Michael Wilson & Partners Ltd v Robert Colin Nicholls & ors [2008] NSWSC 1230 | Case summary

50151/06 Michael Wilson & Partners Ltd v Robert Colin Nicholls & 6 Ors JUDGMENT (ex tempore) 1 HIS HONOUR: The plaintiff Michael Wilson and Partners Ltd ("MWP") is a law firm with offices in Almaty, Kazakhstan, providing legal services in Kazakhstan, Central Asia, the Caucasus, Russia and Ukraine. The first defendant Robert Colin Nicholls and the second defendant David Ross Slater were lawyers employed by MWP from April 2004 and September 2004, until 1 March 2006 and 7 January 2006, respectively. The third to sixth defendants and the seventh defendant are companies which operate or are interested in a business providing business advisory, agency and legal services in Kazakhstan and Central Asia. Mr Nicholls, Mr Slater and one Mr Emmott, who was formerly an employee and director of MWP, are currently employed, engaged or interested in the third, fourth and fifth defendants ("the Temujin Companies") and the sixth defendant ("Shaikenov"). 2 In these proceedings, MWP alleges that, between about October 2005 and July 2006, Mr Nicholls and Mr Slater breached contractual and fiduciary duties owed to MWP by setting up the business of the third, fourth, fifth and sixth defendants; diverting clients and business opportunities, fees, remuneration, compensation and other income from MWP to those defendants; using MWP's confidential information and resources to establish and conduct the business of those defendants; procuring staff of MWP to leave its employ and join those defendants; and conducting the business of those defendants in competition with MWP. MWP further alleges that Mr Nicholls and Mr Slater acted in concert with Mr Emmott and were knowingly concerned in and aided and abetted breaches by him of his obligations to MWP, and that the other defendants were knowingly concerned in and aided and abetted the breaches by Messrs Nicholls, Slater and Emmott of their obligations to MWP. In associated proceedings, which are by way of arbitration in the United Kingdom and are to be heard for three weeks commencing next Monday, 10 November 2008, MWP makes similar allegations against Mr Emmott, who is not a party to the proceedings in this Court. 3 In the present application, brought by Notice of Motion, originally filed on 20 August 2008 and amended on 10 October 2008, MWP seeks relief which may be summarised in the following four categories: first, orders pursuant to (NSW) Civil Procedure Act 2005, s 61(3), striking out the defence and entering default judgment, and consequential orders - apparently on the basis of alleged default by the defendants in giving discovery; secondly, orders for production for inspection of a category of documents that has been discovered by the defendants but of which inspection has been withheld; thirdly, orders for further and better discovery in respect of other categories of documents of which discovery has previously been ordered, but the plaintiff alleges insufficiently provided; and fourthly, release from its implied Harman undertaking, in order to permit it to use certain of the documents to which access is sought in the impending English arbitration proceedings. Strike out and default judgment 4 Although the plaintiff complains of repeated default over a lengthy period by the defendants in giving discovery since an order for discovery was first made by the Court in February 2007, on the evidence before me, while it seems that there had indeed been failures to comply with the time limits imposed by previous orders, the defendants have now filed a verified list of documents, and subsequently amended it, and those previous defaults have thus been rectified. Previous defaults since rectified would not justify the radical summary relief proposed in the Notice of Motion; at the highest, they provide background which may bear on the exercise of discretion on questions that arise concerning the present alleged defaults. This application must focus on alleged subsisting defaults, rather than historical ones. Production and inspection of documents 5 I therefore turn first to what, in reality, is the substantial issue in dispute, and is encompassed in the second category of relief to which I have referred - namely, the claim for production for inspection of the documents in category 13 of the "discovery letter" - which, for convenience, have been called the "client files" of the Temujin companies. These are files of the Temujin defendants in respect of their having acted for various clients in the course of providing legal and other services to those clients, which MWP contends will evidence the fact and quantum of work done by the Temujin companies, which work MWP claims ought to have been undertaken by MWP. Discovery of the client files was ordered on 23 May 2008 by Einstein J. The defendants, having discovered them (by their amended list of documents) as documents 131 - 172 inclusive, object to producing them for inspection. These files are located in Kazakhstan, and the defendants' principal objection to producing them appears to be that production