Global Gaming Ventures (Group) Ltd & Anor v Global Gaming Ventures (Holdings) Ltd & Anor

On an application for urgent mandatory disclosure which would effectively determine the claim, the court should consider both the risk of irremediable prejudice and the relative strength of the applicant’s case. A shareholder’s contractual right to information may impose a positive obligation to keep the shareholder informed of material developments, independently of any request. A director’s access to company records may be sought for a proper purpose. Seeking information to monitor or, if justified, challenge a receivers’ sale process is not inherently improper. The court need not decide at the disclosure stage whether a later challenge to the sale will succeed.

Global Gaming Ventures (Group) Ltd and Anthony Stephen Wollenberg appealed against Arnold J’s dismissal of their application for disclosure and inspection of documents concerning a casino business, its financing and the receivers’ proposed sale of shares in its operating subsidiary: [2017] EWHC 2381 (Ch). The application arose in Part 8 proceedings and sought urgent relief before the accelerated sale process concluded.

Group relied on clause 5.1 of a shareholders’ agreement. Mr Wollenberg relied on his position as a director of Holdings and on statutory and common-law rights of access to company records. The respondents argued that the request was unreasonable or made for an improper purpose because it might obstruct the receivers’ sale, cause insolvency or support future litigation. The central issues were the correct interim approach and whether those objections defeated the claims for disclosure.

1. Appeal allowed. The court ordered disclosure of the Requested Documents. The additional information sought by a later letter was left for determination in the Chancery Division by amendment to the Part 8 claim.
2. Where urgent interim relief comprises substantially all the final relief and the relevant event will occur before trial, the court should consider the relative strength of the claim when assessing the balance of convenience. The ordinary serious-issue inquiry is insufficient where the remedy is effectively now or never. The court may still consider the harm disclosure may cause. This approach was applied in accordance with National Commercial Bank Jamaica Ltd v Olint Corpn Ltd [2009] UKPC 16 and NWL Ltd v Woods [1979] 1 WLR 1294.
3. Clause 5.1 required Holdings to provide Group with reasonably requested information relating to the Group. It also required Holdings to keep shareholders fully and promptly informed of material developments and significant events. That latter obligation was positive and operated independently of a request. The possible use of the information to monitor or challenge the sale did not negate the obligation, and ownership of individual documents was irrelevant to whether they fell within clause 5.1.
4. The court left open the final scope of the statutory and common-law rights relied on by Mr Wollenberg under sections 386 and 388 of the Companies Act 2006. The evidence was insufficient to determine whether documents concerning subsidiaries were books and records of Holdings. The undertaking offered by Mr Wollenberg reduced the risk of unauthorised disclosure.
5. Seeking information to monitor the receivers’ sale process, or potentially to challenge it, was not inherently an improper purpose. Earlier conduct which had threatened the companies’ interests did not justify inferring that the later application would damage Holdings or Developments once the post-receivership legal and economic position was considered. The possibility of future proceedings against Mr Herd, the receivers or Summit did not make disclosure objectionable.
6. The later sale of Developments to a Summit associate for £1 and Mr Herd’s resignation did not remove the appellants’ entitlement to the Requested Documents. The court accepted that harm to the company could be considered, as discussed in Oxford Legal Group Ltd v Sibbasbridge Services plc [2008] EWCA Civ 387, but held that harm could not be assessed without also considering the strength of the disclosure claim. The court did not decide whether the sale could later be challenged or rescinded.

• Court of Appeal (Civil Division): appeal from Arnold J’s order dated 20 September 2017; appeal allowed and disclosure of the Requested Documents ordered.
• High Court, Chancery Division: Arnold J dismissed the application for disclosure with costs: [2017] EWHC 2381 (Ch).