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Cite as: [2010] JRC 117

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[2010]JRC117

royal court

(Samedi Division)

29th June 2010

Before     :

W. J. Bailhache, Esq., Deputy Bailiff, and Jurats Le Cornu and Nicolle.

 

Between

New Media Holding Company LLC

Plaintiff

And

Capita Fiduciary Group Limited

Defendant

Advocate M. St. J. O'Connell for the Plaintiff.

Advocate N. M. Santos-Costa for the Defendant.

judgment

the deputy bailiff:

Background

1.        On 12th May, 2010, the Court made a Norwich Pharmacal Order ex parte in chambers against the defendant directing it to disclose to the plaintiff certain information regarding a series of entities established organised or incorporated under the laws of a number of different jurisdictions but in particular the jurisdictions of Jersey, Delaware, Ukraine and Cyprus.  The basis of the claim giving rise to the Order was that the defendant, as a Jersey resident company providing financial services and the employer of a Mr Grant Timothy Brown, had possession power or control of the information and documents in question, relevant to the business affairs of the plaintiff; which claimed that assets which belonged to a partnership in which the plaintiff was an equal partner had been removed from the partnership structure in circumstances which gave rise to legitimate suspicion of wrongdoing.  The application to the Court for the disclosure of information was based on the premise that the defendant had some documents information and material in respect of which the plaintiff had an ownership right as a partner in the partnership, and secondly, to the extent that one was considering non-partnership information and material, then it was material to which the plaintiff claimed an entitlement under the principles of a Norwich Pharmacal Order.  The Court was shown a letter from Messrs Crill Canavan which appeared to agree that the documents and material would be provided because it was documentation to which the plaintiff was entitled in any event.  There was a caveat in relation to potential confidentiality issues in the absence of consent from the defendant's client or a Court Order, and there was a further caveat in relation to the costs of production. 

2.        On 18th May, the defendant applied inter partes for a setting aside of that Order.  In the course of that application, it was said that no such agreement had been confirmed in the letter in question.  It turned out that there was a typographical error and the word "if" had been omitted, which importantly qualified the confirmation which the letter would otherwise appear to have given.  In those circumstances, the Court ordered on 18th May that agreed partnership documentation should be produced to the plaintiff forthwith, to the extent that it was already available, and the further partnership documentation which was being sought out by the defendant should be produced to the plaintiff by Friday 21st May.  As to costs, the defendant was given liberty to apply, and it was further ordered that the existing ex parte order be stayed for a period of three weeks in order that the parties might apply for a full inter partes hearing on the substance of the application. 

3.        The Court accordingly sat on 7th and 8th June to receive an application from the defendant to set aside the balance of the ex parte order made insofar as it was concerned with non-partnership documentation and other material. 

The Claims

4.        The plaintiff asserted that by an amended and re-stated partnership agreement dated 14th April, 2008, and organised under the laws of Delaware, the plaintiff became a 50% partner in Iota Ventures LLP with a company called Petal Capital Limited, incorporated under the laws of the British Virgin Islands.  The structure chart with which the Court has been provided shows the two principals ultimately involved in this partnership are Mr Vladimir Gusinsky ("Mr Gusinsky") and Mr Konstantin Kagalovsky ("Mr Kagalovsky").  The former is the beneficial owner of the plaintiff.  By a series of subsidiary companies, the Delaware partnership, Iota Ventures LLP, owned a Ukrainian company Teleradiosvit LLC ("TRS"), which was the owner of TVi, a Ukrainian television station, the development of which was the ultimate purpose of the partnership.  The partnership arrangements envisaged that Mr Gusinsky and Mr Kagalovsky would approve jointly all financial decisions in relation to the underlying partnership assets, and both of them respectively put in place their representatives in different parts of the structure so as to ensure the appropriate development of the partnership property. 

