This decision of the Court of Appeal ([2012] EWCA Civ 11) gives guidance on the view taken by the Court in general on disclosure of documents that are deemed to be within a party's control, even if on the face of it that party has no right to those documents.
Judgment had been given against Anstead Holdings for a sum in excess of $20m for which Mr Fomichev and Mr Peganov were guarantors. On Anstead Holdings going into liquidation, North Shore pursued the guarantors for the balance owing (which still stood at over $20m). In turn, the guarantors were then ordered (pursuant to CPR Part 71) to provide information to the court about their assets. The guarantors said that they had no assets, their collected large fortunes having been transferred to a discretionary family trust over which they alleged they had no control shortly before proceedings were commenced.
North Short sought disclosure of the details of the trust arrangement and ancillary trust documentation. At first instance, an order was made by Floyd J ordering disclosure of a wide range of documents relating to the trust on the basis that Floyd J had been satisfied that those documents were within the guarantors' control for the purposes of CPR Part 31.8 (dealing with disclosure obligations).
The guarantors appealed, saying that Floyd J had been wrong to find that the trust documents were within the beneficiaries' control. The Court of Appeal found assistance from the case of Schlumberger Holdings v Electromagnetic Geoservices [2008] EWHC 56 (Pat) where a company had been ordered to provide documents that belonged to a third party because "that [company] enjoyed...the co-operation and consent of the third party to inspect his documents and take copies".
This case was analogous to that – the guarantors' actions were suspicious and there was some evidence of collusion between them and the trustees to try and put assets (and information) beyond the reaches of North Shore. There was a difference between an order for disclosure of trust documents here and that set out in Schmidt v Rosewood, where the issue of a beneficiary's proprietary right to trust documentation was examined.
Here, the judge had been entitled to find that the guarantors were not entirely independent from the trustees and could be said to have had trust documents within their control. Accordingly, Floyd J's judgment had been right and the order for disclosure pursuant to CPR Parts 71 and 31.8 should stand.
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