Consolidated Contractors International Company SAL & Anor v Masri [2011] EWCA Civ 21

Case No A3/2010/2580

[2011] EWCA Civ 21

IN THE HIGH COURT OF JUSTICE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION, COMMERCIAL COURT

MR JUSTICE DAVID STEEL

[2010] EWHC 2640

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 21/01/2011

Before

PRESIDENT OF THE QUEENS BENCH DIVISION

LADY JUSTICE SMITH

LORD JUSTICE AIKENS

Between

CONSOLIDATED CONTRACTORS INTERNATIONAL COMPANY SAL (2) CONSOLIDATED CONTRACTORS (OIL AND GAS) COMPANY SAL Judgment Debtors/ Appellants/Applicants- and –MUNIB MASRI Judgment Creditor/ Respondent

Mr James Lewis QC and Mr Ben Brandon (instructed by SC Andrew LLP, London) for Appellants

Mr Simon Salzedo (instructed by Simmons & Simmons, Solicitors, London) for Respondent

Hearing Hearing dates : 12 January 2011

Judgment

Lord Justice Aikens :

Background to this appeal

[1]Consolidated Contractors International Company SAL (“CCIC”) and Consolidated Contractors (Oil and Gas) Company SAL (“CCOG”) are part of the international construction group known as CCC. I will refer to the two former companies collectively as “the companies”. Both are incorporated in the Lebanon. Mr Wael Khoury is a member of the Khoury family which is the ultimate owner of the CCC Group. He and his two brothers, Tawfic and Samer Kuoury, have the day to day control of that group. Mr Wael Khoury took no part in the present aspect of the current proceedings although he is a party . Mr Munib Masri is a businessman resident in Amman, Jordan.

[2]In July 2006, Gloster J delivered a judgment following a contested liability action in the Commercial Court. Gloster J found that the companies were parties to an agreement with Mr Masri concerning an oil concession in Yemen, known as the “Masila Concession”. The agreement has been known as the 1992 Agreement. Gloster J further found that the companies were liable to Mr Masri for amounts due pursuant to that agreement and until the end of the Masila Concession. Following the liability judgment, quantum was assessed at US$ 75 million. The companies have not paid this outstanding judgment debt, despite the fact that, on their own admission, they have resources of great magnitude.

[3]Since July 2006 Mr Masri has attempted to enforce this judgment debt, both in this jurisdiction and in many others. It is clear that the companies intend resisting enforcement with all the legitimate powers at their disposal, because they protest that Mr Masri should never have won his action in the first place. Mr Masri’s determination to enforce the judgment and the companies’ equal determination to resist it has resulted in many multi-jurisdictional proceedings. The parties have expended no less than £8 million on legal costs in the English enforcement proceedings alone.

[4]Since Mr Masri obtained judgment he has attempted to enforce the judgment debt in this jurisdiction by various means. These include an order under CPR Part 71, freezing orders, an order for an affidavit of assets and, by orders of Gloster J and Tomlinson J, on respectively, 20December 2007 and 21 October 2008, receivership orders. The first of the two receivership orders was in respect of CCOG and the second was in respect of CCIC. The two receivership orders appointed a receiver to collect revenues of these two companies from oil sales relating to the Masila Concession and the international construction contracts concluded by CCIC. Gloster J made a third receivership order on 1 December 2010 but that order remains subject to further argument. There is a single receiver, Mr LA Manning, who is a partner of Deloitte. A third receivership order has been granted by Gloster J at a without notice hearing on 1 December 2010 over CCOG’s rights to the oil in the Masila Concession. This third order remains subject to further argument.

[5]On 11 May 2010, Mr Masri’s instructing solicitors issued and served an application notice on behalf of Mr Masri, as Judgment Creditor, for a declaration pursuant to CPR Part 40.20 that the companies, as Judgment Debtors, were in contempt of court. The application notice also sought orders that(i) Mr Wael Khoury be committed for the acts of contempt which it was alleged had been perpetrated by the companies as Judgment Debtors and

(ii) that the companies be fined for committing acts of contempt of court.

