Ricardo Benjamin Salinas Pliego & Anor v Astor Asset Management 3 Ltd & Ors

A freezing or proprietary injunction will not ordinarily be discharged for alleged non-disclosure where establishing the alleged omission requires the court to resolve disputed facts. The court should avoid turning the discharge application into a preliminary trial.

An offer to contract does not generally represent that the offeror is able and willing to perform the contract as understood by the other party. In appropriate circumstances, however, it may carry an implied representation of honesty in the particular transaction. Delay does not, by itself, eliminate a risk of dissipation, and delay is of still less significance where a proprietary injunction does not require proof of such risk.

The claimants obtained worldwide freezing and proprietary injunctions without notice or on short notice against the defendants in August 2024. The defendants applied to discharge or set aside those injunctions, alleging breaches of the claimants’ duty of full and frank disclosure.

The alleged non-disclosures concerned the construction of a stock loan agreement, the claimants’ implied misrepresentation case, delay in seeking relief, the claimants’ alleged motive, and the first claimant’s wealth and probity. The central issues were whether the alleged omissions were material and whether their resolution required findings that should be reserved for trial.

1. Application dismissed. The claimants had not breached their duty of full and frank disclosure in any of the respects alleged.
2. Merely offering to contract does not, without more, amount to an implied representation that the offeror is able and willing to perform the contract as the opposing party understands it. In some circumstances, an offer to contract on particular terms may imply a representation of honesty in relation to the proposed transaction. Any such representation is ordinarily confined to honesty in the transaction in question. The claimants had a good arguable case that the transaction carried such an implied representation, having regard to the surrounding circumstances and evidence of an alleged stock-lending fraud.
3. The duty of full and frank disclosure requires a fair presentation, but it does not require an applicant to anticipate every argument or possible inference later advanced by the respondent. That is especially so where the existence or relevance of the underlying facts is disputed. Applications made under pressure may allow a reasonable margin of error, although the duty of candour remains substantial.
4. The claimants had not delayed improperly. The evidence supported their case that they became aware of the alleged fraud only shortly before applying. In any event, delay alone does not remove a risk of dissipation where other evidence establishes that risk. In a proprietary injunction application, proof of a risk of dissipation is unnecessary.
5. It was inappropriate to discharge the injunctions where proof of the alleged non-disclosures depended on disputed facts. The court would not conduct a trial within a trial or make provisional findings on matters properly reserved for the substantive proceedings. The claimants had presented a sufficiently fair and accurate account of the arguments that might be raised against their application.

First-instance decision. The judgment records earlier injunction orders made by Jacobs J on 2 and 7 August 2024 and by HHJ Pelling KC on 13 August 2024. The present court dismissed the application to discharge or set aside those orders.