would place them in contravention of the criminal and/or civil law of Kazakhstan. A secondary objection may be that the documents, or some of them, are subject to legal professional privilege. Although articulated in the list of documents as some sort of a claim for privilege, the principal basis on which the defendants object to producing the client files is not, in truth, a claim for privilege against self-incrimination at all: production of these documents would not require the defendants to incriminate themselves in respect of some alleged or supposed offence already committed which is justiciable in this or any other Court. The true characterisation of their objection is that it would require them to do an act which, in the place where it is to be done - namely Kazakhstan - would be illegal, which is not the same concept as is involved in the privilege against self-incrimination. 6 There is, so far as I have been able to ascertain in the limited time available, a dearth of authority on the question. Counsel referred to none. In Ex parte Pollard (1840) Mont & Ch 239 (referred to in Duder v Amsterdamsch Trustees Kantoor [1902] 2 Ch 132, 140) Lord Cottenham LC said (at 250): It is true that in this country contracts for sale, or (whether expressed or implied) for charging lands, are in certain cases made by the Courts of Equity to operate in rem ; but in contracts respecting lands in countries not within the jurisdiction of these Courts they can only be enforced by proceedings in personam, which Courts of Equity here are constantly in the habit of doing: not thereby in any respect interfering with the lex loci rei sitæ . If indeed the law of the country where the land is situate should not permit or not enable the defendant to do what the Court might otherwise think it right to decree, it would be useless and unjust to direct him to do the act; but when there is no such impediment the Courts of this country, in the exercise of their jurisdiction over contracts made here, or in administering equities between parties residing here, act upon their own rules, and are not influenced by any consideration of what the effects of such contracts might be in the country where the lands are situate, or of the manner in which the Courts of such countries might deal with such equities. 7 That passage indicates that a Court of Equity will not make an order in the nature of an injunction or a decree for specific performance which would require the defendant to do something that was illegal in the place in which it was to be done. 8 However, in the field of discovery, in The Consul Corfitzon [1917] AC 550, the Prize Court was hearing a disputed claim to a cargo that had been consigned on a Swedish ship from South America to a Swedish port and was seized in September 1915. Lord Parker of Waddington, delivering the opinion of the Privy Council, noted (at 555) an argument that the appellant, if he complied with the order for discovery appealed from, would or might render himself liable to a penalty under Article 3 of the Swedish War Trade Law of 1916. Having doubted whether that article was intended to hamper Swedish subjects in asserting their rights in British Prize Courts, his Lordship said (at 555-6): But however this may be, their Lordships are clearly of opinion that a Court of Prize cannot properly be deterred from making what it conceives to be the appropriate order because a neutral claimant would, if he obeyed the order, be guilty of a breach of his own municipal law. The substantive law administered by the Court is international law, which cannot be affected by the municipal legislation of any one State, and its practice and procedure are governed by the municipal law of the State from which it derives its jurisdiction, and cannot be modified by the municipal legislation of any other State. 9 That passage suggests that in the field of discovery, being a matter of practice and procedure, the law of the forum prevails, and discovery may be ordered in accordance with that law, even if the law of another forum would make giving discovery or producing documents in accordance with the order an offence. 10 In Comaplex Resources International Ltd v Schaffhauser Kantonalbank (1991) 84 DLR (4th) 343, the Ontario Court was concerned with an application to relieve a bank from any obligation to produce documents and answer questions concerning customer identification or information that could reasonably lead to customer identification, on the ground that to do so would contravene the laws of Switzerland. The reported judgment concerns the resolution of conflicting expert evidence as to the effect of Swiss law and concludes that Swiss law did not, in fact, prohibit the answering of relevant questions or production of relevant documents which disclosed the identify of a customer. In the course of the judgment, however, his Honour noted an earlier judgment of Master Sandler in the same proceedings (at 345) to the effect that even if the Swiss laws prohibited disclosure, they could not provide a valid ground for opposing an order to produce documents or answer relevant questions on discovery, although they could be raised in response to a motion to impose sanctions for non-compliance with any such order made in Ontario; an appeal from that order had apparently been dismissed by consent. 