5.        By a series of licence agreements in January and April 2009, a company called New Media Distribution Company LLC, the majority ultimate beneficial owner of which is understood to be Mr Gusinsky, licensed key programming content to TRS.  The plaintiff asserts that these licence agreements were negotiated on behalf of TRS by Mr Kagalovsky personally, and that Mr Gusinsky, given his interest in the licensing company, did not participate in that negotiation.  It is asserted by the plaintiff that Mr Gusinsky's role in the licensing company was disclosed to all concerned.  The plaintiff asserts that difficulties between Mr Gusinsky and Mr Kagalovsky appeared during the summer of 2009 such that by September, TRS removed Mr Gusinsky's representative as executive director of TRS and he was denied access to the TRS premises.  The licensing company commenced proceedings in the state of New York against the partnership for the recovery of licence fees which were due and outstanding under the terms of the licence agreements, and a Kagalovsky entity commenced proceedings also in New York against the plaintiff and Mr Gusinsky alleging breaches of fiduciary duty and self dealing in connection with the licensing agreements between the licensing company and the partnership.  The plaintiff asserted that these proceedings were subsequently dismissed because the Court before which they were brought lacked jurisdiction over the subject matter. 

6.        At some point in or about September/October 2009, various transfers of shareholdings and/or issue of additional shares took place which resulted, so the plaintiff claims, in a dilution of the partnership's interest in TRS from 100% ownership to less than 1% ownership.  Furthermore, it is alleged that in or about October 2009 the partnership purported to assign the TVi trademarks, which were an asset of the partnership, to TRS.  The plaintiff claims that Mr Kagalovsky orchestrated the assignment of rights and its registration with the Ukrainian Patent and Trademark Authority, as well as the dilution of the partnerships interest in TRS, and that as a result of these various actions, Mr Kagalovsky effectively now owns everything of value which was once owned within the partnership. 

7.        The involvement of the defendant is asserted to be this.  Mr Grant Brown, an employee of the defendant, was the manager of the partnership entity Iota Ventures LLP.  On 1st September, 2009, he executed on behalf of the partnership a Power of Attorney, allegedly without the knowledge or consent of the plaintiff, Mr Gusinsky or any of his representatives, effectively giving to one of Mr Kagalovsky's employees very broad powers to act on behalf of the partnership.  It is also asserted that Mr Brown executed a Power of Attorney on behalf of the partnership in favour of a Ukrainian Patent Attorney to enable the registration of the assignment of the TVi trademarks with the relevant public authority in Ukraine, and that that Power of Attorney was granted without the knowledge or consent of the plaintiff, Mr Gusinsky or his representatives. 

8.        It is apparent that Mr Kagalovsky is a client of the defendant, which may owe him obligations in respect of a number of other personal or business transactions.  The plaintiff has received some voluntary disclosure of documents and information from Mr Brown, endorsed by Capita, and has received further documents and information pursuant to an Order for expedited discovery made in the course of the proceedings issued by the plaintiff in New York.  The analysis of these documents lead the plaintiff to the position that the defendant is mixed up in the wrongdoing of which it asserts it is the victim, namely the dilution of the partnership interest in TRS and the transfer of the valuable TVi trademarks.  The plaintiff's position is that it is unable to say at present whether the defendant is innocently mixed up in that wrongdoing or is itself in one form or another, a wrongdoer.  It asserts that the defendant, as a fiduciary, involved in the management of the partnership, and as a party mixed up in the wrongdoing in one form or another, has come under a duty to assist the plaintiff in the production of information and material which will enable the plaintiff properly and fully to assess its potential actions and remedies, and the jurisdictions in which these might best be brought. 

The New York Proceedings

9.        On 11th December, 2009, the plaintiff brought proceedings in the Supreme Court of the State of New York, County of New York, against Mr Kagalovsky, Iota LP, a Jersey limited partnership, over which it was asserted Mr Kagalovsky exercises complete dominion and control, and which is a co-partner in Iota Ventures LLP, a company called Aspida Ventures Limited, incorporated in Cyprus, and a company Seragill Holdings Limited, a company also incorporated in Cyprus.  The action asserted the wrongdoing substantially described above, and claimed that Seragill and Aspida were the Kagalovsky controlled and owned Cyprus entities which acquired interests in TRS and its immediate holding company International Media Co LLC to the detriment of the partnership Iota Ventures LLP.  The proceedings claimed breach of fiduciary duty and breach of contract against the plaintiff's partner Iota LP, the tort of interference with contract by Mr Kagalovsky, aiding and abetting the breach of fiduciary duty by Kagalovsky, Aspida and Seragill, conspiracy to breach fiduciary duty and in the alternative unjust enrichment. 

