On 16 September 2014, the Claimant (“MHT”) issued a without-notice application for a freezing order against all of the Defendants and a prohibitory injunction against the Third Defendant. I shall refer to the First Defendant as “Mr Taylor”, to the Second Defendant as “Mr Ladhur” and to the Third Defendant as “the Company”. Mr Thomas Grant QC appears for Mr Ladhur and the Company; Mr Paul Burton appears for MHT.

On 17 September 2014, Birss J made two orders against the Defendants. One (“the Prohibitory Injunction”) was an injunction directed at all three Defendants, the effect of which, in broad terms, was to restrain the Defendants from acting in such a way as would damage MHT’s IT systems and in particular the data-bases on which its activities depend. The second was a world-wide freezing order granted against Mr Taylor and Mr Ladhur in sums in excess of £850,000. A return date of 25 September 2014 was set in respect of each order. The application was supported by affidavit evidence from (i) Mr Philip Barden, a partner in MHT’s solicitors Devonshires Solicitors, who has conduct of the proceedings on behalf of MHT and (ii) Mr Simon Hatchman, the then head of Financial Services at MHT (who swore two affidavits). I shall refer to them as “Barden 1”, “Hatchman 1” and “Hatchman 2”. I shall refer to paragraph numbers of those affidavits and other affidavits to which I refer below in the format Affidavit [number].

On the return date, the freezing order was continued by Morgan J after hearing from counsel for each of MHT, Mr Taylor and Mr Ladhur and the Company but the Prohibitory Order was, for the main part, not continued. I will refer to the continuation of the freezing order as “the FO”. It would appear that, on that occasion, Mr Ladhur did not present opposition to the making of the FO but the possibility of such opposition was left open. Accordingly, paragraph 11 of the FO gave permission to him to apply to the Court “at any time, without having to show any change of circumstance or other cause”. If such an application were to be made, that same paragraph laid down directions about how the application should proceed:

Mr Ladhur was to serve with his application all evidence which he relied on;

MHT had permission to file evidence in reply no later than 21 days after service of the application;

The application was to be listed as an interim application by order to be heard not less than 4 weeks after service of the application with a time estimate of 2 days and certified suitable for an expedited hearing.

It was clearly envisaged that if Mr Ladhur were to make an application he would do so promptly. This is apparent from the fact that the Judge certified the application as suitable for an expedited hearing. That is not to say, however, that no application at all could be made unless it was made promptly, although if not made promptly, Mr Ladhur could not have expected to continue to be entitled to an expedited hearing. It is to be noted that the effect of directions ii) and iii) above was that, if the matter was listed promptly, it might come on for hearing after only 7 days from the service of MHT’s evidence in reply.

On 18 February 2015, nearly 5 months after the making of the FO, Mr Ladhur and the Company filed an application seeking (i) an order discharging the FO (which had been made against Mr Ladhur but not the Company) and (ii) to strike out certain passages of the Particulars of Claim (on the basis that they disclose no reasonable grounds for bringing the claim) alternatively summary judgment (on the basis that MHT had no real prospect of succeeding on those paragraphs). These are paragraphs 27(iv), 28(iv) and 36 (iv) and Appendix 6.

As well as relying on evidence already filed in response to MHT’s application for the FO and Prohibitory Injunction, the application by Mr Ladhur and the Company was supported by the 5^th witness statement of Mr Ladhur (“Ladhur 5”), the second affidavit of Charles Americanos (“Americanos 2” and “Mr Americanos”) and the first witness statement of Katherine Gregory all made between 16 and 18 February 2015. MHT’s evidence in response comprised 13 witness statements, the most important of which are the 2^nd witness statement of Philip Barden (“Barden 2”) and the first witness statement of Simon Hatchman (his third piece of evidence – “Hatchman 3”). This evidence was all served at the end of May or beginning of June 2015. Although this was well after the 21 days provided for in Morgan J’s order, Mr Ladhur and the Company agreed to an extension to 8 May but even then the evidence was not provided until the end of May and beginning of June.

The possibility of an application along the lines of the second aspect of the application actually made (strike out/summary judgment) was not raised before Morgan J and his order does not, therefore, contain any directions about it. There is, of course, nothing to prevent Mr Ladhur and the Company making such an application. There is nothing, either, to prevent them making such an application in the same application notice as the application to discharge the FO and that is what they did. Morgan J’s directions did not extend to the second aspect of the application so that the ordinary provisions of CPR 23 and 24 would apply insofar as MHT sought to adduce evidence in relation to that aspect. But the fact of joinder of the second aspect in the same application as the first aspect did not, in my view, abrogate Morgan J’s directions so far as concerned the first aspect. I am not attracted by the argument to the contrary put by Devonshires in correspondence.

MHT’s evidence provoked responsive evidence (which was not provided for by that order) namely the sixth affidavit of Mr Ladhur (“Ladhur 6”), the third affidavit of Mr Americanos (“Americanos 3”) and an affidavit of Venkatachalam Muthiah (“Muthiah 1”). These were provided on or about 19 June 2015, some 11 days before the hearing in front of me commenced.

In spite of the forensic appeal by each side to the failure of the other side to comply with Morgan J’s directions or to seek permission to adduce further evidence, I allowed all of this evidence (from both sides) to be relied on. Nobody, in my view, has suffered any prejudice from the way in which the evidence has been produced and for me to have proceeded other than on the basis of the full evidence would not have been conducive to the overriding objective.

Although the application to discharge the FO has not been made promptly, I do not consider, in spite of suggestions to the contrary, that it is now simply too late for Mr Ladhur to seek to obtain its discharge. That he has taken so long to launch his application may make me slightly more circumspect in my consideration of the prejudice which he says the FO is causing him, but it would, again, be entirely contrary to the overriding objective to refuse his application in limine. I therefore propose to consider the discharge application on its merits.

Mr Ladhur submits that the FO should be discharged for four reasons, each of which on its own would be enough but which, cumulatively, provide an overwhelming case for discharge. The four grounds are these:

There is no good arguable case.

There is not (and never has been) and real evidence of risk of dissipation.

The order is not just and convenient.

There was gross failure by MHT to comply with its obligation to make a fair presentation of the case at the without notice hearing before Birss J.

Mr Grant contends that the evidence placed before Birss J presented a partial and inaccurate view of events. His clients have put in a significant amount of evidence to put their side of the story. It is not possible, of course, for the court on the hearing of an application such as the present to resolve disputed questions of fact. However, evidence which is relied on by an applicant on a without notice hearing may be shown to be clearly wrong or to be clearly weaker than it appeared. The judge dealing with a hearing attended by both sides can, and must, take account of all the evidence in striking the correct balance in the exercise of the discretion whether or not to grant relief. In the present case, Mr Ladhur and the Company have produced evidence which, if it is correct, meets MHT’s case. Some of that evidence is incontrovertible and shows MHT’s evidence in a very different light from that which shone in front of Birss J. It is, moreover, a matter of serious adverse comment by Mr Grant that MHT has not engaged in meeting the evidence which Mr Ladhur and the Company have produced. Mr Burton contends that it is not necessary for MHT to do so, at least not at the detailed level which Mr Grant seems to think appropriate. On an application of this sort, the court will not conduct a mini-trial. Instead, the court proceeds on the basis of the pleadings and of the applicant’s own evidence. That is true, at least up to a point. Certainly, the court is not to undertake a mini-trial and cannot, in any case, assess the veracity of evidence without cross-examination. However, if the applicant’s evidence is met by evidence in response which is (i) consistent with the applicant’s own evidence and (ii) provides an innocent explanation for what the applicant has seen as suspicious, one might expect an applicant to produce, if it can, evidence to show that the explanation is wrong or contrived. I must at least conduct some review of the competing cases on the evidence which I do have; and the fact that to do so may require a considerable amount of time and effort does not mean that I will be conducting a mini-trial. I cannot simply say that, because the task is time-consuming (as the hearing was, running nearly 5 days and as this judgment is proving), it is something the court should not undertake.

Further, the present case is one where the alleged risk of dissipation of assets depends on the allegedly dishonest conduct of Mr Ladhur and the Company which, of itself, is sufficiently serious to lead to an inference of risk of dissipation. Although, as I have just said, it is not appropriate to conduct a mini-trial, I do have to examine the evidence in considerable detail – so that this judgment will look as though I have done just what I should not do (ie conduct a mini-trial). It is one thing to take a broad view of the evidence to decide whether there is an arguable case sufficiently strong to determine whether the first requirement for the grant of a freezing order is satisfied. It is quite another, in my view, to say that because there is an arguable case in that sense, there is necessarily a strong enough case to lead to an inference of a risk of dissipation. In assessing whether an inference should be made, I consider that it is appropriate to pay regard to the explanations given by Mr Ladhur and Mr Americanos and that I should not simply assume that MHT’s arguable case will be established. My review of the evidence is thus, I regret, very long and detailed since the competing evidence is itself very long and detailed.

Although the application before me is made by Mr Ladhur to discharge the FO, the onus is not on him to show that it should not have been granted (although reliance on non-disclosure as a ground for discharge does require him to establish a failure on the part of MHT). The hearing before me was the first occasion on which the merits or otherwise of a grant of a freezing order have been properly debated. The onus, as it has been all along, is for MHT to establish, in the light of all of the evidence, that a freezing order should be granted; it is nothing to the point that a judge, on a without notice application and in the light of the evidence then before the court, should have thought it appropriate to grant a freezing order. In his skeleton argument, Mr Burton submitted that, as this is Mr Ladhur’s application to discharge the FO, the burden is on him to show why the FO should be discharged. Given that the hearing before Morgan J was not a hearing on the merits – because by that stage, Mr Ladhur and the Company had not been able to prepare the evidence which they wished to adduce – and given that the liberty to apply to discharge the FO was given on the basis that a change of circumstance did not need to be shown, Mr Burton’s submission must, in my judgment, be rejected. Indeed, in the course of the hearing, I understood him to have resiled from the proposition. But whether he did or did not resile, I reject it.

Before turning to the grounds for discharge and what will, I regret but for reasons already given, be a lengthy review of the evidence in the light of the submissions made, I need to say a little about the law. It is a matter of some surprise to me that there is any controversy about what are thought to be well-established principles. There is no dispute about the general principles (although I will in due course say something about them so far as they are relevant to the grounds of discharge):

The applicant has to show a good arguable case for the relief sought in the action.

The defendant must have assets in the jurisdiction.

The applicant must show that there is a real risk that any judgment will go unsatisfied owing to the dissipation or disposal by the respondent of his assets unless restrained by the court.

The court must be satisfied that it is just and convenient in all the circumstances of the case to grant the relief.

This last requirement is important. Even if conditions i) to iii) are satisfied, it is to be borne in mind that a freezing order is, as Mr Grant puts it, a nuclear option open to the court. It is a gross interference with a person’s rights; there has to be a strong case for the grant of a freezing order before the court should adopt that option.

The area of controversy relates to what is meant by a “good arguable case” in this context. To get one point out of the way, Mr Burton submits that the way in which Mr Ladhur and the Company have proceeded indicates that they acknowledge that there is a good arguable case. This is because there is an application to strike out, or for summary judgment, in relation to certain paragraphs of the Particulars of Claim which means, according to Mr Burton, that Mr Ladhur and the Company recognise the other parts cannot be struck out or be subject to a summary judgment application and that therefore there is a good arguable case in relation to those other parts.

That does not, of course, follow unless the test for good arguable case is no higher in relation to a freezing order than it is in relation to strike out or summary judgment. But even if the test is the same, I do not consider that Mr Burton’s argument is correct. It cannot, in my judgment, be said that, just because a defendant does not bring a strike out or summary judgment application, he is to be taken as accepting that there is a good arguable case against him. It is one thing to take the point positively by bringing strike out proceedings or launching an application for summary judgment, no doubt at cost and expense and with a risk of losing. It is another to be forced to take the point in the face of an application for a freezing order.

In any case, the attitude of the court in the two different situations is likely to be different. In the case of a freezing order, the court will decide on the evidence before it whether there is a good arguable case; in the case of summary judgment, and possibly in some instances of strike out too, the court will take into account the fact that further evidence may come to light (eg as a result of disclosure) which will make an apparently weak case stronger. I do not propose to take into account when considering the application to discharge the FO that there is also an application to strike out, or for summary judgment in relation to, certain paragraphs of the Particulars of Claim.

Whether the test of good arguable case in relation to a freezing order and in relation to summary judgment/strike out is the same is a different question. Mr Burton draws no distinction and, as I understand his submission, his position is that the test is the same. Mr Grant submits that the test for a good arguable case is higher in relation to a freezing order than in relation to summary judgment/strike out. Is it really the case, Mr Grant asks rhetorically, that the test for the engagement of one of the court’s nuclear weapons (the freezing order) is no higher than for resisting summary judgment (assuming, of course, a risk of dissipation can be established)?

The question is addressed in sections 12.023 to 12.025 of Gee on Commercial Injunctions (5^th ed). From that discussion, with which I agree, it is apparent that the test is not rigid and well-defined; much is left to the judgment of the court. In particular, the test of a good arguable case in relation to freezing orders is not the same as the test of a serious question to be tried which is ordinary applicable in relation to injunction cases. In that context, Gee cites Millett LJ in Lewis v Freighthire Ltd (1 February 1996): “A stronger case must be shown than would justify relief of a less stringent kind”.

The discretion which the court has must, of course, be exercised in accordance with established approaches as reflected in the case law. Guidance can be gained from decisions under the former RSC Order 11 rule 1 concerning leave to serve out of the jurisdiction. In that context, Gee cites Mustill J in Orri v Moundreas [1981] Comm LR 168. It is not enough that there should be an arguable case, namely “one which a competent advocate can get on its feet”.

Both sides have relied on another decision of Mustill J. namely his decision in Ninemia Marine Corporation v Trave Schiffahrtgeseelschaft GmbH (The Niedersachsen) [1983] Comm LR 234. After a review of the authorities he said this:

Mustill J’s decision was upheld on appeal (see [1983] 1 WLR 1412). In the judgment of the court, one finds at p 1417E-F this timely reminder that establishing a “good arguable case” is only the beginning of the exercise:

This is the same point which Mustill J had made at first instance when he said that, even where the plaintiff has a case which reaches the threshold, the strength of his case is to be weighed in the balance with other factors relevant to the exercise of the discretion. And it is for that reason, among others, that I consider it necessary to review the evidence in some detail in a case such as the present where the risk of dissipation depends largely on the inferences to be drawn from the allegedly dishonest conduct.

Mr Burton contends, however, that Gee is now out of date and that the law has moved on. He cited no authority for the proposition that what is written in Gee, albeit it was published some time ago, has been superseded. In support of his conclusion, he submitted that the approach to summary judgment has developed since the date of Gee from which, according to him, it can be said that the approach to “good arguable case” in the context of freezing orders has also developed. He did not cite any of the recent authorities concerning summary judgment and, although those authorities are familiar, I do not perceive them as having anything to say about the meaning of “good arguable case” in the context of freezing orders or about how the court should exercise its discretion to grant such orders.

Dissipation is concerned with dealings with assets other than in the ordinary course of business or for normal and proper business purposes. The test laid down by the Court of Appeal in The Niedersachsen at p 1422H is this:

It is not necessary to show that a judgment would be completely defeated. In order to establish jurisdiction, it is enough to show that the enforcement of any judgment would be more difficult: Congentra AG v Sixteen Thirteen Marine [2008] EWCH 1615 (Comm) at [49]. The extent of the difficulty will, however, be a factor to be taken into account in the exercise of the discretion.

Where dishonesty is alleged, it is sometimes possible to infer a risk of dissipation from the fact of the dishonesty. A recent exposition of the principles and provision of guidance is to be found in the judgment of the Court of Appeal in VTB Capital plc v Nutritek International Corp [2012] EWCA Civ 808, [2012] 2 BCLC 437 at 525 (“VTB Capital”). At [169]ff of the BCLC report, the court discussed some aspects of the principles on which it would be appropriate to issue a world-wide freezing order. The court referred to the judgment of Peter Gibson LJ in Thane Intestments Ltd v Tomlinson [2003] EWCA Civ 1272 (“Thane”). Nothing was said to suggest that Thane is no longer good law or helpful guidance. And so it remains worthwhile to remember these paragraphs of the judgment of Peter Gibson LJ:

[20]: a cautious approach is appropriate before what has been called one of the court’s nuclear weapons (see Bank Mellat v Nikpour [1985] FSR 85 at 92 per Donaldson J) is deployed.

[21]: it is important that there should be solid evidence adduced to the court of the likelihood of dissipation.

[28]: a mere assertion of dishonesty is not enough. In a passage cited by the Court of Appeal in VTB Capital, it was emphasised that the court must

As to ii), it is not every risk of a judgment being unsatisfied which can justify a freezing order. This is why a defendant is not prevented from carrying on ordinary business transactions or paying ordinary living expenses. Further, unsupported statements and expressions of fear carry very little, if any weight. There needs to be evidence of objective facts from which the court can infer a risk of dissipation. I hardly need authority for that proposition, but if it is needed, it can be found in the decision of Peter Pain J in O’Reagan v Iambic Productions Ltd (1989) 139 NLJ 1378 at 1379.

As to iii), the Court of Appeal agreed, in VTB Capital, that the court should be careful in its treatment of evidence of dishonesty. But it was recognised that

After that, the Court of Appeal made a lengthy citation from the judgment of Flaux J in Madoff Securities International Ltd v Raven [2011] EWHC 3102 (Comm) (“Madoff – in which Flaux J himself cited two relevant authorities not referred to in Thane), where he referred to [28] of Thane, saying this:

The Court of Appeal agreed with that, concluding, on the facts of the case before it, in this way:

There is a helpful (and non-exhaustive) list of the sort of factors which might be considered in any particular case in relation to the risk of dissipation which was to be found in an earlier edition of Gee. Those factors were mentioned with approval by Peter Pain J in O’Reagan who added that they were the sort of factors “about which the court should have information” before deciding to grant a freezing order. A similar list is now to be found at section 12.039 of the current edition and includes the following factors which are, or may, be relevant in the present case:

The nature of the assets which are to be the subject of the proposed injunction and the ease or difficulty with which they could be disposed of or dissipated.

The nature and financial standing of the defendant’s business.

The length of time the defendant has been in business.

The domicile or residence of the defendant.

The defendant’s past or existing credit record.

Any intention expressed by the defendant about future dealings with his English assets, or assets outside the jurisdiction.

The defendant’s behaviour in response to the claimant’s claim.

The court has a discretion to make a freezing order if, in accordance with the statutory words, it is “just and convenient” to do so. The usual American Cyanamid principles do not, however, apply: see the judgment of Lord Donaldson of Lymington MR in Polly Peck International plc v Nadir (No2) [1992] 4 All ER769 at pp 785g – 786a, especially (5) at p786a. It is at this stage that the court will take into account the effect of a freezing order on the defendant and his business as well as the potential effect on the claimant if the order is not granted. There would have to be a very strong case indeed for the court to make an order which would destroy the defendant’s business for instance if confidence would be wholly undermined or credit withdrawn. Thus the Court of Appeal in The Niedersachsen said this at p 1426:

Mr Grant has set out, in his skeleton argument, a summary which I consider fairly reflects the relevant principles. I take the following paragraphs from that skeleton argument:

A freezing order is “a draconian remedy and the strict rules relating to full disclosure by the claimant are a recognition of the nature of the remedy and its potential for causing injustice to the defendant”: Fourie v Le Roux [2007] 1 WLR 320 at [33] per Lord Scott.

The duty of the applicant for a freezing order without notice is to make a full and fair disclosure of all the material facts: Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350 (“Brink’s Mat”) at 1356 per Ralph Gibson LJ (principle 1).

The material facts which an applicant must disclose are those which it is material for the judge to know in dealing with the application as made. But materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers: Brink’s Mat at 1356 (principle 2).

The applicant must make proper inquiries before making the application: Bank Mellat v Nikpour [1985] FSR 87. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries: Brink’s Mat at 1356 (principle 3).

The applicant must identify the crucial points for and against the application, and not rely on general statements and the mere exhibiting of numerous documents. He must disclose all facts which reasonably could or would be taken into account by the judge in deciding whether to grant the application. It is no excuse for the applicant to say that he was not aware of the importance of matters he has omitted to state. If the duty of full and fair disclosure is not observed the court may discharge the injunction even if after full enquiry the view is taken that the order made was just and convenient and would probably have been made even if there had been full disclosure: see Siporex Trade SA v Comdel Commodities Ltd [1986] 2 Lloyd’s Rep 428 at 437 per Bingham J.

There is no fundamental distinction between the litigant’s duty of full disclosure of material facts, and his legal representatives’ duty to assist the court by reference to (or a correct summary of) relevant authorities, statutory provisions and practice directions: Memory Corporation plc v Sidhu (No. 2) [2000] 1 WLR 1443 at 1454C-H per Robert Walker LJ and at 1460A-B per Mummery LJ.

If material non-disclosure is established the court will be astute to ensure that a plaintiff who obtains a without notice injunction and without full disclosure is deprived of any advantage he may have derived from that duty: Brink’s Mat at 1357 (principle 5) referring to Bank Mellat at 90-91 per Donaldson LJ.

The court nonetheless has a discretion not to set aside or, if set aside, to make a fresh order: Brink’s Mat at 1357 (principle 7). However, such discretion is to be exercised sparingly: see 1358F per Balcombe LJ. In Behbehani v Salem [`989] 1 WLR 723 at 729, Woolf LJ said this:

In the same case, Lord Woolf stated, at p 732F, that if there has been material non-disclosure, then it is obviously for the claimant to explain it.

In this context, reference should also be made to Brink’s Mat at 1357 (principle 6):

More recently, the position was stated as follows by Andrew Smith J in Dar Al Arkan Real Estate Development Co v Al Refai [2012] EWHC 3539 (Comm) at [148] and [149]:

The merits of the applicant’s case; and

The nature of the order obtained ex parte.”

I would only add this. It is not right, I consider, to compartmentalise the different components in the exercise of the discretion whether or not to grant a freezing order. It seems to me that, although material non-disclosure may of itself justify the discharge of a freezing order and a refusal to renew it, such non-disclosure is also relevant as a factor in relation to the fourth requirement for the grant of a freezing order, namely that the court must be satisfied that it is just and convenient in all the circumstances of the case to grant the relief.

Before turning to the applications before Birss J and Morgan J, I want to give some background to MHT and the defendants. This background appears from the evidence filed. I do not think that it is controversial even in relation to the defendants. But if it is, there is nothing in MHT’s evidence to gainsay it and I see no reason, on this application, to doubt it.

MHT is a very large housing association. Mr Taylor is a former employee of MHT, having been, until his dismissal, MHT’s Oracle Applications Manager (although there is some dispute as to his precise job title and whether his duties were restricted to Oracle-related matters).

The Company is a technology, information management and business consultancy company. Mr Ladhur is a shareholder and director of the Company. At the date of the original injunction, the Company had two directors and two 50/50 shareholders, namely Mr Ladhur and Mr Americanos. Mr Americanos was, at the times material to this claim, the Company’s chief technical officer. Mr Ladhur’s case is that he, Mr Ladhur, does not have a technical role. Mr Americanos has, since this litigation was brought, resigned as a director although he remains a shareholder of the Company.

Mr Ladhur was born in 1965 in Birmingham. He belongs to the Sikh faith and is part of the Sikh community. He graduated from Portsmouth Polytechnic with a degree in electrical engineering in 1988. Since then he has had a number of jobs in the field of business consultancy with high-profile companies. He obtained an MBA in 2000. He has been a director of the Company since 2004. He lives in Ealing with his wife of 20 years and (for most of the time) his elderly mother, for whom he and his wife care. Together he and his wife have three children, aged between 9 and 15, all at local schools.

Mr Taylor and Mr Ladhur have been friends since they met while taking their degrees. As appears in more detail later in this judgment, some years ago, and long before the matters in issue in these proceedings, they jointly purchased two properties in Spain. These purchases have proved to be very disadvantageous (a matter which will not come as any surprise to those familiar with investment in the Spanish property market in the early to mid-2000s).

The Company provided MHT with IT related services from about 2007. MHT terminated its contractual relationship with the Company in September 2014 in circumstances which I will explain later.

Mr Taylor was suspended from his position in February 2014. He was told that his suspension was related to his perceived connection with persons at the Company and the procurement of MHT’s contract with the Company. The letter of suspension is dated 26 February 2014. He has subsequently been dismissed.

As already mentioned, the application before Birss J was supported by the three affidavits Barden 1, Hatchman 1 and Hatchman 2. Prior to the application, MHT had obtained information, without notice to the defendants, under the Bankers Books Act in particular, as explained by Mr Barden in Barden 1.

The case presented to Birss J on the affidavit evidence (at that stage, Particulars of Claim had not been prepared or, if prepared, were not presented to the judge) was that the Company had dishonestly overcharged MHT the sum of £743,761 and that the proposed freezing order should be for that amount, along with the amount of certain sums defined as the “Improper Payments” as defined in Barden 1 [66]. These amounted to some £108,503; a proprietary claim was asserted in relation to those amounts. This is explained in Barden 1 [66] to [68] and [72] read with Hatchman 1.

In Hatchman 1, Mr Hatchman analysed the overcharging which MHT alleges took place. He divided the overcharging into four categories:

Projects Not Delivered: claim £227,588.

Projects Delivered but Overpriced: claim £230,050.

Projects Overcharged against the Contract Rates: claim estimated at £150,000.

Mark-up on Contractors supplied to MHT: claim estimated at £136,000. This claim is founded on the basis that the Company was obliged to charge MHT at a mark-up of no more that 15% above what it paid to its “consultants”.

The orders made by Birss J for disclosure of assets, delivery up of passwords etc and verification of assets were all complied with and, in my view, complied with promptly. No complaint has been made by MHT in relation to Mr Ladhur’s or the Company’s compliance with the two orders made by Birss J or, indeed, the orders made by Morgan J. There is no reason at all to think that they have not made full disclosure in accordance with those orders. I agree with Mr Grant that, for the purposes of the application before me, Mr Ladhur’s assets are to be taken as the following which he has disclosed:

Cash, which in September 2014 amounted to less than £30,000.

