Richard John Slade v Deepak Abbhi

Hearing date: 30 th July 2020

Approved Judgment

I direct that pursuant to CPR PD 39A para. 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

DEPUTY Master Hill QC:

Introduction

These proceedings involve the CPR Part 71 examination of the Defendant as a judgment debtor. By an application dated 24 ^th July 2020 the Defendant seeks one or a combination of orders which will have the effect of limiting the further use that can be made of the financial documentation he has provided during the examination process. The application engages CPR r 31.22 but raises wider issues about the status of Part 71 examinations, and in particular whether they are to be treated as “hearings” under the CPR, and hearings held “in public”.

The factual and procedural background

The Claimant is a solicitor who at all material times was the sole principal in his firm of Richard Slade and Company. The Defendant is the son-in-law of a former client of the Claimant. The Claimant alleged that the Defendant had undertaken to pay his father-in-law's legal fees. These had gone unpaid and the Claimant brought proceedings to recover them.

The matter went to trial before HH Judge Russen QC (sitting as a judge of the High Court). By a judgment dated 24 ^th September 2018, he found in the Claimant's favour. A quantum hearing followed, leading to an order that the Defendant pay the Claimant a total of £430,000 by 15 ^th March 2019. The monies were not paid.

Shortly thereafter the Claimant applied for and was granted an order for examination of the Defendant as to his means under the CPR 71. The examination was originally listed for 27 ^th June 2019.

This hearing was vacated because on 13 ^th June 2019 Lord Justice Longmore had granted the Defendant permission to appeal and stayed the order for examination as to his means. On 6 ^th December 2019 the Defendant's appeal was dismissed and the stay was lifted.

The examination was listed before me on 25 ^th February 2020. The examination did not proceed on that day due to issues around the manner in which the documentation relating to the examination had been served upon the Defendant. Those issues were addressed in my judgment dated 20 ^th April 2020. The examination took place on 8 ^th July 2020. At the end of that hearing I directed that the Defendant produce further documents and that the examination resume on the afternoon of 30 ^th July 2020.

The Defendant has disclosed over 1,000 pages of documents in the Part 71 process. These include bank statements, joint investment account statements, insurance policies, utility bills, documentation relating to a series of trusts and an agreement/plan of merger document from June 2019 to which the Defendant was a party.

The Defendant holds one of his bank accounts and all of the investment accounts jointly with his wife. The trust deeds relate to his wife and children. The Defendant has provided witness evidence indicating his concerns about privacy and security, should the private information relating to his financial affairs and those of his family become public or fall into the hands of unconnected third parties as a result of it having been produced during the Part 71 process. Some of the material produced relates to unrelated third parties including ArisGlobal and Nordic Capital. The Defendant has additional commercial confidentiality concerns about this material.

On 21 ^st July 2020, the Defendant's solicitor, Mr Matthews, wrote to the Claimant setting out the Defendant's concerns about confidentiality. He asked him either (i) to consent to an order that the Part 71 proceedings were private (not public) hearings or (ii) to provide an express undertaking that he would not use the documents produced in the Part 71 proceedings for any other purpose than “ enforcing the Court's orders for damages and costs in these proceedings” and that he would not “ pass to any third party any copy of any of the Part 71 Documents”. Mr Matthews explained that in the alternative he would apply to Court for a declaration that the Part 71 proceedings were not public hearings, alternatively for an order under CPR r 31.22(2) (seeking to restrict the use of the documents produced to subsequent enforcement proceedings).

Later that day the Claimant replied in perfunctory terms indicating that he was not prepared to co-operate in the making of such a request and made adverse comments about the Defendant's conduct.

On 24 ^th July 2020 the Defendant issued this application. Skeleton arguments were provided by both counsel. I heard detailed submissions on the application during the 30 ^th July 2020 hearing. It was considered necessary for me to determine the application before the Defendant answered further questions in the examination. It is intended that the examination will resume on the afternoon of 6 ^th August 2020.

The legal framework

CPR r 31.22 provides in material part as follows:

“ Subsequent use of disclosed documents….

31.22

(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where –

(a) the document has been read to or by the court, or referred to, at a hearing which has been held in public;

(b) the court gives permission; or

(c) the party who disclosed the document and the person to whom the document belongs agree.

(2) The court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public.

(3) An application for such an order may be made –

(a) by a party; or

(b) by any person to whom the document belongs”.

Accordingly the basic rule in CPR r 31.22(1) is that a party to whom a document has been disclosed (here, the Claimant) may use the document only for the purpose of the proceedings in which it is disclosed (here, a Part 71 examination).

There are three exceptions to that rule:

(i) Where the document has been read to or by the court, or referred to, at a hearing which has been held in public (CPR r 31.22(1)(a));

(ii) Where the court gives permission (CPR r 31.22(1)(b)); or

(iii) Where the party who disclosed the document and the person to whom the document belongs agree (CPR r 31.22(1)(c)).

In this case the Claimant does not seek any permission for wider use of the documents under CPR r 31.22(1)(b) and the Defendant does not agree to any additional use of the documentation by the Claimant under CPR r 31.22(1)(c). Therefore the only exception relevant to this application is that set out in CPR r 31.22(1)(a). If that exception has been triggered, the Defendant seeks an order under CPR r 31.22(2) to restrict or prohibit the use of documents which have been disclosed (to essentially restore the “status quo” of the basic rule in CPR r 31.22(1)).

It is agreed that determining an application under CPR r 31.22(2) requires an assessment of the competing weight to be given to privacy rights under Article 8 of the European Convention on Human Rights (“the ECHR”), fair/public hearing rights under Article 6 and the right of access to information by the press and public derived from Article 10. The court must conduct what Lord Steyn at paragraph 17 of Re S (A child) [2005] 1 AC 593 called the “ ultimate balancing test”, involving first, “ an intense focus on the comparative importance of the specific rights being claimed in the individual case”, secondly, a consideration of “ the justification for interfering with or restricting each right”, and, thirdly, the test of proportionality. These principles were set out by David Richards J in Re Coroin [2012] EWHC 1158 (Ch), at paragraphs 92–95 (albeit in the context of a wider application that a trial should take place in private due to the nature of the financial information involved). This balancing exercise also, to varying degrees, informs the Court's approach to the other issues raised in this application.

The Defendant's submissions

The Defendant advances three grounds which alone or in combination would provide him with the protection which he seeks. These are as follows: (1) the exception to the implied undertaking expressed at CPR r 31.22(1)(a) is not engaged; (2) the Court should make an order for a private hearing; and (3) the Court should make an order under CPR r 31.22(2) that the Claimant (i) may only use the documents for the purpose of subsequent enforcement proceedings; and (ii) may not otherwise share the existence of the content of the documents with any other third party.

As the backdrop for all his arguments the Defendant (i) relies on the general principle that “ private information obtained under compulsory powers cannot be used for purposes other than those for which the powers were conferred” (Malek and Matthews, Disclosure, paragraph 19.01); and (ii) highlights the unique nature and purpose of Part 71 proceedings, as being a “ bridgehead” to the enforcement process, which is intended to give the judgment creditor information to decide whether to enforce and what assets to enforce against.

(1) The exception to the implied undertaking expressed at CPR r 31.22(1)(a) is not engaged

The Defendant argues that the documents are not ones that have or will be “read to or by the court, or referred to, at a hearing which has...