Astute Capital PLC & Anor v Countrylarge 444 Limited & Ors

In this judgment, I shall use the same abbreviations as in my judgment handed down on 19 July 2023. Pursuant to that judgment, I made an order on 28 July 2023 on a number of applications made variously by the Claimants and the Finlaw Defendants. In summary:

After the order, the Claimants settled their claim against ARE and Mr Smith on 8 September 2023, and accordingly, as has been confirmed to me by those parties, there is no need for me to resolve any of the outstanding questions as to costs or the terms of the order as between them. Accordingly, the three consequential issues arising from the judgment (the terms of the injunction, costs and the totally without merit issue) need to be resolved only as between the Claimants and the Finlaw Defendants. I received submissions on those issues (the “consequential submissions”) as ordered, on 7 and 14 September 2023 (I gave the parties some time for these submissions because of their holiday and other commitments).

Before I handed down judgment on the consequential matters, the Claimants found out, they say, from an email to which they were copied in, and sent on 21 September 2023 by the Finlaw Defendants’ conveyancing solicitors (Burgess Okoh Saunders) to ARE and Mr Smith’s solicitors, that all the flats at the Property had now been sold, without any of the information required by the Court’s 22 December 2022 order having been provided to them, and notwithstanding the provisions of my order on 28 July 2023.

Accordingly, after making enquiries of the Finlaw Defendants which, they say, were not properly answered, the Claimants issued a further application on 9 October 2023, seeking an order for information about the sales of all the flats at the Property. This application was referred to me by Chancery Listing, and by email of 18 October 2023 I proposed that I should deal with this application together with the existing consequential issues, to which the parties did not object. The application did not identify the rule pursuant to which it was made, but the Claimants’ subsequent submissions have made it clear that it was it pursuant to CPR 25.1(1)(g).

In response to this application, Finlaw provided some further information in a witness statement by the Third Defendant, Ms Lawson, made on 26 October 2023 (her third in these proceedings). This prompted a request for further information on 8 November 2023 made under CPR rule 18, in response to which Ms Lawson provided a further witness statement on 17 November 2023 answering some but not all of the questions asked. So the question on this is, should I order Finlaw to answer the remaining questions in the 8 November 2023 request for further information?

In the meantime, the Claimants had been granted permission by Master Shuman on 28 September 2023 to file and serve a re-re-amended particulars of claim to reflect the settlement of their claim against ARE and Mr Smith, to be served by 14 November 2023. However, in the light of their 9 October 2023 application for further information from Finlaw, the Claimants on 13 November 2023 sought an order extending the time for service of the re-re-amended particulars until after Finlaw provided that further information, so they could take that information into account in the re-re-amendment. The Finlaw Defendants resist this.

Pursuant to directions I gave on 18 October 2023, the Claimants provided written submissions on these further two issues on 10 November 2023, and the Finlaw Defendants on 20 November 2023. On reviewing these submissions, it was not clear to me whether in fact the Claimants were still pursuing their claim for an injunction, and what, if anything, they had to say about recently drawn accounts brought to my attention in Finlaw’s submissions on the question of the undertaking in damages. Pursuant to further directions, the Claimants provided written submissions on this question, with evidence in response, on 22 December 2023, and Finlaw provided submissions in reply on 29 December 2023.

Accordingly, the following issues arise:

The Claimants set out the main terms of the interim injunction which they seek until trial against Finlaw in paragraph 6 of their consequential submissions, and paragraph 4 of the draft order attached to them, that is to say (in summary):

In my judgment, for the reasons given in paragraphs 83 to 85 of my judgment, this application was totally without merit, that is to say (a) it was obvious that the application notice stamped with the court number “001438” was made in support of the relief sought in the claim form which was stamped with the number “001453”; (b) it sought to set aside the undertaking given by ARE, when not even ARE itself sought to set it aside, and so Finlaw had no locus to set it aside; (c) even if Finlaw had been put to cost by the application pursuant to which the injunction was given, that sounded in costs, not setting aside; and (d) there was nothing in Finlaw’s allegations of material non-disclosure.