11 These cases suggest that, discovery being a matter of procedure and not substantive law, and while the Court may in various ways have regard to the impact that compliance with an order for discovery may have on the exposure of a party to penal sanctions under foreign laws, it is not an absolute objection to the making of an order for discovery that compliance would involve contravention of a foreign law. While that sits uncomfortably with the observations of Lord Cottenham to which I have referred, the distinction is that his Lordship was concerned with matters of substance, whereas the cases concerning discovery were concerned with matters of procedure, and the law of the forum governs in matters of practice and procedure all who come before its courts [see, for example, National Mutual Life Association of Australasia Ltd v Godrich (1909) 10 CLR 1, 26 (O'Connor J)]. Accordingly, on the limited authority available, the better view is that the law of the forum governs questions of discovery and privilege, and while the Court will have regard in making orders and in framing regimes for production of documents to the circumstance that foreign law obligations of confidentiality may be involved, that circumstance will not provide an absolute objection to an order for production. Where such foreign obligations of confidentiality are involved, the Court may limit or even dispense with discovery or production as a matter of discretion, taking into account whether the party seeking a limitation or dispensation is the plaintiff or the defendant, and the identity of the third parties whose confidentiality is at stake, but, in general, local notions will predominate because discovery is a part of the local procedure. It follows that, even if the law of Kazakhstan prohibits production of the relevant documents, that would not be an absolute objection to making the order sought here, though it would bear on the exercise of its Court's discretion in considering whether or not to make the order sought. 12 In this case, I am faced with competing expert evidence of Professor Butler for MWP, and a Kazakh firm of lawyers, Signum, for the Temujin defendants. Neither of the experts was cross-examined, and no application for leave to cross-examine was made. Neither descended to much detail in setting out the statutory or other authoritative basis for the opinions that they tendered. In many cases, I am left with competing ipse dixits of the two experts. 13 Although it was submitted for MWP that I should give little weight to the opinions of Signum - on the basis they are unverified, and in fact not even signed (a typewritten "signature" appearing at the foot of each the documents), and also because there was some evidence to suggest that a partner in Signum (not the relevant witness) may have had some past and/or present connection with the defendants - I do not agree. On reading them as closely as I could, the Signum opinions were reasoned at least as well as Professor Butler's opinions; they were not apparently mere drafts but had the appearance of considered legal opinions; that they did not bear a handwritten signature does not mean that they were not authentic; and that they were not verified by affidavit is of practically no significance in circumstances where expert opinion is often tendered by way of unverified report (that is, unaccompanied by an affidavit) and, in this case, the opinion was provided in relative haste. The potential affiliations of a different partner of Signum with the defendants likewise does not strike me as a significant reason to doubt the bona fides or independence of the opinion offered. 14 I must bear in mind that, while on an application for the production of documents the applicant bears the onus of showing that an order should be made, nonetheless where the party opposing production sets up a claim of, or akin to, privilege, the opponent resisting production bears the onus of making out that claim. Thus, in this case, where the "privilege" claimed depends on foreign law, the defendants opposing production bear the onus of proving that they would be exposed to a penalty under foreign law. 15 Mr Walton SC, for MWP, submitted that seven relevant conclusions as to the law of Kazakhstan flowed from the evidence of Professor Butler. I shall comment shortly on each of those. 16 The first was that the relevant Criminal and Civil Codes of the Republic of Kazakhstan do not apply beyond the limits of Kazakhstan. However, even if that be so, in circumstances where the production in question is contemplated to take place in Kazakhstan by persons who are in Kazakhstan, it is quite beside the point. The conduct will take place within Kazakhstan, where the Kazakhstan Codes unquestionably apply. 