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Document Disclosure Pilot Scheme: Roman Pipia v BGEO Group Limited; determining "control" and HMRC v IGE USA Investments Limited; ordering specific disclosure.
The Disclosure Pilot Scheme under CPR PD 51U applies to existing and new proceedings in the Business and Property Courts including the Technology and Construction Court. Two recent cases provide significant guidance on the Court’s approach to requests and orders for additional and specific document disclosure under the scheme.
The case of Roman Pipia v BGEO Group Limited  EWHC 86 (Comm) relates to the Court's approach in determining "control" of documents in relation to applications for additional disclosure and the case of The Commissioners For Her Majesty’s Revenue and Customs v IGE USA Investments Limited  EWHC 1716 (Ch) relates to the Court’s approach to ordering disclosure of specific documents, where the document in question does not relate specifically to an issue in the statements of case served by the parties.
Practical implications of the cases
Roman Pipia v BGEO Group Limited discusses the concept of ‘control’ for the purposes of the obligation in CPR r.31.8 for parties to disclose documents which are, or have been in their control, and for the purposes of the Disclosure Pilot Scheme, governed by CPR PD 51U. In particular, the case confirms that whether a party has control over a class of documents is fact dependent. Property on the mobile phone of an employee is considered to be within the party’s control but property on the phone of an employee of a different company but within the same Group is not within the control of the party.
HMRC v IGE USA Investments Limited concerns the issue of whether disclosure of a specific document or documents can be ordered where the relevant issue to which the document is said to relate is not stated in the parties’ List of Issues for Disclosure and is not identifiable in the statements of case served by the parties. The judgment clarifies that the court has jurisdiction to make an order for specific disclosure where it is sufficiently important that the relevant document or documents be scrutinised in order to give a fair resolution to proceedings. The disclosure of such documents should be reasonable and proportionate to the value of the case or the importance of the issues being litigated, and this will depend upon the facts of individual cases.
In both cases, the court’s decision on whether to order additional or specific disclosure of documents was rooted in the issue of whether the disclosure sought was reasonable, proportionate and necessary to fairly conclude proceedings.
Pipia v BGEO Group Limited
Facts of the case: The Claimant (Pipia) brought a claim against the Defendant (BGEO Group Limited) for allegedly orchestrating a series of transactions to deprive the Claimant of a fertiliser plant in Georgia worth hundreds of millions of dollars. Both the Claimant and the Defendant agreed that two particular witnesses were key individuals to the case; the Defendant subsequently intended to call both of these witnesses to give evidence at the trial.
One of the witnesses was the CEO of the Defendant company until February 2018 ("Witness A"). The other witness was an employee of the Defendant company's subsidiary company ("Witness B"). The Claimant was seeking the disclosure of various emails, WhatsApp messages, and other communications from both of the witnesses.
The following issues came to light in relation to the two witnesses:
- They both resided outside of the jurisdiction;
- Neither witness was a party to these proceedings;
- Neither witness was currently employed by the Defendant company; and
- The mobile telephones which contained the relevant communications were said to be the witnesses' personal possessions, rather than the property of the Defendant company or any of its subsidiaries.
What did the Court decide? – As to whether additional disclosure could be ordered subsequent to the initial order for extended disclosure, the Court held that Claimants do not need to show a change in circumstance to obtain an additional order for disclosure. They must however show that such additional disclosure would be reasonable, proportionate and necessary to justly dispose of the proceedings. Having decided that additional disclosure was warranted on this occasion, the Court addressed the issue of “control” of documents. The question was whether the documents sought were, for the purposes of disclosure, within the control of the Defendant.
The Court came to a different conclusion in respect of the communications on each of the two witnesses' mobile phones. At the material time, Witness A was employed by the Defendant, as the Defendant’s CEO. The employment contract contained terms permitting the Defendant to access any programme or data held on any computer used by Witness A in the course of performing his duties of employment. It was held that a smartphone was a ‘computer’ for the purposes of interpreting this term and subsequently the Defendant had a right to access the information on Witness A's phone. Disclosure was therefore ordered by the court. With regard to Witness B, as this individual did not have a contractual relationship with the Defendant, the Court concluded that the mobile phone was not in the Defendant's control and therefore did not order its contents to be disclosed.
HMRC v IGE USA Investments Limited
Facts of the case: The Claimant (HMRC) entered into settlement agreements with various GE Group Companies (the Defendant) in relation to the Defendant’s tax liability in 2005. In 2018 the Claimant sought to rescind these agreements on the basis of misrepresentation and material non-disclosure. The Claimant issued proceedings in relation to this recission, seeking to recover £650million.
Around one year after issue of these proceedings, the Claimant applied for permission to amend its particulars of claim, principally in order to allege fraud. The Defendant resisted this amendment and denied the Claimant’s allegations. A case management conference took place, in which extended disclosure of documents was ordered. The parties did not agree on all of the issues relevant for disclosure of documents.
The parties later filed evidence. Within the Claimant’s submission there was reference to the fact that the Claimant’s case team dealing with the Defendant’s matter had twice referred the matter to HMRC’s fraud investigation services (FIS) and FIS had declined to investigate in both instances. The Defendant requested the documents relating to the Claimant’s referrals to the FIS. The Claimant refused to supply these and accordingly the Defendant sought an order for specific disclosure.
The Court (a Deputy Master) felt that he had no jurisdiction to make such an order as he interpreted the Pilot Scheme to mean that there could be no order for disclosure, unless the disclosure related to an issue in the parties’ List of Issues for Disclosure and that the List of Issues for Disclosure could not contain issues that were not identifiable within the parties’ statements of case. The Deputy Master granted permission to appeal and the Defendant appealed to a higher Judge accordingly.
What did the Court decide? - The appeal was allowed and the Court held that in order for there to be jurisdiction for specific disclosure, it did not matter if disclosure related to an issue identifiable on the face of the statements of case or not. “Issues for Disclosure” is defined at CPR PD 51U paragraph 7.3 as being those key issues in dispute which the parties consider will need to be determined by the court in order for there to be a ‘fair resolution of the proceedings as a whole’.
The Court decided that the Issues for Disclosure as defined in the Pilot Scheme is the key concept that should inform all concerned with the scope of disclosure. The Issues for Disclosure can be identified in several ways and the parties’ List of Issues for Disclosure is one of the tools that can be used in that process. It did not matter that the parties in this case were unable to agree the List of Issues for Disclosure or that the issues may not have been readily identified from the statement of case itself. Specific disclosure was therefore ordered.