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Sybron Corporation v Barclays Bank Plc

Weekly Law Reports The Law Reports Cited authorities 5 Cited in 97 Precedent Map Related
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JurisdictionEngland & Wales
Date1984
CourtChancery Division
[CHANCERY DIVISION] SYBRON CORPORATION And Another v. BARCLAYS BANK PLC. [1981 S. No. 837] 1984 Jan. 23, 24, 25, 26, 27; Feb. 13, 14, 15, 16; 24 Scott J.

Practice - Discovery - Use of documents - Witness producing documents on subpoena duces tecum - Implied undertaking not to use documents for other purposes - Whether documents produced on subpoena and read in open court losing protection of implied undertaking - Whether leave of court necessary to use documents in later action

In an action commenced in 1974 (“the main action”) the plaintiffs obtained judgment from Walton J. against R. Ltd. and two associated companies and 10 individual defendants, in respect of a fraudulent conspiracy organised by senior employees of the plaintiffs whereby, while still in the plaintiffs' employment, they set up a rival trading organisation in the form of the three defendant companies, made use of the plaintiffs' trade secrets and confidential information, and diverted customers and business from the plaintiffs to the defendant companies.

In the main action, the plaintiffs had obtained an order under the Bakers' Books Evidence Act 1879, pursuant to which a bank employee attended court under subpoena duces tecum and produced certain bank documents related to the bank accounts operated by the bank on behalf of the defendant companies. Some of the documents thus produced were referred to and read from by Walton J. in giving judgment in the main action. In reliance upon those documents the plaintiffs commenced an action against the bank (“the 1981 action”), in which they alleged that the bank, in agreeing to provide banking services for the defendant companies, had become a party to the fraudulent and dishonest conspiracy which Walton J. found to exist. The documents produced under the subpoena and further documents were disclosed by the bank on discovery in the 1981 action. After inspection of those documents, the plaintiffs decided that it was necessary or desirable to add another nine of their associated companies as plaintiffs and to add three of the bank employees as defendants, and took out a summons in the 1981 action for leave to do so. In view of possible difficulties which might arise in connection with the Limitation Act 1980 if other parties were joined to the 1981 action, the plaintiffs decided that it was preferable to commence another action (“the 1983 action”).

On the plaintiff's application for leave, if such leave were necessary, to refer in the 1983 action to the documents discovered in the 1981 action: —

Held, (1) that although the cause of action was the same in the 1983 action as in the 1981 action the implied undertaking imposed upon the plaintiffs as a result of the discovery of documents by the defendant bank ordered by the court in the 1981 action, or as a result of the production on subpoena duces tecum in the main action, prevented the plaintiffs, as the party to whom they were disclosed or to whom they were produced, from making use in any other proceedings of those documents or of any information contained therein, unless such information was obtained from a wholly independent source, without the leave of the court having first been obtained (post, pp. 1063D–F, 1065G–1066A, G–1067A, 1068A–F).

Alterskye v. Scott [1948] 1 All E.R. 469; Norwich Pharmacal Co. v. Customs and Excise Commissioners [1974] A.C. 133, H.L.(E.) and Rank Film Distributors v. Video Information Centre [1982] A.C. 380, H.L.(E.) considered.

(2) That although, in proceedings held in open court, information derived from any record of the proceedings could be used by any third parties without regard to any undertakings, express or implied, which might bind the parties thereto or their solicitors, the purpose of an undertaking was to protect, so far as consistent with the proper prosecution of the action, the confidentiality of documents thus disclosed and to encourage the full and proper disclosure of documents which the proper administration of justice required; that, accordingly, it was wrong and inconsistent with that purpose that the protection of the undertaking should be lost by reason of the fortuitous reading of the document in open court; and that, therefore, the documents produced on subpoena in the main action and read by Walton J. in his judgment retained the protection of the implied undertaking and the plaintiffs were not entitled to make use of those documents or the contents thereof for the purposes of the 1983 action without leave of court (post, pp. 1069C–H, 1070A–E).

