Elizabeth Mckay v. Rysaffe Ltd and Others

HCA013026/1983

IN THE HIGH COURT OF JUSTICE

BETWEEN

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Coram: Hon. Mantell J. in Chambers

Date of Hearing: 19th and 24th November, 1983.

Date of Judgment: 1st December, 1983.

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JUDGMENT

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1. I have before me an application by the plaintiff for leave to proceed with subpoenas duces tecum addressed to the 1st and 2nd defendants notwithstanding that they relate to a chambers hearing and were issued without a Judge's or Registrar's note; and the corresponding application by the 1st and 2nd defendants is that the subpoenas be set aside on that ground and also on the ground that they are vexatious in seeking to achieve discovery to which the plaintiff would not otherwise be entitled. There was a further subpoena addressed to a third party. The application to continue that subpoena was not opposed and, therefore, stands, certainly for the time being. The plaintiff also applies for orders for early or pre-emptive discovery against the 1st and 2nd defendants under Order 24 rule 7. Those applications are also resisted.

2. I propose to dismiss the application for early discovery and to allow the subpoenas to continue. I shall explain why, but first, it is appropriate to refer briefly to the background without rehearsing, if I may be forgiven,  the contents of the many affidavits which have been read to me.

3. The plaintiff is the daughter of Sir Edward and Lady Hulton whose marriage was dissolved in 1966. Sir Edward had been heir to the Hulton publishing business and is a man of very substantial means. He is now old and in decline mentally, if not, physically. On 18th August 1982, the Court of Protection ordered that a receiver ad interim be appointed to administer his affairs. On 28th June 1982, that is some six or so weeks previously, he had entered into a deed of settlement with the 1st defendant as trustee to which the 2nd defendant was made protector. The beneficiaries under the settlement were, amongst others, the plaintiff and Lady Hulton. By a deed of appointment under the settlement and bearing the date of 7th July 1982, Lady Hulton became entitled to the proceeds of the trust on the death of Sir Edward to the exclusion of all other beneficiaries including the plaintiff. On 20th October 1983, a Mr. Hart of the solicitors acting for the plaintiff had an interview with the 2nd defendant, Mr. Grimsdick, from which it transpired, according to Mr. Hart, that Mr. Grimsdick had not received the deed of appointment for his consideration until 11th August 1982 and, therefore, either that he could not have exercised any discretion in approving the appointment or the date attributed to the deed could not be correct. Also, there was some handwriting on the deed of appointment which, it is said, suggests that Lady Hulton had a hand in the drafting of the deed and implicit in the suggestion is that her involvement was motivated by self interest. The plaintiff, having discovered those facts, became suspicious and immediately went before Mr. Justice Jones, in fact on 20th October 1983, to obtain an order ex-parte in effect preventing any further dealings under the deed of settlement. There was, of course, at that time an undertaking given to the judge that a writ would be issued. There was some question as to whether or not that undertaking was fulfilled but I am not concerned with that. A writ was issued and it claims various declarations. I shall not go through the whole of the writ but the relief claimed would, if granted, have the effect of either setting aside the settlement and the deed of appointment or, at least, rendering nugatory their provisions insofar as they deprive the plaintiff of a continuing interest in the settlement. Relief is claimed on the basis that both the 1st defendant and the 2nd defendant acted in breach of trust and also that they failed to exercise proper discretion. Various orders are sought such as would result if granted, of replacing both the 1st defendant and the 2nd defendant as trustee and protector respectively and there is also a claim for damages, I think I am right in saying, for breach of trust and for breach of fiduciary duty.

4. After the issue of the writ, the inter-partes summons came on for hearing before Mr. Justice Clough on 3rd November 1983. I am not entirely clear as to whether he continued the ex-party order in a modified form or made a fresh order to continue until an adjourned full hearing could be heard at some date in the future which, I have been told, is not likely to be before the New Year. It was to the hearing before Mr. Justice Clough that the subpoenas duces tecum related and it was at that hearing that, in the first place, that issue was taken as to their validity. It was said that the documents specified in the subpoenas may be relevant to the issues which Mr. Justice Clough will have to dispose of eventually, in that, they may contain matter which bears upon the allegations that there have been breaches of trust or fiduciary duty or even of bad faith. In the event, no evidence was called or documents produced and the question of the validity of the subpoenas was adjourned to come on in due course before me as a quite separate matter. At first, there was no summons to set aside the subpoenas and no application for discovery. They came into existence between adjourned hearings but eventually, the position became that to which I have previously referred.