Shares in the Company and two other companies, which were estimated to have an aggregate value of some £200,000.

A 50% share in a company pension which was estimated to have a value of about £50,995.

Further pensions valued at about £123,000.

A 50% interest in the family home. The home was valued at about £700,000 and had a mortgage of £106,000. The value of Mr Ladhur’s interest, assuming a sale, was therefore a little less than £300,000

Interests in two Spanish apartments, both of which were in substantial negative equity. The unsecured debt owed in respect of these apartments is about €200,000.

Taking account of the secured and unsecured debt in relation to the Spanish properties, Mr Ladhur considers that the overall position shows net assets of about £520,000 (assuming that Mr Ladhur had to take responsibility for the whole of the borrowing secured by the mortgages on the Spanish properties). This figure makes no allowance for the fact that the shares, if sold on the open market, would no doubt fail to achieve the value which Mr Ladhur attributes to them; and the sale of his shares in the Company would, of course, deprive him of ownership of the vehicle through which he currently earns his living. It can be seen that the bulk of the value of Mr Ladhur’s net assets is in the family home which he shares with his wife, children and mother.

I have already sufficiently described the history of the obtaining of the FO and the other injunctive relief save that I should add something in relation to the latter. The evidence in support of the Prohibitory Injunction was found in Barden 1. It went little further than an assertion that there was a risk that the Company could engage in activity that would disrupt or even temporarily cause the cessation of the services that MHT provided to its customers. As already noted, Morgan J refused to extend that relief. In doing so, he said this:

I am not at all surprised that Morgan J reached that conclusion. That the application for that relief was made in the first place indicates, to my mind, an over-zealous approach which, as will be seen, permeates much of MHT’s case against Mr Ladhur and the Company (I say nothing about Mr Taylor in relation to whom very different considerations apply).

The original claim form was issued on 13 May 2014. It had expired, unserved, prior to the hearing before Birss J. This was not mentioned to Birss J. When raised by the defendants after service of the judge’s orders, MHT issued a new claim form on 23 September 2014. Particulars of Claim (“PoC”) were served on 7 October 2014. A long defence on behalf of Mr Ladhur and the Company (“the Defence”) was served on 27 November 2014. Mr Taylor’s defence came later, on 16 January 2015. No Reply has been served to the Defence or to Mr Taylor’s defence.

The Company has made a counterclaim. It is alleged that, prior to the FO granted by Birss J, it had carried out a considerable amount of work for MHT for which it had not been paid. It issued appropriate invoices which remain unpaid in the sums of £93,301 and £109,690 for work done in 2014 and 2013. It is now accepted that the amount of the counter-claim is excessive, as certain of the invoices had already been paid; it remains at over £100,000, however.

Further, the Company also counterclaimed for work for which it had been paid but which it had underbilled in comparison with the rates which MHT asserts are the rates at which the Company can properly charge under its Master Services Agreement (“MSA”) dated 1 April 2011 about which I will say more later. In its defence to counterclaim, MHT makes no admission in relation to the claims for 2013 and 2014 and it is not admitted that the Company claimed less than it was entitled to. Mr Grant observes that a starting position under which a defendant has claimed less than that to which it is entitled is not a promising starting point for a claim that the same defendant has dishonestly overcharged for amounts to which it is not entitled.

Mr Grant submits that the evidence placed before the Court at the without notice hearing before Birss J presented a partial and inaccurate view of events. Mr Ladhur and the Company have put in a significant amount of evidence in order, as he submits, to put that account right. In his skeleton argument, he has identified the significant areas where the picture presented to the Court was, according to him, skewed. Those areas are ones where he says that the incontrovertible evidence shows that the picture presented on behalf of MHT was skewed. He has not attempted to set out all the evidence put in by Mr Ladhur and the Company nor to set out their evidence where it is disputed. I take in turn Mr Grant’s headings.

At the outset, Mr Grant complains that MHT has presented a picture under which the relationship between the Company and MHT was “managed” by Mr Taylor who “regularly engaged” the Company’s services. This is indeed what Mr Barden says at Barden 1 [20].

Mr Grant submits that this is a wholly partial picture. Mr Ladhur has given detailed evidence which demonstrates that the commencement of the business relationship between the Company and MHT was not in any way linked with Mr Taylor but involved contact at a much higher level. This is, indeed, what Mr Ladhur says in section B5 of Ladhur 5. He explains that he learned (albeit through Mr Taylor) that Mr Rommel Pereira was the Chief Operating Officer at MHT. As it happens, Mr Pereira had been one of Mr Ladhur’s supervisors when he was at CASS Business School. Mr Ladhur accordingly contacted Mr Pereira through the latter’s PA and set up a meeting. He says that Mr Taylor was not involved in this meeting. After the initial meeting with Mr Pereira, the Company was referred to Mr Paul Clark, then the IT director at MHT. Mr Ladhur told Mr Taylor of his approach to Mr Pereira and Mr Taylor suggested that the Company approach his immediate boss Mr Philip Wood. In fact, the Company proceeded with Mr Clark and it was he who took the initiative to introduce the Company to Mr Wood. Mr Ladhur and Mr Americanos had subsequent meetings with Mr Clark, at least one meeting being attended by Mr Wood. Mr Ladhur has no recollection of Mr Taylor attending any of those meetings. The Company, after these meetings, won its first contract in or around August 2007.

Mr Pereira has himself made a witness statement dated 22 May 2015 (“Pereira 1”), long after the date of Ladhur 5 to which his witness statement is, in part, responsive. He clearly disagrees with the way in which Mr Ladhur describes their relationship through CASS and says that the meeting with Mr Ladhur took place because Mr Taylor had recommended that he meet the Company. It is not suggested, however, that Mr Taylor arranged the meeting and there is no reason at all to doubt what Mr Ladhur says about how the meeting came about. Mr Periera says that he believes that he “appropriately delegated to Technology and Procurement to ascertain whether [the Company] was an appropriate supplier to work with”. What does appear, however, is that the relationship between the Company and MHT came to fruition because there had been discussions following his “appropriate delegation”. It may well be correct that the relationship with MHT did not involve Mr Pereira in quite the way that Mr Ladhur suggests. However at the end of Pereira 1 [5.3] one finds this:

The last part of that is puzzling. By using the words “higher up”, Mr Pereira is I assume referring to “higher up than Mr Taylor”: or if that is not what he is intending to convey, it is irrelevant. In any case, he does not expressly suggest is that it was contact with Mr Taylor which was influential in the decision to work with the Company; or, if he is intending to convey that message, then it is wholly inconsistent with Mr Ladhur’s evidence about who it was he met and what meetings led to the Company being engaged, evidence which neither Mr Pereira nor any other witness on behalf of MHT has sought to controvert.

Mr Pereira’s evidence simply does not contradict Mr Ladhur’s account that his main contact with MHT at the beginning was with the IT director and higher management rather than with Mr Taylor; there is no evidence to suggest that Mr Taylor attended the management meetings which Mr Ladhur and his account manager Martin Crosby had with the IT director and Mr Ladhur’s own evidence is that Mr Taylor did not, to the best of his recollection, do so.

On any view, given the importance attached by MHT to Mr Taylor’s alleged control and management of the relationship with the Company, the way in which the Company came to work for MHT in the first place should, in my judgment, have been disclosed to Birss J.

Further, Mr Ladhur’s evidence (which I consider in slightly more detail later on this point) is that, when projects were undertaken, Mr Taylor’s contact was with Company personnel who were involved on site at a delivery level – Victor Horta, Venkat Muthiah and other consultants. MHT does not contradict Mr Ladhur’s evidence of the good working relationship which was established by the Company with MHT’s IT management, namely Messrs Clark, Rumfit, Walsh and Daysh.

On one occasion the Company tendered for a particular contract to upgrade Oracle Release 12 being placed by MHT; it lost out to a rival bidder, the tender process being controlled by MHT’s Executive Management Team, and so not by Mr Taylor. Again this is not contradicted by MHT – indeed Mrs Hammond, one of MHT’s witnesses, confirms it. [I will refer to her in this judgment as Mrs Hammond, although at the time she had not married and was known by her maiden name of Hughes.] Regular management review meetings were held from June 2012 onwards: Mr Taylor rarely attended these, another matter which is not contradicted by MHT.

Of course, none of this is inconsistent with the possibility that the internal arrangements within MHT were very lax and that, in reality, it was Mr Taylor who decided what third party contractors should be used and that those to whom he reported simply took his recommendations without giving them the attention which they deserved. It is possible that Mr Taylor and Mr Ladhur took advantage of that lax governance. If that is so, it may be that MHT will be able to demonstrate at trial that it is so.

But that is not the point which Mr Grant makes at this stage. Rather, what he says is that the picture painted to Birss J was wholly one-sided and does not reflect any of the matters which Mr Ladhur deals with in the aspects of his evidence which I have just addressed and which, importantly, are not controverted. Not being controverted, and being relevant because the evidence goes to the relationship between the Company and MHT and between the Company and Mr Taylor, it should have been presented to the judge. None of it, however, was explained. As Mr Grant puts it, the uncontroverted parts of Mr Ladhur’s evidence are a far cry from the picture painted in MHT’s evidence of the Company operating within some sort of protected personal fiefdom of Mr Taylor.

The MSA was entered into on 1 April 2011 – long after the inception of the business relationship between the Company and MHT. Alleged breaches of the MSA form part of MHT’s claim against the Company: the action is not concerned only with dishonesty on the part of all or any of the defendants. The MSA is referred to in some detail in the evidence in support of the without notice application. The evidence before Birss J did not, however, explain that Mr Taylor was not involved in the decision to enter into the MSA. Mr Ladhur has explained how it came about and who the Company dealt with in Ladhur 5 [57] and [58]. What comes out of that is that Mr Taylor had no role in MHT agreeing to the MSA, with the decision being taken by Mr Tominey and Mr Walsh. MHT does not controvert Mr Ladhur’s evidence save in relation to some details which I consider to be immaterial for present purposes. It is certainly not suggested anywhere by MHT that Mr Taylor was involved. This, in my judgment, should have been disclosed to Birss J.

Mr Grant next complains that the presentation to Birss J was to the effect that all of the work undertaken by the Company was in respect of the Oracle platform. Mr Grant refers in particular to Barden 1 [9], [10], [20], [21], [23], [36]. It is certainly the case that Mr Barden does not inform the reader of Barden 1 that the Company was engaged in non-Oracle business with MHT; but he does not, either, say expressly that the Company dealt only with the Oracle platform. Mr Grant submits that it is significant that the Company’s role was not restricted to the Oracle platform. Mr Taylor’s role was that of Oracle Applications Manager. It is, he says, of relevance that business in which Mr Taylor was in no way involved was carried on between the Company and MHT since it demonstrates that there was a genuine and honest business.

No mention was made to Birss J of the fact significant services to MHT were founded upon its Oneview product and not on Oracle. Mr Ladhur explains the Oneview product and MHT’s use of it at section B10 of Ladhur 5. This section is, subject to one point, uncontradicted by MHT. This aspect of the case is important because, of the “Projects not Delivered” part of the claim and forming part of the evidence before Birss J, all but two of the ten alleged items were Oneview solutions and not part of Mr Taylor’s Oracle responsibilities. The caveated point is one raised in Mr Hatchman’s witness statement dated 25 May 2015 (“Hatchman 3”) [33]. I will return to it later.

I also deal later in more detail with Oneview itself and how it was presented to MHT. I only note at this stage that MHT does not appear to quarrel with Mr Ladhur’s statement about Oneview as follows:

Mr Grant submits that the proposal and presentation concerning Oneview and its use to solve the problems within the Procurement Department are wholly inconsistent with MHT’s case of Mr Taylor and Mr Ladhur working in concert to extract money illicitly out of MHT.

The evidence in support of MHT’s application (both before Birss J and Morgan J) comprised Barden 1 and Hatchman 1 and 2. Mr Burton produced skeleton arguments for each hearing. The second skeleton argument added nothing of substance for present purposes.

I highlight the following matters which Mr Burton mentioned in his first skeleton argument:

MHT’s investigation about the level of spending on the Oracle support system (principally provided by the Company, I add) had revealed “systematic overcharging”.

Mr Taylor had made dishonest declarations on two occasions in failing to disclose, in accordance with MHT’s policy in relation to all employees, any connection with suppliers with which MHT does business or may be likely to do business. He failed to disclose any connection with Mr Ladhur notwithstanding that they were friends and business associates with significant connections. They were formerly co-directors of a company called Sundial Investments Ltd (“Sundial”). They were equal co-owners of five Spanish properties. They were joint holders and/or signatories of four international bank accounts. Mr Taylor had failed to disclose and had concealed his connection with Mr Ladhur and the Company; at his suspension from employment interview, he was specifically asked about any connection with suppliers, including the Company, and continued to lie.

There was evidence that Mr Taylor had benefited from the trading relationship between MHT and the Company other than by payment of his salary. The relevant transactions and payments between the defendants were described as convoluted and opaque and of themselves gave rise to concern. Investigations had revealed direct payments to Mr Taylor and indirect payments that would benefit him, such as payment of his son’s school fees. The evidence goes to dishonesty and was directly relevant to risk of dissipation of assets.

Paragraphs 5 to 11 of Mr Burton’s skeleton argument dealt with alleged overcharging by the Company. This should be read with paragraph 31 which gave a very brief description of the evidence going to dishonesty (namely (i) false declarations/concealment (ii) creation of false invoices (iii) payment made indirectly/benefits indirectly conferred (iv) involvement of offshore jurisdictions for no obvious commercial reason presenting greater opportunities for dissipation/lack of transparency and (v) breach of contractual terms that were agreed in order to prevent fraud). Paragraphs 12 to 18 dealt with the connection between the defendants. Paragraphs 19 to 21 dealt with payments received by Mr Taylor allegedly owing to his connection with Mr Ladhur and the Company and/or MHT’s contract with the Company. Paragraphs 22 to 30 dealt with the law. Paragraph 32 explained MHT’s dependence on the Company for provision of Oracle and related IT services leading to the need for the protection afforded by the prohibitory injunctions. Paragraphs 33ff identified some points which could be taken against MHT.

I cannot summarise the whole of the supporting evidence but I should highlight (itself resulting in a lengthy text) the areas which have given rise to MHT’s concern. I start with Barden 1.

I should at the outset note two points. The first is that Mr Barden, of course, had no personal involvement with the events in question. He states that the facts and matters to which he deposes are “derived from the instructions I have received, investigations undertaken and my review of documents”. Although Mr Grant has not raised any point about this, I am bound to say that I regard as not entirely satisfactory evidence in support of a freezing order on a without notice application which does not even reveal the source of the information. Mr Barden does not reveal the identity of the individual or individuals who gave him his instructions. It cannot be known, therefore, whether the instructions came from a person who had personal knowledge of how MHT operated at the time or of the roles of the defendants vis a vis MHT. I do not know why the individuals who gave the instructions did not themselves depose as to the relevant facts. Mr Barden is, no doubt, absolutely honest and does believe, as he states, that his evidence is true to the best of his knowledge information and belief. But the court does not know that that is true of the persons who instructed him or whether, had they been giving evidence themselves, they might have been more circumspect than their instructions to Mr Barden reveal. Accordingly, it is right, I think, to view Mr Barden’s evidence, where it is clearly based on instructions, with a measure of circumspection where it is inconsistent with the evidence adduced on behalf Mr Ladhur and the Company.

The second point (and this goes to Hatchman 1 and 2 as well) is that the evidence was directed not only at Mr Ladhur and the Company but also at Mr Taylor. Indeed, some of the allegations of dishonesty relate only to him (for instance failure to disclose his relationship with Mr Ladhur in breach of his contract of employment) and there is no allegation of dishonesty on the part of Mr Ladhur which does not involve Mr Taylor. It is important that the evidence before the court is assessed, for the purpose of the applications before me, in relation to Mr Ladhur and the Company and that they are not necessarily to be infected with any dishonesty or failing on the part of Mr Taylor or indeed even more so alleged dishonesty on the part of Mr Tominey.

After an introductory section, Mr Barden explains in Barden 1 [6] the structure of the following paragraphs of the affidavit:

Section 1: the circumstances in which suspicion of fraud came to MHT’s attention.

Section 2: Mr Taylor’s suspension from employment with MHT.

Section 3: the contractual relationship between MHT and the Company.

Section 4: connections between Mr Taylor and Mr Ladhur.

Section 5: fraudulent invoices and the discovery of secret payments. It is noted in Barden 1 [7] that Mr Hatchman deals with the issue of overcharging.

Barden 1 [12] explains that, in the course of investigations, a forensic analysis of Mr Taylor’s company computer and company mobile phone produced documents which demonstrate that he controlled a company registered in Belize, Coronet Incorporated (“Coronet”). This company invoiced the Company on three occasions for a total sum of £45,250. Mr Taylor had these invoices on his system.

Two of these invoices contain purchase order numbers and each number can be found in turn on two invoices from the Company to MHT. In each case, the value of the Coronet invoice is 85% of the amount invoiced to MHT by the Company. It is then said that this shows that secretly Mr Taylor rendered invoices to the Company which

Hatchman 1 then goes on to give further details of those invoices. One of these refers to PO: 2103696 which can be traced back to two invoices from the Company to MHT addressed to Mr Taylor. The net sum of those invoices is £25,000, 85% of which is £21,250 which matches the Coronet invoice value. A similar exercise is carried out by Mr Hatchman in relation to the other invoice.

Records from Mr Taylor’s electronic devices show his involvement in both processing payments for the Company and in checking payments made to Coronet.

Barden 1 [19] gives some detail of Mr Taylor’s personal circumstances and assets. [20] explains that, as Oracle Manager, he was responsible for maintaining the Oracle system. It was sometimes necessary to engage third parties to assist in that maintenance and Mr Taylor was authorised to do so. He regularly engaged the Company “and managed [MHT’s] relationship with [the Company]”.

He was involved in arrangements for payments between MHT and the Company; and Mr Ladhur corresponded with him in relation to invoice payments. Barden 1 [22] describes “the process by which typically, ‘the Company’s] invoices were received, authorised and paid”. Since this is an important aspect of MHT’s case, I set out what Mr Barden says:

Mr Taylor would correspond with the Company to agree the scope and price for a piece of work.

The Company would submit its invoice in respect of the work to Mr Taylor.

Mr Taylor or someone within the team he manages would raise a Purchase Order (“PO”) Number.

Someone other than Mr Taylor would approve the PO Number but that person would not normally be outside Mr Taylor’s team and MHT has found no evidence of a PO Number not being approved.

The invoice would then be paid.

MHT accepts that there was a genuine business relationship between the Company and MHT for the provision of Oracle Services. Mr Barden does not here mention that the Company from time to time also provided other services to MHT.

Mr Taylor, in breach of the mandatory anti-fraud corruption procedures imposed on all employees, failed to disclose to MHT any connection to any suppliers in the declarations which he made in August 2010 and April 2013. In particular he gave a negative answer to the questions whether he was connected in any way to any organisation with which MHT did business and whether he had personally benefited from the supply of goods or services to MHT. In an interview with Mrs Hammond (MHT’s HR director) in February 2014 prior to his suspension, Mr Taylor said he could not think of any link between himself and the Company (apart from the fact that two individuals who previously worked for MHT now worked for the Company).

The Company had supplied MHT with Oracle and IT support services since around March 2007 and had been paid more than £5.5 million. MHT was the Company’s key customer, providing 70% of its turnover in the year ended 31 May 2011 and 83% in the year ended 31 May 2013. This forms part of an overall IT spend by MHT of £6 million and a total services spend of £71.4 million for 2013/14. It is accepted that MHT knew the amount being spent: there is no suggestion of concealment by Mr Taylor. However, Mr Barden says that MHT’s view – and this, it must be remembered is a view so that what Mr Barden says is not evidence of the correctness of that view – is that kickbacks were being paid and so the Company was inflating its prices.

Following a breakdown of the relationship between MHT and its then main Oracle support supplier TATA Consultancy Services Ltd (“TATA”), the Company, which had provided some Oracle services since 2007, assumed primary responsibility for the delivery of Oracle services in 2011, entering into a series or contracts by which those services were delivered. Barden 1 [37] describes the MSA as the primary contract. It provides, it is said, the basis on which the Company delivers services to MHT save where otherwise agreed and the rates at which those services will be charged. Various provisions of the MSA are set out. In particular:

Clause 2 sets out the services to be provided. They comprise the Support Services, the Development Services and “such other services as the parties may agree in writing from time to time”.

Clause 7 sets out the pricing and payment provisions. Payment in respect of the Services is to be made

Charges for Development Services are calculated on a time and materials basis in accordance with the application Rates set out in Schedule 3 as varied under any sub-agreement, the parties agreeing that the Rate Card shall be used to calculate charges.

Schedule 3 contains the Rate Card the details of which I do not propose to set out. Barden 1 [38] correctly summarises the position in this way: The Company delivered a service against discounted rates which further reduced subject to the volume of service provided in £500,000 bands. The service was in any event discounted by 5% and in each band there was an additional discount, ie 10%, 12.5% and 15%.

Although these are not set out in Barden 1, the MSA contains a number of definitions at paragraph 1. Relevant definitions are:

“Development Services”: any software development services to be provided pursuant to a Sub-Agreement or Schedule.

MHP: with respect to the MSA itself “the legal entity entering into [the MSA] as set out above” (that is to say “Metropolitan Housing Partnership” referred to as MHP); with respect to a Sub-Agreement, it is the MHP Company which signs that Sub-Agreement. An MHP Company is any subsidiary, affiliate or agent of MHP.

“Rate Card”: the list of Rates in the Pricing Schedule 3.

“Services: the Support Services, the Development Services and any other services to be provided by the Company pursuant to the MSA.

“Sub-Agreement Special Condition”: a condition in a Sub-Agreement modifying the terms. Clause 2.4 provides that a variation to the MSA can be made only by way of an Amendment Agreement in the form set out in Schedule 1.

“Sub-Agreement”: any Agreement executed by the Company and MHP in accordance with clause 2.4 and Schedule 1.

Barden 1 [39] identifies four agreements which have been entered into. The first three are made between the Company and MHP. The last (dated 28 June 2012) is made between the Company and a number of corporate entities including MHT but not MHP. This would not, therefore, appear to me strictly to fall within the definition of Sub-Agreement in the MSA since MHP is not a party. The third recital to this sub-agreement states that its value for 1 August 2012 to 31 March 2013 shall not exceed £756,385. Schedule 3 sets out pricing that is to say the sums to be paid to the Company by MHT. Schedule 3 is set out in Barden 1 [41]. It sets out for each month of a 12 month period a fixed sum in relation to each of Oracle Managed Support Services and Application and Database Administration. For some (early) months there is an additional fixed sum in a column headed “Transition One off cost 2012”. The total for the 12 month period comes to £504,338. There is a note at the foot of the Schedule which reads “Pricing is fixed for both 2012/2013 – for a 12 month period from commencement of agreement, to be reviewed each year thereafter”.

Before leaving this sub-agreement, I should mention that paragraph 1 of Schedule set out MHT’s anti-bribery policy. Barden 1 [42] draws attention to paragraph 1.1. I would add a reference to paragraph 1.3 which includes provision that the Company shall not offer or give to any employee of MHT any gift or consideration as an inducement or reward in relation to the obtaining or execution of the sub-agreement or any other contract with MHT.

Barden 1 [44] refers to the fact that Mr Taylor and Mr Ladhur appear to be friends and business associates. In particular they were:

Co-owners of Sundial from August to 2003 to the end of September 2006. Sundial was struck off the register and dissolved in 2007. A Mr Dohil was a co-director.

Joint owners (50/50) with Mr Taylor of five properties around Marbella, Spain with a sixth being owned by them together with Mr Dohil. MHT understands that these properties were acquired in 2004/5.

Holders of three international bank accounts with Mr Taylor sharing another international account with Mr Dohil where Mr Ladhur is a signatory.

In the light of the above, Mr Barden says that Mr Taylor should have disclosed his relationship with Mr Ladhur as he owns and runs the Company, but he did not do so. Mr Barden suggests that the reason why Mr Taylor did not reveal the true position but lied in his declarations to MHT was because, had he disclosed the relationship, MHT would have prevented Mr Taylor from dealing with the Company. What Mr Barden does not say, and it was not at this stage suggested on behalf of MHT, is that had Mr Taylor disclosed his relationship, MHT would simply not have dealt with the Company at all.

Barden 1[48] asserts that the Coronet invoices “are clearly fraudulent and were created as a vehicle for [Mr Taylor] to receive kickbacks”. Neither MHT nor Mr Barden can give evidence to that effect. They can depose to the facts; and they may even express a view about the conclusions which they draw, and which they invite the court, to draw from those facts. I do not gain any assistance from Mr Barden’s assertion made at a time when he had not even had the opportunity to hear whether there might be a perfectly innocent explanation.

In Barden 1 [49] to [57], Mr Barden deals with the history and results of the four applications made to the court relating to the disclosure by various banks of details of a number of accounts. I do not propose to summarise the contents of those paragraphs although I should mention one fact, namely that payments were made by the Company to a Rational FX account of over £1 million which MHT views with suspicion. Mr Barden states that MHT firmly believes that certain payments into one of the Spanish bank accounts which he refers to in Barden 1 [57] represent further fraudulent payments being made by the Company for the benefit of Mr Taylor and Mr Ladhur as a result of overpayments being made by the Company by MHT.

Barden 1 [58] to [65] appear under a heading “The School” with sub-headings “G Chacko” and “Bharat Darji and Ray McKee”. The School referred to is the Haberdashers’ Aske’s School which Mr Taylor’s son attends. The disclosure which MHT has obtained shows that some payments have been made by the Company to the School. Disclosure obtained from the School shows that Mr Taylor has not ever directly paid for his son’s school fees. As well as payments from the Company, it appears that payments in excess of £22,500 in four instalments have been paid from a “G Chacko”. MHT regard this as significant because the Company itself has made a number of payments to a “Chacko G” from February 2009 to June 2014, totalling about £150,000.