Mr Sharma, correctly, points out that the test is whether “some rational argument could be raised in support of [the application]” (see the White Book 2023 volume 1 at paragraph 3.4.25, and R(Wasif) v. Secretary of State for the Home Department [2016] EWCA Civ 82), but in my judgment there was simply none for the reasons I have given. In particular, there was nothing in the argument based on Fourie v. Le Roux [2007] 1 WLR 320,relied on particularly by Mr Sharma in his consequentials submissions, because the Claimants were not seeking an injunction without having formulated a substantive claim (that claim was clear from previous correspondence); and although CPR rule 40.9 allows a non-party to set aside orders by which it is directly affected, there was no rational basis for saying that Finlaw was directly affected by ARE’s undertaking (no basis was identified); and further, there was no rational basis for saying that there was any material non-disclosure. I should add that the Claimants did expressly take the point, in paragraph 88 of their skeleton for the May 2023 hearing, that this application was totally without merit.

The Finlaw Defendants accept that the Claimants are entitled to their costs on all the applications save for (a) the injunction application and (b) the summary judgment application.

As to these, I accept that on the face of it, the proper order in relation to the injunction application which was before me (namely, the application issued by the Claimants on 15 December 2022, the hearing of which was adjourned to the May 2023 hearing by Mr Justice Meade’s order on 20 December 2022) should be costs reserved, for the reasons summarised in the 2023 White Book at paragraph 44.2.15.1, and the cases there referred to (in particular Richards von Desquenne et Giral UK Ltd [1999] C.P.L.R. 744 and Wingfield Digby v. Melford Capital Partners (Holdings) LLP [2020] EWCA Civ 1647). This is because the underlying reason for granting the injunction was the balance of convenience, and the underlying merits of the Claimants’ case will have to be revisited and decided at trial, at which the court might find against them.

In their submissions, the Claimants say that before the 15 December 2022 application was made the Finlaw Defendants’ behaviour in refusing to give undertakings was unreasonable and aggressive, and that they eventually gave them only at the hearing before Mr Justice Meade on 20 December 2022.

However, in my judgment that is not sufficient to justify departing from the general principle that costs should be reserved in such cases. If Finlaw does establish its defence, then it follows that it will establish, albeit retrospectively, that it should not have been required in the first place to give an undertaking or ordered to be subject to an interim injunction. Further, the mere fact that the Finlaw Defendants repeatedly refused to give the requested undertakings does not alter this. Were it otherwise, a claimant could always claim the costs of an interim injunction or undertaking eventually awarded or given on the balance of convenience, simply by making a number of requests for it.

Further, I would be reluctant to penalise a defendant in costs who makes a pragmatic concession only at an interlocutory hearing rather than earlier, because that would operate as a disincentive generally to defendants to make such concessions at all. Of course, if the Claimants eventually lose, it may be that one could take the alleged unreasonable and aggressive behaviour into account on the eventual costs order made after trial, or on the detailed assessment. But that is a matter for then, not now.

Finally, as I said in paragraph 75 of my judgment, there was some justification at first sight for Mr Sharma’s submission that order which the Claimants initially sought and which they continued to seek up to the May 2023 hearing, was drafted too broadly and intrusively; and after my judgment, the Claimants in large part rowed back from the width of the order. This is a yet further reason for reserving the costs of the application.

I should add that I appreciate that Finlaw may well be open to criticism, in that it did not reveal to the Claimants or to the Court at the May 2023 hearing that it had already sold all eight flats and disposed of all the proceeds (the understanding I received from the papers and the submissions was that only four had been sold: hence there was an issue about the terms of the injunction which envisaged that they not been sold). But even if Finlaw had revealed this, the application would no doubt have gone ahead with similar arguments because, for the reasons I have given, there was still something to injunct. In my judgment, therefore, the failure to reveal the true position at the May 2023 hearing is a matter which more appropriately goes to the costs that should be made on the Claimants’ 8 October 2023 application for further information and its November 2023 request for further information.

As to the summary judgment application, the Finlaw Defendants say that this merely provided a mechanism for the court to dispose of the case entirely if it held that the injunction application raised no triable issue; and that it added no extra time or costs to the hearing. Therefore, so the argument goes, the costs of the summary judgment application should likewise be reserved.

