Let me be frank: important principles for urgent injunctions and material non-disclosure clarified in the EC COA Paraskevaides decision
In our second blog regarding the landmark decision of the Court of Appeal in Paraskevaides (see our first blog here), we consider the principles applicable to urgent applications for injunctive relief, including the ability to serve out applications prior to there being an underlying claim and the scope of an applicant’s duty to give full and frank disclosure.
Decision at first instance
The BVI Commercial Court had discharged an injunction obtained ex parte, which prevented the unauthorised dealing with trust assets by the administrator of a deceased’s estate appointed by the Cypriot court. In discharging the injunction the Commercial Court ruled that the claimants had breached their duty to give full and frank disclosure in seeking the injunction and had made serious material non-disclosures.
The Court of Appeal overturned the decision of the BVI Commercial Court and set its order aside.
Limits of duty of full and frank disclosure
Crucially, the Court of Appeal disagreed with the court below that the claimants should have perceived the relevance of certain correspondence not adequately drawn to the court’s attention at the ex parte hearing. The Court of Appeal was keen to impress that meaning should not be attached to documents or correspondence after the event and with the benefit of hindsight – an applicant is entitled to rely on the meaning and relevance that can reasonably be attributed to a document at the time of making an application. In the circumstances, the Court of Appeal concluded, in contrast to the BVI Commercial Court, that any non-disclosure had been innocent and that this in turn became a factor to be taken into account when deciding whether the injunction should have been re-granted at the return date.
Service out of injunctions permitted prior to service of claim form
The Court of Appeal also held that the BVI Court has the power to order service out of an injunction which has been obtained on an urgent basis before a claim form has been issued. This is an important clarification given that the civil rules only expressly provide a mechanism for service out of a claim form (and other documents, where a claim form has already been served).
Other key principles
The Court of Appeal also clarified numerous other important principles relevant to applications for interim injunctive relief:
- An appellate court should only interfere with a finding of material non-disclosure if it is blatantly wrong.
- Even if a judge determines that material non-disclosure warrants the discharge of an injunction, where the court fails to consider certain matters that were material to the exercise of his discretion to grant a fresh injunction, the appellate court can consider the question afresh.
- A material non-disclosure will be innocent if the undisclosed fact was not known to the applicant or its relevance was not perceived by the applicant. In this case, the Court of Appeal found that Wallbank J had failed to consider that the Claimants were not aware of the particular relevance attached to the correspondence by the Respondents (and also by the judge).
- In relation to a proprietary injunction, it is not necessary to show that a person who is interfering with property is likely to damage the property or that they intend to cause harm. The interference with the property itself can justify the grant of a protective order to restrain a person from doing what he is not entitled to do.
The decision demonstrates the pragmatism and flexibility of the EC courts in not imposing unnecessary procedural obstacles that could frustrate an applicant’s access to justice in urgent situations and protect very valuable assets.
Harneys, along with Vernon Flynn QC and Daniel Warents, acted for the successful appellants.