a claimant to seek disclosure from an "involved" third party who had information enabling the claimant to identify a wrongdoer
Neutral Citation Number: [2022] EWHC 2954 (Comm) Case No: CL-2022-000517 IN THE HIGH COURT OF JUSTICE BUSINESS & PROPERTY COURTS OF ENGLAND AND WALES COMMERCIAL COURT (KBD) Royal Courts of Justice Strand, London, WC2A 2LL Date: 29/11/2022 Before : THE HON MR JUSTICE BUTCHER
Norwich Pharmacal Co v Comrs of Customs and Excise [1974] AC 133. The principles applicable to a Norwich Pharmacal order were conveniently summarised in Mitsui & Co v Nexen Petroleum UK Ltd [2005] EWHC 625 (Ch), where Lightman J said (at [18]-[21]): 18. … In its original form, the Norwich Pharmacal jurisdiction allowed a claimant to seek disclosure from an "involved" third party who had information enabling the claimant to identify a wrongdoer so as to be in a position to bring an action against the wrongdoer where otherwise he would not be able to do so. Lord Reid described the principle at page 175 as follows: "...if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration." The required disclosure may take any appropriate form. Usually it takes the form of production of documents, but it may also include providing affidavits, answering interrogatories or attending court to give oral evidence. 19. In subsequent cases, the courts have extended the application of the basic principle. The jurisdiction is not confined to circumstances where there has been tortious wrongdoing and is now available where there has been contractual wrongdoing: P v T Limited [1997] 1 WLR 1309; Carlton Film Distributors Ltd v VCI Plc [2003] FSR 47 ("Carlton Films"); and is not limited to cases where the identity of the wrongdoer is unknown. Relief can be ordered where the identity of the claimant is known, but where the claimant requires disclosure of crucial information in order to be able to bring its claim or where the claimant requires a missing piece of the jigsaw: see Axa Equity & Law Life Assurance Society Plc v National Westminster Bank (CA) [1998] CLC, 1177 ("Axa Equity"); Aoot Kalmneft v Denton Wilde Sapte [2002] 1 Lloyds Rep 417 ("Aoot"); see also Carlton Films. Further the third party from whom information is sought need not be an innocent third party: he may be a wrongdoer himself: see CHC Software Care v. Hopkins and Wood [1993] FSR 241 and Hollander, Documentary Evidence 8th ed p.78 footnote 11. 20. Norwich Pharmacal relief is a flexible remedy capable of adaptation to new circumstances. Lord Woolf CJ noted in Ashworth Hospital Authority v MGN Ltd [2002] 1 WLR 2033 at 2049F: Approved Judgment LMN v Bitflyer and Others "New situations are inevitably going to arise where it will be appropriate for the [Norwich Pharmacal] jurisdiction to be exercised where it has not been exercised previously. The limits which applied to its use in its infancy should not be allowed to stultify its use now that it has become a valuable and mature remedy." The development of the jurisdiction is illustrated by the disclosure relief ordered by McGonigal J in Aoot where he said: "[17] In Norwich Pharmacal the information required was the identity of the wrongdoer (the applicant knew what wrong had been done but not who had done it) but I see no reason why the principle is limited to disclosure of the identity of an unknown wrongdoer and does not extend to information showing that he has committed the wrong. "…The information held by [the respondent] may not conclusively reveal an alternate defendant to [one of the alleged wrongdoers] nor conclusively disclose who received any part of the prepayment moneys, but I am satisfied that there is a sufficient prospect that the information they hold will assist [the applicant] in its search for wrongdoers and the funds paid away …to justify making the orders sought. …. [20] The potential advantages to [the applicant] of seeing this part of the jigsaw and the potential disadvantages of it being denied a sight of that part outweigh, in my view, any detriment to [the respondent]." 21. The three conditions to be satisfied for the court to exercise the power to order Norwich Pharmacal relief are: i) a wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer; ii) there must be the need for an order to enable action to be brought against the ultimate wrongdoer; and iii) the person against whom the order is sought must: (a) be mixed up in so as to have facilitated the wrongdoing; and (b) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued. 18. The second line of authority is that stemming from Bankers Trust Co v Shapira [1980] 1 WLR 1274 (‘Bankers Trust’). This may itself be said to be founded on the principle in Norwich Pharmacal (as is suggested in Mackinnon v Donaldson, Lufkin & Jenrette Corp [1986] Ch 482 (‘Mackinnon’) at 498A/B per Hoffmann J), or to overlap with it (as suggested in Murphy v Murphy [1999] 1 WLR 282 at 290A/B per Neuberger J). The central requirements for an order under this jurisdiction were summarised by Warby J in Kyriakou v Christie Manson & Wood Limited [2017] EWHC 487 (QB), as follows: ‘12. The Bankers Trust jurisdiction arises where there is strong evidence that the claimant's property has been misappropriated. The case decided that where there is such evidence the court will not hesitate to make strong orders to ascertain the Approved Judgment LMN v Bitflyer and Others whereabouts of property and to prevent its disposal, and those orders may intrude into what would otherwise be confidential customer information. 13. The jurisdiction has been considered on a number of occasions since; the main authorities being Arab Monetary Fund v Hashim (No.5) [1992] 2 All E.R. 911, Murphy v Murphy [1999] 1 WLR 282, both of those being High Court decisions, and Marc Rich v Krasner [1999] EWCA Civ 581, a decision of the Court of Appeal. 14. Five principles have been identified (and I accept can be identified) as emerging from those authorities. First, there must be good grounds for concluding that the money or assets about which information is sought belonged to the claimant; secondly, there must be a real prospect that the information sought will lead to the location or preservation of such assets; and thirdly, the order should, so far as possible, be directed at uncovering the particular assets which are to be traced. Although the specificity required will differ according to the facts of each case, the general principle appears to be that the order should not be wider than is necessary in the circumstances. 15. A key passage relating to this principle is to be found in the judgment of Morritt LJ in the Marc Rich case, where he said, referring to a passage in the judgment of Hoffmann J in Arab Monetary Fund v Hashim, the following: "I do not understand Hoffmann J to be stating that a Bankers Trust order must be as specific as a subpoena in all cases …No doubt the degree of specificity required will differ according to the facts of each case and those facts will include the relationship between the person against whom the order is sought and the other persons against whom the claims are made. The court must in this, as in all other exercises of its discretionary powers, seek to achieve a just balance between those who seek such orders and those against whom they are sought. In striking such a balance it is necessary to consider the onerousness of compliance with the order sought without being tied down by rules relating to subpoenas." Those words are also illustrative of the fourth principle; namely that interests of the claimant in obtaining the order must be balanced against the possible detriment to the respondent in complying with the order, and the detriment to the respondent includes, in a case where this arises, any infringement, or potential infringement, of rights of privacy or confidentiality. 16. Fifthly (and finally), it is established that the applicant must provide undertakings, first of all to pay the expenses of the Respondent in complying with the order; secondly, to compensate the respondent in damages, should loss be suffered as a result of the order; and thirdly, only to use the documents or information obtained for the purpose of tracing the assets or their proceeds.’