Mitsui & Co Ltd v Nexen Petroleum UK Ltd [2005] EWHC 625 (Ch)

[2005] EWHC 625 (Ch)Case No HC05 00060
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 29/04/2005
Before
THE HONOURABLE MR JUSTICE LIGHTMAN
Between
MITSUI & CO, LIMITEDClaimantNEXEN PETROLEUM UK LIMITEDDefendant
Mr Christopher Carr QC & Mr David Sulan, Solicitor of Herbert Smith (instructed by Herbert Smith LLP, Exchange House, Primrose Street, London EC2A 2HS) for ClaimantMr Ian Glick QC & Mr Philip Reed, Solicitor of Norton Rose (instructed by Norton Rose, Kempson House, Camomile Street, London EC3A 7AN) for DefendantHearing Hearing dates: 12 th– 13 th April 2005
Judgment

INTRODUCTION

[1]By the application before me dated the 14th January 2005, the claimant Mitsui & Co, Limited (“the Claimant”) a very substantial company incorporated in Japan seeks orders pursuant to the principles established in Norwich Pharmacal v. Customs & Excise Commissioners (“Norwich Pharmacal”) [1974] AC 133 (as subsequently developed) against the defendant Nexen Petroleum UK Limited (formerly EnCana UK Limited) (“the Defendant”) for disclosure of documents and for provision of an affidavit by Mr Alan Booth (“Mr Booth”) the former managing director of the Defendant and of its former holding company, EnCana UK Holdings Limited (“Holdings”).[2]The application arises out of the entry by Holdings and Nexen Energy Holdings International Limited (“Nexen Energy”) into an agreement dated the 28th October 2004 (“the Sale Agreement”) for the sale by Holdings to Nexen Energy of the entire issued share capital of the Defendant for $2.1 billion and the completion of the Sale Agreement on the 1st December 2004. The Claimant contends that EnCana Corp (Holdings’ parent company) had by a prior oral agreement with the Claimant agreed not to solicit offers from third parties in relation to the primary asset of the Defendant, namely its interest in the Buzzard Field, and strongly suspects that in breach of that agreement EnCana Corp solicited from Nexen Energy’s holding company Nexen Inc (“Nexen”) an offer to purchase the Defendant. The purpose of the Claimant’s application is to obtain from the Defendant information required to enable it to determine whether to sue EnCana Corp for such breach of contract.

