Sir Ronald Dennis & Ors v Queenwood Golf Club Limited

The applicants sought pre-action disclosure under CPR 31.16 in advance of an intended unfair prejudice petition under section 994 of the Companies Act 2006. The court applied the jurisdictional and discretionary tests for CPR 31.16 (including whether the respondent and applicant would be parties to anticipated proceedings, whether the documents sought fell within standard disclosure and whether pre-action disclosure was desirable under CPR 31.16(3)(d)). The court accepted that those jurisdictional requirements were met and that the documents sought fell within standard disclosure. It granted disclosure of a narrowly defined set of transactional documents that the Company had provided to Deloitte (Category A), because those documents were highly relevant, limited in number, already compiled for Deloitte and likely to assist settlement and case management. The court refused broader requests for board papers and wider classes of documents (Category B) because those requests were overbroad, potentially burdensome, required exercise of judgment by reviewers, and were not necessary once the Category A documents were ordered.

Background and parties:

• The Company runs Queenwood Golf Club. The applicants are B Members with limited voting rights. The A Shares (two shares) and associated voting control are held by Queenwood Development Group LLC, owned via the Queenwood Trust which appears to be controlled by Mr and Mrs Green. The Board includes Mr and Mrs Green.

Nature of the application: The applicants applied for pre-action disclosure under CPR 31.16 in advance of an intended petition under s. 994 Companies Act 2006 alleging unfair prejudice, seeking documents relevant to substantial payments (circa £6.2m) made to Mr and Mrs Green and arrangements relating to the A Shares. The Company had commissioned a Deloitte report and circulated it to members. The applicants did not join the anticipated substantive respondents and sought disclosure against the Company alone.

Issues for determination:

1. Whether the jurisdictional conditions of CPR 31.16 were satisfied (likelihood of parties, scope of standard disclosure, and desirability under r.31.16(3)(d)).
2. Whether it was appropriate in the court's discretion to order pre-action disclosure and, if so, what classes of documents should be disclosed (requests were organised as Category A—documents provided to Deloitte, Category B—board papers/minutes, and Category C—searches of Mr Green's documents; Category C and parts of B were later withdrawn or narrowed by the applicants).

Evidence and factual material: The applicants relied on correspondence and witness statements setting out a history of requests for documents, the Deloitte report, and a table of payments and board/accounting entries indicating payments described variously over time. The Deloitte report concluded it had seen no evidence of fraud or financial wrongdoing but recorded various recharacterisations and an accelerated deed payment in 2016; it did not investigate the nature of services provided by Mr Green or give legal opinions.

Court's reasoning and decision:

• The court held that the applicants and the Company would be parties to any subsequent s. 994 proceedings and that the documents sought were within the scope of standard disclosure, satisfying CPR 31.16(3)(a)–(c).
• On desirability under CPR 31.16(3)(d), the court found that disclosure would (i) assist fair disposal and case management, (ii) assist resolution without proceedings because the Deloitte report (commissioned by the Board to resolve complaints) left unanswered questions, and (iii) save costs by enabling more precise pleadings and negotiations.
• In exercising its discretion the court ordered disclosure of Category A (the Trust Agreement and specified deeds, operating and management agreements and other documents provided to Deloitte) as limited, non-burdensome, and directly tied to the Deloitte report. The court declined to order Category B (board papers/minutes/resolutions across broad date ranges) because those classes were overbroad, potentially burdensome, involved reviewer judgment and were not shown to be strictly necessary once Category A disclosure was ordered.
• The court emphasised this was an exceptional case — the Company's commissioning and circulation of the Deloitte report and the limited nature of Category A drove the decision — and that in other cases the court might insist on joinder of substantive respondents before ordering pre-action disclosure.

At first instance the court made a pre-action disclosure order under CPR 31.16 in respect of a narrowly defined set of transactional documents provided by the Company to Deloitte (Category A) but refused broader orders for classes of board papers and other documents (Category B). The court found the CPR 31.16 jurisdictional conditions were met, the documents sought fell within standard disclosure, and that disclosure of Category A was desirable to dispose fairly of and to assist resolution of anticipated s. 994 proceedings; broader requests were refused as disproportionate and requiring exercise of reviewer judgment.