Fairstar Heavy Transport NV v Adkins

An application for interim relief without notice requires more than a balance of convenience. The applicant must show that notice would probably cause injustice through delay or steps defeating the relief, and must address the risk of uncompensatable harm. The applicant also owes a high duty of full and fair disclosure of facts which might affect the decision. That duty is not answered by good faith or by showing that the order would probably have been made in any event. Where an application was legally misconceived and the complaints about the process were reasonably made, costs ordinarily follow the event on the standard basis.

Fairstar had lost its preliminary claim to a proprietary right in emails held by Philip Adkins. The court then considered costs arising from earlier without-notice applications before Coulson and Eder JJ, and from the preliminary-issue hearing. Adkins argued that Fairstar had unjustifiably proceeded without notice, had presented an inaccurate and incomplete account, and had failed to disclose material matters. The central issues were whether the applications were properly made without notice, whether the duty of full and fair disclosure had been met, and what costs order should follow.

1. Costs outcome. Fairstar was ordered to pay the costs of the applications before Coulson and Eder JJ, and the remaining costs including the 17 October 2012 hearing, on the standard basis, subject to detailed assessment if not agreed.
2. Without-notice relief. The governing principles stated in In Re First Express Ltd [1991] BCC 782 and National Commercial Bank Jamaica Ltd v Olint Corpn Ltd [2009] 1 WLR 1405 require an applicant to justify proceeding without notice. Notice may be withheld where it would probably cause injustice through delay or steps defeating the purpose of the order. Such cases should be rare, and any available shorter notice should ordinarily be considered. Fairstar had not explained the two-to-three-week delay or clearly identified the feared risk of email deletion.
3. Disclosure. On an application for interim relief without notice, the applicant must make full and fair disclosure of relevant facts, including matters adverse to the application: Memory Corporation v Sidhu [2000] 1 WLR 1443. Fairstar should not have left Coulson J with the impression that the existence of the shipbuilding contract had been concealed from the new owners, and should have disclosed Adkins’s reply and given greater emphasis to relevant statements at the EGM. The court found no conscious intention to mislead.
4. Effect of non-disclosure and costs. It was no answer that the order might have been made on proper disclosure, or that any breach was in good faith: Fitzgerald v Williams [1996] QB 657. Nevertheless, the shortcomings did not justify indemnity costs or a special sanction. The applications were also misconceived in law because Fairstar had no proprietary right in the email content. Adkins’s complaints had merit and were not unreasonable, so costs followed the event.