10.      The Royal Court was informed that Seragill and Aspida contest the jurisdiction of the New York Court, although that objection has yet to be determined.  In the meantime, a series of discovery orders have been made and depositions taken pursuant to the New York process.  Before us, Advocate Costa confirmed on behalf of the defendant that the defendant would not object to any of its senior employees being deposed within the New York proceedings, provided that there was an order to this effect from a New York Court.  Advocate Costa gave this undertaking to the Court, emphasising that the undertaking applied only of course to the defendant's own employees.  Our understanding is that a Mr Paul Hucker, a senior employee of the defendant has already been deposed, and that arrangements are being made to take depositions from Mr Brown and other senior employees of the defendant. 

11.      In seeking to set aside the Orders obtained ex parte, Advocate Costa launched his attack on four grounds, albeit the first of them was not advanced with any great enthusiasm.  The four grounds were these:-

(i)        It was said there had been substantial non-disclosure by the plaintiff in making the application for the ex parte order and that on this ground, the ex parte order ought to be set aside. 

(ii)       It was said that the plaintiff had other means of getting the material information, and that accordingly, it was inappropriate to exercise the Court's Norwich Pharmacal jurisdiction as requested. 

(iii)      It was said that the scope and width of the orders was such that the defendant's confidential relationships with its clients would be wrongly invaded, and that therefore they were inadequate limits placed on the information requested. 

(iv)      It was said that the applicant for a Norwich Pharmacal Order ought to pay the defendant's costs in complying with the Order, not least because in this particular case very substantial costs would be incurred indeed.  To give an indication of those costs, 70 lever arch files of agreed partnership documents had been provided in accordance with the Court's Order of 18th May.  This had involved the defendant's staff in a huge exercise and it would be unreasonable for the plaintiff not to have to pay costs accordingly. 

12.      The plaintiff's case amounted essentially to this:-

(i)        It was clear that it had been significantly wronged.  It was entitled to explore every reasonable remedy in whatever jurisdiction and against whatever party.  The Norwich Pharmacal jurisdiction should be exercised so as to give the plaintiff all the information that it needed to make an assessment of the party against which it should bring proceedings and the jurisdiction in which those proceedings should be brought. 

(ii)       The test of necessity contended for by the defendant was not in fact a very high threshold.  The fact that the plaintiff was bringing proceedings in New York was not a bar to Norwich Pharmacal relief. 

(iii)      The plaintiff had not yet identified the full circle of defendants, the type of claims, or where the claims might be brought.  While it is true that the defendant might be one of the potential defendants against which proceedings might be brought, it was not necessarily the case that the defendant would be the subject of substantive proceedings. 

(iv)      There was in fact a dual purpose in bringing the Norwich Pharmacal application in Jersey - it was not only brought in traditional Norwich Pharmacal territory to assess the identity of prospective defendants and the nature of the claims which might be brought, but also to support discovery for the purposes of the New York proceedings where, it was contended, it would be extremely helpful to have documents available prior to the taking of depositions from the defendant's employees such as Mr Grant Brown. 

13.      Before turning to the factors which have weighed upon us in the exercise of our discretion, it is right to review the state of Norwich Pharmacal jurisprudence both in Jersey and, to the extent that it has developed in the United Kingdom since the last Jersey authority on the subject, in the United Kingdom. 

The Authorities

14.      Given that disclosure has already taken place in respect of partnership documents, the only question remaining for the Court now is the issue of disclosure pursuant to what is known in shorthand as the Norwich Pharmacal jurisdiction, so named after Norwich Pharmacal Co-v-Customs and Excise Commissioners [1974] AC 133.  The Courts in Jersey have applied the Norwich Pharmacal principles frequently.  As Birt, D.B. said in Federal Republic of Brazil and Municipality of Sao Paula the Citibank N.A. and Eight Others [2006] JLR 478 at paragraph 13;

"The starting point is Norwich Pharmacal itself and in particular the classic statement of Lord Reid.  Having made it clear that the mere witness rule was still of application within its sphere and that discovery could not be ordered against anyone who happened to be able to give information about the identity of the wrongdoer he went on to say:-

"They seem to me to point to a very reasonable principle that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrongdoing 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".   

15.      This was confirmed on appeal in Macdoel Investments Limited and Others-v-Federal Republic of Brazil and Others [2007] JLR 201, which is the leading authority in the Jersey courts on the application of the Norwich Pharmacal principle.  We apply the criteria which were set out in that decision.  Given that a number of cases from the Courts of England and Wales were put to us in argument, we have noted in particular the comments of the Court of Appeal in Macdoel starting at paragraph 38:-

"38     In any event, whilst the cases in which the Norwich Pharmacal jurisdiction has been developed in England and Wales provide useful guidance on how Lord Reid's statement of principle may be applied, the courts of Jersey are in no sense bound by the scope of the jurisdiction that may have been delineated de facto by the circumstances of these cases. 

