Ireland: Ex Parte Relief And Full And Frank Disclosure

Last Updated: 8 January 2015
Article by Gearóid Carey

A recent decision has confirmed the importance of ensuring full and frank disclosure when seeking an order from the court on an ex parte basis.1 The decision also usefully recites the legal principles regarding the consequences of not making full and frank disclosure.

The plaintiff and his two brothers acted in partnership in relation to the purchase of lands and borrowed moneys from the defendant bank to do so. Legal disputes in relation to the lands had implications for the repayment of the loan and, ultimately, the parties entered into a compromise agreement in order to assist the bank in seeking to recover as much as possible of the debt owed to it. That compromise agreement was made on March 13 2013, but defined the effective date in manuscript text initialled by the plaintiff as being three weeks from May 27 2013.

Under the compromise agreement the borrowers, including the plaintiff, assumed numerous obligations towards the bank. By contrast, the bank's obligations under the compromise agreement were twofold.

  • It would postpone enforcement of the borrower's debts (specifically, by not pursuing judgment proceedings during the relevant period) to enable steps to be taken by the borrowers under the agreement.
  • It would acknowledge full implementation of the agreement as amounting to full and final settlement of the borrowers' debts to it.

The plaintiff borrower issued proceedings against the bank on October 1 2014 on the basis that the bank had not complied with the terms of the compromise agreement and sought various reliefs, including specific performance of the compromise agreement or, alternatively, damages for breach thereof. He also sought various orders restraining the bank from taking steps that were contrary to the provisions of the compromise agreement. The alleged breaches by the bank were threefold.

  • The sum of €335,000 was wrongly debited from his account on March 27 2013 in breach of the bank's obligation under the compromise agreement to postpone its rights/remedies.
  • A receiver was wrongfully appointed on March 18 2014 over two properties covered by the compromise agreement, whose appointment was not discharged.
  • Consent to the sale of the lands to a company whose offer of €1.5 million was accepted by the plaintiff and the other owners on June 13 2014 was wrongfully refused.

Arising from the proceedings and the alleged breaches, the plaintiff applied for and was granted an ex parte interim injunction restraining the bank from taking any steps that were contrary to the compromise agreement from enforcing or recovering the loan liabilities pending the application for an introductory injunction in similar terms. On the same day, and while not having been notified of the interim injunction, the bank appointed receivers to lands that were the subject of the compromise agreement.

Bank application

On October 7 2012 the bank brought an application to have the interim injunction set aside on the grounds of material non-disclosure. It contended that the plaintiff had failed to make a full and frank disclosure of the following matters.

  • Regarding the timing of the debit from the plaintiff's account, the bank submitted that the plaintiff had wrongly failed to disclose that he did not initial his acceptance of the compromise agreement until May 29 2013, such that it was plainly not operative until the effective date recited on its face (ie, three weeks from May 27 2013). In support of the submission that the plaintiff would have been well aware of this, the bank relied on an exchange of emails between the parties' solicitors.
  • In relation to the failure to remove the receiver, the bank submitted that the averments to the effect that the receiver "continued to manage the properties" were entirely false. In this regard, the bank exhibited the relevant deed of discharge in respect of the receiver concerned.
  • With regard to the refusal to consent to the sale of the lands, the bank contended that the plaintiff had withheld a number of material facts. The bank contended that the relevant heads of agreement document dated June 13 2014 had not been provided to the bank prior to the proceedings and that it was unaware of the alleged offer or agreement. The bank also referred to subsequent correspondence (July 28 2014) from the plaintiff's then solicitors indicating that the plaintiff had at that point found a party which had "expressed an interest in purchasing" the property. The bank pointed out that this was difficult, if not impossible, to reconcile with the plaintiff's contention that an offer to purchase those lands had been accepted on or before June 13 2014.

