Summary
A party seeking a without-notice freezing order must make full and frank disclosure of all material facts, assessed objectively by the court. Proper inquiries are required, having regard to the nature and urgency of the application and its likely effect on the respondent.
Material non-disclosure does not automatically require discharge in every case. The court retains a discretion to continue or re-grant relief, weighing the importance of the omitted facts, culpability, the need to deter non-compliance, and the prejudice caused by discharge. There is no rigid rule excluding discretion where the omission was non-innocent.
Factual background
The claimant obtained a worldwide freezing order and proprietary injunction without notice against the defendants. The defendants applied to discharge the order, alleging deliberate and material breach of the duty of full and frank disclosure.
The allegations centred on correspondence sent by the claimant’s solicitors to Richmond Point Capital, which identified the first defendant as a client, and on alleged failures to disclose that correspondence and potential defences. The central issues were whether material non-disclosure had been established and, if so, what consequence should follow.
Held
- Discharge application dismissed. The defendants failed to establish that key evidence had been procured by fraud, that the claimant’s solicitors had improperly interposed themselves between the first defendant and Richmond Point Capital, or that there had been a deliberate strategy of non-disclosure.
- The court applied the principles in Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350. Materiality is determined objectively by the court. Proper inquiries are required, and their scope depends on the case advanced, the order sought, its probable effect on the respondent, urgency and available time.
- The court rejected the submission that discretion to continue or re-grant an injunction exists only where non-disclosure was innocent and the order would have been continued in any event. The court must balance the importance of the omitted facts, the need to encourage compliance and deter non-compliance, culpability, and prejudice likely to result from discharge.
- The reference to the first defendant as a client in correspondence was, at worst, confusion or lack of care. The evidence did not establish deliberate deception, that proceedings against him were then contemplated, or that he had been tricked into lending his name to the letter.
- The defendants were confined to the case advanced in the evidence supporting the discharge application. Wider allegations raised for the first time in written submissions were procedurally unfair.
- Even assuming further disclosure should have been made, any omission was innocent, of marginal materiality and insufficiently culpable to require discharge. The order would have been made in any event, and discharge would risk serious prejudice through dissipation of assets.
Consequential matters, including any permission to appeal, were adjourned.
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Key cases cited
13 authorities cited.
- In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563
- Stephen Hunt v Ravneet Ubhi [2023] EWCA Civ 417
- Memory Corpn Plc v Sidhu (No 2) [2000] 1 WLR 1443
- Tugushev v Orlov & Ors (No. 2) [2019] EWHC 2031 (Comm)
- Fundo Soberano De Angola & Ors v dos Santos & Ors [2018] EWHC 2199 (Comm)
- Lagenes Limited v It’s at (UK) Limited [1991] FSR 492
- Ali and Fahd Shobokshi Group Ltd v Moneim [1989] 1 WLR 710
- Behbehani v Salem [1989] 1 WLR 723 [Note]
- Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350
- Lloyds Bowmaker Ltd v Britannia Arrow Holdings Plc [1988] 1 WLR 1337
- Columbia Picture Industries Inc v Robinson [1987] Ch 38
- Bank Mellat v Nikpour [1985] FSR 87
- In Re Hilckes, Ex Parte Muhesa Rubber Plantations Ltd [1917] 1 KB 48
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Cases citing this case
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