Jersey Unreported Judgments

Hearing (Civil) - providing electronic discovery.

[2020]JRC032

Royal Court

(Samedi)

20 February 2020

Before     :

Advocate Adam Justin Clarke, Judicial Greffier.

 

Advocate N. Williams and Advocate J. Angus for the Plaintiffs.

Advocate J. Harvey-Hills for the First Defendant.

Advocate R. Gardner for the Second Defendant. 

CONTENTS

		Paras
1.	Introduction	1-4
2.	Background	5-6
3.	The plaintiffs' general submissions	7-15
4.	The second defendant's general submissions	16-23
5.	The defendant company's general submissions	24-29
6	The draft discovery protocols	30-32
7	The defendants' discovery	33-92
8	The plaintiffs' discovery	93-103
9	Costs	104

judgment

the JUDICIAL GREFFIER:

Introduction

1.        This judgment contains my reasons following the issuing of a summons by the plaintiffs on the 5^th November, 2019. 

2.        The summons sought orders that:-

(a)       the list of issues attached as Schedule 1 to the summons should be treated as agreed between the parties in accordance with paragraph 1 of the Act of Court dated the 15^th October, 2019;

(b)       the list of agreed facts attached as Schedule 2 to the summons should be treated as agreed between the parties in accordance with paragraph 2 of the Act of Court dated the 15^th October, 2019;

(c)       that the discovery protocol attached at Schedule 3 to the summons shall govern the obligations and approaches to be adopted by each of the plaintiffs, the first defendant and second defendant with respect to the use of electronic discovery; and 

(d)       the costs of the summons should be paid by the first and second defendants on the indemnity basis or on such other basis as the Court deems appropriate. 

3.        In short, the issues contained in the summons arose as a result of a disagreement between the parties concerning their respective interpretations of the orders handed down by the Court on the 15^th October, 2019.  That Act of Court contained 24 directions for case management which had, for the most part, been consented to and agreed by the parties. The relevant directions are found at paragraphs 1, 2, 4 and 5 and state as follows:-

"1.       the advocates for the Plaintiffs and the First and Second Defendant are to seek to agree, by 31st October, 2019, a list of agreed facts and issues;

2.        the advocates for the Plaintiffs and the First and Second Defendant are to seek to agree, in accordance with Practice Direction RC17/08, the use of electronic discovery, including search terms to be used. Any final terms of reference shall be subject to approval of the Royal Court and there shall be liberty to apply if agreement is not reached by 31st October 2019;

4.        by close of business 24th January, 2020, the parties shall exchange lists of electronic documents within their control, together with affidavits verifying the same, in accordance with Practice Direction 17/08;

5.        by close of business 24th January, 2020, the parties shall, in accordance with Practice Direction RC17/08 disclose, to the other parties, copies of  electronic  documents within their control, such disclosure to be given in the form agreed by the parties in accordance with paragraph 2 of this order;

4.        The parties have been unable to find consensus on either a list of agreed facts or issues or on the appropriate search terms to be undertaken in order to comply with their respective obligations to provide electronic documents and disclosure.  As a result, the plaintiffs issued the summons to seek further directions from the Court. 

Background

5.        The background to this case is set out in detail at paragraphs 4 to 15 of the judgment issued by this Court on 28^th October, 2019 reported at Financial Technology Ventures II (Q), L.P. and Ors v ETFS Capital Limited and Anor [2019] JRC214.

6.        In preparation for the hearing, the parties provided very detailed skeleton arguments (and, in the case of Mr. Tuckwell, a supplemental skeleton argument) in support of an agreed bundle and the Court had the opportunity to read these thoroughly prior to the hearing.  In addition, every effort was made to provide the Court with up-to-date working versions of the proposed discovery protocols incorporating comments and detailing the parties' latest positions on each section thereof.  Given the extremely detailed nature of the issues in dispute, the Court is grateful for these efforts made by the parties in this regard. 

The plaintiffs' general submissions

7.        In opening legal submissions, Advocate Williams for the plaintiffs submitted that the breadth of the discovery obligation in this case should be appropriately wide. In support of that position, Advocate Williams argued that the pleaded claim amounted to an allegation that the conduct of the defendant company was unfairly prejudicial to the interests of the plaintiffs' minority shareholding position and that Mr. Tuckwell's associated conduct was such that it required the defendant company to be just and equitably wound up.  This involved a course of dealing which spanned many years.  Notwithstanding that Mr. Tuckwell had admitted that a number of the pleaded acts had indeed taken place, it was still essential that full disclosure in relation to those admitted events should occur as they would likely provide clarity on the motive and knowledge of Mr. Tuckwell at the salient time.  This, the plaintiffs submitted, was crucial given the pleaded case that Mr. Tuckwell had, at all relevant times, harboured an intention to prefer his own interests over those of the other shareholders and continued to do so. 

8.        In support of that position, Advocate Williams drew the court's attention to the dicta in the case of Compagnie Financière du Pacifique v Peruvian Guano Co. [1882] 11 QBD 55 and specifically the words of Brett LJ at page 65:

"It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in the words "either directly or indirectly" because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences."

9.        Advocate Williams referred the Court to the Royal Court Practice Direction 17/07 on discovery and specifically to paragraph 10 which provides the checklist by which the parties are to measure the reasonableness of the searches that ought to be undertaken when fulfilling the discovery process.  He submitted that the scope of discovery that his clients wished to see ordered would sit comfortably within the checklist.  He argued that the matter would be dealt with justly and proportionally by the Court adopting their discovery proposals.  He explained that there was uncertainty as to the overall number of documents to be reviewed but that it was unlikely to be disproportionate to the value and complexity of the claim.  Moreover, there was nothing which should act as a barrier to any of the parties in retrieving the necessary documents. 

10.      Advocate Williams proposed that the requested discovery would also assist in ensuring equality of arms, an issue which he submitted was essential in shareholder disputes. It was important that all parties be afforded the opportunity to put their case fully and the positions of the parties in this action were in stark contrast.  He submitted that the plaintiffs had no control over the actions of the defendant company and no access to the library of relevant documents that are pertinent to the claim.  In the view of the plaintiffs, there was a corporate body of documents which all sides ought to be afforded sight of and the proposed discovery protocol provided for that in an equitable manner. 

11.      Additionally, Advocate Williams submitted that where there was a difference of opinion on the scope of the discovery sought, it was appropriate that the position of the plaintiffs, as the requesting party, should be preferred to that of the defendants.  He referred to the case of Format Communications Manufacturing Limited v Itt (United Kingdom) Limited [1982] WL 967594.  This case was an appeal from an interlocutory decision relating to discovery in the action in which Slade LJ stated at pages 3 to 4: 

"The Court cannot, of course, decide on the basis of the affidavit evidence now before it whose version is the true one. This will have to be decided at the trial. Meanwhile, I think Mr Prescott, on behalf of the defendants, is right in his submission that, for the purposes of testing the materiality of discovery to a particular issue now referred to by the defendants, it is the case of the party seeking the discovery - that is, the defendants - that must be assumed to be true and not that of the party against whom discovery is sought, that is, the plaintiffs."