Mr Hatchman has informed Mr Barden that a “G Chacko” works for or runs a company called Abacus Europa Consultants (“Abacus”). Its UK representative office is the same Saunders House office in West London as that of the Company. He has also informed Mr Hatchman that Mr Chacko was involved in setting up some Oracle training for some members of Mr Hatchman’s team in 2014, having been recommended by Mr Taylor. Mr Chacko latterly used an email address with the suffix @informatrix-solutions.com.

Mr Barden concludes that Mr Chacko was clearly working with or for the Company but that, whilst this might explain some payments into his bank account, MHT strongly suspects that at least a proportion of the payments were made for Mr Taylor’s benefit “given that we know Mr Chacko paid [Mr Taylor’s] sons school fees to the value of £22,589”.

Disclosure from the School has also revealed that “Bharat D Darji” has paid nearly £19,000 spread across four instalments and that “E Ray McKee Trust” has paid nearly £30,500 spread across six instalments in respect of Mr Taylor’s son’s school fees. I note that there is not, however, anything to link these payments with Mr Ladhur or the Company. Mr Barden accepts in Barden 1 [65] that the payment of the school fees may be legitimate but they should be explained by Mr Taylor as the arrangements “seem highly irregular, especially given the fact that [Mr Taylor] did not disclose any employment outside of working for [MHT]”. In Barden 1 [64], Mr Barden refers to an Escrow Closing Agreement and to a letter to a US attorney in Alabama. I have looked at those documents but cannot see why they are significant; in particular, they do not seem to me to show that Mr Taylor was in any sort of employment other than with MHT. They have nothing to do with Mr Ladhur or the Company in any event.

Mr Barden’s suggests in Barden 1 [66] that Mr Taylor and Mr Ladhur have devised and carried out schemes whereby the Company pays monies “in secret” to Mr Taylor. The words “in secret” are clearly intended to suggest dishonesty. However, if the transactions are, as Mr Ladhur insists they are, innocent and explicable, there is no reason why they should have been revealed to MHT by Mr Taylor or Mr Ladhur. Mr Barden suggests that an explanation or account should be given by the defendants in relation to what he calls the Improper Payments. I note here that Mr Ladhur has risen to that challenge as will be seen later in this judgment. He is entitled, in my view, to give the full account which has been invited and should not be criticised for producing the amount of evidence which he has or be accused of attempting to procure a mini-trial.

In Barden 1 [67] it is said that the Improper Payments began at around the time when the Company first became a supplier to MHT with a payment to Sundial of £5,000 in March 2007 after which £8,000 was paid directly from the Company to Mr Taylor in October 2007. Thereafter, Mr Barden says that payments were concealed.

Barden 1 [68] contains a list of 20 payments alleged to be improper, each of which is explained in later paragraphs of the affidavit. The payments run from 27 March 2007 to 16 January 2014. The total of the payments if £108,503.34. The payees are variously Sundial, Mr Taylor, Mr Taylor’s and Mr Ladhur’s joint Spanish account, Coronet and the School.

At Barden 1 [68.1] to [68.6], Mr Barden addresses each of the payments. In each case he asserts that the Company has no legitimate reason for the making of the payment. I do not know how Mr Barden can make such a positive, and judgmental, assertion. He has no way of knowing whether the payments are legitimate and nor does MHT. They suspect that the payments are not legitimate and are entitled to state that they are suspicious and to seek an explanation. For my part I do not find such assertions helpful, although it is, of course, consistent with MHT’s case that such payments were illegitimate.

Barden 1 [69] addresses payments which are said to be questionable in nature, a weaker case being presented that the positive assertion of impropriety in relation to the Improper Payments. These are:

Regular cash payments into Mr Taylor’s current account.

The keeping of a safety deposit box by Mr Taylor at Lloyd’s Bank.

The paying of Mr Taylor’s sons school fees by individuals in Alabama.

Further payments by the Company to Mr Taylor’s account containing references that are similar to his name.

I now turn to Mr Hatchman’s evidence

As is the case with Mr Barden, Mr Hatchman does not identify the source of his evidence. He states that the facts and matters to which he deposes are “derived from my own knowledge”. I do not really understand what that means given that he goes on to say that where the facts and matters are within his own personal knowledge they are true but that where they are not within his own personal knowledge they are true to the best of his knowledge information and belief. I do not understand how that last statement fits with the statement that all of his evidence is “derived from” his own knowledge. Be that as it may, there is this unsatisfactory nature of his evidence, namely that, like Mr Barden, he often does not identify the individuals from whom he has obtained information of which he has no personal knowledge.

Mr Hatchman did not join MHT until January 2013 when he took up his position as Head of Financial Services. In Hatchman 1 [5] to [8], he gives some general background to the use of Oracle and of the Company’s involvement which I do not think is controversial. He at least describes the Company’s functions in a way which is not restricted simply to Oracle-related services.

At Hatchman 1 [9] to [12], Mr Hatchman explains that part of his brief on his appointment (and that of his newly-appointed direct manager, Ms Mussenden) was to make MHT a more cost efficient business. In 2014, the Finance Team became aware of the high level of expenditure on Oracle systems support and development work. That evidence might give the impression that there had been some sort of suppression by withholding of information from MHT management. There is, however, nothing to suggest that MHT did not know of the level of expenditure. It might have been more accurate, or at least would have eliminated the possibility of giving an incorrect impression, if he had said that the Finance Team began to focus on, rather than became aware of, the high level of expenditure.

Hatchman 1 then goes on to identify the alleged overcharging in three sections:

Section 1: Project work undertaken by the Company, sub-categorised into projects not delivered and projects delivered but overpriced.

Overcharging against the Company’s contract rates.

The Company’s mark-up on sub-contractors supplied to MHT.

Mr Hatchman explains that he reviewed all of the invoices submitted by the Company and separated those which “seemed to me to be out of context i.e. contained a vague invoice narrative, were for a very high value or for a round sum figure”. He put together a list of the projects based on the invoices and “sought informed views from colleagues and ex-colleagues where I did not have first-hand knowledge of a particular project”. Given that invoices go back to 2007 and that Mr Hatchman did not join MHT until January 2013, I would expect that he has little first-hand knowledge of the matters about which MHT now complains. When analysing the projects, Mr Hatchman noted that they fell into one of two categories: either the project was not delivered by the Company or it was delivered but substantially over-priced (at least in his view). He sets out, over five pages of Hatchman 1, a table with columns listing the Project, its description, the cost, the time period and his comments. There are eighteen projects referred to. These are responded to in the evidence on behalf of Mr Ladhur and the Company. I will identify them in more detail when dealing with that evidence.

The totals under the Cost column are £227,558 for Projects not Delivered and £230,050 for Projects Delivered but Overpriced, a grand total of £457,638. Mr Hatchman does not indicate the amount which MHT considers it has been overcharged for the second category of work. Its claim against the defendants and the amount subject to the FO do not reflect the fact that the Company would be entitled to charge a significant amount even if the claim is a good one. It does not appear that this was brought to the attention of Birss J.

Mr Hatchman states that he has undertaken research into whether or not the rates charged by the Company have been inflated and has reviewed the Company’s invoices and the rates charged. He has sought to marry those rates against the contractual charge rates in Schedule 3 of the MSA for the period during which the MSA was in force. At Hatchman 1 [18], he states that he would have expected to see consultant’s rates being charged at the contract rate. Instead, he saw a range of rates which are not in the contract, some of which are lower and some of which are higher with no obvious pattern to suggest that the Company has been charging in accordance with the MSA. He notes that the mechanism by which fees would be annually uplifted by RPI has not been applied and it does not appear that the discounted rates based on volume of work have been applied either. He adds that he would have expected to see a differential between work done onsite and offsite but this did not appear to be the case from the invoices. The real question is whether there has been systematic overcharging which might be taken as evidence of dishonesty.

At Hatchman 1 [20], Mr Hatchman sets out a table of the amounts which the Company has charged for 2011/12, 2012/13 and 2014/14 and, based on the contract rates, what the total overcharge is alleged to be. Figures are provided on the assumptions that work was carried on onsite and offsite. The total overcharges on those two assumptions are £112,000 and £302,000. Making the assumption that 80% of the work was carried out onsite and 20% offsite “and based on my experience that is conservative estimate in favour of the Company”, the overcharge is £150,000 (excluding VAT).

Mr Hatchman’s analysis under this heading focussed on the day rate charging for the transactions where he was able to find a direct link between what MHT paid the Company in respect of a named subcontractor and what it in turn paid the subcontractor. Mr Hatchman was only able to analyse a small sample but, even with that small sample, he asserts that he found evidence of systematic overcharging.

What is the basis of that assertion? It is found in Hatchman 1 [24]:

The table referred to lists five named consultants. The table sets out the invoiced amounts, the related payment to the consultant, the mark-up, the expected margin (15%) and the amount of the resulting overcharge, giving a total overcharge of £136,123. I make no comment on, and have no evidence, about the statistical validity of Mr Hatchman’s approach on the basis of this small sample.

At Hatchman 1 [27], it is acknowledged that work orders and invoice payments were being approved by various people. But so far as Mr Hatchman is concerned, this makes no difference:

That last assertion is, of course, a matter for the court not for Mr Hatchman although he is entitled to his own view.

Hatchman 2 is directed at the application for the Prohibitory Injunction rather than the application for the FO. It gives (I think uncontroversial) evidence about the serious risk to vulnerable people and of serious damage to MHT’s business if the continuity of its services were interfered with. It does not contain any evidence about a risk that the defendants might act in such a way as would interfere with the continuity of its services. This aspect of the case was, in the event, dealt with at the hearing before Morgan J, who refused to continue the Prohibitory Injunction, and I need say no more about the detail of the (unfounded) allegations.

I have identified at paragraph 6 above the evidence (which followed on from the affidavits of Mr Barden and Mr Hatchman considered above) in support of and in opposition to the application to discharge the FO and for strike out/summary judgment of parts of the Particulars of Claim. I must now address that evidence in support together with MHT’s reply evidence and evidence in response to that.

Mr Ladhur sets out in section B1 of Ladhur 5 his personal background. It is relevant not only by way of background but also to the issue of risk of dissipation. There is no reason to doubt what Mr Ladhur says in this section. He clearly has a settled life with his wife, three sons and mother in their family home in Ealing. He is a member of the Sikh community. He states that it is part of his culture – indeed he views it as an obligation – to assist people who request help and gives an example of helping a family friend with whom he had no business relationship at all. He gives that evidence by way of explanation for the financial support which he has provided to Mr Taylor. MHT does not accept the explanation although whether it accepts Mr Ladhur’s general description of his philosophy I do not know.

In section B of Ladhur 5, Mr Ladhur explains how his friendship with Mr Taylor and with Mr Dohil started when they were all at Portsmouth Polytechnic together from 1984 to 1988. He explains that they have been close friends for 30 years. I see no reason to doubt this and it is not suggested otherwise by MHT. Mr Ladhur rejects any suggestion that his friendship with Mr Taylor has in any way been hidden from MHT, saying that at least some employees of MHT were aware of their friendship. He identifies one female individual (I do not need to mention by name in this judgment) who was fully aware of that they had been at university together. MHT discounts the relevance of that particular evidence because, according to MHT, it was well-known in MHT that the individual in question was having an affair with Mr Taylor. However, Mr Ladhur explains that his contact with MHT tended to be with senior management and he would not have talked to them about his personal history or the fact that he had been to college with Mr Taylor.

In section B3 of Ladhur 5, Mr Ladhur explains his professional background. I do not think that there is anything controversial in this section.

In section B4 of Ladhur 5, Mr Ladhur explains the formation of the Company and its early progress. Again, I do not think that there is anything controversial in this section. I mention only that Mr Ladhur states that the Company’s structure is to have very few employees and to work mainly through associates and consultants.

In section B5 of Ladhur 5, Mr Ladhur explains how his first contact with MHT came about. I have already considered this section, and Mr Pereira’s response, in paragraphs 57 to 60 above. Clearly Mr Ladhur and Mr Pereira have different perceptions of their previous contact which, insofar as it is relevant at all, is a matter which can only be decided at trial however, I do not consider that MHT’s evidence begins to demonstrate that Mr Taylor was involved in the initial discussions between the Company and MHT although he may have been instrumental in achieving the original meeting.

In section B5, Mr Ladhur describes how he was referred by Mr Pereira to Paul Clark, who was then IT director at MHT who in turn introduced him to Philip Wood whom he describes as Mr Clark’s “number two”. Mr Ladhur refers to further meetings between him and Mr Americanos, on the one hand, and Mr Clark on the other. He does not recall Mr Taylor attending. There is no evidence from Mr Clark or Mr Wood. Mr Ladhur says that he also met Mark Sharman, the then Finance Director of MHT, who in turn suggested that he talk to Nick Wheeler, a systems accountant at MHT. He says that he was told that the finance department was overworked and that they needed more help from IT consultants who understood accounts and systems; however, all projects were controlled and managed by the IT department. Mr Sharman, who has provided a witness statement, does not challenge this account. I see no reason to doubt Mr Ladhur’s evidence in section B5 for the purposes of the application before me.

In section B6 of Ladhur 5, Mr Ladhur explains MHT’s IT systems and its IT department. It is, again, uncontroversial so far as I am aware.

Mr Ladhur accepts that the Company had a lot of contact with Mr Taylor since he was, in Mr Ladhur’s perception, the applications manager for the Oracle system and the majority of the Company’s work was done on that system. Mr Ladhur states that Mr Taylor had a purely technical role; he did not have a decision-making role, a role which was fulfilled by the head of IT or his deputy. That is not accepted by MHT and I will come to what it says later.

In section B7 of Ladhur 5, Mr Ladhur further explains that the account was serviced at a delivery level on the Company side by Mr Horta and others from 2008 to 2011 and, from 2010, by Mr Muthiah. Martin Crosby was involved as account director; and Mr Americanos and Mr Ladhur himself were involved “at a high level”. Mr Ladhur says that he had no substantive contact with Mr Taylor concerning performance of work parcels which had been allocated to the Company. He denies that MHT’s relationship with the Company was “managed and controlled” by Mr Taylor as MHT asserts. He says that the majority of the work done by the Company was done onsite at MHT so that the Company’s personnel “were in effect a Metropolitan IT resource”.

In Ladhur 5 [48] and [49], Mr Ladhur describes advice given (and rejected) by the Finance Department. In the event, MHT proceeded to tender for a brand new accounting system using Oracle, which forms the background to the upgrade to Oracle Release 12. This is dealt with in section B8 of Ladhur 5. Suffice it to say that the Company tendered for this work but was unsuccessful. In June 2008, the contract was awarded to TATA.

In the same section, Mr Ladhur describes how the Company worked with MHT at that time. He says that the Company worked closely with Mr Clark and supported his team where required. Work was both of a technical and non-technical nature (eg training end users on the systems). The Company also provided a dedicated on-site application support service. Mr Ladhur also explains the involvement of Tariq Mehmood observing that it was Mr Mehmood, not Mr Taylor, who was the Oracle expert for MHT. The Company’s personnel became very knowledgeable about MHT’s core Oracle application which meant that the team had contact with Mr Taylor. However, prior to the MSA, Mr Ladhur has no recollection of Mr Taylor attending any of the management meetings which Mr Ladhur and Mr Crosby held with the IT director. This evidence is not contradicted in the evidence provided by MHT.

In section B9 of Ladhur 5, Mr Ladhur addresses the MSA. He clearly views the work which the Company carried out prior to and leading up to the MSA as being of a high standard saying that it was recognised as such by MHT, leading to the Company becoming a strategic partner and the signing of the MSA. So far as he is aware, Mr Taylor had nothing to do with the negotiation or signing of the MSA and, so far as I am aware, MHT does not contend to the contrary. In those negotiations, he and Mr Crosby represented the Company and Mr Tominey, the Procurement Director, together with Mr Walsh, the then IT director, represented MHT. Mr Ladhur believes that the final decision to enter into the MSA was made by Mr Tominey and Mr Walsh.

I should say something about Mr Tominey at this stage. MHT’s position is that Mr Tominey himself was involved in dishonest conduct. I have not been provided with any detail about that other than that it was unrelated to the matters about which MHT complains against the defendants in the present case. An impression might be gained from some of the things that have been written and said that not only was Mr Tominey not alone in dishonest conduct directed against MHT, but also that the Company and Mr Ladhur, as well as Mr Taylor, are somehow infected with the culture of dishonesty. I must make it clear that, for the purposes of this application, there is nothing to connect any of the defendants with the alleged dishonesty of Mr Tominey nor anything to suggest that Mr Ladhur or the Company (I say nothing about Mr Taylor) were in any way aware of a culture of dishonesty within MHT staff or of dishonesty on the part of Mr Tominey, let alone engaged in any impropriety with him.

In section B10 of Ladhur 5, Mr Ladhur describes Oneview, which is a Microsoft-based product. It is based on an idea of Mr Americanos which he licensed back to the Company.

Section B11 of Ladhur 5 deals with what has been referred to as “the Offshoring Contract”. Mr Ladhur explains that a separate stream of work carried out for MHT related to off-site centres. This is set out in the Sub-Agreement dated 28 June 2012 referred to in paragraph 88 above. It is worth setting out much of Ladhur 5 [69] which explains the position and which has not been challenged by MHT:

Section B12 of Ladhur 5 is headed “Working Relationship and Purchase Orders”. I draw particular attention to Ladhur 5 [74] and [75] where Mr Ladhur describes the close working relationship between MHT and the Company. The Company was seen, he says, “as an extension of [MHT’s] IT department”. And so:

This account of how matters worked on the ground has not been challenged by MHT save that there is a dispute as to whether MHT processes were properly followed. And, of course, it is MHT’s case that Mr Taylor was the person on whom everyone else relied and his advice as to scope and cost of work was generally accepted without question.

I have set out those lengthy passages because they are, if true, a compelling rebuttal of any suggestion of dishonesty notwithstanding non-compliance with the strict letter of the MSA, although it may be that MHT has a claim to recover any payment in excess of that which would have been due if the strict letter of the MSA had been observed.

In similar vein, Ladhur 5 [76] explains that, when the Company was required to produce formal proposals, it would calculate the overall costs and then apply a commercial margin to produce a fixed price. MHT would then produce a PO which reflected that agreed price, calculated by reference to days multiplied by day rates “but it was accepted practice that these sums would be treated as a fixed price”. Whether this should have been allowed to happen, and whether there may be contractual consequences, may be open to question. But it does not appear to be challenged that this is in practice what happened (and is indeed confirmed by the evidence of Mr Mitchell on behalf of MHT) although there are disputes about the timing of POs to which I will come in due course.

At Ladhur 5 [78], Mr Ladhur deposes about the extent of the work which has been undertaken by the Company. The Company “has delivered in excess of 500 work parcels to [MHT] and helped them out of the mess caused by Tata”. Far from overcharging (about which no significant complaint had been made prior to these proceedings), Mr Ladhur felt that the Company’s margins were often being squeezed.

Mr Ladhur, in Ladhur 5 [82] to [85], then gives detailed evidence about the process of producing POs and invoices. This is important because it goes to the heart of certain of the complaints made against the Company. Mr Ladhur gives a hypothetical example at [82]:

The whole issue of POs was responded to by MHT and then again by Mr Ladhur and I leave further consideration until later.

At Ladhur 5 [86], Mr Ladhur responds to the allegation in Barden 1 [22] that it was mostly Mr Taylor or someone in his team who would raise or receipt a PO (see paragraph 83 above). An analysis of invoices carried out by Ms Mariotti on behalf of the Company of the majority of the POs received since 2011 reveals that POs were receipted by the following individuals in addition to Mr Taylor:

Jan Roskowski, Business Programme Office (“BPO”) director.

Anup Shah, Finance Manager for BPPO.

Mrs Hammond, HR director.

Phil Carter, IT director.

Ms Mussenden, Chief Finance Officer.

Carl Wicks, Project Manager.

Matt Lawrence, Project Manager.

Owen Shaw, Project Manager.

Gianluca Nicoletti, Procurement Manager

Colin Thomas, Project Manager.

Bernard Tominey, Procurement Manager.

Corinee Seymour, Learning and Support Manager.

Colin Daysh, IT Director.

I do not understand that evidence to be challenged, although MHT does have something to say about its worth, in particular that they were all wholly reliant on Mr Taylor. What is certainly the case, however, is that Birss J and Morgan J were not told about this. They may well have been impressed, in thinking that a freezing order was justified, by evidence from Mr Barden that virtually all of the POs were approved by Mr Taylor. I consider that this is something which Birss J should have been told about.

The list of POs which Mr Ladhur has produced has not been challenged by MHT. It is easy for MHT to check the POs since they are on its systems to which Mr Ladhur no longer has access. The list shows that some 39 out of about 509 were receipted by Mr Taylor himself, and these were for relatively small amounts (up to about £7,500) whereas many other POs are for much larger amounts (up to £186,000 in one case). The total amount receipted by him is just under £250,000 out of a total in excess of £6 million. Unless a large proportion of that £6 million relates to POs which were receipted by individuals who simply rubber-stamped what Mr Taylor said was in order, this is hardly compelling evidence of systematic overcharging by the Company in collaboration with Mr Taylor.

Mr Ladhur also draws attention to an email dated 9 August 2012 from Mr Taylor where he says, in relation to a particular invoice, that the owner of the PO “(NOT ME)” needed to be chased.

Section B13 of Ladhur 5 deals with the Spanish properties. He states, and there is no reason to think that this is not the case, that there are only two Spanish properties. There appear to be more properties because of the way that Spanish title registry assigns more than one title number to owners of apartments on a development where the owner also owns part of the development.

Mr Ladhur explains the acquisition of “El Soto”. It is owned equally by Mr Taylor and Mr Ladhur. It was acquired off-plan in July 2005 well before Mr Ladhur and the Company had anything to do with MHT. There is nothing in the evidence to suggest that the acquisition of this property was other than entirely honest. It is rented out and is subject to a mortgage. The mortgage is serviced through a Sabadell current account. Rent is paid into that account which in turn is debited with mortgage payments, insurance and management charges. There is generally a monthly shortfall so that Mr Taylor and Mr Ladhur are required, as owners, to add funds to ensure that the account does not go over its permitted limit. Mr Taylor does not make any payments – it is said he cannot afford to do so – with the result that Mr Ladhur has to pay the whole amount (otherwise, I imagine, the property could be repossessed and sold). He has paid the whole amount since 2005, again well before any connection with MHT.

La Reserva de Marbella was another purchase off-plan, this time in April 2005. It was purchased jointly by Mr Ladhur, Mr Taylor and Mr Dohil. Mr Ladhur has a one-third share. There is no evidence to suggest anything suspicious or untoward about the acquisition of this property.

At Ladhur 5 [99] and [100], Mr Ladhur explains that the Spanish properties are in negative equity and that, with hindsight, they should have been sold. But the decision was made to hang on to them with the result that Mr Ladhur has in practice had to meet Mr Taylor’s share of the outgoings.

In section C of Ladhur 5, Mr Ladhur deals with the alleged risk of dissipation. As well as denying the payment of any “kick backs” which is, as I see it, the bedrock of MHT’s case for a freezing order, he deals with his family circumstances which point away from any risk of dissipation:

All his children go to school in London. If he were to dissipate his assets he would be unable to pay the school fees of one of those children and would thus jeopardise that child’s education; something he says he would never do.

His family home is in London. Since leaving college, he has never lived anywhere other than London. His roots, his family and his friends are in London.

He has a business to run.

He has limited liquid assets and the majority of his assets are to be found in the equity in his house and the Company through which he runs his business.

He has developed the business over 10 years and has no intention of quitting.

His only international properties are the Spanish properties and bank accounts, but these are in negative equity.

He has never tried to use overseas companies as a way of hiding money or avoiding tax, his asset position being entirely transparent.

He has complied with the court’s orders carefully and has engaged with the process. He has not tried to evade any obligations, with the transfer of MHT’s systems being orderly and without any attempt to frustrate MHT’s efforts in any way.

Section D of Ladhur 5 deals with the extent of Mr Taylor’s involvement. Whilst accepting that there was a considerable amount of contact between Mr Taylor and the Company (not, it is to be noted, Mr Taylor and Mr Ladhur so far as concerns MHT business), he rejects the suggestion that Mr Taylor “managed and controlled” MHT’s relationship with the Company. That this was not the case is, he suggests, demonstrated by the factors set on in Ladhur 5 [108]. MHT disagrees with Mr Ladhur’s position. But, so it seems to me, it cannot disagree that he has produced material which demonstrates clearly that there were several aspects of the business between MHT and the Company which were not dealt with by Mr Taylor and that Mr Ladhur and Mr Americanos regularly dealt with MHT management at a senior level. Nor can MHT suggest that Mr Ladhur personally dealt on-site with the day-to-day aspects of the Company’s work, these being dealt with by the Company’s consultants. As Mr Ladhur puts it “In short, there was simply too much going on for [Mr Taylor] to be the source or the conduit for all the work, and he was not sufficiently senior within [MHT] for the claim to be realistic”.

In section E of Ladhur 5, Mr Ladhur deals with the “allegedly concealed payments” which he deals with in four categories:

Payments made in respect of the jointly owned Spanish properties.

Payments to Coronet.

Payments to the School.

“other questionable payments”.

Mr Ladhur details the payments in respect of the Spanish properties in Ladhur 5 [118]ff. He explains why he has been meeting, since 2005, Mr Taylor’s share of the outgoings. Although some of the expenses have been paid out of funds made available by the Company, this (i) goes back to 2005 and thus predates any involvement with MHT and (ii) was done with the approval of Mr Americanos, his co-owner and director of the Company, with the sums concerned being paid through Rational FX and forming part of his director’s loan account. In Ladhur 5 [122], he explains how the Rational FX account came to be set up and how it was used for transactions with its many foreign suppliers (including suppliers in Slovakia, US, Serbia and India).

