Miller v Scorey
| Jurisdiction | England & Wales |
| Judgment Date | 1996 |
| Date | 1996 |
| Year | 1996 |
| Court | Chancery Division |
Practice - Discovery - Use of documents - Implied undertaking not to use for other purposes - Plaintiffs using disclosed documents in new proceedings against same defendants on related issues without leave of court - Whether breach of undertaking amounting to contempt of court - Whether jurisdiction to grant leave retrospectively - Whether second action to be struck out
In 1993 the plaintiff trustees of a pension scheme commenced an action against former trustees of the scheme and others claiming, inter alia, an account of profits alleged to have been made as commission on an investment contract which they had wrongfully appropriated to themselves. In 1995 in the course of discovery one of the defendants, M. Ltd., disclosed documents which suggested to the plaintiffs that there was a strong case that M. Ltd. had paid £225,000 to two of the former trustees, the first and second defendants, effectively as a bribe. Although the plaintiffs could have amended their 1993 writ to include the bribery claims, they were concerned that any delay could result in the amendments not being in place before the relevant limitation period expired. Accordingly they issued a new writ against M. Ltd. and the first two defendants seeking to recover the £225,000 on the grounds that it had been paid or received by way of a bribe or inducement. The 1995 action could not and would not have been launched but for the information discovered in the 1993 action and no leave was obtained from the court so to use that information.
On a summons by M. Ltd. to strike out the 1995 action as an abuse of the process of the court: —
Held, striking out the 1995 action as against M. Ltd. and the first defendant, that the plaintiffs' implied undertaking given to the court in the 1993 action prohibited them from using the documents in question otherwise than for the purposes of the action in which they were disclosed; that the use of those documents in a separate action against several of the same defendants and for a closely-related, albeit different, cause of action involved a breach of the plaintiffs' undertaking which amounted to a contempt of court and an abuse of its process irrespective of the plaintiffs' intentions; that whether such a contempt had been committed was to be tested objectively, but the fact that the plaintiffs had not acted contumaciously or with the deliberate intention of breaking their undertaking would be material in determining what, if any, penalty should be imposed; and that, although the plaintiffs would probably have been granted leave to make use of the documents for the purposes of a separate action had it been sought at the appropriate time, a de facto validation of the issue of the 1995 proceedings which would obviate the plaintiffs' need to issue fresh proceedings would deprive the defendants of a limitation defence, thereby permitting the plaintiffs to take unfair advantage of their own wrong (post, pp. 1129H, 1130E, 1132A, C–E, 1133E–H, 1134E–G).
Per curiam. It may be that the court has jurisdiction to grant retrospective leave to use disclosed documents for a purpose outside the action in which they were disclosed, but the circumstances in which it would be proper to exercise it would be rare (post, p. 1133B–C).