17 The second was that the Kazakh Criminal Code applies only to natural persons, and thus not to any of the Temujin companies. This contention was raised only in Professor Butler's report in reply, and has not been addressed by Signum. Professor Butler cites Article 14 of the Kazakh Criminal Code which, according to his translation ("Only a putable person who has reached the age established by the present Code shall be subject to criminal responsibility") would apparently limit its application to natural person - although it is not entirely clear that that is its purport, as distinct from providing an age limit in respect of natural persons who are subject to criminal responsibility. There is also a suggestion in letters, from lawyers now acting for Temujin's former clients in Kazakhstan, that criminal liability attaches to the directors and officers of corporations. Although I am left in some state of doubt as to Professor Butler's assertion that the Criminal Code applies only to natural persons, ultimately I have come to the conclusion that the defendants have not proved that it imposes criminal liability on corporations, and bearing in mind where the onus lies, I will therefore proceed on the basis that the Kazakh Criminal Code does not apply to corporate entities. 18 The third proposition was that the Kazakh Civil Code does not apply where the parties have chosen a foreign law to govern their relationship. Civil Code, Article 1112, provides that "A contract shall be regulated by the law of the country chosen by agreement of the parties unless provided otherwise by legislative act of the Republic of Kazakhstan". This effectively provides that the parties may choose the law that regulates a contract. In other words, it provides for selection by the parties of the proper law of a contract. I do not see how it follows that provisions of the Civil Code in respect of obligations of confidentiality - which do not necessarily depend on contract - cease to apply, just because the parties have chosen a particular law to be the proper law of their contract. The Signum opinion is contrary to that of Professor Butler, and is better explained and reasoned in this respect. I do not accept, therefore, that the Kazakh Civil Code in respect of confidentiality does not apply, just because the parties have chosen United Kingdom law to govern their contractual relationship. 19 The fourth proposition is that the relevant provisions of the Kazakh Civil Code impose obligations of confidentiality only where certain stringent procedures, not shown to be in place here, have been implemented by the party maintaining confidentiality. The crucial Article appears to be Civil Code, Article 126(1), which, provides that "information comprising an employment or commercial secret" is subject to protection by civil legislation when the "information has real or potential commercial value by reason of its "being unknown to third persons" and "there is no free access to it on legal grounds" and the possessor of the information "takes measures to protect its confidentiality". Professor Butler opines that the requirement for "measures to protect confidentiality" is satisfied only if the documents are physically isolated, individually marked as confidential, inventoried, and constantly updated as material is added to the category, perhaps on a daily basis. Signum asserts that that opinion is baseless, and that no "legal acts" (which I understand to be a reference to authority) or other legal grounds are cited in support of it. In his reply affidavit, Professor Butler seems to have withdrawn somewhat, saying (in paragraph 27) that he had expressed the opinion in his earlier report "because these are the steps which are required under the law of the other Republics in the Commonwealth of Independent States and there is no doubt in my mind that a Kazakhstan Court would require compliance with the same steps." The Article to which both experts refer requires that measures be taken to protect confidentiality. It does not specify what measures are required. I am satisfied that the law of Kazakhstan requires that a claimant for confidentiality would have to show that measures to protect the confidentiality of the relevant documents were taken, but not that all the "strict procedures" referred to by Professor Butler are required. 20 The fifth proposition said to be derived from Professor Butler's opinion was that, in Kazakh law commercial secrets are not protected in criminal investigations or prosecutions in civil proceedings and that the Kazakh Criminal Code only prohibits disclosure of confidential documents and/or information "without legal grounds"; which Professor Butler says would not apply where, as here, the disclosure would be pursuant to a court order. Signum expresses the opposing view that an order of a court outside Kazakhstan, not recognised in Kazakhstan, would not be "legal grounds". Based on Professor Butler's evidence, I accept that disclosure in accordance with a Kazakh court order would not be "illegal". However, as the evidence stands, I am not satisfied that disclosure in Kazakhstan pursuant to an order of a foreign (from a Kazakh perspective) court would be legal; indeed, I incline, on balance, to the view that a foreign court order could not render legal in Kazakhstan what was otherwise illegal there. 