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Disclosure Procedure In Commercial Injunctions
This paper is a practical guide to the weapons available to a respondent at a return date after an ex parte injunction has been granted against him in the Commercial Court. It has a particular emphasis on how material non-disclosure can be effectively used as the basis for having an injunction set aside.
The applicant must identify any defences, which, although not yet taken, would have been available to be taken by the Respondent had he been present at the application, provided that: (1) the defence is one which can reasonably be expected to be raised in due course by the Respondent (The Electric Furnace Co. v Selas Corporation of America  R.F.C) (2) the defence is not one which can be dismissed as without substance or importance (e.g. an argument based on a misconceived interpretation of a statutory provision (The Electric Furnace Co. v Selas Corporation of America  R.F.C. 23).
Another way of putting this is in the case of Lloyd's Bowmaker Ltd v Britannia Arrow  1 W.L.R. 1337 at 1341 and 1343, where Glidewell LJ. says that the authorities cited support the proposition that the applicant "must disclose any defence he has reason to anticipate may be advanced".
The effect of non-disclosure can be a discharge of the order. The applicable principles have been stated in the context of Mareva relief by Ralph Gibson L.J. in Brink's Mat Ltd v Elcombe  1 W.L.R. 1350 at 1356:
(i) The duty of the applicant is to make "a full and fair disclosure of all the material facts"; (ii) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers; (iii) The applicant must make proper inquiries before making the application. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such enquiries. (iv) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the Respondent; (v) If material non-disclosure is established the court will be 'astute to ensure that a plaintiff who obtains [an ex parte injunction] without full disclosure ... is deprived of any advantage he may have derived by the breach of duty'; (vi) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. (vii) The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented; (viii) Finally, it 'is not for every omission that the injunction will be automatically discharged. A locus penitentiae may sometimes be afforded', per Lord Denning M.R. in Bank Mellat v Nikpour  F.S.R. 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms.
If the non-disclosure is such that the court, on reviewing the matter inter partes, is of the opinion that the ex parte relief was inappropriate and should not have been granted, then plainly the court will' discharge the order (Ali and Fahd Shobokshi Group v Moneim  1 W.L.R. 710). But the "acid test" for whether or not the order will be discharged is not whether or not the original judge who granted the order ex parte would have been likely to have arrived at a different decision if the material matters had been before him (Behbehani v Salem  1 W.L.R. 723 at 729).
A respondent needs to be extremely careful to consider what possible defences could have been identified by an applicant. Careful questioning of your client to identify even the smallest evidential references which explain the behaviour which gave rise to the ex parte application may found a good material non disclosure point.
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