Cadogan Petroleum Plc & Ors v Tolley & Ors

The court may release parties from an undertaking restricting the use of evidence obtained through court-ordered cross-examination where it is just and convenient to do so. The discretion must be exercised having regard to the purpose for which the cross-examination was ordered, the relevance of the material to the proceedings, the overriding objective and the interests of fairness.

Evidence obtained on cross-examination may be used at trial where it is relevant to issues such as tracing assets or witness credibility, including inconsistency between answers. A safeguard may be imposed where the witness serves no evidence: in that event, the answers should not ordinarily be deployed as part of the claimant’s primary case.

The claim involved allegations of breach of contract, breach of trust and conspiracy. The claimants had obtained an order requiring the first defendant, Mr Tolley, to submit to cross-examination concerning assets and statements about their whereabouts and existence.

The cross-examination took place on 20 July 2009. The claimants had undertaken not to use the answers for the trial, criminal proceedings or committal proceedings without the court’s permission. Permission had previously been given to use a limited extract for the purpose of joining another defendant.

The claimants applied to use the remainder of the transcript at trial, while retaining restrictions on criminal and contempt proceedings. The central issue was whether it was just and convenient to release them from the undertaking, and on what conditions.

1. The application was allowed in substance. The court had a general discretion to vary or release an undertaking restricting the use of evidence obtained through court-ordered cross-examination where it was just and convenient to do so. The discretion was to be exercised in accordance with the overriding objective under the Civil Procedure Rules and with regard to the efficient and just disposal of the proceedings.

2. Yukong Line Ltd Korea v Rendsburg Investments Corporation Liberia was concerned principally with whether cross-examination should be ordered. It recognised the need to guard against using the Mareva process merely to obtain material for the substantive action. That reasoning provided limited assistance because the cross-examination here had already occurred and the issue was the later use of the transcript.

3. The approach in Dadourian Group International Inc & Ors v Simms & Ors (No 2), concerning the release of parties from similar undertakings where use of the evidence was just and convenient, supported the exercise of the discretion. The rarity of orders for cross-examination on affidavits did not justify treating the undertaking as incapable of variation in the circumstances.

4. The transcript was materially relevant to potential tracing claims and to Mr Tolley’s credibility. If he gave evidence, the claimants could ask the same questions at trial, and any inconsistent sworn answers would be relevant to the trial judge’s assessment of truth and credibility. Phillips v Symes also demonstrated that pre-trial cross-examination could be permitted in an appropriate procedural arrangement.

5. The permission was conditional. The claimants could deploy the cross-examination evidence if Mr Tolley served a witness statement in the action. If he served no evidence, the answers could not be used as part of the claimants’ primary case. The existing restriction on use in criminal or committal proceedings remained subject to the court’s order.