Ex Parte Relief And Full And Frank Disclosure

A recent decision has confirmed the importance of ensuring full and frank disclosure when seeking an order from the court on an ex parte basis.1 The decision also usefully recites the legal principles regarding the consequences of not making full and frank disclosure.

The plaintiff and his two brothers acted in partnership in relation to the purchase of lands and borrowed moneys from the defendant bank to do so. Legal disputes in relation to the lands had implications for the repayment of the loan and, ultimately, the parties entered into a compromise agreement in order to assist the bank in seeking to recover as much as possible of the debt owed to it. That compromise agreement was made on March 13 2013, but defined the effective date in manuscript text initialled by the plaintiff as being three weeks from May 27 2013.

Under the compromise agreement the borrowers, including the plaintiff, assumed numerous obligations towards the bank. By contrast, the bank's obligations under the compromise agreement were twofold.

It would postpone enforcement of the borrower's debts (specifically, by not pursuing judgment proceedings during the relevant period) to enable steps to be taken by the borrowers under the agreement. It would acknowledge full implementation of the agreement as amounting to full and final settlement of the borrowers' debts to it. The plaintiff borrower issued proceedings against the bank on October 1 2014 on the basis that the bank had not complied with the terms of the compromise agreement and sought various reliefs, including specific performance of the compromise agreement or, alternatively, damages for breach thereof. He also sought various orders restraining the bank from taking steps that were contrary to the provisions of the compromise agreement. The alleged breaches by the bank were threefold.

The sum of335,000 was wrongly debited from his account on March 27 2013 in breach of the bank's obligation under the compromise agreement to postpone its rights/remedies. A receiver was wrongfully appointed on March 18 2014 over two properties covered by the compromise agreement, whose appointment was not discharged. Consent to the sale of the lands to a company whose offer of1.5 million was accepted by the plaintiff and the other owners on June 13 2014 was wrongfully refused. Arising from the proceedings and the alleged breaches, the plaintiff applied for and was granted an ex parte interim injunction restraining the bank from...