12.      By way of further argument, Advocate Williams suggested that the defendant company should conduct the discovery process of the email accounts and other electronic records in its possession, custody and control, (including Mr. Tuckwell's company email account); something that Mr. Tuckwell felt ought to be completed by his legal representatives as it would be more expeditious and cost effective.  Advocate Williams argued that the defendant company had acknowledged its discovery obligations within the Answer that it filed (an Answer which stated that it did not intend to take an active part in the proceedings save in respect of some discrete aspects of the case). In addition, it would be a more efficient and effective disclosure process if the defendant company carried out the review of Mr. Tuckwell's company email account, together with those email accounts of the other officers and employees identified as being relevant to the action because: 

(a)       there was likely to be a large number of emails sent to and from Mr. Tuckwell which were sent by or copied to other defendant company employees.  A review of Mr. Tuckwell's company email account separately from the review of the other employee email accounts would likely lead to considerable duplication.  If the defendant company carries out this task, then a deduplication process can be usefully employed;

(b)       there was a risk that neither set of reviewers would have the full picture which would likely compromise the effectiveness of the discovery review;

(c)       there was a concern by the plaintiffs that Mr. Tuckwell's approach to this matter had been to seek to limit the extent of the discovery review to the greatest possible extent.  Allowing the defendant company to undertake the review would provide a more neutral and balanced result to the review which would be important to the veracity of the litigation process.

13.      In respect of the costs incurred by the defendant company in undertaking this exercise, Advocate Williams argued that these could be dealt with in the usual way (namely the defendant company can seek the costs from whichever of the parties is ultimately unsuccessful in the litigation). 

14.      The plaintiffs argued that email correspondence to and from Mr. Tuckwell's family members ought to be included.  Contrary to the view of Mr. Tuckwell, emails to and from his family members may well include unguarded comments which would cast a light on the motives and intentions of Mr. Tuckwell at relevant times during the relevant events. It was submitted that arguments that Mr. Tuckwell's lawyers ought not to have to review email of a personal or family orientation were misguided because the use of appropriate keywords would filter out those unrelated to the issues at hand. It was unreasonable to assume that all emails to members of Mr. Tuckwell's family would be irrelevant, not least because members of the family were connected with the defendant company. 

15.      Lastly in the opening remarks, Advocate Williams referred the Court to the Act of Court dated 15 October 2019 and specifically paragraph 1 which ordered that the parties were to "seek to agree by 31^st October 2019, a list of agreed facts and issues".  In his skeleton argument, Advocate Williams alluded to what he perceived to have been a failing on the part of the defendants to properly engage in the process of preparing agreed lists of facts and issues as to facts and issues.  He submitted that it was a fundamental limb of his clients' claim that the intention of Mr. Tuckwell was at the heart of the matter and discovery should reflect this.  To simply limit the discovery to discrete aspects where the parties are in factual dispute and to disqualify discovery on all aspects where Mr. Tuckwell has pleaded an admission of fact would be to substantially risk the possibility of essential documents and information not being disclosed.  This was a complex case with important events spanning a lengthy period of time.  Discovery needed to be a "deep dive" to avoid omission of relevant material.   

The second defendant's general submissions

16.      In response, Advocate Gardner for Mr. Tuckwell submitted that the summons was misguided and premature.  He argued that the summons seeks to have the Court rewrite the wording of the directions in the Act of Court of 15^th October, 2019, insofar as the parties had only been required to "seek to agree" a list of agreed facts and issues and this did not require them to achieve a consensus where one could not be achieved.  It was inappropriate to ask the Court to make an order that a list produced by the plaintiffs, which was not agreed by the defendants, should be deemed the list of agreed fact and issues. The parties had attempted to agree a list and that is as far as they were obliged to go. 

17.      In addition, Advocate Gardner submitted that the plaintiffs were attempting to establish a new basis for discovery by introducing a provision in the introduction to the revised discovery protocol which required that the relevance of any document should be determined by reference, at least in part, to the list of issues and by then applying the test in the Peruvian Guano case.  If the Court acceded to this approach and ordered an "agreed issue" (which, in the view of Mr. Tuckwell were not agreed and in some instances were not actually pleaded issues), it would mean that defendants would be required to provide discovery on matters irrelevant to the proper adjudication of the case.  This would be expensive, time consuming and contrary to the overriding objective which the Court was bound to advance. 

18.      Specifically on the list of agreed facts, Advocate Gardner questioned whether it was appropriate for the Court to be involved at all.  Directions for lists of this type were unusual and whilst a successfully agreed list might benefit the trial judge, where agreement cannot be reached between the parties, it was not the best use of Court time to involve the Court where the parties remain at odds. 

19.      Advocate Gardner further submitted that the plaintiffs were attempting to create a link between the contents of the lists of issues and the discovery obligation.  Contrary to the proposed contents of paragraph 3 of the recital to the plaintiffs draft discovery, there was no requirement in discovery for relevance to be attached to the contents of the list of agreed issues.  The rules in regard to discovery obligations are well understood by the respective parties and, moreover, it would be illogical for the parties to have to have regard to a list of agreed issues when they are demonstrably not agreed by the parties. 

20.      In the view of Mr. Tuckwell, the correct approach was to draft the discovery protocol having regard to the pleaded cases alone. Advocate Gardner submitted that on closer examination, the pleaded case was not overly complex, there were but a small number of discrete events and issues at identifiable times in the chronology of the parties' relationship. In truth, this was a fairly straightforward matter. 

21.      On the issue of the searching of emails to and from family members, Advocate Gardner's instructions were clear that this was objectionable to Mr. Tuckwell.  He explained to the Court that within the email addresses @etfscapital.com and @etfsecurities.com there are a large number of emails which could be described as personal, relating to other interests not connected to the issues in dispute and addressed to his family members.  He submitted that his family had no connection of any merit with his business or any of the matters in these proceedings.  To include these emails in the searches would be an excessive imposition into his privacy and that of his family and likely to create a large number of unnecessary hits.  He proposed that this be avoided by excluding from the searches any emails containing amongst the recipients the email addresses of his family members.   

22.      I take the view that I have not been presented with a sufficiently compelling case to include emails to the family members.  At best there are tenuous and tangential relationships between Mr. Tuckwell's family and his businesses.  As such I conclude that it would be appropriate to exclude from the searches emails which include the email addresses of Mr. Tuckwell's family members. 

23.      In overview, Advocate Gardner submitted that the application by the plaintiffs is deemed to be unacceptable because: 

(a)       The court cannot determine a document as an agreed list of facts and issues where there is an absence of actual agreement between the parties. 