Home Office v. Harman [1983] 1 A.C. 280, H.L.(E.) applied.

(3) That although the commencement of the 1983 action might be regarded as a tactical device to attempt to circumvent the effect of section 35 of the Limitation Act 1980 on an application for joinder of fresh parties to the 1981 action, it could not fairly be described as a procedural abuse of process; and that, accordingly, since the causes of action in the 1983 and the 1981 actions were the same the plaintiffs ought to have leave to use the documents for the purposes of the 1983 action (post, pp. 1066G–1067A, 1072H–1073E, 1074H–1075C, F–G).

Dictum of Whitford J. in Halcon International Inc. v. Shell Transport and Trading Co. Ltd. [1979] R.P.C. 97, 109–110 not followed.

The following cases are referred to in the judgment:

Alterskye v. Scott [1948] 1 All E.R. 469

Beaman v. A.R.T.S. Ltd. [1949] 1 K.B. 550; [1949] 1 All E.R. 465, C.A.

Bullivant v. Attorney-General for Victoria [1901] A.C. 196, H.L.(E.)

Distillers Co. (Biochemicals) Ltd. v. Times Newspapers Ltd. [1975] Q.B. 613; [1974] 3 W.L.R. 728; [1975] 1 All E.R. 41

Halcon International Inc. v. Shell Transport and Trading Co. Ltd. [1979] R.P.C. 97, Whitford J. and C.A.

Home Office v. Harman [1981] Q.B. 534; [1981] 2 W.L.R. 310; [1981] 2 All E.R. 349, C.A. [1983] 1 A.C. 280; [1982] 2 W.L.R. 338; [1982] 1 All E.R. 532, H.L.(E.)

Lonrho Ltd. v. Shell Petroleum Co. Ltd. (No. 2) [1982] A.C. 173; [1981] 3 W.L.R. 33; [1981] 2 All E.R. 456, H.L.(E.)

Norwich Pharmacal Co. v. Customs and Excise Commissioners [1974] A.C. 133; [1973] 3 W.L.R. 164; [1973] 2 All E.R. 943, H.L.(E.)

Rank Film Distributors Ltd. v. Video Information Centre [1982] A.C. 380; [1981] 2 W.L.R. 668; [1981] 2 All E.R. 76, H.L.(E.)

Riddick v. Thames Board Mills Ltd. [1977] Q.B. 881; [1977] 3 W.L.R. 63; [1977] 3 All E.R. 677, C.A.

Sybron Corporation v. Rochem Ltd. (unreported), 3, 4, 5 December 1980, Walton J.

The following additional cases were cited in argument:

Air Canada v. Secretary of State for Trade [1983] 2 A.C. 394; [1983] 2 W.L.R. 494; [1983] 1 All E.R. 910, C.A. and H.L.(E.)

Anton Piller KG v. Manufacturing Processes Ltd. [1976] Ch. 55;' [1976] 2 W.L.R. 162; [1976] 1 All E.R. 779, C.A.

Baden, Delvaux and Lecuit v. Societe Generale pour favoriser le Developpement du Commerce et de l'Industrie en France S.A. [1983] B.C.L.C. 325

Bankers Trust Co. v. Shapira [1980] 1 W.L.R. 1274; [1980] 3 All E.R. 353, C.A.

Bartlett v. Barclays Bank Trust Co. Ltd. (Nos. 1 and 2) [1980] Ch. 515; [1980] 2 W.L.R. 430; [1980] 1 All E.R. 139

Beckford v. Crutwell (1832) 1 M. & Rob. 187

Belmont Finance Corporation v. Williams Furniture Ltd. (No. 2) [1980] 1 All E.R. 393, C.A.

British Motor Trade Association v. Salvadori [1949] Ch. 556; [1949] 1 All E.R. 208

British Steel Corporation v. Granada Television Ltd. [1981] A.C. 1096; [1980] 3 W.L.R. 724; [1981] 1 All E.R. 417, Sir Robert Megarry V.-C., C.A. and H.L.(E.)

