Brock Delappe Ltd v Companies Act 2014 (Approved)

Factual and Procedural Background

This opinion concerns an application under section 212 of the Companies Act 2014 involving Company A and certain individuals. The respondents sought orders to prevent the applicant from using or disseminating certain documents obtained by the applicant, on the basis that these documents were improperly obtained and privileged. The applicant contested the claim of privilege and argued that any privilege should be set aside due to the respondents' alleged iniquitous conduct revealed by the documents. The court delivered a detailed judgment finding that all but one of the documents were privileged and that the privilege should not be set aside. Following this judgment, the court invited submissions on the orders to be made, focusing particularly on costs and the publication of the judgment.

Legal Issues Presented

1. Whether the documents obtained by the applicant were privileged.
2. Whether the privilege over the documents should be set aside due to alleged iniquitous conduct by the respondents.
3. The appropriate costs order following the determination of privilege over the documents.
4. Whether and how the judgment should be published given the privileged nature of the documents discussed.

Arguments of the Parties

Respondents' Arguments

• The respondents asserted that eight of the nine documents were privileged.
• They contended that the applicant had given an undertaking not to access the first respondent’s email account, obviating the need for further orders.
• They argued that this constituted a decisive event in the proceedings, justifying an order for costs in their favour.
• They acknowledged the constitutional requirement for open justice but submitted that the court has inherent jurisdiction to impose restrictions on publication where justified, relying on Gilchrist v Sunday Newspapers.
• They proposed measures to prevent reference to the judgment in future legal submissions and to ensure the trial judge had not read the judgment to avoid prejudice.

Applicant's Arguments

• The applicant maintained that the documents were not privileged.
• Argued that even if privilege applied, the respondents’ iniquitous conduct justified setting aside the privilege.
• Regarding costs, the applicant contended that the outcome was a "score draw" since privilege was rejected in respect of one document, and thus no clear event favoured either side.
• Suggested it was reasonable to contest the issues raised.
• On publication, the applicant proposed delaying publication of the judgment until after the substantive proceedings to preserve the effectiveness of the respondents’ remedies without materially impacting open justice.

Table of Precedents Cited

Court's Reasoning and Analysis

The court undertook a detailed examination of the documents and affidavits, concluding that all but one document were privileged. The single exception, document KD10, was found not to attract privilege because it was legal advice given to the company before the solicitors acted for the individual respondents, and the applicant, as a director, was entitled to access it. The court rejected the submission that privilege should be set aside due to iniquitous conduct revealed by the documents.

On costs, the court recognized the respondents’ overall success in establishing privilege but also acknowledged the applicant’s significant success regarding KD10. Applying established principles and precedents, the court apportioned the costs with 85% attributed to the respondents’ success and 15% to the applicant’s, resulting in a net costs order in favour of the respondents for 70% of the costs. The court ordered a stay on the costs pending determination of the substantive litigation.

Regarding publication, the court emphasized the constitutional imperative of open justice and was not persuaded that delaying publication until after the trial was compatible with this principle. The court noted that while judges may inadvertently be exposed to privileged information, they are expected to disregard it in their deliberations. The court considered that appropriate orders could mitigate prejudice without restricting publication.

The court accepted an agreed order from the parties preventing the applicant from using or disseminating the privileged documents and ordered that the applicant’s affidavit containing these documents not form part of the pleadings or be presented in future proceedings. The applicant was granted liberty to file a new affidavit in reply. The court also acknowledged the respondents’ concern that the judge delivering this ruling should not hear the substantive trial and suggested informing the trial listing judge accordingly.

Holding and Implications

DISPOSED OF

The court made the following key orders: the applicant is prohibited from using or disseminating the privileged documents identified; the applicant’s affidavit containing these documents will not form part of the pleadings or be presented at trial; and the applicant may file a new affidavit in reply. A costs order was made in favour of the respondents for 70% of the interlocutory application costs, with a stay pending the substantive case. The court emphasized the constitutional requirement for open justice by declining to delay publication of the judgment, while allowing for measures to mitigate prejudice. No new legal precedent was established; the decision applies settled principles to the facts of this interlocutory dispute.