Third Party Disclosure And Foreign Trusts: Order Secured In Clear Fraud Case

A foreign trustee was recently ordered by the English courts to disclose information about assets held in a foreign trust in a fraud case. This disclosure order is known as a Norwich Pharmacal Order; and the award-winning commercial litigation team at ParrisWhittaker are experts in securing disclosure orders to protect a client’s position.

A recent ruling from the UK’s High Court illustrates the extent to which a Norwich Pharmacal Order (also known as Bankers’ Trust disclosure order) can be obtained in cross-jurisdictional cases.

Why are Norwich Pharmacal Orders useful?

An NPO is a disclosure order – a highly valuable tool to help reveal the identity of a third party who is suspected of wrongdoing, such as fraud or other criminal activity. NPOs are secured against an ‘innocent’ individual or other organisation and requires them to disclose documents and/or information that could help obtain information and/or identify the person responsible.

The courts will not readily grant such orders – specific criteria must be satisfied before an order will be granted. That said, the occasional case is so clearcut the judge has no difficulty in making an NPO.

What’s the background?

The applicant companies sought the disclosure order against an individual (G) who admitted fraud. They had already obtained judgment against him in relation to unauthorised extraction of company funds. Now they were seeking to recover the monies taken by G – who was a citizen of, and lived in, Israel.

The applicant argued that G can be expected to have access to, and control of, the documents of an Israeli trust and documents relevant to the bank accounts of his late father (the trust had been established under the wills of G’s parents, both now deceased).

The court granted the disclosure order and set out its reasons:

1. The English court had jurisdiction to make the order against G personally as the facts showed he had sufficient connection with England.
2. Significantly, one of the bank accounts of a company which appears to amount to a trust asset is in London, so at least some of the documents and information sought by the order relate to assets in the jurisdiction.
3. This was not a case of “hot pursuit” but a case involving an established fraud. It was important to avoid any further delay in identifying the whereabouts of the claimants’ assets.
4. Here, the court was concerned with giving effect to an existing judgment which has already been determined. It was about exercising its power to compel production of documents and information designed to reveal the location of that property so it can be recovered.

This case amounted to a clearcut situation where there was an admitted fraud; judgment had been obtained; and it was now a matter of locating the assets and funds for the claimants to recover it.

The judge emphasised that the court has never hesitated to make strong orders for disclosure in such circumstances.

The ruling gives invaluable guidance on the circumstances in which the courts are willing to make these types of disclosure orders. It will be reassuring for clients in a similar position who need information from third parties – even where there are jurisdictional issues to consider.

How can we help?

Anyone seeking an NPO or other disclosure order needs robust legal advice from experienced commercial litigation lawyers. For urgent legal advice contact Jacy Whittaker at +1.242.352.6112 or email him at info@parriswhittaker.com.

1 Tonstate Group Ltd & Ors v Wojakovski & Ors [2024] EWHC 975 (Ch).