There are before the Court applications by B&Q Plc (“B&Q”) and Mr. Don Jordison to set aside Witness Summonses issued on the 20^th August, 2004 (“the Witness Summons” or “Summonses”, as appropriate) by the Claimant (“Tyneside”).

In a nutshell, Tyneside is the landlord of premises occupied by the Defendant (“Wickes”) at Hanger Lane, Alperton (“Alperton”). There is a dispute as to the rent payable on a rent review under the lease of those premises; that dispute has been referred to a rent review arbitration (“the arbitration”).

Although the lease of Alperton was not in evidence, it is understood from Tyneside’s skeleton argument that the rent is to be reviewed by reference to “the Open Market Rent”, defined as “the full yearly rent at which the Premises might reasonably be expected to be let at the Relevant Review Date by a willing landlord to a willing tenant”. The inquiry in the arbitration accordingly goes to the open market rent payable by a hypothetical tenant to a hypothetical landlord for Alperton. The “Relevant Review Date” is the 29^th September, 2003.

For its part, B&Q is in the process of acquiring a lease of premises known as West 5 Centre, Acton (“Acton”). Allied Dunbar Assurance Plc (“ADA”) will be the landlord. Mr. Jordison is a director of Threadneedle Asset Management Limited (“Threadneedle”) which acts for ADA. On the material before me, there is in existence an Agreement for Lease dated 1^st July 2004 (“the Agreement”) with a draft lease attached but the lease has itself not yet been completed. Though for reasons which go to the heart of the present applications the Agreement has not been in evidence, I have been told that it contains a confidentiality clause in the following terms:

As is well known, B&Q and Wickes are competitors in the DIY market. Additionally, B&Q and Wickes were rival bidders for Acton; in the event B&Q was successful.

The Witness Summonses were issued by Tyneside pursuant to s. 43(2) of the Arbitration Act 1996 (“the 1996 Act”), with (it is said, see below) the agreement of Wickes and the permission of the arbitrator. The Tyneside argument, to which it will of course be necessary to return, is that Acton is a “comparable” which ought to be available for the purposes of the arbitration. As issued, the terms of the Witness Summonses required the Company Secretary of B&Q and Mr. Jordison to attend at the offices of the arbitrator on the 21^st September, 2004 to produce the following documents:

As already noted, the Witness Summonses were issued pursuant to s.43 of the 1996 Act, which (so far as material) provides as follows:

For present purposes, the relevant court procedures are to be found in CPR 34.1 – 34.3; it is unnecessary to set out those provisions here. For completeness, it may be observed that the provisions of CPR 31.17, dealing with orders for disclosure against non-parties to the proceedings, are limited by sub-part (3) thereof, as follows:

By way of procedural clarification, I record that no application was made to have this matter transferred to the Chancery Division. As all parties were present and represented on the day the matter was to be heard, it seemed to me right to proceed.

I further record that by the conclusion of the hearing the following background matters were either common ground or not seriously disputable:

In the context of rent review arbitrations, counsel were unaware of any practice of proceeding by way of witness summonses where a confidentiality clause was to be found in the lease or agreement, the production of which was sought.

Some rent reviews proceed by way of expert valuation rather than arbitration; there is no equivalent procedural mechanism in such instances for obtaining non-party documents. That said and though there was some debate between counsel for B&Q and counsel for Mr. Jordison (ADA) on this topic, I proceed on the assumption (favoured by counsel for B&Q) that most large rent reviews proceed by way of arbitration.

In the ordinary course of events, information as to rent could be discovered by inspecting the Land Register. This feature, however, does not assist in disposing of the present applications; first, because an application for exemption from publication in the Land Register can be made; secondly, because such information would not in any event become public for some months.