[6]A large number of allegations of contempt were made. For present purposes the relevant allegations against the companies are that:(i) they have received revenues under certain identified contractual entitlements over which the receiver had been appointed, to the exclusion of the receiver.

(ii) The companies failed to cooperate with the receiver as required by the relevant orders, or positively interfered with the receivership.

(iii) The companies failed to provide information or documents as required under various orders of the court in the enforcement proceedings.

[7]The companies’ defence to these allegations is that they were entitled to ensure compliance with legal requirements in the various states outside the UK where enforcement was being attempted. Furthermore the companies allege that it has not been possible to comply with the orders of the English court since December 2008 when judicial administrators of the companies were appointed by the Lebanese courts. It is further alleged by the companies that, even if any contempt has been committed, it is not contumacious.

[8]The hearing of all these contempt allegations is due to take place before Christopher Clarke J at the end of this month, i.e. January 2011. The hearing is fixed for 8 days.

[9]On 5, 6 and 10 October 2010, David Steel J held a Case Management Conference (“CMC”) in relation to the committal application. On the last permissible day in the run-up to this CMC, the companies issued nine application notices supported by nine witness statements with numerous exhibits, including an experts’ report on Lebanese law. The companies sought nine different orders. The majority of these are not relevant to the proceedings before this court and I will not deal with them.

[10]The relevant applications and orders made by David Steel J centre on four matters. The first concerns the fact that enquiry agents were instructed on behalf of Mr Masri to assist in obtaining information that would help the enforcement process. The enquiry agents were specifically instructed to search for documents which might assist Mr Masri in enforcing the judgment debt.

[11]On 11 May 2010, Mr Andrew Bartlett of Mr Masri’s solicitors, Messrs Simmons & Simmons, swore his first affidavit in support of the contempt application. Mr Bartlett states, at paragraph 11, that the enquiry agents were instructed to search for such documents using only legitimate means.

[12]Paragraphs 11 and 12 of that affidavit continue:

“11 As part of this search the enquiry agents searched for documents which had been discarded by [the companies] and which might assist Mr Masri in enforcing the Judgment Debt. In particular, they searched the documents discarded as rubbish on the pavement outside the London offices of [the companies]. I understand where they identified documents which might be relevant they made copies of those documents and returned the originals to the refuse sacks outside [the companies’] offices. The enquiry agents have confirmed to me that they have used these methodsof obtaining documents for use in court proceedings on several other occasions before and that their conduct has not been criticised by the court when the means of obtaining the documents have been disclosed. I say this on the basis of information provided to me by the relevant enquiry agents, which I believe to be true. 12. The documents held by my firm have not been used for any purpose other than the ongoing enforcement proceedings between the Judgment Creditors and the Judgment Debtors. ”

[13]The companies assert that this process of searching for and finding documents in the companies’ rubbish outside their London offices involved unlawful, not to say criminal, conduct (allegedly trespass, theft and/or breach of confidence) which will justify excluding any evidence, particularly documentary evidence obtained as a result of those activities. The companies go further. They assert that the contempt application is therefore an abuse of process which should be struck out or stayed.

[14]David Steel J decided that the application to strike out or stay the whole contempt application and the application to exclude any evidence obtained as a result of the enquiry agents activities should be dealt with at the substantive hearing of the contempt application. However, David Steel J was invited by the companies at the CMC to make two orders concerning this activity of the enquiry agents which are relevant to the proceedings before us. First, he was asked to make an order that Mr Masri (through his solicitors) should identify “the source” of “matters of information or belief” which had been given to Mr Bartlett concerning the activities of the enquiry agents in collecting documents from rubbish outside the offices of the companies. In practice, this was an application that Mr Masri identify the individual or individuals in the enquiry agents that provided Mr Bartlett with the information set out in paragraph 11 of his first affidavit and the name of the firm of enquiry agents for whom the individual(s) worked. The companies relied on the provisions of CPR Part 32, Practice Direction Paragraph 4.2 (1) and (2).

[15]David Steel J rejected that application in [42] – [47] of his judgment of 21 October 2010.