In Ladhur 5 [123] he addresses Mr Barden’s evidence in Barden 1 concerning the £1 million paid through Rational FX since 2007. He says that the payments to the Rational FX account are fully explained by reference to the transactions which he had previously described (foreign suppliers and personal transactions mainly to Spain plus some funds to Italy for the refurbishment of a house there owned by his wife). There was, he says, nothing underhand about these transactions:

The payments were not hidden. They clearly show to whom they were paid and Mr Ladhur has not sought to hide them. MHT were not told, but there was no reason why they should have been.

The payments in excess of Mr Ladhur’s own share in relation to the Spanish properties started long before any relationship with MHT. It cannot therefore be argued that, because payment is being made to Spain for Mr Taylor’s benefit, there is therefore something underhand going on.

Payments were made through the Rational FX account direct to the managing agents of the Spanish properties and not only to the joint account with Mr Taylor.

No sums paid to the joint account have been withdrawn by Mr Taylor. The only withdrawals have been for expenses associated with the Spanish properties.

Mr Ladhur has also made one payment in respect of Mr Dohil’s share when he was ill.

The use of the Rational FX for personal transactions was a sensible arrangement, being far cheaper than using other methods of transferring money overseas.

In this way, Mr Taylor explains all of the payments to the joint account listed as payments 4, 5, 6, 7, 8, 13 and 15 in Mr Barden’s list. Payments 2 and 3 are explained as an equalisation of the initial deposit on El Soto. In my view, it cannot be suggested that there is anything suspicious or inappropriate about the acquisition of the Spanish properties nor about the existence of the Spanish accounts. In that last context, MHT perceives a risk of dissipation because Mr Ladhur is the sort of person who owns foreign property and has foreign accounts as if that was somehow indicative of dishonesty. There is nothing to suggest that what Mr Ladhur says about the acquisition of the Spanish properties and the opening of the bank accounts is not correct; and there is nothing to suggest that the payments into and out of the Spanish accounts have been other for the purposes he explains or that Mr Taylor has drawn money himself. It might at first sight give rise to some surprise (or even suspicion) that Mr Taylor’s share of expenses should be paid by Mr Ladhur; but given the fact that this has been going on since well before any relationship between the Company and MHT came into existence, I do not consider that there is anything surprising or suspicious that that has continued. It is, in my view, certainly not appropriate in those circumstances to infer that these payments might be an indirect kick-back to Mr Taylor.

Mr Ladhur deals at section E2 of Ladhur 5 with the Coronet invoices and payments to Coronet referred to in Barden 1: see paragraphs 78 to 80 above. The first invoice is in the sum of £7,000 for “Oracle Related Services”. This is payment 9 on Mr Barden’s list; it is not one of the invoices which he says can be traced through to MHT. Mr Ladhur says that the payment was for consultancy work carried out by Mr Taylor. He was not aware of any contractual reason why Mr Taylor could not carry out this work during his non-working hours. “I even asked him about it and he told me that he had checked with [MHT] and he was allowed to set it up. Unfortunately it appears from this litigation that [MHT] had not permitted this”. Mr Ladhur explains what the work related to and exhibits Mr Taylor’s initial concept design. He states that Mr Muthiah and another colleague confirm that Mr Taylor’s work

The invoice was paid on 21 September 2011. Mr Ladhur says that it was not passed on to MHT: it had nothing to do with MHT and was not a “kick-back”. Mr Ladhur says that he had nothing to do with Coronet itself which was a company set up by Mr Taylor and through which he asked to be paid.

Payments 11, 14 and 16 on Mr Barden’s list relate to two invoices. The invoices are both dated 1 March 2012, for a total of £38,250. The actual payments in relation to those invoices took place on three occasions in April, August and October 2012. The total sum paid was only £21,125, leaving a shortfall of £17,125. Mr Ladhur explains the reason for this in Ladhur 5 [134] to [141]. His explanation is not consistent with the case pleaded at paragraphs 31.2 to 31.4 of Mr Taylor’s defence with which Mr Ladhur expressly disagrees.

Mr Ladhur’s explanation is that the invoices related to a work package of OBIEE (Oracle Business Intelligence Enterprise Edition) which the Company carried out for MHT. This was in part sub-contracted to Coronet. This was subject to a PO receipted by Mr Walsh. The project was delivered and MHT invoiced accordingly. OBIEE is a difficult programme to implement and takes a long time to install. It was a project based on a fixed fee.

He goes on to explain that he was not particularly involved in this project after the beginning and has limited knowledge of what happened, but was aware that the Company needed to recruit some addition resource. Mr Taylor was responsible for the project within MHT and therefore needed to approve the consultants identified by the Company. He rejected at least one consultant, sending an email to Mr Americanos which included the following

Mr Ladhur then explains that the Company was told by Mr Taylor that it would be invoiced directly by his, Mr Taylor’s, preferred sub-contractors. The Company would meet these invoices within the fixed fee agreed with MHT. It is not, to use my own words, therefore the case that the cost of external consultants would be passed on to MHT. Rather, the price agreed with MHT for the work was precisely that, and if MHT needed to hire in additional resource, the cost of doing so would be borne out of the fixed fee. Mr Ladhur states that all he was concerned about was that the work should be completed and that he was not particularly involved with who should carry it out. So far as he is aware, the work was carried out and completed and MHT was accordingly billed “as a standard work parcel”. There was no issue between the Company and MHT.

An issue did arise, however, between the Company and Mr Taylor/Coronet. Mr Taylor presented invoices for this work via his company, Coronet. When presented with invoices, Mr Ladhur was reluctant to pay. He says this at Ladhur 5 [140]:

Mr Ladhur accepts that the Company paid the two instalments of school fees for Mr Taylor’s son listed as payments 10 and 12 of Mr Barden’s list (totalling some £10,064). He describes these, as with the payments in respect of the Spanish properties, as representing nothing more than financial assistance to a friend who was short of money. He had done this before to help another family friend, and produces a bank statement showing the payment (although the statement does not, of course, give any indication of the purpose of the payment).

Payments 17, 18, 19 and 20 on Mr Barden’s list (totalling almost £22,600) relate to payments made by Mr Chacko. Mr Chacko has been, variously, an associate or employee of the Company. Mr Ladhur believes that Mr Chacko did not know Mr Taylor before he came to work with the Company. One of Mr Chacko’s roles was to manage the Company’s offshore operation in Kerela and Pune. Referring to MHT’s case that the Company has paid £150,000 to Mr Chacko, Mr Ladhur says that the figure is rather less than that but that, in any case, the sums relate to work for the Company over a period of 5 years. Mr Ladhur explains that, prior to becoming an employee, Mr Chacko was self-employed in his own consultancy, Abacus. He had an office – this, I add, is important for present purposes – adjacent to the main office of the Company in the serviced offices provided by Avanta in Ealing. Accordingly, Mr Barden is correct to conclude that Mr Chacko was working with or for the Company.

How was it, then, that Mr Chacko came to pay the school fees? Mr Ladhur’s account is as follows. It is derived, according to Ladhur 5, from what Mr Chacko told him in March/April 2013:

Mr Chacko persuaded Mr Taylor to put money into an investment opportunity which went wrong. The investment was a loan to a borrower who required bridging finance. Mr Taylor lost his money.

Mr Taylor had stated to Mr Chacko that the funds which he was to invest had been earmarked for the payment of school fees. With the money going into the investment, an alternative source of payment of the school fees needed to be found. For this reason, Mr Chacko paid the first instalment of fees (payment 17)

In March/April 2103, Mr Chacko told Mr Ladhur of the position he found himself in having put Mr Taylor into a situation where his investment was lost. Mr Ladhur understood that Mr Chacko was in some way a guarantor of the loan made by Mr Taylor to the defaulting borrower and therefore obliged to pay Mr Taylor back in respect of the monies lent.

Mr Ladhur then agreed to a loan to Mr Chacko from the Company, a loan which he expects to be repaid and which appears in Mr Ladhur’s loan account with the Company. Mr Ladhur considered it his religious duty to assist Mr Chacko when assistance was sought.

It appears that Mr Chacko used the loan from Mr Ladhur to reimburse Mr Taylor by making a direct payment of the school fees.

Mr Barden concludes that Mr Chacko was clearly working with or for the Company but that, whilst this might explain some payments into his bank account, MHT strongly suspects that at least a proportion of the payments were made for Mr Taylor’s benefit “given that we know Mr Chacko paid [Mr Taylor’s] sons school fees to the value of £22,589”.

This is the first payment on Mr Barden’s list. It was made on 27 March 2007. Mr Ladhur explains that Sundial was formed to market off-plan Spanish properties to Asian investors. Mr Ladhur and Mr Taylor were each 50% shareholders; they were directors together with Mr Dohil. The venture never got off the ground and no sales were ever made and it ceased activities after 2005. Mr Ladhur decided to use Sundial as the vehicle for another venture, this time in the educational sector marketing to Indian students. Mr Taylor and Mr Dohil resigned as directors on 29 September 2006. Mr Ladhur thinks that Mr Taylor transferred his shares and Mr Taylor, in paragraph 28.3 of his defence, states that he does not believe that he holds them any more and has no involvement in the company. In any case, the payment of £5,000 was made before the Company had done any work for MHT. The payment was made, according to Mr Ladhur, to Sundial to fund the marketing costs of the new education venture (which was not successful and was soon wound up) is therefore irrelevant, on his case, to the issues in the present litigation. Further, at this stage, MHT and the Company were only in preliminary discussions and there was no guarantee that any business would result.

Quite apart from the fact that this appears to be a thoroughly convincing explanation of why £5,000 was paid to Sundial the real point against MHT’s reliance on this payment is that it was made before the Company had undertaking to provide any services to MHT.

In section F of Ladhur 5, Mr Ladhur turns to deal with the “Questionable payments” listed in Barden 1. As to these, Mr Ladhur’s response is as follows:

Regular cash payments into Mr Taylor’s current account. Mr Ladhur denies making regular payments. Over the last few years he has lent some cash on the understanding that it would be repaid. Mr Ladhur has recorded amounts totalling £2,300 over the period May 2010 to November 2013. He does not know the source of other deposits to which Mr Barden refers. I may have misunderstood the evidence, but the bank statements to which Mr Barden refers at Barden 1 [69.1] do not appear to me to disclose any regular payments. Indeed, I do not know what entries it is said reflect payments made by the Company. I do not consider that there is material here on which MHT can properly rely in the context of the freezing order.

Mr Ladhur states that he has no idea or involvement in any safety deposit box or payments by individuals in Alabama which Mr Barden refers to at Barden 1 [69.2] and [69.3]. To be fair to Mr Barden, he does not say that Mr Ladhur had any knowledge of these matters: it seems to me that this evidence is aimed at Mr Taylor and not, directly at least, at Mr Ladhur and the Company. I do not consider that it can be relied on in relation to Mr Ladhur and the Company.

At Barden 1 [69.4], Mr Barden refers to further payments from the Company’s account containing references that are similar or connected to Mr Taylor’s name. He gives one, and only one, example, that of a payment to “Nita”. He exhibits some pages of the Company’s Santander account in support of this suggestion. I do not know the basis on which Mr Barden refers to further payments in the plural since the pages of the account he exhibits contain only the “Nita” entry which falls into the category which he describes. As to that, Mr Ladhur explains that Nita is indeed Mr Taylor’s wife whom the Company used on an ad hoc basis to carry out some administrative/accounting work as an independent contractor for which she was paid a one-off payment in June 2010. Mr Americanos confirms that evidence.

MHT’s responsive evidence to which I will come does not address Mr Ladhur’s evidence about the allegedly questionable payments. I do not consider that the allegations assist MHT’s case in support of a freezing order.

I will adopt the same headings as Mr Ladhur which, in turn, respond to the items in the table at Hatchman 1 [15]. It is a very serious allegation to make that the Company charged for work which was not carried out or charged for delivery of projects which were not delivered. When making the application to Birss J, that was part of its case. As will be seen, Mr Ladhur has spent a great deal of effort in assembling evidence to show that work was in fact done and projects delivered. Whether the price charged was appropriate or whether the work done was necessary or provided a solution to MHT’s needs are different questions.

Recruitment fee (£5,633): This was paid in August 2007 before the MSA was entered into. The Particulars of Claim referring to a breach of the MSA cannot be right. The basis of MHT’s complaint appears to be that there was no contractual basis on which the Company could claim for this amount. Whether the Company was contractually entitled to a recruitment fee is not, it seems to me, really the point for present purposes. Mr Ladhur explains in Ladhur 5 [169] to [172] how the relevant individual, Mr Chilkuri, was recruited and how the Company came to charge for its time and effort. There is no doubt that MHT agreed to, and did, pay even if there was no pre-existing contractual obligation. Even if MHT has a claim to recover this amount, as to which I express no view at all, I do not consider that this aspect of the case provides any evidence of dishonesty or supports MHT’s application for a freezing order. There is nothing in MHT’s further evidence in response to Ladhur 5 which causes me to question my conclusion.

Safehaven (£9,000): The payment in question arose in 2010, again before the MSA, the terms of which are therefore irrelevant. Mr Ladhur was unable, at the time of Ladhur 5, to respond as he needed to investigate further. What is more, he said that he needed information from the MHT IT department as the Company no longer had details of what was done. Given that Mr Hatchman’s evidence on this aspect of the case came from a colleague who was involved in the project who has not himself given evidence and who, according to Mr Hatchman “cannot recall [the Company] being involved and cannot think of any reason why it would have need to be involved in a project of this nature”, I would have expected MHT, by the time of the hearing before me, to have provided Mr Ladhur with relevant material. No information has been provided. In the light of that, I decline to take account of this allegation.

Supplier Rationalisation Portal (£41,813): Mr Hatchman’s table stated that MHT does not have a Supplier Rationalisation Portal. However, POs were approved by Mr Tominey and, for reasons already given, MHT cannot in my judgment rely, as against Mr Ladhur and the Company on Mr Tominey’s alleged dishonesty. Mr Hatchman also says that Matt Bush who took over from Mr Tominey was not aware of the Portal and has seen no documentation relating to it. Hatchman 1 and 2 make no mention of any work which was done in relation to the development of such a portal even if that work did not result in the final production of an operative portal. I deal with MHT’s evidence in response to Ladhur 5 later. However, if such work was carried out by the Company pursuant to instructions from MHT, it was entitled to be paid; and if that was the case, it seems to me to be a serious failure of full and frank disclosure and proper presentation on the part of MHT.

Mr Ladhur contends that there is or was a Portal and that Mr Bush is or was aware of it. Mr Bush has in turn given some evidence in response to that. I will review their evidence in a moment, but note as a preliminary point that Mr Bush’s evidence itself demonstrates the incompleteness of Mr Hatchman’s account. Mr Ladhur says that the portal was a Oneview solution provided by the Company. He refers to documents which show that an initial spend of £30,000 was agreed on 25 January 2011 by Mr Tominey and was confirmed by Mr Keith Robertson of MHT, including an email from Mr Robertson dated 25 January 2011. Mr Robertson reports that he had spoken to Mr Tominey. Mr Tominey approved £30,000, but sought a change on the payment terms and a condition about the running of user acceptance tests after about a week from delivery of the system. Change requests were made by Mr Tominey. The invoices for the change requests match the amounts stipulated in the change requests.

Mr Ladhur refers to, and exhibits, documents which he says demonstrate that the portal was developed in line with MHT’s requests: a project management plan, a user manual and project implementation documentation. He says that the portal received user acceptance for various elements on 8 March 2011 and 13 April 2011. He exhibits a user acceptance testing sign-off form which was signed by Mr Tominey on 8 March 2011 and confirmation from Mr Tominey that there were no issues outstanding on the Supplier Rationalisation Oneview application. Similarly, Susan Pritchard signed off acceptance and an absence of outstanding issues in relation to the Contract Management Oneview application on 13 April 2011. Mr Ladhur says that further functionality was added with Mr Robertson confirming on 27 June 2011 that this worked with the changes going live on 28 June 2011. The email thread of 27/28 June 2011 which he exhibits demonstrates, he says, that this is so; I agree.

He says that logs show that the portal was being used by MHT personnel. He refers to emails passing between Mr Bush and the Company in April 2012 regarding unpaid invoices which suggest that Mr Bush was aware of the Oneview solution entitled “supplier rationalisation programme” which he says must have been the portal.

Significantly, Mr Ladhur states that a PO must have been issued and that after the work had been completed, the PO was receipted by Anup Shah and the invoice paid.

None of these documents were shown or mentioned to Birss J on the original application.

Mr Ladhur states that Mr Taylor was not involved in this project.

Here again Mr Ladhur suggests that the documentation demonstrates that the Office Lease Portal was developed by the Company for MHT contrary to Mr Hatchman’s allegations. This again was a Oneview solution provided by the Company. It was an application designed to pull information from MHT’s system and create an interactive database in relation to leases managed by MHT in relation to some 300 properties. Mr Ladhur’s evidence is that he explained to Mr Robertson and Tanem Mehmet (Facilities Manager at MHT) that the Company had experience in property management. Mr Robertson responded by email, which Mr Ladhur exhibits, on 1 February 2011. This email indicated that Mr Robertson had spoken to Mr Tominey and Ms Mehmet about the “Building Management solution” (ie the Office Lease portal) which the Company could offer. Mr Robertson wrote “Bottom line is Bernard will take the cost under his budget. They both want to proceed with this. Finalised cost still to be negotiated. Circa £25K is on the table”.

In due course a formal letter of agreement (prepared by the Company) dated 14 March 2011 was exchanged with a price of £20,000 for the portal plus £10,000 for enhancement. Mr Ladhur refers to a spreadsheet of users and emails dated 18 May 2011 showing that the system was ready for data to be transferred and that is was live. Ms Mehmet confirmed in an email on 18 January 2012 that the portal was working. The initial cost plan showed a cost for 10 users of 12 months. Mr Ladhur thinks that MHT may not have renewed the licences after the initial period which he speculates might explain why MHT now says that the portal does not exist. Again, Mr Taylor is said to have had no involvement with this project.

Mr Ladhur identifies the allegation made by MHT in this way: the project related to a lease with Hewlett Packard for office equipment and that the Company provided no services, Mr Hatchman explaining that this was a simple office equipment lease and there was no need for the Company’s involvement. This, Mr Ladhur says, is to misunderstand the Company’s role which was one of data management not involvement with the leases itself. I deal with Mr Hatchman’s response later.

This again, according to Mr Ladhur, was a Oneview solution designed to assist MHT to control and manage its spend on leased equipment and was to replace an existing record on a spreadsheet which required manual updating. The solution was a Oneview web based interactive spreadsheet and was charged on the basis of so much “per tab” of the database. Mr Ladhur refers to an email dated 17 August 2011 from Gianluca Nicoletti of MHT, asking Mr Robertson whether it would be possible to control the process and data with HP finance; this request was forwarded to Mr Muthiah at the Company with the appropriate service then being provided.

Mr Robertson was involved in both the Supplier Rationalisation Portal and the Office Lease Portal. In dealing in his table with the latter, Mr Hatchman refers to Mr Robertson as a corrupt individual no longer employed by MHT. He notes that the PO was approved by Gianluca Nicoletti “another individual who was the subject of a previous fraud investigation by [MHT]” and has since left MHT’s employment. I have not been informed of the nature of their alleged dishonesty. There is nothing in the evidence to suggest either (i) that the allegedly dishonest conduct of those individuals related in any way to the Office Lease Portal or the HP Leasing Agreement or (ii) more importantly for present purposes, to suggest that Mr Ladhur or the Company knew of any dishonesty (or even of any allegation of dishonesty) on the part of those individuals let alone to link Mr Ladhur or the Company with any such dishonesty. There is not a hint of how those individuals might have benefited from the award to the Company of a contract at over-value. The fact that an individual may be dishonest does not bring into question every single transaction in which he or she may have been involved.

Again, Mr Ladhur says that Mr Hatchman and MHT have failed to understand the Company’s role which was, as with the HP leasing, one of data management not involvement with the leases themselves. He refers to an email from Gianluca Nicoletti dated 25 July 21011 asking whether it would be feasible to have fleet-management within Oneview and he also describes briefly the process leading to the contract and the release of the URL for the system on 15 December 2011. Again, Mr Taylor had no involvement. Mr Hatchman notes the involvement of the same individuals as in relation to the previous items, but again there is nothing to link Mr Ladhur or the Company with any alleged dishonesty on the part of those individuals.

This is dealt with in Mr Americanos’ evidence. The project was driven within MHT by procurement not IT.

Mr Ladhur deals, in section G8 of Ladhur 5, at some length with this aspect of MHT’s case. That case includes an assertion that Mr McLennon (a member of staff in the Home Ownership Team) wanted to terminate the project but was pressured into continuing it by Mr Taylor, adding that there has been no tangible benefit to MHT. Mr Ladhur says that Mr Hatchman is completely wrong in suggesting that nothing was delivered by the Company. Mr Ladhur’s position is that the project was driven by the Business Project Office of MHT in the person of Jan Roszkowski who later became (interim) director of IT. The project was to design an IT solution to the management of various home-purchase schemes which MHT was promoting. The Company’s case is that Mr McLennon was one of the authors of a “Prioritisation Challenge Paper” dated 31 August 2011 (which he exhibits) which set out why this IT upgrade was “Priority 1”; and that Mr McLennon was the sponsor of the project. I have not had the advantage (or otherwise) of evidence from Mr Roszkowski for the purposes of the applications before me.

The project had 5 “milestones” with a total spend of £22,500 for the first 4 milestones being agreed as recorded in an email from Mr Americanos to Susan Pritchard dated 20 December 2011. Mr Ladhur says that it appears that only the first two milestones were reached with invoices being issued for £12,500. At least one of these invoices was approved by Mr McLennon himself

It was MHT which chose to pull the project after the initial analysis and design stages. This did not mean, the Company contends, that the work done by the Company had no value let alone that nothing had been delivered.

Mr Hatchman relies on a colleague who apparently commented that MHT did not need overnight and weekend service of the database. Mr Ladhur finds this a surprising comment given that MHT claims that its computer systems are a matter of life and death. MHT had, according to Mr Ladhur, significant problems with its MWorld system which would regularly crash. It needed to be sure that its systems were working at the start of the working day; MHT also requests manual checks over the weekend. Although the request came from Mr Taylor, it is said that it is clear that this was on the instruction of the head of IT, reference being made to an email dated 20 June 2013. Mr Ladhur also explains that some MHT workers were active from time to time on Saturdays and that Mr Taylor had requested that the checks should be completed by 8.00 am; he does not understand, therefore, how Mr Hatchman can say that “weekend service of the database is not required”.

The project to which this sum relates entailed work on site on MHT’s Oracle system. The Company does not hold the documentation. MHT’s case is that Mr Taylor had told Mr Hatchman that OBIEE was “in the box” meaning it had not yet been taken out for deployment and was a potentially useful tool for the business. Mr Taylor did not tell Mr Hatchman that £75,000 had already been spent. Mr Taylor’s presentation was that nothing had been spent and that he was actively misled by Mr Taylor. Mr Hatchman notes that two of the allegedly fraudulent Coronet invoices states “BI Apps for Obiee” as their invoice narrative.

Mr Ladhur considers that the reference to a single overall price of £103,000 is misleading. The alleged project was, he says, in effect two projects. The first took place between September 2011 and November 2012 at a cost of £65,600 plus VAT, a figure agreed, according to Mr Ladhur, at high level meetings which he attended with senior management at MHT, including Patrick Walsh and Jan Roszkowski. It appears, he states, that the project was delivered and was presented to Susan Pritchard some time February and March 2012.

The second project was undertaken between November 2013 and February 2014 and was required as a result of changes to Oracle itself. The agreed cost was £38,000 plus VAT. Mr Ladhur refers to the project brief set out in the Company’s letter dated 7 November 2013. The PO was dated 11 November 2013 and was receipted by Phil Carter (then IT director). Mr Ladhur does not think that Mr Taylor was involved in this second project. As to that last suggestion, Mr Hatchman’s evidence is that Mr Taylor was very much involved, including taking the lead on a demonstration (Mr Hatchman adds of “very poor quality “) of the system to him and members of his team.

Mr Ladhur deals in section H of Ladhur 5 with the allegations relating to projects delivered but overpriced. As a preliminary point, he observes that Mr Hatchman gives estimates of how long he thinks various tasks should have taken but that he does not explain the basis for his figures. Mr Ladhur questions Mr Hatchman’s qualification to give such estimates. He refutes the suggestion of overcharging, noting the absence of any complaints from MHT in that regard during the whole of the relationship and noting that the sums were agreed by MHT and receipted on its behalf to demonstrate acceptance of the work done.

Mr Ladhur explains why this was not a “quick job” and why the cost was appropriate. The task was actually completed at less cost than had been anticipated by Jan Roszkowski, who had never suggested that this was a simple product to implement. Mr Roszkowki, it can be seen from his email dated 14 June 2011 (which Mr Ladhur exhibits) recognised that it would cost “around £80k” and that £10,000 was to be spent with Oracle on Demand to set up the software. I add that this email was responding to a refusal of approval by MHT of i-supplier at a cost of £165,000 which itself demonstrates some oversight of at least this project. Mr Ladhur says that the portal was made available and worked: the fact that MHT only used it for a limited number of suppliers (so that the cost of the portal per supplier might seem large) has nothing to do with what the Company actually provided and the work necessary to do so.

Mr Ladhur gives, in section H2 of Ladhur 5, what is to my mind a convincing answer to Mr Hatchman’s complaint in relation to the work done in 2011 (at a cost of £4,000). As Mr Ladhur puts it, the work was needed because “MHT’s expenditure categories were very complex and miscoding and mistakes occurred on a frequent basis within the organisation. Smart Forms reduce the number of errors made”.

