The defendant bank moved to dismiss an action alleging fraudulent and negligent misrepresentation on the basis that the plaintiff breached the deemed undertaking rule under Rule 30.1 of the Rules of Civil Procedure by using documentary productions obtained in related litigation to commence a separate claim.
The court held that the plaintiff had indeed used documents obtained through discovery in the earlier proceeding to inform and support its decision to initiate the new action, thereby breaching the deemed undertaking rule.
However, considering the substantial overlap in parties, issues, and factual matrix between the two proceedings, and the minimal prejudice to the producing party, the court granted retroactive relief from the rule.
The court dismissed the bank’s motion to dismiss or stay the action but allowed the plaintiff limited permission to use the discovery materials in the new action.
Costs were awarded against the plaintiff due to its failure to seek leave before using the materials and its lack of candour in case management proceedings.