FACTUAL BACKGROUND

[3]The Defendant and Holdings are both incorporated in England and Wales. Both EnCana Corp and Nexen are incorporated in Canada. EnCana Corp has registered here as an overseas company. Nexen Energy is incorporated in the Channel Islands.[4]In early 2004 the Defendant owned (together with interests in the Scott and Telford Fields) a 43.2% interest in the Buzzard Field, the most significant oil field to be discovered in the North Sea in the past decade. The other parties interested in the Buzzard Field were Intrepid Energy North Sea Limited (“Intrepid”), which held a 29.9% interest, BG Group, which held a 21.7% interest, and Edinburgh Oil and Gas Plc, which held a 5.1% interest.[5]Between January and April 2004 the Claimant attempted to purchase Intrepid’s interest in the Buzzard Field. It was unsuccessful in doing so, but the Claimant remained keen to acquire an alternative interest in the Buzzard Field at the first available opportunity. It retained JPMorgan to assist it to do so. JPMorgan advised the Claimant that EnCana Corp was currently re-evaluating its North Sea strategy. As a result the Claimant approached EnCana Corp and expressed an interest in acquiring its interest in the Buzzard Field.[6]EnCana Corp responded positively. An initial meeting was held between the senior executives of the parties in Calgary, Canada on the 4th August 2004. During the 4th August 2004 meeting a confidentiality agreement (of which the applicable law was English law) was entered into between:(1) EnCana Corp, Holdings and the Defendant; and(2) the Claimant (“the Confidentiality Agreement”). The Confidentiality Agreement imposed on EnCana Corp, Holdings and the Defendant a duty of confidence in respect of the proposed transaction and in particular the identity of the Claimant, the offer price and the financing arrangements. In its skeleton argument the Claimant raised the question whether EnCana Corp breached its obligations under the Confidentiality Agreement, but it is common ground that this question is not relevant on this application. The proposed purchase was a significant transaction for the Claimant and, since a large amount of senior management time was to be invested in the negotiations and the Claimant was to incur significant external consultant fees, it was very important to the Claimant to complete the deal successfully. To that end, the Claimant attempted to obtain EnCana Corp’s agreement to negotiate exclusively with the Claimant. But EnCana Corp would not agree to this.[7]Nonetheless the Claimant contends that EnCana Corp did agree on a lesser form of protection for the Claimant and that for this purpose entered into an oral agreement with the Claimant referred to as the Protocol Agreement (“the Protocol”). The Claimant does not suggest that the applicable law of the Protocol was other than English law and I must proceed on that basis. The Claimant says that by the Protocol EnCana Corp agreed: i) not to solicit offers from third parties in relation to the Defendant’s interest in the Buzzard Field (the “First Limb”); and ii) to advise the Claimant of any bona fide offers from third parties in relation to the Buzzard Field Assets and to allow the Claimant an appropriate time to respond to any such offers (“the Second Limb”). EnCana Corp denies that it entered into any such agreement and that, if any such agreement was entered into, it had or was intended to have any legal effect. It is common ground that it is not for me on this application to examine the merits of this dispute and I must proceed on the basis that the Claimant has a real prospect of establishing the existence and enforceability of the Protocol. I must however later say a word about the First Limb.[8]Negotiations between the parties continued from August 2004 to the end of October 2004 and were conducted on behalf of EnCana Corp by Mr Brian Ferguson and on behalf of Holdings and the Defendant by Mr Booth. Both of these persons were at all key meetings between the parties. All key terms of the proposed deal (including price) were agreed. The proposed deal was to the effect that the Claimant should purchase the entire share capital of the Defendant and that arrangements would be made to strip out of the Defendant assets which the Claimant did not wish to purchase (which included part of the Defendant’s interest in the Buzzard Field and the Defendant’s interest in two other fields). During the negotiations, (according to the Claimant in accordance with the Second Limb) EnCana Corp notified the Claimant on or about the 7th October 2004 of an offer made by Oil and National Gas Corp Limited for the interest of the Defendant in the Buzzard Field.[9]Towards the end of October 2004 the Claimant and EnCana Corp were in an advanced stage of negotiation and were due to sign the legal documentation in London in the week beginning the 1st November 2004. But on the 29th October 2004 EnCana Corp announced that it had entered into the Sale Agreement. By clause 20(1)(a) of the Sale Agreement, Holdings and Nexen Energy covenanted with each other that they and their affiliate companies (a term which included their subsidiaries) would keep confidential information relating to the negotiations leading to the Sale Agreement. EnCana Corp did not previously at any stage advise the Claimant of Nexen’s interest in purchasing the Defendant’s interest in the Buzzard Field or of any offer by Nexen or allow the Claimant to respond to such offer. JPMorgan subsequently advised the Claimant that Mr Booth had said that Nexen became interested in purchasing the Defendant’s interest in the Buzzard Field on or around the 19th October 2004. This would mean that Nexen formulated the bid by its subsidiary from start-to-finish in approximately ten days. On the 1st December 2004 the sale to Nexen Energy was completed. On the 2nd December 2004, the Defendant (now a subsidiary of Nexen) was renamed Nexen Petroleum UK Limited.