Taylor v Santos & Ors No. Scgrg-96-2015 Judgment No. S6584

[1998] SASC 6584

TAYLOR v SANTOS & ORS (Application by Document 64)

The defendants have filed affidavits relating to whether or not they have or have had documents belonging to certain specified categories in their custody or possession (as opposed to control).  The affidavits were filed pursuant to orders made by me in May last year on an application by the plaintiff for further and better discovery.  I published reasons on 13 May 1997 in order to explain why I gave a direction for the filing of affidavits.  The plaintiff now applies for leave to cross-examine three of the deponents:  Mr Roberts who swore his affidavit as Company Secretary for the first defendant, Mr Armstrong and Mr Gibson.  The plaintiff relies on the provisions of SCR 58.04A.

Both counsel, in putting submissions as to the way in which SCR 58.04A was to operate, contrasted the provision with SCR 58.04(e).  The relevant parts of the two provisions are as follows:

“58.04(e)........... ....where it appears to the Court that there are grounds for a belief that some document or class of documents relating to any matter in question in the proceedings may be or may have been in the possession, custody or power of a party, order that party:”

“58.04A(1)........ The Court may at any time order that the deponent to an affidavit filed under Rule 58.04(e) either answer written interrogatories and/or attend before the Court for cross-examination on the affidavit where it is satisfied that there are reasonable grounds to suspect that such deponent, or a party for whom he has made the affidavit, has not made full and proper discovery of documents in the proceedings.”

Mr Wells Q.C., counsel for the plaintiff,  submitted that the requirement in SCR 58.04(e) to establish that there existed “grounds for a belief” did not mean that the applicant must satisfy the Court to the extent that the Court forms a belief that some material documents may be or may have been in the possession or custody or power of a party.  I understand the effect of his submission to be that it was sufficient to persuade the Court that, for example, the applicant held the relevant belief and that that belief was based on reasonable grounds.  Although the rule does not state that the belief is to be based on “reasonable” grounds, I agree that such a construction must be placed upon the provision.  To do otherwise would enable an applicant to apply for the appropriate order no matter how perversely (but genuinely) the relevant belief might be held.

I also agree that the provision does not require an applicant to persuade the Court to form the relevant belief.  It is sufficient if the applicant persuades the Court that he holds open the relevant belief and that it is based on reasonable grounds.  That may be the same as saying that the applicant must persuade the Court that a reasonable person, in the circumstances, would form the relevant belief.  That, in any event, in my view, is the appropriate test.

Mr Wells submitted that compliance with the requirements of SCR 58.04(e) constituted a greater task than compliance with the requirements of 58.04A because the former required persuasion as to the existence of a belief whereas the latter required persuasion as to the existence of a suspicion.  He submitted that it was more difficult to establish a belief based on reasonable grounds than to establish the existence of a suspicion based on reasonable grounds.

The new Shorter Oxford English Dictionary defines  “belief” as follows:

“Mental acceptance of a statement, fact, doctrine, thing, etc, as true or existing.”

In the same dictionary part of the definition of “suspicion” is as follows:

“Imagination of something (not necessarily evil) as possible or likely; a faint belief that something is the case; a notion, an inkling.”

Based on those dictionary definitions, it is apparent that a belief is something of greater substance than a suspicion and that it must follow that it is more difficult to establish the existence of a belief based on reasonable grounds than the establishment of a suspicion based on reasonable grounds.

It is not clear why there is a difference in the wording of SCR 58.04(e) and 58.04A.  There may have been a deliberate attempt to introduce different requirements in the latter.  However, in my view, a comparison of SCR 58.04(e) and 58.04A does not assist with determining the extent to which the Court must be satisfied of the relevant requirements. 

In argument Mr Gray Q.C., counsel for the defendants, contended that the requirement in SCR58.04A that the Court be satisfied of the relevant matters meant that the burden of persuasion upon the applicant was to establish almost to the level of the criminal onus, the requirements for the invocation of the section:  Edwards v Edwards & Elsegood [1947] SASR 258. At the very minimum, it was submitted, the burden on the applicant was to be imposed in accordance with the principles enunciated in Briginshaw & Briginshaw (1938) 60 CLR 336. I think the preferable approach is that stated by von Doussa J in Fryer v Systems Services Pty Ltd (1994) 125 ALR 592 where his Honour held that he should not be “satisfied” that a matter had been established “unless the likelihood that that is so appears as a clear probability”.