The evidence relied on by Tyneside is to be found in the Witness Statement of a Mr. Garofalo, dated 16^th September, 2004. Mr. Garofalo is a partner in the firm of Knight Frank LLP, which is retained by Tyneside to act on its behalf in the rent review concerning Alperton. Mr. Garofalo said this:

So far as concerns the permission of the arbitrator and the consent of Wickes, Tyneside point, firstly, to an e-mail dated 5^th August, 2004 from the arbitrator in the following terms:

B&Q’s evidence in support of the applications to set aside the Witness Summonses is contained in the Witness Statement dated 10^th September, 2004, from a Mr. Grant, a director of Estates Management employed by B&Q. Mr. Grant, inter alia, questioned the relevance of Acton to Alperton, remarking that “the rent review date is almost 12 months ago and the lease of Acton remains uncompleted”. Importantly, Mr. Grant went on to say the following:

Mr. Jordison’s evidence is to be found in a Witness Statement dated 10^th September, 2004 of a Mr. Bradley, an Asset Manager employed by Threadneedle. Mr. Bradley complained of the terms of the Witness Summonses, observing that as Threadneedle operates a paperless office it would be “quite burdensome” to have to locate all the documents production of which was sought. Mr. Bradley also made reference to the confidentiality clause in the Agreement. With regard to the negotiations for Acton, he said this:

For B&Q, Mr. Male QC submitted, first, that the Witness Summons went beyond the permission granted by the arbitrator. Secondly, Mr. Male attacked the drafting of the Witness Summons; its terms were vague in the extreme; it amounted to a fishing expedition. Thirdly, Mr. Male disputed that Acton was relevant to Alperton. Aside from the fact that the valuation date for Alperton preceded the Acton transaction by many months:

For Mr. Jordison, Mr. Morshead’s submissions followed a broadly similar path to those of Mr. Male. In particular, Mr. Morshead submitted:

That the documents sought in the Witness Summons were irrelevant. The Acton deal was confidential. Information was relevant only to the extent that it was available in the open market. This was a short but complete answer to the Witness Summons.

The documents were not necessary in order to dispose of the arbitration fairly or to save costs. As Mr. Morshead put it in his skeleton argument, “perfect knowledge of potentially comparable transactions was not ‘necessary’ for the negotiation of an open market rent”. In this regard Mr. Morshead emphasised: (1) matters were not as bad as Mr. Garofalo suggested; on his own evidence, comparables were available; (2) even to the extent that there was a shortage of comparables, other tools were available to the arbitrator to dispose of the arbitration; (3) Tyneside had failed to seek disclosure from Wickes of its negotiations for Acton; but such disclosure might well fill much of the evidential gap of which complaint was made.

The documents sought by Tyneside were private and confidential. If need be, Art. 8(1) of the European Convention on Human Rights (“the Convention”) was engaged and enshrined the individual’s right “to respect for his private …life…and his correspondence”.

For Tyneside, Ms. Holland submitted that none of the objections to the Witness Summonses held good. The documents in question would potentially furnish the best evidence for the arbitration. They were plainly relevant and no doubt contained extremely good comparables. Acton was a comparable open market transaction; it was therefore relevant; it was neither here nor there that the parties had made the Agreement confidential. Cardgrange and Lynall were distinguishable. It “could not be assumed” that, without such documents, the arbitrator could dispose fairly of the arbitration. Disclosure from Wickes would be pointless; arbitrators or valuers frequently excluded or placed no weight on offers and negotiations; they were interested in concluded transactions. As to confidentiality, Ms. Holland disputed that the documents contained sensitive material at all; rent was only one part of the business equation. In any event, the confidentiality clause in the Agreement itself contemplated that the production of the information in question could be compelled in the present circumstances. Still further, any confidentiality was to be overridden in the public interest of an open rental market; see the decision of the Court of Appeal of New Zealand in Re Dickinson [1992] 2 NZLR 43, together with the discussion in Clarke & Castle’s Manual of Rent Review (Release O, 1996), at paras. 7.320 and following. Were it otherwise, the “whole basis upon which modern standard rent reviews are based would be undermined”.

As to the terms of the Witness Summonses, Ms. Holland’s initial stance was that the objections fell away because Tyneside had agreed to narrow their ambit by reference to a pro-forma exhibited to Mr. Garofalo’s Witness Statement. After some encouragement from me, Ms. Holland ultimately produced a draft amended Witness Summons which, she submitted, did not give rise to objection. This draft sought the production of the following documents:

In reply, Mr. Morshead concentrated, first, upon the irrelevance of the documents covered by the Witness Summonses, given the confidentiality of the Acton transaction. The question for the arbitrator was the rent at which the premises might “reasonably have been expected” to be let at the relevant date; that question could not be answered on the basis of information about which nobody knew at the time. An “open market” was not the same as a market in which there is openness. Secondly, as to Re Dickinson, the omission of any reference to Cardgrange and Lynall was very telling. Finally, there was no basis for Ms. Holland’s submission that if the confidentiality clause was upheld the general scheme of rent reviews would break down.