As to the work done in 2013, the PO was receipted by Mr Hatchman himself. The work was, according to Mr Ladhur, for an entirely different project from the 2011 Smart Forms project and resulted from a change in MHT’s reporting coding structures.

Mr Hatchman suggests that the work could have been completed in one day. The Company had agreed a PO on the basis of 17 days’ work. The PO was issued by Hilary Gelling (Projects Coordinator in the Business Project Office, and not a person in Mr Taylor’s team). Mr Hatchman has not explained how he arrived at an estimate of one day, and Mr Ladhur has produced some evidence based on a comparable which suggests that considerably more than one day would have been required. No doubt there is a dispute about how long the work should have taken, but even if there was overpricing, this is hardly evidence which lends any support to an allegation of dishonesty in support of a freezing order.

In his response evidence, Mr Hatchman states that the report was used extensively within his team but criticises the quality of the product with budget holders complaining that it did not help them manage their budgets. He does not consider that it is a piece of work which should have been outsourced given that MHT had an in-house Oracle support team. This is a new allegation which did not feature in the case before Birss J nor is it pleaded, although MHT can, of course, seek to amend its pleading.

This project resulted, according to Mr Ladhur, from a change in financial reporting requirements under FRS 15. Mr Ladhur explains, in section H4 of Ladhur 5, what was involved.

In particular, he explains as follows. The interface between Oracle and Asset 4000 had to be amended to take account of this change. Asset 4000 is an asset register application designed by Real Estate Management. MHT decided to bring a specialist from Real Estate Management to assist with implementing the changes required; however, his expertise was in SQL (another type of database) and he found it difficult to work with Oracle and so the Company had to assist. The project was disrupted by the involvement of multiple project managers from MHT including Owen Shaw (who left near the start of the projects) and Colin Tulleth (who also left).

Again, there may be a dispute about what should properly have been charged, but Mr Hatchamn’s proposition that the work should have taken only 2 to 3 days is one which I find extremely surprising. The POs were issued and receipted by responsible people within MHT – Hilary Gelling, Jan Roszowski and Mrs Hammond.

Mr Hatchman’s response asserts that Mr Ladhur fails to explain the supposed complexity of the project. His position is that the project related to an interface file, nothing more than that; the principles of component accounting are the same whether you are looking at one property or 40,000 and the IT solution should be entirely scaleable. Evidence in response to that, which I consider later, has been provided by Mr Muthiah.

Mr Hatchman, relying on comments from Mr Maxwell, suggests that this was a simple task. He says that the Company “was engaged simply to scan tenancy agreements into the Serengeti management system”. This task could have been done by a low-grade administrator. Mr Ladhur explains in section H5 of Ladhur 5 why this was not so. Scanning was indeed necessary, but this was not done by or on behalf of the Company. What required the input of an Oracle expert provided by the Company was selecting the appropriate location in the system to which these documents should be uploaded. Each batch consisted of around 1500 pdf files which needed analysis in order to connect them properly. This work had nothing to do with Mr Taylor.

The purpose of Intercompany is to record internal supplies within MHT’s accounting system. This was subject to a PO issued by Kim Barnes in the sum of £30,000 for 60 days’ work. The PO was receipted by Patrick Shaw. Mr Hatchman contends that this work parcel was standard Oracle functionality and should have taken only 3 days to set up. Mr Ladhur’s evidence, based on what he had been told by Mr Muthiah, is that the relevant application within Oracle required significant reconfiguration and involved considerable co-ordination between the IT and finance departments together with configuration and testing in multiple environments.

Mr Hatchman’s response is that the work was described to him by Mr Taylor as “flicking a switch”. Apart from that comment, Mr Hatchman does not attempt to meet Mr Ladhur’s explanation or to suggest why it is wrong. I consider Mr Muthiah’s evidence later.

The PO here was for 56 days of work; Mr Hatchman suggests that it should have taken no longer than 1 day. The PoC at Appendix 4 suggests that the appropriate time was 3 days not 1 day. Mr Hatchman refers to the production of weekly compliance reports; but Mr Ladhur’s understanding is that the program allows a user to produce a report (not just a weekly report) within MHT and send it simultaneously to multiple destinations. Mr Ladhur is told by Mr Muthiah that “report bursting” is a way of splitting a single report into multiple reports and sending each report to appropriate individuals. This had never been done at MHT before so that infrastructure was required to set this up across multiple environments to test it and produce it. He sets out what Mr Muthiah told him about the extent of the work required, concluding that it could not have been done in 3 days. As to the Requisitioner Reassignment, Mr Ladhur says, again on the basis of what Mr Muthiah tells him, that this has been implemented; Mr Hatchman says that it is not operational, but whether or not it is used is MHT’s choice.

In response, Mr Hatchman says that Mr Ladhur’s description seems to describe technology which ought to be scaleable. As to functionality, Mr Hatchman understands from Ms Anderson (current Head of Procurement) that this functionality was not present in the Metropolitan iProc purchase ordering system; he does not know why MHT would invest in a product which was not then used within its live systems. This, I observe, is a very different case from that which was presented to Birss J. The complaint in Mr Hatchman’s table is that the time said to have been taken to execute the project was excessive; it was not suggested that the project was unnecessary in the first place. But the Company was commissioned to undertake this work. It is prima facie entitled to be paid.

Mr Bush’s evidence is this. He was himself involved in this project. It did not amount to 56 days’ work. He does not see how this project was not part of the core standard service as it was using functionality within Oracle which the Company was providing. Mr Taylor would certainly have been involved in defining what resources were to be used for this project. Mr Taylor was the key person involved in scoping and pricing the project.

I come to the evidence in response to that later.

Mr Hatchman complains that excessive time was spent on this project and says he does not believe substantial coding was necessary. Mr Ladhur disagrees, referring by way of example to a number of emails showing the complexity of the work.

In his response evidence, Mr Hatchman says that he was involved in this piece of work but not in the costing and purchase ordering. He was not happy when he found out now much it had cost in total. But as Mr Ladhur notes, that, did not prevent his agreeing to it. Mr Hatchman says that, as well as the work done by the Company, MHT spent a similar sum with another firm of IT consultants and so the total cost of the project was in the region of £40,000. Mr Hatchman does not explain whether there was overlap in the work done by the two consultants (the Company and the other firm) and does not explain why the charge for the work actually done by the Company was excessive. In his original evidence, he did not suggest that the project, in itself, was unnecessary and, it seems to me, he is not saying that in his response evidence either. It is not suggested that Mr Ladhur or the Company knew that other consultants were involved. It was not disclosed to Birss J.

Mr Bush explains that Mr Taylor was, once again, key in this project and it was he whom Mr Bush approached to provide the cost and timescale for the project. He regards the costs as “certainly higher than would have been reasonable” although Mr Taylor advised that they were reasonable. Mr Bush, it should be pointed out, nonetheless accepted the cost notwithstanding that he disagreed with Mr Taylor that it was reasonable.

Mr Ladhur makes the point that all of these allegedly overcharged projects were carried out pursuant to POs at an agreed price. MHT’s position is that the MSA governed the position and that the Company was entitled to charge only on the basis of the time actually spent. In relation to POs after the date of the MSA, MHT may or may not be correct. It will be a matter to be resolved at trial whether the Company in fact had a valid contractual claim for the “agreed” PO amounts or whether, having paid invoices rendered on the basis of those agreed amounts, MHT has a claim to recover any excess which it can establish. If it can do so, then there will be an issue whether the Company can claim for its actual work when it has rendered invoices for less than its entitlement or whether MHT’s argument to the contrary should prevail – to my mind an unattractive (although possibly legally sound) argument whereby MHT seeks to assert the dominance of the MSA but only where it is to its advantage to do so.

In response, Mr Hatchman says that he based his assessment of overpricing on the total price paid for each project comparing this to his own experience from elsewhere for similar work and using feedback from colleagues. This, I consider, is an inadequate response to Mr Ladhur’s evidence. There is no engagement with why Mr Ladhur is wrong in what he says about the scope of the work and the time required.

In section I of Ladhur 5, Mr Ladhur deals with Mr Hatchman’s suggestion that the Company has overcharged by reference to the agreed contractual rates on the Rate Card of the MSA. Here again Mr Ladhur makes the point that day rates were used to fix a price on the basis of the estimated time; and on the basis of Mr Americanos’ analysis of the invoices rendered for 2011/12, 2012/13 and 2013/14, the total charge strictly in accordance with the Rate Cards demonstrates an undercharge. Those are, of course and as I have already said, matters to be determined at trial. As Mr Ladhur points out in his responsive evidence (Ladhur 6 identified below), there has been no challenge to Mr Americanos’ analysis of the sums charged and his conclusion that there was undercharging, on the basis of the Rate Cards, in some cases.

Although there is clearly a good arguable case that in some cases the Company has charged more for work done that the contract rate (that is to say the rate specified in the MSA) there are cases, as Mr Hatchman himself describes it, where the rate charged has been less than the contract rate. He did not, for the purpose of the application before Birss J, himself attempt to assess the amount of any undercharging. As I have just said, Mr Americanos’ evidence has not been challenged so far with the result that the net position may well be that there has been overall undercharging. As to that, MHT may be able to argue that the Company is not able to net-off the undercharging and the overcharging. That, however, is not the real point of relevance for present purposes. The real point, it seems to me, is that the way in which business generally was conducted as between MHT and the Company (and, so far as the evidence goes, this appears to have been the case more widely) is that the contractual provisions were frequently not observed; and the fact of undercharging as well as overcharging is a strong pointer to the absence of any dishonesty. In my judgment, even though MHT may have a good arguable case to recover sums overpaid, it cannot rely on such overpayment in support of its case that there is a risk of dissipation.

The first point which Mr Ladhur makes is that not all of the individuals concerned were sub-contractors. Many of them were employees in respect of whom it cannot sensibly be suggested that the Company charges to its customers must reflect a mark-up not exceeding 15% on the salaries of its employees. The individuals who were employees are Pratik Chatterji, Kevan Martin and Devarshi Thakkar. Once these are removed from Mr Hatchman’s table, the vast majority of the overcharge is removed. In fact, only just over £11,000 would remain.

Mr Hatchman has not addressed this point in his response evidence. Mr Burton effectively conceded that the point is a good one. Certainly for the purposes of the application to discharge the freezing order, I do not consider that MHT can rely on the alleged overcharging in relation to the individuals who were employees.

Quite apart from that, Mr Ladhur does not understand the basis on which sub-contractors should have been charged with any particular mark-up. There was never, he points out, a contract to that effect. If it is right that the Company was entitled to charge an agreed fixed price for work subject to apparently fixed-price POs, the question of mark-up does not arise since the Company was entitled to fulfil its contract to provide a piece of work by using its own employees or by using outside consultants. I would add that the Rate Cards which refer to consultants do not have rates as low as that which MHT says the Company should have charged since those rates, at least in some cases, are higher than the rates actually paid to the consultants plus a 15% mark-up.

As will be seen later, I consider that paragraphs 27(iv) and Schedule 6 of the PoC should be struck out. It is not, in my judgment, possible, in the light of my reasoning in reaching my decision to strike out those parts of the PoC, for MHT to rely on an alleged overcharging. But even if that were wrong, and although there is a dispute about what the Company was entitled to charge, there is, in my view, real merit in the position of the Company and Mr Ladhur. Even taking account of MHT’s responsive evidence, (in particular from a Mr Halil) and even if, at trial, MHT’s contrary position that there has been overcharging is vindicated, I do not consider that the invoices raised provide any support for an allegation of impropriety.

Mr Ladhur explains that there are unpaid invoices for services which the Company has provided to MHT amounting to £189,991. Although he understands why the invoices have not actually been paid whilst the litigation is continuing, he complains that no credit has been given in relation to the amount of the freezing order sought.

This point is not addressed in the response evidence on behalf of MHT. There has been no challenge by MHT to those invoices. It seems to me that credit must be given subject to this namely, that in Ladhur 6 (as described below), Mr Ladhur acknowledges that he made a mistake in Ladhur 5 [304], explaining how the mistake came to be made. He now accepts that certain of the invoices referred to had been met. Outstanding invoices, however, remain in the lesser sum of £109,690.80.

In section B of Americanos 2, Mr Americanos sets out a number of background issues which I do not need to go into save so far as concerns section B4 where he deals with Oneview. This he describes as a Microsoft-based technology product which was his idea and which he developed. The idea was to introduce a product for the Company, not based on Oracle, to address a variety of markets, initially commercial property managers in the UK. Oneview started in about 2009; Mr Americanos (as Americanos Consulting) commenced design and development, sub-contracting development to his overseas team in Slovakia. He explains that he joined the Company full-time in 2011 as chief technical officer to commercialise Oneview and to “ensure a solid road map for Oneview (under licence)”.

He, together with Mr Ladhur, met Bill Payne, then CEO of MHT, and demonstrated Oneview to him around May/June 2011. Mr Payne was supportive of the introduction of the product and the development of Oneview solutions for MHT, solutions which were bespoke to deal with particular problems within MHT.

Oneview did not provide Oracle-based solutions. Mr Taylor had nothing to do with Oneview and its application within MHT. Indeed, Mr Americanos’ perception is that Mr Taylor was antagonistic to Oneview because his expertise was in Oracle; he was resistant to the application of Oneview in his areas.

So far as concerns payments from the Company’s accounts (including the Rational FX payments, Spanish property payments and school fees) Mr Americanos says that he agreed to these payment on the footing that they were added to Mr Ladhur’s director’s loan account. He confirms that the explanations given in Mr Ladhur’s evidence are the explanations which Mr Ladhur gave him at the time.

As to the Coronet payments, Mr Americanos is unable to give evidence about the agreements which were made with Mr Taylor. However, he does say that, during the relevant year-end accounting review, Mr Ladhur explained that Mr Taylor had undertaken some private work on behalf of the Company, payment for which would be settled through Coronet.

Mr Americanos confirms what Mr Ladhur has said about the payments to Mr Taylor’s wife, Nita. She worked, he believes, for the Company for 6 months and he authorised the work which she completed “as being done to a correct standard”.

In relation to “Projects allegedly not delivered”, Mr Americanos is able to give evidence about the Oneview projects and products. He implicitly confirms that these projects were delivered when he seeks to explain why MHT might be making the allegation that they had not been delivered. He says that the only reason he can think of is that, at the time of MHT’s review of its systems, its subscription to Oneview had been terminated. This meant that the products would not then have been available to MHT as they were hosted on the Company’s servers and therefore not visible on the review. In that context, he refers to an email dated 27 April 2012 from Matt Bush referring to a discussion of Oneview and “the ending of the subscription for its use”. Mr Hatchman’s only response to that is that this “would not give me confidence that the project was actually delivered, given the way in which the Procurement team under Bernard Tominey was operating at Metropolitan at the time”. Mr Hatchman’s absence of confidence is not an answer to Mr Ladhur’s evidence given that, at least for present purposes, Mr Ladhur and the Company are not to be taken as having any knowledge of Mr Tominey’s dishonesty. There is no reason to think that Mr Tominey was behaving other than in MHT’s interests in relation to MHT’s dealings with the Company.

Mr Americanos says that the work in relation to the second OBIEE project was certainly carried out, by which I understand him to mean that the work for which MHT was invoiced was carried out. Mr Hatchman, in response, accepts that some work was carried out but that the project never got anywhere near delivery. The project appeared to be going nowhere and was terminated with an alternative product from a different supplier being used. Mr Taylor was, apparently, resistant to MHT deciding to use the different, (non-Oracle) product; that chimes with Mr Ladhur’s evidence about Mr Taylor’s resistance to the use of Oneview solutions which he considers Mr Taylor may have seen as a threat to his position, being an Oracle expert.

Mr Americanos comments (rather more briefly than Mr Ladhur) on a number of these projects:

Supplier Rationalisation Portal: He essentially confirms Mr Ladhur’s evidence. He states that he attended several meetings with the Procurement Team at MHT which was “very happy with the end result”. The portal was a short-term solution and was licensed for a short term. The original invoice shows a licence for 9 months for 8 users but this was not extended.

Office Least Portal: Mr Americanos had a meeting with Tanem Mehmet of MHT during preliminary discussions. She set out MHT’s requirements, informing him that she would document that and meet with the Company’s operations manager. Mr Americanos has no doubt that the portal was delivered to Ms Mehmet’s satisfaction.

HP Leasing and Fleet Car Leasing: Mr Americanos was not involved in these projects, but is able to confirm that they were Oneview solutions hosted on the Company’s server.

Telecom & Monarch Assessment: Mr Americanos says that he was particularly involved in this project, known as “streamline”. It was a project to streamline the process of paying utility suppliers (at the time taking up the majority of the time of 3 MHT staff). The scope and the cost of the project were not agreed before work commenced. However, the Company was, he says, clearly instructed to do the work by the procurement department. This is supported by email correspondence which he exhibits. Further, he met with 5 senior members of the MHT staff on 28 June 2011 (not including Mr Taylor) setting out progress already made and explaining missing data in relation to 90 BT accounts. He is clear that the project was driven by Procurement and not IT. Mr Taylor did not attend the key meeting and his role was peripheral.

MHO Work Parcel: Mr Americanos confirms what Mr Ladhur says about this. He gives further detail of his own involvement. He gives some pertinent evidence in section E7 of Americanos 2 which I rely on but do not propose to set out in detail.

Component accounting: Mr Americanos regards Mr Hatchman as naïve in thinking that the complex matter would have been a simple task. He refers to another of his clients who had spent in excess of £100,000 on this issue. Mr Hatchman’s evidence in response is that at another Housing Association (Hanover) where he had previously worked, “the IT-related elements of the transition accounting were successfully delivered in-house without any money being spent on external consultancy support, although the systems in use were not Oracle-based”. That, with respect to Mr Hatchman, does not come anywhere near meeting Mr Americanos’ evidence. There is, in his evidence, no comparison between the tasks involved, there is no comparison of the technical skills of personnel at the two associations, there is no evidence about the time spent by personnel at Hanover (and no assessment of the cost, including overhead cost, therefore properly attributable to the task). The fact that the different task could be done in-house at Hanover does not mean it was a simple task.

Inevitably, Ladhur 5 and Americanos 2 have provoked some responses, with which I must now deal. The responses are important as much for what they do not say as for what they do say. I have already addressed some of the response evidence, in particular aspects of Hatchman 3.

In Barden 2, Mr Barden draws attention to the inconsistent explanations given by Mr Taylor and Mr Ladhur of the Coronet invoices. One or other of them is, he says, lying. He points out that Mr Ladhur gives no explanation for the inclusion of the MHT PO numbers on the Coronet invoices (a matter which Mr Ladhur has not commented on in his subsequent evidence). He concludes that “the Defendants’ contradictory explanations for the Coronet invoices are clear indications of dishonesty on the part of the Defendants”. There is a difficulty with that conclusion. It is no doubt that the case that one or other of Mr Taylor and Mr Ladhur is lying: but it is not necessarily the case that both or them are lying so that it cannot be said that there is clearly indication of dishonesty on the part of “the Defendants” ie including both Mr Taylor and Mr Ladhur. Further, if one or other of the accounts given by them is true, that (truthful) account would be entirely consistent with an honest explanation of the Coronet invoices. Given that MHT’s case is that Mr Taylor is clearly dishonest (as is shown, in particular, by his dishonest answers to questions put to him in his disciplinary interview) it might be thought that he, rather than Mr Ladhur, was being less than honest in his own pleading and evidence.

Nonetheless, MHT is perfectly entitled to rely on the fact of the Coronet invoices; and to the extent that each of the accounts given by Mr Taylor and Mr Ladhur is questionable, it is open to it to argue that there is a case sufficient to justify a freezing order and to rely on the alleged dishonesty as demonstrating a risk of dissipation. I do not consider that it adds to MHT’s case against Mr Ladhur to point to the inconsistent evidence of Mr Taylor concerning the Coronet invoices.

Mr Barden refers at some length to previous fraud against MHT by Mr Tominey. Mr Barden refers to claims made against Mr Tominey and the subsequent compromise of those claims. I am left in the dark about the compromise because its terms and the extent of any admissions made are the subject of a Tomlin order, which is stated to be confidential and has not been disclosed in the evidence.

In any event, as Mr Barden himself accepts, there is no suggestion that the Tominey fraud is directly connected to the fraud allegedly committed by Mr Taylor and Mr Ladhur. The word “directly” comes from Mr Barden. I would only add that there is no evidence before me that Mr Ladhur or the Company were in any way connected, even indirectly, with the Tominey fraud. To my mind, that fraud is wholly irrelevant to the issues before me. Moreover, there is no evidence that Mr Tominey has colluded in any overpricing or overcharging by the Company let alone that he has taken any kickbacks or received other advantages from the Company. It is true that he was involved in some of the work which the Company carried out and that he signed off acceptance of some work and receipted invoices too. But it cannot be inferred from that that he colluded in any way in overcharging or overpricing.

Further, the relevant section of Mr Barden’s evidence refers to proceedings not only against Mr Tominey but against other employees of MHT. All of these proceedings have been compromised (again on confidential terms). It may be that there was a serious deficiency in the internal governance and supervision within MHT leaving it exposed to dishonest practices of its employees. The responsibility for that rests with senior MHT management not with Mr Ladhur or the Company. Unless Mr Ladhur and the Company can be somehow implicated in the alleged dishonesty of MHT’s employees, that dishonesty has no impact, it seems to me, on the relationship between MHT on the one hand, and Mr Ladhur and the Company on the other. I reject Mr Barden’s suggestion that, simply because Mr Tominey lacks all credibility (assuming that he does so), he cannot be relied on by Mr Ladhur and the Company as a person who approved and verified work undertaken by the Company or that where he did so he was not acting in the best interests of MHT. After all, most of the work carried out by Mr Tominey was surely genuine: it cannot be suggested that in almost every aspect of his activities, Mr Tominey’s aim was to milk, or to assist someone else in milking, MHT. Similarly, I do not consider that evidence given by Mr Hatchman in Hatchman 3 concerning Mr Tominey’s fraud is relevant. The same points can be made in relation to Mr Robertson and Mr Nicoletti.

I do not consider those conclusions to be affected by what Mr Barden says in Barden 2 [35]. He says there that it is clear that Mr Tominey, Mr Ladhur and Mr Americanos had a relationship beyond that of an ordinary arm’s length supplier and purchaser. He refers to their involvement in a company now called Infoprop Ltd but at the material time called D&A Support Ltd (I will refer to it as “D&AS”), of which all of them as well as Mr Robertson, were at some time directors, concluding that Mr Tominey, Mr Robertson, Mr Ladhur and Mr Americanos were at least considering entering into a profit-sharing agreement and discussed entering into business together outside MHT. Even if that is so, it is not of itself evidence that any of them were, or were likely to be, engaged in fraudulent activity perpetrated on MHT. It may also be – a matter for trial – that all of those individuals knew that Mr Tominey and Mr Robertson would be in breach of their obligations to MHT by engaging in outside activities, even where those activities were wholly unconnected with the activities of MHT. But that is not indicative of the sort of dishonesty which would justify a freezing order.

Mr Barden deals with the relationship between Mr Taylor and Mr Ladhur/the Company in Barden 2 [37] to [40]. That evidence goes to Mr Taylor’s failure to disclose to MHT his relationship with Mr Ladhur and is an attempt to refute the suggestion that the relationship was not hidden from MHT. There was, I accept, a failure to disclose the relationship and it is certainly the case that there is a strong argument for saying that Mr Taylor should have disclosed it. In that sense, the relationship was hidden from MHT. It is a different question whether the relationship was hidden in the sense that individuals within MHT were misinformed about the relationship or that positive steps were taken by Mr Taylor and Mr Ladhur to make sure that nobody appreciated the existence of their friendship.

Mrs Hammond, a former HR director, has given evidence about Mr Taylor’s obligations in this regard and the consequences of his failure to comply with them. She is of the view that Mr Taylor would very likely have been dismissed for gross misconduct had his failure been known. Further, had he disclosed the relationship, MHT may well have decided not to contract with the Company in the first place or would have ensured that Mr Taylor would not have any involvement in managing the day to day relationship. That may well be so. But it is not necessarily the case that Mr Ladhur and the Company were aware of Mr Taylor’s responsibilities or, if they were aware, that Mr Taylor had breached them.

Nor is it necessarily the case, even if they were aware of all of this, that the Company embarked on and carried out its contractual relationship with a view to defrauding MHT. A person may improperly bribe an employee of a company to obtain business but nonetheless provide a good service at a competitive rate. The making of the bribe may be viewed as dishonesty, but it is not the sort of dishonesty which would necessarily lead one to conclude that the person making the bribe, when his misconduct is discovered, would be likely to hide or dissipate his assets in order to avoid enforcement of any judgment against him resulting from that misconduct.

And so, in the present case, it does not necessarily follow from the breach by Mr Taylor of his duties, that Mr Ladhur and the Company are to be taken, even assuming that they knew that Mr Taylor was acting in breach of his duties in failing to reveal the relationship, as demonstrating the sort of dishonesty which would justify a freezing order.

Turning to Hatchman 3, Mr Hatchman explains at [25] that the relationship between Mr Taylor and Mr Ladhur was not known within MHT and that the knowledge of one individual of that relationship cannot, to use my words, be imputed to MHT. There is evidence from other individuals who have made witness statements to the same effect. For the purposes of the present application, I must proceed on the basis that the relationship was not known within MHT generally. That is the overwhelming flavour of a considerable amount of evidence from MHT and the dispute can only be resolved at trial.

Mr Hatchman puts into issue, to some degree, the nature of Mr Taylor’s role within MHT and the extent to which he managed the day to day relationship between MHT and the Company: see Hatchman 3 [27]. It is to be noted that Mr Hatchman’s evidence is based on his experience during his time at MHT: he does not speak as to the position before that. It is, however, reasonable to assume for present purposes that Mr Taylor’s role did not differ from what it was before Mr Hatchman joined MHT. More significantly, Mr Hatchman’s focus is on Mr Taylor’s role in relation to Oracle-related supplies. He does not engage with Mr Ladhur’s and Mr Americanos’ evidence in relation to non-Oracle related supplies, in particular Oneview projects.

