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Ruling handed down in Connective Services Pty Ltd & Anor v Slea Pty Ltd & Ors

12 May 2017

Justice Peter Almond of the Commercial Court has ordered that this proceeding be stayed after finding that a material document which formed the basis of the plaintiffs’ claim was used in breach of the implied undertaking that binds parties during the discovery process. The undertaking prohibits a party from using documents obtained in discovery for purposes beyond that specific proceeding without consent or leave of the court.

The parties have been engaged in a long history of litigation and are parties to a number of proceedings. The plaintiffs obtained the document in question through discovery in one of these proceedings, and sought to use the document to found the basis for this proceeding. During argument at an interlocutory hearing in the earlier proceeding, the document was read from aloud in open court and the references are recorded on the transcript of the argument. The plaintiffs sought to rely on the transcript as a secondary source of the contents of the document, which they argued was in the public domain and therefore no longer subject to the implied undertaking.

Justice Almond ruled that the plaintiffs were not entitled to rely on the transcript references as a secondary source to initiate this proceeding. He held that the undertaking, which applies to the parties in the earlier proceedings, did not cease to apply when the agreement (which was not tendered in evidence) was read from aloud in open court by counsel during argument. He said the consequence of the alternative would be that parties could ‘effortlessly sidestep’ their obligations simply by reading aloud in court an otherwise private and personal document, disclosed under the coercive process of discovery. He held that this would likely deter parties from properly engaging in the discovery process and lead to tactical manoeuvrings by parties to ensure that discovered documents were or were not read out in court.

Although members of the public (such as the media) may use and publish information they hear in open court or read on a transcript, the party that is subject to the undertaking remains bound by it and must obtain leave of the court before seeking to use the contents of discovered documents for purposes beyond the immediate proceedings.

Justice Almond also rejected the plaintiffs’ argument that the subsequent tendering of the document in other interlocutory proceedings after the commencement of this proceeding had the effect of remedying the breach.

Note: This summary is necessarily incomplete. It is not intended as a substitute for the Court’s reasons or to be used in any later consideration of the Court’s reasons. The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.

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