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The High Court considered the duty of full and frank disclosure in the context of the defendants’ application to discharge a without notice injunction ordered against them. The Judge held that the claimant had complied with its duty and dismissed the discharge application.

This judgment contains a helpful summary of the nature of the duty of full and frank disclosure, including that the touchstone is one of fair presentation and that the responsibility of the applicant’s legal team to ensure the lay client is aware of the duty is a heavy one. 

Overview

The claimant successfully obtained an order for injunctive relief (delivery up, evidence preservation and computer imaging) following a without notice application made because of the defendants’ alleged misuse of its confidential information. The defendants sought to discharge the order (“the discharge application”) on the basis, inter alia, of 12 grounds of alleged non-compliance with the duty of full and frank disclosure (“the duty”).

One of the 12 grounds relied on was that, although the claimant had cited Goulding: Employee Competition (3rd ed) in support of the proposition that “orders for the early provision of information or early disclosure of documents are exceptional and should not be granted where they amount to a fishing expedition, or are “tantamount to standard disclosure in an unpleaded case””, the claimant should have made more of this point at the hearing of the without notice application and should have drawn the court’s attention to authorities which support that legal proposition [60]. The Judge rejected this ground (as well as the other 11 grounds).

Judgment

The Judge set out the relevant legal principles (at [44] to [49]) and considered each of the 12 grounds in turn (at [50] to [84]) before concluding that the defendants had not established that the claimant failed in its fair presentation obligation and dismissing the discharge application (at [85]).

Nature of, and reasons for, the duty

The duty of the applicant is to make “a full and fair disclosure of all the material facts”. Materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers. The applicant must make proper inquiries before making the application. The duty applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries. The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case; (b) the order sought and its probable effect on the defendant; and (c) the degree of legitimate urgency and the time available for the making of inquiries [45].

It is a basic principle of fairness that the court will hear both sides before reaching a decision. The duty is a necessary corollary of the court being prepared to depart from that principle. Derogation from the basic principle is an exceptional course adopted in cases of extreme urgency or the need for secrecy. On a without notice application, the court must be able to rely on the applicant to present the evidence and argument in a way which is not merely designed to promote its own interests, but in a fair and even-handed manner, drawing attention to evidence and arguments which it can reasonably anticipate the absent party would wish to make. It is a duty owed to the court which exists in order to ensure the integrity of the court’s process. The ultimate touchstone is whether the presentation of the application is fair in all material respects. The evidence and argument must be presented and summarised in a way which, taken as a whole, is not misleading or unfairly one-sided [46].

Duty on the applicant and responsibility of the applicant’s legal team

The duty is not confined to the applicant’s legal advisers but is a duty which rests upon the applicant itself. It is the duty of the legal team to ensure that the lay client is aware of the duty of full and frank disclosure and what it means in practice for the purposes of the application in question; and to exercise a degree of supervision in ensuring that the duty is discharged. No doubt in some cases this is a difficult task, particularly with clients from different legal and cultural backgrounds and with varying levels of sophistication. But it is important that the lay client should understand and discharge the duty, because often it will only be the client who is aware of everything which is material. The responsibility of the applicant’s lawyers is a heavy one, commensurate with the importance which is attached to the duty itself. It is akin to the duties of solicitors in relation to disclosure of documents [46].

Limits on the duty

The Judge held that there must be some limit to the duty. For example, just because a respondent might have taken the court to a number of cases to reinforce a legal proposition, so long as the applicant has fairly drawn the court’s attention to the principle derived from those cases, the applicant is not required to take the court to those cases in the way the respondent would have done. Further, incorrect submissions or arguments, including erroneous legal submissions, will not amount to non-disclosure or material misrepresentation provided that such errors do not deprive the court of knowledge of any material circumstance. This is on the basis that the applicant has acted fairly and is entitled to advance his arguments as he wishes provided that the court receives a fair presentation of the case [49]. 

The full judgment can be read here.

Robert Anderson QC, Mark Vinall and Daniel Burgess of Blackstone Chambers, instructed by Mishcon de Reya LLP, acted for the claimant.

Diya Sen Gupta
Winner, Employment Junior of the Year, Chambers UK 2016
Shortlisted, Employment Junior of the Year, Legal 500 UK 2019

December 2018

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