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Consequences of not telling the Court all the facts

6th September, 2021

The High Court has sharply criticised a company which obtained an interim injunction that was “completely unnecessary” and in breach of the principle of full disclosure. The court said that the ex parte application gave the “false impression” that certain action needed to be taken to ensure the fire safety of the applicant’s premises. The company was left to pay all the court costs!

The court also stated that the applicant failed to exhibit important email correspondence between the parties which outlined the defendant’s offer to correct the issues. Accordingly, the court emphasised its “severe displeasure at the failure on the part of a plaintiff to comply with the golden rule” of uberrimae fidae.

Factual background

The applicant, Dardania Holdings Limited, owned and operated a number of rental properties in Dublin which had up to 20 occupants. The defendant, Advanced Life Safety (trading as Advanced Fire Protection), provided the fire alarm systems to the applicants’ properties under a contract. At the time of the injunction, the applicant had not fully paid the defendant for the installation of the fire alarms and had not engaged the defendant for periodic maintenance of the alarms.

On 20 July 2020, a tenant caused a fault to be reported by the fire alarm system. On 22 July, the applicant contacted the defendant seeking the defendant’s master codes for the fire alarms at all the applicants’ properties. The defendant refused to do so on the basis that the master codes would give the applicant access to the thousands of alarms installed by the defendant in the country.

Instead, the defendant verbally offered to provide an engineer to attend the site and fix the issue for €150 plus VAT. The applicant initially agreed to pay the charge but subsequently refused the offer. The applicant continued to demand the master codes belonging to the defendant to fix the alarm.

Later, on 2 September 2020, the applicant applied to the High Court on an ex parte basis for the engineer codes on the basis that there was an imminent threat to life from the faulty fire alarm and that there was no other method of fixing the alarms. It was also stated to the court that the defendant’s codes were essential to the maintenance of the alarms and that the applicant had paid the full €150 requested by the defendant.

However, in making the application, the applicant failed to adduce any emails/correspondence beyond 22 July. As such, the applicant did not produce an email of 20 August by the defendant which stated in writing the offer to attend the site and reset the alarms to manufacturer’s codes. Further, the application did not refer to the verbal offer by the defendant to fix the issue in July.

After the interim order had been granted by the court, the defendant had the matter relisted in October 2020 to have the order vacated. It transpired that the applicant had engaged a third party to fix the alarm after the interim order had been granted.

The applicant later applied to the court for its costs of the interim injunction. However, the defendant objected on the basis that the applicant had failed to properly inform the court about the previous offers made to fix the alarm. Further, it was argued that the injunction was entirely unnecessary since the applicant did not need the codes to fix the alarm.

It was also pointed out that the applicant never properly accepted the defendant’s offer to fix the alarm for €150 plus VAT.

High Court

Delivering judgment in the case, Mr Justice Mark Heslin held that the applicant had clearly failed to provide full and frank disclosure in the interim application. As such, the applicant had broken the “golden rule” outlined in Bambrick v. Cobley [2006] 1 ILRM 81. There was no need for the master codes when a small fee would have fixed the issue and, further, the defendant had offered to reset the codes to allow the applicant to have future access.

The court rejected a submission that the defendant had only properly made the offer when it wrote to the applicant on 20 August. The court held that the verbal offer was made in July and, in any event, the written offer in August had been made long before the ex parte application.

It was the existence of the offer which showed that there was no merit in the application whatsoever and that there was a lack of full disclosure by the applicant in seeking the order, the court said. As such, “it was utterly inappropriate and completely unnecessary for the plaintiff subsequently to move the ex parte application” and to lead the court to believe that an imminent fire risk existed.

The “utter inaction” by the applicant for weeks was “inexplicable” if there was a real and pressing concern, the court held. Further, it was noted that the purported acceptance of the offer by the applicant was severely lacking.

Amongst other things, the applicant failed to pay the VAT on the €150, continued to demand the codes, made the payment to the wrong entity and failed to make arrangements for the defendant’s engineer to attend the premises. All of this led tended to show that there was no urgency to the fire alarm issue, the court said.

The court held that there were several clear methods for the applicant to resolve the issue, including contracting with a third party to fix the alarm. This is what ultimately occurred and showed that the applicant never needed the codes to remedy the situation.

The court was highly critical of the applicant’s averments and stated that, if the true position had been outlined, the interim order would never have been granted. The court said that the omissions in the application were a “grievous sin” and that it was necessary to mark “severe displeasure” with the applicant’s conduct.

Conclusion

The court awarded costs in favour of the defendant. In making its ruling, the court did not criticise counsel for the applicant for any lack of disclosure, as he was only instructed prior to the costs hearing.

written by Killian Flood BL