Koldyreva v Motylev & Ors

A search order may be made against a non-party who holds, or may hold, evidence relevant to proceedings, including a person in a position analogous to a respondent to a Norwich Pharmacal order. The court must apply five requirements: a strong prima facie case; serious danger to the applicant, with evidence of major importance where destruction is feared; clear evidence that incriminating material is possessed; a real possibility of destruction or removal; and proportionality between the likely harm and the order’s legitimate purpose. Search orders preserve evidence and are distinct from disclosure orders. Proportionality may require substantial limits on searches of residential premises, particularly where children are involved.

The intended claimant sought two search orders against premises associated with the intended defendant, Anatoly Motylev: his home and the office of Megatrend Capital Partners Ltd. Megatrend was not an intended defendant, and the application was not based on a cause of action against it. The claimant relied on evidence suggesting that Mr Motylev controlled and used Megatrend to conduct business and move money.

The central issues were whether the court had jurisdiction to make a search order against a non-party and whether the requirements for such an order, including proportionality, were satisfied.

1. Jurisdiction. Section 7 of the Civil Procedure Act 1997 permitted a search order against a non-party, at least where the respondent was in a position analogous to a Norwich Pharmacal respondent. It was unnecessary to decide the outer limits of the jurisdiction. The respondent had to hold, or potentially hold, evidence relevant to the proceedings and the order had to be necessary to secure it.
2. Requirements. The court adopted the five requirements identified in BMW [2018] EWHC 1713 (Ch) and set out in Fordham [2020] EWHC 2426 (QB): a strong prima facie case; serious danger to the applicant, with evidence of major importance where destruction was feared; clear evidence that incriminating documents or articles were possessed; a real possibility of destruction or removal; and proportionality.
3. The evidence established a strong prima facie case and indicated that relevant documentary and electronic evidence was likely to exist. The risk of destruction or removal followed from the conclusions concerning dissipation of assets. The court was required to be pragmatic about the detail an applicant could provide before the search occurred, without weakening the requirements.
4. Following TBD (Owen Holland) Ltd v Andrew Simons [2020] EWCA Civ 1182, a search order served a different function from a disclosure order. The order sought was directed to preservation of evidence; later use of recovered material for tracing assets would require separate consideration.
5. The court granted orders against both locations, but materially limited the order concerning the home. The residential search was restricted by time, area and purpose, excluded the child’s electronic devices and could not take place during school hours. A bedroom could be searched further only if it appeared to be used as a home office. These restrictions made the order proportionate.

The search orders were granted in the stated terms.