The case underscores the importance of full and frank disclosure for without notice applications, and the critical duty of legal representatives in verifying their client’s allegations, ensuring that all material facts are fairly presented and properly evidenced before the court.

Background

In August 2024, Apollo Xi Limited (Apollo), a BVI based investment company, entered into a loan agreement with Nexedge Markets Limited (Nexedge), a UK FCA authorised broker, advancing a sum of $10m for a ten-year term. The agreement provided that the loan could be used to “upgrade the Borrower’s [FCA] licence and to fund the operating expenses of the regulated business”. The companies had been working together since 2023, when their respective directors had been introduced. In late 2024, however, the relationship between the parties began to deteriorate. By April 2025, the relationship had completely broken down, with Apollo’s representatives suspended from access to Nexedge’s offices (in which they had previously shared space) on 10 April 2025.

The next day, a four-hour audio recording was made of Nexedge’s CEO, Mr Spina, making a series of telephone calls which Apollo claimed revealed plans by Nexedge to “relocate Nexedge's assets and businesses out of the jurisdiction and to prevent Apollo being able to recover the monies owed under the Loan Agreement”. The recording was made through a laptop which had been left open in Mr Spina’s office and engaged remotely to record. The circumstances surrounding the production of the recording featured heavily in the case, with Apollo alleging its existence was a part of usual practices, whilst Nexedge’s position was that this was “bugging”. 

On 14 April 2025 Apollo served a default notice on Nexedge, accelerating the loan and demanding immediate repayment in full. Nexedge responded the same day disputing breach and providing a partial payment of interest under the loan.

Two days later, on 16 April 2025, Apollo applied for, and was granted, a freezing injunction on a without notice application. This was based on Apollo’s claim that Nexedge was planning to remove assets from the jurisdiction and frustrate Apollo’s rights as lender.

The injunction and its discharge

In its application before Cheema-Grubb J, Apollo had relied primarily on the contents of the covert recording to support its argument that there was a risk of imminent asset dissipation. 

A transcript of the recording was not produced in its entirety before the judge, and counsel for Apollo said that he had not been able to listen to the recording himself. However, he assured the judge that there should be no “concerns about its usability”. 

The application was granted on the basis that, although Cheema-Grubb J had not listened to the recording herself, the evidence as presented to her from the affidavit of one of Apollo’s directors persuaded her that “something [was] afoot with Nexedge” and there was a real risk of dissipation. 

However, at the return hearing before Saini J, the injunction was discharged due to the failure to meet the applicant’s duty of full and frank disclosure. Saini J agreed with Nexedge that Apollo had failed in its duty of candour, both as regards the origin of the recording and its contents.

Failure fairly to present evidence that a judge would have needed or wanted to take into account is sufficient for discharge of an injunction that has been granted without notice. However, Saini J felt able to draw stronger conclusions. He was confident that if there had been fair presentation of the evidence, the order would not have been granted, or the judge would have ordered that the hearing take place on notice. Saini J concluded that Cheema-Grubb J would have viewed the evidence in “a very different light” if she had been correctly presented with the full context.

Although she was aware that the recording was made without Nexedge’s knowledge, Cheema-Grubb J was misled as to the circumstances in which it was obtained. Saini J observed that there were inconsistencies in Apollo’s evidence on this point. While the true origins of the recording will have to be determined at trial, there was sufficient evidence to support a “strong inferential case” that the recording came about through “bugging”. Most significantly, even if it were to turn out the recording had been made innocently, it still should have been obvious to Apollo that the contents were confidential. As a result, the assurances given to Cheema-Grubb J that there need not be any concerns about its usability were not properly made. The duty of fair presentation of evidence had thus been breached - Cheema-Grubb J ought to have been informed that there was, in principle, a breach of confidence involved.

The substance of the evidence had also been “materially misrepresented”. Saini J agreed with Nexedge that excerpts from the recording had been “cherry picked” and that Cheema-Grubb J had not been directed to other parts which suggested the “exact opposite” of what Apollo were contending. Furthermore, Saini J expressed grave concern at Apollo’s failure to disclose the material context surrounding the recording. He found that Apollo had chosen to present evidence in a manner that cast Mr Spina’s words in a “sinister fashion”. But a proper examination of the recording and its surrounding context revealed that there was nothing improper taking place. For example, references to a “move over” were not to moving assets offshore but to an office move “a few yards up the road”. Moreover, Nexedge was applying for enhanced FCA permissions and demonstrably continuing to adhere to a business plan that projected significant growth in the UK. This made clear that Nexedge’s plans were “quite the opposite” of planning to dissipate assets or leave the jurisdiction, and wholly inconsistent with Apollo’s narrative.

Saini J also reminded parties at various points in his judgment that the duty of fair presentation falls on both an applicant and their legal advisers. In this case, both were in breach. The affidavit in support of the application contained material inaccuracies as to the content of the audio recording. But it was also the case that Apollo’s legal team did not seem to have independently satisfied themselves as to the evidence (although there was no reason to think this was due to any bad faith). Indeed, Apollo’s barrister admitted he had not listened to the recording, and had taken Cheema-Grubb J to sections of the affidavit, rather than a transcript of the recording itself. Provision of a hyperlink and USB stick to allow the judge to listen for herself was not sufficient. 

Key lessons 

The judgment offers various lessons for those pursuing without notice applications and those seeking to have such orders discharged.

• The duty of full and frank disclosure is stringent and non-negotiable – The decision highlights the importance of full and frank disclosure in without notice applications. The duty applies to both applicants and their legal advisors, and “cannot be excused by reference to urgency or practical difficulty.” Failure to comply with this duty will usually result in discharge of any injunction obtained.
• Fair presentation requires context, not cherry-picking – Apollo’s representatives’ presentation of the recording was described as a “cut and paste” job which failed to provide the full picture to the court and led to the granting of an injunction in circumstances in which it would otherwise likely not have been. The judgment is a reminder that evidence should not be provided out of context and the circumstances surrounding its production should be made clear from the outset.
• Legal representatives must independently scrutinise client instructions – The court was clear that simple reliance on a client’s account of the facts is unacceptable and, given the “substantial trust” placed in an applicant’s solicitors and counsel in such applications, “the legal representatives must satisfy themselves that the factual allegations being put forward by a lay client are in fact properly evidenced by the material”. Allowing a client to “dictate” what is put forward to the court is not permissible.