Because the requirement of reasonableness is specifically incorporated into SCR 58.04A, the question about which the Court must be satisfied is:  Would a reasonable person, informed of the factual matters advanced by both the applicant and the respondent to the application, come to suspect that the relevant deponent had not made a full and proper discovery of documents. 

It was one of the defendants’ submissions that, when the purpose of the plaintiff’s application was considered, there was no point in any event in making an order for cross-examination.  It was submitted that the purpose of the application was to obtain documentation which could then in turn be put to the plaintiff’s experts for the purposes of obtaining their opinion.  If that purpose could not be served then there was no point in ordering cross-examination.  I think such a submission overlooks the fact that there is a fundamental obligation upon the party to give discovery to the extent required by law irrespective of what intentions the opposing party may have with regard to the use of such documentation.  In other words, when looking at the question of whether or not there were “reasonable grounds to suspect” that the deponent had  “not made full and proper discovery” is to be looked at in light of the legal obligation to give discovery and that alone.

In his affidavit of 11 June 1997 (document 55) Mr Roberts stated that he was the secretary of the first defendant and that he swore the affidavit in compliance with my order of 13 May 1997.  I set out below the material parts of Mr Roberts’ affidavit:

“3..... I have caused search and enquiry to be made through the Company’s solicitors of relevant officers and employees of the first defendant as to the matters referred to in the order of Judge Burley of 13 May 1997.

4...... I seek leave to refer to the affidavit of Charles Neville Hervey Bagot sworn herein on 25 March 1997, the affidavits of Norman Stewart Taylor sworn herein on 2 April 1997 and Grant Kingsley Feary sworn herein on 7 April 1997 and the affirmation of Paul Neil Dugan herein filed on 24 February 1997.

5...... (i)     I refer to paragraph 4 of the affirmation of Paul Dugan of 24 February 1997.  That paragraph refers to “a detailed technical file (that) was compiled by personnel of Santos and Santos Europe involved in the valuation of the Armada Unit” (“the technical file”).

......... (ii)    As a result of the search and enquiry that I have caused through the Company’s solicitors to be made I am informed and verily believe that no one of the Company’s personnel involved in the technical evaluation of the Armada Unit know of or recognise the entity referred to by the term “the technical file”.

6...... Other than documents discovered in the List of Documents of the first defendant filed herein on 20 December 1997 which, by definition, because they had already been discovered, could not be part of “the documentation” as defined in the Judgment of Judge Burley dated 13 May 1997 being documents of which discovery is sought by the plaintiff, and the documents from the Supplementary List of Documents of the first defendant referred to below, I am informed by the Company’s solicitors and verily believe that:

(i).... The first defendant does not have in its custody or possession any document comprised in the documentation, or copies thereon; and

(ii)    the first defendant has not at any time had in its custody or possession any document comprised in the documentation or copies thereof.

7.I am further informed by the Company’s solicitors that in or about the month of July 1996 the Company received from the plaintiff a copy of the Information Memorandum relating to the Armada Unit provided by Agip to Santos Europe, that this document was last in the Company’s possession on or about 31 July 1996 and that that document was left at the Guildford offices of Santos Europe Ltd on or about 31 July 1996.

8.In relation to the documents discovered by the first defendant in the Supplementary List of Documents of the first defendant filed herein on 28 April 1997, I am informed by the Company’s solicitors that the documents set out below are documents which may be within the description “the documentation”.

DocumentDate  From Whom

......... Number  Document Received

......... 990 - 1024 inclusive           (see below)                 Andrew Dodman

104727.8.96  The Plaintiff

......... 1048  12.7.96  The Plaintiff

105131.7.96  The Plaintiff

I am further informed by the Company’s solicitors that documents 990-1024 were created by Andrew Dodman on or about the dates shown in relation to those documents in the Supplementary List and that the documents referred to above have been discovered by the first defendant and have been inspected by the plaintiff’s solicitors at the offices of the solicitors for the first defendant.”

Mr Wells Q.C. criticised the fact that Mr Roberts delegated to the company’s solicitors the task of speaking to the relevant officers and employees of the first defendant as to the matters referred to in my reasons delivered on 13 May 1997.  I do not accept that Mr Roberts should be criticised for having delegated much of the work to the company solicitors.  On the contrary, I think that the solicitors were better equipped to carry out the necessary enquiries because they would inevitably have a better understanding of the strict requirements which apply in relation to the obligation of a party to proceedings to give discovery.