Decision

The court noted that the obligation to make full and frank disclosure in applying for relief on an ex parte basis had been approved by Judge Clarke in Bambrick v Cobley2 in the same terms as set down by Vice Chancellor Browne Wilkinson in Tate Access Floors Inc v Boswell. 3

"No rule is better established, and few more important, than the rule (the golden rule) that a plaintiff applying for ex parte relief must disclose to the Court all matters relevant to the exercise of the court's discretion whether or not to grant relief before giving the defendant an opportunity to be heard. If that duty is not observed by the plaintiff, the court will discharge the ex parte order and may, to mark its displeasure, refuse the plaintiff further inter partes relief even though the circumstances would otherwise justify the grant of such relief."

The court indicated that it was satisfied that the plaintiff had failed to disclose some nine particular facts when applying for and obtaining the ex parte injunction. It went on to consider whether the undisclosed facts were material to the application for ex parte relief as made by the plaintiff. In this regard, it noted that the plaintiff would have done well to heed the caution expressed by Lord Chancellor O'Hagan in Atkin v Moran4 that:

"The party applying is not to make himself the judge whether a particular fact is material are not. If it is such as might in any way affect the mind of the court is its duty to bring it forward."

Here, the court was satisfied that each of the relevant facts was at least capable of affecting the mind of the court and, although not necessary to do so, it went on to say that it was difficult to conceive how those facts would not have affected the mind of the court. In coming to that conclusion, it was mindful of the decision in Bambrick v Cobley that:

"The test by reference to which materiality should be judged is one of whether objectively speaking the facts could reasonably be regarded as material with materiality to be construed in a reasonable and not excessive manner."

Consequently, in this case the court found that there was a significant and material failure to disclose matters which should have been disclosed in the context of the ex parte application.

Consequences of material non-disclosure

The court acknowledged that the consequence of material non-disclosure is not automatic and that the court has discretion, in cases where failure to make full and frank disclosure at the interim stage has been established, to discharge the interim injunction already granted and to refuse to grant any interlocutory injunction then sought. 5 The factors relevant to the exercise of that discretion are as follows.

  • the materiality of the facts not disclosed;
  • the extent to which it might be said that the plaintiff is culpable in respect of failure to disclose; and
  • the overall circumstances of the case which led to the application in the first place.

Taking those factors into account, the court found that the facts not disclosed were directly relevant and reasonably material to the specific allegations made by the plaintiff with regard to the breach of the compromise agreement by the bank. While he would not go so far as to find the non-disclosure to be deliberate, it was satisfied that it involved a culpable failure on the part of the plaintiff. Finally, it concluded that no other aspect of the overall circumstances of the case was directly relevant to the exercise of the discretion at issue. Accordingly, it acceded to the application on the part of the bank to discharge the interim injunction and ruled against the application for interlocutory relief by the plaintiff.

Injunction analysis

Notwithstanding its ruling with regard to the effects of the material non-disclosure, lest it be wrong in that view, the court then went on to consider whether it would be appropriate to grant an interlocutory injunction in accordance with the relevant Campus Oil guidelines in any event. 6 It accepted that there was a bona fide question to be tried concerning the alleged breach of the compromise agreement. It also accepted that damages would not be an adequate remedy (although it noted that any cross-undertaking from the plaintiff would be of little or no value in any event). Looking at the final limb of the test (the balance of convenience), it felt that the maintenance of the status quo was best preserved. Accordingly, the court would, in any event, have declined the interlocutory application.

Comment

Although the decision does not set out new law, it does offer a useful reminder of the obligation on a party seeking an ex parte order to ensure that it fully and frankly puts all material facts before the court. Failure to do so can not only result in the interim order being set aside, but may preclude that party from obtaining the relief sought on an interlocutory basis pending the ultimate trial.

Endnotes

1 McDonagh v Ulster Bank Ireland Limited [2014] IEH 476.

2 [2005] IEHC 43.

3 [1991] Ch 512, at p. 532.

4 [1871] IR 6 EQ 79.

5 Relying on Bambrick v Cobley [2005] IEHC 43 and Lloyds Bowmaker Limited v Brittania Arrow Holdings Ltd [1988] 1 WLR 1337.

6 Campus Oil Limited v Minister for Industry and Energy (No 2) [1983] IR 88 – the main authority regarding the test for such injunctive relief.

This article first appeared in the International Law Office Litigation newsletter, 23 December 2014.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.