[16]The second application in relation to the activities of the enquiry agents is that Mr Masri should be ordered to give disclosure of certain classes of documents relevant to the activities of the enquiry agents referred to in paragraph 11 of the first affidavit of Mr Bartlett. The scope of the application was obscure, even at the hearing before us. It certainly was intended to include all instructions and reports and any other documents in Mr Masri’s “control” (within the definition at CPR Part 31.8) concerning the activity of the enquiry agents which are relevant to the companies’ case that(a) those activities were unlawful/illegal/criminal and

(b) that evidence obtained by such activity should not be admitted in the contempt proceedings. It also appeared to include an application for disclosure of documents that had originally been produced by the companies themselves but had been put out as rubbish which had been searched by the enquiry agents.

[17]Before the judge, the companies argued that they were entitled to such disclosure on several grounds. First, it was submitted that the contempt application constituted proceedings of a quasi-criminal character and that the committal application was a quasi-criminal “trial”, so that the relevant principles of disclosure were those set out in the Attorney General’s Guidelines. It was therefore submitted that Mr Masri was obliged to disclose “all documents which might reasonably be considered capable of undermining the case of the claimant ….. or of assisting the case for [the companies]”. Secondly, it was submitted that because the contempt application must be subject to the terms of

Article 6 of the ECHR

, and that the companies were entitled to a fair hearing of the contempt application, that included the right to disclosure of the classes of documents sought. Thirdly, it was submitted that there should be this disclosure in order to ensure that there could be a fair disposal of the contempt application, including the companies’ application to exclude evidence obtained as a result of the enquiry agents’ activities.

[18]David Steel J rejected all three bases and refused to order any such disclosure.

[19]The third issue concerns the companies’ application for disclosure and inspection of part of two specific documents, referred to as exhibit ACB7/44 and exhibit ACB7/55. Both these documents were exhibited to the first affidavit of Mr Bartlett dated 11 May 2011.

[20]Exhibit ACB7/44 is an email which was originally sent from Mr Samer Khoury to a large number of other people. It had attached to it a response by the companies to a press release which had been circulated in some newspapers and other media by Mr Masri or his associates. The response set out the companies’ position in relation to Mr Masri’s claims and Mr Masri’s attempts to enforce the Commercial Court judgment. Mr Khoury asked the recipients of the email to use “as necessary” the response attached to the email and to pass it on to clients of the companies and to banks if appropriate.

[21]It is clear that this email and its attachment were forwarded by someone to Mr Bartlett. The companies alleged that it was forwarded in breach of a duty of confidentiality and/or in some other unlawful manner. It is therefore alleged that this evidence was obtained as a result of unlawful conduct procured by Mr Masri or “his servants or agents”. There is no evidence supporting the allegation of breach of confidentiality or other unlawfulness.

[22]The judge refused to order disclosure and inspection of the part of the email (either hard-copy or electronic version) which would have indicated the sender of it to Mr Bartlett. The judge accepted the submission on behalf of Mr Masri that that part of the document was protected by legal professional privilege: [54] of his judgment.

[23]The second specific documents known as exhibit ABC7/75 is said by Mr Bartlett to have been removed from the companies’ refuse by the enquiry agents. The document is a printout of an email sent using a Blackberry which is signed by “Stephen”. The companies allege that it is unlikely that this document was removed from the companies’ refuse by the enquiry agents. It is said that there is a complete absence of the kind of “header” information as is usually seen on printouts of emails. The companies wish to have disclosure of what they claim is the original and to have inspection of it, which I infer is intended to mean inspection of a document which includes the “missing” header. The judge concluded that there was no basis for a suggestion that this document had been tampered with and he refused the application for disclosure/inspection.

[24]The last relevant issue for the present proceedings concerns to the companies’ application to the judge for disclosure of documents in the control of the receiver. This application for disclosure was made against the receiver who had been appointed in respect of both receivership orders, ie. Mr Manning. The companies sought an order for disclosure by the receiver of all communications between him (in his capacity as receiver of either or both of the companies) and Mr Masri or his agents (including, but not limited to, Simmons & Simmons) and all communications between the receiver and either or both of the companies and any third parties. David Steel J rejected this application: see [49] of his judgment. Permission to appeal to this court.

