Lloyds Developments Limited v Accor Hotel Services UK Limited [2026] EWHC 1522 (TCC)

[2026] EWHC 1522 (TCC)Case No HT-2022-000022Case No HT-2026-000079
IN THE HIGH COURT OF JUSTICE
KING’S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 19/06/2026
Before
THE HONOURABLE MR JUSTICE CONSTABLE
LLOYDS DEVELOPMENTS LIMITED (in administration)Claimant / ApplicantACCOR HOTELSERVICES UK LIMITEDDefendant / Interested Third Party in Part 8 Claim
Between
RISHIPAL SINGHRICHARD DIAMONDInterested Third Parties / Respondents / Part 8 DefendantsThomas Lazur (instructed by Hill Dickinson LLP) for ClaimantRobert Blackett and Jack Spence of Haynes and Boone LLP for DefendantDr Timothy Sampson (instructed by Spencer West LLP) for Part 8 DefendantsHearing Hearing date: 12 June 2026
Approved JudgmentThis judgment was handed down remotely at 10.30am on 19 June 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction

[1]The Claimant, Lloyds Developments Limited (in administration) (“Lloyds”) applies for Rishipal Singh and Richard Diamond (“the Directors”) to hand their mobile devices over to an Independent Reviewer so that a disclosure exercise for relevant documents can be performed in respect of a specified class of their instant messages. It does so through a Third Party Disclosure application brought within the proceedings between it and Accor Hotel Services UK Limited (‘Accor’) (‘the Main Proceedings’), and by separate Part 8 Proceedings against the Directors, in which Accor is an Interested Party (‘the Applications’). By consent, the Part 8 proceedings have been consolidated with the Main Proceedings.[2]This is a case with considerable procedural history. The extent of judicial time in the management of this case, which, whilst high in value and no doubt of considerable importance to the parties, is not particularly complex within the range of litigation seen in the Technology and Construction Court, has been, at least in my experience, unprecedented. The order which follows this application will be at least the 56th made since the commencement of the litigation, with practically the entire cohort of TCC judges having been involved at one point or other. Oft-repeated pleas on the part of the Court for the parties to co-operate in the manner to be expected in modern litigation have largely, and regrettably, fallen on deaf ears. What impact this may have on the recoverability of costs, whoever wins in due course, lies in the future. Insofar as specifically applying to disclosure, Coulson LJ has already characterised this case, when refusing permission to the Directors to appeal the order of Alexander Nissen KC which has led directly to the applications before me, as “having been bedevilled by delays and failure on the part of Lloyds to comply with their disclosure obligations. In that default, they have been assisted by the Directors.” I agree.[3]The original trial date of March 2024 was adjourned in December 2023 after witness statements had been filed, but before expert reports were exchanged. At a CMC on the 25 February 2025, a new trial date of 6 November 2026 and directions leading up to that date were given. It is in the context of preparation in advance of that impending trial date that the Court considers the present application. Background/Procedural History[4]The underlying dispute is summarised concisely by Alexander Nissen KC in his unreported ruling dated 20 January 2026, following which he made various orders explained more fully below (‘the Nissen Order’). I borrow directly from that summary in the following paragraphs.[5]In the barest of outlines, Lloyds’ case is that it had secured funding based on a design for the hotel approved by Accor in December 2018, but which Accor later sought to change. Lloyds contends that Accor fraudulently said the changes were needed to avoid infringing copyright. Lloyds says that the consequences of this were severe given the limited financing it had available to it, of which it says Accor was aware. It says funders were unwilling to lend the additional monies required to implement the works in accordance with the design changes. Lloyds says that the redesigns caused immediate delay and increased costs. Lloyds had to abandon the project, and now claims in excess of £180 million against Accor in deceit.[6]Accor denies ever having given binding approval for the original design. It admits to suggesting possible changes, and says that those which were adopted by Lloyds were not induced by fraud. They would also have cost little to implement. Irrespective of other points, Accor’s case is that the failure of the project was caused by other factors than design changes. These include the insufficiency of funding for the project, which Accor says was underfunded by about £10 million. It says that the Directors told investors that the project would cost less than was true. It is also said that they misappropriated the funders’ money to pay off other debts.[7]Lloyds later undertook a different hotel project with Virgin Hotels on the same site, which could not open until August 2023, by which point it says it had suffered substantial losses. Lloyds also claimed those losses resulting from that venture against Accor. Accor says it was not responsible for that second failure or the losses which followed. Lloyds went into administration in December 2023, and the hotel itself closed within two weeks.[8]As such, there are allegations of dishonesty in both directions.[9]In 2022, Lloyds’ Disclosure Review Document (‘DRD’) represented that there were WhatsApp messages, iMessages and SMS on mobile phones likely to be relevant, and the mobile phones of the Directors were available to Lloyds, were data sources to be considered at collection, and did not raise particular difficulties due to their location, format or any other reason. This information was provided at a point at which the Directors would have been responsible for providing instructions on the content of the DRD.[10]On 14 October 2022, HHJ Kelly ordered Lloyds to give Extended Disclosure in accordance with that DRD. That was not complied with insofar as it related to data on the mobile phones.[11]Following a contested hearing, by order dated 9 May 2024 and sealed on 27 June 2024, Jefford J directed that the parties agree to the appointment of an Independent Reviewer and that Lloyds should:
“…procure that Rishipal Singh and Richard Diamond shall provide all mobile telephones and any other devices used to send or receive any SMS text messages, iMessages, WhatsApp messages or any other instant messages between Rishipal Singh and Richard Diamond (including in group conversations to which others were also party) between 30 August 2018 and 13 August 2020 to the Independent Reviewer.”