However, in my judgment this argument proves too much, and one could just as well turn the argument around and say that as the Claimants succeeded in the summary judgment application so as to entitle them to the costs thereof, so too they must have all the costs of the injunction application because it added nothing to the costs incurred on the summary judgment application.

Further, and more importantly, the two applications did not necessarily stand and fall together. It would have been perfectly possible for the Claimants’ injunction application to fail, whether because they could not establish a proprietary claim or on the balance of convenience, but for their claim in debt to be allowed to continue as having a real prospect of success.

Accordingly, I shall order Finlaw to pay the costs of the summary judgment application. The question of precisely how the overlap of these costs, and the costs of the injunction application, are to be dealt with will have to be a matter for detailed assessment.

I shall also order that the Finlaw Defendants pay the costs of the Relief/Extension application and the default judgment and First Strike Out application on the indemnity basis. For the reasons set out in paragraph 48, the Finlaw Defendants’ conduct in suddenly revoking their consent to the extended deadline for service of the Reply and Defence just one hour 19 minutes before the original deadline, when all that was left for the Claimants to do was to countersign the consent order and send it to the court, was wholly unreasonable and opportunistic; and as I there said, I find it difficult to see how the Finlaw Defendants, or at least their solicitors, could have thought it proper in the circumstances to do what they did.

Further, the Finlaw Defendants’ attempt to take advantage of this and their continued refusal to agree to relief from sanctions was also opportunistic, especially as the breach was trivial and technical, and caused them no prejudice. In particular, as I said in paragraph 50, the justification advanced by the Finlaw Defendants for the last minute revocation was groundless speculation and was disproved by the terms of the Reply and Defence to Counterclaim when it was later served.

Taken in the round, therefore, this seems to me to be just sort of conduct which the Court of Appeal had in mind in paragraph 43 of Denton v. White [2014] 1 WLR 3926, where it held that heavy costs sanctions should be imposed on parties who unreasonably refuse to agree extensions or unreasonably oppose applications for relief from sanctions, including orders for costs to be assessed on the indemnity basis. Put another way, such conduct was not only unreasonable and inappropriate, but also outside “the norm”, which merits an award on this basis.

Further, the consequential relief which the Finlaw Defendants sought on the back of their withdrawal of consent and refusal to agree to relief from sanctions, namely the striking out of the whole of the Claimants’ claims, was hopeless in any event, for the reasons set out in paragraph 51(2) of my judgment. Even if this might not have been a sufficient reason on its own, it is a yet further factor which tilts the balance firmly in favour of an award of indemnity costs.

I should add that this applies to all four of the applications, because they were all related to each other, and founded upon the original unreasonable withdrawal of consent and refusal to agree to relief from sanctions.

On this application too I shall order the costs to be paid on the indemnity basis, in this case by Finlaw alone, because only Finlaw made the application. Although, as I have indicated above, an order for indemnity costs should not be made unless the paying party’s conduct is outside “the norm”, making an application which is totally without merit is just such conduct.

As I understand it, the Claimants do not seek an order that the costs on the summary judgment application be assessed on the indemnity basis (and anyway I would not have been prepared so to order); and in the light of my judgment above, the question of what basis to award costs on does not arise on the interim injunction application.

The day before the May 2023 hearing, the Claimants served a statement of their costs which said that it was their

“ Statement of Costs for the hearing on 15 May 2023

Costs of dealing with Applications from 3 January 2023”

This provided for a global total of £101,339.13 (without VAT, but no VAT was claimed) for all the applications heard in May 2023, without identifying what costs were incurred on what application. And as can be seen from the dates above, it did not include anything for the hearing before Mr Justice Meade on 20 December 2022, or indeed for anything before 3 January 2023.

However, when serving their costs submissions on 7 September 2023 the Claimants served five separate statements, this time dated 21 July 2023, which was two days after the judgment, (a) for the re-amendment and relief from sanctions application, in the sum of £14,315; (b) for the default judgment and First Strike Out Application, in the sum of £25,805; (c) for the Summary Judgment and Second Strike Out application, in the sum of £25,805; (d) for the Third Strike Out application, in the sum of £25,805; and (e) for the injunction application, in the sum of £51,817.50 including (unlike the previous global statement) the costs incurred on the 20 December 2022 injunction hearing. These statements total £143,547, that is to say, an extra £42,000 or so.

