Summary

The court ordered disclosure of parts of a confidential settlement agreement made between a claimant and some of the defendants that were relevant to the outstanding issues in the proceedings between the claimant and the remaining defendants.

Facts

The applicants (X) applied for specific disclosure of a settlement agreement. X, along with the respondents (G) and other parties, had been sued by a group of companies (Y) arising out of the sale of two gas processing plants by G to Y. It was alleged that the plants had been sold at an excessive price. G and Y entered into a settlement agreement, which contained a confidentiality clause, and G were removed as defendants. X applied for disclosure and inspection of the agreement, which was opposed by G but not by Y. An order for partial disclosure was made, being those parts of the settlement agreement that had been referred to in evidence relied on by G in opposition to the application in open court. X were also directed to instruct an independent counsel who could make submissions on their behalf with sight of the agreement, whilst preserving the confidentiality of G.

Held

(1) The basis for disclosure could only be that the settlement agreement was relevant to the outstanding issues in the proceedings. X's liability, in quantum terms, would have to take into account ultimately, if liability was established, what recoveries had been made against G and the other defendants. That would mean that Y would have to give credit for any recoveries from the other defendants so that there was no double recovery, and given the allegations of dishonesty there was a possibility that X might make contribution proceedings against G. The other area where the settlement agreement could be relevant was in relation to the trial and the availability of witnesses for trial. (2) Settlement of proceedings clause. X were entitled to know in full terms of the settlement of the claims brought against G by Y. Therefore, they were entitled to all parts of the agreement save where it extended beyond the subject matter of the action. In addition, as a matter of public policy the clauses that dealt with the provisions whereby the parties attempted to restrict disclosure and the giving of evidence was also relevant. (3) Disposal of gas plants clause. The disclosure of those clauses, which comprised terms for the re-sale of the gas plants, was important because they could be relevant when it came to evaluating the allegations that Y would make as to the true worth of the plants. (4) Clauses 23-30 had no relevance to the subject matter of the litigation, and should not be disclosed. (5) Although clauses 31-52 were relatively normal provisions that one would expect in a settlement of the kind in question, they were not to be disclosed but they were to be drawn to Y's attention for consideration whether disclosure ought to be made in the future.

Judgment accordingly