(b)       The plaintiffs' discovery protocols are objectionable in that they seek to impose on the defendants' disproportionately broad discovery which cannot be justified on the matters in issue within the pleadings.  The drafts placed before the Court should be characterised as attempts to overburden the defendants; a fishing expedition intended to trawl for a new case.   

The defendant company's general submissions

24.      Advocate Harvey-Hills adopted a neutral stance on behalf of the defendant company and confirmed that his client would comply with its discovery obligations as it had set out in its brief Answer to the Order of Justice.  He took the Court to an email that he had sent to Advocate Angus on 31^st October, 2019.  The email reiterated the neutral stance being taken by the defendant company and urged that the parties keep the discovery proportional given the considerable degree to which factual matters appear to be uncontentious.   

25.      He urged (and I have concurred), so far as the discovery protocols were concerned, that the issues in the recitals referring to "relevance" and "privilege" were unhelpful and should be removed to avoid further dispute.   

26.      Advocate Harvey-Hills stressed that as a neutral party, despite the suggestion by the plaintiffs, it would be more appropriate for the electronic discovery of Mr. Tuckwell's data held by the defendant company to be undertaken by Mr. Tuckwell's legal representatives as they would be better resourced and better placed to understand relevance and avoid duplication with Mr. Tuckwell's discovery.  A neutral party should not be burdened with reviewing the emails of Mr. Tuckwell and others especially when his lawyers are content to do the work. 

27.      On the issue of whether or not the defendant company should be allowed to transfer its electronic discovery obligation to Mr. Tuckwell in respect of Mr. Tuckwell's company email account, I have listened carefully to all the submissions.  Whilst I can recognise the argument that a neutral party should not be saddled with an onerous burden there are two matters which have led me to conclude that it would be in the best interests of justice between the parties if the defendant company completed all of its own discovery. 

28.      First, taking the pleaded allegations at their highest, it is clear that there is a suggestion that the defendant company has been unable to maintain its independence from Mr. Tuckwell and has allowed his preferences to colour the manner in which it has chosen to conduct it's affairs.  It is the alleged integration of Mr. Tuckwell into the running of the defendant company that has brought about the legal action. It is not the purpose of this judgment to express a view as to the efficacy of that proposition, but it would be careless not to have regard to the nature of the allegation.  Therefore, I have concluded that to ensure the greatest perception of neutrality and independence, the discovery exercise should be undertaken by the defendant company where it relates to electronic documents within its custody, power and control. 

29.      Second, I did not receive any submissions suggesting that either the plaintiffs or Mr. Tuckwell would be incapable of refunding the reasonable costs incurred in the discovery process should the trial court award costs against them.  

The draft discovery protocols

30.      In anticipation of the hearing, the plaintiffs filed draft electronic discovery protocol documents for both their proposed electronic discovery and that of the defendants.  The documents contained several parts by reference to events which had occurred during the parties' commercial relationship.  Each commenced with a rubric which included an introduction, an explanation of the application of the search terms chosen, a section on the test to be applied as to the relevancy of the documents to be reviewed and disclosed, a comment on the application of privilege and a statement on the manner in which the produced documents were to be formatted for presentation.  In the draft protocol created for the defendants, there was an additional section in regard to the distinction to be drawn between Mr. Tuckwell and the defendant company.  

31.      As an opening observation, and accepting the submissions made by Advocate Harvey-Hills for the defendant company on this topic (which I refer to earlier in this judgment), I do not feel that the entries in the protocols in respect to "relevance" and "privilege" are helpful to the parties or the Court in this case.  What resulted was a thread of correspondence between the parties, leading to detailed submissions both in the skeleton arguments and subsequently at the hearing on litigation topics which should not need to be spelt out or debated in such depth.  The Court expects the parties to adhere to the rules regarding each of these fundamental principles of discovery and should any of the parties feel the need to question the actions of another, an application for specific discovery remains a viable option. 

32.      Following on from the general submissions made by Advocate Williams, Advocate Angus, also for the plaintiffs, then took the Court through the discovery protocols in considerable detail.  The Court heard submissions on each of the 15 topics identified by the plaintiffs for the defendants' electronic discovery.  Each of the topics was itself subdivided into three further sections: the appropriate keywords to be searched, the salient time periods for which searches needed to be undertaken and also the names of any other custodians whose electronic databases need to be reviewed.  In response, Advocate Gardner likewise took the Court through Mr. Tuckwell's objections and counter-proposals in respect of the defendants' electronic discovery.  For the sake of completeness, it would be right to address the submissions on all of the listed headings and I do that below.  I also wish to record that each party (at the request of the Court) filed, after the hearing, updated versions of their respective preferred discovery protocols to assist the Court in reaching a decision on these detailed issues.  

The Defendants' Discovery

FTV's investment in the defendant company:

33.      The plaintiffs' position is that it is a fundamental limb of their claims that information represented to them at the time of their initial investment in the defendant company is salient to the issue of whether or not they have suffered prejudice as a minority shareholders and whether Mr. Tuckwell's behaviour justifies a just and equitable winding up and distribution of the assets to the shareholders or, in the alternative, a buy out of their shareholdings.  It created the expectation of the plaintiffs that all parties anticipated a liquidity event which would have facilitated the redemption of the initial investment together with profits achieved through the increase in value of the defendant company in the intervening time between investment and sale.  Moreover, the appropriate time period in relation to the investment by the first and second plaintiffs ("FTV") should be from the time that the parties commenced discussions in regard to the purchase of shares in the defendant company (being January 2006) until the 30^th June, 2007. 

34.      The plaintiffs requested a number of keywords including "FTV", "PE" and "investment".  They argued that "PE" was pertinent because it stood for Private Equity and FTV had been described on numerous occasions as a PE Investor by Mr. Tuckwell and the defendant company.  The plaintiffs asked the Court in include "investment" as this was central to the very activity which ultimately led to the dispute now before the Court, however they later agreed that this term would not be included as it appeared to produce a disproportionate number of results. 

35.      In contrast to those submissions, Advocate Gardner advanced Mr. Tuckwell's position that a close analysis of the pleadings showed that almost all the factual assertions within paragraphs 20-39 of the Order of Justice which related to this period had been admitted by the second defendant and there was no pleading of misrepresentation.  It was submitted that the expectation of the plaintiffs was nothing to do with Mr. Tuckwell.  As regards the time period for any search, as Mr. Tuckwell contended that the only live issue in dispute in this topic was whether the defendant company actually needed any investment from FTV, the time period should be limited to one month prior to the provision of a term sheet to FTV and onto one month after the final call on the shares by FTV (namely 1^st May, 2006 to 30^th June, 2007). 

