The decision in British Sky Broadcasting Group v Digital Satellite Warranty Cover Ltd(1) makes it clear that the court will take a restrictive approach to the use of information that is obtained under cross-examination of a person who swears an affidavit pursuant to the requirements of a freezing injunction.
Sky brought proceedings against the defendants for unlawfully taking customer information from Sky's database in order to market extended warranty service plans for Sky's satellite equipment. It also complained of infringement of Sky's trademarks and passing off.
Sky successfully applied for a freezing injunction over the assets of the fifth defendant, Mr Marrow. The injunction required him to swear affidavits as to his assets, which he duly did. Sky then applied for an order that Marrow attend court for cross-examination on his affidavit and assets, to which he agreed.
Under the freezing injunction, Sky gave an undertaking in the following terms:
"[Sky] will not without the permission of the court or under compulsion of law use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in England or Wales or in any jurisdiction other than this claim."
On the day of the cross-examination, Sky sought to reduce the scope of the undertaking in relation to the use of information obtained in cross-examination and to widen the scope of the cross-examination by asking the court for an order that there was no limit to the purpose for which the cross-examination could be undertaken or used.
Sky submitted that the cross-examination would occur in open court and, if something arose that was not in Marrow's affidavit, it would be open to Sky to use that information in committal proceedings. Marrow had been given the opportunity to clarify matters contained in his earlier evidence and had declined to do so. Sky therefore submitted that the affidavit evidence would be caught by the undertaking given, but the information obtained in open court would not. It also submitted that the order for cross-examination had been obtained by agreement, and not by the court, so the undertaking given in respect of the injunction did not apply.
Marrow argued that the answers given in cross-examination could not be used for the purposes of committal proceedings unless the parties agreed or the court gave permission. Marrow referred to Civil Procedure Rule (CPR) 34.12, which states:
"(1) Where the court orders a party to be examined about his or any other assets for the purpose of any hearing except the trial, the deposition may be used only for the purpose of the proceedings in which the order was made.
(2) However, it may be used for some other purpose –
(a) by the party who was examined;
(b) if the party who was examined agrees; or
(c) if the court gives permission."
Sky submitted that CPR 34 applied only to depositions ordered under CPR 34.8, which states that a party may apply for an order for a person to be examined at a hearing before the trial.
The judge ordered that the cross-examination was to be confined to establishing the assets of Marrow; he did not widen its scope as Sky had contended for. In addition, he directed that Sky was not entitled to use any information obtained as a result of the cross-examination for the purpose of any proceedings (including any proceedings for contempt) other than the present claim, without the express permission of the court.
The judge stated that where the cross-examination is in furtherance of a freezing order, the information obtained during the cross-examination should be treated as information obtained as part of the freezing injunction, and as such would be covered by the claimant's undertaking given in relation to the injunction application.
The cross-examination should be confined to the purpose for which the affidavit was required, which was to establish the relevant assets of Marrow. The cross-examination would supplement or correct the information given by the affidavit so that the relevant assets of Marrow were known. The judge cited Vos J in Jennington International Inc v Assaubayev(2) that cross-examination "must not be undertaken… for an ulterior purpose".
The judge also rejected Sky's argument regarding CPR 34.12, stating that the rule was not confined to depositions; rather, it applies "where the court orders a party to be examined about his or her assets for the purposes of any hearing except the trial". The result is that it did apply to an order for a cross-examination in support of a freezing injunction.
The judge commented that the fact that the cross-examination was made by agreement made no difference to the position.
The judgment in relation to the scope of the cross-examination and consent is unsurprising. It would have been an odd result if a person who consented to being cross-examined on his affidavit was in a worse position than one who had given evidence under compulsion – which would have been the result had the court accepted Sky's argument that the undertaking to use the evidence for only a limited purpose did not apply if the cross-examination took place by consent.
The judge focused on the purpose of the cross-examination which "exists to supplement or correct the information given by the affidavit". The purpose of an affidavit is to give evidence on oath. The case demonstrates the restrictive approach of the court: a defendant might give oral evidence under cross-examination which would support an application that the defendant was in contempt of court, yet the evidence could not be used for that purpose without the court's permission.
For further information on this topic please contact Rebecca Stewart at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email ([email protected]).