Loudmila Bourlakova & Ors v The Estate of Oleg Bourlakov & Ors

Case-management disclosure should be directed to genuinely defined issues and should not require a complex accounting or tracing exercise before the legal and factual parameters of that exercise are established. Where foreign-law remedies depend on a party’s share of partnership assets, including fruits, proceeds and withdrawals, the court may require liability issues to be determined first and defer the consequential accounting and valuation.

The English court may determine the timing and manner of determining foreign-law remedies under its procedural law without imposing an English-law remedy. Requests for further information must concern a disputed matter and be concise, strictly confined, necessary and proportionate.

The claim concerned alleged fraud and asset diversion within the Bourlakov family. The seventh and eighth defendants advanced counterclaims alleging a partnership between the seventh defendant and Oleg Bourlakov, safekeeping and nominee arrangements, unjust enrichment and transactions at an undervalue under Insolvency Act 1986, s 423.

The application sought amendments to the list of issues for disclosure, approval of Model C requests and answers to requests for further information. The proposed disclosure included tracing assets and proceeds and undertaking an expert-led partnership accounting before trial. The central questions were whether those exercises could sensibly be undertaken within the existing proceedings and whether the requested information was necessary and proportionate.

1. Application dismissed in substance. The proposed amendments to Issues for Disclosure 23, 23A and 24, the proposed expansion and division of Appendix 3, the disputed Model C requests and the outstanding requests for further information were declined, save as otherwise indicated. The parties were directed to agree a consequential order.
2. The court treated the proposed partnership accounting as a complex exercise involving the identification and valuation of partnership assets, the tracing of asset and fund flows and the identification of partner withdrawals. The exercise could not sensibly be undertaken within the existing procedural framework before trial, particularly while the scope of the partnership and the distinction between partnership assets and withdrawals remained unresolved.
3. The existence and terms of the alleged partnership and safekeeping agreement, together with the basis and fact of withdrawals, should be determined at trial. If liability were established, the remedies should then be determined after an appropriate accounting and valuation, including the entrusted assets, their fruits and proceeds.
4. The same approach applied to the first defendant’s counterclaims because the relevant remedies and accounting issues substantially overlapped. This was a case-management decision under the English procedural law governing the conduct of the proceedings, not the imposition of an English-law remedy on claims governed by foreign law.
5. The court was not persuaded that subsequent transfers were sufficiently relevant to the liability issue under Insolvency Act 1986, s 423. Their relevance was speculative and depended on prior findings concerning the partnership and safekeeping arrangements.
6. For requests for further information, the conditions in Civil Procedure Rules 1998, Part 18.1(1), and Civil Procedure Rules 1998, Practice Direction 18, para 1.2, had to be satisfied. The requests failed because they were not necessary and proportionate, or were not strictly confined to the pleaded disputes.

This was a first-instance case-management ruling. The judgment records earlier procedural stages, including the first case management conference, the disclosure guidance hearing and the second case management conference, but states no appellate history.