In his reply, Mr. Male maintained his objection to the terms of the Witness Summons, whether as original or as contained in the proposed amendment. As to substance, Mr. Male submitted that I should in any event allow the applications and set aside the Witness Summonses on the particular facts of this case, especially: (1) that the information was not only confidential but commercially sensitive; (2) that Wickes and B&Q were rivals in the same business sector; (3) that Wickes was a rival bidder for Acton itself; (4) that Tyneside had not sought disclosure from Wickes of its negotiations in respect of Acton. Furthermore, there was no evidence in support of Ms. Holland’s wider argument that the rent review system would become inoperable if a confidentiality clause such as that found in the Agreement was upheld; indeed, Mr. Garofalo’s own evidence suggested otherwise, given the material which would in any event be before the arbitrator.

In fairness to counsel, I should record that a variety of other arguments were also advanced; I have confined my summary to the principal arguments (as they appeared to me).

It is clear that the Court has power under CPR Part. 34.3(4) to set aside or vary a witness summons; however, no guidance is given in the CPR as to the approach to be adopted by the Court. In these circumstances, albeit with caution, regard is to be had to the authorities decided under the previous Rules of the Supreme Court (“RSC”): Civil Procedure, Vol. 1 (2004 ed.), 34.4.1 and Harrison v Bloom Camillin, (unreported, transcript dated 12^th May, 1999), Neuberger J. (as he then was), at p.3.

For present purposes, the position under the “old” RSC may be summarised as follows (using current terminology):

The object of a witness summons is to obtain production at trial of specified documents; accordingly, the witness summons must specifically identify the documents sought, it must not be used as an instrument to obtain disclosure and it must not be of a fishing or speculative nature.

The production of the documents must be necessary for the fair disposal of the matter or to save costs. The Court is entitled to take into account the question of whether the information can be obtained by some other means. It is to be remembered that, by its nature, a witness summons seeks to compel production from a non-party to the proceedings in question.

Plainly a witness summons will be set aside if the documents are not relevant to the proceedings; but the mere fact that they are relevant is not by itself necessarily decisive in favour of the witness summons.

The fact that the documents of which production is sought are confidential or contain confidential information is not an absolute bar to the enforcement of their production by way of witness summons; however, in the exercise of its discretion, the Court is entitled to have regard to the fact that documents are confidential and that to order production would involve a breach of confidence. While the Court’s paramount concern must be the fair disposal of the cause or matter, it is not unmindful of other legitimate interests and that to order production of a third party’s confidential documents may be oppressive, intrusive or unfair. In this connection, when documents are confidential, the claim that their production is necessary for the fair resolution of proceedings may well be subjected to particularly close scrutiny.

The Court has power to vary the terms of a witness summons but, at least ordinarily, the Court should not be asked to entertain or perform a redrafting exercise other than on the basis of a considered draft tendered by the party’s advocate.

I add this; while the factors to which I have referred are entitled to individual consideration, the Court will of course also look at the matter as a whole. Moreover, in the exercise of the Court’s discretion, the weight to be given to individual factors is bound to vary depending on the facts of the case.

For completeness, in the light of the position reached under English Law, it does not seem to me that the argument raised by Mr. Morshead with regard to Art. 8(1) of the Convention can add much to the debate; I therefore express no view on and say no more of it.

I have reached a clear view that, in the exercise of my discretion, the Witness Summonses should be set aside. My reasons follow.

(1) The terms of the Witness Summonses: A moment’s consideration shows that the original terms of the Witness Summonses were manifestly unsatisfactory. In my judgment, they had the hallmarks of a fishing expedition, were redolent of a request for disclosure and failed to identify the specific documents of which production was sought. It is to be remembered that the recipient of a witness summons should not be obliged to exercise judgment or discretion in order to comply with it – and that a failure to comply may be treated as a contempt of court. Wording such as “The transaction documentation relating to..” and “including…” simply will not do. For my part such deficiencies were in no way remedied by Tyneside’s offer to rest content with answers to a pro-forma exhibited to Mr. Garofalo’s Witness Statement; save by consent, that would not be an appropriate way of proceeding. Against this background, it is idle to consider whether the Witness Summonses strayed outside the permission granted by the arbitrator – and in any event, I do not think that would matter given the consent from Wickes as to the issue of the Summonses.