The reference to “the technical file” referred to in the considerable correspondence that took place between the solicitors for the party in that regard was the subject of much debate during the course of argument.  Mr Gray criticised the plaintiff to the extent of saying that his affidavit in support of the application for leave to cross-examine could not be relied upon to support a case for an order for leave to cross-examine.

Both parties sought to rely upon the events of 26 August when the plaintiff met Mr Goode and Mr Taliangis at the Hilton Hotel.  The plaintiff said that he had “the technical file” or a copy thereof which he handed over to representatives of the first defendant on that occasion.  Both Mr Goode and Mr Taliangis deny having received any documentation from the plaintiff on that day although Mr Goode recalled that he was shown some documentation, which he thought was a memorandum, by the plaintiff but that the plaintiff retained that document.  Mr Taliangis does not recall any document having been handed over either to himself or Mr Goode by the plaintiff on that occasion.  However, it is apparent from a list of documents filed by the first defendant, that the document which the plaintiff has now identified as being the one he allegedly handed over on 26 August, came into the possession of the first defendant on 27 August.  On the front of the document as preserved by the first defendant there is a yellow sticker which contains the following:

>      PA Goode
         >      Peter
         >      From Norm
         >      Paul

On an interlocutory application such as this I cannot resolve the discrepancy in the evidence but in any event I am not willing to draw any adverse inference in respect of any of the participants.  One or more of them is mistaken but at the end of the day that is not a mistake of vital significance.

It was submitted that in the early stages of the correspondence between the parties on the subject, the plaintiff, through his solicitors, contended that there was in existence a technical file which had not been discovered.  Paragraph 5 of Mr Roberts’ affidavit refers to some of the correspondence directed to that question.  It is one instance of the defendants having said on many occasions that a technical file did not exist and could not be discovered.  However, after Mr Roberts’ affidavit was filed, a supplementary list of documents was filed and served in June of 1997.  In that supplementary list document 1047 was disclosed.  A copy was tendered in evidence during the course of the hearing of this application and it has been marked A1.  By his affidavit of September 1997 the plaintiff stated that Exhibit A1 was a bundle of technical papers which he had previously sought to be discovered. 

Whilst I do not accept Mr Wells’ submission that the plaintiff had not caused confusion to the defendants in attempting to ascertain the existence or otherwise of a technical file, I do not think that what I consider to be the plaintiff’s understandably imperfect memory of how the technical documents relating to the matter at issue in the action generally were described could constitute serious undermining of the reliability of the plaintiff’s affidavit in support of the application for leave to cross-examine.  I do not intend to undertake a minute dissection of all of the submissions that were put and of all of the evidential references that were made on this question.  It is sufficient for me to state that I consider that the use of the phrase “the technical file” and similar phrases involving the use of the word “technical” and “file”, even if in the context of a general description of the bundle of documents, created an unintended confusion on the part of the defendants in trying to locate the documentation.  The confusion of the defendants was understandable because document 1047, subsequently acknowledged by the plaintiff in his affidavit of September 1997 to be technical documents he had previously been referring to, is entitled “Armada Fields Sub Surface Report, Revision 4 August 1996”.

In my view, the mistake made by the plaintiff does not cast an overall doubt on whether or not the affidavit evidence sworn to by him in support of the application may be relied upon.  Since the alleged dismissal, he had not had access to the relevant documentation and it is not surprising that the confusion arose.  However, it must be stated that the confusion was caused by the plaintiff and that any apparent lack of full discovery by the defendants attributable to that confusion cannot be visited upon the defendants on an application for leave to cross-examine.  In that regard I find, on the evidence taken as a whole, that the defendants made all necessary attempts properly to discover the technical materials which were in their custody and possession at the time that the affidavits filed in pursuance of my order of 13 May 1997 were filed (and thereafter).  It follows that, to that extent, I am not satisfied (to the degree referred to above) that there are reasonable grounds to suspect that the 1st defendant has not made full and proper discovery.

In order to gauge the sufficiency or otherwise of Mr Roberts’ affidavit (and the sufficiency of the affidavits of Mr Gibson and Mr Armstrong) it is necessary to look at the affidavit of the plaintiff filed in support of the application for leave to cross-examine.