36.      As to the keywords, Mr. Tuckwell submitted that a brief analysis of the number of hits which would appear when searching for the word "investment" within the dates proposed by the plaintiffs would be in excess of 12,000.  This was disproportional and insufficiently discrete. In addition, Mr. Tuckwell was prepared to agree to the search for "FTV" provided that was not to include hits for that term within an email address as this would create a vast number of hits.  Finally, requests by the plaintiffs for keywords which included the search criteria of "/5" (that is to say where two words appear within 5 words of each other) were too broad and should be declined. 

37.      On the whole I was persuaded by the plaintiffs on the majority of the points under this topic.  Whether or not the factual allegations have been agreed or otherwise in the pleadings, where the nature of the claim is focused on the expectation of one of the parties and the purported deliberate behaviour of the other contrary to that expectation, documentary evidence of the intention of all sides has every prospect of being relevant and assisting the Court in reaching an equitable decision.  It is not sufficient in my view for a blanket rule to be applied that demands that there be no discovery where a factual admission has been made.  Each circumstance must be considered separately and in these circumstances, I do not accept that the admissions made by Mr. Tuckwell divest him of the responsibility of providing relevant discovery on all occasions.  As to the time period, I order that this should commence on 1st January, 2006 and conclude on 30^th June, 2007. 

FTV's put option

38.      This topic was rendered nugatory by the plaintiffs' incorporation of the "put/5 option" keyword into the previous topic.  I have therefore removed this topic in its entirety from the final protocol attached to the Act of Court.   

FTV's conversion from preferred to ordinary shares

39.      The plaintiffs plead that FTV chose to convert their shareholding in the defendant company because they wished to take advantage of a favourable conversion rate in light of their continuing expectation that a liquidity event (in the form of an IPO or sale of the defendant company) would be forthcoming.  At the hearing, they argued that the second defendant's statement within his skeleton argument that their "alleged rationale and reasons for conversion, and "expectations", are however very much in issue" meant that Mr. Tuckwell was accepting that this was a topic that required discovery from the defendants.  

40.      Advocate Gardner submitted that there was nothing for the defendants to provide discovery upon why the plaintiffs had chosen to convert at the time that they did was nothing to do with his client.  It was accepted and admitted within the pleadings that consideration was being given to the possibility of an IPO at that time. However, that IPO never came to pass. 

41.      Whilst I acknowledge that the time period proposed by the plaintiffs is relatively narrow (being between 1^st August, 2009 and 30^th November, 2009), I am unconvinced that this is a topic upon which the defendants should be required to undertake a discovery process.  It is difficult to understand what documents might be in existence at this time (given the accepted factual matrix surrounding the conversion) that would be sufficiently apposite to the basis of the claims pleaded by the plaintiffs.  I therefore concluded that this topic was beyond the scope of appropriate discovery and removed the topic in its entirety. 

FTV's purchase from the shareholders

42.      This topic centred on the pleaded case that between October 2009 and June 2010, FTV purchased further ordinary shares from other shareholders of the defendant company.  In essence this stands as further evidence that the plaintiffs maintained an expectation of a forthcoming liquidity event in the form of an IPO or a company sale which would facilitate the release of their invested funds together with a degree of profit acquired from the increase in company value.  If that was not the case, why would the plaintiffs have tied up yet further capital in the defendant company? 

43.      Advocate Gardner submitted that these assertions had been admitted in the pleaded Answer and were not factually in dispute.  The events in question took place some three years after the initial investment by FTV.  He contended that the only issues that arose from this topic were:

(a)       Whether these were the only purchases made by FTV, which would be a matter for the defendant company to confirm by the simple production of the share register; and

(b)       Whether the purchases were at a discount and/or at what FTV believed was a discount.  This would be matter upon which FTV may need to provide discovery but not Mr. Tuckwell. 

44.      I have concluded that, given the time elapsed between the initial investment and these additional purchases and the fact that the purchases came out of agreements reached between FTV and the other shareholders in the defendant company, it was less than clear why discovery on this topic would assist the Court in adjudicating on the main limbs of the pleaded cases and for that reason I removed this topic in its entirety.  

The secondary sales

45.      This topic relates to the events in late 2010 and early 2011 when FTV chose to sell a proportion of its shareholding in the defendant company to the other named plaintiffs (referred to as Millennium and Susquehanna).  The plaintiffs contend that the defendants must have documents relating to these sales and it is admitted in the pleadings that the defendant company provided assistance in the due diligence processes and by engaging Sandler O'Neill Partners to undertake marketing exercises. 

46.      Whilst the facts of the sale are admitted, the plaintiffs submit that disclosure by the defendants will cast light on the reasons why the defendant company was prepared to assist.  In addition, Advocate Angus stated that it was not admitted that during the sales process, Mr. Tuckwell had demanded a fee for the defendant company executives who had assisted with the for himself.  It was submitted that Mr. Tuckwell cannot avoid providing discovery in relation to this demand for a fee as it is material to the plaintiffs' allegations as to the manner in which Mr. Tuckwell has caused the defendant company to conduct its affairs to his benefit and the breakdown of the trust and confidence which the plaintiffs previously had in Mr. Tuckwell and his management of the defendant company. 

47.      In addition, Advocate Angus asserted that this topic also spoke to the expectation of Millennium and Susquehanna that a liquidity event was forthcoming. It followed that it would be appropriate for a search over the period from October 2010 to April 2011 to cover Sandler O'Neill Partners' involvement. 

48.      Advocate Gardner submitted that again this was an aspect of the claim that had been admitted almost in its entirety.  The facts of the sale to Millennium and Susquehanna were straightforward and the course of the marketing was irrelevant to the heart of the pleaded case.  The only pleaded issues were:

(a)       The supposed "expectations" of Millennium and Susquehanna; and

(b)       Whether the price they paid for the shares constituted a discount.

49.      In the view of Mr. Tuckwell, the first issue was not a matter for the defendants to provide discovery on - rather these were almost entirely matters for Millennium and Susquehanna.  The only caveat to that stance was that there had been an assertion as to "expectation" within the Reply filed by the plaintiffs; namely that a representation had been made by the defendant company that it intended to pursue an IPO and to file the requisite form with the Securities Exchange Commission. Advocate Gardner contended that had that been included in the Order of Justice, his client would have admitted the facts as to the expectation of the defendant company at the time.

50.      Taking all the submissions in the round, I have concluded that this topic is not necessary.  The facts of the secondary sales are admitted.  The request for a fee has been admitted.  The issue as pleaded is the expectation of Millennium and Susquehanna and that is something that those plaintiffs will be able to provide discovery upon.  It is noted in Mr. Tuckwell's skeleton argument at paragraph 89 (and it echoes with the Court's view) that if there are to be any relevant documents on the topic of the expectation of Millennium and Susquehanna, they must have been documents provided to these plaintiffs to affect their expectation.  It follows that such documents will therefore be available for discovery by those parties.  I have therefore concluded that it would be appropriate to remove the topic in its entirety. 

