The High Court has ordered the defendants in Sports Direct International plc’s shareholder dispute to swear a replacement discovery affidavit in the form required by court rules. It refused all other reliefs in three discovery and inspection applications.
The judgment, delivered by Mr Justice Max Barrett on 22 October 2015, concerns pre-trial applications. It does not decide the underlying dispute over shareholder agreements, property transactions or the existence of a disputed deed.
Sports Direct seeks specific performance of provisions in a 1995 shareholders’ agreement, including pre-emption rights. It alleges that three defendants breached those rights when they purported to buy another defendant’s shares in the company in April 2014. The defendants dispute that the relevant provisions bind the company’s shareholders, pleading that the parties agreed they would not apply or acted in a way that prevents Sports Direct from relying on them.
Sports Direct also relies on a 2002 agreement concerning property transactions. The defendants admitted that the parties had operated on the basis that its clause 9 applied, but said transactions had taken place without the required consent. The judgment records an earlier interlocutory injunction restraining certain property transactions without Sports Direct’s written consent pending trial.
The applications before Mr Justice Barrett focused on discovery. Sports Direct sought further discovery from the defendants and asked the court to strike out their defence and counterclaim for alleged discovery failures. The judge found no evidence of a failure approaching the threshold for striking out and refused that request. He also declined most of Sports Direct’s discovery requests, relying in part on sworn evidence that specified records did not exist or that supplementary discovery had already addressed omissions. He directed the defendants to swear a supplemental affidavit in the prescribed form, which will replace their first affidavit.
The defendants sought discovery of documents said to relate to their contention that Mike Ashley signed and returned a Deed of Adherence in 2004. Sports Direct says the deed would have confirmed that shareholders were bound by the 1995 agreement, but it cannot locate a signed copy. The defendants deny that there was an agreement binding them to those terms. The judge said he was not required to decide whether the deed had been executed. He refused the defendants’ discovery request, finding the evidence insufficient to show that relevant undisclosed documents were or had been in Sports Direct’s possession. He also refused a request for a supplemental affidavit explaining the basis for Sports Direct’s assertion.
The defendants further sought inspection of documents over which Sports Direct claimed privilege, and discovery of documents concerning “concerns” in an email exchange. The judge upheld privilege for qualifying legal advice, including on successor-in-title and common-interest grounds. He distinguished legal advice from legal assistance, which is not privileged under Irish law, but found inspection of non-privileged material was not necessary to resolve the dispute fairly or save costs. He refused the remaining discovery request, noting Sports Direct’s solicitor had sworn that it would produce no further documents.
The judgment leaves the substantive shareholder claims and the disputed deed’s status for later proceedings.