interim relief

In English Courts, relief and remedy sought by the claimant are granted after the trial. In many cases, circumstances exist where Courts may be moved to make orders and grant interim relief to preserve the position of the claimant prior to the trial, in a variety of ways.

Purpose

Typically, this involves obtaining orders for preservation of evidence, freezing assets (such as the contents of bank accounts and physical property) and obtaining information from either respondent or third parties, and ordering the search of premises of evidence relevant to the dispute.

The jurisdiction of English Courts is most frequently exercised to obtain evidence in circumstances where it might be destroyed (including search orders, formerly known as 'anton pillar orders') and assets (property as well as money) by use of freezing orders (formerly known as 'mareva injunctions').

Freezing orders are designed to bring assets into the control of the courts by making an order against named parties - in the absence of a court order preventing a party from dealing with its assets, a person is not restricted from doing anything which it would otherwise be entitled to do with it; search orders are geared to permit the claimant to secure evidence where there is a real risk that it may be destroyed or disposed of, which would prevent the claimant from having a fair hearing at the trial. In addition, other forms of order are available to secure relevant evidence where it will form an essential part of the claimant's case and there is a risk that it will be destroyed.

Process: Interim Relief

Those who apply for interim relief are known as applicants, and those against whom relief is sought are respondents. In English legal proceedings, it is a fundamental premise that a defendant/respondent is entitled to be heard before an order is made which requires them to do or not to do something.

Applications without notice (also ex parte applications) are, by definition, made in the absence of the respondent. Respondents are usually given no notice of application to the Court and only finds out the court action after the order has been obtained. This is not to say that all applications such as these should be made without notice - there must still be a good reason for doing so.

Often, that reason is that notice of the application would defeat the purpose of the application for one reason or another. Where there is no good reason to make an application without notice, notice must be given in the usual way. Failure to do so may well jeopardise the order at a future date and expose the claimant to financial consequences.

Court Orders Available

Orders which a court may be prepared to make depend upon the nature of the application, the background circumstances of the case and the risks evident to the claimant by not making the orders sought. A suite of types of orders are available against the wrongdoers to:

1. Search physical premises, servers, and any other electronic device, and to disclose password details to enable access to electronic devices;
2. freeze assets both within the jurisdiction of English Courts and abroad, so as to prevent dealings with assets;
3. identify assets both in England and abroad;
4. require disclosure of information identifying accomplices, location of assets (such as real property);
5. preserve documents and property, and facilitate inspection, testing, detention, or photographing of property.
6. collect samples (such as in a trade mark infringement case);
7. sale of perishable property with the proceeds to be retained pending the trial;
8. pay of income of property pending the trial;
9. pay a fund into Court pending the trial;
10. prepare and file affidavits relating to the dispute, which may include information in respect to those matters referred to above and/or accounts relating to the dispute.

Interim relief is also available against persons innocently caught up in wrongdoing. They may be required to provide particulars in respect of the wrongdoers (such as where a bank has received money but the identity of the account holder is unknown); reveal bank statements to show where wrongfully received money has been transferred, gagging orders to prevent disclosure of the order itself so as to prevent putting the ultimate wrongdoers on notice.

Indeed, Courts have jurisdiction to make any order which appears to be just and convenient in the circumstances to grant, whether or not final relief would be available to the claimant/applicant. The purpose of these orders is to empower the Court to make orders which give effective interim relief in the circumstances of the case in respect to relevant property.

Applications for Interim Relief

When applications are made, other than in cases of extreme urgency, the Court will require

1. an Application Notice to be filed, which sets out the relief sought;
2. a draft order setting out the relief sought;
3. evidence setting out the background, the reasons why the application for the interim injunction is made, why the application is made without notice (if applicable);
4. in many cases, draft claim form and particulars of claim, which set out the legal grounds of the claim to be made against those responsible for the misconduct;
5. evidence in support of the application.

At the hearing before the Court, the court room may be closed to the public in instances where secrecy is essential to preserving the purposes of making the order. Because the respondents are not present at these hearings, the applicant(s) are required to give a fair presentation of the application and full and frank disclosure of all relevant matters which are relevant to the Court’s assessment of the application.