[25]On 12th December 2010 Thomas LJ refused to grant permission to the companies in respect of all of the orders referred to above. The application for permission to appeal was renewed at an oral hearing before Rix LJ on 16 December 2010.

[26]Rix LJ gave limited permission to appeal. First, he gave permission on the question of whether the identity of the source of the information that Mr Bartlett gives in paragraph 11 of his first affidavit should be given to the companies. Secondly, he gave limited permission to appeal on the question of disclosure of documents relating to the enquiry agents’ activities. He refused permission to argue that there should be disclosure by Mr Masri in relation to documents that originated from the companies: see [11] and [17] of the judgment. Rix LJ also refused to give permission to appeal the issue of whether there should be “general disclosure”, under what had been Application 1 before the judge: see [11] of his judgment. That was the ground on which the judge had considered the argument that there should be general disclosure based on the Attorney General’s Guidelines: see [26] of David Steel J’s judgment. Therefore, Rix LJ refused permission to argue that ground.

[27]Rix LJ did give limited leave in relation to the application for disclosure of documents that were relevant to the question of whether the court should exclude documents obtained by the enquiry agents from the rubbish sacks outside the companies’ offices. However, it is clear from [17] of Rix LJ’s judgment that he was refusing permission to argue that there was a general right of disclosure based on the Attorney General’s guidelines or indeed any basis other than that provided in the Civil Procedure Rules. Rix LJ also emphasised at [25] that permission to appeal did not extend to “…any reaching out for further unused material, save to the extent that there is any such material which throws light on the argument of exclusion. That will not, I think, be in the unused material itself derived from the rubbish. It might arise in some other way”.

[28]Rix LJ adjourned the question of permission to appeal on the question of disclosure and inspection of the two individual documents and discovery by the receiver. Those applications were renewed before us by Mr Lewis QC, who appeared before us for the companies.

[29]We heard the oral argument concerning the five questions the companies wished to pursue on Wednesday 12 January 2011. We gave our decisions on each of them in the form of a draft order which was communicated to the parties on Thursday 13 January 2011. We allowed the appeal in relation to the first issue (disclosure of the identity of the source of the information in paragraph 11 of Mr Bartlett’s first affidavit) but dismissed the appeal on the second issue. We dismissed the applications on the remaining three issues.

[30]These are my reasons for those decisions. Issue One: disclosure of the identity of the source of the information in paragraph 11 of the first affidavit of Mr Bartlett

[31]As already noted the basis of this application is CPR Pt 32 Practice Direction 32PD.4 at paragraph 4.2. This provides: “An affidavit must indicate:(1) which of the statements in it are made from the deponent’s own knowledge and which are matters of information or belief, and

(2) the source for any matters of information or belief”.

[32]David Steel J had held, at [47], that there was a distinction between a requirement to “indicate” and one to “identify” the source of any matter of information or belief. I cannot agree with that distinction. This paragraph in the Practice Direction concerns affidavits, which are the most formal type of written evidence. Affidavits have to be used to adduce evidence in any application for an order against anyone for an alleged contempt of court. Therefore, in my view the aim of that paragraph of the Practice Direction is to ensure that a person against whom serious allegations are being made can identify the source of any information or belief that is not within the deponent’s own knowledge so that the facts deposed to on the basis of information or belief can be investigated. That is only fair to the person against whom the evidence in the affidavit is directed. Therefore, I would interpret the phrase “…must indicate…the source for any matters of information or belief” as meaning that, save in exceptional cases, the deponent must identify the source of the relevant information or belief. If the source is a person, that person must, save in exceptional cases, be identified with sufficient certainty to enable the person against whom the affidavit is directed to investigate the information or belief in accordance with the rules of court or other relevant legal principles.

