Personal guarantees: will the court order that the original documents should be disclosed?

Photo by Joey Kyber
27 June 2023

In litigation, the fundamental purpose of disclosure is to make available any evidence which either supports or undermines the respective parties' cases where, under Part 31 of the Civil Procedure Rules (CPR), parties are required to disclose to each other any documents that damage their case, as well as any helpful documents. Needless to say, not least where disclosure of a document could make or break a case, the courts are often asked to rule on disputed disclosure issues.

Indeed, in the recent High Court decision of Emirates NBD Bank PJSC & another v Hassan Saadat-Yazdi & others [2023] EWHC 747 (Comm), in the context of an allegation made by the applicant defendants that personal guarantees had been forged, production was sought of the originals of purported personal guarantees and guarantee confirmations to help plead their defence.

The facts of the Emirates v Hassan case

In proceedings to enforce judgments of the Dubai onshore courts, in which the first and second defendants were held liable under personal guarantees for the multi-million pound liabilities of Pacific Control Systems, a company in which they were investors, the defendants allege that the guarantees were forged and that the claimants are responsible for having misled the Dubai courts.

Prior to service of their defence, the defendants sought production of the originals of purported guarantees and confirmation of those guarantees, having only poor copies of those documents.

The reasoning of the judge in that case

In ordering the claimant banks to produce the originals of the personal guarantees and guarantee confirmations, and having regard to the criteria set out under paragraph 6.4 of Practice Direction (PD) 57AD CPR — setting out the rules relating to extended disclosure in the business and property courts — Henshaw J was “entirely satisfied” that it was “reasonable, proportionate and necessary” for the original documents to be produced for inspection by the defendants and their forensic expert.

It was held by the High Court that where a claim was based on purported guarantees, alleged to be forged on non-fanciful grounds, it was obvious that the originals should be produced at the outset, enabling the defendants to fully particularise their case of forgery. It was said by the judge to be “the most elementary application of the principle that litigation should be conducted with cards face up on the table.” In reaching this decision, Henshaw J noted that these were large claims in which the applicant defendants were seeking to make serious allegations and, as the documents were centrally important to the case, the originals would be of high probative value.

Inspection of the originals would essentially enable the applicants and their expert to consider matters such as how the alleged forgery was carried out — for example, by pasting in from other documents or the use of wet signatures — which can only be done with the benefit of the originals.

The noteworthy reminders about disclosure

In finding that the original personal guarantees and guarantee confirmations should be produced, the judge provided a number of noteworthy reminders when it comes to the parties’ obligations in the context of disclosure, including the fact that the court may order production of original documents.

Although paragraph 21.1 of PD 57AD refers to a party’s right to request a “copy” of certain documents, under paragraph 21.4 of PD 57AD, which refers more generally to “documents”, the court “may make an order requiring a document to be produced if it is satisfied such an order is reasonable and proportionate.” Paragraph 5.11 of PD 57AD also provides that the court may “require a party to disclose documents to another party where that is necessary to enable the other party to understand the claim or defence that they have to meet or to formulate a defence or reply.”

Finally, in the context of evidence, paragraph 13.1 of PD 32 CPR provides that “photocopies instead of originals may be exhibited provided the originals are made available for inspection.” The court also noted, if needed, that it had power to order production of the originals for inspection under CPR 3.1(2)(m) and section 37 of the Senior Courts Act and/or its inherent jurisdiction.

Legal disclaimer

The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions. Before acting on any of the information contained herein, expert advice should always be sought.

© Melissa Worth, June 2023

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