Jersey Unreported Judgments

Injunctions - reasons relating to decision not to re-impose interim injunctions.

[2017]JRC035

Royal Court

(Samedi)

28 February 2017

Before     :		T. J. Le Cocq, Esq., Deputy Bailiff, and Jurats Blampied and Ramsden
Between	Bruce Ronald Skinner		First Plaintiff
And	Gillian Linda Skinner		Second Plaintiff
And	Minister for Infrastructure		First Defendant
And	Public of the Island of Jersey		Second Defendant

Advocate R. A. Leeuwenburg for the First and Second Plaintiffs.

Advocate D. J. Mills for the First and Second Defendants.

judgment

the deputy bailiff:

1.        On 12^th August, 2016, the Deputy Bailiff signed an Order of Justice brought by Bruce Ronald Skinner and Gillian Linda Skinner ("the plaintiffs") against the Minister for Infrastructure and the Public of the Island of Jersey ("the defendants"). 

2.        The claim related to an area of land adjacent to the property known as Le Hocq Point, La Grande Route de la Côte, St Clement ("Le Hocq Point") which the plaintiffs acquired by contract passed before the Royal Court on 23^rd April, 2004.  The adjacent area of land ("the disputed land") is situated to the west of Le Hocq Point and is triangular in shape and is bordered by La Grande Route de la Côte to the north and the sea wall to the south. 

3.        Both the plaintiffs and the Public of the Island claim title to the disputed land.  The Order of Justice contains various averments on behalf of the plaintiffs as to the title to the disputed land and discloses that they became aware of the intention of the Public of the Island to carry out various works to the disputed land.  The plaintiffs sought confirmation from the defendants that no work would be undertaken over the disputed land and received a response on 12^th August, 2016, saying, amongst other things, that:

"As advised previously the works would be commencing on Monday 15th August 2016."

4.        Because in part of the urgency of the matter the Deputy Bailiff granted an interim injunction against the defendants restraining them, their officers, employees, servants and agents from entering the disputed land to carry out the proposed works and carrying out any of the works including any actions taken with regard to any plant, bush or tree on the disputed land.  By summons dated 23^rd August, 2016, the defendants applied to discharge the interim injunction on the grounds primarily of a failure by the plaintiffs to make full and frank disclosure and generally by reference to the principles which apply to the grant of interim injunctions. 

5.        On the 5^th September, 2016, we raised the interim injunctions on the basis of a lack of full and frank disclosure and declined to re-impose them on the basis that we were not persuaded that there was a serious issue to be tried but that in any event the balance of convenience fell in favour of the Public of the Island.  We indicated that we would in due course give reasons for the decision that we had made and left over the question of costs for determination at the time of those reasons.  These, in brief, are our reasons. 

Law on full and frank disclosure

6.        The obligation on an applicant for an order to be granted on an ex parte basis to make a full and frank disclosure of all matters that may count against the granting of the order is well known. 

7.        The principles have been set out in a number of cases but for our purpose we take the statement of principles set out in Goldtron Limited v Most Investments Limited [2002] JLR 424 as a very clear statement of principles.  At paragraph 14 et seq of that judgment Birt, Deputy Bailiff (as he then was) set out the legal position in the following terms: 

"14     The essential feature of judicial proceedings is that each party has the opportunity of putting his case. Thus the court will not generally hear only one side to a dispute. However, on occasions, this is necessary either because of the urgency of the matter or because the very nature of the relief requested requires that it be done in the absence of the other party (e.g. the obtaining of an injunction freezing assets because it is feared that the other side will remove them). Even then, the other side has the right to bring the matter back before the court at the earliest opportunity for an inter partes hearing. Clearly, there is great scope for injustice if orders are made in the absence of one party. If the court "wrongly" imposes a freezing order on a party's assets because it has been misled by the applicant, serious damage may be caused without that party having had the opportunity to put its case to the court. Accordingly, it is fundamental and of the highest importance that a party applying for ex parte relief must be completely frank with the court and must put before the court any matters which militate against the making of the order in question.

