A preliminary matter arising in the proceedings was whether the applicable regime for discovery applications brought in winding up proceedings is contained in the Grand Court Rules (GCR) rather than the Companies Winding Up Rules (CWR). The Petitioner’s application for specific discovery against the Respondents was formulated on the basis that GCR (specifically, GCR O.24) should apply.

As to this, the Court cited with approval the 2023 decision of Kawaley J in In re Global Cord Blood Corporation  to the effect that:

1. GCR O.24 does not apply to winding up proceedings.
2. Nevertheless, the Court does have the jurisdiction under the CWR (specifically CWR O.3, r.12(1)(i)) to give directions for discovery as the Court considers appropriate.
3. Within the context of contributories’ petitions, there is no starting assumption, corresponding to GCR O.24, r.10, that production of documents will be ordered because they are referred to in affidavits or pleadings. The Court has the jurisdiction to order discovery which is to be exercised where it is “appropriate.”
4. However, where a discovery application is made under the CWR in circumstances which are procedurally similar to circumstances which would arise under the GCR, the practice under the GCR will be analogous and highly persuasive although not dispositive.
5. The practice under the GCR is not dispositive because the jurisdiction contained in the CWR is expressed in more open-ended terms. However, where there is no material distinction between the winding up jurisdiction and the general civil jurisdiction, it will generally be desirable for legal clarity and consistency that the same procedural approach is adopted in each jurisdictional context.

The Court agreed to proceed in this particular case to determine the application, taking into account both the GCR and the CWR (likely because the parties agreed to specific reference to GCR O.24 in a previous consent order).

The Court then went on to examine the test to be applied as to whether the documents of a subsidiary are within the “power” of its holding company. After considering the relevant caselaw, the Court concluded that it is bound by the decision of the Cayman Islands Court of Appeal in WAFR Holdings Ltd  which followed the House of Lords’ decision in Lonrho Ltd v Shell Petroleum Co Ltd, meaning that:

1. A party has a document in his “power” only if he has a presently enforceable legal right to obtain inspection of the document from whoever actually holding it without the need to obtain the consent of anyone else.
2. A parent company does not merely by virtue of being 100% parent have control over the documents of its subsidiaries.
3. It is not sufficient that consent could be obtained if it were asked from the subsidiary. If there is no evidence of an existing right or understanding or arrangement giving a parent access to subsidiary’s documents then the parent does not have the necessary control over its subsidiary’s documents.
4. However, a party may have sufficient practical control if there is evidence of the parent already having unfettered access to the subsidiary’s documents or if there is material from which the court can conclude that there is some understanding or arrangement by which the parent has the right to achieve such access.
5. Each case will depend on its own facts and the burden of proof lays on the applicant to prove that the documents are within the “power” of the other party or parties.

Ultimately, the Court decided on the facts to refuse most of the Petitioner’s requests.

In making its decision, the Court also emphasised that, in applications for specific discovery, the documents or at least the classes of the documents sought should be identified with precision in the application.