21 The sixth proposition is that divulgence in accordance with a court order was not a form of divulgence proscribed by the Civil Code. Article 126(1) protects information to which "there is no free access on legal grounds", and I incline to the view that a foreign court order would not be legal ground for access to documents in Kazakhstan. Professor Butler bases his opinion on what he describes as "an analogy" to the practice in respect of a Kazakh order; I prefer as the more rational opinion Signum's opposing view: there is no obvious analogy between a local Kazakh order and a foreign order. 22 The seventh proposition is that for protection against disclosure under both the Civil Code and the Criminal Code, damage or potential damage must be demonstrated, and none is shown here. So far as the Criminal Code is concerned, it is clear that for the crime referred to in Article 200(2) to be committed there must have been damage, although the evidence of Signum suggests that what is "considerable damage" for that purpose amounts to not much in terms of quantum. So far as the Civil Code is concerned, liability to pay damages would presumably be dependent on showing that there was damage, but that does not mean that there is no civil obligation in the absence of damage (any more than under our law, the absence of damage does not mean that there are no civil obligations, although there may be no liability to pay damages). Interestingly, no submission was made as to whether damage is required for the Kazakh concept of "administrative liability"; there is nothing in the evidence to suggest that it is. 23 Assuming, for present purposes, that there was evidence from which it could be concluded that the documents, production of which is sought, were commercial secrets within Kazakh law, I have come to the conclusion that their production in accordance with an order of this Court would not contravene the criminal law of Kazakhstan. I reach that conclusion primarily because one essential component of criminal liability under Article 200(2) of the Criminal Code is that the disclosure or divulgence be for selfish, personal, or venal interests. A disclosure pursuant to an order, even of a foreign court, in compliance with the order of that Court, would not be for selfish, personal, or venal interests. Accordingly, it seems to me that the Temujin defendants would not contravene the Criminal Code of Kazakhstan so as to be exposed to criminal liability if they were to produce all client files in compliance with an order of this Court for their production. That conclusion is reinforced, in respect of the third to seventh defendants, by my inability to be satisfied that corporate criminal liability is known to Kazakh law (although given the possibility that officers might be liable, I would have reached my conclusion less readily if that were its only basis). 24 I come secondly to the question of civil liability. For the reasons I have already given, I do not accept that there can be no civil obligation without damage, although liability to pay damages would not arise in the absence of damages. As I have already foreshadowed, I do not accept the argument that disclosure in accordance with a foreign court's order would be a lawful disclosure for the purposes of Kazakh law. Accordingly, disclosure of the relevant documents would potentially involve infraction of civil obligations imposed by Kazakh law. However, if accompanied with appropriate protections, it would not likely result in liability to pay damages, and this would be relevant to the weight this factor might otherwise attract as a discretionary consideration. 25 I turn then to the question of administrative liability under the Code on Administrative Violations of the Republic of Kazakhstan. This Code creates a liability to pay penalties in respect of misconduct which falls short of criminal conduct. The concept is one rather similar, as I perceive it, to our concept of civil penalties under, for example, the (CTH) Trade Practices Act 1974 or (CTH) Corporations Act 2001. Article 158 of the Code on Administrative Violations provides that a violation of the duty to preserve the confidentiality of a commercial secret is subject to a fine. Professor Butler first expressed the view that the Administrative Code was not applicable beyond the limits of Kazakhstan, nor contravened by divulgence in accordance with a court order. As to the first of those propositions, it appears to be irrelevant so far as disclosure to take place in Kazakhstan is concerned; as to the second, no basis for that opinion, even if it was limited to the Kazakh order and not a foreign order, is apparent. Signum referred to other provisions of the Administrative Code - including Article 4 (which provides that an administrative violation committed on the territory of Kazakhstan is recognised as an action which started and continued or finished on the territory of Kazakhstan), and Article 37 (from which it appears that foreign legal entities that commit administrative violations in Kazakhstan are subject to