Attempted IPO/Sale of the defendant company

51.      Fundamental to the plaintiffs claim is the contention that the intended IPO (which would have been a liquidity event requiring the defendants to release the plaintiff's initial investment and profit element back to the plaintiffs) transposed into an assets sale which did not constitute a liquidity event and therefore prevented the plaintiffs obtaining their funds in the defendant company. 

52.      The plaintiffs assert that there are likely to be documents in relation to these issues within the custody and control of the defendant company which would cast light on Mr. Tuckwell's intentions in relation to the pursuit of liquidity events, what he and the defendant company envisaged would be the result of any such event, and the circumstances in which the IPO and company sales came to be abandoned.  They contend that such documents will be highly relevant and obviously disclosable. 

53.      Advocate Angus supplemented his request for discovery under this topic by submitting that the time period requested (1^st January, 2011 - 31^st May, 2012) was narrow and the keywords to be employed were discrete and limited.  As to the additional custodian, Mr. Tom Quigley was the accepted author of a memorandum in October 2011 which had been generated following a visit by him and Mr. Tuckwell to see potential advisors for an auction of the defendant company and wherein he had written of generating a "liquidity event" through a sale.

54.      Advocate Gardner again drew the Court's attention to the contention that almost all of Section 5 of the Order of Justice which related to this topic had been admitted in the Answer.  He argued that there was no direct allegation of wrongdoing against the defendants in respect of the IPO and no allegation on the pleadings on why the IPO had not been pursued. 

55.      I have concluded that this topic is relevant to the issues pleaded against the defendants.  Where the plaintiffs contend that the allegedly self-serving behaviour of Mr. Tuckwell has resulted in prejudice to them as minority shareholders and that there has been a breakdown of the trust and confidence such as to engage the Court's jurisdiction for a just and equitable winding up of the defendant company, it must be appropriate for defined discovery on that topic to be given.  Where it is alleged that Mr. Tuckwell deliberately sought to avoid pursuing a liquidity event in a manner contrary to the purported reasonable expectation of the plaintiffs and to their prejudice it is reasonable that appropriate searches should be undertaken.  I am content that the time period is reasonable and that the keywords are pertinent to the issues at hand.  I am further in agreement with the plaintiffs that Mr. Quigley should be added as a custodian and appropriate searches of his data must be undertaken. 

Sale of the Defendant Company and disputes between FTV and Mr. Tuckwell

56.      Both of these topics had been rendered nugatory by the inclusion of the associated keywords into the earlier topics and as such I removed both of the topics in their entirety. 

The transfer of shares to the Tuckwell Foundation

57.      It is pleaded by the plaintiffs that in May 2013, FTV discovered that in June 2011, the defendant company had registered the transfer of 17,633 shares from Mr. Tuckwell to a Foundation that he and his wife had established in Australia.  It was further pleaded that this was in contravention of the shareholders' agreement and was only discovered when Mr. Tuckwell sought shareholder approval for a waiver of the pre-emption and associated rights of any "past or future" share transfers between, amongst others, Mr. Tuckwell and the Foundation.  It is contended that Mr. Tuckwell intended to repurchase those shares in due course, thereby providing the Foundation with cash.  The plaintiffs pleaded that this donation of shares to the foundation would enable Mr. Tuckwell to defray a significant personal tax liability to the Australian government.  These transfers were ultimately deemed void but the plaintiffs plead them as examples of the alleged improper behaviour of Mr. Tuckwell and his use of the defendant company for his own benefit and in breach of his duty to act in the best interest of the shareholders as a whole. 

58.      Fundamental to the plaintiffs' claim is the contention that the intended IPO (which would have been a liquidity event requiring the defendants to release the plaintiffs' initial investment and profit element back to the plaintiffs) transposed into asset sales which did not constitute a liquidity event and therefore prevented the plaintiffs automatically receiving their investment funds and profits in the defendant company. 

59.      As to the dates proposed (1^st January, 2011 - 30^th June, 2011 and 1^st May, 2013 - 30^th September, 2013), the plaintiffs argue that, given that they do not know when Mr. Tuckwell first began the process of transferring the shares to the Foundation, the initial time period will provide a reasonable run-in to the date of the actual transfer.  The second period covers the time between the discovery of the transfer to the date of the cancellation of the transfer in the defendant company's records.  

60.      The keywords for this topic proposed by the plaintiffs cover the parties to the transfer and the financial and legal advisors.  The plaintiffs request two additional custodians; namely Mr. Quigley (as the Chief Financial Officer of the defendant company) and Mr. James (in house counsel), both of whom, it is suggested, would have been involved in or known about the arrangements for the transfer. 

61.      In response, Advocate Gardner for Mr. Tuckwell again started from the position that all the pleaded facts regarding the transfer have been admitted and therefore there is nothing in dispute which justified a discovery burden for the defendants under this topic. In addition, Advocate Gardner submitted that despite the plaintiffs' claim that Mr. Tuckwell's knowledge of the shareholders agreement is now in issue, there is no pleading to that effect.  He characterised the requests under this topic as a fishing expedition into the charitable and private affairs of Mr. Tuckwell in the hope of finding any information to launch further limbs of the action to strengthen a weak claim.  

62.      As to the date range, Mr. Tuckwell argues that January 2011 is too early and given that the transfer took place in June 2011, the date should start in May 2011 at the earliest.  Moreover, searches should be restricted to 2011 and not extend through to the date of cancellation in 2013.  Advocate Gardner suggested that there was no point in including the names of the directors of the defendant company in the keywords and this would likely lead to a large number of unnecessary and irrelevant hits within the searches.  

63.      I have considered carefully the submissions made on this topic.  Whilst I accept that there is a great deal of admitted fact within the pleadings in and around the transfer of the shares to the Foundation, I must balance that with the position that the plaintiffs' claim is, in part, predicated on the allegation that it has been Mr. Tuckwell's intentional behaviour that has been prejudicial to the plaintiffs and justifies the orders set out in the prayer to the Order of Justice.  This topic specifically relates to a set of actions by Mr. Tuckwell which might support the position of the plaintiffs and if there exists documentation highlighting a pre-existing knowledge about the invalidity of the transfer, that would be pertinent to the claims made.  I am therefore content that the defendants should provide discovery on this topic.  

64.      I have retained the time periods that the plaintiffs requested for two reasons.  First, I do not consider that Mr. Tuckwell's suggestion of commencing the searches on 1^st May, 2011, gives sufficient run in to the actual transfer.  To have utilised that date would have run the risk of missing relevant documentation.  Second, I have concluded that the period in the run up to the cancellation of the transfer is very likely to be a busy time in communications regarding the transfer and Mr. Tuckwell's intention and knowledge of the shareholders agreement.  It would be inappropriate to exclude that period.  Finally, on the issue of the additional custodians, I am content that the respective positions held by Messrs. Quigley and James vis-à-vis the defendant company makes their inclusion reasonable when the discovery relates to the invalid transfer of shares. 