The relevant parts of the plaintiff’s affidavit of 22 September 1997 (document 65) are as follows:

“4..... Until about 22 August 1996, I had responsibility to supervise and coordinate the overall evaluation of the Armada Unit from both a technical and commercial perspective.  During July and August 1996 I saw, from time to time, both the third and fourth defendants referring to and discussing with others involved in the evaluation;

·...... at least some of the documents comprised in the technical file referred to in paragraph 4 of the Dugan affidavit and paragraph 10.1 of the Bagot affidavit; and

·...... at least some of the working papers referred to in paragraph 5 of the Dugan affidavit and paragraph 10.2 of the Bagot affidavit.

5...... Up to 22 August 1996 the people who were involved in the evaluation of the Armada Unit and their respective roles and responsibilities were as follows;

·...... John Elgar was employed by Santos Europe Ltd as a reservoir engineer in Business Development and was responsible for preparing the operating and capital cost estimates for the Armada evaluation;

·...... Bart de Boer was a reservoir engineering consultant engaged by Santos Europe Ltd to develop estimates of recoverable reserves and production profiles for the life of the Armada Unit;

·...... John Martin was a consulting geologist engaged by Santos Europe Ltd;

·...... John Boucher was a geophysicist who was at the relevant time engaged by Santos Europe Ltd on a long term contract and is now, to the best of my knowledge an employee of Santos Europe Ltd;

·...... Mr Martin and Mr Boucher were together responsible for determining the gas initially in place in the Armada Unit and assessing the exploration prospects of the licences containing the Armada Unit;

·...... Andrew Dodman was employed by the first defendant as Senior Analyst, Business Development and was responsible for the preparation of the economic models including the valuation model;

·...... Peter Goode was the General Manager Petroleum Development employed by the first defendant with responsibility to review and sign off on all technical aspects of the evaluation from the first defendant’s perspective;

·...... The fourth defendant was General Manager Santos Europe Ltd and would have had ultimate responsibility for managing that company’s interest in the Armada Unit had the interest been acquired and had responsibility to review and sign off on all technical and commercial aspects from Santos Europe Ltd’s perspective;

·...... The third defendant was employed by Santos as President Americas and Europe which included Santos Europe Ltd and had ultimate responsibility to review and sign off on all technical and commercial aspects from the Americas and Europe business unit perspective;

·...... Scott Pickford is a consulting group which was engaged by Santos Europe Ltd to complete a petrophysical analysis of the Armada Unit;

·...... Ian Linton was a consulting engineer who was engaged by Santos Europe Ltd to advise on operating, capital and abandonment cost estimates for the Armada Unit.

6...... After 22 August 1996, to the best of my knowledge and belief, the only people mentioned in paragraph 5 above to have a continuing involvement in the Armada evaluation were John Armstrong, Stewart Gibson, Andrew Dodman, John Boucher and John Elgar.  In addition to these people, from about 27 August 1997 Paul Taliangis, who was employed by the first defendant as Senior Corporate Advisor, Corporate Development and reported to me, was also involved following the termination of my employment as detailed in paragraph 15 below.

7...... On or about 30 July 1996, Peter Goode, General Manager Petroleum Development of the first defendant, spent about a full day with the evaluation team for the Armada Unit, reviewing the team’s technical evaluation.  I went in and out of the room in which the team and Mr Goode were, and participated from time to time in the review.  During that review, I saw Mr Goode refer to and discuss at least some of the working papers referred to in paragraph 5 of the Dugan affidavit and paragraph 10.2 of the Bagot affidavit.

8...... Now produced and shown to me as an exhibit and marked with the letters “NST1” is a copy of a letter I am informed by my solicitors and truly believe was sent to the solicitors for the defendants on or about 15 April 1997.  In this regards, I refer to paragraph 3.1 of, and exhibit “CNHB1” to, the Bagot affidavit.  To the best of my knowledge neither I nor my solicitors have received any response to “NST1”.

9...... Now produced and shown to me as exhibits are true copies of the following documents:

·...... A facsimile transmission from Andrew Dodman to John Elgar/John Boucher dated 28 August 1996, marked “NST2”;

·...... A facsimile transmission from John Boucher/John Elgar to the third defendant dated 28 August 1996, marked “NST3”;

·...... A facsimile transmission from Andrew Dodman to John Boucher/ dated 29 August 1996, marked “NST4”;

·...... A facsimile transmission from John Elgar to the third defendant dated 29 August 1996, marked “NST5”;

·...... A memorandum from Paul Taliangis to the Development Committee of the first defendant dated 30 August 1996, marked “NST6”;

·...... A facsimile transmission from me to, inter alia, the third and fourth defendants dated 22 August 1996, marked “NST7”;