In these circumstances and more especially given the absence of any proposed amendments at the commencement of the hearing, it was tempting simply to set aside the Witness Summonses on this ground alone. While, as it seemed to me, such a course would have been unobjectionable it would also to some extent have been unfortunate. If the sole objection to the Witness Summonses was their drafting, Tyneside could of course return on another occasion, at increased cost to all concerned.

As foreshadowed, proposed amendments (in the terms set out above) were ultimately forthcoming from Ms. Holland. For my part, I am minded to accept Mr. Male’s objections to paragraphs 2, 3 and 4 of the amended draft, on the ground that it is not satisfactory to begin such a request with the indefinite wording “A document…” – carrying with it the implication that there might or might not be such a document. However, so far as concerns drafting, I do not think that proper objection could be taken to paragraph 1 of the proposed amendment; although the wording “with respect to” is employed, I think that this paragraph identifies the Agreement with sufficient specificity. It follows that: (1) I allow the proposed amendments to the extent of permitting paragraph 1 of the amendments to replace the existing Witness Summonses; (2) I do not set aside the Witness Summonses on the ground of their terms alone.

(2) Documents not necessary for the fair disposal of the arbitration (“Necessity”): Given the view which I take of the matter, I shall proceed on the assumption that the documents sought are relevant to the arbitration and return later to the argument on that issue.

Plainly, if Acton is a comparable and relevant to the arbitration, production of the documents would be helpful to the arbitrator; but once objection is taken to their production, I could not begin to say that they are necessary (however loosely the word is used) for the fair disposal of the arbitration; that would be a leap altogether too far.

Essentially here, I accept the thrust of Mr. Male’s and Mr. Morshead’s arguments. First, as Mr. Garofalo’s evidence itself demonstrated, other comparables and material were available to the arbitrator. While the quality of the material before the arbitrator might well be improved by production of the Acton documents, the evidence does not justify the conclusion that the arbitrator is unable to dispose fairly of the arbitration without them. As Mr. Morshead put it, “perfect knowledge” of comparable transactions was not necessary for the task required of the arbitrator; the absence of such “perfect knowledge” is indeed a commonplace in many arbitrations in different areas of law.

Secondly and in any event, I cannot conclude that the information sought by way of the Witness Summonses (or much of it) could not have been obtained by other means. It is to be underlined that Wickes was an unsuccessful bidder for the very premises in question. In the circumstances, I do think that the failure of Tyneside even to seek disclosure from Wickes of its negotiations for Acton was telling. I accept that, in general and for very good reasons, those conducting rent reviews are interested in concluded transactions rather than negotiations; however, here, on the evidence in particular from Mr. Bradley (see above), those negotiations would at the very least have provided useful guidance as to the final Acton transaction.

In my judgment therefore, Tyneside has failed to make good a sufficient justification for the Witness Summonses; at most, it would be convenient if the documents covered by the Witness Summonses were produced; it is not established that the fair disposal of the arbitration requires that B&Q be compelled to produce them. By itself, this means that the applications to set aside the Witness Summonses should succeed; but if I had any real residual doubts on the matter, these are dispelled when regard is had to the confidentiality of the documents.

(3) Confidentiality: In the circumstances of this case, confidentiality is a factor entitled to very considerable weight. In essence:

I am amply satisfied that the documents in question, going to the rent of Acton are both confidential and, with respect to Ms. Holland’s argument to the contrary, acutely commercially sensitive. As to confidentiality, the clause in the Agreement speaks for itself. Given that Wickes and B&Q are not only direct and major competitors but that Wickes was an unsuccessful bidder for the very premises in question, to my mind commercial sensitivity speaks for itself. While rent is no doubt only part of the business equation, it is an important part and, for the reasons given by Mr. Grant in his Witness Statement (set out above), it is eminently understandable that B&Q should resist giving Wickes so considerable an insight into the cost base of its Acton trading operations.