5. It is convenient to deal first with the application for early discovery.

6. There is no doubt that in a proper case, a party can seek and obtain disclosure of documents at a very early stage in the proceedings. It is available as an aid to some other injunction of the Anton Piller or Mareva variety or as sought in this case under Order 24 rule 7. But it will only be ordered in exceptional circumstances (See RHM Foods Limited v. Bovril Limited) ⁽¹⁾ and not where the sole object is to seek discovery before a full and proper pleading in the Statement of Claim and merely to substantiate suspicions and thereby assist in obtaining interlocutory relief. Here, it seems to me, that the words of Oliver L.J. at page 680 which I have paraphrased are entirely apposite. It is said that this is an exceptional case because the plaintiff as beneficiary is entitled as of right to many of the documents requested. That is conceded by Mr. Faulkner and there has been an offer to make such documents available. But even without the concession or the offer, the plaintiff has a right to see the documents as a beneficiary under the settlement and that right may be enforced independently and my dismissal of the application for early discovery, of course, does not prejudice the plaintiff's right to pursue that independent means. But the classes of documents which are discoverable and the classes of documents to which she is entitled, by virtue of a proprietary right, may not be' the same. She may not be entitled discovery to all documents to which she has a proprietary claim and vice versa. In my judgment, the fact that the plaintiff has this independent right to see certain of the documents is not such an exceptional circumstances as would justify the making of an order for early discovery which I hold to be inappropriate in this case.

7. The first objection to the subpoenas is not entirely technical. Order 32 rule 7 provides that where the writ of subpoena is required to compel the attendance of the witness at a particular proceeding in chambers, it will issue only on the authority of a note from the judge or registrar. Now, although order 2 rule 2 is ample to cover the failure to obtain authority, as happened in this case, the real question on an application to set aside the writ will be as to whether the judge would have given his authority if asked for (See Re Sanders ⁽²⁾ If not, the writ should be set aside, otherwise it should stand. It is said that the judge would not have given his note because the subpoenas are vexatious in seeking discovery of documents which is not available at this stage of the proceeding as, indeed, I have held to be the case. Mr. Faulkner referred me to a reference in the White Book at page 659 under Order 38 rules 14 to 19 to the case of Steel v. Savory,⁽³⁾ but I take that to be authority for the proposition that the subpoena duces tecum will not lie in respect of documents which are not discoverable at any stage. My refusal of early discovery does not deprive the plaintiff of her right to make use of the subpoena procedure if appropriate any more than it would prevent her enforcing her proprietary interest in certain of the documents. And certainly, it would difficult to under-stand insofar as the subpoenas relate to documents in which the plaintiff has a proprietary interest as defined in Re Londonderry's Settlement, ⁽⁴⁾ it could said that the subpoenas duces tecum are oppressive. So I dismiss the application to set the subpoenas aside and, if necessary, I order that they shall continue. But the effect of that should not be misunderstood. The hearing to which they relate is the adjourned hearing before Clough J. There is no obligation upon the witness or witnesses to whom they are addressed to produce the documents before that hearing, as the subpoena procedure like that available under Order 38 rule 13 is not intended to provide the opportunity for an earlier private inspection (See Smith Williams v. Frere) ⁽⁵⁾ and it remains open to the party to whom the subpoena is addressed to raise any valid objection to the production of a particular document at the hearing. Well, it will be for Clough J., not me to rule in relation to any document to the production of which objection is raised. I have been told, however, that it is probable that long before that hearing takes place, the bulk of the documents will have made available for inspection by the plaintiff's advisers and that, in the meantime, they will be made safe from the possibility of alteration by reason of an undertaking given before me.

(1)    [1982] 1 A.E.R. 673

(2)    [1919] Law Times, Volume 147, page 212

(3)    (1981) weekly Notes 1958 T.L.R. 84

(4)    [1965] 1 Ch. 918

(5)    [1981] 1 Ch. 323

Representation:

N. Aiken (Johnson, Stokes & Master) for Plaintiff.

R. Faulkner (Stevenson, Harwood & Lo) for 1st, 2nd and 6th Defendants.