Court Takes Hard Line on Non-Cooperative Director

In most legal proceedings, the parties are required to give disclosure of documents prior to the trial. Failures to give proper disclosure may lead to an application for specific disclosure, and/or a strike out application. A successful strike out application will probably lead to judgment being entered against the party failing to give proper disclosure.  Where this occurs, the party which has failed to supply the relevant documents can apply for relief from the order for their case to be struck out, on the basis that the order was not justified in the circumstances of the case.

There are several criteria the court will apply when considering an application for relief. These include considering whether the administration of justice will be served; whether the application for relief has been made promptly; whether the failure to supply the requested information was intentional or of there was a good explanation for the failure; the effect that the failure to comply had on the other parties and the extent to which the person has complied with other directions of the court.

As might be expected, courts take a robust attitude regarding such failures. In a recent case, a director of a company in liquidation applied for relief after an order was made that he must comply with requests for documents or lose his right to defend himself against claims that he breached his fiduciary duty to the company. The Court of Appeal ruled that the director’s non-compliance was serious and persistent and rejected the argument that it was relevant that he had a good chance of defending the claim. Without a material change in his circumstances or a legitimate reason for non-compliance, the original sanction was ordered to stand.

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