[10]The Claimant’s representative Mr Tsuruta had discussions with Mr Ferguson on the 5th November 2004 in an attempt to establish why EnCana Corp had decided to sell its UK business to Nexen, why EnCana Corp had failed to comply with the Protocol and how Nexen had been able to complete the deal so quickly. Mr Ferguson said that Nexen had originally negotiated to purchase the assets of the Defendant other than its interest in the Buzzard Field, but had then made an unsolicited offer for the Defendant together with all its assets at a much better price than the Claimant had offered and that there had been no point in referring that offer to the Claimant because the Claimant had made plain that its previous offer was its final offer.[11]Between the 5th November 2004 and the 26th November 2004 Herbert Smith, solicitors acting on behalf of the Claimant, corresponded with EnCana Corp’s solicitors, Freshfields. The primary purpose of the correspondence was to attempt to understand how EnCana Corp completed the transaction with Nexen so quickly, and why EnCana Corp failed to notify the Claimant about Nexen’s offer. EnCana Corp failed to provide details satisfactory to the Claimant of how Nexen’s bid came about. EnCana Corp and Nexen regard the information sought as confidential. The Claimant commenced these proceedings on the 14th January 2005.[12]By this application the Claimant seeks orders for: i) disclosure of all documents within the Defendant’s control which contain information relating to EnCana Corp’s negotiations with Nexen, including but not limited to: a) documents which tend to show how Nexen came to know that the Defendant’s interest in the Buzzard Field was on the market for sale; b) documents which tend to show whether EnCana Corp assisted Nexen in formulating its bid for the Defendant including (but not limited to) documents which indicate that EnCana Corp in breach of its obligations under the Confidentiality Agreement advised, or in any way notified Nexen of the Claimant’s identity as a bidder or the price which the Claimant had offered; c) communications between representatives of EnCana Corp (including but not limited to Mr Ferguson and Mr Booth) in relation to Nexen’s bid for EnCana UK; d) communications between representatives of EnCana Corp (including but not limited to Mr Ferguson and Mr Booth) and representatives of Nexen in relation to Nexen’s bid for the Defendant; e) communications between representatives of EnCana Corp (including but not limited to Mr Ferguson and Mr Booth) and EnCana Corp’s advisors in relation to Nexen’s bid for the Defendant; f) communications between representatives of EnCana Corp (including but not limited to Mr Ferguson and Mr Booth) regarding the Protocol and/or the Confidentiality Agreement; g) any board minutes or board documents which refer to Nexen’s bid for the Defendant; h) any confidentiality agreement(s) entered into between Nexen and EnCana Corp; i) documents which show which parties were in the Buzzard Field data room, and when they were granted access; and j) a list of contents of the data room set up for the Scott and Telford Fields and/or a list of documents provided to prospective purchasers in that sale process such as Nexen. ii) Mr Booth to provide the Claimant with an affidavit which sets out and explains in chronological order the stages of negotiations between EnCana Corp and Nexen which identifies: a) how Nexen came to know that the Defendant’s interest in the Buzzard Field was on the market for sale; b) when EnCana Corp and Nexen began negotiations in relation to Nexen’s purchase of that interest; c) which parties were in the Buzzard Field data room, and when they were granted access; d) when agreement in relation to the purchase price of the entire shareholding in the Defendant was reached during the negotiations between EnCana Corp and Nexen; e) whether EnCana Corp indicated to Nexen that EnCana Corp was in advanced discussions with another party (with or without naming the Claimant) in relation to its interest in the Buzzard Field; f) whether EnCana Corp indicated to Nexen the price which had been offered for its interest in the Buzzard Field (with or without identifying the Claimant as the bidder); g) whether during EnCana Corp’s negotiations with Nexen, EnCana Corp’s representatives considered and/or referred to the Protocol and/or the Confidentiality Agreement and if so, the nature of the consideration that was given; and h) whether during EnCana Corp’s negotiations with Nexen, EnCana Corp discussed with Nexen the Protocol it had entered into with the Claimant and/or its obligations pursuant to the Confidentiality Agreement, and if so, the nature of these discussions.[13]At the hearing the parties agreed that I should first decide as a matter of principle the Claimant’s entitlement to relief and that, if I decided that question in favour of the Claimant, I should then hear argument as to the nature and extent of the relief to be granted.[14]I should make two observations in relation to the relief sought. The first is that I suggested to Counsel during the hearing that, if I held that the Claimant was entitled to relief, rather than order the onerous disclosure of documents requested by the Claimant, it might be appropriate to order instead interrogatories requiring the Defendant to answer the questions which it had declined to answer in correspondence. Both parties indicated agreement in principle to this course. The second is that the ambit of any order for disclosure must depend upon the ambit of the First Limb and what may or may not constitute solicitation in breach of the obligation imposed.

