New year, new reminder of the obligation to make full and frank disclosure in without notice applications, this time in the context of a falling out within the UK Independence Party (UKIP). The obligation can be satisfied only by drawing the court's attention to legal or factual matters which could undermine the applicant's own application; it is not enough to simply put relevant matters in evidence before the court (UKIP v Braine).(1)
The dispute concerned applications for election to UKIP's National Executive Committee. UKIP's chair and party secretary were said to be concerned that supporters of the former party leader (the so-called 'Batten Brigade') were being inappropriately put forward. Each side tried to remove or suspend members of the opposing faction from their positions within UKIP and made complaints to the police about unlawful access to data.
Against that background, UKIP's then party leader instructed a party member to "[d]o a Microsoft Office 365 Evidence scan of the chairman's account and other UKIP.org account [sic] to gain evidence, for use later". Members of UKIP's National Executive Committee subsequently received an email which threatened to release information allegedly collected from their email accounts unless they resigned from the party. The email was sent from an unknown account using the pseudonym 'BB' (which UKIP claimed in its evidence to be a reference to the Batten Brigade).
UKIP secured a non-disclosure order (NDO) on a without notice basis, the court finding that there was a serious issue to be tried and that UKIP could not be adequately compensated by damages (the test set out in American Cyanamid).(2) The NDO prohibited the defendants from disclosing or publishing information originating from or "concerning a data breach of a list of 143 email addresses or accounts".
At the subsequent on notice hearing, the defendants opposed UKIP's application to continue the NDO on the grounds that there were serious defects in UKIP's original application and it had breached its obligation of full and frank disclosure. The court rejected UKIP's application to continue the NDO until the trial of UKIP's claim. However, it also rejected the defendants' application to have the NDO set aside for material non-disclosure.
The judge found that UKIP should have drawn the court's attention to the correct enhanced merits test set out in the Human Rights Act 1998 (ie, whether UKIP was likely to establish that publication should not be allowed)(3) rather than relying only on the standard American Cyanamid basis. By failing to do so, UKIP had committed what the court deemed to be a serious breach of duty.
UKIP had also failed to draw the court's attention to important matters of fact relevant to its original application. For example, UKIP had not referred to a relevant internal report summarising a conversation in which two of the defendants denied any knowledge of what the court described as the 'blackmail email' (although the report was in evidence) and the fact that the threatened deadline had passed without any publication. The court ruled that the obligation of full and frank disclosure:
is not limited to not 'hoodwinking' the Judge, or avoiding misrepresentations that would change the outcome. Nor is the duty discharged by putting a document in a bundle. The obligation is to disclose that which, if present, the defendants would have wanted the Court to know; and it extends to drawing attention to the most important features of the evidence or law that could undermine the application. (Emphasis added.)
The court confirmed that non-disclosure of material facts on a without notice application could lead to an order being set aside without examination of the merits(4) and that the rule in favour of discharge is an important deterrent. An applicant which has obtained an injunction in breach of its duty of full and frank disclosure should be deprived of any advantage gained as a result.
Notwithstanding its determination that UKIP had breached its duty of full and frank disclosure, the court held that the NDO had no practical impact and refused to set it aside. The defendants need not rely on the court's refusal to continue the NDO in order to sanction UKIP. Instead, the most just and proportionate course was to order that UKIP pay its own costs of the original NDO application.
Without notice applications are subject to strict disclosure requirements and an applicant's duty of full and frank disclosure (and that of its legal advisers) can be satisfied only by drawing the court's attention to legal or factual matters which could undermine its own application. It is not enough to simply put those matters in evidence without referring to them in witness statements or submissions; the applicant must notify the court of matters which "if present, the defendants would have wanted the Court to know".
The courts have a discretion to set aside or continue any order obtained in breach of an applicant's duty of full and frank disclosure but they have no obligation to do so. Instead, they may opt for practical penalties, such as costs awards, in order to deter others from following the same course.
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Endnotes
(2) American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1 (5 February 1975).
(3) Section 12(3) of the Human Rights Act 1998.
(4) Relying on the consequences of a breach of duty summarised in YXB v TNO [2015] EWHC 826 (QB).
