Home Information Cases Dar Al Arkan Real Estate Development Co v Majid Al-Sayed Bader Hashim Al Refai (2012)

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Dar Al Arkan Real Estate Development Co v Majid Al-Sayed Bader Hashim Al Refai (2012)

Summary

The defendants to claims of breach of confidence and unlawful interference with business interests were successful in setting aside interim orders granted to the claimants on ex parte applications as they had established that the claimants had breached their duties to the court.

Facts

The first, second and third defendants (D) applied to set aside orders made on ex parte applications by the claimant companies (C).

 

The first claimant (C1), a Saudi Arabian company, and the second claimant (C2), a Bahrain investment bank, had common shareholders and directors. The first defendant (D1) had been CEO and managing director of C2. C alleged that, following his dismissal, D1 had instigated a campaign to discredit their businesses, including publication of untrue allegations through a website, and had enlisted the second defendant (D2), an English company providing investigatory services, and the third defendant chartered accountant (D3). D1 had been convicted in his absence in Bahrain of offences including misuse of C2's funds. C claimed breach of confidence, conspiracy to injure, unlawful interference with business interests, defamation and malicious falsehood. D2 and D3 relied on defences of justification and of C protecting confidentiality in iniquity. C obtained disclosure, non-disclosure and document delivery orders against D, and a worldwide freezing order against D1, having previously successfully applied to use computer hard drives containing emails from D1 in any application for relief. They claimed that the drives had been sent to them anonymously and gave a preservation undertaking. A delivery up order was subsequently made by the court. A forensic examiner confirmed that deleted material on the drives indicated they might have originated from C1 and involved "hacking" of D1's emails. D sought to set aside the orders on the grounds that C had not made full and frank disclosure, had misled the court and had not complied with the undertaking.

Held

(1) D's allegations had to be examined at length to protect the court against the alleged abuse of its procedure. A failure to comply with such undertakings or orders could justify the court discharging interim relief, Crown Resources AG v Vinogradsky considered. C had not given a full and honest explanation regarding how and why the material was deleted. The conclusion was that it was deleted in the knowledge that it was a breach of the preservation undertaking as the documents would reveal that the drives were in C's possession before the date stated. D would probably not suffer prejudice as a result but the court could not excuse deliberate breaches of orders and undertakings on that basis. D had identified matters that belied the evidence presented by C when obtaining the interim orders and their account given in the instant hearing. That could only be attributed to dishonesty (see paras 45-48, 50-86 of judgment). (2) The duty on an applicant was to make "a full and frank disclosure of all the material facts", R. v Kensington Income Tax Commissioners Ex p. Princess Edmond de Polignac [1917] 1 K.B. 486 considered. An ex parte applicant would fail not only if they materially misrepresented matters to the court but also if they did not fairly present factual or legal difficulties in the way of the application. The disclosure required was defined by what the applicant could have presented had they made the inquiries that were proper in all the circumstances. The extent of those inquiries depended on the nature of the case when the application was made, the order sought and the probable effect of that order on the other party, the legitimate urgency and the time available for inquiries, Brink's-MAT Ltd v Elcombe [1988] 1 W.L.R. 1350 applied. C had made serious allegations of misconduct against D. Their failure to make proper enquiries before making the applications was a breach of their responsibilities as ex parte applicants (paras 87-88, 96-97). (3) D2 and D3's complaint that C had not given the court a fair understanding of the extent and nature of the website material for the court to form some preliminary view about the iniquity defence was justified. An ex parte applicant also owed a duty to provide proper guidance to the court as to the relevant law, Memory Corp Plc v Sidhu (No.1) [2000] 1 W.L.R. 1443 applied. The court's attention should have been drawn to the Human Rights Act 1998 s.12(3) but was not. However, that was a result of an understandable oversight by C's lawyers, and the only consequence was that it might have aggravated the inadequacies of the presentation of the iniquity defence. C were in breach not only by failing to make proper disclosure but also because some of their evidence was misleading. D had established that C had breached their duties as ex parte applicants, and thereafter had not corrected the deficiencies in the ex parte presentation. They had not complied with the preservation undertaking and were probably in breach of the drives delivery order (paras 115-147). (4) The general rule where there had been such a breach of duty was that the court would discharge any orders granted and not renew them until trial, Arena Corp Ltd (In Provisional Liquidation) v Schroeder [2003] EWHC 1089 (Ch) applied. However, that rule would not be rigidly applied so as to allow injustice. C's breaches were extensive and culpable and aggravated by their subsequent conduct. The public interest in there being a proper response to such conduct outweighed the merits of C's case and required that they should be deprived of the relief they had obtained ex parte, St Merryn Meat Ltd v Hawkins [2001] C.P. Rep. 116 applied (paras 148-158).

Applications granted in part

Queen's Bench Division
Andrew Smith J
Judgment date
12 December 2012
References

LTL 13/12/2012 : [2012] EWHC 3539 (Comm)