[12]The parties, characteristically, did not agree to the appointment of an Independent Reviewer and, by a further order dated 10 October 2024, Jefford J directed that Hogan Lovells LLP be appointed as the Independent Reviewer so that the order for disclosure to the Independent Reviewer could be complied with.[13]As Jefford J would later explain in the reasons given for an unless order dated 11 December 2024, the Directors had objected to this order on the basis that it should have been the subject of an order for third party disclosure, but the Directors had made no formal application to vary or set aside the order until 20 November 2024, and that application was not before Jefford J when the 11 December 2024 order was made.[14]On hearing the Directors’ application to set aside, by order dated 14 February 2025 and sealed on 19 March 2025 Jefford J suspended the order to disclose to the Independent Reviewer on the basis that disclosure would be given of documents from the device of Mr Singh. Accor was given liberty to apply to lift the suspension if, having considered the documents disclosed to it, it was deemed necessary to do so.[15]Accor made an application to lift the suspension and reactivate the order for disclosure to the Independent Reviewer on 7 April 2025, but the application was not heard until January 2026, at which the Directors were represented.[16]In an order made on 20 January 2026, Alexander Nissen KC, sitting as a Deputy Judge of the High Court:(1) Reactivated the order for disclosure to the Independent Reviewer.(2) Varied the order to provide further detail with respect to the devices to be handed to the Independent Reviewer and the scope of the records to be reviewed.(3) Made provision that, if the Directors did not give effective access to the devices to allow Lloyds to comply with the order, Lloyds was to make an application with any necessary originating process to seek an order that the Directors give effective access to those devices and to procure that order as soon as reasonably possible.(4) Responding to Accor’s concern that Lloyds would pursue the application perfunctorily, Mr Nissen KC set out the bases upon which Lloyds should make the application: (a) The common law right to inspect and copy documents of the Directors as former agents (Fairstar Heavy Transport NV v Adkins [2013] EWCA Civ 886 and Yasuda v Orion Marine Insurance [1995] Q.B. 174); (b) The enforceable agreement between Lloyds and the Directors obliging the Directors to assist with the litigation (‘the Funding Agreement’); (c) That the devices are the subject matter of the proceedings or as to which a question arises in the proceedings which the court may order the inspection of under CPR 25.2 and section 34(3) of the Senior Courts Act 1981. (d) That the same order can be made by way of a third party disclosure order under CPR 31.17. (e) That Lloyds is entitled to effective access under section 426 of the Insolvency Act 1986 and the court’s powers pursuant to section 234-237.(5) Accor was given permission to attend at and participate in any hearing of any effective access application that was made in accordance with the order.(6) Mr Nissen KC went on to provide extensive directions as to how the disclosure process should be managed if and when effective access to the devices was given to the Independent Reviewer.[17]The Directors’ application for permission to appeal to the Court of Appeal on the basis that Mr Nissen KC was wrong not to set aside the 9 May 2024 Order of Jefford J was refused.[18]The Directors did not give effective access to the devices to enable Lloyds to comply with the effective access order.[19]As a result:(1) On 10 February 2026, an application was made by Lloyds under proceedings HT-2022-000022 against the Directors for effective access to the devices;(2) Accor was concerned that Lloyds’ application was not supported by an ‘originating process’ and that separate proceedings should have been commenced by Lloyds against the Directors. Lloyds sought advice from the Court as to how to proceed. Noting that it was for Lloyds to decide how to pursue its application, a practical solution was suggested that separate, short form proceedings be brought alongside the existing application to avoid any technical objections. Lloyds therefore issued Part 8 proceedings on 8 March 2026 seeking specific performance and/or a mandatory injunction under section 37 of the Senior Courts Act 1981, compelling the Directors to give effective access to the devices in accordance with Mr Nissen KC’s order on the basis of the contractual right to cooperation incorporated in the parties’ Funding Agreement. The Evidence[20]Lloyds relies upon an explanatory witness statement from Ms Emerson, a solicitor and partner from Hill Dickinson LLP, solicitors for Lloyds.[21]The Directors have both served separate witness statements in support of their opposition to the Applications, the content of which is largely echoed in the submissions made by Dr Sampson during the course of the hearing and which is considered further below. They assert that vast amounts of private, confidential, and legally privileged material—much of it belonging to third parties—would be accessed through the exercise, and their phones contain extensive personal data accumulated over many years, far beyond what is relevant to the proceedings.[22]Mr Singh also relies on expert evidence which he appends to his statement, in respect of which the Directors additionally have sought permission to rely. Mr Naghdi, a digital forensic analyst, has produced a report dated the 9 April 2026 (‘the Naghdi Report’).[23]Mr Naghdi sets out his conclusions as to the recoverability of the instant messages clearly:
