Full and frank disclosure means more than just putting relevant matters in evidence – a new year warning in UKIP v Braine & Others

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 UKIP party. The obligation can only be satisfied 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 & Others).(1)

Background

The dispute concerned applications for election to UKIP's National Executive Committee. UKIP's chairman 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: "Do 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 "B.B." (which UKIP claimed in its evidence to be a reference to the "Batten Brigade").

The Non-Disclosure Order

UKIP secured a non-disclosure order 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.

Full and Frank 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 (HRA) (i.e. 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 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 did not refer 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 (our emphasis):

"… 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. "

 The court confirmed that non-disclosure of material facts on a without notice application could led 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 who 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 did not need to 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.

Comment

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 only be satisfied 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 is obliged to notify the court of matters which "if present, the defendants would have wanted the Court to know".

The court has a discretion to set aside or continue any order obtained in breach of an applicant's duty of full and frank disclosure but it has no obligation to do so. Instead, it may opt for practical sanctions, such as an award of costs, in order to deter others from following the same course.

(1) [2019] EWHC 3527 (QB)
(2) American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1 (05 February 1975)
(3) Section 12(3) of the Human Rights Act 1998
(4) Relying upon the consequences of a breach of duty summarised in YXB v TNO [2015] EWHC 826 (QB)