·...... A facsimile transmission from Andrew Dodman to the third and fourth defendants and Paul Taliangis dated 1 September 1996, marked “NST8”;

·...... A memorandum from the fourth defendant to the third defendant undated marked “NST9”;

·...... A facsimile transmission from Paul Taliangis to the third and fourth defendants dated 4 September 1996, marked “NST10”;

·...... A facsimile transmission from Paul Taliangis to the third and fourth defendants dated 5 September 1996, marked “NST11”;

·...... An Extract of Minutes of a meeting of the board of directors of the first defendant held on 6 September 1996, marked “NST12”; and

·...... A letter from Santos Europe Ltd, signed by the fourth defendant, to Robert Fleming & Co and Agip (UK) Ltd dated 9 September 1996, marked “NST13”;

10.... “NST`12” appears on its face to be a facsimile transmission from Andrew Dodman, a member of the evaluation team for the Armada Unit who then resided in Australia, to two other members of the evaluation team, John Elgar and John Boucher who, at the time, resided in the United Kingdom.  In the facsimile transmission, Mr Dodman appears to refer to points made by the third defendant that the third defendant sought to have incorporated “into the valuation scenario”.  Those “points” appear to relate to estimates of gas reserves and estimates of gas production from the gas fields which comprise the Armada Unit.  The references in the facsimile to “Fleming”, “Drake” and “Hawkins” would appear to me to be references to the gas fields so-named which comprise the Armada Unit.

11.... Wherever the initials “JDA”, “SGG”, “JDB” and “NST” are used in documents exhibited to this my affidavit, I say that those initials denote the third defendant, fourth defendant, John Boucher and myself respectively.  The established office practice during my time as an employee of the first defendant was for these initials to be used in documents as described.

12.... “NST3” appears to be a facsimile transmission from John Boucher and John Elgar to the third defendant, the latter then residing in the United States.  The facsimile appears intended to be copied to Andrew Dodman.  The facsimile appears to attach “GIIP calculations” for the Armada Unit.  “GIIP calculations” are calculations which seek to estimate the “gas-initially-in-place” in a gas field.  Once again, the references in the facsimile to “Fleming”, “Drake” and “Hawkins” would appear to be references to the gas fields so-named which comprise the Armada Unit.  With reference to the established office practice referred to in paragraph 11 the initials “JDA” and “SGG” in the second numbered paragraph of the facsimile appear to denote the third and fourth defendants respectively.  The second numbered paragraph suggests that a review was conducted by the third and fourth defendants on 19 August 1996 in which those defendants probably reviewed documents of a type described in paragraphs 10.2 and 10.3 of the Bagot affidavit.

13.... “NST4” appears on its face to be a facsimile transmission from Andrew Dodman to John Elgar and John Boucher.  The facsimile appears to me to be in repsonse to “NST3”.  Mr Dodman appears to refer to a telephone conversation he had had with the third defendant.  With reference to the established office practice referred to in paragraph 11, the initials “JDA” in the third full paragraph of the facsimile appear to denote the third defendant.  It appears that the third paragraph as a whole refers to a view of the third defendant as to the estimated “volumes” or reserves of gas in the fields which comprise the Armada Unit.

14.... “NST5” appears to be a facsimile transmission from John Elgar to the third defendant.  The second full paragraph commencing “The various reserve cases we discussed ....” appears to set out in table form some comparative estimates of gas reserves and gas production in respect of the fields comprising the Armada Unit.  From the period of time I worked with the third defendant, I am familiar with his handwriting.  I recognise his handwriting as the annotations to the second full paragraph of this facsimile.

15.... “NST6” appears to be a memorandum to the Development committee of the first defendant from Paul Taliangis.  At that time Mr Taliangis resided in Australia.  For an explanation of the nature of the Development committee, I refer to paragraph 15.2 of the Bagot affidavit.  Under the heading “Action Plan”, the memorandum indicates, inter alia, that;

·...... the technical evaluation of the Armada Unit was still in the process of being completed as at the date of the facsimile (ie 30 August 1996); and

·...... following completion of the technical review, the third and fourth defendants would discuss with Paul Taliangis the “revised valuation” of the Armada Unit.

