CPOD SA v De Holanda Jr & Ors

Once proceedings have begun, CPR 31.16 cannot support an order for pre-action disclosure. A Norwich Pharmacal order is a distinct, exceptional remedy and does not generally justify accelerating disclosure which can be obtained through ordinary litigation procedures.

The equitable jurisdiction to protect and trace trust property may permit interlocutory disclosure against defendants, but the applicant must show that disclosure is necessary immediately to trace or protect the property and that an order is just and convenient. The court should ordinarily require the claimant first to plead its case. Delay, the availability of freezing undertakings, possible prejudice, premature determination of proprietary issues and jurisdictional uncertainty may together justify refusing relief.

CPOD alleged that Mr Holanda and companies he owned had operated a fraudulent invoice scheme and sought bank statements and an interim account before serving Particulars of Claim. It relied on an alleged proprietary claim, tracing jurisdiction and the equitable jurisdiction associated with Bankers Trust orders.

The defendants disputed the application and relied on the premature nature of the request, the absence of a pleaded proprietary claim, delay and the possible exclusive jurisdiction of the Portuguese courts under the service agreements. The court considered whether it had jurisdiction to order early disclosure and an interim account, and whether such relief was necessary, just and convenient.

1. The application for bank statements and an interim account was dismissed against all defendants, including Upcity. Mr Holanda and Airtown were awarded their costs.

2. Once proceedings have been commenced, the court has no jurisdiction to order pre-action disclosure under CPR 31.16: Personal Management Solutions Ltd v Gee 7 Group Wealth Ltd [2016] 1 WLR 2132. The Norwich Pharmacal discovery jurisdiction is distinct and is an exceptional, last-resort remedy. It was unavailable because CPOD had sufficient information to plead its case.

3. The court accepted that its equitable jurisdiction could support an order against a defendant for disclosure relating to property allegedly held beneficially for the claimant. The relevant questions were whether immediate disclosure was necessary to trace or protect the property, and whether an order was otherwise just and convenient. The jurisdiction was not equivalent to ordinary disclosure and was exercised cautiously.

4. The normal adversarial sequence required CPOD to plead its claims before compelling disclosure. There was no demonstrated urgency. CPOD had delayed for many months, had extensive audit evidence, and held undertakings equivalent to a freezing order over assets exceeding the claim. Early disclosure would risk pre-judging the uncertain proprietary and fiduciary issues and impose potentially onerous obligations on the defendants.

5. An interim account was inappropriate before Particulars of Claim had been served. The alleged duty to account depended on establishing a fiduciary or proprietary basis, and the proposed account might become an unproductive dispute about the defendants’ “running account” explanation.

6. The possible challenge to the court’s jurisdiction under the Portuguese exclusive jurisdiction clause was an additional factor favouring caution, although it was not independently determinative. The cumulative considerations meant that disclosure was neither necessary at that stage nor just and convenient.

First-instance decision. No appellate history is stated in the judgment.