High Court grants permission for non-party disclosure application to be served out of the jurisdiction

Facts of the Case:

• the Claimant applied pursuant to CPR 31.17 and s.34 of the Senior Courts Act 1981 (the “SCA”) for third party disclosure of certain documents held in this jurisdiction by the First Respondent, Forsters LLP (“Forsters”), a firm of English solicitors
• Forsters were the advisers to the trustees of two Cypriot trusts (the “Trustees”). Among the issues at trial were to be how and why the Claimant was financially supported through these two trusts.  Forsters, on the Claimant’s case, were therefore in possession of documents which were likely to be relevant to those issues
• Forsters argued that no order for disclosure could be made against them because they held the documents on behalf of their clients, the Trustees
• the Claimant accordingly amended his original application to join the Trustees. The Claimant then served the application on Forsters in this jurisdiction and successful applied for permission to serve the application on the Trustees out of the jurisdiction pursuant to gateway (20) in Practice Direction 6B paragraph 3.1: “a claim made … under an enactment which allows proceedings to be brought”
• the Trustees applied to set aside the order for permission to serve out, arguing inter alia that:
  • as regards gateway (20), (i) an application under CPR 31.17 is not a “claim” and (ii) s.34 SCA is not “an enactment which allows proceedings to be brought”, since it depends on the existence of proceedings in relation to some other cause of action
  • s.34 SCA does not allow proceedings to be brought against persons not within England and Wales

The Decision

The Court found as follows:

• a “claim” is widely and non-exhaustively defined in CPR 6.2 and expressly includes inter alia any application made before action. There is therefore no basis to argue that it should be restrictively interpreted to exclude an application under CPR 31.17
• s.34 SCA is “an enactment which allows proceedings to be brought”, given proceedings are being originated or brought against the non-party by the issue of the application notice
• there is nothing in s.34 SCA which limits its application to persons within the jurisdiction nor any reason why it should be so construed, it being drafted in broad terms to allow an application to be brought against “a person who is not a party to the proceedings”
• despite the letter of request regime, permission to serve out should be permitted primarily because (i) disclosure was sought of documents held by officers of the court within the jurisdiction, (ii) the documents concerned transactions which were to take place in the jurisdiction and (iii) the application against Forsters (who were contending that the application should be against the Trustees) was yet to be decided and it was preferable that all relevant parties would be before the court

Analysis and Practical Advice:

• while it remains the case that applications against overseas third parties should generally be made using the letters of request regime, this decision confirms the potential availability of an alternative route where such documents are (i) held in and relate to matters in this jurisdiction, (ii) disclosure would not require any substantive steps to be taken in the overseas jurisdiction other the issuing of instructions to give disclosure and (iii) it can be shown that the letter of request regime would not lead to disclosure in time for trial
• although this application was brought solely on the basis of gateway (20), the court expressed the tentative view – since it was not the subject of full argument – that it might also have been brought under the “necessary and proper party” gateway (Practice Direction 3B paragraph 3.1 (3)). This was on the basis that the Trustees were a necessary or proper party to the claim, and contrasts to the position in relation to the respondent to a Norwich Pharmacal order (although permission to serve a Norwich Pharmacal order out of the jurisdiction may now be sought under the new gateway (25))
• finally, while there is a presumption in domestic law that legislation is generally not intended to have extra-territorial effect, this decision is a reminder that the question is ultimately who is “within the legislative grasp, or intendment” of the relevant statutory provision. The jurisdictional scope of statutory provisions will therefore vary, and it is not necessary that the enactment in question expressly authorises the bringing of proceedings outside of the jurisdiction. Here, it was found that a territorial limitation on s.34 would undermine its purpose and efficacy, particularly in view of the international nature of the disputes before the English courts and the very real possibility that non-parties may be located outside the jurisdiction

Further reading

Court of Appeal confirms mobile provider is a "mere witness" for the purpose of NPO application

ESCOU Homepage