AMBIT OF FIRST LIMB

[15]It is common ground that I must determine this application on the assumed basis that the Claimant can properly plead and has a real prospect of establishing the existence of the Protocol and that the Protocol is lawful and enforceable. The Claimant asserts that it needs the assistance of the court to establish whether or not EnCana Corp solicited an offer in breach of the First Limb. It is common ground that, if the Claimant establishes the existence and legal enforceability of the Protocol, there is established a breach of the Second Limb.[16]The Claimant’s case is that it has grounds for strong suspicion that EnCana Corp “tipped off” Nexen about its proposed sale of its interest in the Buzzard Field and thereby or otherwise solicited interest and an offer by Nexen; and that, even if (as alleged by EnCana Corp) Nexen made an unsolicited approach and offer, EnCana Corp thereafter “solicited an offer” from Nexen in breach of the First Limb by negotiating and providing information designed to lead, and which did lead, to the Sale Agreement. The Claimant contends that it is entitled by this application to obtain the necessary evidence to establish whether or not this suspicion is well-founded. I raised at the hearing the question of the meaning and ambit of the obligation assumed by EnCana Corp under the First Limb (assuming that the Protocol constitutes a valid and enforceable contract). There was little (if any) argument on this issue. When in the course of preparing this judgment the importance of this issue became apparent, I invited both Counsel to make written submissions on it and they did so.[17]On the material before me I am of the view that the First Limb cannot have been intended to preclude EnCana Corp from proceeding to negotiate a deal with a third party which has initiated negotiations by making an unsolicited offer: the restriction is imposed on solicitation, not responding to solicitations and thereafter negotiating, furnishing information and concluding a sale. It is the Claimant’s case that the Protocol was entered into to provide lesser protection when EnCana Corp had refused to grant to the Claimant exclusive negotiating rights. EnCana Corp was insisting on retaining the right to negotiate with third parties. As it seems to me, once a third party has made an unsolicited approach to EnCana Corp, so far as dealing with that third party the First Limb ceases to have effect and the Second Limb comes into play in its place. EnCana Corp is free to exercise its retained right to negotiate with the third party, but the Second Limb affords to the Claimant the right to respond to any offer before EnCana Corp accepts it. This question (as I have said) has some importance both on the issue whether to grant relief (and in particular whether the Defendant was “mixed up” in wrongdoing against the Claimant) and on the ambit of any relief to be granted to the Claimant. The relief must be confined to the disclosure of information relating to the breach of the First Limb and accordingly to whether EnCana Corp solicited an offer and cannot extend to whether (an unsolicited offer having been received from a third party) EnCana Corp subsequently negotiated with or provided information to the third party.

