Lowry Trading Limited & Anor v Musicalize Ltd & Ors (No 2)

The Business and Property Courts’ disclosure regime under Practice Direction 57AD may support an order for extended disclosure even where initial disclosure and a Disclosure Review Document have not been completed. The court may also order further information under Civil Procedure Rules 1998, rule 18.1, where clarification is directly relevant to compliance with a freezing injunction.

Orders must remain reasonable and proportionate. They may be targeted at the individuals responsible for the relevant conduct and may include safeguards for privacy, confidentiality and privilege. The privilege against self-incrimination may also be relevant to an order for further information.

The claimants had obtained summary judgment on a substantial part of their claim and had previously obtained freezing and proprietary orders. They alleged that the defendants had dealt with hospitality boxes at the O2 Arena and Wembley Stadium without complying with obligations to notify the claimants or otherwise account for the resulting income.

The claimants sought specific disclosure of bank statements and answers to a Part 18 request. The application was considered on paper after the defendants, who were then without legal representation, failed to provide substantive submissions. The issues were whether the court had power to order disclosure under Practice Direction 57AD and further information under Civil Procedure Rules 1998, rule 18.1, and whether such orders should be made.

1. The court refused to make an order for disclosure under rule 31.5 of the Civil Procedure Rules 1998. By paragraph 1.8 of Practice Direction 57AD, Civil Procedure Rules 1998, Part 31 did not apply to these proceedings, subject to exceptions irrelevant to the application.

2. Part 6 of Practice Direction 57AD gave the court sufficiently wide powers to order extended disclosure. The absence of completed initial disclosure or a Disclosure Review Document did not prevent an order where the stage and circumstances of the proceedings justified it.

3. The court also had power under rule 18.1 of the Civil Procedure Rules 1998 to require further information concerning the destination of monies and the use of the boxes. Those matters were directly relevant to whether the defendants had complied with the freezing injunctions.

4. The claimants had produced prima facie evidence that assets subject to the injunctions had been dealt with. In light of the earlier findings supporting summary judgment, there was a low threshold for suspicion that the defendants might have acted outside the rules and norms of society or failed to comply with court orders.

5. Having regard to paragraph 6.4 of Practice Direction 57AD, a reasonable and proportionate disclosure order was appropriate. The order was directed to the second and third defendants, required bank statements and verified witness evidence, and permitted limited redactions for confidentiality or privacy. It preserved claims to privilege.

6. The defendants were ordered to provide the disclosure and further information by 4pm on 19 April 2024. The order recorded that the privilege against self-incrimination might be invoked in relation to the further-information request. Costs were reserved.