......... From the period of time I worked with the second defendant, I am familiar with his handwriting.  I recognise his handwriting as the annotation at the top of the facsimile.  With reference to the established office practice referred to in paragraph 11 that annotation appears to be intended as a note to me, using my initials, on 31 August 1996, to the effect that an indicative, non-binding bid for the Armada Unit would require the approval of the board of directors of the first defendant such that it would be preferable for a short paper to be prepared for the board rather than the Development committee.  However, I was not in any way involved in the preparation of a board paper for the further valuation of the Armada Unit from 22 August 1996.  I travelled to Australia from the United Kingdom on 23 August 1996 at the second defendant’s request.  On 26 August 1996, the second defendant, in a meeting I had with him in Adelaide, told me that he was terminating my contract of employment.  He told me that he would discuss “settlement” (which I inferred to be settlement of my contract of employment) upon my return from annual leave in France on 16 September 1996.  I returned from Australia to my home in the United Kingdom on 27 August 1996.  I was on annual leave in France from 30 August 1996 to 15 September 1996 inclusive.  I never received a copy of "“ST6”.  The first time that I saw this document or any copy of it was when it was discovered by the second defendant.

16.... “NST7” is a copy of a memorandum written by me to the Development Committee of the first defendant and the third and fourth defendants.  From the period of time I worked with the fourth defendant, I am familiar with his handwriting.  I recognise his handwriting as the annotations at the bottom of the facsimile.  From my involvement in the Armada Unit evaluation, the annotation appears to be a note to the effect that the estimate of gas reserves of the Armada Unit should reflect that certain portions of the fields comprising the Armada Unit should be excluded from the estimate.

17.... “NST8” appears to be a facsimile from Andrew Dodman to the third and fourth defendants and Paul Taliangis.  The facsimile appears to contain revised valuations of the Armada Unit based on the gas reserves and gas production estimates contained in “NST5”.  I recognise the handwritten annotations on the facsimile as those of the fourth defendant.  The annotations at the bottom of the last page of the facsimile appear to note capital expenditure requirements and a view on the present and future number of wells to be drilled in the 3 fields comprising the Armada Unit.

18.... “NST9” appears to be a draft information memorandum or paper for the board of directors of the first defendant in respect of the evaluation of the Armada Unit, sent from the fourth defendant to the third defendant.  I recognise the handwriting of the fourth defendant at the top of the first page.  The annotation appears to read;

“To:  JDA (a reference to the third defendant in accordance with the established office practice referred to in paragraph 11)

1st pass on Armada
Apologies for delay
Stewart (ie the fourth defendant)

19.... “NST10” appears to be a facsimile from Paul Taliangis to the third and fourth defendants attaching a redrafted version of “NST9”,

20.... “NST11” appears to be a facsimile from Paul Taliangis to the third and fourth defendants attaching a copy of the final board paper submitted to the board of directors of the first defendant on 6 September 1996 seeking approval to submit an indicative, non-binding bid for the acquisition of the interest of Agip (UK) Ltd in the Armada Unit.

21.... “NST12” appears to be an extract of the minutes of meeting of the board of directors of the first defendant held on 6 September 1996 at which the board endorsed the submission of an indicative, non-binding bid in respect of the Armada Unit in the amount and subject to the conditions set out in “NST11”.

22.... “NST13” appears to be a letter from Santos Europe Ltd signed by the fourth defendant wherein the indicative, non-binding bid referred to in paragraph 21 above was made to the agents of Agip (UK) Ltd and Agip (UK) Ltd itself.  Statements made in the second, third and fourth full paragraphs of that letter indicate that:

·      the indicative, non-binding bid is based on a general valuation of the Armada Unit by the first defendant or Santos Europe Ltd; and

·      the indicative, non-binding bid is based on documentation which has been disclosed by Agip (UK) Ltd to the first defendant or Santos Europe Ltd.

23I believe the matters referred to in the above paragraphs 9 to 22 inclusive of this my affidavit demonstrate that:

·...... From about 22 August 1996 the third and fourth defendants were responsible for supervising and coordinating the overall evaluation of the Armada Unit from both a technical and commercial perspective;

·...... From at least 28 August 1996 the third defendant was directly involved in finalising the technical evaluation of the Armada Unit;

·...... In finalising the technical evaluation of the Armada Unit, the third defendant did not always accept the assessments or workings of the evaluation team;

·...... The third defendant sought in part to make his own assessments to arrive at a final technical evaluation;

·...... The third defendant would have needed to have access to technical information of the type described in paragraphs 10.2 and 10.3 of the Bagot affidavit in order to make his own assessments and perform his own workings to arrive at a final technical evaluation;

·...... From at least 22 August 1996 the fourth defendant was directly involved in finalising the technical evaluation of the Armada Unit;

·...... In finalising the technical evaluation of the Armada Unit, the fourth defendant did not always accept the assessments or workings of the evaluation team;

·...... The fourth defendant would have needed to have access to some technical information of the type described in paragraphs 10.2 and 10.3 of the Bagot affidavit in order to make his own assessments and perform his own workings to arrive at a final technical evaluation;

·...... The fourth defendant prepared a draft paper for submission to the board of directors of the first defendant which comprised a final technical evaluation of the Armada Unit arrived at by the third and fourth defendant together.

