John Walsh & Ors v Peter Spence & Ors

The court’s supervisory jurisdiction over trusts is confined to the administration of the trust and the relationship between trustees and beneficiaries or other persons interested under it. It does not provide a route for trustees to obtain pre-action disclosure from strangers to the trust.

Civil Procedure Rules 1998 Part 64 is procedural and cannot enlarge that jurisdiction. It concerns internal trust applications, not adversarial claims for documents belonging to third parties. Information recorded in a third party’s accounting database is not thereby trust property. The charity’s own records remained deliverable, subject to reasonable collation and delivery costs.

The claimants were trustees of three registered charities associated with the Royal Antediluvian Order of Buffaloes. They sought documents and access to the defendants’ Sage accounting system to enable the charities’ accountants to prepare and audit accounts, investigate alleged financial irregularities and potentially restate earlier accounts.

The defendants contended that the Sage system belonged to the RAOB Grand Lodge of England, that the claim was in substance pre-action disclosure against strangers to the trusts, and that sufficient accounting information and access had already been offered. The central questions were whether the court had jurisdiction under its inherent trust jurisdiction or Civil Procedure Rules 1998 Part 64, and whether relief should be granted.

1. Disposition. The application was dismissed except that the defendants were ordered to deliver up the charities’ own records, consisting of approximately six pallets of documents, upon payment of reasonable collation and delivery costs. The parties were given liberty to apply on implementation.
2. Inherent jurisdiction. The court’s inherent jurisdiction to supervise trusts is directed to the administration of the trust and the trustee-beneficiary relationship. It does not permit trustees, merely because they are trustees, to obtain pre-action disclosure from strangers to the trust for hostile or contemplated litigation. The present claim was adversarial in substance and the claimants’ status as trustees was incidental.
3. Sage system and information. The Sage database was created and owned by the RAOB GLE, not by the charitable trustees or with trust money. Information recorded in the database was not, merely by being recorded there, property of the charities. This differed from the charities’ own documents, which were their property and could properly be ordered to be delivered up.
4. CPR Part 64. Part 64 is procedural and cannot confer a jurisdiction which the court does not otherwise possess. Rule 64.2(a)(ii) concerns internal trust applications, including directions and accounts in the administration of a trust. It does not authorise disclosure or delivery up of documents held by third parties who are strangers to the trust.
5. Alternative basis. Even if jurisdiction existed, relief would have been refused as discretionary equitable relief. The evidence showed that the claim had developed into an attempt to search the defendants’ records for evidence supporting wider allegations of wrongdoing. The accountants had been offered audit packs, access to relevant records and supervised access to Sage, and had not sufficiently used those opportunities to identify specific deficiencies.