“12.1 In my expert opinion: a. Deleted WhatsApp messages on iPhones are often technically unrecoverable; b. Recovery outcomes are unpredictable and frequently nil; c. Forensic imaging enables assessment, not guaranteed recovery;”
[24]The Court grants permission for reliance upon this report. It also accepts, for the purposes of the Applications, the conclusions set out above.[25]I also record that Mr Esly, a solicitor and partner at Haynes Boone who represent Accor, served evidence criticising various aspects of the way in which the Applications have been prosecuted by Lloyds. These points were responded to in a further statement from Ms Emerson, for Lloyds, and a further statement from Mr Singh. Although at least some of the complaints were justified (particularly in respect of Lloyds’ unwarranted redactions of the Funding Agreement), they do not ultimately go to any of the matters of substance before me. (1) The common law right[26]The Directors were Lloyds’ agents. They used their phones for communications about their principal’s affairs. It is contended, therefore, that Lloyds has the right at common law to inspect those phones and extract and copy such communications.[27]In Fairstar Heavy Transport NV v Adkins[2013] EWCA Civ 886the Court was required to determine whether the appellant company was entitled to an order requiring its former CEO, after termination of his appointment, to give it access to the content of emails relating to its business affairs. Mummery LJ held that it was, for the following reasons: “52. First, their former relationship had been that of principal and agent.[53]Secondly, as a general rule, it is a legal incident of that relationship that a principal is entitled to require production by the agent of documents relating to the affairs of the principal.[54]Thirdly, as Black LJ observed in the course of argument, “documents” may, depending on context, include information recorded, held or stored by other means than paper, as is recognised in the Civil Procedure Rules. …[55]Fourthly, materials held and stored on a computer, which may be displayed in readable form on a screen or printed out on paper, are in principle covered by the same incidents of agency as apply to paper documents. The form of recording or storage does not detract from the substantive right of the principal as against the agent to have access to their content.[56]…Quite apart from the existence or non-existence of property in content, Mr Adkins was under a duty, as a former agent of Fairstar, to allow Fairstar to inspect emails sent to or received by him and relating to its business. The termination of the agency did not terminate the duty binding on Mr Adkins as a result of the agency relationship.”[28]In Yasuda v Orion Marine Insurance [1995] Q.B. 174, Colman J held that the claimant had the right to inspect records and databases held by the claimant’s underwriting agencies following termination of the parties’ agreements both under the common law as a consequence of the relationship of principal and agent and that the obligations arising from that relationship were not displaced by the contractual rights and obligations save where expressly limited or excluded. The judge held that both the contractual right and the co-existing common law right to inspection survived termination, and inspection was ordered (see from 187D). Relevantly, in the context of arguments raised in this case, Colman J also held that: “It is not open to the defendants to rely on the inseparability of irrelevant material as a basis for declining to permit inspection, extraction and copying of relevant material”, cited with approval by the Master of the Rolls in Phones 4U (In Administration) v EE Ltd and Others [2022] 1 All England 239 at [29].[29]Dr Sampson does not dispute this starting point. He contends that general principle derived from these authorities must be balanced with a proportionate consideration of a party’s article 8 rights to privacy, in cases such as the present one where the documents being sought are contained on a personal mobile phone that will contain very considerable amounts of private, confidential and potentially privileged information. He also relies upon Phones 4U:
“37. Any order relating to the disclosure of business materials mixed with personal materials engages a number of potentially conflicting interests. The need for the due and efficient administration of justice has to be balanced against the individuals’ article 8 rights of privacy. In balancing these interests, the court will seek within the bounds of the CPR and the overriding objective to find a workable solution; such a solution should not be excessively costly, time-consuming or complex. In other words, the solution must itself be reasonable and proportionate.”