THE NORWICH PHARMACAL PRINCIPLE

[18]The principles established in Norwich Pharmacal (as subsequently developed) are the basis of the Claimant’s application for relief. In its original form, the Norwich Pharmacal jurisdiction allowed a claimant to seek disclosure from an “involved” third party who had information enabling the claimant to identify a wrongdoer so as to be in a position to bring an action against the wrongdoer where otherwise he would not be able to do so. Lord Reid described the principle at page 175 as follows:
“...if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.”
The required disclosure may take any appropriate form. Usually it takes the form of production of documents, but it may also include providing affidavits, answering interrogatories or attending court to give oral evidence.[19]In subsequent cases, the courts have extended the application of the basic principle. The jurisdiction is not confined to circumstances where there has been tortious wrongdoing and is now available where there has been contractual wrongdoing: P v T Limited[1997] 1 WLR 1309; Carlton Film Distributors Ltd v VCI Plc[2003] FSR 47 (“Carlton Films”); and is not limited to cases where the identity of the wrongdoer is unknown. Relief can be ordered where the identity of the claimant is known, but where the claimant requires disclosure of crucial information in order to be able to bring its claim or where the claimant requires a missing piece of the jigsaw: see Axa Equity & Law Life Assurance Society Plc v National Westminster Bank (CA) [1998] CLC, 1177 (“Axa Equity”); Aoot Kalmneft v Denton Wilde Sapte[2002] 1 Lloyds Rep 417 (“Aoot”); see also Carlton Films. Further the third party from whom information is sought need not be an innocent third party: he may be a wrongdoer himself: see CHC Software Care v. Hopkins and Wood[1993] FSR 241 and Hollander, Documentary Evidence 8th ed p.78 footnote 11.[20]Norwich Pharmacal relief is a flexible remedy capable of adaptation to new circumstances. Lord Woolf CJ noted in Ashworth Hospital Authority v MGN Ltd [2002] 1 WLR 2033 at 2049F:
“New situations are inevitably going to arise where it will be appropriate for the [Norwich Pharmacal] jurisdiction to be exercised where it has not been exercised previously. The limits which applied to its use in its infancy should not be allowed to stultify its use now that it has become a valuable and mature remedy.”
The development of the jurisdiction is illustrated by the disclosure relief ordered by McGonigal J in Aoot where he said:
“[17] In Norwich Pharmacal the information required was the identity of the wrongdoer (the applicant knew what wrong had been done but not who had done it) but I see no reason why the principle is limited to disclosure of the identity of an unknown wrongdoer and does not extend to information showing that he has committed the wrong. “…The information held by [the respondent] may not conclusively reveal an alternate defendant to [one of the alleged wrongdoers] nor conclusively disclose who received any part of the prepayment moneys, but I am satisfied that there is a sufficient prospect that the information they hold will assist [the applicant] in its search for wrongdoers and the funds paid away …to justify making the orders sought. …. [20] The potential advantages to [the applicant] of seeing this part of the jigsaw and the potential disadvantages of it being denied a sight of that part outweigh, in my view, any detriment to [the respondent].”
[21]The three conditions to be satisfied for the court to exercise the power to order Norwich Pharmacal relief are: i) a wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer; ii) there must be the need for an order to enable action to be brought against the ultimate wrongdoer; and iii) the person against whom the order is sought must:(a) be mixed up in so as to have facilitated the wrongdoing; and(b) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued.[22]I have accordingly to determine whether these three conditions are satisfied. There is no issue that the first condition has been satisfied. Attention needs to be concentrated on the second and third.[23]I consider first whether the second condition is satisfied. I proceed in this judgment on the basis that the Claimant needs further information which the Defendant is likely to be able to provide before it can fully and properly plead a breach of the First Limb and sign on the pleading the Statement of Truth required by CPR r.22(i)(a) confirming that the facts pleaded are believed to be true. In a word the information sought is necessary to enable the action to be brought. The critical question raised is whether this is sufficient to satisfy the second condition or whether satisfaction of the second condition also requires the Claimant to establish that it cannot obtain this information elsewhere and in particular from EnCana Corp, the likely defendant in any proceedings for breach of the First Limb. EnCana Corp can be no less in possession of the information sought than the Defendant.[24]In my judgment despite the argument of Mr Carr that there is no authority directly in point, it is clear that the exercise of the jurisdiction of the court under Norwich Pharmacal against third parties who are mere witnesses innocent of any participation in the wrongdoing being investigated is a remedy of last resort. (It is the Claimant’s case that the Defendant is such an innocent third party.) The jurisdiction is only to be exercised if the innocent third parties are the only practicable source of information. The whole basis of the jurisdiction against them is that, unless and until they disclose what they know, there can be no litigation in which they can give evidence: see e.g. Lord Kilbrandon in Norwich Pharmacal and 203B and 205G. Whilst there is a public interest in achieving justice between disputing parties, there is also a public interest in not involving third parties if this can be avoided: see Sir John Donaldson MR in Harrington v. Polytechnic of North London[1984] 1 WLR 1293 at 1299 F-G. The jurisdiction is both exceptional and only to be exercised when it is necessary: Lord Woolf CJ in Ashworth Hospital Authority v. MGN Ltd[2002] 1 WLR 2033 at 2049. The necessity required to justify exercise of this intrusive jurisdiction is a necessity arising from the absence of any other practicable means of obtaining the essential information.

