Laager v Kruger

• Jurisdiction: Cayman Islands
• Judge: (Harre, C.J.)
• Judgment Date: 20 June 1997
• Date: 20 June 1997
• Court: Grand Court (Cayman Islands)

Grand Court

(Harre, C.J.)

LAAGER

and

P. KRUGER and B. KRUGER

A.J. Jones for the plaintiff;

A. Hochhauser, Q.C., J.R. McDonough and S.G. Hellman for the defendants.

Cases cited:

(1) Crest Homes PLC v. Marks, [1987] A.C. 829; [1987] 2 All E.R. 1074, considered.

(2) Distillers Co. (Biochemicals) Ltd. v. Times Newspapers Ltd., [1975] Q.B. 613; [1975] 1 All E.R. 41.

(3) Miller v. Scorey, [1996] 1 W.L.R. 1122; [1996] 3 All E.R. 18, distinguished.

(4) Riddick v. Thames Board Mills Ltd., [1977] Q.B. 881; [1977] 3 All E.R. 677.

(5) Sybron Corp. v. Barclays Bank PLC, [1985] Ch. 299; (1984), 128 Sol. Jo. 799.

(6) Wilden Pump & Engr. Co. v. Fusfeld, [1985] F.S.R. 581, followed.

Civil Procedure-discovery-use of information obtained-no breach of implied undertaking not to use documents for collateral or ulterior purpose by using financial information obtained by discovery following judgment in earlier proceedings to enforce judgment against debtor”s personal and corporate assets

The plaintiff applied for declarations that he be allowed to enforce a judgment obtained in related proceedings, against property owned by the defendants and against the assets of companies owned by them.

In giving judgment for the plaintiff in the related proceedings, the Grand Court ordered under the Grand Court Rules, O.48, r.1 that the first defendant be orally examined about his property, that he produce all books and records in his possession relating to his assets, and that the plaintiff be permitted to take copies of them. The plaintiff commenced the present proceedings on the basis of information thereby obtained.

The defendants, who were husband and wife, applied for the proceedings to be struck out on the ground that they were an abuse of the process of the court, since the plaintiff had breached his implied undertaking not to use documents obtained by discovery in one action other than for the purposes of that action, and not for any collateral or ulterior purpose. In the related proceedings, the Grand Court had held that there was no breach of that undertaking in using the information disclosed in the related action to enforce a Mareva injunction obtained in the present action against the first defendant”s assets in Florida. The Grand Court proceedings are noted at 1996 CILR N-2.

The defendants submitted that (a) since it was settled law that when the plaintiff obtained discovery, he impliedly undertook not to use the information for any purpose beyond the proceedings in which it was obtained, he was in contempt of court in pursuing the present proceedings, including obtaining an injunction in respect of the defendants” assets; and (b) since the court had at no stage given the plaintiff leave to use the discovered documents in a separate action (and it would not be proper for it to grant leave retrospectively), the present proceedings were an abuse of the court”s process and should be struck out accordingly.

The plaintiff submitted in reply that (a) since the present proceedings did not arise from a cause of action separate from that in the proceedings in which discovery had been obtained, but were rather commenced solely for the purpose of enforcing the earlier judgment against the enjoined

assets, he was not in breach of his implied undertaking; (b) consequently, there was no contempt of court and the present proceedings should not be struck out as an abuse of process; and (c) moreover, this issue had already been adjudicated upon in the plaintiff”s favour when leave was given to enforce the Mareva injunction in Florida.

Held, refusing to strike out the proceedings:

(1) Whilst the plaintiff had given an implied undertaking upon obtaining discovery in the earlier proceedings against the first defendant that he would not without the court”s leave use the documents or information obtained for any purpose other than for those proceedings, he would not be in breach of that undertaking merely by using the information obtained under the Grand Court Rules, O.48, r.1 to enforce the judgment against the defendants” assets. The present proceedings were not only closely related to the earlier proceedings but were commenced solely for the purpose of execution and accordingly there was no contempt of court or abuse of the court”s process (page 315, lines 26–31; page 316, lines 37–42).

(2) The court had not previously adjudicated upon this matter, since its earlier ruling giving leave to the plaintiff to use the information to enforce a Mareva injunction in proceedings in Florida was confined to that issue only (page 317, lines 37–42).

40	HARRE, C.J.: This was an application to strike out Cause No. 266 of
1996 as an abuse of the process of the court. On May 3rd, 1996 summary
judgment was entered in Cause No. 77 of 1996, in which the present
plaintiff was also the plaintiff and the first defendant was the sole
defendant. It provided that he attend to be orally examined about the
45	debts owing or property owned by him and produce all books and records

in his possession relating to those matters, and that the plaintiff (acting by
his attorneys) be permitted to inspect and take copies of certain relevant
books and records.
On May 24th, 1996 the plaintiff issued a writ commencing the present
5	action. It was based upon the information which the plaintiff had obtained
as a result of the order for discovery to which I have referred. The
application to strike out is based on the alleged breach of the implied
undertaking that documents obtained upon discovery and information
derived from those documents will only be used for the purposes of the
10	action in which they have been disclosed and not for any collateral or
ulterior purpose.
In determining this question it is necessary to look at a number of
authorities. The authority on which the defendants principally rely is
Miller v. Scorey (3). That was a case in which trustees, having started an
15	action claiming an account of profits, became aware in the course of
discovery in that action of documents which strongly suggested that one
of the defendants had paid a bribe to the others. They started a fresh
action against the same three defendants which could not have

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