The removal of Ben Cukier from the board

65.      This topic relates to Mr. Tuckwell's actions in removing Mr. Cukier (FTV's sole representative on the board of the defendant company) by way of an EGM purportedly held on the 27^th September, 2012.  It is pleaded that it can be inferred that this was an attempt to limit FTV's insight into the future actions of the board of the defendant company and that these actions by Mr. Tuckwell constituted conducting the affairs of the defendant company in a manner prejudicial to the interests of the plaintiff shareholders. 

66.      There was a degree of agreement between the parties on the need for the defendants to provide discovery on this topic.  On the topic of the time periods, Advocate Gardner proposed that as the removal had taken place in September 2012, the searches should not start from 1^st April, 2012 (as proposed by the Plaintiffs) but rather from 1^st July, 2012.  

67.      I have included this topic within the defendants' discovery protocol.  I have decided that an appropriate time period will be between 1^st June, 2012 and 31^st October, 2012 which I feel provides a proportionate amount of time before the removal event to capture documentation that may shine a light on the intentions behind the removal.  I have agreed that Mr. James should be included as an additional custodian as this was not contentious and have added a further keyword phrase in the form of "Remove* AND (ben OR Cukier)" to improve the possibility of capturing salient documents. 

Mr. Tuckwell's proposed share repurchase

68.      In June 2012, it is pleaded that Mr. Tuckwell proposed to the board of the defendant company that it repurchase shares from him and certain other members of the management team at a fixed price per share.  The rationale, set out in a memorandum drafted by Mr. Quigley, was that following the abandonment of the IPO and the failure of a company sale to materialise, the defendant company needed to improve morale and retain essential staff by offering them a method for liquidating their shares.  Importantly, that memo included a suggestion that Mr. Tuckwell be entitled to participate in the repurchase of shares and that he would be entitled to sell two to three times as many shares as the other staff members.  The plaintiffs assert that this was further evidence of Mr. Tuckwell acting in breach of his duties to the defendant company, misusing his fiduciary powers and seeking to conduct the affairs of the defendant company in a manner prejudicial to the interests of the other members. 

69.      Advocate Gardner argues that, as the repurchase did not actually take place, there was no prejudice to the plaintiffs.  Again, he argued that the allegations regarding the facts of the proposal and rejection by the board are admitted by Mr. Tuckwell in his Answer and therefore there are no factual issues in dispute that justify imposing a discovery burden on the defendants.  Mr. Tuckwell argues that the only issue in dispute is a legal one; namely whether making the proposal for the repurchase constitutes an action that would fall within the auspice of Article 141 of the Companies (Jersey) Law 1991 ("the 1991 Law").  He further submitted that to the extent that any discovery should be ordered, the proposed time period was too broad and should commence from 1^st June, 2012 as opposed to 1^st April, 2012. 

70.      Again I have reached the decision that given that this relates to the alleged prejudicial behaviour of Mr. Tuckwell which in turn goes to the heart of the claims pleaded by the plaintiffs, I am prepared to allow this topic to be included.  I take the view that the fact that the proposal did not come to fruition does not preclude the action of proposing it being salient to claims under Articles 141 and 155 of the 1991 Law.  I am content that the time period proposed by the plaintiffs is not excessive and that the inclusion of Messrs. Quigley and James as additional custodians is rational given their respective authorship of pertinent memorandum and offices within the defendant company. 

Mr. Tuckwell's unauthorised share allocation.

71.      This topic relates to three allocations of shares in the defendant company to Mr. Tuckwell between February 2011 and December 2011.  The plaintiffs plead that the allocations were improper, were purportedly evidenced by inaccurate and misleading company minutes and were in part subsequently acknowledged as having been improperly issued by the defendant company.  The plaintiffs did not become aware of the allocations immediately and plead that the actions of Mr. Tuckwell and the defendant company were prejudicial to the plaintiffs in that they had the effect of diluting their shareholding. Moreover the purported actions of Mr. Tuckwell again suggested that he was acting contrary to his fiduciary duties to the defendant company and directly to the detriment of the plaintiffs. 

72.      Advocate Angus argues that the appropriate time period covers 1^st January, 2011, (just prior to the first allocation) up to September 2013 (when the defendant company wrote to FTV to inform them of the forfeiture of some of the shares by Mr. Tuckwell and the creation of a new service agreement between the defendants).  Moreover, the plaintiffs contend that Messrs. Quigley, James and Weeks (the Chief Executive Officer of the defendant company) should be included as custodians. 

73.      Advocate Gardner submitted that on a close analysis of the parts of the Order of Justice pertinent to this topic, the allegations are limited to the assertions that the allocation was made without board or shareholder approval and, by association, without regard to the interests of the defendant company. He submitted that the matters actually in dispute were what was, and what was not, agreed by the board and in what circumstances and that discovery should be limited to these narrow points.   

74.      Moreover, Advocate Gardner asked the Court to consider what would be the appropriate time period.  All the allocations were completed by December 2011 and there were no issues in dispute in 2012 or 2013 and therefore the appropriate search period would be from 1^st January, 2011 to 31st December, 2011.  

75.      I am content that the topic justifies a discovery obligation for the defendants.  hese are allegations that go again to the motivation of Mr. Tuckwell's behaviour and his alleged desire to conduct the affairs of the defendant company for his own benefit and to the prejudice of the plaintiffs.  I am also prepared to allow the keywords proposed by the plaintiffs on their revised draft Protocol.  Where I diverge from the proposals of the plaintiffs is on the issue of the time periods.  With the allocations taking place between February and December 2011, I take the view that documents that might support an assertion that the actions were specifically motivated are most likely to be found immediately pre or post the event.  Seeking discovery from the defendants for a period of almost three years is disproportional and contrary to the themes of the overriding objective.  I therefore order that the discovery on the first part of this topic should be constrained to the period from 1^st January, 2011 to 31^st January, 2012. 

The sales

76.      The plaintiffs assert that when a possible sale or asset sale was pursued in January 2017, Mr. Tuckwell expressed the intention to pursue the company sale.  This would have been a liquidity event allowing the plaintiffs to recover their initial investment and profits.  Subsequently, and contrary to that expressed intention, UBS were retained to advise the defendant company on the asset sales.  They plead that Mr. Tuckwell caused the defendant company to retain the proceeds of the asset sales and to reinvest those proceeds as part of his desire to convert the defendant company into a "family office" and to consequently pressurise the plaintiffs into accepting a highly discounted value for their shares in order to achieve the recovery of their investments. 