[30]Dr Sampson relies upon the following factors which he contends the Court should have regard to and which point away from making the order sought:(1) The Directors have already provided access to their phones to both their own solicitors (Spencer West and then Williams Sturges) and latterly Lloyds’ own solicitors (Hill Dickinson). It is said that this distinguishes this case from each of the authorities referred to above, which were cases where there was an attempt to deny any access to the information being sought;(2) The only messages to which the application now relates are messages which may have been deleted. On the basis of the Naghdi Report, it is said that recovery of these messages is ‘highly unlikely’, and this information was not available to any of the previous judges when the various orders were made;(3) As such, (a) there has been compliance in substance with the various disclosure orders and (b) the Court is now being asked to order a search for material evidence that ‘no longer exists’ in what will be ‘an entirely speculative’ and ‘technically improbable’ exercise.[31]Dr Sampson argues, by analogy, that a Court would not require a party to proceedings to produce documents that are no longer in that party’s power possession or control and the same principle should apply here. He therefore submits, in light of the very substantial amounts of private, confidential and privileged information also on the phones, that what Lloyds seek is neither reasonable nor proportionate to the likelihood of recovering any relevant and disclosable messages.[32]In substance, the only aspect of the submission before me which is different to those considered on a number of occasions by different judges is that(a) the focus is now said to be limited to deleted messages and(b) whether the process will successfully recover deleted messages is unpredictable and may result in no recovery of further material. In the context of this case, in particular where allegations of dishonesty play a central part of the case against the Directors, these factors do not begin to militate against the Directors being required to provide their phones.[33]First, it is not clear that the only relevant material would be deleted messages and that all relevant non-deleted messages have been disclosed. That may or may not be the case, but in circumstances where no properly supervised and considered review of the material has been carried out by a legal team, the submission is one based upon, effectively, a unilateral assertion by the Directors themselves. Ms Emerson, in her Fourteenth Witness Statement, explained that:
“At no point has Hill Dickinson (nor any independent forensic expert acting on their behalf) been provided with the devices for any purpose to include the taking a full forensic image or complete copy….Rather, as has already been explained in the evidence before the Court, the extraction process was more focussed in nature and carried out under the control of the device holders.”
