Inversiones Frieira SL & Anor v Colyzeo Investors II LP & Anor

A limited partner’s right to inspect partnership books is assessed functionally by reference to the partnership’s business, governing documents and the documents actually in existence. The right is not a process of general disclosure and does not require the general partner to create partnership records or obtain documents belonging to separate entities. A court may assist only where further documents probably exist, fall within the relevant statutory or contractual right, and their production would provide a practical benefit having regard to the interests of all partners. Documents held by a delegate may be partnership documents, but an individual limited partner cannot compel the general partner to exercise the partnership’s rights against other entities.

The claimants were limited partners in an investment partnership managed through a general partner and delegated investment manager. In an earlier judgment, the court stated general principles governing inspection of the partnership books and invited the parties to agree which documents should be produced. Agreement was not reached, and the matter returned for determination of the remaining disputes across sixteen consolidated categories.

The central issues were whether the claimants were entitled to documents held by or relating to special purpose vehicles, whether the defendants had to obtain documents not already in the partnership’s possession, and whether the material already supplied was sufficient to enable the claimants to understand the partnership’s business.

1. The application was largely refused. The only order made concerned a search for five missing minutes of the Partnership Advisory Committee and confirmation of the result by witness statement. The provisional costs order was that there should be no order as to costs.
2. The right to inspect partnership books is functional. What constitutes the books depends on the nature and conduct of the partnership business, the governing documents and current business practice. The inquiry focuses on documents actually existing and their function, rather than abstract categories of documents.
3. The right is not equivalent to disclosure under the CPR. The general partner need not create partnership books or obtain documents belonging to separate special purpose vehicles. Where proper partnership records ought to have been kept, the partner may inspect primary documents in the partnership’s possession from which those records ought to have been created.
4. Documents held by the general partner or its delegate may form part of the partnership books if they were obtained in conducting partnership business and are sufficiently relevant. However, an individual limited partner cannot compel the general partner to exercise rights belonging to the partnership against wholly owned, intermediate or asset-owning special purpose vehicles.
5. Where the material supplied is said to be complete, the applicant must identify a practical insufficiency or show that further documents probably exist and are material to understanding the partnership business. The court will not order production merely because documents of a particular type might exist, or impose expense on the partners generally without a demonstrated practical advantage.
6. The rights of one limited partner are qualified and regulated by the corresponding rights of the other partners. Information may be provided where it is necessary to explain an element of fair market valuation and can be obtained with reasonable ease and without undue expense, but the general partner retains management discretion concerning requests to outside entities.

Not stated in the judgment.