Where injunctions are sought (including search orders), the applicant to give the court a cross-undertaking in damages. The cross-undertaking essentially requires the applicant to comply with any order the Court may make if it eventuates in the fullness of time that an order obtained by the applicant was wrongly made - for any reason. When courts call on the undertaking it will require the applicant to compensate the defendant for losses sustained as a result of the injunction.

This may include loss of trade or profit, legal fees and other expenses stemming from compliance with the order. The Court will require the applicant to 'fortify' the cross-undertaking in damages, particularly where they are a foreign defendant. This requires that the applicant provide security for the undertaking up to a sum requested by the Court.

Also, because the respondent is not in attendance the applicant (usually through its solicitors and counsel in attendance at the hearing) must make and prepare a detailed note of all the proceedings before the judge and serve it on the respondent after the hearing, as well as any other person who may be affected by the grant of the order.

Fair Presentation of the Application

The application must be made fairly, accurately, without misrepresentation or non-disclosure of any matter, whether it be of fact, law, practice, procedure or expectations.

A large part of what is said to the judge or omitted depends on the completeness of the instructions received so that the legal representatives are in a position to make an assessment of whether or not the judge should be informed, with an ever-present eye for caution and doing anything that may prejudice the order at a later date.

Importantly, if relevant facts come to light after the order has been made that may effect the making of the order in the first instance, the Court must be informed to allow an opportunity to rectify any possibility that the court has been misled. Not doing so may lead to the Court dissolving the injunction altogether and calling on the applicant to make good on the cross-undertaking as to damages.

Full and Frank Disclosure

Although there is an overlap between the obligation to present the application fairly and the duty to give full and frank disclosure to the Court, the duty lies with the applicant disclose all matters which are material to the application that are, and should be considered by the Court when deciding whether or not to grant the interim relief sought. The applicant must act in the utmost good faith.

The duty applies not only to facts but any matter that judge should know or consider prior to making an order.  Incorrect submissions or arguments do not amount to a material non-disclosure or material misrepresentation provided that such errors do not deprive the court of any knowledge of any material circumstance, as the applicant will have acted fairly in the presentation of its case.  The burden in respect to freezing and search orders takes an elevated status due to the draconian nature of interim relief.  It is of fundamental importance, and in the absence of the ‘fullest and frankest disclosure’ orders will be revoked: Bank Mellat v Nikpour.

It is no answer to a material misrepresentation that if all the relevant matters were put before the Court that the Court’s decision would be the same, and still would have made the order. Nor would it be an excuse for the applicant to say subsequently that he was genuinely unaware or did not believe that the facts were relevant or important. In addition, Court will not accept that an applicant has forgotten relevant matters in question. Having said that, the nature and circumstances of the material non-disclosure will be relevant for the Court to consider how the material non-disclosure should be rectified.

What must be done therefore is to:

1. place the full story before the court; this includes requiring witnesses to place all relevant documents and materials before the court which they have to minimise the risk of misleading the court;
2. identify defences that may be available to the defendant;
3. make proper enquiries to ascertain materials facts that would be available if the enquiries were made.  The nature and extent of the enquiries depend upon (a) the nature of the case (b) the order sought; (c) the probable affect of the order on the defendant; (d) the degree of legitimate urgency and the time available for making enquiries prior to the application.

When fresh evidence is brought to light that may touch upon a material non-disclosure or material misrepresentation after the hearing, that evidence ought to be produced to the court promptly.

Material Non-Disclosure

The court will consider all relevant circumstances of the non-disclosure or material misrepresentation, where proportionate to do so, simply set aside the order. This would reflect the view that the applicant’s conduct was such that they should be deprived of any advantage obtained by the grant of ex parte relief. 

Whether an order will be discharged will rely upon the importance of the fact to the issues of the case which were decided by the judge on the application. Where the non-disclosure was innocent, in that the fact was not known or its relevance was not perceived, will be an important factor but not decisive by reason of the duty on the applicant to make all proper enquiries and to give careful consideration to the case being presented.

The court retains a discretion in the event that a material non-disclosure has taken place to continue the order or make a new order on terms (such as the payment of the defendant’s costs).