AVAILABILITY OF OTHER SOURCES OF INFORMATION

[25]The answer to the first question accordingly requires consideration of the second question whether the information required by the Claimant can be obtained elsewhere than from the Defendant.[26]The first suggested alternative source of information is from EnCana Corp on an application for pre-action disclosure under CPR 31.6. CPR 31.6(3) (so far as material) provides as follows:
“(3) The court may make an order under this rule only where— (a) the respondent is likely to be a party to subsequent proceedings; (b) the applicant is also likely to be a party to those proceedings; (c) if proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and (d) disclosure before proceedings have started is desirable in order to— (i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without proceedings; or (iii) save costs.” (a) the respondent is likely to be a party to subsequent proceedings; (b) the applicant is also likely to be a party to those proceedings; (c) if proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and (d) disclosure before proceedings have started is desirable in order to— (i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without proceedings; or (iii) save costs.”
[27]This rule has been the subject of an authoritative exposition by the Court of Appeal in Black v. Sumitomo Corp[2002] 1 WLR 1562 (“Black”). A purpose of pre-action disclosure is to assist those who need disclosure as a vital step in deciding whether to litigate at all or to provide a vital ingredient in the pleading of their case (Black at 1583G). The purpose must include enabling a party to sign the required Statement of Truth. Consideration whether disclosure is “desirable” (as required by CPR 31.6(3)(d)) involves a two stage process. For jurisdictional purposes the court is only permitted to consider the granting of pre-action disclosure where there is a real prospect in principle of such an order disposing fairly of the anticipated proceedings or of assisting the parties to avoid litigation or of saving costs in any event. If there is such a real prospect (and the jurisdictional threshold is low), then the court should go on to consider the question of discretion which has to be decided on all the facts and not merely in principle but in detail.[28]On the material before me it seems to me quite clear that the Claimant can, or should be able to, surmount both the jurisdiction and discretion hurdles required to obtain the necessary disclosure from EnCana Corp. It must be quite exceptional where necessary information is available both from a likely party to proceedings and an innocent third party (in this case the Defendant) that an order for disclosure should be made against the innocent third party and not the likely party to proceedings (in this case EnCana Corp). Yet that is the position which the Claimant says prevails in this case.[29]Mr Carr contends that there are three insuperable obstacles to obtaining pre-trial disclosure from EnCana Corp and I must consider each in turn.[30]The first is the decision of Hoffmann J in Mackinnon v. Donaldson, Lufkin & Jenrette Securities Corp[1986] 1 Ch 482. In that case the court had to decide the propriety of an order made without notice under section 7 of the Bankers Books Evidence Act 1879 against an American bank which was not a party to the action and of the issue of a subpoena against an officer of the bank, each of which required the production of documents held at its head office in New York. Hoffmann J discharged the order and subpoena, holding that (save in exceptional circumstances) the court should not require a foreigner who was not a party to an action (and in particular a foreign bank which would owe a duty of confidence to its customers regulated by the law of the country where the customer’s account was kept) to produce documents outside the jurisdiction concerning business transacted outside the jurisdiction and that the order and subpoena taking effect in New York were infringements of the sovereignty of the United States.[31]Mr Carr submits that the principles so stated are applicable to any application for pre-action disclosure against EnCana Corp, for it is a foreign company and no action has been commenced against it. He accordingly argues that pre-action disclosure is not available against EnCana Corp.[32]In my judgment the principles stated by Hoffmann J relied on by Mr Carr and his decision have no application on the facts of this case. EnCana Corp is the likely defendant in the proceedings and not a mere witness. Further EnCana Corp has registered here as a foreign company and accordingly submitted to the jurisdiction, and submission to the jurisdiction must embrace submission to exercise of the court’s powers to order pre-action disclosure. Further the litigation and the disclosure relate to enforcement of private rights of property (and in particular rights under the Protocol of which the applicable law was English) the subject of the jurisdiction of this court. That this is the law accords with the passage in the judgment of Hoffmann J reported on pages 494-5.[33]The second objection raised by Mr Carr is that the Claimant would have insuperable difficulty in satisfying condition (c) in CPR 31.16(3) and in particular in establishing that EnCana Corp’s duty of standard disclosure, if proceedings had started, would extend to the documents of which disclosure is now required. The reason he gives is that the ambit of standard disclosure is regulated by reference to the pleadings and that the Claimant cannot adequately plead until the documents sought are obtained. In my judgment this objection is totally unreal. The rule must necessarily assume and accept the present deficiencies and lack of particularity in any pleadings in the prospective litigation which the application for disclosure is designed to enable the Claimant to cure. I cannot see how or why the Claimant cannot draft a pleading in the prospective litigation sufficient for the purposes of the application under CPR 31.16 (even if not for the actual commencement of proceedings) alleging breach of the First Limb which is such as to bring the documents sought within the reach of standard disclosure as required by the rule.