[34]However, even taking the Directors’ position at its highest, deleted messages may be as relevant as messages which have not been deleted, and on one view more likely to contain material of relevance than messages which the Directors were content to leave on their phones when submitting them to their lawyers for the purposes of disclosure. I stress that this does not imply any conclusion as to whether the Directors have consciously deleted relevant material prior to the exercise referred to above, but it is a possibility that Accor is entitled to explore. To the extent deleted messages are recoverable, they are within the Directors’ control, and subject to the general common law rights. This is particularly so given that it was the existence of concerns as to the adequacy of the manner in which disclosure had originally been provided by the Directors from their phones which led to the original order by Jefford J. The short point is that the disclosure order is no less important as it applies to recoverable deleted messages as to messages that were not deleted.[35]For these reasons, the fact that some messages have been provided does not equate with substantial compliance by Lloyds with either the letter of or even the broad spirit of the various disclosure orders, starting with HHJ Kelly’s in October 2022.[36]The fact that the outcome of the exercise is unpredictable does not mean, at least in the context of this case, it is disproportionate to carry it out. Some of the language used by Dr Sampson in characterising the conclusions of the Naghdi Report overstated the position. The phrases ‘improbable’ or ‘highly unlikely’ to describe the chances of a successful recovery of material are not justified by the evidence. It is clear that the outcome is unpredictable, but the Naghdi Report does not quantify the likelihood of success in terms of probability. Whilst recovery of deleted messages may ‘often’ or ‘frequently’ be unsuccessful, that language is of course not inconsistent with recovery also ‘often’ or ‘frequently’ being successful. Given the outcome is unpredictable, it is plainly not possible to predict that the exercise will be unsuccessful.[37]Previous judges have already considered the fact that the relevant material (if any) will be mixed with personal and irrelevant material. This fact gives rise to the Directors’ privacy argument, which rests upon, as set out in Phones4U, the need for the due and efficient administration of justice to be balanced against the Directors’ rights of privacy pursuant to Article 8 of the ECHR (s.8 of the Human Rights Act 1998). The right under Article 8 is not absolute. A balancing exercise is required. The existence of protections for the Directors is important in this regard – as it was in Nix v Emerdata Ltd[2024] EWHC 125 (Comm), in which HHJ Pelling determined: “35. … (3) … There is no risk of private information which is immaterial to this litigation coming into the hands of either the claimants or the claimants' solicitors because the order contemplates that the images, once taken, will be held by the independent computer specialist … (4) … the respondent has the added protection of knowing that all ultimately that is sought by the claimants and their solicitors is that the images obtained be then subjected to the search parameters that have been used for the purpose of generating disclosure in this case with the result that the claimants' solicitors ultimately will never gain access to all the material that is imaged but will only gain access to the documents which, by definition, are material to this litigation because they are identified as responsive when tested against the criteria identified in the DRD … I am entirely satisfied that the respondent is protected in the circumstances of this case because of all the points that I have already made ….” (3) … There is no risk of private information which is immaterial to this litigation coming into the hands of either the claimants or the claimants' solicitors because the order contemplates that the images, once taken, will be held by the independent computer specialist … (4) … the respondent has the added protection of knowing that all ultimately that is sought by the claimants and their solicitors is that the images obtained be then subjected to the search parameters that have been used for the purpose of generating disclosure in this case with the result that the claimants' solicitors ultimately will never gain access to all the material that is imaged but will only gain access to the documents which, by definition, are material to this litigation because they are identified as responsive when tested against the criteria identified in the DRD …[38]The balance on the facts of this case weighs firmly and decisively in favour of enforcing Lloyds’ common law rights. In this respect, nothing has changed. As noted by Alexander Nissen KC at [105]-[107] of his judgment which I gratefully adopt: “105. Firstly, it was the directors who chose to use their own mobile phones for making and receiving communications relating to their work for the company. See Phones4U. They would be expected to bear the consequences of having done so.[106]Secondly, when HHJ Kelly made her original order in October 2022, Lloyds was not in administration. The interests of the directors and the company were then aligned. As I have pointed out, no difficulties in handing over the phones were foreshadowed. It may be assumed that the two directors, Mr Singh and Mr Diamond, were involved in that part of the DRD, which referred to the content of the phones being handed over. As such, the concerns of the directors which are now being raised should be understood with a degree of scepticism, given that it was apparently not their position in 2022.[107]Thirdly, because the Judge made her order with issues of confidentiality and privacy well in mind, and has already provided protections through the use of the IR.”[39]I also note that Coulson LJ, when refusing permission to appeal the Nissen Order, also gave specific consideration to this point, and concluded at [33]:
“As to the privacy point, the judge did not think that there was anything in that (see [106]). In any event, he introduced further protections in addition to the provision of the material to the independent reviewer.”
