Understanding Civil Procedure Rules in Commercial Disputes | Lessons from Kurvits v Kender Case
In previous articles, we have explained the importance of the ‘overriding objective’ introduced by The Civil Procedure Rules (‘CPR’), aimed at ensuring fairness, efficiency and accessibility in the application of civil justice. It imposes and enforces a strict code of behaviour with the intent of enabling the court to deal with cases justly, and at a proportionate cost.
There is a requirement that all cases are properly investigated and prepared at an early stage and that management resources are committed to the resolution of the dispute.
This applies to civil cases across the board as clearly evidenced by the case of Kurvits and another v Kender and others [2024] EWHC 3622 (Ch), being heard in the Business and Property Court of the High Court of Justice.
A petition had been issued to wind up Zaum UK Ltd on the just and equitable ground.
Those opposing the petition sought to clarify, under CPR Part 18, important issues upon which the application was based prior to serving a detailed defence. The petitioners refused to provide the requested information stating that there were no matters ‘in dispute’ because, at that point, no defence to the petition had been served.
The dispute came before the court which found that a matter could be ‘in dispute’ based on material other than pleadings (i.e. inter alia, the service of a defence). The majority of the CPR Part 18 requests served by those opposing the petition were found to be reasonable and proportionate.
Stuart Southall of KANGS outlines the nature of this procedural dispute and the Judge’s findings.
The Relevant Law | The Civil Procedure Rules 1998
CPR 18.1 Obtaining further information
The court may at any time order a party to:
- clarify any matter which is in dispute in the proceedings, or
- give additional information in relation to such matter,
whether or not the matter is contained or referred to in a statement of case.
This CPR is supplemented by the Practice Direction which provides at paragraph 1.2 that:
A Request should be concise and strictly confined to matters which are reasonably necessary and proportionate to enable the party to prepare his own case or understand the case which he has to meet.
The Main Points in Dispute
The petition sought to wind up Zaum UK Limited, filed by Mr. Robert Kurvits and Mr. Sander Taal was on the basis that its original purpose could no longer be fulfilled. Mr. Kurvits, claimed that he had been excluded from the company despite the fact that the Shareholders' Agreement explicitly stated that the company's business was to ‘develop, produce and nurture Elysium Intellectual Property created by Robert Kurvits.’
He claimed that because of his exclusion, the company’s business cannot be carried on.
Those opposing the petition sought to clarify why it was maintained that the company’s business could not be continued in his absence.
Before filing a defence to the petition, the majority shareholders and the company served requests under CPR 18 seeking clarification of several elements of the petition.
The petitioners refused to provide the information arguing that the matters set out in the CPR 18 Requests, could not be regarded as being ‘in dispute’ prior to service of a defence.
The Court Judgment
The court was asked to consider whether a request under CPR Part 18 could be made prior to the service of a defence.
Following detailed argument in court, Judge Mullen ruled that, apart from one issue, the requests which had been submitted were proper and should be answered and, in his Judgment, he stated:
‘The petitioners must have considered what cannot be done without Mr Kurvits and why that prevents the business of the company being carried on. The cost of particularising that will be minimal and it will enable the defence to focus on what the case is, rather than what it might be’
‘It would be absurd if a defendant could not seek clarification prior to the service of the defence’
‘That would not be consistent with the overriding objective. If a pleading that is not so defective as to warrant striking out can be clarified and it is reasonably necessary and proportionate to do so, then it is open to the court to make an order for a Part 18 response.’
‘It does not seem to me to be an answer to a Part 18 request to say that requests for clarification must await close of the pleadings or service of a defence. That is not what Part 18 says and it is not conducive to the efficient conduct of litigation at proportionate expense.’
How Can We Assist?
The team at KANGS is always alert to changes in the law and court procedural rules, closely monitoring developments as a matter of course.
Our skilled solicitors have a wealth of experience of all facets of information protection as well as extensive expertise in Alternative Dispute Resolution (ADR), Intellectual Property disputes and commercial disputes, regardless of their complexity or nature.
If we can be of assistance, our team would be delighted to assist you, simply contact us using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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