In other words, in the July 2023 statements (a) the Claimants sought to divide up the time spent on each of the hearing applications heard in May 2023, (b) they added a claim for the injunction hearing on 20 December 2022, and (c) the total claimed was increased by £42,000 odd. Further, it was in support of these statements, not the previous global statement, that the Claimants made their submissions on costs.

In their reply to these submissions, the Finlaw Defendants objected to the Claimants reliance on the July 2023 statements, and pointed out that they had not explained the divergence from the May 2023 statements. Further, CPR PD 44 paragraph 9.5(4)(b) (read together 9.2(b) and 9.5(2)) requires a statement of costs for a hearing which lasts for a day or less to be filed at court and served on the other side at least 24 hours before the time fixed before the hearing, but the July 2023 statements self-evidently do not satisfy this requirement, and there was no application to file and to serve them in place of the original May 2023 statement.

Although this point was made in Mr Sharma’s 14 September 2023 submissions, and although there have been further submissions since, the Claimants have not, as they could have done, sought permission to put in a short response to these points.

In such circumstances, I am not prepared to carry out a summary assessment of the September 2023 statements. Nor am I prepared to carry out a summary assessment of the May 2023 global statement, because the Claimants do not now seek a summary assessment of it, and anyway, it is not clear to me, just looking at that global assessment, what is the proper division between the various applications.

Mr Sharma adds that in the circumstances, I should not award even an interim payment pursuant to CPR 44.2(8), which provides:

“Where the court orders a party to pay costs subject to a detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.”

In my judgment, the mere facts that there is a divergence in the May and September 2023 statements of costs, and that the Claimants in the post hearing submissions have sought to rely only upon the July 2023 statements without asking for permission to do so, is not a “good reason” for not ordering Finlaw or the Finlaw Defendants to pay a reasonable sum on account of costs on the applications on which the Claimants have succeeded.

In particular, it seems that I can safely take as my starting point that if I were to go by the July 2023 statements I would have to deduct, for the purposes of an interim award on account, the sum of £51,817.50, so as to make a provisional starting point, on those statements, of about £91,500 odd for the costs of the other applications on which I have held the Claimants to be entitled to their costs. Further, and erring on the side of caution, I am prepared to reduce this starting point to £80,000, because it is not clear to me why, of the £101,339.13 May 2023 statement, more than this should have been incurred on the issues on which the Claimants have been awarded their costs.

The Claimants have contended that if only a payment on account is to be awarded, then it should be for 50% of the costs on the applications on which they succeed. The Finlaw Defendants have contended that it should be just 20%.

I have no hesitation in agreeing with the Claimants on this, because 50% would not be unusual, and anyway on all the relevant applications, save for the summary judgment application, I have awarded such costs on the indemnity basis.

Accordingly, I shall make an award on account of £40,000 against Finlaw, that is to say 50% x £80,000, because it was the unsuccessful party on each application on which I have awarded the Claimants their costs.

As for the other Finlaw Defendants, Ms Lawson and Ms Cox, they were unsuccessful parties to (a) the reamendment/relief from sanctions applications, (b) the default judgment/first Strike Out Applications, and (c) the summary judgment/Second Strike Out application: on which, according to the Claimants’ July 2023 statements, the costs incurred were £14,315, £25,805, and £25,805 respectively, a total of £65,925. Given the lack of explanation of the breakdown of these figures and how they relate to the figures in the May 2023 statements, I shall take £57,500 as the starting point, and make an award against Ms Cox and Ms Lawon of £27,750, concurrent but not in addition to the award against Finlaw.

I should add that, standing back and looking at the matter in the round, I am entirely confident that in each case the Claimants will obtain awards of at least these amounts respectively against Finlaw and Ms Cox and Ms Lawson on the detailed assessments.

As I have said above in paragraph 16, it now appears from Ms Lawson’s third witness statement (made in response to the Claimants’ 8 October 2023 application), and her fourth witness statement (made in response to the Claimants’ 8 November 2023 request for further information) that all eight flats at the Property were sold and their proceeds disposed of by the end of January 2023. There is no suggestion that this information was provided beforehand, and it was not provided to the Court at the May 2023 hearing.