At Hatchman 3 [28], Mr Hatchman refers to the apparent absence of any competitive tendering leading to the MSA. He refers to the fact that it was Mr Tominey who signed the MSA; and Mr Ladhur’s own evidence is that it was negotiated by Mr Tominey and Mr Walsh on behalf of MHT. I am not sure what Mr Hatchman seeks to take from this evidence. It is part of a cloud of innuendo but he does not come out and clearly assert that Mr Tominey and Mr Ladhur were perpetrating yet another improper arrangement.

At Hatchman 3 [29] to [35], Mr Hatchman refers to and exhibits several emails involving Mr Tominey, Mr Robertson and Mr Ladhur, a number of which were sent by or to Mr Taylor. In particular:

One email exchange demonstrates that Mr Ladhum, Mr Americanos, Mr Robertson and Mr Tominey had joint business interests outside MHT in relation to the outsourcing of procurement, with MHT being one of the target customers.

Another exchange provides evidence of joint business interests between Mr Ladhur, Mr Americanos, Mr Robertson and Mr Tominey, in which they discuss a four-way profit sharing arrangement in a new business.

Reliance is placed on an email from Mr Robertson in relation to one project in which he was involved. He writes that he hopes for a financial return since he was not going to do any more unless he was “part of the personal gain plan”. He was clearly hoping for further work since he asks “When can you start pulling me out of MHP”. He states that he is probably decreasing his days (ie with MHT) to 4 per week in a couple of weeks time and that he had “actually had enough now and am starting to actively look for change”. This may, again, be a significant breach of contract by Mr Robertson vis a vis MHT, but it is, I suggest, hardly evidence of any intended fraud to be perpetrated against MHT or evidence top justify a freezing order, not against Mr Robertson it is to be noted, but against Mr Ladhur.

A more significant exchange includes an email dated 14 December 2011 from Mr Ladhur to Mr Robertson. In this email (copied to Mr Taylor and Mr Nicoletti), he seeks to recover for the time spent on various initiatives to help procurement noting that “we have still underbilled real effort spent on this”. The email then goes on “In addition, I also want to discuss how do I recover the time [the Company] spent on Nottinghill – should this invoice go to MHP. We can discuss this offline with Bernard [Mr Tominey]”. And so, Mr Hatchman suggests, that the intention was that work done by the Company for Notting Hill Housing Trust should be invoiced to MHT with an expectation that Mr Robertson would be complicit in this.

There is also email correspondence which, according to MHT, points towards Mr Ladhur and Mr Robertson working together to ensure that costs of the Company’s projects were approved without being scrutinised by anyone who might object to the costs. Thus in an email dated 26 May 2011, Mr Robertson wrote to Mr Ladhur:

As to Mr Ladhur’s example at Ladhur 5 [66] about how Oneview would allow MHT to see how much money it was spending on individual suppliers, Mr Hatchman consider this to have been a very basic task which in-house staff in the IT department were capable of performing.

As to Mr Ladhur’s assertion (see paragraph 140 above) that there were only a very small number of invoices which predated the corresponding PO and that this was because the Company knew that the Procurement Department at MHT was going to be disbanded in its current form, Mr Hatchman says that this is entirely at odds with emails exchanged between Mr Ladhur and Mr Robertson on 31 August 2011. I agree that this cannot have been the reason, but I will need to say more about the underlying allegation later.

Mr Hatchman refers to an email from Mr Ladhur to Mr Robertson in which he says this:

That exchange is also important because it appears that Mr Ladhur is telling Mr Robertson, as an MHT employee, what POs he wishes to have set up in order to recover the cost of work done without prior approval. The email continues by stating what process must be followed in future: it was not “process mania” but an attempt “to regain control of a very uncomfortable position”. This, it is said, shows that Mr Ladhur and the Company had created a difficult position for Mr Robertson because work had been undertaken without prior approval of the costs and the scope of the project being agreed. I agree with that: but it does not begin to indicate, by itself, any dishonesty. Again, I return to this later.

In response to Mr Ladhur’s statement that he was not aware of any complaints about the Company overcharging MHT, Mr Hatchman says that the culture at MHT prior to his arrival was to accept the price quoted by a supplier with no questions asked, a practice prevalent throughout the business not just within IT. That may well be the case. But suppliers, including the Company, are not responsible for the governance of MHT or of any failings in supervision of contractual pricing. Nor is there any reason to assume that any particular supplier was aware of this lax practice let alone that it would set out to take dishonest advantage of it.

Mr Hatchman takes issue with Mr Ladhur’s description (see Ladhur 5 [83]) about the receipting of invoices. He explains that, when he arrived, the new procurement team has recently started circulating a weekly purchase order compliance report to the business. This showed that in over 50% of cases, suppliers were raising invoices before the related purchase order had even been created. Controls were limited and the business was “stuck in a cycle of raising retrospective purchase orders simply to allow invoices to be processed through the system and paid” adding that “very few people actually looked at whether the spend was valid”. Again, the failure of governance is hardly the fault of suppliers. In any case, Mr Ladhur is surely correct when he says that MHT had a process to pay suppliers only if a PO was receipted. A supplier would not know of the governance failures within MHT and would be entitled to assume, absent any collusion with an employee, that receipting of the invoice provided precisely the check which Mr Ladhur refers to.

Next, Mr Hatchman refers to Mr Ladhur’s evidence that employees of MHT other than Mr Taylor receipted invoices. This, he says, is of limited relevance because MHT had a policy of devolving “ownership” of IT system development spend out to departmental managers, meaning that the expenditure appeared on their budget reports rather than being centrally recorded against the IT team budget. This meant that departments had to raise and receipt their own POs. Mr Hatchman goes on:

As to that, I again comment that Mr Ladhur and the Company are not responsible for the governance failings of MHT or for its employment of a raft of corrupt, incompetent or malleable employees. Unless MHT can show that there was collusion between these individuals and Mr Ladhur/the Company, what Mr Hatchman says does not really assist in establishing the dishonesty which must form the foundation of the application for a freezing order.

At Ladhur 5 [85], Mr Ladhur asserts that only a small number of invoices pre-dated the corresponding PO. Mr Hatchman says that this is not the case. He has exhibited a spreadsheet setting out all POs raised for the Company in the period from 7 February 2011 with the details of who requested and approved the PO. Data before that date is no longer accessible. The spreadsheet reveals 269 requisitions prior to Mr Taylor’s suspension from MHT. Mr Hatchman describes a requisition as non-compliant if the date of the Company’s invoice is before the date the requisition was requested. In relation to requisitions requested by Mr Taylor (114 in total) 48% were not compliant. In relation to requisitions approved by Mr Taylor (35 in number, some or all of which may already appear in the 114), 59% were not compliant. I come to Mr Ladhur’s evidence in response to that later.

As to what Mr Ladhur had to say about the OBIEE project in Ladhur 5 [134] to [141], Mr Hatchman says (see Hatchman 3 [44]) that he has found no evidence that the work had been completed, noting that it had been described to him by Mr Taylor as “still in the box”. This must refer to the first project in 2011. It is certainly the case that the emails exhibited by Mr Hatchman do not show Mr Taylor as presenting the second project other than as a new project: there is no reference to a previous project on which MHT had already spent a considerable sum. Mr Hatchman returns to OBIEE at Hatchman 3 [54]. He says that he never saw any evidence of the OBIEE product being in use during his time at MHT and it was not used by the Finance team during his time. It was described to him during his early weeks at MHT by both Mr Taylor and Mr Raszkowski as being “in the box”. Again, this must be a reference to the first project. It was subsequently raised as a possible solution to an acute problem, when it was presented to him by Mr Taylor as a new project.

Mr Ladhur’s evidence is that the second project was required as the result of change to Oracle itself. Mr Hatchman says that this is absolutely not the case. His position is that it was he himself who decided to pursue this project in order to try to improve the quality of management reporting to MHT. It was his decision to look at this based on Mr Taylor’s recommendation and he sought authority from Sarah Mussenden to commit to the cost for the project. Again, I will consider Mr Ladhur’s further evidence about this later.

Mr Hatchman turns to the Supplier Rationalisation Portal at Hatchman 3 [48]. I am not sure whether he now accepts that work was done on this portal, although I think he does so since he does not engage with the documentation exhibited by Mr Ladhur to show that work was done. However, he goes on to say that, even as described by Mr Ladhur, a price of £42,000 is an extraordinary sum for the tool involved. He explains an alternative technical solution involving Excel which members of his finance team would have been capable of implementing. Mr Muhtiah responds to that evidence; I will consider that response later.

As to Mr Ladhur’s evidence regarding I-Supplier, Mr Hatchman assessed the total time billed as something like 420 hours and gives his view that he cannot see how anything of this nature could have taken that long. He also refers to emails exchanged between Mr Robertson and Mr Ladhur in relation to this project. It appears that Mr Robertson obtained authorisation from Mr Tominey. An email from Mr Ladhur to Mr Robertson reads as follows:

Mr Hatchman has a number of observations to make on Mr Ladhur’s evidence concerning Smart Forms. As with OBIEE, he says that he was not made aware by Mr Taylor of any historic work already done on the product when he made the decision to invest in 2013. He does not address or now seek to contradict Mr Ladhur’s evidence concerning the 2011 project.

As to the 2013 project, he says that he commissioned this to reduce the volume of purchase order coding errors made across the business. “In particular” he says “it involved the creation of a new Smart Form for service chargeable spend, so that the range of codes used for those activities was kept ring-fenced from the range used for other business activities”. And so “the circumstances and drivers behind this piece of work were identical to those described [by Mr Ladhur] for the first piece of work. There was no imperative to perform the work because of changes to our reporting coding structures”.

The second project was delivered satisfactorily, but MHT’s suspicion is that it was overcharged because the same project was delivered and paid for twice.

Matthew Bush has made a witness statement dated 1 June 2015. He was employed as MHT’s Environmental Sustainability Manager from May 2008 and was promoted to Head of Sustainability & Supply Chain Management in January 2012, replacing Mr Tominey on his departure. When appointed to the latter post, part of his remit was to review MHT’s suppliers, a difficult task, he says, as the record keeping had been very poor.

One of his first actions was to try to obtain full and complete details for suppliers. He arranged for a letter to be sent to all MHT’s suppliers. It included a link to an online survey which all suppliers were asked to complete. He adds: “I stated that all suppliers who wanted to remain an approved supplier for Metropolitan were expected to complete this”. Over 140 suppliers completed the survey. The Company was, he states, sent this letter to its registered office. The Company did not complete the survey. I am bound to say that the impression which I gained from this part of Mr Bush’s witness statement when I read (and reread) it was that the response rate had been good and that the Company was in a minority in failing to respond. I was surprised, therefore, to read in his email dated 28 March 2012 (which he exhibits) to Directors and Heads of Service that there were 2,700 suppliers so the response rate was on just over 5%. I am not sure what turns on this since, although it was open to MHT to decline to work further with the Company in the light of its failure to complete the survey, it did not do so. If a response to the survey by the Company was important, why, I wonder, did MHT continue to purchase services from it in the absence of a response. Mr Bush can hardly cast responsibility onto Mr Tominey or Mr Taylor or any of the other corrupt or incompetent staff.

The letters to suppliers also referred to an online Guide for completion of the survey. Section 7 of the Guide refers to the Bribery Act 2010 and MHT’s maintenance of high ethical standards. It asked the supplier to confirm that it was aware of MHT’s zero tolerance of bribery and to say whether it operated an anti-bribery policy itself. Section 9 of the survey deals with Declaration of Interest. It stated that MHT had to ensure that consultants or contractors are prohibited from making a payment or grant of a benefit to various people including employees. It had to be satisfied that any supplier had answered a number of questions. Question 9.4 is relevant for present purposes: “Is there any information you think Metropolitan should be aware of regarding your company employees with regards to declarations of interests?”.

Mr Bush then contends that the Company “received the questionnaire and would have then accessed the bribery policy. The prohibited conduct directly prevents payments to employees of Metropolitan such as via an off shore bank account. D1-3 inclusive cannot have been in any real doubt about this”. Of course, that contention is right only if Mr Ladhur/the Company actually went to the link and read the Guidance. However, even if they did not, MHT would nonetheless have a very powerful case for saying that Mr Ladhur must have known that bribery was prohibited and that, if Mr Ladhur/the Company were making payments to Mr Taylor in order to obtain business, that would be serious impropriety on their part. It is a very different matter, however, whether Mr Ladhur/the Company can be taken to have known of any obligation on the part of Mr Taylor to disclose their relationship as friends and joint investors in property. It is also open to question whether, had the Company answered the survey, question 9.4 would have required it to reveal that relationship.

After reviewing MHT’s policies concerning bribery and conflicts of interest, Mr Bush concludes that Mr Taylor and Mr Ladhur/the Company were aware “of their obligations with regard to not conducting a relationship beyond that of an arm’s length supplier and purchaser and that it was entirely inappropriate for Mr Taylor to be receiving money, or other benefits, from [the Company] particularly where the source of that money, being [the Company’s] profits, was predominately Metropolitan”.

Mr Ladhur’s evidence in Ladhur 6 is that he does not recall receiving or seeing the letter which Mr Bush says was sent, noting that there is no copy in the evidence of the letter addressed to the Company itself. He says that he was not aware of the survey to which Mr Bush refers. I cannot, of course, resolve this issue on the present application; I proceed on the basis that MHT has a good arguable case for saying that the Company received the letter and was aware of the link.

Mr Bush gives evidence that Mr Taylor managed Oracle internally within MHT and managed the interface with the Company, a proposition supported by several witnesses on behalf of MHT. Mr Taylor had control over the scope and costs of Oracle-based projects. As he puts it, “Mr Taylor set the resource requirement and the cost at the outset and when accepted it was this that determined the cost”.

For the present purposes, I proceed on the basis that Mr Taylor’s role was as described by Mr Bush and others suggest, although it remains open, of course, to Mr Ladhur and the Company to demonstrate otherwise at trial. But I accept that only in relation to Oracle-based projects. I do not consider that the involvement of Mr Taylor in non-Oracle based work, in particular Oneview, is established sufficiently for the purposes of an application for a freezing order. Further, although Mr Taylor must be taken as having the major Oracle-based role internally, his control and management of the relationship with the Company is to be seen as the interface with the Company’s consultants on the ground. There is no challenge by MHT to Mr Ladhur’s evidence that he (and to some extent Mr Americanos) dealt with other senior management.

Mr Bush comments on a number of specific projects.

Supplier Rationalisation Portal. Mr Bush’s evidence does not really add anything to Hatchman 3. Like Mr Hatchman, he sees £41,000 as an overpayment for this database. He did not see any evidence of a completed portal but notes the claim by Mr Ladhur and the Company that it was completed before he was in post. He states that prior to this appointment he was aware of Oneview and that Mr Tominey was pushing it forward. “I saw it” he says “as little more than a fancy Excel spreadsheet”. This is an entirely new criticism of the Company and did not feature in the application before Birss J.

Office Lease Portal. Mr Bush says that he did not see any evidence of the Portal having been designed or delivered and could not see any value in it. There was no visibility of the portal and no-one was using it. He would not have authorised £20,000 for this solution. He refers to email correspondence which he says supports this. In fact, the emails do not go that far. What they show is something rather different. The thread starts with an email dated 26 June 2013 in which Mr Bush asks Mr Varley (of MHT) about an item in his “issues register” which related to the Company. It identified a Company-hosted Oneview platform for a database for leases and a starter licence for Oneview software hosting. The “issue” suggested that it might be possible to end the agreement and use an existing MHT tool. He set out the issue in full and asked whether Mr Varley still used the service and whether he was still paying for it and “if still live, please just confirm you [sic] next steps…”. Mr Varley replied that he was not aware of it adding “OK the view from my guys is the following: Pauline was not aware of it. Rute does have a log in but does not use it”. Mr Bush then asked Mr Taylor to enquire of the Company whether this service it developed for Tanem Mehemet was still active and whether MHT was still being charged; and if so, Mr Taylor was to give immediate notice of termination.

Mr Taylor duly emailed Mr Muthiah at the Company:

Mr Muthiah confirmed that to be the position.

This email correspondence is not, in my view, supportive of the conclusion that what has been referred to as the Office Lease Portal was not provided by the Company. Nor is it supportive of Mr Bush’s further proposition that these emails evidence that Mr Taylor was the key contact in terms of the Oracle Applications Team and the Company and that he was in control of the relationship between MHT and the Company although the emails are perfectly consistent with that proposition.

HP Leasing Assessment and Fleet Car Leasing. Mr Bush did not see evidence of completed portals. He did not come across them in the handover when he took up his post.

Telecom and Monarch Assessment. Mr Bush acknowledges the existence of the project but contends that the solution fundamentally missed the point in that the failures arose because the cost codes used at the start were wrong, which risked utility costs being assigned to wrong schemes, rents and leasehold charges. When he was appointed, he focused the team on getting the right cost codes; getting this right resolved the problem. He accepts that some effort was put into the project but was focused on trying to solve the wrong problem and therefore costs were wasted. Mr Taylor was managing the project as it related to Oracle.

This is an entirely new criticism which was not raised before Birss J. It does not now appear to be challenged that work was done (albeit overpriced) or that the Company was requested to carry it out. That it was requested may demonstrate incompetence, but is not, in itself, an indication of dishonesty.

i-supplier. Mr Bush states that, in approving the invoice, he was entirely reliant on information provided about the work undertaken. Although he says that Mr Taylor was key to the project, I note that the information to which he refers was actually provided by Mr Robertson in an email dated 24 January 2012.

Smart Forms. Mr Bush’s evidence is concerned with the 2013 Smart Forms project which Mr Ladhur contends, but Mr Hatchman contests, was an entirely different project from the 2011 Smart Forms project. Mr Bush says that the later project was presented to him by Mr Taylor as a potential solution for the problems it sought to address. He did not present it as something which had been done by the previous procurement team and which had already been paid for once. He presented it as a new project and a new solution. It was not, in any case, delivered. Mr Bush says that he took responsibility and resolved, in large part, the problems without using Smart Forms.

Report bursting and requisitioner reassignment, MDS Invoice receipting. I have already dealt with Mr Bush’s evidence under these headings above.

I do not propose to review all of Mr Payne’s evidence. The important points which emerge are these. First, he understood the Company to be an arm’s length supplier and had no idea that the relationship between Mr Taylor and Mr Ladhur went beyond that. Secondly, Mr Taylor was a senior manager within MHT and it was he who managed and controlled the relationship between MHT and the Company (not only in relation to Oracle-related matters). Thirdly, the friendship between Mr Taylor and Mr Ladhur was hidden from the Company and had it known of the full relationship (close friendship, joint investment in Spanish properties, joint Spanish bank accounts, payments (to Mr Taylor) from the Company for consultancy work carried out by the Company for MHT, payment of School fees by the Company), disciplinary action would have been taken and Mr Taylor would have been dismissed. He does not accept as adequate Mr Ladhur’s and Mr Americanos’ suggestion that Mr Ladhur did not consider the friendship to be relevant. He contends that the fact that Mr Taylor set up an off-shore company to receive funds from the Company demonstrates the concealment of the true relationship.

Mrs Hammond has made a witness statement dated 7 May 2015 (“Hammond 1”). She was a senior HR manager (Executive Director of People and Resourcing) at MHT until August 2014. She gives evidence about Mr Taylor’s role at MHT. Her evidence is consistent with that of Mr Hatchman, Mr Barden, Mr Payne and Mr Bush to the effect that Mr Taylor was responsible in a majority of cases for commissioning work from the Company. Her evidence, like theirs, is inconsistent with that of Mr Ladhur and with Mr Taylor’s Defence concerning the limited scope of Mr Taylor’s responsibilities. She, like other witnesses, is clear that Mr Taylor was responsible for managing the relationship between MHT and the Company. She reiterates the importance of disclosure of relationships with contractors and, like Mr Payne, is firmly of the view that had Mr Taylor’s connections with Mr Ladhur been known to MHT, there would have been a case for summary dismissal for gross misconduct since he had undertaken paid work for the Company without MHT’s approval. Her evidence is that, had the friendship between Mr Ladhur and Mr Taylor been discovered, it would by itself have resulted in the immediate removal of Mr Taylor’s involvement and the most likely outcome would have been termination of the Company’s contract.

Rommel Pereira has made a witness statement dated 22 May 2015 (“Pereira 1”). He was the Chief Operating Officer of MHT between September 2005 and September 2010. He too gives evidence about Mr Taylor’s role which again demonstrates far greater responsibility for the relationship with the Company than Mr Taylor and Mr Ladhur accept.

Mr Pereira does not accept Mr Ladhur’s description of him as Mr Ladhur’s “old tutor” which he considers to be suggestive of a relationship which did not really exist. In fact, Mr Ladhur merely said that he had been a supervisor, that is to say on a particular project. Mr Pereira goes on to explain that he was a “distance coach” to a number of CASS MBA students and this was not special or exclusive to Mr Ladhur. His recollection is that Mr Taylor recommended that he should meet Mr Ladhur and it was only on meeting Mr Ladhur that he remembered him as one of that intake. Following that meeting, he delegated further involvement to Technology and Procurement to ascertain whether the Company was an appropriate supplier to work with. He had no further involvement and was not, therefore, influential in the decision to work with the Company. The relationship was not initiated “higher up” (the words used by Mr Ladhur), the implication of Mr Pereira’s evidence being that it was initiated by Mr Taylor. However, even if Mr Taylor provided the initial contact, there is no evidence to suggest that he played any other role in the Company obtaining its initial business with MHT.

I gain no assistance from Pereira 1 [5.5] and [6] where Mr Pereira expresses astonishment about a number of matters. Why he should be astonished that, for instance, Mr Ladhur and Mr Taylor had Spanish property investments (acquired before any relationship between MHT and the Company) or payments for private school education I have no idea. It is a matter for him but of no evidential value to me. Nor am I assisted by Mr Pereira’s own assessment concerning impropriety and conflicts of interest, matters which are for the court to determine.

Carl Wicks has also given evidence in a witness statement dated 22 May 2015 (“Wicks 1”) consistent with other MHT witnesses about the extent of Mr Taylor’s role in MHT and to the effect that Mr Taylor manages MHT’s relationship with the Company. He relates one example of what, on its face, seems a rather questionable arrangement concerning Ian Pottinger, the detail of which I do not propose to relate but which can be found at Wicks 1 [12] to [14].

Karen Lynch has also given evidence about Mr Taylor’s role. She is able to say that Mr Taylor was the IT manager for the Oracle development and support team when she joined MHT in 2005. She explains that his role was expanded during a restructure in 2011 so that he was managing applications support for both the Oracle and the Housing Systems environments. They were part of the same IT management team and, accordingly, she interacted with him regularly. So far as she is aware, Mr Taylor dealt with the day-to-day management of the relationship with the Company.

The final witness statement on behalf of MHT to which I wish to refer (“Kutshwa 1”) was made by Helena Kutshwa on 1 June 2015. Currently the Management Accountant for Central Services, she joined MHT in December 2007 to undertake an administrative role in the Accounts Payable team. She liaised regularly with Mr Taylor because he was one of the budget holders for a cost centre within IT services. She also worked with him as part of the Oracle Release 12 implementation. She relates that in late 2013 she became concerned about the amount of money which MHT was spending on the Company’s services. The support costs for Oracle provided by the Company were very high when compared to how much was being paid for Oracle itself. “This suggested to me” she says “that either Oracle was not working well for Metropolitan or that we were being overcharged for the support services provided by Informatrix”. She raised her concerns with her manager, Mr King and also spoke to Mr Hatchman.

The mass of responsive evidence from MHT, raising new points to some extent and coming quite late in the day, has resulted in further evidence being produced on behalf of Mr Ladhur and the Company. Although the directions for evidence did not contemplate service of such evidence, I have decided to admit it and so to take account of it. The evidence is to be found in further affidavits from Mr Ladhur (Ladhur 6) and Mr Americanos (Americanos 3) as well as a first affidavit from Mr Muthiah (Muthiah 1).

Ladhur 6 was sworn by Mr Ladhur on 19 June 2015. It is a long affidavit. I highlight some material points in the following paragraphs.

While accepting that Mr Taylor was responsible for Oracle applications, Mr Ladhur reiterates that he was not responsible for all areas in which the Company was concerned. Thus the work on Oneview was not within Mr Taylor’s responsibilities. Mr Ladhur thus contends that this is particularly relevant because all but two of the ten alleged “projects not delivered” were Oneview solutions.

In section D of Ladhur 6 Mr Ladhur has more to say about the relationship between Mr Taylor and the Company. He reiterates something said in Ladhur 5 which was not challenged, namely that, in terms of decision making, he had regular meetings with the IT department without Mr Taylor being present; his contacts were generally at a higher level within MHT and all of the participants were aware of the costs and the projects being worked on. Further, his evidence is that Mr Taylor was not keen on offshoring or the use of Oneview; and yet, in spite of his opposition, this work was given to the Company.

Mr Ladhur also refutes the suggestion made by Mr Mitchell that Mr Ladhur had denied that Mr Taylor was the primary source of contact for the Company. He points out, correctly, that what he said (see Ladhur 5 [44]) was that the contact with Mr Taylor was not through him but through the Company’s delivery managers; and points out also that he acknowledged that Mr Taylor had a lot of contact with the Company in relation to Oracle applications. It is fair for him to draw attention to this distinction.

In section E of Ladhur 6, Mr Ladhur deals, again at some length, with the “Allegedly Concealed Payments” namely matters relating to the Spanish properties, Coronet, School fees and Sundial, noting that MHT itself had nothing to add in relation to School fees and Sundial in its responsive evidence. There is, in my view, nothing whatsoever to give rise to any suspicion in relation to the payment to Sundial. I do not consider that MHT has demonstrated a good arguable case in relation to the payment to it, being payment 1 on Mr Barden’s list.