[40]There is nothing, and in particular nothing in the Naghdi Report, which is the only additional evidence not before previous judges, which causes me to reach a different conclusion. Given the safeguards in place, the intrusion is minimal. Delivery up remains proportionate notwithstanding the unpredictability of outcome.[41]In the circumstances, Lloyds have established their common law right to such information as may be recovered from deleted messages.[42]It was not suggested by Dr Sampson that if the right were established, it would be inappropriate for the Court to enforce that right by final mandatory injunctive relief. It is appropriate to do so. (2) Contractual Rights[43]The Directors accept that they have entered into what has been referred to above as the Funding Agreement, dated 21 November 2025. The general obligation under the Funding Agreement with regards to the assistance to be provided by RS and RD is as follows:
“4.1 The Funder and the Directors shall comply with the Civil Procedure Rules and associated practice directions (CPR), any applicable guides and all orders of the Court. Further, they shall also co-operate with LDL and the LDL Officeholders in the conduct of the Proceedings and the ASA Proceedings and any Potential Claims and provide all reasonable assistance and will comply with the Claimant’s Solicitors’ reasonable requirements in conducting the Proceedings and the ASA Proceedings and any Potential Claims.” 4.3 “The Funder and the Directors agree that: (a) They will disclose to LDL, the LDL Officeholders and to the Claimant’s Solicitors all documents (as defined by the CPR) that are or may be liable to be disclosed under the CPR or otherwise by order of the Court to the Defendant and any Affiliate as advised by the Claimant’s solicitors. (b) They will provide reasonable access to all such documents to the Claimant’s Solicitors and to any third party agent instructed on behalf of the parties (including an expert advisor or expert witness instructed by or on behalf of the parties or one of them) or joint expert as directed by the Claimant’s Solicitors.”
[44]Lloyds contend that these provisions provide Lloyds with an indefeasible contractual right to require that RS and RD provide their mobile devices to the eDisclosure provider.[45]Dr Sampson argues that, in the context of the general obligation under clause 4, the disclosure orders made in respect of the Directors’ mobile devices have been directed at Lloyds, rather than RS and RD personally and as such it cannot be the case that the Directors themselves have failed to comply with any “…order of the Court” with respect to the delivery up of their mobile devices. Indeed, it is said that the Directors have both provided their solicitors and Lloyds’ solicitors with access to their mobile devices to assist Lloyds in meeting its disclosure obligations. It is technically correct that the Directors are not presently in breach of a Court Order. That is not a point with substantive merit or indeed relevance to their obligation under clause 4.1.[46]The Directors are to “….provide all reasonable assistance…” and “… will comply with the Claimant’s Solicitors’ reasonable requirements in conducting the Proceedings….”. There can be no doubt that, in the context of the Nissen Order, Lloyds’ solicitors formally wrote to the Directors requesting that they provide their phones so that Lloyds could comply with its disclosure obligation.[47]Dr Sampson argues that the obligation of reasonable assistance, as a matter of contractual construction, cannot be construed to mean that the Directors have waived their Article 8 ECHR (s.8 of the Human Rights Act 1998) rights in respect of their personal, private, and confidential information on devices, such as their phones. This is undoubtedly right. However, it is relevant only insofar as requiring the Directors to provide their phones would offend their Article 8 rights. For the reasons given above, this is not the case, so the point of construction goes nowhere.[48]Dr Sampson also argued that, given the issue of delivery up of the phones existed prior to the date of the Funding Arrangement, if the parties had intended that reasonable assistance would have included provision of the phones, one would have expected an express reference to that obligation. The opposite is true. The language of reasonable assistance is broad and unfettered. Without narrowing, the provision of material so as to avoid Lloyds being in breach of a Court Order would plainly constitute reasonable assistance. Had the parties intended that obligation would not include the provision of the phones, one would have expected that to be made clear. In any event, it is necessary only to construe the words that in fact exist.[49]The Directors are in breach of their contractual obligation pursuant to clause 4.1 of the Funding Agreement.[50]It is not therefore necessary to consider whether they are also in breach of clause 4.3. For what it is worth, they plainly are. Clause 4.3(a) requires the disclosure of documents, and 4.3(b) requires them to provide reasonable access to all such documents to the Claimant’s Solicitors. By refusing to provide their phones, they have failed to provide reasonable access to the Claimant’s solicitors to facilitate review by the IR. Argument focussed on whether ‘parties’ means parties in the Main Proceedings or parties to the Funding Agreement. Even if it means parties to the Funding Agreement (and therefore does not refer to the IR process), this does not affect the freestanding obligation to provide reasonable access to the Claimants Solicitors, which the Directors have failed to do.[51]In the circumstances, Lloyds have established their contractual right to access to the phones for the purposes of complying with its disclosure obligations.[52]It is appropriate that such right is enforced by final mandatory injunctive relief. (3) CPR 31.17[53]In the circumstances, it is unnecessary to consider the application under CPR 31.17. I do so for completeness.[54]CPR r.31.17 provides:
“Orders for disclosure against a person not a party 31.17 (1) This rule applies where an application is made to the court under any Act for disclosure by a person who is not a party to the proceedings. (2) The application must be supported by evidence. (3) The court may make an order under this rule only where– (a) the documents of which disclosure is sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and (b) disclosure is necessary in order to dispose fairly of the claim or to save costs. (4) An order under this rule must – (a) specify the documents or the classes of documents which the respondent must disclose; and (b) require the respondent, when making disclosure, to specify any of those documents – (i) which are no longer in his control; or (ii) in respect of which he claims a right or duty to withhold inspection. (5) Such an order may – (a) require the respondent to indicate what has happened to any documents which are no longer in his control; and (b) specify the time and place for disclosure and inspection.” (a) the documents of which disclosure is sought are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and (b) disclosure is necessary in order to dispose fairly of the claim or to save costs. (a) specify the documents or the classes of documents which the respondent must disclose; and (b) require the respondent, when making disclosure, to specify any of those documents – (i) which are no longer in his control; or (ii) in respect of which he claims a right or duty to withhold inspection. (a) require the respondent to indicate what has happened to any documents which are no longer in his control; and (b) specify the time and place for disclosure and inspection.”
