Need for full and frank disclosure of material facts

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."

 

Application of non-disclosure principle in Kenya

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 28^th July 2007 and that of the 1^st Defendant of 2^nd 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 25^th 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."

 

Non-disclosure in leave for judicial review application

In Kenya, the requirement for full and frank disclosure in application for leave to apply for judicial review is based on the fact that such application is, by virtue of order 53 of the Civil Procedure Rules, made ex-parte. In the above KNFC case, the court referred to a number of authorities on necessity making full disclosures in applications for leave for judicial review.  In R-v-Metropolitan Police Force Disciplinary Tribunal ex-parte Lawrence (1999) EWHC Admin 588, the High Court of England observed :

 

"… [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" 3^rd 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."

 

In R-v-Leeds City Council, Ex P Hendry (1994) Admin LR 444D in which Latham J observed:

"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.

 

Conclusion

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'.

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A checklist for capacity to make a valid will

Every now and then, a client appears in chambers wanting with instructions that a will be drafted for him. Quite a number of induviduals have considered the need to make a will and wondered whether they had the capacity to make one. For the benefit of lay persons, it is important to state at the outset that being not having property at present does not mean that you cannot make a will bequithing the same. This is especially relevant where one expects certain property to transfer to his/her name in future.

The following is a brief discussion of the issues that a counsel or a person making a will should put in consideration to avoid invalidation of an otherwise valid will on basis of lack of capacity of the maker. In essence, they are also the issues that a lawyer must satisfy himself of before getting a client to execute a will besides formality issues.

1.Capacity
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The Law of Succession Act, Cap 160, Laws of Kenya, (hereinafter the “Act”) provides that any person who is of sound mind and not a minor may dispose of all or any of his free property by will and may thereby make any disposition by reference to any secular or religious law that he chooses (Section 5(1) of the Act).

2.Age
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An infant is incapable of making a valid will. Any will made during infancy is invalid even when the minor reaches the age of majority. The minor upon reaching the age of majority can validate the infancy will by:

(i) re-executing the will or;
(ii) preparing a codicil confirming the will.

3.Testamentary Capacity
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As per Section 5(3) of the Act, any person making or purporting to make a will shall be deemed to be of sound mind unless he is at the time of executing the will, in such a state of mind, whether arising from mental or physical illness, drunkenness, or from any other cause, as not to know what he is doing.

In Vaghella –vs– Vaghella [1999] 2EA 351, the court stated that the validity of a will derives from the testamentary capacity of the testator and from the circumstances attending its making.

A will made by a person during period of mental unsoundness of mind is invalid. Mental capacity is not directly linked to mental disorder or madness but it refers to the testator’s capacity to understand the nature of what they are doing.

The test of mental capacity to make a will as set by Cockburn C.J. in Banks –vs– Goodfellow (1870) LR 5 QB 549 requires that testator must have:

(i) Sound mind enabling him to understand the nature of the act of making a will and its effects. He must understand what he is doing, not of low mentality or is under the influence of drink or drugs. The testator’s mind must not be prey to insane delusions perverting his moral sense thus interfering with his reason and judgment in the way he disposes his property. This point was also address in Re Nightingale [ 1974] 119 Sol Jo 189

(ii) Sound memory enabling him to have a recollection of the property of which he is disposing. It is not the degree of memory possessed by the testator but he ought to be able to recollect the property he is about to bequeath, the manner of distributing it and the objects of his bounty.

(iii) A sound understanding. He should be able to remember the persons he is morally to provide for, having regard to their relationship to him.

4.Insane Delusions
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A person suffers from insane delusions if he holds belief of a particular matter which no rational person can hold and the belief cannot be eradicated from his mind by reasoning with him.

Insane delusions were defined in Dew –vs– Clark (1826) 3 add 79 where the testator had made a prima facie valid will but in which he excluded his daughter because he had an insane aversion to her. The will was declared invalid.

Insane delusions will only affect the person’s capacity to make a Will if it affects the way he disposes of his property. The effect of this is to invalidate the will. If it affects the whole will, then the entire will is invalidated and if it affects part only the affected part is invalidated.

In the Banks –vs– Goodfellow (Supra), the testator believed that evil spirits and a person who was already dead were pursuing him. The court found that although the testator suffered from insane delusion the same did not affect his testamentary capacity as the delusions did not affect the way in which he disposed off his property by will.

CONCLUSION
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For a will to take effect as a valid testamentary disposition, it must be proved that: the testator had capacity at the time of executing the will, the formal requirements were complied with and whether the document alleged to be a will was revoked by the testator before his death.
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This article is an adaptation of a section of group work we did with a couple of my friends from whom I was not able to obtain permission to acknowledge by name.

A dozen quotes for the lawyer

Here the dozen legal quotes which I live on:

1. [When advised not to become a lawyer because the profession was overcrowded:] "There is always room at the top."

- Daniel Webster, quoted in Edward Latham, Famous Sayings and Their Authors 65 (1904)
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2."Ignorance of the law is no excuse in any country. If it were, the laws would lose their effect, because it can always be pretended."

- Thomas Jefferson, Letter to Andre Limozin, 22 Dec. 1787, in Papers of Thomas Jefferson 12:451 (Julian P. Boyd ed. 1955)

It is ignorance of the law rather than knowledge of it that leads to litigation.