77.      Advocate Angus submits that documents in relation to the asset sales will be relevant as to why the asset sales were structured in the manner in which they were and to the relevance of the instruction of UBS and the Wisdom Tree indemnity (the company in which the defendant company now holds a substantial shareholding as part of the asset sales negotiations), both of which the defendants accept are discoverable. 

78.      The plaintiffs argue that the appropriate time period should cover from 1^st June, 2017 to 30^th April, 2018, which would be the period from when the asset sales were first considered until completion.  They suggested a series of keywords which relate to the plaintiffs' names, salient executive officers of the defendant company and phrases which would refer to the asset sales and the purported discounted share price that would be available to the plaintiffs' should they wish to liquidate their interest in the defendant company. In addition, the plaintiffs would wish to see additional custodians in the form of Mr. Weeks (CEO), Mr. James (in house counsel) and Mr. Roxburgh (Chief Financial Officer after the departure of Mr. Quigley). 

79.      In response Advocate Gardner returned to his previous stated position that almost the whole of the factual matters pleaded in the Order for Justice in regard to this topic had been admitted in the Answer and that, in those circumstances, there was no need for an onerous discovery burden upon the defendants on this topic.  The Court's attention was drawn to a letter dated 12^th November, 2019 from Advocate Gardner to Advocate Williams wherein the second defendant pointed to the assertion that the excessively broad nature of this particular request is evidenced by the fact that in pre-action correspondence the plaintiffs made a series of allegations focused on the propriety of the sale, the appropriateness of the prices obtained and whether they had been in the best interests of the defendant company's allegations which Advocate Gardner contended have not been repeated in the pleaded case. 

80.      Mr. Tuckwell was prepared to provide discovery on the terms of UBS's retention for the asset sales and on the Wisdom Tree indemnity that was presented to the board of the defendant company.  

81.      Whilst I recognise the argument advanced by Advocate Gardner, I am uncomfortable in overly restraining discovery on such a central and pivotal topic.  The fact that the sales took place in the manner they did is at the very centre of the dispute between the parties.  The plaintiffs say that this decision to structure the sales as asset sales was a deliberate tactic by Mr. Tuckwell to avoid the reasonably anticipated liquidity event and intended to pressurise the acceptance by the plaintiffs of heavily discounted prices for their shareholding.  It therefore follows that any documentary evidence regarding the stated intention of Mr. Tuckwell will be extremely relevant to the action.  I do not consider the latest version for the proposed keywords to be excessive, nor can one realistically seek to exclude the time period when it covers the life of the sales.  Finally, I deem the additional custodians to be reasonable having regard to their respective positions within the defendant company at the time of the sales. 

Forced resignations of the defendant company's independent directors

82.      This topic relates to the allegation that shortly after the completion for the sales, Mr. Tuckwell forced the resignation of two directors who had refused to approve a fee to Mr. Tuckwell for the sales.  It is pleaded that such actions constituted behaviour by Mr. Tuckwell which sought to prefer his interests over, and at the expense of, the defendant company- simultaneously acting in a manner that conducted the affairs of the defendant company to the prejudice of the minority shareholders. 

83.      There was little dispute on this topic save that Mr. Tuckwell argued for a more narrow time period. The proposed time period was from 1^st April, 2018 to 30^th June, 2018, and I am content that this is not unreasonable given the period in question is small and the keywords are extremely limited.  

Change of the defendant company's business model

84.      The plaintiffs have asserted that since 2012, Mr. Tuckwell has threatened to alter the purpose of the defendant company into that of a "family office".  Post the sales in 2018, they assert that Mr. Tuckwell caused the defendant company to make a sizeable investment in a third party entity and the press release following the investment portrayed the defendant company as "the world's largest private equity firm devoted solely to investing in companies and start-ups operating in the ETF eco sphere".  Advocate Angus contended that the documents relating to these investments would be pertinent to the nature of the intention behind the change of business. 

85.      Advocate Gardner submitted that the investment made by the defendant company is fully admitted and the information regarding the investment and the third party entity are fully available on the internet.  If it were deemed helpful, the defendants would be prepared to provide the plaintiffs with copies of the investment packs as part of the discovery process.  He referred the Court to the fact that there were no pleaded allegations that the investment was not in the best interests of the defendant company. 

86.      I have concluded that on this topic, the plaintiffs have overreached and that their proposed discovery for the defendants is too broad for it to be proportional.  I am prepared to allow limited discovery but I have limited the keywords to "Carried interest", "Private equity" and "Family Office".  I find that the appropriate time period should be limited to 1^st April, 2018 to 31^st, December, 2018, so that it covers the documents relating to the pleaded investment in the third party entity and I do not accept that additional custodians should be necessary in this limited topic. 

Mr. Tuckwell's attempts to force the plaintiffs to sell at a substantial and unjustified discount

87.      This topic was no longer requested as its contents had been included within a subsequent topic. I therefore removed it in its entirety. 

Mr. Tuckwell's refusal to distribute the proceeds of the sales, attempts to reinvest and demand for a minority discount

88.      It is pleaded by the plaintiffs that on 8th August, 2018 following the asset sales Mr. Tuckwell wrote to Millennium (in response to a letter seeking clarity on the production of a liquidity plan for the investors) stating that he did not support a distribution of surplus cash to the shareholders.  This was due to purported tax inefficiencies and that he would only support a buy back of their shares provided it included a discount which had been calculated by KPMG (the defendant company's auditors) at between 36% and 50%. 

89.      It is common ground between the parties that there are aspects of this topic which require discovery from the defendants. The plaintiffs have provided a broad list of keywords, intended to cover the parties, key individuals and phrases associated with the proceeds of the sales, the buyback of the shares, any discount associated with that and also KPMG's involvement.  In addition, the plaintiffs seek the time period to commence on 1^st April, 2018 and cease on 31^st December, 2018.  Additional custodians are to include Messrs. Weeks, James and Roxburgh. 

90.      Advocate Gardner accepted that there should be a limited amount of discovery on this topic and has suggested a smaller range of keywords, no additional custodians and a time period that ceases on 30^th May, 2018.  In support of this argument, he contends that this topic is entirely new from the initial protocols exchanged between the parties and is an attempt to obtain excessively wide discovery by the back door.  On the issues of the additional custodians, Advocate Gardner submitted that Mr. Weeks was not at the defendant company in 2018 and therefore his inclusion is otiose. 

91.      Having weighed the submissions of the parties carefully, I have concluded that the balance lies in favour of a broader range of discovery on this topic.  The alleged refusal to distribute the proceeds of the sales, and the demanding of a buy back at a discount, are central limbs of the alleged behaviour of Mr. Tuckwell that the plaintiffs say justify the actions under Article 141 and 155 of the 1991 Law.  I note that there remained a line of communication between the parties up to and including December 2018 on the topic of the discount and as such I find that it is appropriate to order discovery by the defendants up to the end of 2018.  As to the issue of the additional custodians, if Mr. Weeks was not at the defendant company during 2018 (as Advocate Gardner submitted) it is to be assumed that a search of his email account at the defendant company during that time period will create a nil return and will not therefore unduly add to the discovery burden. 