[55]Dr Sampson focused on the requirement at 31.17(3)(a). He argued that disclosure is being sought by Lloyds, as applicant, in an application effectively on behalf of Accor, in light of Accor’s belief that there is material on the phones which is likely to support its, Accor’s, case or be adverse against one of the other parties’, i.e. Lloyds’, case. In these circumstances, it is said that Lloyds cannot satisfy this requirement. Lloyds does not submit that disclosure is likely to support the case of the applicant, i.e. Lloyds, in the context of an application brought because it is said (indirectly by Accor) that the opposite is the case.[56]In response to this ingenious but unmeritorious argument, Mr Lazur says that in the wholly unusual circumstances of this case, where whilst Lloyds is the actual applicant, Accor is the de facto applicant, the Court should deem the provision satisfied, even though Mr Lazur accepted that technically the provision was not met. It is plain that the wording of the provision did not have in mind the specific situation presently facing the court. Nevertheless, it is unnecessary to decide whether the Court should ‘deem’ satisfaction of the provision in circumstances, or conclude that the provision has not been met. It has. It is the Directors’ own position that any material on the phones which is relevant to the issues in the case would be supportive ofthe applicant’s case. It is irrelevant that Accor (who is not the applicant) considers that the reverse is likely to be true.[57]Although Dr Sampson, in the context of this argument, criticised Accor for not bringing its own application under 31.17, this point goes nowhere. It is also worth noting that the same point was argued in front of Jefford J, who rightly dismissed it as a basis not to deal with the matter through the lens of Accor’s ordinary entitlement to disclosure from Lloyds in the context of the Main Proceedings.[58]The second argument advanced by Dr Sampson was that, even if the provisions of CPR 31.17 were satisfied, the Court ought not to order disclosure of documents which cannot reasonably be expected to exist. This is based on Dr Sampson’s overstatement of the effect of the evidence of the Naghdi Report, and is not a good point for the reasons dealt with previously.[59]Third, Dr Sampson argued that there is no right under CPR 31.17 to order delivery up of the phones. He argued that the power now exists pursuant to CPR 25.15 which deals specifically with search and imaging orders, but it is said no such application is brought pursuant to these provisions. This argument ignores the fact that the power underlying CPR 31.17, found within section 34(2) of the Senior Courts Act 1981, specifically grants the Court power:
“to order a person who is not a party to the proceedings and who appears to the court to be likely to have in his possession, custody or power any documents which are relevant to an issue arising out of the said claim— (a) to disclose whether those documents are in his possession, custody or power; and (b) to produce such of those documents as are in his possession, custody or power to the applicant or, on such conditions as may be specified in the order…” (a) to disclose whether those documents are in his possession, custody or power; and (b) to produce such of those documents as are in his possession, custody or power to the applicant or, on such conditions as may be specified in the order…”
[60]These words are of sufficient breadth to allow the Court to make the present order which specifies the conditions upon which the Directors are being required to produce such documents. That condition may include the provision of the device upon which the documents are to be found and the provision of any passwords and the like. It may also specify the safeguards designed to protect the Directors’ right to privacy, in a similar manner to the protections that are provided to a party subject to an imaging order under CPR 25.1(1)(i).[61]In the circumstances, I am satisfied that had the application been brought solely pursuant to CPR 31.17, that application would have been successful.[62]In this context, not least because it was the subject of specific submission and it is at least tangentially relevant to Accor’s application for its costs against Lloyds, the following further observations are made:(1) Given the Nissen Order, it was clear that the application should be advanced not just pursuant to CPR 31.17 (within the Main Proceedings) but on the basis of the common law and contractual rights enjoyed by Lloyds;(2) Whilst the common law and contractual rights might be relevant to the exercise of the Court’s discretion under CPR 31.17, their role within the evaluation is different. It is at the very least implicit in the Nissen Order, that the intention was that claims pursuant to the common law and contractual entitlements were to be brought in their own right. To do so undoubtedly required separate originating processes.