Nor are these courts constrained by the limits which may be placed on the application of the principle in the different social and economic conditions that may prevail from time to time in England and Wales (see, generally, State of Qatar-v- lang="EN-GB" style="font-style: normal;">Al Thani).  They will have regard to, amongst other things, the policy considerations which shape the law of Jersey and the social and economic context in which it operates.  

39       We are conscious that, as the Court of Appeal of Jersey remarked in Durant Intl Corp-v- lang="EN-GB" style="font-style: normal;">Att Gen [2006] JLR 112, at para. 1, per Sumption, J.A.):-

"Over the last half-century, Jersey has become a major financial centre, providing trust and banking facilities for an extensive international clientele . . . It has for some time been the policy of the legislature and of the executive agencies exercising statutory powers that the commercial facilities available in Jersey should not be used to launder money or mask criminal activities here or anywhere else."

Although these remarks were made in the context of an action that concerned the provision of assistance by the authorities in Jersey to foreign prosecutors, they have relevance in the sphere of civil litigation, where the courts are conscious that Jersey's reputation as a major financial centre might suffer if it were not willing to assist victims of wrongdoing to obtain redress".

16.      Taking into account the comments of the Court of Appeal in Macdoel, we consider there are three questions for us to answer:-

(i)        Are we satisfied there is a good arguable case that the plaintiff is the victim of wrongdoing? 

(ii)       Are we satisfied, to the same standard that the defendant was mixed up in that wrongdoing?

(iii)      As a matter of discretion, do we consider it to be in the interests of justice to order the defendant to make disclosure? 

17.      We have used the expression "good arguable case" because it is clear that something less than prima facie evidence will suffice so as to entitle the Court to order disclosure to be made.  The Court of Appeal in Macdoel noted that there was support for that view in some English cases, and at paragraph 50, the Court said:-

"In a case of the type before us, where the court is being asked to exercise its powers to assist the victim of a fraud to recover what has been taken from him, or its equivalent in damages, there is, in our opinion, no good reason why it should require a more exacting factual basis on which to order disclosure than does an English court exercising its equitable jurisdiction to protect and preserve a trust fund".

18.      And again at paragraph 53:-

"Both Lord Kilbrandon and Jacob, J. clearly thought that something less than prima facie evidence of wrongdoing was sufficient to entitle the court to order disclosure.  We can see no reason to require a higher threshold in respect of the question whether or not the defendant is a person who has become innocently mixed up in the wrongdoing".

19.      As to the third question, namely the exercise of discretion, the facts of each case where a claim for Norwich Pharmacal relief is made will differ, and it follows that no comprehensive statement of principle can be made.  Ultimately, the Court has to make its decision as to whether the interests of justice require that an Order be made against the defendant for disclosure.  Nonetheless there are some considerations which are liable to be relevant to the exercise of discretion in most, if not all, cases. 

20.      First of all, it is clear that the Norwich Pharmacal jurisdiction is an extraordinary jurisdiction, not to be exercised lightly.  The focus is on whether it is just to make the Order.  In this context, we refer to the President of the State of Equatorial Guinea and Another the Royal Bank of Scotland International and Others [2006] UKPC 7, a decision of the Privy Council on appeal from the Court of Appeal of Guernsey.  At paragraph 16, the decision of their Lordships is given in these terms:-

"16     The second ground rested on the Lieutenant Bailiff's ruling, when summarising the principles governing the grant of Norwich Pharmacal relief that

"The power to order discovery is discretionary.  The Court should not so order unless it is satisfied that it is just and convenient to do so (on the basis of, or by analogy with, [the grant of an injunction]". 

The Court of Appeal held this to be a misdirection (para 63 of its judgment):-

"No Norwich Pharmacal type order should be made by the Royal Court unless the plaintiff establishes that it is essential and necessary [to assist the plaintiff in achieving justice] for the order to be made".