(Cicero (106-43 BC) De Legibus, bk. I, ch. VI)
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3. "Never fear the want of business. A man who qualifies himself well for his calling never fails of employment in it."

- Thomas Jefferson, Letter to Peter Carr, 22 June 1792, in Writings of Thomas Jefferson 6:92 (Paul L. Ford ed. 1895)
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4. "Our profession is good, if practiced in the spirit of it; it is damnable fraud and iniquity when its true spirit is supplied by a spirit of mischief-making and money catching. "

- Daniel Webster, Letter to James Hervey Bingham, 19 Jan. 1806, in Papers of Daniel Webster: Legal Papers 1.69 (Alfred S. Konefsky & Andrew J. King eds. 1982)
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5. "Your law may be perfect, your knowledge of human affairs may be such as to enable you to apply it with wisdom and skill, and yet without individual acquaintance with men, their haunts and habits, the pursuit of the profession becomes difficult, slow, and expensive. A lawyer who does not know men is handicapped."

- Louis D. Brandeis, Letter to William H. Dunbar, 2 Feb. 1893, in Letters of Louis D. Brandeis 1:108 (Melvin I. Urofsky & David W. Levy eds. 1971)
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6. "Courage is the most important attribute of a lawyer. It is more important than competence or vision. It can never be an elective in any law school. It can never be de-limited, dated or outworn, and it should pervade the heart, the halls of justice and the chambers of the mind."

- Robert F. Kennedy, Speech at University of San Francisco Law School, San Francisco, 29 Sept. 1962, quoted in Sue G. Hall, The Quotable Robert F. Kennedy 111 (1967)
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7. "Anyone who believes a better day dawns when lawyers are eliminated bears the burden of explaining who will take their place. Who will protect the poor, the injured, the victims of negligence, the victims of racial violence?"

- John J. Curtin, Jr., Remarks to American Bar Association, Atlanta, 13 Aug. 1991, quoted in Time, 26 Aug. 1991, at 54
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8. "Lawyers, Preachers, and Tomtits Eggs, there are more of them hatch'd than come to perfection."

- Benjamin Franklin, Poor Richard's Almanack, 1734, in Papers of Benjamin Franklin 1:354 (Leonard W. Labaree ed. 1959)
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9. The leading rule for the lawyer, as for the man of every other calling, is diligence. Leave nothing for tomorrow which can be done today. Never let your correspondence fall behind. Whatever piece of business you have in hand, before stopping, do all the labour pertaining to it which
can then be done.

-(Referred to in the Law Society Journal. "These are not the words of a
modern time management consultant, but of Abraham Lincoln in 1850.")
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10. Discourage litigation, Persuade your neighbours to compromise whenever you can ...
As a peacemaker the lawyer has a superior opportunity of being a good man ...
There will be business enough.

(Abraham Lincoln, Notes from Law Lectures, 1st July, 1850 quoted in
The Court is Open by Bartley)
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11.I started in life with the belief that our profession in its highest walks afforded the most noble employment in which any man could engage and I am of the same opinion still ... I believed a man could be of greater service to his country and his race in the foremost ranks of the Bar than anywhere else and I think so still. To be a priest and possibly a high priest in the Temple of Justice to serve at her altar and aid in her administration, to maintain and defend those inalienable rights of life, liberty and property upon which the safety of society depends, to succour the oppressed and to defend the innocent to maintain constitutional rights against all violations whether by the executive, by the legislature, by the relentless power of the press or
worse of all by the ruthless rapacity of an unbridled majority. To rescue the scapegoat and restore him to his proper place in the world - all this seemed to me to furnish a field worthy of any man's ambition.

(Joseph Choate the 21st President of the Chicago Bar Association)
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12.Please remember that law and sense are not always the same.

(Jawaharlal Nehru (1889-1964) in N.B. Sen, Wit and Wisdom
of India, 1961)

(Compliled from diverse sources which have been acknowledged)

For safety, Let Devil have Law's Benefit

—
Margaret: “Father, the man is bad.”
More: “There’s no law against that.”
Roper: “There is a law against it. God’s law.”
More: “Then God can arrest him.”
Roper: “Sophistication upon sophistication!”
More: “No. Sheer simplicity. The law, Roper, the law. I know what’s legal, but I don't always know what’s right. And I'm sticking with what’s legal.
Roper: “Then you set man’s law against God’s?”
More: “No. Far below. But let me draw your attention to a fact. I am not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of the law, there I am a forester. I doubt if there’s a man alive who could follow me there, thank God.”
Alice: “While you talk, he is gone.”
More: “And go he should, if he was the Devil himself, until he broke the law.”
Roper: “So now you'd give the Devil the benefit of law!”
More: “Yes. What would you do? Cut a great road through the law to get to the Devil?”
Roper: “I'd cut down every law in England to do that!”
More: “Oh? And when the last law was down, and the Devil turned round on you -- where would you hide, Roper, the laws all being flat. This country’s planted thick with laws from coast to coast -- man’s laws, not God’s -- and if you cut them down -- and you're just the man to do it -- do you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of the law, for my own safety’s sake.”

(Extracted from Robert Bolt(1960), Man for All Seasons[1st ed., Vintage Books)