Norwich Pharmacal orders: an analysis of the “good arguable case” requirement

The recent case of Hickox v Dickinson & Anor [2020] EWHC 2520 (Ch) considers the requirements for obtaining a Norwich Pharmacal order (“NPO”). The ability of the court to make such an order remains an exceptional jurisdiction, and the courts are alive to the need to prevent mere “fishing expeditions”. The judge gave welcome guidance on the requirement of a “good arguable case” of wrongdoing.

Summary

  • An NPO is an order for disclosure against a third party who has been identified as holding information that will enable a party to plead its case against the wrongdoer, trace assets or to bring proprietary claims.
  • The doctrine was established in the House of Lords’ case of Norwich Pharmacal v Commissioners of Customs & Excise [1974] UKHL 6.
  • There does not need to be a definite intention to commence proceedings against the wrongdoer.
  • The courts will not allow the equitable doctrine to be used as a “fishing expedition”, nor will they allow the information sought to be used for an improper purpose.
  • It is common ground that the standard of proof as to the existence of wrongdoing (being one of the requirements) is that of a “good arguable case” in the sense of a case that is more than just capable of serious argument.

The requirements of an NPO

The following hurdles (taken from the judgment of Saini J in Collier v Bennett [2020] EWHC 1884 (QB) must be met by an applicant if their application for an NPO is to succeed:

(i) The applicant has to demonstrate a good arguable case that a form of legally recognised wrong has been committed against them by a person (the Arguable Wrong Condition);

(ii) The respondent to the application must be mixed up in so as to have facilitated the wrongdoing (the Mixed Up In Condition);

(iii) The respondent to the application must be able, or likely to be able, to provide the information or documents necessary to enable the ultimate wrongdoer to be pursued (the Possession Condition);

(iv) Requiring disclosure from the respondent is an appropriate and proportionate response in all the circumstances of the case, bearing in mind the exceptional but flexible nature of the jurisdiction (the Overall Justice Condition).

The first three hurdles must be met before the court will consider the Overall Justice Condition.

The facts

The Claimant, Ms Linda Hickox, sought information from the Defendants (art dealers and advisors based in London) relating to an oil painting entitled Calanque de Canoubier (Pointe de Bamer) painted by the impressionist Paul Signac in 1896 (the “Painting”).

The Painting belonged to Ms Hickox, and she claims it was stolen from her by former art dealer, Mr Timothy Sammons. The Second Defendant acted as agent for the purchaser of the Painting, and consequently Ms Hickox believes that they hold information including the location of the Painting, details of transactions involving the Painting and the identity of the purchaser. Mr Sammons has already been convicted of grand larceny and fraud in New York in July 2019.

Good arguable case of wrongdoing

The judge was careful to make it clear that the ultimate wrongdoer for the “arguable wrong” requirement was not Mr Sammons. It was common ground that Mr Sammons is a wrongdoer in respect of his dealings with the Painting, but the Claimant had already obtained judgment against him in New York. The judge stated that: “…the existence of Mr Sammons’ wrongdoing would not in itself justify the requested order…” and that “…it would be necessary for the Claimant to establish a good arguable case of a separate wrongdoing.”

The Claimant had been unable to identify who else had committed a wrong (other than Mr Sammons) or say precisely what wrongs had been committed. However, she maintained that on the basis the Painting had been stolen by Mr Sammons, anyone who thereafter purchased it or took possession of it committed the tort of conversion (i.e. when one person interferes with the personal property of another, for example by taking it or withholding it without lawful justification). Furthermore, the Claimant suggested there may be claims in bailment against persons taking possession of the Painting with sufficient notice of her interest, or claims against third parties connected with Mr Sammons’ breach of fiduciary duty. The Defendants argued that the Claimant’s application was speculative and the NPO jurisdiction could not be used to find out if there were wrongs other than those committed by Mr Sammons.

“In all Norwich Pharmacal applications the claimant’s case is partly inchoate, that is the very point of the relief.”

The judge stated that: “…the fact that the Claimant
has not yet identified the wrong she alleges does not mean that the application is a fishing expedition as to whether she has a good arguable case.” The judge described the term “fishing expedition” as a “very wide-ranging request” but stated that the essence of the complaint is that the request is “speculative”. However, the judge explained that the warnings against speculative applications did not mean that an application was impermissible in order to establish whether a wrong has been committed. She further explained that the “good arguable case” test “…goes to the existence of any wrong as well as it’s potential
merits.”

In relation to the level at which a claimant needs to show a good arguable case, the judge stated that: “…if there is a clear defence or no good arguable basis for essential elements of a cause of action then that may well prevent the claimant establishing a good arguable case for that wrong.” The judge was satisfied that the Claimant had established a good arguable case of conversion against any person who has taken possession of the Painting in relation to the sale or subsequently. Based on the conviction of Mr Sammons, the judge considered there was “…strong evidence of a theft that would make subsequent purchasers taking possession liable in conversion…” (unless appropriate defences could be invoked).

In contrast, the judge did not consider that the other potential claims were sufficient to justify an NPO on the basis that it was speculative to suggest that anyone came into possession of the Painting with notice of the Claimant’s interest, and the information requested would not be sufficient to establish the requisite knowledge, notice or dishonesty in respect of claims arising from a breach of fiduciary duty by Mr Sammons (such as tracing, knowing receipt and dishonest assistance).

Comment

The case gives a useful overview of the requirements for an NPO. The point that an application will not be considered speculative merely on the basis that the specific wrong has yet to be identified is a welcome clarification.

Should you suspect that you are a victim of fraud or other wrongdoing, please do not hesitate to get in touch at hello@tenetlaw.co.uk

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