In litigation, situations are wont to arise where a party will of necessity have to obtain orders in lieu of service to the other party and/or inter partes hearing. Courts of law and equity have been keen ensure that the party benefiting from such ex parte orders does not do so at undue expense of the opposite party. It is therefore settled that a party applying for ex-parte orders act uberimae fides.
Principle of non-disclosure of material facts
The principle of non-disclosure was stated in the well-known case of R-v-Kensington Income Tax Commissioner E.p. Princess Edmond De Polignac [1917] 1 KB 486 where Scrutton LJ referred to it as 'one which it is of greatest importance to maintain'. In that Court of Appeal of England case, Warrington LJ at page 509 said as follows:
"It is perfectly well settled that a person who makes an ex parte application to the court-that is to say, in the absence of the person who will be affected by that which the court is asked to do-is under an obligation to the court to make the fullest possible disclosure of all material facts within his knowledge, and if he does not make that fullest possible disclosure, then he cannot obtain any advantage from the proceedings, he will be deprived of any advantage he may have already obtained by him. That is perfectly plain and requires no authority to justify it."
Rationale for material disclosure requirement
In Lloyds Bowmaker Ltd-v-Britania Arrow Holdings p/c (larens, third party) [1988] 3 All ER 178 Balcombe LJ rationalized the requirement of full, fair and frank disclosure thus:
"The rule that an ex parte injunction will be discharged if it was obtained without full disclosure has two fold purposes. It will deprive the wrongdoer of an advantage improperly obtained…But is also serves as a deterrent to ensure that persons who make ex parte applications realize that they have this duty of disclosure and of the consequence (which may include liability in costs) if they fail in that duty."
In Tiwi Beach Hotel Ltd-v-Stamm [1991] KLR 658, the Court of Appeal in the appeal on a ruling of an a dismissal of opposition to injunction on grounds that the applicant had failed to make disclosure of all material facts to the application held that: when considering an averment of material disclosure, it is important that the Court is not left with a lacunae in the narrative which might be relevant to that averment. The Plaintiff in its depositions of 19/10/2007 deliberately left a lacuna on the facts of the matter by concealing from the court records its letter of 28th July 2007 and that of the 1st Defendant of 2nd August 2007.
Further, the Court of Appeal held that it matters not upon a point of this nature being taken, whether the applicant was entitled to or that the Court would have granted the relief sought in any even, that is to say leaving aside the non-disclosure, for it is affront to the dignity and credibility of the Court that is in point. In the case, the court rejected the contention as to non-disclosure because, after examining the sequence of the events, it was unable to find that there was deliberate concealment on the part of the respondent. That cannot be said of the present case.
The appeal case of Owners of the Motor Vessel "Lillian S"-v-Caltex Oil (Kenya) Limited [1989] KLR 1 also dealt with the duty of applicant to make full and frank disclosure of material facts in ex-parte applications and the consequences of non-disclosure thereof. The court of Appeal held that it is axiomatic that in ex-parte proceedings there should be full and frank disclosure to the court of facts known to the applicant. And that, failure to make such disclosure may result in the discharge of any order made upon the ex-parte application.
Guidelines on Non-disclosure of facts
In the above case, Kwach JA (as he then was) quoted the following passage in the decision in Brink's Mat Ltd-v-Elcombe [1988] 3 All ER 188 by Ralph Gibson LJ, at page 192(f) as the law on non-disclosure. Ralph Gibson LJ in the case said as follows:
"In considering whether there has been relevant non-disclosure and what consequence the court should attach to any failure to comply with the duty to make full and frank disclosure, the principles relevant to the issues in these appeals appear to me to include the following. (i) the duty of the applicant is o make a full and fair disclosure of the material facts. (ii) The material facts are those which it is material for the Judge to know in dealing with the application as made; materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers. (iii) The applicant must make proper inquiries before making the application. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had such inquiries. (iv) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application (b) the order for which application is made and the probable effect of the order on the Defendant, and (c) the degree of the legitimate urgency and the time available for the making of the inquiries. (v) if material non-disclosure is established the court will be astute to ensure that a Plaintiff who obtains an ex parte injunction without full disclosure is deprived of any advantage he may have derived by that breach of duty. (vi) 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 issues which were to be decided by the judge on the application. The answer to the question whether the 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 give careful consideration to the case being presented. (vii) Finally, it is not for every omission that the injunction will be automatically discharged. A locus penitentiae (chance of repentance) may sometimes be afforded. The court has discretion, not withstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order."
Despite non-disclosure new orders may issue
However, the court may make a new order on, as stated by Glidewell LJ in Lloyds Bowmaker Ltd-v-Britania Arrow Holdings p/c (larens, third party) [1988] 3 All ER 178 at p.183, the following terms:
"… When the whole of the facts, including that of the original non-disclosure, are before it, (the court) may well grant such a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed." (Emphasis mine)
Clearly, a party will not be entitled to new order where the non-disclosures are demonstrably reeking of guilt and calculation. Such suffices as unclean hands and put a curb on the equitable discretion of the court to act in the circumstances. Also, new order will not issue if had the facts been disclosed, the Plaintiff would not have had the ex-parte orders.
