Sanaa El Debs & Ors v Craig Coughlan

An application for pre-action disclosure under the Civil Procedure Rules 1998 r 31.16 does not require proof that proceedings are likely to be issued. It is enough that the parties are likely to be parties if proceedings are issued, and “likely” may mean “may well”. The court must first identify a real prospect that disclosure will serve one of the rule’s purposes, then exercise a broad discretion on all the facts. Where English jurisdiction is founded as of right, a forum objection succeeds only if another available forum is clearly or distinctly more appropriate. An inference-based fraud claim is not speculative merely because direct evidence is unavailable. A deceit claim does not require a special relationship or assumption of responsibility. Disclosure may be ordered where it can clarify the issues, test the inference of wrongdoing, avoid amendments, resolve the dispute or save costs, subject to proportionate limits.

The four applicants, members of the Debs family, invested nearly USD6 million in notes issued in connection with Drecford Holdings Ltd and later alleged fraudulent misrepresentations and an unlawful means conspiracy. They applied under the Civil Procedure Rules 1998 for pre-action disclosure from Craig Coughlan, a director and shareholder of Drecford, before issuing proceedings.

The respondent challenged the English forum, the arguability of the proposed claims, the relevance and scope of the documents, their control, and whether disclosure was desirable. The central issues were whether the parties were likely to be parties to subsequent proceedings, whether the documents fell within standard disclosure, and whether pre-action disclosure was justified in light of a related ADGM application.

The application was granted. Disclosure was ordered subject to narrowing Category 2 to exclude the Bonds and limiting Category 3 documents to the period ending in October 2021.

1. Pre-action disclosure. The court applied the Civil Procedure Rules 1998 r 31.16 and Black v Sumitomo Corp [2001] EWCA Civ 1819. There was no additional requirement to show that proceedings were likely to be issued. It was sufficient that the parties were likely to be parties if proceedings were issued. The desirability requirement involved a jurisdictional threshold followed by a broad discretion on all the facts, including the nature of the loss, clarity of the issues, nature of the documents, pre-action inquiries and the opportunity to make the case without disclosure.
2. Forum. Under Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, the respondent had to show that an available alternative forum was clearly or distinctly more appropriate. The court rejected the contention that the ADGM was the natural forum. Drecford had no established physical presence there, and the respondent’s central management and control supported an inference that it was resident in England, applying De Beers Consolidated Mines Ltd v Howe [1906] AC 455. The applicable law was a complex issue unsuitable for determination on this application, and the applicants were not parties to the ADGM proceedings.
3. Arguability. The proposed deceit claim did not require a special relationship or assumption of responsibility. The respondent’s reliance on Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830 concerned negligent misrepresentation and did not govern deceit. The representation that the investment was safe and sound was at least arguably one of fact. An inference-based fraud claim was not speculative merely because the alleged wrongdoing was concealed. The court applied the unlawful means conspiracy principles in Tinkler v Invesco [2025] EWHC 1624 (Ch), including that intention to injure need not be the sole or predominant intention and that unlawful conduct by one conspirator may suffice.
4. Documents and discretion. The proposed issues and document categories were sufficiently identified. Documents bearing on the truth of the representations, knowledge, communications and trading activity could fall within standard disclosure. Company documents in a director’s custody or physical possession had to be disclosed even if held in an official capacity, applying B. v. B. (Matrimonial Proceedings: Discovery) [1978] Fam 181. Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627 was distinguishable because it concerned a parent company’s control of subsidiary documents. Disclosure could enable proper particularisation, avoid amendments, test or rebut the inference of wrongdoing, save costs and identify appropriate defendants. It was not a fishing expedition.