Ex parte Remedies and Disclosure

As I noted in my posts on Mareva Injunctions and Anton Piller Orders, seeking powerful remedies can be risky. Because these orders often sought ex parte, the plaintiff must make full, fair and frank disclosure of all material matters of which it has knowledge. The cost of improper disclosure is steep. Failure to make proper disclosure may lead to the injunction being dissolved and/or heavy adverse costs awards. In Factor Gas v. Jean, an Ontario Superior Court judge set aside an Anton Piller order which had authorized the search of the defendant's home due to non-disclosure of facts on the original ex parte motion and the failure of the applicant to make proper inquiries prior to resorting to the motion. Finding that the motion to obtain the Anton Piller order violated the fundamental principles of obtaining ex parte orders, the judge ordered a cost award against Factor Gas of a half million dollars. In its dismissal of Factor Gas' appeal, the Divisional Court noted that plaintiffs seeking an Anton Piller order on an ex parte motion assume “significant responsibilities”. A court may set aside an Anton Piller order notwithstanding satisfaction of the Celanese conditions if it determines that the plaintiff failed to disclose material facts within its knowledge. Further, where the plaintiff must demonstrate a strong prima facie case and serious damage resulting from the defendant's alleged misconduct, the duty of the plaintiff to act in good faith in the ex parte hearing includes a duty to make proper inquiries before bringing the motion.

That Factor Gas subsequently brought proceedings against its law firm underscores the importance of proper disclosure for clients and their lawyers alike.

In my next blog post, I will discuss an interesting pre-trial remedy that allows a plaintiff to obtain evidence from a third party, even before commencing an action.