[33]I recognise that there may be particular occasions where the “source” must not be specifically identified, eg. where confidentiality is in issue; and there may be other circumstances which I will not attempt to define. In such cases the wording of the Practice Direction is sufficiently flexible, by using the word “indicate”, to ensure that justice can be done.

[34]Mr Lewis relied on a statement made by Patten J in Clarke v Marlborough Fine Art

[2002] 1 WLR 1731

at [36]. Patten J was concerned with similar wording at 32PD 18.2. However it is clear that he did not have the present situation in mind when making his comments. They do not, therefore, directly support the argument he puts forward.

[35]However, for the reasons I have given, it is my view that Mr Masri must identify the source of the information concerning the enquiry agents’ activities in gathering documents from the rubbish of the companies set out in paragraph 11 of his first affidavit. I assume that source was a person or persons; in which case he or they must be identified by name. Mr Salzedo, for Mr Masri, did not submit that there were exceptional circumstances which meant that the names of personal sources of information should not be given in this case if the principle I have set out above applies. Because the information set out in Mr Bartlett’s affidavit was provided by a person who was engaged in a professional activity upon the instructions of Mr Masri’s solicitors, I think it right that the name of the enquiry agents who employed the source of the information should also be given.

[36]I emphasise that this order does not mean that Mr Masri is obliged to identify anyone else, eg. anyone else who was engaged in the actual work that was undertaken by the enquiry agents, unless such a person was the source of the information given to Mr Bartlett. Issue Two: Disclosure of documents by Mr Masri relating to the activities of the enquiry agents.

[37]Mr Lewis attempted to argue that he was entitled to seek discovery of documents in the control of Mr Masri on a broad basis, as he had done before the judge. However, as noted above, the scope of the permission to appeal on this issue that was granted by Rix LJ was narrow. In any event, as a result of discussion in the course of argument, Mr Lewis indicated that his application for discovery was limited to disclosure of documents in the control of Mr Masri within the following classes:(a) all instructions given to the enquiry agents to obtain documents to assist in enforcing the judgment obtained by Mr Masri;

(b) all reports by the enquiry agents on such activities; and

(c) any other documents relating to the activities of the enquiry agents relevant to the issue of whether documents were obtained unlawfully by the enquiry agents.

[38]Mr Lewis submits that, whether this issue is approached on the basis of the Attorney General’s Guidelines, or the provisions in the CPR, fairness demands that the companies have disclosure of these classes of documents to ensure that they can pursue the issue, which is to be determined at the contempt application hearing, that the enquiry agents obtained the documents illegally and so they must be excluded.

[39]David Steel J dealt with this issue (having rejected the application for general disclosure at [29]) at [30] to [41]. His first conclusion was that he doubted whether, on the basis of the material before him, there was even a prima facie case that there had been any unlawful conduct by the enquiry agents in obtaining the documents. In this regard he considered the possibility of theft, trespass and breach of confidence. Secondly, he concluded that, even if there was a prima facie case of unlawful conduct, the prospect of persuading the judge hearing the contempt application to exclude the documents obtained by the enquiry agents was “wholly remote”: [36]. David Steel J also noted that it was not suggested by the companies that they could not have a fair trial: [37].

[40]The last conclusion of

the judge is set out at [41] of his judgment, where he states:

“The inference I draw is that the exercise is primarily directed at an unfocussed inquiry into the role of the inquiry agents and the resulting activities of the claimant's solicitors and not to any issue in the application itself. In short the whole purpose from the defendants' point of view seems to boil down to research into the question whether the claimant's solicitors have cherry picked the documents so as to mislead the court. In short it is a fishing expedition into entirely collateral territory.”

[41]Mr Lewis submitted to us that the judge applied the wrong tests in reaching his conclusion on the issue of disclosure of documents relating to the activities of the enquiry agents. In my view that argument is wholly unsustainable. Proceedings for committal or other penalties for contempt are civil proceedings and applications for discovery in relation to them must therefore be governed by the CPR; in particular by Pt 31. That rule applies to discovery in “interlocutory” proceedings as well as trials. It was common ground before us that Pt 31 applies to these contempt proceedings.