While it is correct, as Ms. Holland contended, that the confidentiality clause in the Agreement contemplated that the production of otherwise confidential information could be compelled by the Court, to my mind, her submission in this regard begs the question. The fact that the clause contemplates (as would many a well-drawn confidentiality clause) that confidentiality might have to yield to a court order, does not mean that a court order overriding confidentiality is appropriate in the present circumstances.

As to Ms. Holland’s wider submission that to uphold the confidentiality clause would undermine the basis on which modern standard rent reviews are conducted, quite simply the evidence did not support it. Mr. Garofalo’s evidence went no further than a complaint as to a dearth of comparables and a shortage of open market evidence in the retail warehouse sector, particularly in London. Such evidence does not warrant the conclusion that the rent review system is in danger of breaking down in that sector, let alone elsewhere; nor does it assist in making good the submission that there is any pressing concern as to confidentiality clauses. In any event, to uphold the confidentiality clause in the particular circumstances of this case (helpfully underlined by Mr. Male) does not mean that the interests of confidentiality would prevail in other perhaps very different circumstances.

With regard to Re Dickinson, I should make it plain that I reject certain criticisms of its reasoning advanced by Mr. Morshead. That said, the context of the decision appears to have been a particular problem of obtaining information as to genuine market rentals in the then prevailing economic climate. Even if the observations of the Court were intended to have a wider application, I am not persuaded that the judgments lay down a general, still less an inflexible, rule. It may be noted that Gault J. said this (at p.48):

Pulling the threads together, I see no particular difficulty in an order (in the absence of agreement) for the production of a lease or agreement, where there is no confidentiality clause and the document in question evidences a relevant comparable required for the fair disposal of a rent review arbitration. In some cases, a confidentiality clause may be overridden where, for example, a clear need for the documents is demonstrated and considerations of commercial sensitivity are not present or at least not present in the acute form to be found in the present case. In other cases, confidentiality will be a very relevant factor telling in favour of setting aside a witness summons. The facts of the individual case are plainly of the first importance. Here, I am satisfied that on the ground of confidentiality as well, the Witness Summonses must be set aside. To do otherwise would be unjustifiably intrusive, having the effect of opening up B&Q’s commercially sensitive information to its rival, Wickes. At all events, for such a course to have been just, a very clear case of necessity needed to be made good; for the reasons given earlier, the Tyneside case in that regard fell well short of doing so.

(4) Relevance: As already outlined, Mr. Male and Mr. Morshead raised the intriguing argument that as the Acton transaction was confidential, its details would not be available on the open market and, accordingly, these were irrelevant to Alperton. As I have decided the issues of necessity and confidentiality adversely to Tyneside on the assumption (in its favour) that the documents sought were relevant, the question of relevance is academic. Moreover, the resolution of this issue could have wider ramifications. In the circumstances, I am reluctant to express a concluded view on this topic but, in fairness to the arguments which were developed, I shall (if briefly) indicate a provisional view.

My inclination here would have been to prefer Ms. Holland’s argument. The key to this debate, as it seems to me, lies in the analysis of why comparables are relevant. The reason that they are relevant was explained by Hoffman J. (as he then was), in Land Securities Plc v Westminster Council [1993] 1 WLR 286, at p.288, in the following terms:

What remains is the question of whether Cardgrange and Lynall preclude the conclusion towards which I incline. With respect, I am (at least provisionally) not minded to think that they do. The issue in Cardgrange concerned not a comparable property but the income earning capacity of the premises which were themselves the subject of the rent review. It was in that context that Scott J. (as he then was) concluded that confidential information of the outgoing tenant, not available to prospective new lessees could not form part of any negotiations between such lessees and the hypothetical lessor – and was hence irrelevant. However, there is an attractive argument for saying that this reasoning is inapplicable to an open market letting of a comparable property, which is relevant because of the inference which may be drawn from the objective fact of the conclusion of such a bargain (as explained by Hoffmann J.) and not because of the knowledge or deemed knowledge of that bargain by the parties to the hypothetical transaction. If right so far, then Lynall is (with respect) similarly distinguishable. All this is, however, a provisional view only and, for the reasons already given, academic.

In the event, the applications by B&Q and Mr. Jordison to set aside the Witness Summonses succeed. I shall be grateful to counsel for assistance in drawing up the order and on all questions of costs.