15       In our judgment, a short and accurate summary of the duty lying upon the party applying for ex parte relief is to be found in the decision of Bingham, J. in Siporex Trade S.A. v. Comdel Commodities Ltd. (4), ([1986] 2 Lloyd's Rep. at 437):

"The scope of the duty of disclosure of a party applying ex parte for injunctive relief is, in broad terms, agreed between the parties. Such an applicant must show the utmost good faith and disclose his case fully and fairly. He must, for the protection and information of the defendant, summarize his case and the evidence in support of it by an affidavit or affidavits sworn before or immediately after the application. He must identify the crucial points for and against the application, and not rely on general statements and the mere exhibiting of numerous documents. He must investigate the nature of the cause of action asserted and the facts relied on before applying and identify any likely defences. He must disclose all facts which reasonably could or would be taken into account by the Judge in deciding whether to grant the application. It is no excuse for an applicant to say that he was not aware of the importance of matters he has omitted to state. If the duty of full and fair disclosure is not observed, the Court may discharge the injunction even if after full enquiry the view is taken that the order made was just and convenient and would probably have been made even if there had been full disclosure."

16       We must emphasize the passage concerning the exhibiting of numerous documents. It is not sufficient for a plaintiff to be able to say that, buried somewhere amongst the voluminous exhibits, the point at issue was available to the judge. The duty is much more stringent. All defences actually raised by the defendant or which can reasonably be expected to be raised in due course must be identified and fairly summarized in the affidavit. If the affidavit itself is voluminous, counsel may need to refer the judge to the relevant points. The overriding duty of the applying party and his advocate is to ensure that all actual or possible defences (and other material matters) are brought to the specific attention of the judge so that he may consider them before making his order."

8.        And further at paragraph 21 et seq the court discussed the consequences of a non-disclosure in the following terms:-

"21     Clearly, if the material which has not been disclosed would have led the judge not to have granted the ex parte relief in the first place, that would be the end of the matter. The injunction would be discharged and not re-imposed. However, that is often not the position. As Bingham, J. made clear in the passage referred to above in Siporex (4), the court may discharge the injunction even if, had there been full disclosure at the time, the judge would nevertheless have granted the ex parte relief. The reason for this approach is to emphasize the importance which the court places on the need for full and frank disclosure and to act as a deterrent to future applicants by making clear the serious consequences which may follow in the event of non-disclosure.

22       But even where the court has discharged an injunction on the grounds of non-disclosure, it has a discretion to re-impose the injunction. The circumstances in which it would be right to do so were considered by the English Court of Appeal in the case of Brink's Mat Ltd. v. Elcombe (1). Two particularly useful passages are as follows. Balcombe, L.J. said this ([1988] 1 W.L.R. at 1358):

"The rule that an ex parte injunction will be discharged if it was obtained without full disclosure has a two-fold purpose. It will deprive the wrongdoer of an advantage improperly obtained: see Rex v. Kensington Income Tax Commissioners, Ex parte Princess Edmond de Polignac, [1917] 1 K.B. 486, 509. But it also serves as a deterrent to ensure that persons who make ex parte applications realise that they have this duty of disclosure and of the consequences (which may include a liability in costs) if they fail in that duty. Nevertheless, this judge made rule cannot be allowed itself to become an instrument of injustice. It is for this reason that there must be a discretion in the court to continue the injunction, or to grant a fresh injunction in its place, notwithstanding that there may have been non-disclosure when the original ex parte injunction was obtained ... Whilst, having regard to the purpose of the rule, the discretion is one to be exercised sparingly, I would not wish to define or limit the circumstances in which it may be exercised."

Ralph Gibson, L.J. said this (ibid., at 1357):

"(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented.

(7) Finally, it 'is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded:' per Lord Denning, M.R. in Bank Mellat v. Nikpor, [1985] FSR 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue that order, or to make a new order on terms."

