Robert Kurvits & Anor v Kaur Kender & Ors

For CPR 18.1, a matter may be “in dispute” before a defence is served. The question is determined from the case as a whole, including available pre-action correspondence and other material, rather than from pleadings alone. The court may order clarification where the information sought is reasonably necessary and proportionate to enable the applicant to understand the case it must meet or prepare its own case. That may include clarifying the scope and nature of the relief sought, even if clarification could cause part of the dispute to disappear. Requests must remain confined to genuine issues in the proceedings and must not be speculative or disproportionate.

The petitioners sought the winding up of Zaum UK Ltd on the just and equitable ground, alleging failure of substratum. The majority shareholders and the company made applications under Part 18 for clarification of allegations concerning the company’s business, intellectual property, purposes, surplus on winding up, ownership declarations and possible contractual relief.

The petitioners argued that matters could not be “in dispute” before service of a defence. The court considered whether Part 18 jurisdiction was engaged before pleadings had closed and whether the individual requests were reasonably necessary and proportionate.

1. The court rejected the submission that a Part 18 order cannot be made before service of a defence. Whether a matter is “in dispute” is not determined by pleadings alone. The court may consider the available material, including pre-action correspondence, to identify issues currently in dispute.
2. The requirements that the request concern a matter in dispute and be reasonably necessary and proportionate are threshold conditions. If satisfied, the jurisdiction is engaged. A request may clarify the scope of a dispute, including an issue which might cease to be contested once the clarification is given.
3. It would be inconsistent with the overriding objective to require a defendant to plead, potentially by general denial, and then seek clarification. A Part 18 order may therefore be made before a defence where the pleading is capable of clarification and the request is properly confined.
4. The majority shareholders’ requests concerning the legal and practical basis of the alleged inability to exploit the games, the company’s purposes, the effect of Mr Kurvits’s exclusion, and the alleged loss of substratum were reasonably necessary and proportionate. The request concerning Mr Taal’s removal was refused because the information already supplied was sufficient.
5. The company’s requests concerning the alleged surplus, intellectual property ownership, the effect of the declarations sought, and contracts allegedly divesting the company of intellectual property or games were also reasonably necessary and proportionate. They were material to whether the company had a sufficient interest, what case it had to meet, and whether it should participate in the dispute.
6. Orders were made requiring the petitioners to answer the requests, except the request concerning Mr Taal’s removal, within 21 days.

First-instance decision on two applications under Part 18 of the Civil Procedure Rules arising from a winding-up petition. No prior appellate decision is stated.