The Plaintiff commenced an Action against several former employees and their new employers for unlawfully using the Plaintiff’s confidential information in order to compete with it. One of the Defendant corporations, Triumph, entered into a partial settlement agreement (“PSA”) with the Plaintiff, which PSA was disclosed to the other Defendants. The settling parties applied to have the PSA approved by the Court at a case management hearing; but, the Court directed that an Application was necessary in order to properly consider the procedural fairness of the making and performance of the PSA. Secure Energy Services Inc. (“Secure”) and the individual employees applied to the Court at the same time seeking disclosure of records from the Plaintiff and leave to question witnesses of the settling Defendant corporation. The Plaintiff joined Secure in seeking clarity around which parties were adverse in interest, but resisted the Questioning of witnesses.

Chief Justice Wittmann reviewed the phrase “party adverse in interest” under Rule 5.17. Secure argued that, because of the PSA, the settling Defendant was no longer adverse in interest and should not be subject to the usual document productions and Questionings. Wittmann C.J. reviewed authorities relating to parties being adverse in interest. His Lordship indicated that the determination is made by reference not only to the pleadings but also to the record as a whole. Wittmann C.J. also noted that adverse interest can arise at any point in the proceedings as the record and evidence develop. A Justice will be tasked with looking beyond the pleadings to the entire record. Wittmann C.J. also commented that adverse inference is a flexible term and can relate to any number of different types of interests between Parties. His Lordship ordered production of various records from the settling Defendant as well as Questioning of their witnesses.