23       In our judgment, this reflects the position at Jersey law. In cases of comparatively minor non-disclosure, the court may well continue or re-impose the order. But in cases of serious non-disclosure, even if innocent, as described by Ralph Gibson, L.J., the normal order will be to discharge the order and not re-impose it. As Balcombe, L.J. said, the power to re-impose should be used sparingly. The reason for this is to ensure compliance with the duty to make full and frank disclosure. If it became the case that injunctions were routinely re-imposed, with the only penalty being one of costs, not only would plaintiffs and their advisers begin to take this duty less seriously; but defendants would eventually give up applying to set aside injunctions obtained as a result of non-disclosure if their only "reward" were simply to recoup the costs of the application, with the injunction remaining in place. This would in turn further reduce the pressure on plaintiffs to make full disclosure."

9.        It is, therefore, not the case that every failure of full and frank disclosure will lead to the discharge of the interim order and it is useful to keep in mind the judgment of the Royal Court in the case of Consolidated Resources Armenia v Global Gold Consolidated Resources Limited and others [2014] JRC 124 in which Clyde-Smith Commissioner in a case relating to an allegation of a failure to make full and frank disclosure, at paragraph 23 and 24 of the judgment said this:-

"23 Whilst not detracting from the general obligation to make full and fair disclosure in any ex parte application for an interim injunction, we note that:-

(i)        This is not a Mareva injunction.  There is no injunction over the assets of Mr Krikorian and Global Gold.  The injunction relates solely to the joint venture company, which is the subject matter of the action. 

(ii)       Transactions in the ordinary and proper course of business are not restricted. 

(iii)      Bearing in mind the provisions of the shareholders' agreement, the injunctions in fact go little further than the contractual restrictions already placed upon the activities of the joint venture company. 

24.      In this case, there has been material non-disclosure as noted above, but in our view it was innocent and would not have made a difference to the decision of the Deputy Bailiff to grant the interim injunctions.  It would be disproportionate for the injunctions to be lifted on account of it, and we decline to do so.  The interim injunctions will therefore remain in force."

Law on interim injunctions

10.      The general statement of the law relating to the circumstances in which it would be appropriate to grant an interim injunction is as well-known as the principle of full and frank disclosure when applying for such an injunction on an ex parte basis. 

11.      There are a number of cases which could be cited in which those principles are set out but for convenience we use the citation from the case of Milner v Milner Laboratories Limited, Leech, Smith and Sim [2000] JLR 266 in which Sir Philip Bailhache, Bailiff, at page 273 of the judgment said this:

"We accordingly set aside the injunctions and proceed to consider afresh whether they ought, in the light of all the submissions at this hearing, to be re-imposed.  Both counsel were agreed that the appropriate test was that laid down in American Cynamid Co. v. Ethicon Ltd. [1975] 1 All ER 504 and adopted by this Court on many occasions.  The principles were usefully summarized in Alpha Print -v- Alphagraphics [1989] JLR 152 at 157.

"1.      Has the plaintiff shown on the evidence before the court that there is a serious question to be tried?  If not, then no injunction is granted.  

2.        If there is a serious question to be tried, then the court considers whether the damages awarded at the trial would be an adequate remedy for the plaintiff.  If so, then no injunction is granted.  

3.        If damages would not be an adequate remedy for the plaintiff, the court then goes on to consider if damages would be an adequate remedy for the defendant:  if so, then normally an injunction will be granted. 

4.        If damages would not be an adequate remedy for the defendant, the court goes on to consider the factors affecting the balance of convenience, i.e. which party will suffer more uncompensatable damage from the grant or refusal of the injunction. 

5.        If the balance of convenience is fairly even, then it is prudent for the court to seek to preserve the status quo. 

6.        Finally, where there is approximately equal uncompensatable damage to both parties, it is proper to look at the relative strength of the parties' substantive cases.  Where one is disproportionately stronger than the other, this may swing the balance."

12.      These tests may fall to be considered once again by this Court in the event that we raise the interim injunction on the basis of a lack of full and frank disclosure. 

