M3 Property Ltd v Zedhomes Ltd

An order for inspection or preservation of relevant property under Civil Procedure Rules 1998, Part 25.1 must be necessary and proportionate. The court should weigh the likely evidential value of the proposed exercise against its cost, intrusiveness, difficulty and the issues already capable of being addressed by existing evidence and disclosure. A speculative or largely confirmatory forensic investigation will be refused where it is unlikely to produce materially different evidence.

M3 Property Ltd claimed £181,000 from ZedHomes Ltd for consultancy fees relating to a proposed development. ZedHomes relied on an alleged full and final settlement, said to be evidenced by an email and letter. M3 alleged that the documents had been fabricated and sought an order allowing independent forensic inspection and imaging of ZedHomes’ remaining servers and backup devices.

The application was considered against the existing evidence, the destruction of older devices, the pending disclosure process and M3’s incomplete searches of its own devices. The central issue was whether the proposed inspection was necessary and proportionate.

1. Application refused. The court declined to order the proposed forensic inspection of ZedHomes’ servers and backup devices.
2. Under CPR Part 25.1, the court had power to order inspection or preservation of relevant property. Following the approach confirmed in Patel v Unite [2012] EWHC 92 QB, the order had to be both necessary and proportionate and had to be considered consistently with the overriding objective.
3. The proposed exercise was not necessary. M3 already had substantial points available to challenge the authenticity of the alleged settlement documents. Its own IT searches, the credibility evidence and the forthcoming disclosure, including electronic disclosure, could address the issue. The Defendant’s evidence that the relevant older devices had been destroyed was supported by three employees.
4. The exercise was also disproportionate. It would involve an intrusive and difficult search over several years, including deleted emails and drafts, at an estimated cost of about £20,000 or more. The claim was for £181,000, and the likely result was that no trace of the email would be found. A search that would at best cross-check existing evidence did not justify the cost and burden.
5. The Claimant’s amendment to the earlier order was allowed, as it was not objectionable in light of the ruling.