In section F of Ladhur 6, Mr Ladhur turns to the “Questionable Payments”. I have anticipated Mr Ladhur’s responsive evidence under a number of headings already. I do not need to say anything more at this point.

Supplier Rationalisation Portal. It is to be noted that both Mr Hatchman and Mr Bush now seem to accept that some work was done on this Portal. But they say that the cost of the Portal was excessive. It seems to me that Mr Hatchman bases this assertion on the proposition that an alternative (and cheaper) solution was available using Excel so that the Oneview solution was not needed. Accordingly, it is not so much that the cost of the Oneview solution was excessive; rather it was that Oneview was an inappropriate tool and the cost should not have been incurred. Mr Bush puts it slightly differently. He sees the cost as excessive “for this database” but, as with Mr Hatchman, this conclusion is based on the proposition that Oneview was no more than a fancy Excel spreadsheet.

In Ladhur 5, Mr Ladhur had referred to a considerable amount of documentation to explain that the Portal was delivered and that a lot of work had to be done. He did not meet a criticism that the Oneview solution to the problem was inappropriate because that allegation had not been made. MHT has not, in its responsive evidence, addressed the documentation to which Mr Ladhur referred, other than, in effect, to rely on Mr Tominey’s involvement as if to show that the project was thereby infected with dishonesty. In Ladhur 6, Mr Ladhur explains why the Portal (which was for use by a number of users inside and outside MHT) was far more sophisticated than MHT now suggests. Having discussed the matter with Mr Muthiah (the person more qualified on technical matters within the Company), Mr Ladhur gives reasons why the solution could not have been provided within Excel. Assuming that Oneview was an appropriate solution, there is no evidence to suggest that £41,000 was an excessive price for the work actually done.

Although, of course, this is not a trial – or even a mini-trial – of the suitability of Oneview, I do not consider that the areas of dispute in relation to the Supplier Rationalisation Portal indicate any impropriety let alone dishonesty on the part of Mr Ladhur or the Company. Mr Taylor does not even seem to have been involved so the relationship between him and Mr Ladhur is not material to this aspect of the claim to a freezing order.

Office Lease Portal. MHT has not engaged in any helpful way with Mr Ladhur’s evidence about this Portal. Mr Hatchman attempts to dispose of Ms Mehmet’s involvement by saying that she had been described to him by colleagues as someone who “was not competent in her role as Facilities Manager and was very much part of Bernard Tominey’s inner circle”. I decline to pay any attention to that description of Ms Mehmet. The source of the criticism is not identified nor is there a shred of supporting evidence (eg even one example of incompetence) given. If by describing her as one of Mr Tominey’s inner circle it is suggested that she is dishonest and not be trusted, such a suggestion should not be made without clear evidence to support it. If it is not suggested, the fact of her being part of that inner circle is irrelevant.

Significantly, there is nothing in MHT’s responsive evidence which directly supports the proposition that the Office Lease Portal was not carried out. At Hatchman 3 [50], Mr Hatchman explains Mr Bush’s role in clearing up “the mess that Bernard Tominey had created”. This included “closing down areas of corrupt or wasted expenditure. In my view, the Office Rationalisation Portal probably falls into both categories”.

Mr Hatchman is entitled to his view; but his view is not evidence. As I understand MHT’s case before me (matters may be different by the time of trial), it is not alleged that Mr Ladhur or the Company (or even Mr Taylor) were involved in collusive dishonest conduct with Mr Tominey (rather than with Mr Taylor) aimed at defrauding MHT. In particular, there is no allegation that Mr Tominey was receiving kickbacks from the Company. Why, one might ask, in the absence of such improper and dishonest conduct, would Mr Tominey want to assist Mr Ladhur and the Company to the extent of defrauding MHT. It is difficult to think of an answer.

Mr Bush says that he saw no evidence of the Portal. He nonetheless had the email correspondence which I have referred to at paragraph 271 above and instructed Mr Taylor to terminate the licence. The email from him dated 26 June 2013 appears to recognise the existence of a database for leases (ie what is now referred to as the Office Lease Portal). It is not entirely easy to reconcile his statement with the email.

The important point here, however, is how MHT’s case has changed. Before Birss J the case was that the Office Lease Portal did not exist: thus Mr Hatchman’s table states “We do not have an Office Lease Portal” the clear implication being that MHT never had one. Mr Bush now says that the concept was little more than a database of leases and that he would not have authorised the project. Mr Ladhur disagrees with that description. The Company provided “a corporate Estate Management System which was a light version of a property management system used in the property industry”. There may disputes about the appropriateness of the Office Lease Portal, but, as with the Supplier Rationalisation Portal, I do not consider that the areas of dispute indicate any impropriety let alone dishonesty on the part of Mr Ladhur or the Company.

HP Leasing Assessment and Fleet Car Leasing. Mr Hatchman’s table, it will be recalled, asserted that the HP Leasing Assessment and the Fleet Car Leasing projects were ones where there was no reason for the Company to be involved. I have dealt with Mr Ladhur’s response at paragraphs 185ff above. Mr Hatchman has clarified his evidence in Hatchman 3 [51] and [52], his point being that the Company did not need to be involved in the project and he did not intend to say that the Company was involved in the leases themselves. Neither Mr Hatchman nor Mr Bush address Mr Ladhur’s evidence that these portals were web-based interactive spreadsheets produced following requests from Mr Nicoletti. There is no evidence, therefore, that having had the explanation which Mr Ladhur provided, MHT still considers that these are areas where the Company should have had no involvement. Mr Hatchman relies on Mr Nicoletti being corrupt; but there is no allegation that Mr Ladhur or the Company were in any way aware of that or involved in any of Mr Nicoletti’s unspecified nefarious dealings. I do not consider that MHT has made out a good arguable case on these issues.

Telecom & Monarch Assessment. MHT has not responded to Mr Americanos’ evidence about this project or commented on the emails which he exhibits. Mr Ladhur’s position is that the project was undertaken at the request of MHT and he considers that the Company was entitled to be paid for what it had done. There should have been a PO in place but there was not. He regards this as a fault within MHT. Given Mr Hatchman’s own description of the unsatisfactory non-adherence to procedures within MHT, it is not entirely surprising to me that suppliers (including the Company) might sometimes be requested by staff to undertake work which had not been properly authorised and subjected to a PO. It may or may not be correct that such a supplier would then find itself unable to recover for the work done. But I see nothing improper in a supplier seeking to recover for the work, nonetheless. Provided that the work was requested, and was not known to the Company to be unnecessary, I see nothing dishonest or indeed improper in Mr Ladhur having sought to recover for the work which the Company had done at the request of MHT.

There is, however, some reasonable concern on the part of MHT about the way this was actually dealt with. Mr Robertson clearly considered that it was within the scope of Mr Tominey’s authority to authorise the payment and both he and Mr Tominey must have considered that MHT should pay for the work done notwithstanding non-compliance with procedures. But Mr Robertson must have appreciated that others in MHT’s management might take a different view. That is one explanation for saying “we don’t want to get Guy involved with approvals”. Another explanation might be that, although Guy might well approve the payment, Mr Robertson did not want the hassle of having to explain what had happened and receive criticism for lax observance of proper process. Yet another explanation might be that he knew that Guy would not approve, and that Mr Tominey would not then be able himself to approve the payment.

In my view, MHT has an arguable case for saying that there was impropriety on the part of Mr Robertson and for saying that Mr Ladhur knew that that was the case so that the Company should not have accepted payment without Guy’s authority. But even if that is correct, it is not something which, by itself, would justify an inference that Mr Ladhur would dissipate his assets in the absence of a freezing order although it is certainly a point which needs to be taken into account in the exercise of my discretion.

Mr Bush has taken a different line from Mr Hatchman. He acknowledges the existence of the project but contends that the solution fundamentally missed the point in that the failures in the system arose because the cost codes used at the start were wrong, which risked utility costs being assigned to wrong schemes, rents and leasehold charges. When he was appointed, he focused the team on getting the right cost codes; getting this right resolved the problem. He accepts that some effort was put into the project but that effort was focused on trying to solve the wrong problem and therefore costs were wasted. Mr Taylor was managing the project as it related to Oracle. If Mr Bush is right, it may demonstrate incompetence on the part of the Company and its employees and consultants. However, on Mr Bush’s approach, there was also incompetence within MHT which did not rest with Mr Taylor. Mr Bush’s approach shows that the problem was not with the IT but with the way in which the relevant non-IT staff were using the facility. I do not see how the Company can properly be made responsible for that.

MHO Work Parcel. There has been no response to Mr Ladhur’s extensive evidence about this project save that Mr Bush says that he was not aware of it. Mr McLennon has not given evidence to support the assertion that he was pressured into continuing the project by Mr Taylor. On the evidence before me, I do not see how MHT can seriously maintain that the project did not proceed; and in the context of an application for a freezing order, a short statement that Mr McLennon was pressurised by Mr Taylor is, in my view, simply not good enough to lend support to an allegation of dishonesty against Mr Ladhur and the Company. If the emerging service/product was useless, that is a different matter and may give rise to a financial remedy. But that is not at present the claim which MHT makes. Accordingly, I do not consider that MHT has shown a good arguable case on this issue.

Additonal DBA Checks. There has been no response to Mr Ladhur’s evidence on this topic save for Mr Bush saying that he was not aware of the project. However, Mr Hatchman’s complaint in his table is not that the work was not delivered but that overnight and weekend service of the database is not required by a business such as MHT’s. In saying that, Mr Hatchman has relied on a “colleague within our in-house team, Andrew Parsons”. I am told nothing about Mr Parson’s role and responsibilities or his knowledge of the operation of the business. Mr Hatchman has not suggested that the work was not done or that the cost was excessive. Given Mr Ladhur’s evidence about why overnight and weekend service was necessary, and given the absence of any evidence to refute that – Mr Hatchman has not even obtained Mr Parson’s comments, or, if he has, I have not been told of them – I do not consider that MHT has demonstrated a good arguable case to support the grant of a freezing order. This issue does not, therefore, assist MHT in its application for a freezing order.

OBIEE (£103,000). From the previous discussion of this topic, it can be seen that MHT’s case is not only that the work was not done, but that there was a serious element of double-charging. In other words, MHT had paid for work done in 2011 which was repeated and charged for again in 2013/14.

I am not clear whether MHT’s case is now that no work was done on what Mr Ladhur describes as the first project in 2011 or whether it is that the project was simply not delivered. The former would be very difficult to maintain in the light of the proposal which I come to in the next paragraph of this judgment. Assuming that it is the latter (relying on Mr Taylor’s saying that OBIEE was still “in the box”), Mr Ladhur contends otherwise. He draws attention to Bush 1 [5] where Mr Bush appears to accept that a licence fee was paid and that “some resource may have been expended”. However, I should add that Mr Bush also said that OBIEE was not operational within MHT and that Mr Taylor was responsible for the project.

Mr Ladhur draws attention to documents exhibited by Mr Hatchman. One of those is a document entitled “OBIEE Background and Proposal”. This was a proposal from the Company to MHT relating to the second project. In the section titled “BACKGROUND” is to be found the following:

And in the section headed “Proposal to Productionise OBIEE/BI Apps” is to be found the following:

This shows, Mr Ladhur submits, that the first project was in fact carried out (in 2011). It is certainly powerful evidence, which MHT’s current evidence is wholly inadequate to begin to displace, that basic configuration was implemented 18 months previously with additional configuration being effected for the demo to the Finance Department. The proposal is also compelling evidence that Mr Ladhur and the Company, at least, were not hiding the fact that some previous work had been carried out whatever Mr Taylor may have said to Mr Hatchman. The proposal which Mr Hatchman authorised and which Ms Mussenden approved (see below) was clearly building on work which had already been done and no-one reading the proposal would be entitled to assume that previous work had been carried out free of charge.

Now, whether the work for which MHT paid in relation to the first project met a contractual obligation for which the Company was entitled to payment or whether that work was intended to go beyond the work described in the proposal (ie basic configuration and additional basic configuration for demonstration purposes) before an entitlement to payment arose, is not disclosed in the evidence so far before the court. I have absolutely no way of knowing whether £65,000 was a realistic sum to reach the stage which was reached or, if it was, why authorisation for further expenditure was not immediately forthcoming following the positive reaction to the demos stated in the proposal. As Mr Ladhur points out, the documentation is on MHT’s “N” drive to which the Company has no access; MHT have not provided the relevant documentation or stated that none exists.

As to the second project, Mr Ladhur asserts that Mr Hatchman himself appears to accept that some work was carried out. Thus, he says that Mr Taylor was heavily involved in the second project. Moreover, Mr Hatchman himself states that he sought authority for the cost of the project from Ms Mussenden and exhibits an email dated 23 October 2012 in which he states that he has discussed the Company’s fee for the project with her and that she had approved the project.

The work required was set out in the proposal and the email. I should set it out as it appears in the proposal (and as is repeated in the email):

OBIEE requires an upgrade/patching to the latest stable release

BI Apps requires an upgrade/patching to the latest stable release

Environment Setup of OBIEE Tool

Configuration of BI Apps modules

Configuration of Security

Data ETL

Testing on Dev and UAT

Deployment

Handover

Mr Burton submits that there is no admission that the second project was completed although Mr Ladhur’s evidence is that it was completed and handed over to MHT in the first quarter of 2014. There is no evidence, as far as I am aware, from MHT that the project was in fact not delivered. It was clearly authorised by MHT and Mr Ladhur says it was delivered. For the purposes of the present proceedings, I am not prepared to proceed on the basis that it was not delivered.

MHT’s complaint must be restricted for present purposes to the allegation that the first project and the second project overlapped with consequential double charging by the Company. That is something which can only be established at trial. But given my conclusion that the earlier work was not hidden from MHT, appearing from the proposal as I have explained, there can be no complaint that the Company misled MHT and is therefore directly involved in dishonesty.

Mr Ladhur returns to the issue of “Projects delivered but overpriced (£230,000)” in section H of Ladhur 6. He had been critical in Ladhur 5 of Mr Hatchman’s ability to estimate a reasonable cost for IT projects, to which Mr Hatchman’s response was to say that his experience qualified him to give such estimates. In that context, Mr Ladhur draws attention to the following: In Hatchman 1 [15], Mr Hatchman states in relation to MDS Invoice Receipting that the cost of £17,500 was vastly excessive for this work. But then, in Hatchman 3 [74], he states that MHT also spent a similar sum on a second consultant to produce the system resulting in a total payment of over £40,000. So either the sum charged by the Company was not vastly excessive or the other supplier was also charging vastly excessive sums. There is force in Mr Ladhur’s point and I do find this aspect of Mr Hatchman’s evidence unsatisfactory.

I-Supplier. Although Mr Ladhur has an explanation for his use of the phrase “who is the next victim”, I can appreciate why MHT views this with some suspicion. It is a self-serving explanation and can only be tested in cross-examination. I certainly cannot resolve the truth or otherwise of the explanation on this application.

Mr Ladhur addresses Bush 1 [55] where Mr Bush had said that he was shocked when told by Mr Taylor that the i-supplier project would need to be almost started again because the necessary user skills within MHT had been lost. This has no direct relevance to the overcharging claim since the project for which the Company was paid had long since been implemented. In any case, Mr Bush refused to authorise any further expenditure (a fact which shows that Mr Taylor was subject to some control and supervision at least after Mr Bush’s appointment).

It is also the case that MHT’s responsive evidence fails to address Ladhur 5 [244] and [245] referring to Mr Roszkowki’s involvement. He had identified I-Supplier as the most appropriate module for MHT as it was an Oracle product. He did not suggest that it would be simple to implement and recognised the cost would be around £80,000 with £10,000 being spent on Oracle on Demand to set up the software. Again, this is a matter which can only be resolved at trial, but it is not easy to see how a charge of £62,000 can be said to indicate dishonesty in the light of perfectly open correspondence between the Company and MHT (in the person of Mr Roszkowski). If it is suggested that Mr Roszkowski was yet another of MHT’s corrupt and/or incompetent employees, there is no evidence at all to link Mr Ladhur with such corruption or incompetence.

Smart Forms (£13,150). As I have already said, I regard Mr Ladhur’s explanation of the 2011 work and its cost as convincing and nothing said by Mr Hatchman in Hatchman 3 causes me to alter that conclusion. Indeed, Mr Hatchman says nothing at all about the 2011 project or Mr Ladhur’s evidence about it. In relation to the 2013 work, Mr Hatchman explains that the drivers behind it were the same as the drivers behind the 2011 work. There was, he says and contrary to Mr Ladhur’s assertion, no imperative to perform the work because of changes to reporting coding structures. “This apparent duplication” he states “leads to the suspicion that Metropolitan was overcharged i.e. the same project was delivered and paid for twice”. I agree with Mr Ladhur that it is not clear from Mr Hatchman’s evidence, that the work was not caused by “changes to our coding structures”, whether he is saying that there were changes but they did not cause the work, or whether he is saying that there were no changes. Either way, it is the case that Mr Hatchman refers to some work being undertaken which work involved the creation of a new Smart Form; and he puts MHT’s case no higher than that there is an apparent duplication leading only to a suspicion of overcharging. His use of the words “apparent duplication” also begs a rather large question. Whilst the drivers for the two pieces of work may have been the same (a proposition on which I express no view), it does not follow that there was any actual duplication of work and for my part I do not see why there was an apparent duplication either. These are not building blocks in the edifice erected to obtain a freezing order.

GL Detailed Transaction Report (£8500). Mr Ladhur states that there were no complaints at the time. He asserts that the work was designed and built to user requirements and was tested, delivered and accepted by the user at the time. Mr Ladhur correctly points out that Mr Hatchman does not engage in Hatchman 3 with his evidence to explain why the work could not have been done in the short time, one day, which Mr Hatchman asserted in his original table; nor does Mr Hatchman explain, or justify, his assertion in Hatchman 3 that the work should not “have taken much time at all to produce”. Importantly, he does not challenge Mr Ladhur’s evidence at Ladhur 5 [255] and [256] that (i) MHT decided to change its accounts structure and budget responsibilities (ii) that Oracle delivers a standard transaction report (iii) that the change in structure meant that the coding had to change and (iv) that the organisation structure of MHT was not supported in Oracle. Nor does Mr Hatchman comment on the comparable produced by Mr Ladhur to demonstrate the reasonableness of the Company’s charge. I do not consider that Mr Hatchman’s simple assertion that the work should not have taken the time claimed by the Company demonstrates a good arguable case in the light of the unchallenged evidence of Mr Ladhur. In that context, it is not enough, in my judgment, to say, as Mr Burton does, that Mr Hatchman’s original evidence shows a good arguable case and that Mr Ladhur has not displaced it with evidence which is incontrovertibly correct. Mr Hatchman’s original evidence is far too tenuous for that.

Component Accounting (£21,500). As already set out, Mr Ladhur explains the involvement of a consultant from Real Asset Management. One of the POs in relation to the Company’s involvement refers to 15 days “to support RAM”. In the light of that alone, it is very difficult to understand how Mr Hatchman can continue to contend (if he does) that the project should have taken 2 to 3 days.

As to Mr Hatchman’s assertion that the project related to an interface file and nothing more, Mr Ladhur points out that interface files are not always simple. The Company consultant had this work to do as well as assisting the Real Asset Management consultant. There may well be a dispute about the appropriate amount of time actually spent (and thus on the level of charging), but I do not consider that the case alleged by Mr Hatchman before Birss J – on which MHT relies in relation to the freezing order – is sustainable. Moreover, taken by itself, I do not consider that a dispute about the appropriate amount of time actually spent is any indication of improper conduct on the part of the Company.

Serengeti support (£46,000). Mr Hatchman does not contest Mr Ladhur’s case that the Company did not undertake the scanning activity. He changes tack, and thus departs from MHT’s case in support of the freezing order. His position now is that it is not clear why it needed an Oracle Database Specialist to point these documents to the right part of the Oracle system: the task sounds to him like menial and repetitive work which a junior IT team member should have the ability to perform after some initial guidance. He does not explain the basis on which he makes that assertion. He does not address Mr Ladhur’s evidence that someone with Oracle expertise was required. I do not consider that MHT has demonstrated at this stage a good arguable case on this issue.

Intercompany. Apart from referring to Mr Taylor’s statement that the project was just a matter of flicking a switch, Mr Hatchman does not address Mr Ladhur’s evidence about what the project involved. MHT does not produce any evidence to suggest that Mr Ladhur is incorrect about what he says in Ladhur 5 [281] (significant configuration required, and need for co-ordination and analysis between IT and Finance Departments, together with configuration and testing in multiple environments). I do not consider that MHT has demonstrated at this stage a good arguable case on this issue.

In section H7 of Ladhur 6, Mr Ladhur responds to Mr Hatchman’s evidence, presenting a different case from that presented to Birss J. My view is that much of what Mr Hatchman says is of no, or only marginal, significance to the present application. What is more significant is what he does not say. In particular, he does not address what Mr Ladhur said in Ladhur 5 [288.2] about Compliance reports, namely the need for substantial testing and the fact that output had to be signed off by key business users.

Further, Mr Ladhur explains that the time estimate would have taken into account the amount of time it would take the Company’s consultants to get the various departments to agree the roles and responsibilities. The application was business critical so that it would have been necessary to follow a strict process of testing in multiple environments.

As to Mr Bush’s assertion that the project did not amount to 56 days of work, Mr Ladhur reiterates that Mr Bush does not have any relevant technical expertise so cannot speak to the amount of time required to complete this project. Instead, Mr Ladhur places reliance on what another of MHT’s witnesses, Mr Mitchell, says, namely that a PO for 56 days was raised with no suggestion that the time was inappropriate. However, it is only right for me to add that Mr Mitchell says that the PO was raised on the basis of resource requirements provided by Mr Taylor and Sailen Shah who reported to him. Nonetheless, it is surprising to me that, given that Mr Mitchell was giving evidence at all, he did not express his view on the appropriateness of the 56 day allowance in the light of his qualifications as an IT expert.

In my view, MHT’s evidence on this issue is, currently, very weak. Mr Ladhur has met the new case raised by the weak evidence. If he is right, then there is an explanation for the time claimed. As I have pointed out, important parts of what he says are not challenged at all even by assertion. Had evidence been produced which challenged the so far unchallenged evidence concerning the time taken for testing and involvement of MHT personnel, matters might be different. But as matters stand, there is no evidence from MHT that, even taking into account Mr Ladhur’s points, the time taken was excessive. I do not consider therefore that MHT has demonstrated at this stage a good arguable case on this issue.

In Ladhur 6 [123] to [130] Mr Ladhur addresses Mr Barden’s evidence about Infroprop. Mr Americanos deals in more detail with this in Americanos 3 [19] to [25]. Mr Ladhur explains that Mr Tominey had no interest in D&AS and was never a director or shareholder of D&AS. There is, I agree, no evidence that Mr Tominey was ever a director or shareholder, but that is not Mr Barden’s point. His point is that the documents disclose a relationship with Mr Tominey going beyond that between them arising out of his role at MHT.

Mr Ladhur explains that, before the creation of D&AS and before any discussion with others, Mr Robertson and he had lengthy discussions about whether the Supplier Rationalisation Portal was practical to use elsewhere. Mr Ladhur says that he thought Mr Robertson was an independent consultant and did not realise that he was an employee of MHT. Mr Americanos says the same thing, as an independent consultant, there would have been no objection to his entering into other transactions. Mr Ladhur gives an explanation of the relevant events concerning D&AS. If it is accepted at trial, it provides an innocent explanation. Broadly, the idea was to set up a portal for RSLs. The Company had implemented the Supplier Rationalisation Portal for MHT and was looking to provide a cloud service offering to other RSLs. As Mr Ladhur puts it “We wanted many RSLs to join, with the intention that they could see each other’s suppliers and then achieve volume discounts by making collective orders with suppliers, who would themselves have signed up to the portal”.

Mr Ladhur says that this portal was mentioned to Mr Payne (at the time, the CEO of MHT) who was interested in the idea. He refers to a diagram produced at a meeting with Mr Payne which he says shows that they were open with MHT about their involvement with Notting Hill Housing Trust (“NHHT”).

Mr Ladhur accepts that the intention was that Mr Tominey would be involved as well, as he had the relevant relationships with suppliers. His case is that, if the project had proceeded, there would have been a contract with Mr Tominey to contact suppliers “but only at a later date and on the basis that he had left Metropolitan”. However, the project did not get off the ground because Mr Robertson left MHT, and joined Network Rail; it could not have worked without Mr Robertson’s active involvement to pursue his contacts with RSLs.

Mr Ladhur does not, however, deal with the email correspondence relied on by Mr Hatchman showing a business relationship involving Mr Tominey and a 4-way profit share proposal in relation to a new product which was being considered.

For present purposes, I therefore proceed – indeed I think that this is reasonably clearly established – that there was a relationship between Mr Ladhur/the Company and Mr Tominey which went beyond that which would be found between a supplier and an employee of the person to which supplies are made. However, discussions of the sort which Mr Ladhur accepts took place do not indicate any dishonesty. And although one might be sceptical about whether Mr Tominey might not become involved in the project and obtain financial gain even if he did not leave MHT, there is no reason to think that, if he did so, MHT would somehow be defrauded.

This leads Mr Ladhur on to consider the email dated 14 December 2011 relied on by Mr Hatchman (see paragraph 247 iv) above). He explains that the comment (“should this invoice go to MH?”) was probably tongue in cheek. He may establish that at trial but I am bound to say that it appears to me to be a pretty feeble explanation. In fact, an invoice was not rendered to MHT for this work.

In Americanos 3, Mr Americanos provides a fuller, but not inconsistent, narrative. I do not need to rehearse it all. The important points which emerge are these:

Mr Tominey had no interest in D&AS

Mr Americanos kept Mr Payne up to date about progress with NHHT; he was supportive of the Company using Oneview in that context.

