High Court in England places extraordinary demand for questioning on an urgently submitted petition
In a groundbreaking decision, the High Court has granted a defendant permission to cross-examine witnesses in the case of Mold Investments Ltd v Holloway and others [2025]. This case is exceptional due to allegations of fraud and fabrication of documents by both parties.
The freezing order in this case was a draconian remedy, based on serious allegations that are themselves challenged on the basis of further exceptional allegations of fraud. The unusual aspect of this case is that witnesses in interim applications generally do not expect to be cross-examined, as the court is not usually making final determinations of fact.
However, in this instance, the High Court recognized that cross-examination was necessary due to the defendant's challenges to the truthfulness of key evidence supporting the injunction. The allegations involved serious misconduct, requiring testing through oral evidence. The issues raised were intricately linked to the substantive merits, and there was a need to avoid "mini-trials" at the interim stage.
The first defendant sought a five-day hearing of his set-aside application and permission for cross-examination of the claimant's witnesses. The judge granted the first defendant's application for cross-examination and oral expert evidence on the strike-out application, on the condition that the first defendant's allegations of fraud be properly particularised.
The case involves claims for breach of fiduciary duty by two defendants in connection with their former roles in the claimant company. The first defendant alleged that the freezing order was obtained by the claimant's non-disclosure and by fraud on the court. The WhatsApp messages on which the claimant relies in the case have been immediately disputed by the defendants.
The court in this case emphasised the serious nature of freezing injunctions and the importance of the court policing their use and preventing abuse. The imaging orders made in relation to certain devices said to contain relevant evidence were not properly discharged, as the claimant alleges that the relevant devices had been damaged or stolen.
The decision serves as a reminder of circumstances in which witnesses might be cross-examined at an interim hearing. It also underscores the need for "very exceptional circumstances" (per Hunt v Annolight [2021] EWCA Civ 1663) for permission for cross-examination on interim applications. This case highlights the extraordinary measures that can be taken in cases involving serious allegations of fraud or fabrication directly affecting the validity of the interim order, requiring immediate testing of evidence through cross-examination to ensure fairness before the substantive trial.
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Finance was a key concern in this extraordinary case, as it involves claims for breach of fiduciary duty and allegations of fraud that may have resulted in the improper acquisition of a freezing order. The court's decision to allow the cross-examination of witnesses serves as a reminder of the need to ensure fairness in finance-related matters before the substantive trial.
