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Review Your SQE 1 Practice Records

Examination Timing: 00H01M43S

You act on behalf of a company in a claim for breach of contract against a customer. The customer is based in the UK only temporarily and is known to your client to have assets overseas. As the claim progresses to trial, it looks increasingly likely that it will succeed, though your client has discovered issues with its evidential position on quantum. Your client is concerned that the customer will seek to move assets in order to frustrate the enforcement of a judgment and seeks your advice regarding the making of a freezing order without notice. Your client wants to maximise the sum for which any relief is granted and has requested that you do not mention the evidential issues in the event that an application is made. 

Which of the following best represents the duty of disclosure to which your client is subject?

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When seeking a freezing order, especially on a without notice basis, the applicant is under a strict duty to provide "full and frank disclosure" of all material facts and legal issues to the court. This duty requires the applicant to present all relevant information, including any potential weaknesses or issues in their case, to ensure that the court can make a fully informed decision. The principle of full and frank disclosure was reinforced in cases such as Deutsche Bank Suisse SA v Khan and others [2013] EWCA Civ 1149, where the Court of Appeal emphasized the necessity of disclosing all pertinent information, regardless of the urgency or mode of communication. Concealing any evidential issues would breach this duty and could lead to the freezing order being set aside and other legal consequences. 

Key Point: Full and frank disclosure is mandatory when applying for a freezing order without notice. This requirement ensures the court is fully informed of all relevant facts and legal issues, including any weaknesses in the applicant’s case, to maintain fairness in the legal process.

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