[34]The third objection taken is that only documentary disclosure is available under CPR 31.6 and not disclosure e.g. by interrogatories or affidavit which is available under Norwich Pharmacal. Cases may occur where the information required cannot be furnished by documents and can only be furnished e.g. by interrogatories or affidavits, in which case pre-action disclosure will be no substitute or alternative for an order under Norwich Pharmacal. But there is no reason to believe that that is the situation here.[35]Mr Carr went on to submit that, even if pre-action disclosure was available again to EnCana Corp, the availability of an application for pre-action disclosure cannot be a ground for refusing Norwich Pharmacal relief because of the terms of CPR 31.18. This rule reads as follows:
“Rules not to limit other powers of the court to order disclosure 31.18: Rules 31.16 [Disclosure before proceedings start] and 31.17 [Orders for disclosure against a person not a party] do not limit any other power which the court may have to order— (a) disclosure before proceedings have started; and (b) disclosure against a person who is not a party to proceedings.”
[36]In my view CPR 31.18 merely preserves the Norwich Pharmacal jurisdiction: CPR 31.18 provides that CPR 31.16 and CPR 31.17 in no way limit the court’s pre-existing jurisdiction under Norwich Pharmacal. It in no way modifies the established principles governing the exercise of that jurisdiction. Those established principles require regard to be had to the existence of other means available for obtaining the information needed and accordingly require regard to be had to CPR 31.16 and 17. It is entirely in accord with CPR 31.18 that, if CPR 31.16 provides an alternative means of obtaining the information required by the Claimant, the Norwich Pharmacal jurisdiction should not be exercisable. The power to grant Norwich Pharmacal relief continues to subsist but in accordance with the established principles governing its exercise in cases where its exercise is no longer necessary, it no longer should be invoked. In short the existence of the new powers conferred by CPR 31.16 and 17 may limit substantially the need for exercise of the Norwich Pharmacal jurisdiction and (in the circumstances such as present where there is no such need) on established principles its exercise is precluded. This situation is entirely consonant with CPR 31.18.[37]In my judgment accordingly this application should be dismissed because the Claimant can obtain the information sought by other means and in particular by pre-action disclosure from EnCana Corp. I should add that the Claimant’s solicitors Herbert Smith (through Counsel) have told me that they advised the Claimant that one reason for making this application rather than the application for pre-action discovery against EnCana Corp was that the costs incurred on an application under Norwich Pharmacal were more likely to be recoverable from EnCana Corp if the Claimant subsequently succeeds in proceedings against EnCana Corp than the costs of an application for pre-action disclosure. This, if correct, would be most surprising. I cannot think that it is correct. But even if it is it cannot justify the course taken.[38]That is a sufficient ground to dismiss the application. But the application should also be dismissed for two other reasons. The first is that, even if recourse is required to Norwich Pharmacal to obtain the information sought, the obvious party from whom the information could be obtained and against whom the application under Norwich Pharmacal should have been made was (if not EnCana Corp) Holdings. Holdings was the seller and the Defendant merely the target. Further, Holdings continues to be the wholly owned subsidiary of EnCana Corp. The Defendant has no continuing connection with EnCana Corp. In the exercise of my discretion whether to grant the relief sought I am surely entitled to have regard and do have regard to the respective involvements of the available sources of information in the impugned sale and their relationships with the likely defendant in proceedings. There is no explanation for the choice of the Defendant in place of Holdings as the defendant to this application. The proper respondent to the application should surely be the party more closely involved in the events the subject of the likely proceedings and more closely connected with the likely defendant.[39]A further ground on which I would (if this were necessary) refuse the application would be the absence of evidence that the Defendant was mixed up in or facilitated the alleged breach of the First Limb. As it seems to me, the only available breach of the First Limb is solicitation (i.e. asking for or encouraging an offer or invitation to treat) and not the subsequent negotiation or provision of information after an unsolicited offer or invitation to treat has been received. There is no reason to believe that the Defendant was involved or mixed up in the suspected breach of contract and accordingly that the third condition for exercise of the Norwich Pharmacal jurisdiction is not satisfied.[40]I accordingly dismiss this application.

Cited in 47 later judgments

and 38 more of the most senior