13.      Argument has also been addressed to us as to whether or not it was appropriate to apply for the order on an ex parte basis.  Our attention has been drawn, once again, to the judgment of Sir Philip Bailhache in Milner in which, at page 270, the court said this:

"Mr. Le Cocq's first submission was that the representation should not have been made nor determined ex parte. It was a fundamental principle of natural justice that an order should not generally be made without giving the other party the opportunity to be heard. He referred the Court to a decision of Hoffmann J in Re First Express Limited (10th October 1991) "The Times". That was a case where a company had gone into voluntary liquidation on 15th January 1991. On 29th January 1991, receivers were appointed by one of the secured creditors. On 25th February 1991, the receivers applied ex parte to the registrar and obtained an order under the Insolvency Act 1986 requiring the liquidator to transfer the books and records of the company and all moneys held by him on behalf of the company. The affidavit in support of the receivers' application was misleading and incomplete.  The report in The Times Law Reports states ([1991] T.L.R. at 439): 

"Mr. JUSTICE HOFFMANN said that he was firmly of the view that it was wrong for the application to have been made ex parte.  It was a basic principle of justice that an order should not be made against a party without giving him an opportunity to be heard.  The only exception was when two conditions were satisfied:

First, that giving such an opportunity appeared likely to cause the applicant injustice, by reason either of delay or action which it appeared likely the respondent or others would take before the order could be made and

Second, when damage to the respondent was compensatable under a cross-undertaking or when the risk of uncompensatable loss was clearly outweighed by the risk of injustice to the applicant if the order were not made. 

Applicants tended to think that a calculation of the balance of advantage and disadvantage in accordance with the second condition was sufficient to justify an ex parte order. 

That attitude should be discouraged.  One did not reach any balancing of advantage and disadvantage unless the first condition had been satisfied. 

The principle audi alteram partem did not yield to a mere utilitarian calculation and could be displaced only by invoking the overriding principle of justice which enabled the court to act at once when it appeared likely that otherwise injustice would be caused.  Here there was nothing to preclude an inter parties hearing."

The case for the Defendants

14.      The defendant's case on a want of full and frank disclosure is in effect put in the following way:

(i)        There was correspondence between the Public of the Island and the plaintiffs in which the plaintiffs request the Public to enter into a deed of arrangement to agree encroachments as part of their purchase.  This was at the plaintiffs instigation and consequently, so the defendants argue, indicative of the fact that they did not at that time hold the view that they had any right to the disputed land because had they done so then they would not have needed the Public to enter into any arrangement with them. 

(ii)       Seven items of correspondence, which we do not need to go into in detail, were listed by the defendants all of which so it was argued disclosed that there was active negotiation taking place at the time of the purchase in 2004 with regard to such a deed of arrangement. 

(iii)      When Le Hocq Point was sold there was a retention from the proceeds of sale to cover the costs of such a deed of arrangement. 

(iv)      Between 2009 and 2011 there was correspondence requesting the Public to enter into a deed of arrangement to confirm the encroachments.  Again this would not have been necessary if, as the plaintiffs allege in their Order of Justice, they have title to the disputed land.  We were shown a number of items of correspondence few of which were exhibited to the affidavit of the plaintiffs on application for the interim injunction or indeed shown to the Deputy Bailiff during the course of the application. 

(v)       Furthermore, there is a course of correspondence between the Law Officers' Department and the first plaintiff in which the first plaintiff had sought to lodge a third party appeal pursuant to Article 114(1) of the Planning and Building (Jersey) Law 2002 against the grant of permission to construct a bus shelter at Le Hocq but which was subsequently withdrawn by the first plaintiff on the basis that he did not meet the statutory criteria for bringing such a third party appeal in that he did not own property within 50 metres of the site in respect of which permission had been granted.  A file note in the Law Officers' Department dated 28^th March, 2008, reflects the fact that the first plaintiff had telephoned Advocate Mills of that Department and indicated that he realised that he did not satisfy the 50 metre rule and accordingly would be withdrawing his appeal. 