·...... The draft paper comprising the final technical evaluation referred to above formed the basis of the final paper submitted to the board of directors of the first defendant on 6 September 1996 seeking approval to submit an indicative, non-binding bid for the acquisition of the interest of Agip (UK) Ltd in the Armada Unit;

·...... The final technical evaluation arrived at by the third and fourth defendant comprised in the final board paper was arrived at on the basis of technical information provided by Agip (UK) Ltd of a type described in paragraph 10.1 and 11.3 of the Bagot affidavit;

·...... Accordingly, the third and fourth defendant are likely to have had access to and utilised documents of a type described in paragraph 10.1 and 11.3 of the Bagot affidavit.

24.... I refer to paragraph 7 of the Dugan affidavit.  I have inspected myself, or caused my solicitors to inspect the documents which have been discovered by the defendants.  Some earlier valuation models in respect of the Armada Unit have been discovered by the first defendant but none of the defendants have discovered the final valuation model containing the final assumptions and reserves/production estimates used to support the bid price contained in the board paper “NST11”.  In accordance with the usual practice of the first defendant and its subsidiaries at that time, the final valuation model should have been referred to by the third and fourth defendants and Mr Taliangis in the preparation and finalisation of the board paper.”

Several objections were taken to parts of the above material and some of it was admitted de bene esse.  It is appropriate now to proceed to a final determination of the conditional rulings.

As to paragraph 4, I rule that the matters deposed to therein are admissible but that limited weight should be placed upon the assertions because they are not very specific.  I make the same ruling in relation to paragraph 7 of the affidavit.

In relation to paragraph 23 of the affidavit, I do not consider that the matters referred to are admissible.  They consist mainly of assertions or submissions based on evidence.  To that extent they are either repetitions of what has preceded paragraph 23 or are argumentative.  I rule that the content of paragraph 23 is inadmissible as evidence.  Of course, to the extent that the contentions set out in paragraph 23 have been pursued by counsel, they need to be taken into account.

The relevant parts of Mr Armstrong’s affidavit are as follows:

3...... “In relation to the documents referred to in paragraphs 1.1 to 1.4 inclusive in the Application dated 24 February 1997 of the plaintiff in the within action (“the documentation”), I say that other than:

3.1... documents discovered in my List of Documents filed herein on 24 December 1997 which by definition, because they had already been discovered,     could not be part of “the documentation” as defined in the Judgment of Judge Burley dated 13 May 1997; and

3.2... the documents referred to below from my Supplementary List of Documents filed herein on 28 April 1997 which I believe may be within the description “the documentation”,

I do not have in my custody or possession any document comprised in the documentation or copies thereof and I have not at any time had in my custody or possession any document comprised in the documentation or copies thereof.

4...... The documents referred to in paragraph 3.2 herein were provided to me by the persons shown below at or about the dates shown below and have been discovered by me and have been inspected by the plaintiff’s solicitors”:

......... Document No.           Date                   From Whom Document

Obtained

11115/7/96              J G Elgar

......... 112  26/7/96              John Elgar

113unknown            Stewart Gibson

......... 114  15/7/96              Santos Europe Ltd

11515/7/96              Santos Europe Ltd

......... 208  July 1996          Santos Europe Ltd”

The relevant parts of Mr Gibson’s affidavit are as follows:

“In relation to the documents referred to in paragraphs 1.1 to 1.4 inclusive in the Application dated 24 February 1997 of the plaintiff in the within action (“the documentation”), I say that other than documents discovered in my List of Documents filed herein on 14 January 1997 which by definition, because they had already been discovered, could not be part of “the documentation” as defined in the Judgment of Judge Burley dated 13 May 1997:

3.1... I do not have in my custody or possession any document comprised in the documentation or copies thereof;

3.2... I have not at any time had in my custody or possession any document comprised in the documentation or copies thereof.”

