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High Court confirms principles for construction of court orders and entitlement to collateral use of disclosed documents and non-party disclosure orders

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management - Disclosure Other

05-05-2021

Coward v Phaestos Ltd & Ors [2021] EWHC 9 (Ch)

Facts of the Case

  • In March 2013, the trial of these proceedings (the “English Proceedings”) took place before Asplin J resulting in judgment and an associated order (the “Asplin Order”).
  • In late 2019/early 2020, the claimant (“C”) made an application in relation to certain documents (the “Materials”) which C had disclosed in the English Proceedings, and which pursuant to an interlocutory order C had destroyed or delivered up to a third party (the “3P”).
  • In summary, C sought an order enabling him to review the Materials held by the 3P for information relevant to his matrimonial proceedings in Cyprus (the “Cypriot Proceedings”). C’s application was made on various grounds including that:
    • the Asplin Order gave the parties liberty to apply;
    • CPR 31.22(1)(b) provides that a party to whom a document has been disclosed may, with the Court’s permission, use the document other than in the proceedings in which it was disclosed; and
    • a non-party disclosure order could be made against the 3P under CPR 31.17(3) in relation to the Materials on the basis that the documents were likely to support C’s case and disclosure is necessary in order to dispose fairly of his claim or to save costs.

The Decision

  • The court refused the application on the following bases:
    • First, that on its proper construction the Asplin Order was not intended to entitle C to review a large body of data for the purpose of potentially finding information that would assist him in the Cypriot Proceedings.
    • Secondly, CPR 31.22(1) can only be relied upon by an applicant to whom the relevant documents were disclosed. It does not apply, as in this case, where the applicant himself has disclosed the documents and they are now held by another.
    • Thirdly, CPR 31.17(3) does not apply to non-parties who hold documents on behalf of parties to the proceedings and pursuant to a court order. Further, the purpose of a non-party disclosure order must be connected to the underlying claim, and the determination of substantive issues between the parties in that claim. It cannot be for unrelated purposes, as was the case here.
    • Fourthly, the court has no general power to order disclosure in support of foreign proceedings. The proper place to apply for such disclosure would, for the purposes of these proceedings, be in Cyprus.

Analysis and Practical Advice

  • In determining the proper meaning of an order, the court set out the following principles of construction:
    • The exercise is to establish what the judge would objectively be understood to have meant by the words in the order.
    • The general approach to the construction of written documents is to be applied, with the necessary changes, acknowledging that the meaning of an order is distinctly different from construing a contract or a statute.
    • The question is what a reasonable person, having all the background knowledge, which would have been available at the time would have understood the judge to be using the language in the document to mean.
    • The subjective intentions of the parties are not admissible, nor strictly is the subjective intention of the judge unless it is sought to amend the order under the slip rule.
  • Further, in construing a court order, the court will not have regard to a transcript of discussions between counsel and the judge, save potentially where there is ambiguity on the face of the order. This is because (i) counsel’s submissions are more likely to reveal what they were thinking than the judge, (ii) a judge may or may not intervene and (iii) any intervention may simply reflect initial thoughts testing the submissions.
  • The case also highlight the need for parties to give careful thought to (i) ensuring liberty to apply clauses are clear as to their scope and sufficiently narrow/broad (as appropriate) and (ii) where parties are ordered to destroy and deliver up documents, whether provision needs to be made to enable them to search or other take steps in respect of those documents in due course given the limitations in that regard of CPR 31.22(1) and CPR 31.17(3).

 

 

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