Matrix Receivables Ltd v Musst Holdings Ltd

Hearing date: 30 July 2024

Date of hand-down of judgment in draft: 12 August 2024

Approved Consequentials Judgment

This judgment was handed down remotely at 12noon on 19 August 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

I Introduction

On 30 July 2024, the Court heard consequential arguments arising out of a judgment in this matter neutral citation [2024] EWHC 1495 (Ch) (“the Judgment”). The primary issues were about the form of order in respect of Musst's collateral use allegation and the orders as to costs as regards the various applications that were before the court.

The Judgment, particularly at paragraphs 8 and 75, comments about overload, or what Lewison LJ in refusing permission to appeal referred to as a ‘mini-trial’. The enthusiasm of the parties and determination that no stone goes unturned is reflected by lengthy skeleton arguments for the consequentials hearing comprising 25 pages by MRL and 16 pages by Musst. The consequentials hearing lasted 3 1/2 hours. Due to other judicial commitments of which the parties were aware, there was not time to give judgment at that hearing.

The Court had in mind giving judgment orally, but this proved impractical at holiday time with key people understandably being in holiday destinations abroad. Accordingly, judgment is being handed down in writing, and it is a statement of the result on the very orders to be made and the key reasons. It is not intended to cover every single point that has been raised in the above arguments but they have all been considered. This judgment on the consequentials is to be read alongside the Judgment. I shall not extend this judgment by repeating that which appears in the Judgment.

II Decision as to form of order

As regards the collateral use allegation, the submission of Musst is that MRL should destroy or delete the documents in the Astra trial bundle and any notes made there. This is save only those documents which (a) it proposes to rely on in these proceedings and (b) which were referred to in open court or which the judge was specifically invited to read or which were specifically referred to in the Judgment in the Musst v Astra proceedings.

The submission of MRL is that Musst should provide MRL with all public documents in the Musst v Astra proceedings including skeleton arguments, written submissions, chronologies, reading list and correspondence with the Judge about suggested reading, the judgments given in the case not limited to the final judgment and transcripts of public hearings such as there are (hereafter collectively referred to as “the Public Documents”).

MRL also submits that if the filleting exercise is to be comprehensive, then Musst should not use documents disclosed by Astra and which were not already known to Musst (e.g. because they were common documents between the parties such as correspondence). To that end, a part of the filleting exercise should be putting to one side the Astra documents so that they are not used without the permission of the court or the consent of Astra in the instant proceedings.

Musst submits that it will be very costly for it to be involved in this process. Musst says that MRL has brought it about, and so Musst should not have to concentrate its resources on a filleting exercise, but if it does, it should be at the expense of MRL.

MRL submits that Musst has knowledge of the Musst v Astra proceedings. Only Musst can assist in relation to the details of whether documents fall within or outside the prohibition against collateral use and within the exception in CPR 31.22(1)(a). Thus, Musst should do the filleting exercise.

As regards Musst removing the Astra disclosed documents, Musst says that its position is different from MRL in that Musst was a party in the proceedings with Astra and there is no question of it using any documents from Astra. In any event, there was no application to this effect, and it should not be countenanced at this stage. On review, it was said by MRL that they did make this point: to the extent that they did, it appears to be more a defensive technique to show that any breach on its part was a technical breach. It showed that such a breach was so prevalent that it was technically committed by Musst as well. It is too late for this point to be considered as a freestanding point, if it was ever intended as such, but it is not too late in the context of regulating the future by a filleting exercise, to make sure that there is taken out of the documents disclosed in Musst v Astra any infringing documents whether emanating from Musst or Astra.

III Discussion

This matter needs to be dealt with in a proportionate manner. In the Judgment, I found the following:

(i) no specific prejudice has been identified from any breach of the rule against collateral use;

(ii) Musst has not identified any deployment by MRL of any documents disclosed in the Musst v Astra proceedings;

(iii) In the course of the hearing before the Judgment was handed down in draft, Musst did not identify any specific use of documents which were used without being deployed in this action. Since the hand down of the Judgment, Musst sought to identify three instances of such breach. The court held that it was too late to micro analyse these points and in any event it was unnecessary. The reason for this is that any specific breach did not have any practical effect. The points were not of such a nature which require a sanction or a striking out of all or part of the case [J/101–103];

(iv) The key documents in this action appear to be those documents which have been referred to in court or read by the court in the first action [J/106–107].

In my judgment, it is likely that the process of filleting out the documents in the Musst v Astra bundles which are prohibited from use pursuant to CPR 31.22 is not a vast exercise. I have identified in the hearing three stages in order for this to be done, namely as follows:

(i) Musst should provide to MRL the Public Documents in the Musst v Astra proceedings. If the trial bundles do not include the list of documents, these should be included for the purpose of the checking exercise only.

(ii) MRL should then go through the Public Documents and identify the documents which have been read to the court or referred to in the hearing (including where there is an inference that it has been read by the court e.g. the documents referred to in skeleton arguments or in submissions or chronologies). MRL should then identify what documents are being retained and which not retained in the easiest and most economical way of doing this. It should state how it is dealing with the non-retained documents so as to ensure that no use hereafter will be made of them. The preparation of a detailed list document by document is not required.

(iii) Thereafter, Musst should go through the documents and identify what documents it has which derive from Astra through disclosure) and (a) which Musst did not have in any event (e.g. by correspondence between Musst and Astra), and (b) which have not been read to the court or referred to in the hearing and where there is no inference that they have been read by the Court. Musst should then identify what documents are being retained and which not retained in the easiest and most economical way of doing this. It should state how it is dealing with the non-retained documents so as to ensure that no use hereafter will be made of them. The preparation of a detailed list document by document is not required.

The parties are to prepare an order to give effect to the foregoing including timings.

IV The costs consequences of the application for strike out on the basis of collateral use

The Judgment has found that there has been a breach of the obligation not to use documents obtained in disclosure from the Musst v Astra action. The breach has not been in deployment, but in considering the documents (without filleting) for the purpose of this action. However, there has been rejected the submissions to the effect that Mills & Reeve LLP were less than frank in correspondence. The submission of Musst was that there was a deliberate or at least a highly culpable dereliction of professional obligations on the part of Mills & Reeve LLP and that their correspondence thereafter was intended to misleadMusst submitted in writing that MRL's conduct deserved “the court's strongest opprobrium. Put simply, MRL have not played with a straight bat in respect of their unlawful collateral use (hence the failure to come clean about it until 18 April 2024)”. It submitted orally [Day1/64]: “However one cuts it, even if it is entirely innocent, there was no sensible basis on which Mills & Reeve — a very reputable firm — could have thought they could review the trial bundles generally without getting permission.” It was said [Day1/66–67] “… Mills & Reeve were pretty opaque, to use the word, about what had happened, and they ought to have come clean….much earlier about the fact they had the trial bundles….”. At [Day1/70], it was said that it was “very serious” In fact, the Judgment rejected the allegation of deliberate or reckless breach or of cover up. The Judgment found that there was a misunderstanding about the relevant law: see [J/100 and...