administrative responsibility). In his reply affidavit, Professor Butler said, in paragraph 17, that the third to fifth defendants could not be brought to administrative or criminal responsibility for any divulgence of a criminal secret. However, this opinion appears to depend on the non-applicability of the Criminal Code to corporations, and no basis is apparent for its extension to administrative responsibility - particularly in the light of Article 37, referred to by Signum, which expressly refers to administrative liability of foreign legal entities. Otherwise, in his reply report, Professor Butler simply affirms his original position with regard to administrative responsibility, without adding anything. Although it seems probable that the evidence before me is far from complete, so far as it goes it supports the view that administrative liability would be incurred by a violation of the duty to preserve the confidentiality of a commercial secret, and thus by the disclosure in Kazakhstan pursuant to an order of this Court of documents containing confidential commercial secrets. 26 All that said, however, the question remains whether the documents in question contain confidential commercial secrets. I have been able to find no evidence whatsoever from which it could be inferred that those documents contain a confidential commercial secret. Save for their description as "client files", there is no description of their contents. There is no evidence of any measure taken for the preservation of their confidentiality. There is no evidence that anything in them would have commercial value arising from their being kept secret. There is nothing beyond a mere assertion of confidentiality by or on behalf of the relevant clients of the Temujin companies. 27 In those circumstances, whatever the position might otherwise have been, the defendants have wholly failed to show any basis for concluding that the material in the client files contains or includes confidential commercial secrets. Accordingly, there is no basis upon which I could uphold their claim to confidentiality in respect the client files, even if the Court were to have regard to potential liability under foreign law as a relevant discretionary consideration as to whether or not production should be ordered. Legal professional privilege 28 So far as the claim for legal professional privilege is concerned, it is not difficult to suppose that in the client files there would be documents which fall within our notion of client legal privilege under (NSW) Evidence Act 1995, s 118. However, at this stage, all that is apparent is a bald and unparticularised claim that all of the documents are subject to that privilege or, alternatively, a list prepared by the lawyers now acting for Temujin in Kazakhstan which denotes certain of the documents produced as subject to the claim, but provides no facts or evidence from which the correctness of that claim can be ascertained or tested. To sustain any claim for legal professional privilege would require further evidence. No application for an adjournment for that purpose was made. And in this context, the history of previous defaults is of some relevance. In any event, there was no application for an adjournment on the basis that an opportunity was sought to put further evidence supporting the claim for privilege before the Court. In those circumstances, bearing in mind that claims for legal professional privilege must be properly proved (as explained by the Full Court of the Federal Court in Barnes v Commissioner of Taxation [2007] FCAFC 88; (2007) 242 ALR 601; see also Carbotech-Australia Pty Ltd v Yates [2008] NSWSC 1151), there is an absolute want of evidence from which it could be inferred in this case that any particular document was entitled to legal professional privilege. 29 Accordingly, in my view, the defendants have failed to establish that production of the client files would expose them to any form of liability under Kazakh law, or to sustain a claim for privilege under the law of the State of New South Wales. I will, therefore, order that the documents described in discovered documents 131 - 172 be produced for inspection, and I will in due course hear the parties on the formalities for implementation of that order. Further and better discovery 30 I turn then to the application for further and better discovery in respect of the documents referred to in order 4(d) of the Notice of Motion. 31 The proposed order is in substance no different from orders already made for discovery of those categories of documents. An order for further and better discovery is made only if the Court is persuaded that the discovery has been shown to be, or manifestly is, incomplete. Ordinarily, the affidavit of discovery is regarded as conclusive. 