Mr Wells took the point that Mr Gibson failed to disclose in his affidavit a document of which he was the author and which ended up with Mr Armstrong.  Mr Wells submitted that this is an important matter to be taken into account when deciding whether or not I am satisfied that reasonable grounds existed that there was suspicion that Mr Armstrong had not given full and proper discovery.  I disagree with that submission.  The omission to discover the document by Mr Gibson has been explained as an inadvertent mistake and it comes as no surprise to me that such a mistake has been inadvertently made.  In weighing up all of the matters relied upon by the plaintiff, the mistake made by Mr Gibson should be looked at in that light.

It was the plaintiff’s case that the third and fourth defendants were intimately involved in the overall evaluation of the Armada Unit from both a technical and commercial point of view.  It was submitted that the first defendant and the third and fourth defendants made their own assessments of the information provided by SEL including technical information.  It may be that because the third and fourth defendants may have had from time to time, access to material supplied by SEL and that that access may have varied from the transient to periods of somewhat longer duration, mistakes may have been made with regard to the disclosure of, in a list of documents, documentation that was in the possession of either or both of the defendants but subsequently went back to SEL.  However, any possibility for mistake or misunderstanding has been more than adequately covered by the enquiries made by Mr Bagot which are the subject of his evidence in his affidavit of 25 March 1997 (document 46). 

If I am to accede to the plaintiff’s request for leave to cross-examine, I must form the view that a reasonable person apprised of all of the affidavit material filed by both parties on this application would form the suspicion that Mr Roberts, Mr Armstrong and Mr Gibson did not make full and proper discovery.  I could only arrive at such a conclusion if the suspicion were that the three deponents had deliberately or carelessly failed to disclose all material documentation that either was or had been in their custody or possession.  I do not include documentation in the power of the first defendant or, for that matter, any of the other defendants, because that question was specifically excluded from my order of May 1997.

In my view, nothing has been put before me to suggest even remotely that any of the deponents has deliberately withheld information about material documentation which is or has been in their custody or possession.   Specifically, nothing put by Mr Wells could properly in my view lead to a suspicion, based on reasonable grounds, that any of the deponents had deliberately done so.

As to the matter of carelessness, I have allowed for the possibility that Mr Armstrong and Mr Gibson may have been mistaken in their recollection as to the extent to which they had access to SEL documentation (whether that be SEL’s own documentation or documentation supplied by the third party to SEL), but such mistakes, if they have been made, are not such that cross-examination should result.  To that extent, even if it is assumed that because of the possibility of mistakes having been made by Mr Armstrong and Mr Gibson along the lines referred to and that that in itself constitutes reasonable grounds for a suspicion that they may not have given full and proper discovery, there still remains for the Court to exercise a discretion as to whether or not leave to cross-examination will be given.  I would not exercise the discretion in favour of the plaintiff even in light of such possible mistakes because I think the mistakes, if they did occur, related to imperfect recollection which is not a matter confined to the defendants.  The non-disclosure, if it occurred, would have been inadvertent.  Cross-examination would not assist because the mistake followed what was obviously a careful examination of what documentation the defendants have and have had as evidenced by the affidavit of Mr Bagot.

To some degree, in deciding whether or not to grant the plaintiff’s request for cross-examination, I have to examine on the one hand the affidavit evidence of the plaintiff which is based on the recollection of events some time ago and compare it with the positive assertions made by Mr Bagot and Mr Feary as the solicitors for the defendants and by Mr Roberts, Mr Gibson and Mr Armstrong.  Their evidence in turn must be taken in the context that there has been a direction to discover documents which are or were physically in the custody or possession of them.  It is evident from the affidavits of Mr Bagot and Mr Feary that the defendants have gone to a lot of trouble to ascertain whether they have any of the relevant documentation in their possession or whether they have had such documentation in their possession in the past.  They may be definite about the former because that is evidence as to the existence or otherwise of the present state of facts.  As to the past, they have to,  like the plaintiff, rely upon recollection and just as the plaintiff’s recollection is imperfect so is that of the various deponents.  I see no reason to go behind the assertions of the various deponents about whether or not documentation is presently within their custody or possession.   To do so would be to form the suspicion that Messrs Roberts, Gibson and Armstrong had deliberately sought to mislead the plaintiff and the Court or that they had been careless with the truth.  I am not satisfied that the likelihood of such a suspicion “appears as a clear probability”.

For the above reasons I am not satisfied that there are reasonable grounds to suspect that the relevant deponents have not made full and proper discovery.  The plaintiff’s application must therefore be refused.