Joe Thorne and Amanda Whitehead

A fundamental principle of our legal system is that all parties to a dispute should be given the opportunity to be heard. However, the law recognizes that some circumstances warrant speedy judicial intervention in proceedings brought without notice to the adverse party.

What are the obligations on a party seeking ex parte relief from the court?

The Newfoundland and Labrador Supreme Court, Trial Division recently reviewed whether an ex parte order may be overturned on the basis of non-disclosure of facts in Nalcor Energy v Anderson.¹

This case is also of note as it addressed the status of journalists exercising their Charter right of freedom of the press in the face of an injunction.

Background

The Lower Churchill hydroelectric project is one of the most significant and controversial development projects in the history of Newfoundland and Labrador. The project is being developed by Nalcor Energy and Muskrat Falls Corporation (collectively, “Nalcor”).

Among the parties opposed to the project are Indigenous groups in Labrador, whose opposition includes concerns regarding potential methylmercury contamination arising from reservoir flooding.

In the fall of 2016, protests at the Muskrat Falls construction site led Nalcor to seek an injunction restraining protesters from obstructing access to the site. Nalcor applied ex parte, as is often the case in such circumstances, and was granted the injunction (the “Injunction”).

Nevertheless, as is also often the case in such circumstances, the protests continued. Protesters ultimately breached the fence, entered the construction site, and occupied a building while maintaining the blockade at the site entrance.²

In response, Nalcor applied, again ex parte, for a show cause order against the protesters. The Court granted this second order that required certain named individuals to appear before the Court to show why they should not be held in contempt for violating the Injunction (the “Contempt Order”).

One of the named respondents was Justin Brake. Brake is a journalist who was reporting on the protest.

Brake applied to set aside the Injunction and the Contempt Order on the basis that Nalcor breached its duty to disclose all material facts on the ex parte applications. In particular, Brake alleged that Nalcor failed to disclose to the Court that he was a journalist reporting on the protest during the events giving rise to the Injunction and the subsequent Contempt Order.

Decision

Setting aside an ex parte injunction

Justice Murphy noted that the Newfoundland Court of Appeal set out the applicable test to set aside any order secured ex parte:

On any ex parte application, the utmost good faith must be observed. That requires full and frank disclosure of all material facts known to the applicant or counsel that could reasonably be expected to have a bearing on the outcome of the application. Because counsel for the applicant is asking the judge to invoke a procedure that runs counter to the fundamental principle of justice that all sides of a dispute should be heard, counsel is under a super-added duty to the court and the other parties to ensure that as balanced a consideration of the issue is undertaken as is consonant with the circumstances.³

The “super-added duty” arises from the fact that on such applications, the Court and the absent party are at the mercy of counsel for the applicant.⁴

However, the duty of full and frank disclosure is not a mechanistic analysis. Undisclosed facts must be reviewed for materiality and whether they would have impacted the outcome. In other words, non-material or inconsequential omissions may be excused.⁵

Justice Murphy held:

1. an ex parte order can be overturned where there has been a material non-disclosure or misstatement of relevant facts;
2. that a material non-disclosure or misstatement will not automaticallyresult in the ex parte order being vacated; and
3. that whether a material non-disclosure or misstatement should justify vacating the ex parte order is a discretionary decision for the court.

On the last point, Justice Murphy held that a non-exhaustive list of the factors that a court should consider in whether to exercise its discretion included:

1. the practical reality that there is often urgency that explains why the application is brought without notice;
2. whether facts were intentionally suppressed or omitted due to simple carelessness or ignorance;
3. the pervasiveness of the non-disclosure;
4. the difficulty of determining what is material or immaterial non-disclosure;
5. the significance of the undisclosed facts to the outcome of the application; and
6. the potential injustice to the person impacted by the order without having an opportunity to be heard.⁶

Was Brake’s journalist status material?

Materiality is an objective test: is the fact necessary for the court to reach its decision, and does its omission impact the outcome?

In Brake’s case, was the fact that he was a working journalist engaged in covering the Muskrat Falls protest a material fact?⁷ If so, did Nalcor’s omission of this fact justify setting aside the ex parte orders?

Justice Murphy began:

How is it that it is “plain and obvious that the fact of the Applicant being engaged as a journalist” was material? To be a material fact it must be a fact that objectively viewed may have affected the outcome of the ex parte applications. It is my view that in order for this to be the case then Mr. Brake, as a journalist, must have had some special status or right that applied to his coverage of the protests against the Muskrat Falls Project, including his trespass on the Muskrat Falls construction site in contravention of the Injunction Order. The nature of such special status or right would have to have been such that if known, it may have changed the outcome of the ex parte applications.⁸

Brake asserted his status as a journalist and the freedoms of expression and of the press in section 2(b) of the Charter created a special status that rose to the level of a material fact.

Justice Murphy disagreed.

In fact, Justice Murphy noted that other courts had come to the opposite conclusion – that journalists have no “special status” in relation to others.

Justice Murphy concluded that Brake had no more right to breach the Injunction than any of the non-journalists.⁹

Justice Murphy was satisfied that the ex parte orders did not prejudice Mr. Brake, as the Injunction was not directed at him personally and the Contempt Order provided an opportunity to present his case in response.

Justice Murphy denied Brake’s application and concluded that the omission of his status was not material. If it had been material, the Court would not have exercised its discretion to set aside either order in any event.

Takeaways for Litigants

Emergency injunctions are messy business. By their nature, they are brought on little or no notice when all available facts may not be at hand.

Nevertheless, a party seeking an injunction must take all due care to ensure that it presents the Court with all available relevant facts.

This decision echoes others in that it acknowledges that inadvertent or minor omissions will often be excused. But litigants should always be aware that material non-disclosure or misstatement will be met with serious admonishment by the courts, including reversal of the injunction and orders of costs against the applicant.

¹ 2017 NLTD(g) 10.
² Nalcor, para 7.
³ Nalcor, para 13.
⁴ Nalcor, para 14.
⁵ Nalcor, para 20.
⁶ Nalcor, para 25.
⁷ Nalcor admitted that it was aware of Brake’s journalist status at the time of the show cause application. There was no suggestion that Nalcor attempted to deliberately mislead the Court in omitting this fact.
⁸ Nalcor, para 31.
⁹ Nalcor, para 37.