E Group Ltd v Baker

A party must comply substantively and clearly with a court order for disclosure. Alleged deficiencies in the other party’s disclosure do not answer non-compliance, although they may support a separate, comprehensible application. Where non-compliance threatens the trial timetable, an unless order may require compliance within a specified period, with the defence and counterclaim liable to be struck out if the order is not obeyed. The fact that documents are held by an accountant is not, without more, a sufficient reason for withholding disclosure. Costs may be ordered on an indemnity basis where an application is caused by a party’s failure to comply with a court order.

The claimant brought proceedings concerning a software contract and sought recovery of approximately £687,000 and damages. The application concerned three matters: enforcement of an earlier disclosure order, disclosure of documents said to be held by the defendant’s accountant, and reduction of money paid into court under an undertaking given in support of an injunction.

The defendant’s purported disclosure response did not identify adequately whether documents existed, whether they were available for inspection, or what had happened to unavailable documents. The defendant did not attend the hearing or participate by telephone.

1. The application was allowed in substantial part. The defendant had failed to comply in substance with the earlier order requiring a witness statement addressing each category of documents, their existence, availability for inspection, and, if unavailable, what had happened to them.
2. The defendant’s complaint that the claimant’s disclosure was deficient did not answer her own failure to comply. Any challenge to the claimant’s disclosure required a separate application in a comprehensible form.
3. An unless order was appropriate because compliance with disclosure obligations was critical to preserving the forthcoming trial date. The defendant was required to comply with the earlier order within 14 days. Failing compliance, her defence and counterclaim would be struck out and judgment entered against her, with damages to be assessed.
4. No order was made on the application for disclosure of documents said to be held by the defendant’s accountant, although the application could be renewed. Documents being with an accountant was not, by itself, an acceptable excuse for withholding disclosure. Relevance, privilege, or other proper grounds might justify withholding.
5. The amount paid into court by the claimant under its injunction undertaking was reduced by the total outstanding costs orders against the defendant, including the costs of the hearing. The reduction was considered just in the circumstances.
6. The defendant was ordered to pay the claimant’s costs of the hearing, assessed at £5,000, on the indemnity basis because the application had arisen solely from her failure to comply with a court order.

Not stated in the judgment.