32 The plaintiff contends that the discovery so far given in respect of the relevant categories is incomplete. The evidence it adduces in support of that contention amounts to affidavit evidence of its solicitor deposing on information and belief to an opinion formed by the principal of MWP that an inference is to be drawn that additional documents in those categories are in existence and are in the possession of the defendants. On the other hand, the defendants' solicitor has sworn an affidavit that he is instructed and informed, and believes, that the defendants have no such documents in their possession. No documents have been produced - whether as a result of subpoena or otherwise - which would tend to show that the discovery given is incomplete. With the exception of certain bank statements which are missing from those discovered and in respect of which the defendants have undertaken to make a further search and obtain copies if they cannot be found, I am not satisfied that a case for further and better discovery has been made out. Harman undertaking 33 The remaining aspect of MPW's application is that it be released from its Harman undertaking, to permit use of the client files in connection with the arbitration pending in the United Kingdom. 34 In Wellness Pty Ltd v Hamilton-Bond [2002] NSWSC 1259, Campbell J, as his Honour then was, said (at [8]; references omitted): The test which the Court uses in deciding whether it will grant permission for the documents to be used in some other way, when (as here) the documents have not been read out in open court, is that the release of the documents will not be allowed save in special circumstances and when such use will not occasion injustice to the person who produced the documents under subpoena. … Deciding whether "special circumstances" have been made out involves a balancing exercise which takes into account the particular nature of the material produced, the policy underlying the implied undertaking, and any other relevant factors, and asks whether the needs of justice are better served by relieving from or maintaining the undertaking … . 35 I am content to accept that there is a commonality of issues between these proceedings and the arbitration in England in connection with which it is proposed that the client files might be used. However, it is also to be borne in mind, first, that what is presently sought is a blanket authorisation to use a vast quantity of documents not yet produced, and the full detail of which is not yet known (as distinct from an application to use a particular document, the consequences of which might more readily be ascertained if it were known); secondly, that although I have concluded that evidence has not been adduced to make good the claim for privilege and confidentiality, nonetheless the documents in question are files in respect of the Temujin companies having acted for third party clients in which those third parties have a legitimate interest, and which they object to being produced; and thirdly, that the timing of this application, and the context of the correspondence that surrounds it, suggests that pursuit of access to the client files in these proceedings has been motivated in large part by the desire to obtain them for use in the UK arbitration, such that these proceedings are being used, at least in part, in aid of the UK arbitration. Thus, in a letter from Clayton Utz to Henry David York dated 18 July 2008, MWP's solicitors wrote: It appears that your clients are attempting to delay the provision of discovery in New South Wales so that such discovery cannot be used by our clients (with leave of the Court) in the related London arbitration. 36 That very assertion indicates that the pendency of the UK arbitration was a significant motivating factor in the pursuit of this application. While it is one thing to permit documents obtained on discovery, which appear to have relevance to other proceedings, to be used for that additional purpose, it is quite another effectively to sanction the use of the instant proceedings as an ancillary means of obtaining discovery for the foreign proceedings. If the plaintiffs wished to obtain these documents for use in the arbitration, there were ample means for them to do so by discovery, subpoena or otherwise in the arbitration. In those circumstances, I am entirely disinclined to relieve the plaintiffs from their implied Harman undertaking in connection with the client files. Conclusion 37 Accordingly, I will order production for inspection of the client files. I will not make an order for further and better discovery as sought in paragraph 4(d) of the Motion. I will not release the plaintiffs from the Harman undertaking in respect of the client files, and I will otherwise dismiss the Motion. 38 I order that by 11 November 2008 the defendants produce for inspection in Almaty, Kazakhstan, and otherwise in accordance with the regime provided for in order 6 made on 28 May 2008, documents numbered 131 - 172 inclusive in the defendants' amended list of documents. 39 The plaintiff has been far from entirely successful, but has obtained a measure of success on the central issue in the motion. I order that the defendants pay half the plaintiff's costs of motion. I order that the exhibits be returned. **********

Michael Wilson & Partners Ltd v Robert Colin Nicholls & ors

At a glance

Court

Decision date

Before

Source

Judgment (12 paragraphs)

Parties

Cases Cited (5)

Cited By (5)