Mr. Tuckwell's move to Australia

92.      As the plaintiffs had withdrawn this topic, I removed the topic in its entirety. 

The Plaintiff's Discovery

93.      The Court was advised that there was considerably less in dispute between the parties on the issue of the electronic discovery that the plaintiffs would be obliged to provide.  The draft protocol provided to the Court by the plaintiffs (and which the Court has employed as the boiler plate in the Act of Court) broke the discovery down between FTV, Millennium and Susquehanna and then, within each, broke it down further by reference to subjects and date ranges.  

94.      As there have been a number of topics where the parties were ad idem at the hearing, I shall only refer below to those topics where issues of dispute remained. 

FTV discovery

95.      One of the main areas of disagreement was the inclusion of "ETFS" as a keyword search.  The plaintiffs argued that as "ETF" was a commonly used term in their trading activities, the inclusion of such a stark keyword would create a massive number of false hits which in turn would need to be reviewed for relevance.  This would be expensive and disproportionate.  On the contrary, Advocate Gardner asserted that it ought to go into all of the searches.  It was such a fundamental term (being the name of the defendant company) that to exclude it would be to nullify the purpose of the discovery exercise.  During the course of the hearing and subsequent correspondences, it was suggested that the keywords "ETF Securit*" could be employed, thereby excluding the generic reference and catching the name of the defendant company.  That has been adopted and I have ordered that this be the case in each of the relevant searches.  

FTV's initial investment, put option, conversion from preferred to ordinary shares and purchases from shareholders

96.      On the issue of the initial investment by FTV, Advocate Gardner contended that the correct time period should be from 1^st January, 2006 to 30^th April, 2007 (the period when the final put of the investment by FTV occurred).  The plaintiffs ultimately proposed (in their latest iteration of the discovery protocol produced after the hearing) the insertion of an additional search period between 1^st January, 2006 and 31^st October, 2006 (which would cover the period up to the final investment) and this in tandem with the period between 1^st May, 2007 and 24^th June, 2007, when FTV exercised the put option.  I am content that these periods are appropriate and proportional and I have ordered the same. 

97.      There were disputes regarding the keywords to be searched under this topic including the use of "ETFS", which I have dealt with as set out in paragraph 95 above, and the inclusion of limitations where the plaintiffs proposed the terms "Convers*/10 ETF" and "Preferred/10 ETF".  Mr. Tuckwell objected to the limitation of "within 10 words of ETF" and I am minded to concur with him on this matter given the stated importance of the expectation and intention of FTV at the time of their initial investment in the defendant company.  In addition, the latest protocol has retained as custodians, Messrs. Garcia, Bienkowski and McNeill (each former employees from whom FTV acquired shares in the defendant company) and I have therefore ordered this. 

The sales and after

98.      Mr. Tuckwell takes issue with the time period to cover this topic, which is proposed by the plaintiffs as being 1^st January, 2017 to 30^th April, 2018.  The Court heard that the asset sales took place between 16^th March, 2018 and 17^th April, 2018. Advocate Gardner submitted therefore that it would be a misnomer to call the topic "The sales and after" when the time period stops so abruptly after the sales were completed. In response, Advocate Angus submitted that whilst there may have been correspondence between the plaintiffs and the named custodians post the asset sales, any such correspondence post May 2018 will be privileged. FTV have not been permitted to attend any board meetings of the defendant company and, consequently, no documentation (save that which Millennium and Susquehanna hold in relation to board meetings) will be disclosable.  Where Mr. Tuckwell has suggested that the plaintiffs may have tried to sell their shares and not liked the price offered, the plaintiffs argue that they have confirmed that no attempt to sell their shares was undertaken. 

99.      I have sympathy with the position of Mr. Tuckwell in his contention that 30^th April, 2018, provides little time after the asset sales were completed to potentially capture salient documentation held and discoverable by the plaintiffs.  However, extending the time to the present appears to be excessive and too onerous a burden.  The events in question concluded in March 2018.  There may be subsequent correspondence which is relevant but the likelihood of the same in 2019 and beyond seems slight. I note that the plaintiffs proffered an alternative date being the 31^st August, 2018.  I am content that this strikes a reasonable balance and I order that date. 

Millennium and Susquehanna discovery

100.   The primary area of disagreement between the parties was in respect of the inclusion or otherwise of Mr. Sam Schwerin as a custodian.  The plaintiffs contended that Mr. Schwerin need not be included because he did not have day to day involvement with the investment made by Millennium.  Any documents that he held would also be held by the other agreed custodians. Adding Mr. Schwerin as a custodian would result in a very large number of false hits and duplication on the searches, adding considerably to the costs of the process without adding to the number of discoverable documents. 

101.   Advocate Gardner submitted that as Mr. Schwerin had been named by the plaintiffs in their Reply as someone within Millennium who held the expectation of an expected liquidity event alongside Mr. Burstein and Mr. Chee (who were included as custodians), it would follow that he be included as an additional custodian. 

102.   On this point, I am content that disclosure will be facilitated through the named and agreed custodians and that such discovery will be sufficient to ensure that appropriate disclosure is achieved proportionally. 

103.   A final matter was the inclusion of certain additional wording within keywords for the post-sales topic.  The plaintiffs proposed that the uncontentious keywords to be applied "in combination with the following: Minutes, Board, Pack, Meeting". Advocate Gardner objected to this as there was no basis for these restrictions.  On this topic, discovery by Millennium was not to be confined to their participation at board meetings of the defendant company.  I agree with Advocate Gardner on this topic and conclude that the restraint proposed by the additional wording is unnecessary and I have therefore removed it for the discovery ordered for both Millennium and Susquehanna. 

Costs

104.   I did not hear or invite submissions on costs at the time of the hearing.  Advocate Harvey-Hills submitted that if any order as to costs ought to be given it should be costs in the cause but neither the plaintiffs nor Mr. Tuckwell has had the opportunity to make submissions on this topic.  I therefore invite the parties, should they wish to make an application for costs of and incidental to this hearing, to indicate the same in writing within 7 days of the delivery of this judgment, failing which costs shall be in the cause.  

Authorities

Financial Technology Ventures II (Q), L.P. and Ors v ETFS Capital Limited and Anor [2019] JRC 214

Compagnie Financière du Pacifique v Peruvian Guano Co. [1882] 11 QBD 55

Royal Court Practice Direction 17/07

Format Communications Manufacturing Limited v Itt (United Kingdom) Limited [1982] WL 967594

Companies (Jersey) Law 1991