(3) Whilst ultimately the outcome would not have been different had the application only been brought pursuant to CPR 31.17, Accor were entirely justified in pressing Lloyds to issue the Part 8 claim in parallel to the CPR 31.17 application. (4). Other Bases of Claim[63]Although referred to within the Nissen Order, no party considered it appropriate for Lloyds to have pursued matters under section 426 of the Insolvency Act 1986 and the court’s powers pursuant to section 234-237. Costs[64]Lloyds seeks its costs from the Directors.[65]Accor seeks its costs from the Directors and Lloyds jointly and severally. Lloyds disputes Accor’s entitlement to costs against it.[66]I conclude that Accor is entitled to costs against Lloyds, but that(a) Lloyds’ obligation to make payment should be ordered only in circumstances of non-satisfaction of the costs order by the Directors in the first instance; and(b) in such circumstances, the Directors are to pay to Lloyds such costs (including any interest on costs) as Lloyds may be liable to pay to Accor.[67]I come to this conclusion because: (1). the nature and extent of Accor’s involvement has been materially contributed to by Lloyds’ conduct. The manner in which Lloyds had hitherto acted, as indeed determined by Alexander Nissen KC, gives legitimate cause for Accor to be concerned that without its involvement in applications and proceedings by Lloyds against the Directors, their pursuit was in danger of being ‘half-hearted’; and (2). as things turned out, Accor’s concerns were justified. I have already made observations about the appropriateness of their efforts to ensure Lloyds pursued the contractual and common law rights. Another example is Lloyds’ initial redaction of the Funding Agreement, which was inappropriate.[68]However, whilst Lloyds are to be jointly and severally liable, this application has ultimately been necessitated not by Lloyds, but by the Directors. The primary obligation to make payment of costs to Accor should fall to the Directors. The Directors are obviously also liable for Lloyds’ costs, given that(a) the Part 8 claim succeeded; and(b) the CPR 31.17 application succeeded.[69]Accor seek their costs in the sum of £58,150.00. Lloyds seek their costs in the sum of £82,472.50.[70]In respect of Accor’s costs, Mr Lazur made three specific points: the first related to the time spent on correspondence; the second to time at the hearing, given that the matter was ultimately heard in 50% of the estimated time; the third related to the attendance of both senior and junior advocates. The second point is a good one – and justifies a deduction of £6,000; I do not accept the first or the third. As to the first, whilst it is right that some of the correspondence has been and remains unnecessarily combative, the thrust of the points made in that correspondence (e.g. around the need for originating proceedings and the issue of redactions) was justified. As to the third, Mr Spence engaged in advocacy in relation to discrete parts of the arguments, and his doing so no doubt reduced the (more expensive) preparation time by Mr Blackett. The division of labour was reasonable and, notwithstanding the attendance of both, was likely to have reduced rather than increased the overall costs.[71]Dr Sampson made a single overarching point relating to duplication. This is fair. No doubt a reflection of the lack of co-operation between Lloyds and Accor, neither suggested to the other that, in preparing for the hearing, they should approach matters in a manner designed to avoid duplication. For example, Accor might have reviewed a draft of Lloyds’ skeleton and only addressed additional points. Whilst it was inevitable that the Directors would face both Lloyds and Accor, I consider that the costs incurred by both have increased by reason of their lack of co-operation. I consider that their costs should be limited to an 80% recovery.[72]Therefore, the Directors are to pay: (1). 80% of Lloyds’ costs, summarily assessed at £82,472.50; (2). 80% of Accor’s costs, summarily assessed at £52,150.[73]Lloyds is jointly and severally liable for Accor’s costs (and any interest on costs), payable only in circumstances where the Directors fail to make payment within 21 days of the Order. In circumstances where Lloyds makes payment of Accor’s costs together with any interest, the Directors are liable in the same sum to Lloyds.[74]The parties are to draw up the resulting Order.