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13 October 2020
By means of a Norwich Pharmacal order, the English courts have the power to order parties mixed up in wrongdoing to disclose key information to the victim of that wrongdoing to assist the victim in pursuing the wrongdoers. For example, a victim of anonymous online defamation might seek the defamer's identity from an internet service provider in order to sue the defamer.
In a recent application for a Norwich Pharmacal order in Hickox v Dickinson ( EWHC 2520 (Ch)), the owner of a stolen painting sought information from the defendants (fine art agents) as to the painting's whereabouts and the identity of its possessor and purchaser. The defendants resisted on two main grounds:
In granting the Norwich Pharmacal order, the court found a good arguable claim for conversion against the ultimate purchaser. The court held that it was sufficient to establish a good arguable case for essential elements of the cause of action, even if there were significant questions over important case aspects, such as limitation.
The claimant (Ms Hickox) contended that a painting had been stolen from her by a third party (Timothy Sammons, a former art dealer) and sold without any authority. Sammons was subsequently convicted in the United States for theft offences arising from several artwork sales that he had brokered, including the painting in question. However, Hickox received neither the painting nor any sale proceeds.
The defendants were an art dealership (which acted as the agent for the purchaser of the painting) and its director.
Hickox applied for a Norwich Pharmacal order against the defendants, seeking information as to the painting's location and any transactions involving it, including the identity of any purchasers.
Hickox did not articulate the precise nature and existence of any tort (by the ultimate purchaser) in her application. The information was requested on the basis that it would enable Hickox to establish the basis of the transactions and determine the potential defendants.
The conditions for the grant of Norwich Pharmacal orders, which Hickox had to meet, are as follows:
(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); and
(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).(1)
In addition, in relation to establishing the arguable wrong condition, showing a good arguable case requires more than "an honest and reasonable belief that there has been any wrongdoing". However, in exercising its discretion to grant Norwich Pharmacal orders, the court must be vigilant in guarding against fishing exercises in what is regarded as an exceptional jurisdiction.
Hickox did not articulate the precise nature and existence of any wrongdoing by the ultimate purchaser. However, she submitted that there would be a good arguable case regarding the following potential causes of action:
The defendants argued that the Norwich Pharmacal order was speculative and should not be granted on this account.
In deciding the application, the judge noted that:
As regards conversion, the judge noted that this was a strict liability tort, which did not require knowledge or notice on the wrongdoer's part. In concluding that Hickox had a good arguable case that the painting had been converted, the judge found as follows:
As regards the remaining conditions to grant a Norwich Pharmacal order, the judge:
For completeness, the judge found that no Norwich Pharmacal order could be granted based on the potential bailment claim or the potential claims for breach of fiduciary duty. This was because essential elements of these causes of action (relating to the purchaser's knowledge or notice) could not be satisfied to the good arguable case standard.
Hickox also sought disclosure pursuant to a Bankers Trust order. This relief arises from the eponymous case of Bankers Trust v Shapira ( 1 WLR 1274 (CA)), which held that in order to give effect to the equitable right to trace, a court could order a bank to disclose the state of, and documents and correspondence relating to, the account of a customer who was, on the face of it, guilty of fraud. However, the judge found that Hickox's case on misappropriation was not so strong as to justify disclosure solely on this basis.
Norwich Pharmacal orders can be useful tools in the armoury of a victim of fraud or other wrongdoing. This case provides helpful guidance for Norwich Pharmacal orders in cases where the wrongdoer's identity or other details required to establish the wrongdoing are unknown. However, it is also a reminder that the courts are mindful not to permit Norwich Pharmacal orders to be used as fishing expeditions. All essential elements of the putative cause of action must be established to the good arguable case threshold.
Court records indicate that Hickox has since issued a claim against eight defendants (including the defendants to this application). It remains to be seen whether she will succeed in recovering her stolen painting or the proceeds from its sale.
For further information on this topic please contact Kirtan Prasad or Davina Given at RPC by telephone (+44 20 3060 6000) or email (email@example.com or firstname.lastname@example.org). The RPC website can be accessed at www.rpc.co.uk.
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