Valbonne Estates Ltd v Cityvalue Estates Ltd & Anor

In a without-notice injunction application, the applicant must disclose significant factual, legal and procedural matters, including information which materially undermines the application. The duty continues until the first hearing on notice and extends to newly discovered inaccuracies in the original evidence. A substantial and culpable failure ordinarily requires discharge of the injunction, without renewal. The court retains a discretion to continue or re-grant relief, but exercises it sparingly and only where the interests of justice, including a compelling case of injustice, justify doing so. A strong case on the merits does not excuse non-disclosure. The court should not turn the disclosure issue into a mini-trial, but must assess whether proposed factual and legal objections were reasonably apparent and material.

The applicant sought continuation of a without-notice injunction restraining Cityvalue Estates Ltd from dealing with a leasehold property and United Homes Ltd from acquiring an interest in it. The injunction had been granted by Mann J on 10 December 2020.

The respondents alleged that Valbonne had materially misled the court by misdescribing a Beth Din award, failing to disclose that completion funds had been returned, failing to disclose that it had been told the sale had already occurred, and making unsupported assertions about corporate connections. Valbonne also sought, if necessary, re-grant of the injunction. The central issues were whether there had been material breaches of the duty of full and frank disclosure and whether relief should nevertheless continue.

1. Material non-disclosure. The court found serious and substantial breaches of the duty of full and frank disclosure. Valbonne had presented a fabricated written version of an oral Beth Din decision as a final award, omitted the dispute about its terms, failed to disclose that the £500,000 completion funds had been returned, and failed to disclose that it had been told that the sale to United Homes had already taken place. Unsupported assertions concerning common ownership and connections between companies were also materially misleading.
2. The matters concerning the Second Award were critical because Valbonne’s substantive claim depended on the alleged removal of the First Award’s 28-day time limit. The return of the funds was material because it bore directly on whether Valbonne remained able to complete. The alleged prior sale was material because it undermined the proposed enforcement claim and the asserted status quo.
3. The arguments that the Beth Din was functus officio and that an oral award failed to satisfy section 52 of the Arbitration Act 1996 were arguable, but were not sufficiently obvious on the facts known at the without-notice hearing to constitute breaches of the disclosure duty. The respondents’ conduct had indicated that they regarded the Second Award as operative.
4. Under Brink’s Mat v Elcombe [1988] WLR 1350, the starting point after material non-disclosure is discharge without renewal. The court retains a discretion in the interests of justice, but that discretion is sparingly exercised. Valbonne had not shown the compelling injustice required to justify continuation or re-grant.
5. The injunction against Cityvalue would have no practical effect because the sale appeared to have completed. The proposed relief against United Homes was also undermined by the absence of a properly pleaded and served proprietary claim. The injunction was therefore discharged and not re-granted.