Punjab National Bank v Jain & Ors

A court may use case-management powers to order disclosure in the context of a strike-out application where missing or destroyed documents also bear on substantive issues. Under the Civil Procedure Rules, individual identification of lost or destroyed documents may be required in exceptional cases, although a general statement remains sufficient in ordinary cases. Disclosure and inspection orders may be combined to avoid unnecessary applications, subject to protection for privilege and confidentiality. The exercise must remain proportionate: an order requiring a wholesale trawl through numerous files should be narrowed where it adds little to the issue. Decisions about mediation remain matters of case-management discretion.

The bank’s claim concerned security allegedly granted over properties to secure a company’s debt. The defendants relied on an alleged oral compromise and, in two cases, undue influence. Following delayed and supplemental disclosure, the deputy judge ordered production for inspection of three or four enforcement files and required the bank to identify documents referred to in disclosed documents but no longer available. He refused to order mediation and directed that the first defendant’s costs be in the cause. The bank renewed its application for permission to appeal. The central issues were whether the disclosure and inspection orders were within the court’s powers and proportionate, and whether the refusal of mediation should be disturbed.

Lord Justice Mance gave the judgment, with Lord Justice Jacob agreeing.

1. Disposition. Permission to appeal was granted only in relation to paragraph 2 of the deputy judge’s order. The appeal was allowed to that extent. The order concerning inspection of the three or four enforcement files and the refusal to order mediation were maintained.
2. Jurisdiction and disclosure. The court had jurisdiction under its case-management powers to order disclosure in the context of a strike-out application. Destruction of documents was relevant not only to the proposed strike-out application but also to the substantive issues at trial. The disclosure rules could, in an exceptional case, require individual identification of documents no longer in a party’s control and an explanation of what had happened to them. A general statement remained appropriate in ordinary cases, but the circumstances here justified insistence on the literal requirements of the rules.
3. Inspection. The deputy judge was entitled to short-circuit the ordinary procedure and combine specific disclosure with inspection. The enforcement files were relevant as a whole to the missing-document issue. The order properly protected privileged material and material confidential to other clients by permitting it to be covered.
4. Proportionality. Paragraph 2 went further than was justified. The judge had misunderstood the burden of identifying every missing document and maintained the order despite the resulting disproportion. The court substituted a narrower first-stage exercise. The bank was required to examine the list prepared by the defendants, identify documents that were irrelevant, privileged or probably non-existent, and explain any remaining missing documents by reference to material available in London. The first defendant had liberty to restore the matter to the Chancery judge, who could then decide whether further investigation in India was necessary.
5. Mediation and costs. Refusal to order mediation fell within the deputy judge’s case-management discretion and was not open to criticism. The costs order below remained unchanged, with the first defendant’s costs in the cause. Both parties’ costs of the appeal were also made costs in the cause.

• Court of Appeal (Civil Division) [2004] EWCA Civ 589: permission granted in relation to paragraph 2 of the disclosure order; appeal allowed to vary that order. The challenges concerning paragraph 1 and mediation were refused.
• High Court of Justice, Chancery Division: on 11 August 2003, the deputy judge ordered inspection of three or four enforcement files, required further identification of missing documents, refused a mediation order, and made the first defendant’s costs costs in the cause.