Rubin v Coote

Third-party disclosure is exceptional. Under CPR 31.17, the applicant must show cumulatively that the documents may well support its case or adversely affect another party’s case, and that disclosure is necessary for fair disposal or to save costs. Even then, the court retains a discretion, including a duty to balance privacy, confidentiality and proportionality.

The jurisdiction cannot be used as a back door to replace the investigative powers of an insolvency office-holder under section 236 of the Insolvency Act 1986. A creditor cannot ordinarily assume the liquidator’s role. Norwich Pharmacal relief is confined to necessary information and does not provide general discovery. The same limitations applied to a request to inspect the Land Registry index.

Michael Coote was the principal unsecured creditor of Branchempire Ltd. He appealed against an order by HHJ Cooke sanctioning a compromise negotiated by the liquidator, David Rubin, with parties associated with the company.

Pending that appeal, Mr Coote applied for third-party disclosure from Brian Henton, Lookmaster Ltd and Penelope-Ann Zygmant under section 34(2) of the Senior Courts Act 1981, CPR 31.17 and the Norwich Pharmacal jurisdiction. He also sought access to the Land Registry index of proprietors’ names. The central issue was whether the requested information was relevant and necessary to the issues that the Court of Appeal would determine.

1. Both applications were dismissed. The material sought was not relevant in the CPR 31.17 sense. The Court of Appeal would review whether HHJ Cooke had erred in principle or failed to take relevant matters into account, by reference to the material available when he sanctioned the compromise in June 2009. New material obtained through later investigation could not properly advance that appeal.

2. CPR 31.17 imposed cumulative requirements. The documents had to be likely to support the applicant’s case or adversely affect another party’s case, and disclosure had to be necessary to dispose fairly of the claim or save costs. The word likely meant that the documents may well assist. Third-party disclosure remained exceptional, and the court retained a residual discretion even where both thresholds were satisfied.

3. The requested disclosure was in substance an attempt by Mr Coote to step into the shoes of the liquidator. Section 236 of the Insolvency Act 1986 provided the statutory mechanism by which the liquidator could obtain information necessary to discharge his functions. It was inappropriate to use CPR 31.17 to circumvent or replace that mechanism, particularly where the liquidator had considered the request and declined to pursue it.

4. The Norwich Pharmacal jurisdiction did not assist. It was confined to necessary and proportionate information and did not provide a general right of discovery or a means of gathering evidence. The information sought was not necessary for the reasons already given.

5. The application to inspect the Land Registry index was governed by effectively the same considerations. The statutory insolvency regime protected the creditor’s rights through the liquidator, and no sufficient basis existed for personal disclosure to Mr Coote.

6. The judge observed, although it was unnecessary to decide the point, that the submissions concerning a direct duty owed by Mr Henton to Mr Coote were correct. The court nevertheless urged Mr Henton to disclose to Mr Rubin the documents he had offered to provide.

The applications arose in an appeal to the Court of Appeal from HHJ Cooke’s decision sanctioning the liquidator’s compromise under section 165(2)(b) of the Insolvency Act 1986. The judgment records that permission to appeal had been granted, but does not state the outcome of that appeal.