points of law on interim applications, as articulated in Derby & Co v Weldon [1990] 1 Ch 48, is a salutary one with good reasons behind it (including the difficulty in proportionately ensuring procedural fairness to non-parties).  However, he found that it is not an absolute or inflexible principle, and that the Court may properly resolve these sorts of issues in advance of trial in an exceptional case.  He reasoned that a case is more likely to fall within this exception to the general rule where the factual matter in issue can be “readily established by evidence falling within a relatively narrow compass” and is “not one which is germane to any of the substantive issues in the underlying proceedings”.

Nugee LJ took a different approach in his concurring judgment.  He drew a distinction between, on the one hand, ordinary applications for interim injunctions and on the other hand applications to set aside injunctions on the basis of a failure to make full and frank disclosure.  In relation to ‘ordinary applications’, he found that “it is no part of the Court’s function on an application for a freezing injunction to seek to resolve disputed issues of fact, whether they go to the merits of the substantive claim, or to the risk of dissipation”.  He clarified that this likewise applies to applications to discharge interim injunctions on the basis that the test for the grant of an injunction is not met (as the different in practice between the Chancery Division and Commercial Court as to how without notice injunctions are dealt with has no material effect on the test to be applied by the court).  By contrast, where a party alleges that there has been a failure of full and frank disclosure, the Court will not be determining whether the threshold has been met for the grant of an interim injunction, but rather deciding as a matter of fact whether there has actually been a failure to make full and frank disclosure.  In the latter case, the question of how to resolve any disputes of fact will depend on all the circumstances of the case, and will require competing considerations to be balances so as best to further the overriding objective.  The most relevant consideration in that regard is likely to be the extent of any overlap with matters in issue at the substantive trial.

Finally, Snowden LJ identified the difference in approach between Arnold and Nugee LJJ, and endorsed the reasoning of the former.  He agreed with Mold that it may well be the case that the Court won’t resolve disputes of fact as to a real risk of dissipation on interim injunction applications, but emphasised that the reason for this is that those disputes will often overlap with questions about the merits of the substantive claim.  He stated that this overlap will not invariably be the case, and that where there is no such overlap there is nothing to prevent the Court from resolving the dispute prior to trial.

Conclusions

The judgments set out three slightly different approaches to the question of when the Court ought properly to resolve a dispute of fact before trial in the context of an application to discharge or set aside an interim injunction.  Though the approaches of Arnold and Snowden LJJ are very similar, and Snowden LJ expressly endorses Arnold LJ’s approach, they differ in that Arnold LJ expressly sets out a requirement of exceptionality, whereas the only relevant consideration in Snowden LJ’s reasoning is the extent of any overlap between the issues on the application and the issues at trial.  The third approach, set out in Nugee LJ’s judgment, is on the one hand to limit the permissibility of pre-trial cross-examination to applications grounded on an alleged failure to make full and frank disclosure, but on the other hand more expansively to permit pre-trial cross-examination where it is justified in all the circumstances (albeit that the most relevant circumstance will again be the extent of an overlap in the matters in issue).

Whatever the differences in the nuances of meaning between the judgments, it is therefore clear that the main take-away is that parties ought to apply a rigorous analysis of the issues required to be determined on any application, and thoroughly to scrutinise whether, and if so to what extent, those issues overlap with the matters which will be in issue at trial.  In this regard, credibility is likely to be the biggest stumbling block for any defendant seeking to set aside a freezing injunction.

It also appears likely (though open to argument) that any defendant asking the Court to order cross-examination before trial will also need to show that the case is exceptional, as well as dealing with any overlap of matters in issue.  Though the availability of pre-trial cross-examination is not limited to circumstances where there are allegations of a lack of full and frank disclosure, it is difficult to envision a broad range of cases where this could transpire.

Article by Ryan Hocking, instructed by Lewis Silkin.