High Court refuses defendant’s application to set aside consent order despite claimants’ failure to give full and frank disclosure when obtaining an earlier injunction

Charlie Tomlinson

Todaysure Matthews v Marketing Ways Services demonstrates how the courts will balance the need to uphold a consent order agreed between the parties, with enforcing disclosure obligations owed to the court. In delivering his judgment and upholding the consent order, Teare J held that while the disclosure breach by the claimant was serious, the continuation of the consent order was not unjust.

The parties were Marketing Ways Services (the defendant), a Saudi Arabian provider of waste treatment facilities, and one of its English supplier’s Todaysure Matthews (the claimant). The claimant claimed it had only received part of the agreed price.

The case concerned an application by the defendant to set aside a consent order previously agreed between the parties, so that it could be released from its undertakings. This related to an earlier injunction which had ordered the defendant to withdraw a demand it had made for a performance guarantee and also a freezing order (the “English Injunction”).

The basis of the application was that the claimant had failed to disclose its intention to seek a temporary restraining order in the US courts (the “US Injunction”). The claimant obtained this injunction the day after the English Injunction was granted, but failed to inform the English court under its continuing duty of disclosure. The defendant alleged that it would not have entered into the agreement with the claimant which lead to the consent order had it known about the US Injunction.

Teare J considered whether the failure to disclose made the continuation of the consent order unjust. He found that the failure of the claimant to disclose the US Injunction was a serious breach of its duty to the court, but upheld the consent order on terms that the claimant withdraw the US Injunction. Teare J decided that had the defendant known about the US Injunction, it would have agreed to the consent order anyway, provided the injunction was withdrawn (which the claimant was willing to do). Furthermore, it was in the interests of the administration of justice that the parties’ agreement be upheld. The consent order benefited both parties and its continuation also meant the operation of the scheme would not be impeded.

The case shows that while failure to disclose is a serious breach of duty to the court, the court will only set aside a consent order agreed between the parties if it is unjust to do so.

Todaysure Matthews Ltd and another v Marketing Ways Services Ltd [2015] EWHC 64 (Comm)

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