Boreh v Republic of Djibouti & Ors

Parties and solicitors remain under a duty not to mislead the court at an inter partes hearing. Deliberate misleading which materially supports a freezing injunction will ordinarily require that injunction to be discharged, with no fresh relief granted where the court’s trust has been abused. The civil standard remains the balance of probabilities, although cogent evidence is required for allegations of dishonesty. Solicitor and client are generally treated as indivisible, subject to exceptional cases where the solicitor alone is at fault and the client is blameless. The clean hands doctrine may independently bar fresh equitable relief where misconduct has an immediate and necessary relation to the injunction. A proprietary injunction is distinct and may remain where the misconduct concerns risk of dissipation rather than the proprietary claim.

The applicant, the first defendant, applied to set aside a freezing injunction, a proprietary injunction and ancillary relief granted on 11 September 2013 in proceedings brought by Djibouti. The application alleged that Djibouti and its legal representatives had deliberately or recklessly misled the court. In a judgment dated 13 November 2014, the court had already found that it was misled about the dates of telephone transcripts relied upon in support of terrorism allegations. The issues were whether Mr Gray, the solicitor with conduct of Djibouti’s case, had deliberately misled the court and, if so, what consequences should follow for the existing relief.

The application was granted in part. The freezing injunction and ancillary relief were set aside. The proprietary injunction over the shares in HDHL was retained.

1. Dishonesty. The appropriate test was the two-stage test described in Bryant v Law Society [2007] EWHC 3043 (Admin); [2009] 1 WLR 163: whether the conduct was dishonest by the ordinary standards of reasonable and honest people, and whether the solicitor knew that it was dishonest by those standards. The civil standard applied, but the seriousness of the allegation required cogent evidence. The court also assessed conduct without hindsight and tested credibility against objective facts, documents and overall probabilities.
2. Deliberate misleading. The court found that Mr Gray knew before the September 2013 hearing that the transcripts were misdated, that the conviction and supporting evidence were unsafe, and that counsel and the court were proceeding on the false basis that the calls followed the Nougaprix attack. His failure to correct that misapprehension was deliberate.
3. Consequences for freezing relief. The duty not to mislead applies at every stage, including inter partes hearings. The principles governing full and frank disclosure on without-notice applications apply by analogy. Deliberate misconduct material to the exercise of discretion requires discharge of the freezing relief, even if the court might otherwise have granted it. The court should not allow the claimants to retain an advantage obtained by abusing the court’s trust.
4. Clean hands and responsibility. The misconduct had an immediate and necessary relation to the freezing injunction. The later use of the judgment, continued reliance on unsafe evidence and improper settlement pressure also supported refusal of fresh freezing relief. Solicitor and client were generally indivisible for this purpose, and the exceptional approach in Eastglen International Corporation v Monpare SA 1987 WK 493266 did not apply.
5. Proprietary relief. A proprietary injunction is fundamentally different from a freezing injunction. It protects an asset claimed as the claimant’s property, is less intrusive, and has a direct connection with the substantive claim. The misconduct concerned risk of dissipation and did not materially affect the proprietary basis of the relief. The proprietary injunction therefore remained in force.

The judgment was a first-instance decision on an application concerning interlocutory relief.

• 11 September 2013: freezing, proprietary and ancillary injunction relief was granted.
• 13 November 2014: the court found that it had been misled about the dating of the telephone transcripts.
• 23 March 2015: the present application was granted in part; the freezing relief was set aside, but the proprietary injunction was maintained.