(vi)      Whereas Le Hocq Point was not within 50 metres of the proposed new bus shelter the disputed land was and clearly at that time the first plaintiff accepted that he did not own a property within the 50 metre statutory requirement. 

(vii)     Other correspondence passed between the first plaintiff and the Planning Minister in November 2012 which makes no reference to the purported ownership by the first plaintiff of the disputed land. 

15.      Even though none of the correspondence referred to above would have been determinative of title because, of course, a person's understanding of the legal position can alter over time nonetheless, so the defendants urge, these matters were both apparent from the plaintiffs own records or from any review of their conveyancing file.  These things should have been disclosed to the Court to indicate that the view that the plaintiffs have had of their title to the disputed land was very different when they first purchased and in the years thereafter. 

16.      In his written submissions Advocate Leeuwenburg drew our attention to other information from the conveyancing file.  It is argued by the beneficiaries that had this body of information be placed before the Deputy Bailiff at the time that he considered the grant of the interim injunction he would not have granted it. 

17.      The plaintiffs maintain that whereas there may have been a failure to disclose in fact it was an innocent failure and had all of the documentation been disclosed then the Deputy Bailiff would have granted the order in any event.  Furthermore, so the plaintiffs argue, they conducted the course of the correspondence mentioned above under an erroneous belief of that title and at that time, in fact they did own the disputed land although the correspondence suggest that they did not believe so.  An erroneous belief is not evidence, of course, of what the title actually is. 

18.      In our view there was a failure to make full and frank disclosure in this matter.  Moreover the disclosure was material in that it pointed to a course of conduct and understanding which was inconsistent with the plaintiffs' assertion that they had title to the disputed land.  Even if it would have been open to the plaintiffs, as indeed it was, to submit that that was not indicative of the actual position as to ownership, nonetheless, in the Court's view, such material should have been disclosed. 

19.      Having been disclosed it is unlikely that the Deputy Bailiff, given a preponderance of evidence suggesting a contrary view, would have granted the injunction on an ex parte basis but would rather have referred it to an inter partes hearing. 

20.      Furthermore, it does not seem to us that the urgency of the matter precluded the provision of full disclosure.  The matter of the ownership of the land had been in issue for some time and whilst the immediate cause of the application might have been the insistence, communicated on Friday, that the Public would be going ahead with works on the disputed land on the following Monday, the information that the plaintiffs failed to deploy in the application should have been available to them and deployed. 

21.      Accordingly in our view the correct course is to raise the interim injunction. 

22.      Notwithstanding the view that we have expressed, that this was a material non-disclosure, we accept it was an innocent one, but had the further information been disclosed it is likely that the Deputy Bailiff would have referred the matter to an inter parties hearing.  In our view, the failure to make disclosure was sufficiently serious that we should not re-grant the injunction for that reason alone. 

23.      Were we to be in the area where we were considering a re-grant we do not on the information before us, including a report on title provided by the defendants, believe that the plaintiffs have a sufficient prima facie case and were we considering the balance of convenience it further seems to us that for the reasons advanced in the submissions before us on behalf of the defendants, namely that of public safety, the balancing exercise would have concluded in favour of the refusal of the order. 

24.      In any event we discharge the injunction and do not re-impose it. 

25.      Should the defendants proceed with any work in light of the fact the injunction is now raised, they do so at their own risk because in the event the plaintiffs ultimately succeed naturally the defendants must be facing possible reinstatement.  The question of costs having been left over, we are content to deal with this by exchange of written arguments between the parties.  In this respect the parties are invited to make applications and submissions in writing by lodging the same within 14 days. 

Authorities

Goldtron Limited v Most Investments Limited [2002] JLR 424.

Consolidated Resources Armenia v Global Gold Consolidated Resources Limited and others [2014] JRC 124.

Milner v Milner Laboratories Limited, Leech, Smith and Sim [2000] JLR 266.

Planning and Building (Jersey) Law 2002.