Practice and Procedure


PUBLISHED June 17, 2003

An application for disclosure prior to the commencement of proceedings was refused where the potential claims were speculative and the disclosure sought was too broad.Application under CPR 31.16 for disclosure prior to the commencement of proceedings. The applicant ('Snowstar') and the defendants ('Graig' and 'Fortis') negotiated through brokers in relation to the sale of two new container vessels. The sale of one vessel fell through due to delays associated with the intention of Graig to partly fund the purchase via a UK tax lease scheme to be approved by the Inland Revenue. Graig claimed it was unable to complete the relevant tax lease documentation within the stipulated time. Snowstar disputed Graig's account of the timing of steps taken towards obtaining approval of the proposed tax scheme. Snowstar sought disclosure of all documents that passed between Graig or their representatives and the tax authorities concerning the proposed scheme. It also sought confirmation of the date when those documents were provided if not expressly shown. In making the disclosure application, Snowstar foreshadowed potential claims for breach of contract, as well as misrepresentation and/or negligent misstatement in relation to the funding of the purchase and completion of the tax lease documentation.HELD: (1) The potential claim in contract satisfied the "credibility" test. However, the more speculative the claim the less inclined the court was to grant the application and its weakness was a factor to be taken into account when considering whether a pre-action disclosure order should be made. The claim faced two clear difficulties; namely proof of the existence of a contract and proof of the content of the purported contract. (2) The potential claim for misrepresentation was speculative and its credibility was not aided by the allegation of fraud raised by Snowstar. (3) The court did not have the power under CPR 31.16 to order the date confirmations sought. (4) The scope of disclosure sought by Snowstar was too broad, wide and woolly. The application fished for disclosure of documents that would be commercially sensitive or covered by privilege. (5) In considering the judicial discretion to allow pre-action disclosure, the application was refused for being too widely drawn and concerning claims that were speculative.Application dismissed.

[2003] EWHC 1367 (COMM)