[42]Effectively, the companies’ application is for specific disclosure under CPR Pt 31.12. Under paragraph (1) of that rule, the court is given a discretion to order specific disclosure or specific inspection. A court which is determining such an application must consider, amongst other things:(a) the issue to which it is the discovery is relevant;

(b) the extent to which the proposed discovery would aid the party seeking discovery in the resolution of the issue concerned because it might assist their case;

(c) whether disclosure should be ordered in all the circumstances of the case, bearing in mind the “overriding objective” in CPR Pt 1. The judge’s decision on whether to order specific discovery is, ultimately, a discretionary one; he must make a judgment based on the relevant legal principles and the facts of the case.

[43]In this court, the judge’s decision can only be impugned if it is shown that he failed to follow the correct legal principles, or he failed to take into account factors that were relevant or he took into account factors that were irrelevant or his conclusion was wholly wrong. In my view Mr Lewis cannot establish any of those things.

[44]The judge correctly stated that the issue in the contempt application for which this discovery was sought was whether the documents obtained by the enquiry agents should be excluded from use at the contempt application hearing. The judge correctly stated that this depended, in the first place, on whether it could be shown that there was a prima facie case that they had been obtained unlawfully. Mr Lewis argued that the judge was wrong in saying that there was not a prima facie case of theft, because the documents had not been abandoned altogether, but left out for the council refuse collectors to take. Mr Salzedo countered that even if that were the case, there could be no theft in this case because there was no intention by the enquiry agents permanently to deprive the companies of the documents in the refuse bags and so a vital element of the crime was absent: see section 6 of the Theft Act and R v Mitchell

[2008] EWCA (Crim) 850

. I am not persuaded that, on the facts before the judge, his assessment that there was not even a prima facie case of theft, was wrong. Mr Lewis said nothing in relation to either trespass or breach of confidentiality that demonstrated that the judge’s assessments in relation to those allegations was wrong. In my view his assessment of the chances of a prima facie case of unlawfulness being demonstrated cannot be faulted.

[45]The judge correctly stated the principle that even if there was a prima facie case, the evidence will still be admissible unless a court takes the view that, in all the circumstances, including the nature of the conduct of the party that had obtained it, it would be just to exclude it. That is ultimately a case management decision for a judge to make taking all relevant factors into account: see Jones v Warwick University

[2002] 1 WLR 954

, particularly at [28] in the judgment of the court given by Lord Woolf CJ. The judge made his assessment of whether these documents would be excluded and decided it was “wholly remote”: [36]. Mr Lewis’ arguments failed to persuade me that this assessment was wrong or that the judge had considered irrelevant matters or failed to consider relevant matters when reaching that judgment.

[46]Mr Salzedo submitted that if the judge’s assessment of the strength of the companies’ case on excluding the evidence obtained by the enquiry agents from the rubbish sacks could not be impugned, then it was impossible also to impugn his decision that, as a matter of discretion under CPR Pt 31.12, he should not order specific discovery. I accept that submission. The judge took into account all the circumstances of this case, which must include:(a) the obstructive attitude of the companies from the outset of the enforcement proceedings;

(b) the companies’ determination to take any legitimate point, whatever its merits, in relation to the contempt proceedings;

(d) the low chance of the point for which discovery was requested being successful.

[47]Moreover, in relation to the first of the two classes of documents identified by Mr Lewis at the hearing before us, even if they were “disclosable” in the sense that they should be listed generically as relevant classes of documents pursuant to an application for specific discovery, there could be no inspection of those classes of documents. Instructions by Mr Masri’s solicitors to the enquiry agents and reports by the latter to the former must both be protected by legal professional privilege because the instructions and reports would have been produced in the course of litigation and for the purposes of litigation. In those circumstances there would have been no point in ordering disclosure of those classes of document in any event.

[48]For all these reasons I would dismiss the appeal on this discovery issue.

