Todaysure Matthews Ltd & Anor v Marketing Ways Services Ltd

An applicant seeking ex parte injunctive relief must disclose any intention to use the order to support related relief in another jurisdiction. Materiality extends to facts which reasonably could or would be taken into account when assessing whether to grant the order and its likely consequences.

Where parties subsequently agree a consent order replacing the ex parte relief, the question is whether there is good cause to release a party from its undertakings. The court must weigh the seriousness of any disclosure breach, the practical effect of the undisclosed matter, and what would probably have occurred had disclosure been made. The overriding question is whether it would be unjust to hold the party to the agreement.

Todaysure Matthews Ltd and Matthews International Corporation obtained an English injunction against Marketing Ways Services Ltd in connection with a demand under a performance guarantee.

The claimants intended to seek, and shortly afterwards obtained, a further injunction in Pennsylvania restraining payment under related banking instruments. They did not disclose that intention or the American injunction before agreeing a consent order under which Marketing Ways could pursue its demand, subject to any proceeds being paid into court.

Marketing Ways applied to set aside the consent order and be released from its undertakings. The central issues were whether the undisclosed matters were material and whether their discovery made it unjust to hold Marketing Ways to the consent order.

1. The intention to seek an injunction from a foreign court was material to the ex parte application. It was a fact which reasonably could or would be taken into account by the judge because it affected the likely consequences of granting the English injunction. The possibility that the judge might still have granted relief did not make the intention immaterial.
2. The American injunction was also potentially material to the freezing order because it might have prevented or inhibited payment through the banking chain. The claimants should have disclosed both their intention to seek it and, subsequently, the fact that it had been obtained.
3. The applicable approach differed from that governing an order granted ex parte in the exercise of the court’s discretion. The consent order was the product of negotiation and agreement. Consistently with Chanel Ltd v Woolworth and Co and, in particular, Emailgen Systems Corpn v Exclaimer Ltd, good cause was required before a party could be released from a voluntary undertaking.
4. The court considered three matters: the seriousness of the breach of the duty of full and frank disclosure; the effect of the American injunction; and what was likely to have happened if disclosure had been made. The breach was serious, and the injunction probably inhibited payment. However, it was more likely than not that Marketing Ways would still have agreed to the consent order if the claimants had undertaken to withdraw the American injunction.
5. It would therefore not be unjust to hold Marketing Ways to its undertakings. The consent order was upheld on terms that the claimants seek withdrawal of the American injunction. This did not refashion the parties’ bargain but ensured that the agreed scheme could operate.

First-instance decision. The judgment does not state any prior appellate history.