It is true that in some cases the words "necessary" has been used, echoing or employing the language of Order 24, Rule 13 of the Rules of the Supreme Court.  But, as Templeman, L.J. observed in British Steel Corporation -v-Grenada Television Limited [1981] AZ 1096, 1132, "The remedy of discovery is intended in the final analysis to enable justice to be done."  Norwich Pharmacal relief exists to assist those who have been wronged but do not know by whom.  If they have straightforward and available means of finding out, it will not be reasonable to achieve that end by overriding a duty of confidentiality such as that owed by banker to customer.  If, on the other hand, they have no straightforward or available, or any, means of finding out, Norwich Pharmacal relief is in principle available if the other conditions of obtaining relief are met.  Whether it is said that it must be just and convenient in the interests of justice to grant relief, or that relief should only be granted if it is necessary in the interests of justice to grant it, makes little or no difference of substance.  In the present case the Appellants were concerned to identify those who had financed the aborted coup in March 2004.  It is not suggested that there was any legal means of doing so open to the Appellants other than that which they chose."  

21.      I note that these dicta were applied by the Divisional Court in Aamer-v-Secretary of State for Foreign and Commonwealth Affairs [2009] EWHC 3316 (Admin), a decision given on 15th December, 2009.  In that case, the Divisional Court asked itself five questions - was there wrongdoing?  Was the UK government, however innocently, involved in the wrongdoing?  Is the disclosure of the information necessary?  Is the information sought within the scope of the available relief?  Should the Court exercise its discretion in favour of granting relief? 

22.      Secondly, a review of the authorities tends to suggest that in England and Wales there is a requirement to have regard to whether it is necessary to make the Norwich Pharmacal Order, although criticism has been made of cases where the test of necessity has been elevated to require proof that no other mechanism for obtaining the information is possible or that this is a remedy of last resort.  These dicta were criticised by the Divisional Court in Binyan Mohammed-v-Secretary of State for Foreign and Commonwealth Affairs [2008] EWHC 2048, but in the later case, the Divisional Court nonetheless held that in England and Wales, the Norwich Pharmacal principle has developed in case law such that there is a requirement that it should be necessary for the information to be disclosed. 

23.      In the light of the judgment of the Privy Council in the Equatorial Guinea case, (supra), in our view the issue of necessity is a matter to be considered within the remit of the Court's exercise of discretion.  If the plaintiff has a straightforward and available means of obtaining the information by some other route, it would probably not be reasonable, in most cases, to exercise the discretion in his favour.  That emphasises that the Norwich Pharmacal jurisdiction is an exceptional one.  However, we do not consider that there is any formal requirement for the plaintiff to establish that there is no other way of gaining access to the information he seeks. 

24.      Thirdly, it seems to us to be clear that one has to have close regard to the purposes for which the Norwich Pharmacal Order is sought.  It is clear from the authorities that these purposes may be for the identification of potential defendants in litigation, but they may be for other purposes, whether in connection with other litigation which is continuing (see for example Grupo Torras SA and Another-v-Royal Bank of Scotland Plc and Others [1994] JLR 41) and in the matter of the representation of Lucas [1981] JJ 83 or for the purpose of taking other lawful steps, albeit not steps in a Court of law.  (See P-v-T Limited [1997] 4 AER 200). 

25.      Fourthly it is right to note that there is not a requirement that the defendant in Norwich Pharmacal proceedings should necessarily have been innocently involved in the wrongdoing of which the plaintiff complains.  It is true that in Macdoel, the Court of Appeal frequently used the expression "a defendant who is alleged to have become innocently mixed up in wrongdoing".  Indeed, at paragraph 48, the Court of Appeal said this:-

"In our view, in attempting to answer that question [should the threshold in respect of the involvement of the innocent bank be set lower than a requirement at prima facie evidence be adduced?] it is helpful to look at the position of the third party who is convened as the defendant in an action for disclosure of this kind.  He is brought to Court because the person wronged believes that he may have information about the wrongdoer.  If it is confidential information, the duty of confidence is likely to be owed, directly or indirectly, to the wrongdoer.  It is likely that the third party has become mixed up because the wrongdoer, directly or indirectly, has chosen to involve him in order to facilitate the wrongdoing.  His innocence is acknowledged by fixing responsibility for his costs on the person wronged.  Disclosure will only be ordered if there is no other source of information that will assist the person wronged.  It does not seem to us unjust that a duty to disclose should arise where the Court is satisfied that there is a reasonable suspicion that the third party has been mixed up in the wrongdoing ". 

