HEADLINE SUMMARY

The court has wide case management powers, which include the discretionary power to order a person who is not a party to proceedings to give disclosure of documents relevant to an issue in those proceedings.  CPR 31.17, which codifies the court's powers under section 34 of the Senior Courts Act, governs such applications, which are made by a party to proceedings.  The court's wide powers extend to the granting of permission to serve a non-party disclosure application on a party outside of the jurisdiction, which does not amount to an extra-territorial use of the court's powers.

GORBACHEV V GURIEV AND OTHERS [2022] EWCA CIV 1270 

COMMENTARY

In a recent judgment (upheld on appeal), the claimant was granted permission to serve an order for non-party disclosure on a party located outside of England and Wales.  The court was well within its rights to grant such an order, having regard to the relevant legislation and specific facts of the case, including that the documents sought by way of disclosure were located within the jurisdiction.

FACTUAL BACKGROUND

The process for a party to apply for non-party disclosure of documents relevant to an issue in the claim is set out in CPR 31.17.  An applicant must satisfy the court that such disclosure is (i) likely to support the case of the applicant or adversely affect the case of another party; and (ii) necessary to dispose fairly of the claim or to save costs.  Even where the criteria is satisfied, the court retains a discretion whether to order disclosure.

Where an applicant wishes to obtain non-party disclosure from an overseas party, the English court will usually issue a "letter of request" to the relevant overseas court (in accordance with CPR 34.13, PD 34A and the Evidence (Proceedings in Other Jurisdictions) Act 1975.  The UK is a party to various international conventions on the taking of evidence abroad, including the 1970 Hague Convention.  

In addition, jurisdiction over defendants domiciled outside of the jurisdiction of England and Wales is generally governed by CPR 6.36, CPR 6.37 and PD 6B.  Permission is required to serve an English claim form on a defendant outside of the jurisdiction, which will usually be sought on paper without notice to the other side.  Permission will only be granted if, amongst other things, there is a good arguable case that the claim is covered by one of the "gateways" in paragraph 3.1 of PD 6B.  These gateways include, at paragraph 3.1(20(a)) of PD 6B, a claim made under an enactment that allows proceedings to be brought, and those proceedings are not covered by any of the other grounds referred to (Gateway 20).  

The Gorbachev proceedings relate to a dispute between the claimant and defendant in relation to their interests in a valuable fertiliser business, based in Russia.  One of the issues to be determined at trial was how, and why, the claimant was supported by two Cyprus trusts.  The second and third respondents to the application were the respective trustees of these two trusts, and were advised by the first respondent – Forsters, solicitors based in London.

The claimant sought to obtain non-party disclosure of certain documents held by Forsters, which Forsters alleged were held on behalf of the trustees.  The claimant therefore sought permission to join the trustees to the original application and to serve the original and amended applications on the trustees out of the jurisdiction.  That order was granted, and the claimant subsequently served the disclosure applications in accordance with the terms of the order granting permission: by delivering the applications to Forsters' offices and sending them, via email, to the specified addresses.

The trustees applied to set aside the order, on the basis that Gateway 20 did not apply to an application for disclosure against a non-party because it was not a 'claim'.  The judge disagreed with that analysis, noting the broad definition of 'claim' per CPR 6.2: "'claim' includes petition and any application made before action or to commence proceedings and 'claim form', 'claimant' and 'defendant' are to be construed accordingly." This had two consequences:

• Firstly, an application for pre-action disclosure under CPR 31.16 would therefore fall under this definition as a 'claim', and arguably therefore an application under CPR 31.17 for disclosure from a non-party should be treated similarly.
• Secondly, it was implicit in CPR 6.39 (service of application notice on a non-party to proceedings) that where an application was made against a non-party, permission to serve the application notice out of the jurisdiction could be granted in appropriate circumstances. 

The trustees also argued that section 34 of the Senior Courts Act did not allow proceedings to be brought and therefore was not covered by Gateway 20, on the basis that it only enabled an interlocutory application within existing proceedings.  The judge disagreed and held that:

• "proceedings" should be seen in the context of the width of the word "claim" (which includes claims of a procedural nature);
• in certain circumstances proceedings in court can be originated by the issue of an application notice; and
• an application under CPR 31.16 was "proceedings" for the purposes of Gateway 20 and an application under CPR 31.17 was very similar. 

The judge therefore concluded that an application under CPR 31.17 (in accordance with section 34 of the Senior Courts Act) could properly be deemed commencement of proceedings against a non-party.  The judge further held that there was no express or implied provision in section 34 that prevented an application being brought against parties located outside of England and Wales.  The wide discretion of the court was crucial here, which the court held could not be fettered by an argument that its powers under section 34 could not extend beyond the jurisdiction.

The application therefore fell within Gateway 20.

KEY LEGAL POINTS

Whilst an application for disclosure from non-parties located outside of the jurisdiction should generally be made under the "letter of request" procedure, there are circumstances in which it may be appropriate for the court to order service out of present proceedings on parties based overseas.  This may be suitable where, as in the Gorbachev case:

• the documents sought by way of disclosure are located in England and held by English solicitors;
• there are unresolved proceedings against a party holding the documents on behalf of the overseas non-party (in this case Forsters);
• the letter of request procedure would have no material benefit, because any disclosure using that procedure is likely to take place after trial.

The Gorbachev decision is at odds with previous authority that held that Gateway 20 does not cover an application for disclosure against a non-party located outside of the jurisdiction (Nix v Emerdata, 2022).  However, the Gorbachev decision provides a more detailed analysis of the relevant principles and rationale of the court, was upheld on appeal, so it is likely to become the preferred authority on this complex area of procedure.  This is particularly so since, on appeal, the Court of Appeal dismissed the respondents' appeal that (1) the judge was wrong to exercise his discretion in favour of the claimant and (2) the correct process was the letter of request procedure.  Central to the Court of Appeal's decision was the fact that the relevant documents were held in England, and therefore the legislation permitting the court to order non-party disclosure was not being applied extra-territorially and the order was capable of enforcement.

Whether a different outcome will be reached where certain facts differ, for example the location of the documents sought, remains to be seen. However, for present purposes the case is good authority that a court can, in principle, grant an application for non-party disclosure to be served on a party outside of the jurisdiction.