A recent decision suggests that the court’s powers to make orders for disclosure will not readily be exercised to require a party to provide documents evidencing whether and how it has complied with its disclosure duties: Eurasian Natural Resources Corporation Limited v Ake-Jean Qajygeldin [2021] EWHC 462.

The Master accepted that she was bound by the decision of James Packering QC (sitting as a Deputy High Court Judge) in the recent case of Revenue and Customs Commissioners v IGE USA Investments Limited [2020] EWHC 1716 (Ch) (considered here), which held that the court has jurisdiction to order disclosure in relation to issues which do not arise on the statements of case (in that case issues arising on proposed amendments alleging fraud). However, she pointed out that there are “strong policy reasons” for the court’s reluctance to exercise that power, as the parties’ and the court’s resources should be directed to matters which the court needs to decide in order for there to be a fair resolution of the claim.

So while the decision does not preclude the possibility of an order for disclosure of documents evidencing a party’s compliance with their disclosure obligations, in an appropriate case, it suggests that such orders may be rare.

Background

The claimant is the parent company of a group of companies with international business interests, including mining in Kazakhstan and Africa. The defendant is a former Prime Minister of Kazakhstan, who resigned in 1997 and formed a political party in opposition to the then government.

The claimant brought proceedings alleging breaches of confidence by the defendant, relating to incidents that allegedly took place between 2010 and 2015. The defendant denied acquiring or using any confidential information that belonged to the claimant.

The present application concerned two categories of electronic repositories of documents which the defendant said were irretrievable, namely:

  • certain email accounts with “gmail.com” addresses; and
  • a laptop, two smartphones and a mini-iPad all said to have been stolen in April 2016.

The defendant identified these categories in an initial draft of his Section 2 of the Disclosure Review Document (“DRD”), in response to question 12 which asks for details of any documents that a party anticipates will be irretrievable for any reason.

The claimant’s solicitors were not satisfied with the defendant’s response and raised numerous queries relating to the dates of creation and use of the email accounts and whether access could be restored, and the nature of the devices that were stolen, the circumstances of their theft and steps taken to retrieve the devices or the data they contained. Protracted correspondence between the parties’ solicitors ensued, which culminated in the claimant issuing an application to the court seeking orders to the effect that the defendant write to:

  1. Google LLC seeking information held by Google regarding the email accounts, including their current status, the reasons why they were no longer accessible, and whether Google had retained any information pertaining to them; and
  2. his German lawyers and the German police and/or relevant law enforcement agencies seeking all information held about the nature and circumstances of the April 2016 theft of his electronic devices and any ensuing investigations.

In both cases the order sought would require the claimant to be copied into all such correspondence and any responses received.

The defendant resisted the application, arguing that the claimant was only entitled to information that it reasonably required in order to agree the disclosure searches to be carried out by the defendant. While he agreed to inform the claimant of the results of his solicitors’ enquiries to that extent, he objected to providing:

  1.  copies of the responses received, which might include information which was irrelevant or confidential and the provision of which would breach the GDPR/Data Protection Act 2018;
  2. some of the categories of information set out in the order on the grounds that to do so would breach rights of confidence, privacy and/or data protection.

Master’s decision

The High Court (Master Clark) dismissed the claimant’s application.

Court’s power to order disclosure

The claimant submitted that the court had power to make the order both pursuant to paragraphs 10.3 and 17.1 of the Disclosure Pilot and under its inherent jurisdiction.

(i)            Paragraph 10.3 of the Disclosure Pilot

Paragraph 10.3 states, “The parties’ obligation to complete, seek to agree and update the Disclosure Review Document is ongoing. If a party fails to co-operate and constructively to engage in this process the other party or parties may apply to the court for an appropriate order …, and the court may make any appropriate order… .”

The Master observed that section 12 of the DRD, which the defendant had completed, merely required the disclosing party to provide information. It did not, in her judgment, oblige that party to provide documents evidencing why documents are irretrievable. Since a party’s obligation to complete the DRD did not extend to providing documents to prove the steps it had taken (or any responses it had received to such steps), the “appropriate order” which the court had power to make did not extend to the provision of such documents.

(ii)           Paragraph 17.1 of the Disclosure Pilot

Paragraph 17.1 provides that “where there has been or may have been a failure adequately to comply with an order for Extended Disclosure the court may make such further orders as may be appropriate”, including requiring a party to undertake further searches or produce documents. The Master agreed with the defendant’s submission that paragraph 17.1 was not yet engaged because the dates by which the parties were to carry out extended disclosure had not arrived. Therefore the defendant could not be said to have failed to comply with the order for extended disclosure.

(iii)          Inherent jurisdiction of the court

The Master accepted the claimant’s submission that the court did have inherent jurisdiction to order disclosure in interim proceedings, extending to issues which do not arise on the statements of case. She cited David Steel J in Harris v Society of Lloyds [2008] EWHC 1433, as follows:

“It is well established under the previous procedural rules [Rules of the Supreme Court] that the power to order disclosure for the purpose of interlocutory proceedings should be exercised sparingly and then only for such documents as can be shown to be necessary for the just disposal of the application… There are good reasons for concluding that the same, if not a stricter, approach is appropriate under the provisions of CPR….”

Whether the court should exercise its power in this case

The Master reviewed the nature of the complaints levelled at the defendant in respect of the enquiries made and the information provided in relation to the categories of documents said to be irretrievable, including allegations of delay and inconsistencies in the defendant’s account of what he had done.

The Master rejected most of the complaints or found them to be insignificant. She accepted that two points had not been dealt with satisfactorily by the defendant, but noted that the defendant had since agreed to take further steps which would remedy the position. In any event she concluded that they fell “far short” of justifying the disclosure sought.

However, the “fundamental objection” to the orders sought by the claimant was that they were orders for disclosure in respect of the defendant’s compliance with his disclosure obligations, and the claimant had not cited any authority in which such an order had been made. Although cases such as Harris established that the court did have jurisdiction to order disclosure on issues that did not arise on the statements of case, that was a power that is exercised sparingly. As the Master put it:

“There are strong policy reasons for the court’s reluctance to order disclosure as to this type of issue, which are vividly illustrated by this case. The parties’ and the court’s resources should be directed and focussed upon the matters which the court will need to decide in order for there to be a fair resolution of the claim at trial.”

Applying the principles to this case, the Master concluded that the defendant was obliged to undertake a reasonable and conscientious search for disclosable documents, and the claimant was entitled to enough information about those searches to show that the defendant had done so. The defendant had agreed to provide copies of his solicitors’ enquiries, and to inform the claimant of the outcome of those enquiries to the extent that his disclosure obligations obliged him to do so. There was no basis for the court to require the defendant to disclose the correspondence in response, and to do so would, in her judgment, be wrong in principle and disproportionate.

Anna Pertoldi
Anna Pertoldi
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Caroline Tuckwell
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Maura McIntosh
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