John Walsh & Ors v Peter Spence & Ors

Key legal principles and decision grounds:

• The court held that trustees are entitled to the Charities' own documents (which are the Charities' property) and ordered delivery up of those documents subject to payment of the defendants' reasonable costs of collation and delivery.
• The court refused to order production or disclosure of the RAOB Grand Lodge of England's wider accounting database (Sage) or other third‑party documents on the basis that the Sage system is not trust property and the court has no inherent jurisdiction, nor a CPR Part 64 jurisdiction, to compel a third party to produce documents for pre‑action discovery outside the limited supervisory jurisdiction over trusts.
• The judge applied authorities on disclosure by trustees (including Schmidt v Rosewood and Re Londonderry’s Settlement) and concluded CPR Part 64 is confined to internal trust administration matters; it cannot be used as a backdoor to obtain pre‑action disclosure from strangers to the trust. The proper procedural route for pre‑action disclosure would be CPR r.31.16.

The application was therefore allowed in part (delivery up of the Charities’ own records) and dismissed in all other respects.

Background and parties: The claimants are trustees of three registered charities associated with the Royal Antediluvian Order of Buffaloes Grand Lodge of England (RAOB GLE). The defendants are representatives of the unincorporated association RAOB GLE and its management committee. The trustees alleged that important accounting records and documentation required to prepare and audit charity accounts were being withheld by the RAOB GLE and that, as a consequence, the trustees could not prepare or audit accounts (including restating the 2018 accounts).

Nature of the claim / relief sought: The Part 8 claim sought delivery up or access to extensive documentation and electronic data (initially the schedules in Schedules 1 and 2 to the auditors' witness statement), in particular a full backup of the Sage accounting system, prime records and certain specific documents (an internal audit report, a KPMG report, previous auditors' working papers and details of a police enquiry). The claim relied on the court’s inherent jurisdiction and CPR Part 64 (estates, trusts and charities jurisdiction).

Issues framed:

• Whether the Court had jurisdiction (inherent jurisdiction and/or under CPR Part 64) to order production or access to the Sage database and other material held by RAOB GLE (a third party to the trusts).
• Whether the information on Sage constituted trust property or trust documents of the Charities and, if not, whether disclosure could nevertheless be ordered.
• Whether the Charities were entitled to delivery up of their own underlying documents held by RAOB GLE and, if so, on what terms (including who should bear the costs of collation/delivery).

Court’s reasoning and outcome on issues:

• Jurisdiction: The court analysed the law on disclosure in trust supervisory proceedings (Schmidt v Rosewood, Re Londonderry’s Settlement and authorities summarised in Lewin on Trusts) and concluded that the supervisory/inherent jurisdiction over trusts is limited to internal trust administration and does not permit trustees (or beneficiaries or strangers) to obtain pre‑action discovery from third parties to enable hostile litigation. CPR Part 64 was construed consistently with that limitation and does not confer a wider power to extract documents from third parties in aid of pre‑action litigation.
• Sage and third‑party records: The Sage accounting system was held to belong to RAOB GLE and not to the Charities; information on Sage is not, by the mere fact of containing charity‑related entries, converted into trust property. The court emphasised that information as such is not proprietary; equitable protection may arise only in confidentiality contexts but does not render a third party database the property of the trustees. Consequently the court would not order production or copying of the RAOB GLE’s Sage backup or other RAOB GLE records beyond what the Charities already owned.
• Available disclosure: The court found that substantial cooperation and audit material had been offered and in many instances provided (audit packs, trial balances, on‑site access, and a Sage transactions report for 2018–19). The judge noted the trustees’ auditors had not availed themselves of offered on‑site access, had not collected prime records already offered, and had not engaged in the proposed inspection process before pursuing the court process.
• Relief granted: The only material the court ordered produced was the Charities' own historic documentation (approximately six pallets), with production on payment of the defendants’ reasonable collation/delivery costs and liberty to apply as to practical arrangements and timing.

Wider context: The judgment stressed the rarity of using trust supervisory powers to compel third‑party production and emphasised proper procedural routes (e.g. pre‑action disclosure under CPR r.31.16 or data‑protection subject access procedures) where a party seeks documents from a non‑trustee. The court also rejected arguments that supervised on‑site access would unacceptably threaten auditor independence or justified wholesale copying of RAOB GLE systems.

Application allowed in part. The court ordered delivery up of the Charities’ own documents in the possession of the RAOB GLE (circa six pallets) on payment of the defendants’ reasonable costs of collation and delivery and with liberty to apply as to practical arrangements and timing. All other relief sought was dismissed. The court held (1) the Sage system is not trust property and the Charities had no proprietary title to the RAOB GLE database; (2) the court’s inherent supervisory jurisdiction and CPR Part 64 are confined to internal trust administration and do not authorise broad pre‑action disclosure from third parties; and (3) the proper route for pre‑action disclosure is CPR r.31.16 (which had not been pursued).