WITHOUT NOTICE INJUNCTIONS 1: CLAIMANT’S APPLICATION FOR AN INJUNCTION GOES DOWN THE PAN

The judgment in Brothers Enterprises Ltd v New World Hospitality UK Ltd [2017] EWHC 2455 (Ch) has only recently arrived on BAILLI. However it is a case that shows the importance of disclosure in relation to without notice injunctions.  What is significant is that the claimant’s conduct, and failure to give full disclosure when applying for an injunction without notice, played a part in the judge’s  exercise of his discretion and the refusal to grant an injunction at the hearing held on notice.

 

THE CASE

The claimant ran a restaurant in a building it shared with the defendant which ran a hotel. The defendant was carrying on renovation work and needed to change the route that the claimant’s customers took to the toilets.   The claimant sought, and obtained, a without notice injunction.  The matter later came before the court for a hearing with both parties present.

THE OPENING OBSERVATIONS OF THE JUDGMENT

The opening words of the judgment give some indication of where the matter is going.

MR JUSTICE ROTH:

  1. This is the restored application for an interim injunction. It arises on a dispute between two adjacent trading businesses regarding the interference with an easement by right of way for customers of the one over the premises of the other. But it has generated a great deal of heat with serious allegations being made by each party against the other, including regarding the conduct of their respective solicitors. That has continued in this hearing. Each side has accused the other of acting in a high-handed fashion and being deliberately misleading. There is no doubt in my mind that this dispute has been greatly exacerbated by the very unfortunate conduct on both sides.

THE DEFECTS IN THE INITIAL APPLICATION FOR A WITHOUT NOTICE INJUNCTION

The judge reviewed the facts and the factors in favour of the claimant being granted an injunction.
    1. Those factors count in favour of the grant of an injunction. However, Mr McLinden urged me strongly to look at the way the claimant had conducted itself in these proceedings. He emphasised in particular two aspects. First, the failure to give proper notice of the application on 24 July. Secondly, the failure at the hearing of that application to make frank and full disclosure to the court.
  1. As regards the first, the solicitors of the respective parties had been in communication throughout the week following 17 July. The claimant’s witness statement, on which the application on 24 July was based, was signed on Friday, 21 July. I am told, although I did not see it, that the draft order that was placed before Mr Justice Norris was also prepared on 21 July. The decision to seek an injunction must therefore have been taken either on Friday 21 July or possibly first thing in the morning of 24 July. No attempt was made at communication with the defendant’s solicitors until the email that was sent at 12.30, albeit unsuccessfully, and that was not long before the application was being brought to court at two o’clock.
    1. Mr Booth frankly acknowledged that this was perhaps regrettable. I regard it as beyond regrettable. I think it is wholly inappropriate conduct in the circumstances of this case. There was nothing desperately urgent about seeking relief on 24 July. The interference had begun on 17 July. The restaurant, even when interim relief was granted, did not reopen and there is no reason that I can see why the claimant could not have come to court on 25 July and given at least one day’s notice. The explanation for what happened may be that the partner responsible was out of the office on Monday, 24 July, but that cannot be a justification or excuse. It cannot be emphasised too strongly that where interim relief is being sought, only in the most wholly exceptional circumstances can there be justification for not giving notice to the other side. Such circumstances include a case where giving notice would risk defeating the very substance of the relief that is being sought, as in a freezing order or a search order, or possibly where dissemination of confidential information is imminent; but those are far removed from the circumstances of the present case.
    2. As to the second – that is, disclosure to the judge – the claimant’s solicitors had raised the previous week the possibility that their client might seek an injunction. Thus, the solicitors to the defendant wrote to the solicitors to the claimant on 17 July, making various points about what was taking place. In that email, Mr Roger Brown of the defendant’s solicitors said this:
“If you proceed with an application to the court, kindly bring to the attention of the court all of the correspondence of today and ideally please apply upon notice to us”.
The “correspondence of today” that he referred to included a copy of the project manager’s letter of 12 July, which was sent under cover of an email to Jimmy on 17 July.
  1. When the matter came on for hearing before Mr Justice Norris, the judge made clear at the outset of the hearing that he had not read the witness statement to which those letters were exhibited, but counsel for the claimant did not take the judge to those letters. It is quite insufficient on a without notice application to leave material that should relevantly be drawn to the attention of the judge simply buried in an exhibit. That is not a criticism of counsel in this case as apparently junior counsel who then appeared was himself only instructed at 1pm and received a copy of the witness statement when he got to court. That may also explain another aspect of that hearing which I regard as serious.
  2. Counsel told Mr Justice Norris that the claimant could not open the restaurant, among other things, because of the licence conditions affecting the absence of direct access to toilets. In so saying, he followed what was said in the witness statement of Murat regarding licensing issues. That point clearly influenced the judge as it is referred to in his brief judgment. It was not correct, as the evidence of Mr Trevena makes clear, and that point has not been pursued….
  1. Those matters, in my view, go to the question of whether it is just and equitable to grant injunctive relief. The overall conduct of the parties, it seems to me, must be a matter of relevance.
  1. Would it be oppressive to the defendant to grant an injunction? Not without some misgivings, because of the failure to give proper notice so that this matter could have been dealt with sensibly and in a timely fashion, I have concluded that it would. I think it is inevitable that an old building used as a hotel will at some point undergo certain building works and those might require temporary interference with rights of way over the premises. If that interference cannot be carried out, those works are very seriously hampered, if not precluded altogether. Even if it would not be oppressive, bearing in mind Lord Neuberger’s observation at the end of para.123 of his judgment in Lawrence v Fen Tigers that the Shelfer guidelines should not be strictly applied, this is a case where, in my judgment, having regard to all the circumstances, an injunction should be refused.