Non-disclosure abuse of court process
The Court of Appeal in the MV Lilian S' case (supra) found that the respondent had failed to disclose to the court that their claim was being pursued by arbitration. Upholding an appeal, inter alia, on ground of the non-disclosure it found that invocation of the jurisdiction of the court ex parte in view of the non-disclosure of material facts amounted to an abuse of the process of the court.
Non-disclosure is want of good faith
In Mutua & others-v-Milligan & Co Ltd [1991] KLR 405 the learned Bosire J (as he then was) held that the court will exercise the power to strike out an injunction for want of good faith where it has evidence that the appellant came to court and obtained ex-parte orders without full disclosure of material facts essential for the just determination of the matter, or where the facts relied upon are clearly false.
Recent case on non-disclosure in Kenya
The need for non-disclosure of material facts was also emphasized by the High Court in Republic versus Kenya National Federation of Cooperatives Limited Ex parte Communication commission of Kenya [2005] 1 KLR 242. The facts were that on 25th November 2004, the Kenya National Federation of Cooperatives Limited (KNFC) filed an ex-parte application for leave to apply for judicial review orders against the Communication Commission of Kenya (CCK). It also sought that the grant of leave operate as a stay of the performance for operation of the license for the Global Service Mobile (GSM) issued to Econet Wireless Kenya Limited by the CCK pending the hearing and determination of the application which concerned the issuance of the license.
The court granted the orders sought ex parte and directed that Econet Wireless Kenya Limited (EWK) be made a party to the application. The EWK then applied for orders that the stay and the leave be discharged. The application was principally based on the ground of non-disclosure of material facts by the KNFC.
KNFC had failed to disclose facts that would appear to be material especially on matters relating to correspondences with CCK and its negotiations with EWK. Whether this was deliberate, the court did not seek to establish.
The High Court in discharging the leave and the stay held that it is essential that parties who seek leave ex-parte to move for judicial review to appreciate that they have a duty to make a full disclosure of all potentially material matters to the court. It was the court's view that whether or not the fact subject of non-disclosure is of sufficient materiality to justify or require immediate discharge of the order without examination of merits depended on the importance of the fact to the issues to be decided by the judge on the application.
The facts not disclosed do not seem to have been capable of dissuading the court to deny the leave had they been disclosed. However, the fact of lack of innocence on the part of the applicants swayed the court's discretion in discharging the ex-parte leave.
In the case, it was submitted on behalf of KNFC that the court could still maintain the ex parte orders granted if it found that despite the non-disclosures, the leave and stay could still be properly granted had they been disclosed or availed to the Court. That was one of the aspects considered in the Brink Mars case (supra). The learned judge, Ibrahim J, held that the non-disclosure was deliberate and calculated and that had the information undisclosed been disclosed to him, he would not have possibly granted the order of stay. Ibrahim J, saying he was lost because of the non-disclosure further stated at page 266 (Para 20):
"The Court must insist on strict compliance with the rule pertaining to non-disclosure in order to afford protection to the absent parties at the ex parte stage."
"… [I]t is essential that parties who seek leave to move to judicial review should appreciate that they have a duty to make full and frank disclosure of all potentially material matters to the court …"
In the authoritative Book "Judicial Review Handbook" 3rd edition By Michael Fordham, an essential and must have text on judicial review, the author at page 352 says:
"21.5 Claimant's duty of Candour
A claimant for permission [read leave] is under an important duty to make full and frank disclosure to the court of all material facts and matters. It is especially important to draw attention to matters which are adverse to the claim, in particular: (1) any statutory restriction on the availability of judicial review; (2) any alternative remedy; (3) any delay or lack of promptness and so need to apply for an extension of time."
"It is of fundamental importance that applications for judicial review should be made with full disclosure of all material available to the claimant … this is a case which I can properly in order to sent a message to those who are making applications to this court reminding them of their duty to make full disclosure: failure to do so will result in appropriate cases in the discretion of the court, being exercised against (a claimant) in relation to the grant of (a remedy)".
These above quotations demonstrate that the requirement for full and frank disclosures by applicants in judicial review is as stringent as in all other ex-parte applications. In deed, the requirement for full and frank disclosure apply in other ex parte application in addition of injunctions and leave to apply for judicial review. One can include such other applications as ex parte application to serve out of jurisdiction, application for substituted service and ex parte application for arrest before judgment among others. In these other case, cases, the duty for full disclosure is no less stringent.
Undoubtedly, ex-parte orders are inevitable in civil litigation. The best and recommended policy is to be careful in drafting to ensure full disclosures are made. It is also important to remind clients of the principle and encourage them to let on all the facts of the matter even if they deem the same 'irrelevant'.