Brooke v. Bool [1928] 2 K.B. 578, D.C.

Chanel Ltd. v. F. W. Woolworth & Co. Ltd. [1981] 1 W.L.R. 485; [1981] 1 All E.R. 745, Foster J. and C.A.

Crofter Hand Woven Harris Tweed Co. v. Veitch [1942] A.C. 435; [1942] 1 All E.R. 142, H.L.(Sc.)

C. S. Publications Ltd. v. Peckham (unreported), 25 February 1983, Whitford J.

Customs and Excise Commissioners v. A. E. Hamlin & Co. [1984] 1 W.L.R. 509; [1983] 3 All E.R. 6541 [1983] S.T.C. 780

Cutler v. Wandsworth Stadium Ltd. [1945] 1 All E.R. 103, C.A.

D. v. National Society for the Prevention of Cruelty to Children [1978] A.C. 171; [1977] 2 W.L.R. 201; [1977] 1 All E.R. 589, H.L.(E.)

Faccenda Chicken Ltd. v. Fowler [1984] I.C.R. 589

Falcon v. Famous Players Film Co. Ltd. [1926] 1 K.B. 393

Gamlen Chemical Co. (U.K.) Ltd. v. Rochem Ltd. [1983] R.P.C. 1; (unreported), 7 December 1979; Court of Appeal (Civil Division) Transcript No. 777 of 1979, C.A.

Greenhalgh v. Mallard [1947] 2 All E.R. 255, C.A.

Harrison v. Hall (1832) 1 M. & Rob. 185

Hopkinson v. Lord Burghley (1867) L.R. 2 Ch.App. 447

Hunter v. Chief Constable of the West Midlands Police [1982] A.C. 529; [1981] 3 W.L.R. 906; [1981] 3 All E.R. 727, H.L.(E.)

Jackson v. Bowley (1841) Car. & M. 97

Johnson v. Youden [1950] 1 K.B. 544; [1950] 1 All E.R. 300, D.C.

King v. Victor Parsons & Co. [1973] 1 W.L.R. 29; [1973] 1 All E.R. 206, C.A.

Koursk, The [1924] P. 140, C.A.

Liptons Cash Registers and Business Equipment Ltd. v. Hugin (G.B.) Ltd. [1982] 1 All E.R. 595

McLaughlin v. Pryor (1842) 4 Man. & G. 48

Medway v. Doublelock Ltd. [1978] 1 W.L.R. 710; [1978] 1 All E.R. 1261

Midland Bank Trust Co. Ltd. v. Green (No. 3) [1982] Ch. 529; [1982] 2 W.L.R. 1; [1981] 3 All E.R. 744, C.A.

Ministry of Social Security v. John Bryant & Co. (Bristol) Ltd. [1968] 1 W.L.R. 1260; [1968] 3 All E.R. 175

Mogul Steamship Co. v. McGregor, Gow & Col (1889) 23 Q.B.D. 598, C.A.; [1892] A.C. 25, H.L.(E.)

Moodalay v. Morton (1785) 1 Bro. C.C. 469

Morton-Norwich Products Inc. v. Intercen Ltd. [1978] R.P.C. 501

Paget v. Birkbeck (1863) 3 F. & F. 681

Performing Right Society Ltd. v. Mitchell and Booker (Palais de Danse) Ltd. [1924] 1 K.B. 762

Petrie v. Lamont (1841) Car. & M. 93

Pratt v. British Medical Association [1919] 1 K.B. 244

Reg. v. Churchill (No. 2) [1967] 2 A.C. 224; [1967] 2 W.L.R. 682; [1967] 1 All E.R. 497, H.L.(E.)

Reg. v. Sinclair [1968] 1 W.L.R. 1246; [1968] 3 All E.R. 241, C.A.

Reg. on the prosecution of A. Newton Esq. v. Harland (1838) 2 M. & Rob. 141

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