Dadourian Group International & Anor v Simms & Ors

Express undertakings governing the use of evidence obtained on cross-examination control the material, rather than any implied undertaking arising from disclosure. A Part 24 summary judgment application may constitute a “trial” for that purpose, so permission is required before the evidence is deployed.

The application to release or vary an undertaking is determined by considering all relevant circumstances and the justice of the case. An exceptional-circumstances threshold is unnecessary. At that stage the court considers whether the evidence is capable of being relevant; its weight is reserved for the substantive hearing. Privileged material remains inadmissible unless the separate privilege issues are resolved in its favour.

The claimants sought permission to use evidence given by the first defendant, Mr Simms, during cross-examination ordered in connection with freezing-order proceedings. They wished to deploy that evidence in support of applications concerning documents obtained from a former employee of Citilegal Consultants Ltd.

The evidence was subject to express undertakings restricting its use without the court’s permission. The defendants argued that permission was unnecessary because the evidence would be used in Part 24 proceedings, and opposed its release. The court had to determine whether the undertakings applied, whether the claimants had standing to oppose their release, and what test governed permission.

1. Permission required. The express undertakings in the cross-examination order governed the use of the evidence. The implied undertaking on disclosure did not apply. A Part 24 application was, in substance, a “trial” within the undertaking because it could result in judgment without a further merits hearing. The claimants therefore required permission before using the material.
2. Standing and purpose. Mr Simms did not object to the proposed use. Jack and Helga Dadourian and the corporate defendants had no locus to challenge release of an undertaking given to protect Mr Simms, since they were not parties to the original application and were potential targets of the information-gathering exercise. In any event, the court considered their objections on the merits.
3. Applicable test. The Court of Appeal’s formulations in the related Dadourian proceedings were materially consistent. The court had to consider all relevant circumstances and decide whether release was just, convenient, or appropriate for enforcing or policing the freezing order. The exceptional-circumstances test in Crest Homes PLC v Marks was rejected.
4. Application. The claimants’ evidence was accepted as showing that the cross-examination material was capable of demonstrating a pattern of deception and was relevant to the application concerning the Eagle documents. The court did not determine the material’s ultimate weight or the merits of the Part 24 application. Those matters were reserved for the substantive hearing.
5. Privilege. The court expressly reserved whether the Eagle documents were privileged, whether privilege had been waived, or whether privilege could be defeated because the documents evidenced crime. Relevance and significance alone could not justify admission of privileged material.
6. The application was granted in the terms of the proposed order, except in relation to items (f) and (g).

Earlier proceedings included Warren J’s judgment of 24 November 2006, [2006] EWHC 2973 (Ch), which was under appeal. The Court of Appeal later dismissed an appeal concerning the use of cross-examination material in committal proceedings: [2006] EWCA Civ 1745; [2007] 1 WLR 2967. This judgment determined the present applications concerning permission to use Mr Simms’s cross-examination.