Issue Three: the discovery and inspection of Exhibit ACB7/44 and Exhibit ACB7/75

[49]ACB7/44: The document of which the companies want disclosure is that which was forwarded to Mr Bartlett, not the original that was sent out by Mr Khoury with the attached draft press release. So the questions are:(a) assuming that the document that was forwarded is relevant to the issues raised in the contempt proceedings (on which Mr Salzedo took no point) was the document subject to legal professional privilege;

(b) if so, has that privilege been waived by the disclosure of the rest of the email, but not the header which shows the sender to Mr Bartlett.

[50]This document was not one that was generally available to the public and then obtained by one party for the purpose of the present litigation. Such documents are generally not privileged. This is, on the evidence, a document that was sent to a legal adviser, Mr Bartlett, from a third party during and for the purposes of the contempt application. Such a class of document is, in principle, undoubtedly subject to legal professional privilege.

[51]The only question is whether that privilege has been waived by the fact that only the part of the email has been redacted. The part that has been redacted contains the only part that is privileged, viz. the identity of the sender of the document to Mr Bartlett. It is privileged precisely because that document was sent during and for the purpose of the litigation. It is clear that, in those circumstances, even if the rest of the document is not privileged, the party whose document it is remains entitled to claim privilege for the part of the document that contains the privileged matter. I would accept that this is the result of GE Capital Corporation Finance v Bankers Trust Co

[1995] 1 WLR 172

, as explained by Rix J in Hellenic Mutual War Risks Association (Bermuda) Ltd v Harrison

[1997] 1 Lloyd’s Law Rep 160

. See also Documentary Evidence (10th Ed) by Charles Hollander QC at para 12-05.

[52]I therefore would refuse permission to appeal on this issue.

[53]ACB7/75: Mr Lewis stated that if the court allowed the appeal on the issue of disclosure of the identity of the source of the information in paragraph 11 of the first affidavit of Mr Bartlett, the application in relation to this document would not be pursued. As we did allow that appeal, I need say no more on this point.

Issue Four: disclosure by the receiver

[54]This application is against the receiver, not Mr Masri. The receiver had notice of the companies’ intention to renew its application to appeal the refusal of the judge to order the discovery that they had sought before the judge at the CMC, so we decided that we would hear the application even though the receiver was not present nor represented before us.

[55]In my view Mr Salzedo provided the correct short answer to this application for specific disclosure by the receiver. The companies already have a great deal of the correspondence and other documents generated by the receiver by his activities in this case. They want any further documents that are in his control that indicate what steps he has taken and will take in his capacity as receiver of the two companies. The only relevance of those documents which the companies do not have must be that they may assist the companies in their defence to the allegation of failing to assist or obstructing the activities of the receiver. In order to succeed in those allegations, it is accepted on behalf of Mr Masri that he will have to demonstrate (to the criminal standard) that the companies’ failure to assist was deliberate and/or that the companies intended to obstruct the receiver’s activities. But, if the companies did not know what the receiver had done or was about to do, as might be disclosed in documents that emanated from him but had not been sent to the companies, they could not be guilty of a deliberate failure to assist or an intent to interfere with his activities. Therefore, correspondence and other documents that are in the control of the receiver but were not sent to the companies will not assist the companies’ case that at no time did they deliberately fail to assist or intentionally interfere with the receiver’s activities. So, the judge was correct to reject the application for discovery, particularly at the comparatively late stage it was requested.

[56]The proposed discovery is not, in my view, necessary in order to deal fairly with the issues in the contempt application. I would therefore dismiss the renewed application for permission to appeal the order of the judge refusing this disclosure from the receiver.

Conclusion

[57]For the reasons given, I would allow the appeal in relation to disclosure of the identity of the person(s) who was the source of the information contained in paragraph 11 of Mr Bartlett’s first affidavit. But I would dismiss the appeal and application for permission to appeal in relation to the three classes of disclosure sought against Mr Masri by the companies. I would also dismiss the application for permission to appeal the refusal to order disclosure by the receiver.

Lady Justice Smith:

[58]I agree. The President of The Queen’s Bench Division:

[59]I agree that this appeal and these applications for permission to appeal should be disposed of as indicated in paragraph 57 of Aikens LJ's judgment and for the reasons which he gives in his judgment.