Mr Payne secured the opportunity for the Company to make a presentation to Mrs Hammond and Anieken Umoren (also for MHT). He mentioned the work at NHHT “explaining that we had assisted with a cost reduction exercise, with the involvement of Bernard Tominey”.

At all times “we were open with Metropolitan and about our work with NHHT and the involvement with Mr Tominey”.

He and Mr Ladhur decided that the project was not viable (not least because NHHT was not interested in the new application due to budget/business priorities and staff availability).

D&AS remained dormant until September 2012 with the Company becoming the only shareholder and director.

D&AS was renamed Infoprop following a decision to use the company as the vehicle for a new undertaking focusing on commercial property project management and services.

The final affidavit to which I refer (“Muthiah 1”) was made by Venkatachalam Muthiah on 19 June 2015. I have referred to him already a number of times in this judgment. He was and is the delivery manager at the Company where he is not employed but works as a consultant. He is responsible for making sure work is delivered by the Company. He does not code software himself but is in charge of managing others and is responsible for addressing issues which arise. Although he does not now generally become involved in programming, he has an MBA in IT from Annamalai University in India. He is responsible for development of the Oneview platform and delivery of Oneview applications to the Company’s customers. Muthiah 1 is directed at two matters: POs and the Company’s invoices and the Supplier Rationalisation Portal versus spreadsheets.

Mr Muthiah challenges Mr Hatchman’s evidence that certain invoices issued by the Company pre-date the relevant POs. Mr Muthiah has considered Mr Hatchman’s tables and cross-referenced them against the Company’s records concluding that Mr Hatchman is incorrect.

He does not – he could hardly do so for the purposes of this application – deal with each and every invoice separately in his evidence. But he takes as an example invoice 4143 and demonstrates, conclusively to my mind, that the invoice was actually submitted only after the relevant PO had been issued.

He then explains that he updated Mr Hatchman’s tables (exhibiting the updates) analysing 156 invoices. He then considered in more detail the cases where the PO was issued after the invoice had been emailed to MHT. He breaks this down into 3 categories. He states in relation to category 1 that invoices were sent to MHT after the PO date. That is an error if one looks at the table: the 108 invoices he refers to are ones where the PO date was after the date on the invoice; there is only one of these which was actually sent before the PO date.

It seems to me, therefore, that Mr Muthiah is correct in relation to 107 of the invoices in category 1: these were all sent after the PO had been created. But Mr Hatchman is correct in relation to the remaining invoice in category 1 and all of the invoices in categories 2 and 3.

In Muthiah 1 [15] Mr Muthiah explains that he was the Delivery Manager for the project which meant he had an overview of the work which was being done. He would sit with MHT’s users to understand their requirements. He reviewed documents such as the User Manual. He says that the project took place over 4 or 5 months; he was responsible for the project until MHT signed the User Acceptance Testing Certificate sign off form (exhibited by Mr Ladhur in Ladhur 5). I add that the sign-off was by Mr Tominey.

Whilst accepting that it would be possible for a small entity to use pivot tables (ie a summary page which slices and dices data from detailed data contained within another sheet in the same Excel file), he explains that there are limits to what Excel can do. He lists four constraints which lead to the conclusion that the Excel solution would not have been appropriate. These constraints are:

Oneview operates in real time whereas Excel does not. It automatically looks up Oracle records and does not need any manual updating. Excel would have required manual downloads.

Excel spreadsheet can only be viewed by one person at a time whereas MHT had 40 or 50 users who needed to have access.

Excel cannot deal with millions of records. MHT records included several million supplier data items which Excel could not have dealt with. In addition, it would have been impossible to open such Excel spreadsheets over a network given the size of the files that would be needed.

Oneview was able to restrict the data available to each user; each user had a profile which established the data they could view. To achieve that in Excel would require separate spreadsheets to be established for each use, each of which would have to be separately updated from Oracle.

MHT did not attempt to introduce yet further evidence at a very late stage to contradict what Mr Muthiah says about Mr Hatchman’s suggestion. It might have met with some opposition, and some hostility from me, if it had sought to do so. The state of the evidence on this issue before me is such that I do not consider that MHT has shown even an arguable case let alone one which would count against Mr Ladhur and the Company in relation to a freezing order.

Viewing the many areas of complaint individually, my conclusions are summarised in the following paragraphs.

The allegedly concealed payments, including the kickbacks are these:

Sundial.

Payments made in respect of the jointly owned Spanish properties.

Payments to Coronet.

Payments to the School.

“other questionable payments”.

For reasons already given, I do not consider that there is anything suspicious about the Sundial payment or about acquisition of the Spanish properties or the opening of Spanish bank accounts. Payments 1, 2, 3, 4, 5, 6, 7, 8, 13 and 15 in Mr Barden’s list do not give rise to any suspicion. MHT has not demonstrated a good arguable case that these payments were in any way improper or that they gave effect to a dishonest arrangement between Mr Ladhur and Mr Taylor.

As to the Coronet invoices, a distinction is to be drawn between payment 9 on Mr Barden’s list and the other payments. That first payment, according to Mr Ladhur, related to consultancy work which had nothing to do with MHT’s business. Unfortunately for him, Mr Ladhur has not provided any supporting evidence for that assertion and it is not, for present purposes, a sufficient answer to the good arguable case which I consider MHT has presented. MHT’s case is stronger in relation to the other invoices. In those cases, the work which Mr Taylor is alleged to have carried out was work for MHT so that MHT can say that it should not be paying Mr Taylor for doing work which he should have done, if he was to do it at all, as part of his employment. Mr Ladhur and the Company have not produced any sufficient evidence to demonstrate conclusively that Mr Taylor in fact did the work to which any of the invoices relate.. The issue can, therefore, only be decided at trial.

If the work was done, then Mr Taylor was not receiving a kick-back: that would be a bribe for diverting work to the Company and not payment for work done. The employment of Mr Taylor in breach of contract would not, of itself, be conduct designed to defraud the Company and would not be dishonest in the way that a bribe is dishonest. It ought not to carry much, if any weight, in deciding whether a risk of dissipation is established.

As to the payments of school fees by the Company and Mr Chacko, MHT accepts, as I have said, that the payment of School fees may be legitimate but requires an explanation. I agree that direct payments (ie the ones made by the Company) to or for the benefit of an employee of company by a supplier is something which does require an explanation and that, in the absence of one, there is a justifiable suspicion that something improper is going on. Mr Ladhur has given an explanation; it is one which MHT does not accept and can only be determined at trial. MHT has demonstrated a good arguable case that the Company made these payments in order to benefit itself in its relationship with MHT; and Mr Ladhur’s explanation is not so obviously true that the arguable case is destroyed.

As to the payment of school fees by Mr Chacko, it is apparent that the funds to enable Mr Chacko to make the payments derived from the Company, although Mr Ladhur has explained how, according to him by way of loan, this came about. Mr Ladhur has thus acknowledged that MHT’s suspicion that payments were made to Mr Chacko for Mr Taylor’s benefit (albeit that Mr Chacko is liable to repay the money). Although the case is not as strong as in relation to the direct payment of school fees, I consider that MHT has demonstrated a good arguable case here too.

School fees are covered by payments 10, 12, 17, 18, 19 and 20 on Mr Barden’s list and total around £32,600.

Of the claims under heading “Projects Not Delivered” totalling £227,588, I have already concluded that MHT has not shown a good arguable case in relation to Recruitment Fee, Safehaven, HP Leasing Assessment, Fleet Car leasing, MHO Work Parcel and Additional DBA checks. These account for £45,776 under this heading.

In relation to a number of other claims under “Projects not Delivered”, it is the case that MHT may have financial claims which are not entirely without merit but they are claims where I am satisfied that, on the current evidence, where MHT has not shown anything approaching a good arguable case that there was any dishonesty on the part of Mr Ladhur or the Company. There are the Supplier Rationalisation Portal and the Office Lease Portal. These account for a further £71,813 under this heading.

Of the remaining items under this heading, I have concluded in relation to Telecom & Monarch Assessment (which accounts for a further £7,000 under this heading) that MHT has demonstrated a good arguable case that Mr Robertson was acting improperly and that Mr Ladhur knew this to be the case so that the Company should not have accepted payment without referring the matter higher up the hierarchy at MHT. But, jumping ahead, I have also concluded that this does not justify an inference that Mr Ladhur would dissipate his assets.

That leaves OBIEE, accounting for the largest single claim under this head, £103,000. I have considered this aspect in some detail already. My conclusion can be found at paragraph 324 above namely that MHT’s complaint must be restricted for present purposes to the allegation that the first project and the second project overlapped with consequential double charging by the Company but there can be no complaint that the Company misled MHT and is therefore involved in any dishonesty. As to quantum, MHT has not complained that the price for the second project was excessive other than by reason of the money spent on the first project. The evidence before me is that the first project cost £65,000 plus VAT; that must therefore be the maximum amount of any claim under this head. I should add that, in my judgment, this claim lends no support to the proposition that Mr Ladhur would be likely to dissipate his assets.

Of the claims under heading “Projects Delivered but Overpriced” totalling £230,050, I have already concluded that MHT has not shown a good arguable case in relation to Smart Forms, GL Transaction Report, Serengeti Support, Intercompany, Report Bursting and Requisitioner Reassignment. These account for £126,050 under this heading.

There are some other claims where there may be disputes about the amount which it was appropriate for the Company to claim and recover (so that there is a good arguable case about what is due or perhaps can be recovered) but where, in my view, MHT has not established a good arguable case of any dishonesty on the part of Mr Ladhur or the Company. These are i-supplier and Component Accounting. These account for £86,500 under this heading.

I have found the issue relating to MDS Invoice Receipting difficult to resolve. I conclude that MHT has established a good arguable case that the work was overpriced, but I do not consider that it has established a good arguable case of impropriety on the part of Mr Ladhur or the Company. This accounts for £17,500 under this heading.

I have already dealt with other questionable payments at paragraphs 168 and 169 above, concluding that these allegations do not assist MHT’s case in support of a freezing order.

The claim under this head is estimated at £150,000. I have already dealt with this: see paragraphs 219 and 220 above. I do not consider that this alleged overcharging, even if established, supports the case that there is a risk of dissipation.

I have already dealt with the claim in relation to Mark-up on Contractors supplied to MHT at paragraph 221 above, my conclusion being raised do not provide any support for an allegation of impropriety even if, at trial, MHT’s contrary position that there has been overcharging is vindicated. In any case, the claim for £136,000 is not, on the current evidence, sustainable because the majority of the alleged improper payments were in respect of individuals who were employees and not sub-contractors. The claim, on that footing, would reduce to something in the order of £11,000. In relation to that figure, MHT may have a claim – it has shown a good arguable case – but I do not consider that it is a claim which supports an allegation of dishonesty and certainly does not support the suggestion that there is a risk of dissipation.

It can be seen that MHT has not established a good arguable case in relation to a number of issues accounting for a significant part of the money-value of its claims. In many cases where it has established a good arguable case, it has not also established a good arguable case that there was dishonesty on the part of Mr Ladhur or the Company.

It is the case, I appreciate, that the test of good arguable case for the purposes of the applicable tests for the grant of a freezing order does not require there to be good arguable case of dishonesty. However, where alleged dishonesty is relied on as part of the case in support of a risk of dissipation, it is important to consider whether a good arguable case of dishonesty is established in relation to the conduct relied on. If a good arguable case of dishonesty is not established, that conduct is not relevant to the argument that there is risk of dissipation because of the alleged dishonesty of Mr Ladhur and the Company. I will return to this theme when considering the alleged risk of dissipation.

Putting MHT’s case at its highest in the light of my conclusions so far, it has shown a good arguable case in relation to the following:

Payments 9, 10, 11, 12 14 and 16 to 20 of Mr Barden’s list. The claims here total just under £51,000.

In relation to Projects not Delivered,

A good arguable case is shown for claims amounting to just under £72,000, but a good arguable case of dishonesty is not shown.

In relation to Telecom & Monarch Assessment, MHT has shown a good arguable case and also a good arguable case that Mr Ladhur must have known of impropriety on the part of Mr Robertson in obtaining authorisation of the payment. This accounts for a further £7,000.

A good arguable case is shown in relation to OBIEE up to £65,000, but a good arguable case of dishonesty is not shown.

In relation to Projects overpriced,

MHT has shown a good arguable case that something may be recoverable in relation to i-supplier and Component Accounting although I am very doubtful that the claims can be as high as actually claimed - £86,500 in total. MHT has not established a good arguable case of dishonesty in relation to this amount.

I have also concluded that there is a good arguable case in relation to MDS Invoice Receipting (£17,500) but have also concluded that MHT has not established a good arguable case of impropriety on the part of Mr Ladhur or the Company.

MHT has established a good arguable case in relation to overcharging (for something in the order of £150,000) but this is subject to possible set-off of amounts under-charged. The allegations do not support a case of dishonesty or impropriety.

MHT has established a good arguable case on mark-up of sub-contractors rates, but this claim is limited to something slightly over £11,000. The evidence does not support any claim that Mr Ladhur or the Company were acting dishonestly.

Mr Grant submits that MHT’s evidence before Birss J on risk of dissipation as regards Mr Ladhur (Mr Grant says nothing, and needs to say nothing, about Mr Taylor) was essentially non-existent. It is not possible to see, he says, where Mr Barden or Mr Hatchman deal with this key area which needed to be addressed in great detail. Mr Burton’s skeleton argument dealt with this aspect of the case at paragraphs 26 to 31; no additional oral submissions were made at the hearing. At least, I have not found any in the transcript.

At paragraph 31 of his skeleton argument for the hearing before Birss J, Mr Burton submits that the evidence he had earlier referred to was not simply “general” evidence of dishonesty. It was directly relevant to the issue of dissipation of assets

False declarations/concealment.

Creation of false invoices.

Payments made indirectly/benefits indirectly conferred on the participants.

Involvement of offshore jurisdiction for no obvious commercial reason presenting greater opportunities for dissipation/lack of transparency.

Breach of contractual terms that were agreed in order to prevent fraud.

I comment that the first and last of those could only be directly relevant to Mr Taylor.

Mr Ladhur has provided his evidence relevant to dissipation in section C of Ladhur 5. This is an extremely important aspect of Mr Ladhur’s application with which I must deal in the light of the legal principles which I have already discussed and the conclusions which I have already reached. At paragraph 43 of his second witness statement dated 29 May 2015, Mr Barden says this:

MHT’s position has to be, and I think actually is, that the evidence which it relies on to demonstrate dishonesty is of itself, in accordance with the legal principles which I have discussed, sufficient to establish a real risk of dissipation. Even so, the last sentence of Mr Barden’s paragraph 43 is curious. Mr Ladhur clearly has put forward evidence – indeed a mass of evidence – to show that there is not a good arguable case and if that is right there is clearly no risk of dissipation. Further, it is the case that MHT has put forward no evidence to counter that which Mr Ladhur has presented in section C of Ladhur 5, evidence designed to show that there is nothing in the suggestion that he would dissipate his assets.

I am not satisfied that there is a real risk of dissipation of assets by Mr Ladhur or the Company (again I say nothing about Mr Taylor).

Firstly, it will be apparent from my very long analysis of the evidence that most of the evidence relied on by MHT fails to satisfy me that there is a good arguable case of dishonesty.

In fact, the only instances where I have not concluded that either (i) there is no good arguable case at all or (ii) that there is no good arguable case of impropriety/dishonesty, related to the Coronet invoices and the payment of school fees (including payment by Mr Chacko and the possible link between payments made by him to the School and payments to him by the Company). These claims relate to just under £51,000, a very different scenario from that presented to Birss J and Morgan J where claims (amounting to many hundreds of thousands of pounds) were relied on as to demonstrating dishonest conduct. I accept, of course, that if the claims in respect of that £51,000 demonstrated clear fraud on the part of Mr Ladhur, that might be sufficient to justify a conclusion that there is a real risk of dissipation and that a freezing order should then be made in relation to the total of the claims where MHT is shown to have a good arguable case. But that is far from the present case where, although there is a good arguable case (so that the first part of the test for the grant of freezing order is satisfied) the case is far from a clear one of fraud and there may well be an innocent explanation.

Secondly, on the evidence before me, I am not satisfied, in relation to any of the other allegations, that there is good arguable case of dishonesty. But even if it could be said that, by breaching the terms of the MSA, Mr Ladhur and the Company were behaving in an improper way with a view to financial advantage for the Company, the impropriety is not, it seems to me, of a type which would leads to the conclusion that Mr Ladhur would hide his assets or deal with them in such a way as would make enforcement of any judgment more difficult.

Thirdly, there is nothing remotely suspicious in Mr Ladhur’s investment in Spanish properties or in his holding foreign bank accounts (even jointly with Mr Taylor) or in his making use of a Rational FX account in the way in which he did. There is no evidence that he has used foreign corporations or bank accounts in jurisdictions unconnected with his (Spanish) investments. The nearest one comes to suspicion is that payments were made to Mr Taylor through Mr Taylor’s foreign company and its foreign bank account.

Mr Ladhur’s own family and business circumstances make it inconceivable to my mind that there is the slightest risk that he, personally, would leave the jurisdiction to avoid a judgment. Further, as he explains and as must be accepted for present purposes, his only assets of any value are his share in his family home and his shares in the Company, the entity through which he makes his living. Thus, taking account of the seven factors mentioned in paragraph 24 above, each of them is a factor in favour of Mr Ladhur and the refusal of a freezing order.

Ultimately, whether to grant a freezing order is a matter for the court in the exercise of its discretion, in accordance with established principle and in the light of all of the evidence. In the present case, I do not consider that there is a real risk of dissipation and accordingly consider that a freezing order is not appropriate. I do not consider that the delay on the part of Mr Ladhur and the Company in launching their discharge application is such, in all the circumstances, as to weigh sufficiently in the balance so as to result in a refusal of the discharge application when otherwise it would succeed. I therefore conclude that I should discharge the freezing order made by Morgan J.

If that is wrong, then it should be noted that the claims where I consider that MHT has demonstrated a good arguable case are as follows:

Payments 9, 10, 11, 12 14 and 16 to 20 of Mr Barden’s list. The claims here total just under £51,000.

In relation to Projects not Delivered,

A good arguable case is shown for claims amounting to just under £72,000, plus £7,000 in relation to Telecom & Monarch Assessment.

A good arguable case is shown in relation to OBIEE up to £65,000.

In relation to Projects overpriced,

i-supplier and Component Accounting give rise to claims for a maximum of £86,500 in total.

MDS Invoice Receipting has established a good arguable case to recover for £17,500.

MHT has established a good arguable case in relation to overcharging (for something in the order of £150,000) but this is subject to possible set-off of amounts under-charged.

MHT has established a good arguable case on mark-up of sub-contractors rates, but this claim is limited to something slightly over £11,000.

Ignoring for the moment the £150,000 under iii) c), the total is £310,000. Given the nature and value of Mr Ladhur’s assets as disclosed and bearing in mind the very serious disruption that a freezing order gives rise to, I consider that a general freezing order such as the FO itself represents a disproportionate response to the risk of dissipation. A more appropriate order would be to restrain Mr Ladhur from any disposition of the assets described in paragraph 48 other than item i) (cash, which in September 2014 amounted to less than £30,000). This would restrict dealings with shares in the Company and two other companies, pensions, his share in the family home and (for what it is worth given that they are in negative equity) the Spanish properties. As to the claim for £150,000 in relation to overcharging by reference to contract rates, I would not consider it fair or proportionate to bring this claim into account in assessing the amount of any freezing order given (i) the unchallenged evidence of Mr Americanos that there has been overall under-charging and (ii) the absence of any dishonesty in relation to the claim.

In reaching my conclusions, it has been unnecessary for me to take into account Mr Grant’s submissions in relation to the absence of full and frank disclosure before Birss J and Mr Ladhur’s case that such non-disclosure was sufficiently serious (i) to justify the discharge of the FO and (ii) to justify a renew it. For completeness, I should say that even if I were to regard the non-disclosure as sufficiently serious to justify discharge of the FO, I do not consider that this is a case where, for that reason alone, the court should decline to renew it. However, the non-disclosure (which I have identified at various points of this judgment) was not trivial; it is a factor which would weigh in the balance in favour of refusing to renew the FO were I in doubt about whether to discharge it for the reasons which I do.

I propose to take this briefly. The substantive material paragraphs of the PoC are as follows:

Paragraph 14 asserts a number of terms (as a matter of construction or as implied terms) one of which is found at sub-paragraph (iv) namely that the Company “would not inflate the figure that it had actually paid to its subcontractors when invoicing and/or seeking and/or receiving payment of these sums from [MHT]”.

Paragraph 27(iv) alleges that, by submitting certain listed invoices, the Company made a representation that “The sums invoiced for work completed by subcontractors of [the Company] would be the actual sums charged by the subcontractor, subject to an industry standard mark-up of 15%, and not an inflated amount”,

The Company’s case is that the MSA specifically prescribed the rates to be charged. It cannot therefore be alleged that an implied term is to be imported into the contract because that would be to contradict the express term, as to which it is elementary that a term will not be implied which is contrary to an express term. In any case, it is said that the alleged term is hopelessly vague and does not meet any of the usual tests for implying a term.

Further, in making its case, MHT must be saying that the industry standard is to be implied into the contract. Mr Grant makes the point that MHT does not say that there some “notorious and certain” mercantile custom that can be relied on to imply a particular term and submits that it could not say that. Although mercantile practice can give rise to an implied term, it must be “notorious and certain” which an alleged industry standard of 15% mark-up is not.

So far as the individuals who were employees and not self-employed contractors, I consider that the relevant claim should be struck out. As currently pleaded, there is no alternative claim which seeks to achieve the same economic relief, and which relies on the same, or a very similar alleged, fraud in relation to the employees as is made in relation to the contractors. No application to amend has been made.

I also consider that the relevant claim should be struck out for the reasons put forward by the Company. This is both an alternative ground for striking out the claim against the individuals who were employees and the (sole) ground for striking out the claim against the individuals who were self-employed consultants. If a particular piece of work carried out by the Company was, or should have been, subject to the terms of the MSA then it was subject to the provisions of Clause 7. In that case, clearly it was either subject to the Rate Card (applicable in the case of Development Services) or it was not.

If it was so subject, then the Company was entitled to charge at the rates specified for the relevant level of consultant. What the Company actually paid its consultants, whether employees or self-employed consultants, is neither here nor there. There is simply no room for an implied term that the Company would not inflate the figure which it had actually paid to its consultants when invoicing MHT or seeking or receiving payment. Of course, if the invoice purports to cover work which was not actually done, that would be a different matter: but the complaint would not be an excessive mark-up on the amount paid to sub-contractors but a straightforward claim that the hours had not been put in and would fall within paragraph 14(i) and/or (ii) of the PoC (which the Company does not seek to strike out).

If it was not so subject, then the Company’s right to payment will depend on the precise contractual arrangements under the relevant sub-agreement under which the Services were provided. MHT has not identified any relevant sub-agreement or suggested that there was an express or implied term in such a sub-agreement along the lines of that pleaded at paragraph 14(iv) of the PoC. Nor is it explained how there could be a contractual obligation under the MSA to pay only an hourly/daily rate in relation to Services other than Development Services.

In either case, there is no scope of the implication of term into the MSA such as is alleged in paragraph 14(iv).

Given that analysis, paragraph 27(iv) of the PoC is unsustainable. Although the grammar of the paragraph has gone slightly awry, what is being said is that by preparing and submitting the invoices, the Company was making a representation that the sums charged in respect of the individual subcontractors carrying out the work would be the sums charged by the sub-contractors plus 15% (as an industry-standard mark-up). I do not think that that can possibly be right. Each of the invoices related, obviously, to a contract:

If the relevant contract was the MSA, and if the Rate Card applied, then as explained above in relation to paragraph 14(iv) of the MSA, the Company is entitled to charge by reference to the Rate Card whatever it may be paying its consultants. The Company may be restricted to recovering the amounts payable in accordance with the Rate Card. But no issue of misrepresentation such as that alleged arises in that case.

If the relevant contract was not the MSA, then the question of whether the rendering of the invoices could give rise to a misrepresentation will depend on the terms of the relevant contract. For instance, if, counterfactually, the relevant contract had provided expressly for the Company to charge the cost of the consultant plus 15%, a claim for say £575 per day might be seen as giving rise to a representation that the relevant consultant was being paid £500 per day. But no such contract is alleged and no contractual provisions are pleaded to give the context within which the allegation of misrepresentation can be judged.

Further, the case pleaded in paragraph 27(iv) relies on an industry standard. If there were a “notorious and certain” mercantile custom to the effect that there was never more than a 15% mark-up, that might form be of some assistance to MHT. But that is not their pleaded case; the rather more vague industry standard is not, in my view, a firm enough foundation on which to build a case of misrepresentation.

Accordingly, I consider that paragraph 27(iv) of the PoC should be struck out. It follows that parts of the PoC which are relevant only to that paragraph should also be struck out. Thus paragraph 28(iv) should be struck out. However, I do not consider that paragraph 36(iv) should be struck out. That paragraph identifies the losses claimed by MHT not only by reference to paragraph 27(iv) but also by reference to various other breaches alleged. However, the reference to Appendix 6, and Appendix 6 itself, should in my judgment be struck out. Appendix 6 is, as I read it, concerned only with the claim to an overcharge based on the misrepresentation alleged in paragraph 27(iv). Since 27(iv) is to be struck out, so too Appendix 6 must be struck out.

Against that, it might be said that the application notice does not expressly seek to strike out paragraph 14(iv) of the PoC. That at least should leave, it can then be said, Appendix 6 in place in relation to the individuals who were sub-contractors. I do not think that that is correct. The application notice clearly sought to strike out Appendix 6. The Company was entitled to rely on the impossibility of implying the terms found at paragraph 14(iv) and, with Appendix 6 struck out, the implied term becomes irrelevant.

I think the proper course, therefore, is to strike out paragraph 27(iv) and Appendix 6 but leave paragraph 36(iv) in place. If the parties consider that this does not properly reflect my substantive reasoning, I will consider an alternative course.