Hally Labels Ltd v Powell

Hally Labels Limited (the plaintiff) sought permission to use documents discovered in a proceeding between it and the second and third defendants in a separate proceeding against the first defendant in the Employment Court. The second and third defendants did not oppose the request. The plaintiff argued that the documents were relevant to whether the first defendant had breached an implied undertaking he gave to the Employment Court not to compete with the plaintiff. The court was required to consider the prohibition of the collateral use of discovered documents, the circumstances in which discovered documents may be used collaterally, and the procedure for obtaining permission or leave. The court identified that the prohibition on the collateral use of discovered documents is contained in r 8.30(4) High Court Rules and is based on balancing the public interest in full disclosure and the protection of confidential information. The court also identified that the circumstances in which discovered documents may be used collaterally are when the document has been read out in open court or when there are special circumstances not occasioning injustice to the person giving discovery. The court further identified that the procedure for obtaining permission or leave is to make a formal application on notice and served on the relevant parties. The court found that the plaintiff should first seek the consent of the second and third defendants, which if given would be the only prerequisite to use of the documents in the Employment Court. If consent is not available, then the plaintiff should proceed on the basis of an interlocutory application filed in the normal way and supported by the appropriate evidence. The court did not grant the plaintiff's request in terms of the memorandum filed for leave to use in the Employment Court email documentation provided by the second and third defendants in the discovery process in this proceeding.