Turquoise International Ltd v Dearman Engine Company Ltd

An order directing an account does not bring the litigation to an end. The court retains jurisdiction to manage the accounting process and to determine issues arising during it. Disclosure may be ordered before liability for particular transactions has been resolved, especially where the relevant information is peculiarly within one party’s knowledge. The choice between standard and specific disclosure is ordinarily a case-management decision. A costs order may properly be made immediately against a party who pursued an application that should not have been made, regardless of the eventual outcome of the proceedings.

Dearman appealed, or sought permission to appeal, against parts of an order made by Master Kay on 12 November 2018. The order required standard disclosure in proceedings concerning an account of success fees and ordered Dearman to pay the costs of an unsuccessful application to vary summary judgment.

Dearman argued that the Master had acted without jurisdiction, had become functus, should have ordered specific rather than standard disclosure, and had failed to address confidentiality and other matters. It also argued that the costs should await the conclusion of the proceedings. The central issues were whether the Master retained jurisdiction to manage the account and whether the challenged case-management and costs decisions disclosed an appealable error.

1. Permission refused. No justiciable basis, point of principle or impermissible error was shown in relation to either part of the order.
2. An order for an account is not the end of the litigation. Where the amount due cannot be identified because relevant information is peculiarly under the control of the other party, the court retains jurisdiction, and must have jurisdiction, to manage the accounting process and determine issues arising within it. The Master was therefore entitled to order disclosure after giving Dearman an opportunity to respond to the proposal.
3. The decision whether to order standard disclosure or more restricted specific disclosure was a matter of case management. The circumstances, including Dearman’s particular knowledge of the disputed transactions, provided no basis for appellate intervention. The fact that liability for those transactions remained unresolved did not prevent disclosure. Any confidentiality concern was addressed in part by the implied undertaking governing the use of disclosed documents.
4. The court’s power under Civil Procedure Rules 1998 Practice Direction 40A, paragraph 5, to direct a hearing and give directions for resolving issues arising in an account did not require express citation by the Master. His directions for further information and replies showed that he had considered how the issue should be managed.
5. The Master was entitled, and right, to order immediate payment of the costs of an application that should not have been made. That approach discourages poor points which would otherwise delay proceedings, irrespective of the eventual disposal of the action.

• High Court (Queen’s Bench Division): Master Kay’s order dated 12 November 2018 required standard disclosure and ordered Dearman to pay the costs of its application to vary summary judgment.
• High Court (Queen’s Bench Division): Sir Alistair MacDuff, sitting as a High Court judge, stayed the relevant parts of the order and directed the present hearing.
• High Court (Queen’s Bench Division): permission to appeal was refused on both proposed grounds.