26.      Advocate Costa relied on this passage for a number of reasons, but it seems to us that its emphasis is the threshold test in relation to the level of satisfaction which the Court must have before making a Norwich Pharmacal Order - prima facie evidence of wrongdoing, or reasonable suspicion?  On the facts of Macdoel, there was no issue as to whether the banks from which the information was sought were other than innocently mixed up in the alleged wrongdoing.  Accordingly it was unsurprising that the structure of the Court of Appeal's decision repeats the language of a defendant who is innocently mixed up in wrongdoing. 

27.      It is clear however from the case of CHC Software Care Limited-v-Hopkins and Wood [1993] FSR 241, noted by Lightman J in Mitsui-v-Nexen Petroleum UK Limited [2005] EWHC 625, that the third party from whom information is sought need not be an innocent third party but maybe a wrongdoer himself.  Where however the Plaintiff seeks Norwich Pharmacal relief against a defendant who is asserted to be a wrongdoer and not innocently involved, that appears to us to be a factor which would need to be considered very carefully by the Court when having regard to the purposes for which the Order is sought.  Other than the pre-action disclosure which is permitted by statute under the Law Reform (Disclosure and Conduct Before Action) (Jersey) Law 1999, the law of Jersey does not permit pre-action discovery.  We do not have the equivalent of Rule 31.16 of the Civil Procedure Rules which apply in England and Wales and enable pre-action discovery to be made in appropriate cases.  If therefore the Royal Court were to be satisfied that the primary purpose of the Norwich Pharmacal application was to obtain pre-action discovery, it seems to us that it would be very unlikely that the discretion of the Court would be exercised in favour of the applicant.  Any introduction of such a change to the rules of disclosure is one that, in our view, should be effected by new primary and/or secondary legislation which would have been subject to consultation before its adoption. 

28.      Fifthly, we do not eschew the possibility that in an appropriate case, it may be relevant to make a Norwich Pharmacal Order in order to assist proceedings which are taking place in another court, whether that court is in Jersey or elsewhere.  The case of Lucas (supra) is authority for that proposition in Jersey.  It would be a matter for the Court to determine, in the exercise of its discretion, whether it is appropriate to make an order on those grounds, and it will do so if it considers that it is convenient in the interest of justice, to do so. 

The Merits

29.      Against those principles, we have come to exercise our discretion in relation to the application before us.  The application is to discharge orders obtained on an ex parte basis in circumstances where the only reason that they were made on that basis, and not after an inter partes hearing, was a letter from Messrs Crill Canavan which, by reason of the typographical error to which we have referred, appeared to indicate that the defendant agreed that the information should be disclosed but raised only questions of cost and potential confidentiality in relation thereto.  In the circumstances, we have approached the matter today simply on the basis as to whether or not we think the disclosure orders should be maintained. 

30.      In particular, although Advocate Costa asserted there had been substantial non-disclosure, he did not press this ground hard with us, and we do not decide the matter on that basis. 

31.      The Court considers that the disclosure orders should be set aside to the extent that they require the disclosure of non-partnership material.  The reasons for this are as follows:-

(i)        The Court is satisfied that the plaintiff has established a good arguable case that it is the victim of wrongdoing.  The Court is also satisfied, to the same standard, that the defendant was mixed up in that wrongdoing, not least because Mr Brown, an employee of the defendant, appears to have executed powers of attorney as set out in paragraph 7 above the result of which has been, on the plaintiff's case, a substantial diminution in the assets of the partnership between it and the Kagalovsky entity, Iota LP.  As however was submitted by Advocate Costa, it is clear that the plaintiff already has a great deal of information in relation to that wrongdoing and the potential claims which it might bring - indeed claims it has brought in the proceedings in New York.  In those circumstances, it appears to us that the plaintiff has quite sufficient information already to be able to identify what we call the classic Norwich Pharmacal questions of whom to sue and what the course of action might be in relation to that wrongdoing.  We disregard for these purposes the third Norwich Pharmacal jurisdiction of tracing orders because there is no evidence before us that that was the basis upon which the orders might be applied for or maintained. 