The following cases are referred to in the judgment:
Beddoe, In re; Downes v. Cottam [
Crest Homes Plc. v. Marks [
Distillers Co. (Biochemicals) Ltd. v. Times Newspapers Ltd. [
Halcon International Inc. v. Shell Transport and Trading Co. [
Home Office v. Harman [
Knight v. Clifton [
Mahesan s/o Thambiah v. Malaysia Government Officers' Co-operative Housing Society Ltd. [
Mileage Conference Group of the Tyre Manufacturers' Conference Ltd.'s Agreement, In re (
Riddick v. Thames Board Mills Ltd. [
Spectravest Inc. v. Aperknit Ltd. [
Sybron Corporation v. Barclays Bank Plc. [
Tate Access Floors Inc. v. Boswell [
The following additional cases were cited in argument:
Alterskye v. Scott [
Astro Exito Navegacion S.A. v. Southland Enterprise Co. Ltd. [
Bettinson v. Bettinson [
Clarke v. Heathfield [
Hadkinson v. Hadkinson [1952] P. 285; [
National Employers Mutual General Insurance Association Ltd., In re [
Omar v. Omar [
Reynolds v. Godlee (
X Ltd. v. Morgan-Grampian (Publishers) Ltd. [
MOTION
By a writ dated 22 November 1993 the plaintiffs, Roger George Miller and K.C. Independent Trustees Ltd., suing as the present trustees of the Rockwood Holding Plc. Group Pension Scheme (“the scheme”), commenced an action (“the 1993 action”) against the defendants, (1) Michael George Scorey, (2) Thomas Forrest and (3) Andrew Robert Peter Smith, all former trustees of the scheme, (4) the M.I. Group Ltd. (“M.I.G.”), (5) Merchant Investors Assurance Co. Ltd. (“M.I.A.”), (6) Porchester Group Ltd., (7) Terence Harvey, (8) D.W. Thomas (Investments) Ltd., (9) D.W. Thomas (Pensions) Ltd., (10) Derek Walter Thomas and (11) Sun Life Assurance Society Plc., seeking, inter alia, an account of profits from Mr. Scorey. In the course of that action on 24 July 1995 M.I.G. and M.I.A. gave discovery. From some of the documents disclosed it appeared that there was a strong case that M.I.A. had paid and Mr. Forrest and Mr. Scorey had received certain payments as bribes from mid-September 1989 onwards.
On 4 September 1995 the plaintiffs issued a new writ (“the 1995 action”) against (1) Thomas Forrest, (2) Michael George Scorey and (3) Merchant Investors Assurance Co. Ltd. seeking against each defendant, inter alia, £225,000 on the grounds that it was paid or received by way of a bribe.
On 10 January 1996 M.I.A. issued a summons in the 1995 action seeking to strike out the writ, alternatively the statement of claim, alternatively such parts of the statement of claim as relied on or derived from documents disclosed on discovery in the 1993 action as being frivolous or vexatious and/or otherwise an abuse of the process of the court pursuant to
On 16 January 1996 the plaintiffs issued a notice of motion in the 1993 action seeking that it be determined by the court whether they needed leave to use the documents disclosed by the first, fourth, fifth and tenth defendants in the 1993 action or the information contained therein in the 1995 action.
On 7 March 1996 the plaintiffs issued a summons in the 1993 action that the 1993 action and the 1995 action be consolidated.
The facts are stated in the judgment.
James Clifford for M.I.A.
Josephine Hayes for the plaintiffs.
The other defendants did not appear and were not represented.
RIMER J. There are before me two summonses and a motion in one or other of two actions commenced by the same plaintiffs in 1993 and 1995. The issue which I have to decide is whether or not to permit the 1995 action to be proceeded with. The third defendant to that action is Merchant Investors Assurance Co. Ltd. (“M.I.A.”) and it asks me to strike the action out as having been prosecuted to date in circumstances said to involve a contempt of court and an abuse of its process. That contention is founded on the fact that its prosecution has been enabled by documents and information obtained by the plaintiffs from the discovery given in the 1993 action and which they have used for the purpose of the 1995 action without obtaining the prior leave of the court.
The 1993 action
The 1993 action was commenced by a writ dated 22 November 1993. The plaintiffs are Roger George Miller and K.C. Independent Trustees Ltd. They sue as the present trustees of the Rockwood Holdings Plc. (“Rockwood”) group pension scheme (“the scheme”). The scheme was established by an interim trust deed dated 26 August 1987. The original trustees were Michael George Scorey, Thomas Forrest and Andrew Robert Peter Smith. They are the first three defendants to the action. They are all former officers of Rockwood. There are eight other defendants, including the M.I. Group Ltd. (“M.I.G.”) and M.I.A.
The action raises two main claims. First, it claims damages or compensation against all the defendants for loss said to have been suffered by the scheme by what is said to have been an unsuitable investment contract made between the original trustees and Sun Life Assurance Society Plc. (“Sun Life”), the eleventh defendant. That contract was taken out in 1989, is due to mature in about 2012, provided for the payment of monthly premiums and...
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