(ii)       Advocate O'Connell's submission that the plaintiff has not yet identified the full circle of potential defendants and the type of claims which might be brought may indeed be factually correct, but he has identified no wrongdoing in respect of which the plaintiff might claim to be a victim other than the wrongdoing where he already knows enough to be able to bring proceedings.  Norwich Pharmacal relief is not available as a form of pre-action discovery where one has already identified the potential defendant in advance, nor is it generally a remedy to supplement discovery in aid of existing foreign proceedings.  On the latter point, in our judgment such relief is available in order to identify a person who might be a defendant in foreign proceedings or to establish the cause of action or a tracing claim for the purposes of foreign proceedings, but generally one would otherwise allow the foreign court to exercise its jurisdiction over the disclosure which it required for the purposes of doing justice in the case before it.  We accept the submission that, to the extent that disclosure was sought for use in the New York proceedings, the correct approach was to obtain relevant orders from the New York Court, including if necessary the taking of evidence pursuant to the Hague Convention by means of a request to this Court for assistance. 

(iii)      Had the plaintiff been able to establish that it had been wronged in other ways but did not know the identity of the wrongdoer in respect of that wrongdoing, it would have been open to the plaintiff to seek an order against the defendant in that respect.  That however is not the basis of the application before us. 

(iv)      It may be said that the plaintiff has not had full disclosure of all that the defendant has in its possession or power in relation to the matters of which the plaintiff complains.  One answer to that would be to seek to join the defendant to the proceedings in New York, if the plaintiff is so advised and if, as a matter of New York law and procedure, the New York Court has jurisdiction to allow that course of action.  In that event, the defendant would of course automatically be susceptible to disclosure orders which the New York Court might make.  If on advice the plaintiff believes that the New York Court has no such jurisdiction, it remains open to the plaintiff, if so advised, to bring proceedings of a substantive nature against the defendant in Jersey, in which case disclosure will follow in the course of those proceedings in the usual way.  It does not appear to us that Norwich Pharmacal relief ought to be available to a plaintiff if the predominant purpose is to supplement the disclosure process which exists in the Courts of another jurisdiction where a substantive action is already taking place. 

(v) style='font: 7pt/normal "Times New Roman"; font-size-adjust: none; font-stretch: normal;'>       It is unnecessary to deal with the defendant's arguments about confidentiality and costs, given the view at which we have arrived on the primary question in respect of which we need to exercise our discretion.  However, we take the opportunity of indicating that in our view, the right approach to matters of confidentiality, had they been relevant, would have been to leave the order stand but have questions of confidentiality raised in relation to individual documents or classes of documents for subsequent determination.  We noted for example that Advocate O'Connell very properly conceded that he had no interest in any documents which the defendant might hold in relation to the private business of Mr Kagalovsky which did not impact upon the partnership and the claims which his client had.  The arguments around confidentiality therefore would have best been served by highlighting classes of documents in respect of which confidentiality was claimed and if no agreement between the parties could be reached, the Court would have adjudicated upon it. 

(vi) style='font: 7pt/normal "Times New Roman"; font-size-adjust: none; font-stretch: normal;'>      As to costs, the Court considers that in circumstances where there may be a substantive complaint against the defendant in any event, it would have been more appropriate, had the Norwich Pharmacal disclosure orders been permitted to stand, for a requirement to be made of the plaintiff that money be paid into its Jersey lawyers' client account pending determination of the costs issue by a court at some future date.  We understand a similar approach has been taken by way of security for the costs incurred by Mr Brown.  On what we have read so far, we would not have been minded to require the plaintiff to meet all the costs of producing documents at this stage.  However this matter does not arise because the Court has resolved to discharge the balance of the disclosure order as indicated above. 

Authorities

Norwich Pharmacal Co-v-Customs and Excise Commissioners [1974] AC 133.

Federal Republic of Brazil and Municipality of Sao Paula the Citibank N.A. and Eight Others [2006] JLR 478.

Macdoel Investments Limited and Others-v-Federal Republic of Brazil and Others [2007] JLR 201.

Durant Intl Corp-v-Att Gen [2006] JLR 112.

President of the State of Equatorial Guinea and Another the Royal Bank of Scotland International and Others [2006] UKPC 7.

Aamer-v-Secretary of State for Foreign and Commonwealth Affairs [2009] EWHC 3316.

Binyan Mohammed-v-Secretary of State for Foreign and Commonwealth Affairs [2008] EWHC 2048.

Grupo Torras SA and Another-v-Royal Bank of Scotland Plc and Others [1994] JLR 41.

Lucas [1981] JJ 83.

P-v-T Limited [1997] 4AER 200.

CHC Software Care Limited-v-Hopkins and Wood [1993] FSR 241.

Mitsui-v-Nexen Petroleum UK Limited [2005] EWHC 625.

Law Reform (Disclosure and Conduct Before Action) (Jersey) Law 1999.


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