As a result of Ms Lawson’s witness statements, nine requests for further information in the Claimants’ November 2023 request are now outstanding. These ask for further information of the matters set out in paragraphs 11 to 17 of Ms Lawson’s third statement.

As I initially understood Mr Sharma’s submissions (and as reflected in my draft judgment) the Finlaw Defendants took the point that November 2023 request for further information could not be justified under CPR 25.1(g), because this rule does not apply to “freezing injunctions”.

However, in his comments on the draft judgment, Mr Sharma points out that this is a misreading of his submissions. He was merely saying that it was ironic that in paragraph 72(1) of my judgment I had said that Mr Symondson’s evidence in support of the second injunction application for an injunction, in December 2022, did not have to be by way of affidavit because it was not in support of a “freezing injunction”, whereas now the Claimants were positively asserting the opposite, because they were seeking to rely upon CPR 25.1(g) for their application, on the footing that it was indeed a “freezing order” within CPR 25.1(g). His criticism, therefore, was directed to what I had said in my first judgment in reliance on the Claimants’ submissions: he was not seeking to say that CPR 25.1(g) does not apply to proprietary freezing orders. (I said what I did in my first judgment because the application was on notice and was not for a “Mareva” type freezing order, and anyway the affidavit/witness statement point made no difference.)

For good measure, however, I am satisfied that CPR rule 25.1(1)(f) and (g) do allow for a proprietary restraining (or “freezing”) order to be made.

CPR rule 25.1(1)(f) and (g) provide:

“The court may grant the following interim remedies –

….

(f)

an order (referred to as a ‘freezing injunction’) –

(i)

restraining a party from removing from the jurisdiction assets located there; or

(ii)

restraining a party from dealing with any assets whether located with the jurisdiction or not;

(g)

an order directing a party to provide information about the location of relevant property or asset which are or may be the subject of an application for a freezing injunction.”

Accordingly, the Claimants in my judgment are entitled in principle to seek further information under CPR 25.1(1)(g) in support of the interim order I have made.

I should add that although the November 2023 request for further information said it was served under CPR Part 18, the Claimants on the following day in their 10 November 2023 submissions made it plain in paragraph 29.1 that they were relying on CPR 25.1(1)(g), so by the time Ms Lawson made her fourth witness statement in response to that request, on 17 November 2023, it was clear enough that it was on this rule as well, or alternatively, that the Claimants were relying. Indeed, Mr Sharma’s 20 November 2023 submissions quite properly approach the requests as ones made both under CPR Part 18 and CPR 25.1(1)(g). Therefore, the fact that the outstanding requests were purportedly made under CPR Part 18 is of no significance.

The second general point Mr Sharma takes is that the Claimants’ November 2023 request for further information of Ms Lawson’s third witness statement under CPR Part 18 does not ask questions about the “proceeds” of sale of the flats, but only about other sums received by Finlaw in connection with the development. Two things follow from this, he says.

As for the first point, I disagree, because the order to which the Finlaw Defendants agreed in their 14 September 2023 submissions (and the order which I am accordingly making) included a provision that:

“Until final disposal of the Claim or further order of the Court Finlaw must not remove from England and Wales or in any way dispose of, deal with or diminish: (i) any sum representing or comprising sums paid to the Respondents (whether arising by way of any refinance, or the sale of the Property or the Flats, or any other means) in satisfaction of [the purported ARE charge] (“the Charged Sums”); (ii) any asset which, in part or in whole, represents or derives from the Charged Sums, save for the purposes of giving effect to this order.” [Emphasis in underlining added.]

As is clear from the underlined words, the order is not limited to proceeds of sale of the flats. It also covers (a) any other part of the Property, and (b) more importantly, sums paid to any of the Respondents “whether arising by way of refinance, or the sale of the Property or the Flat, or any other means”. Therefore, by part (i) of this provision, Finlaw must not apply any such sums, whether paid to itself, Ms Cox or Ms Lilly, or indeed ARE and Mr Smith, in satisfaction of the purported ARE charge; and by part (ii) it must not deal in any other way with any asset which represents or derives from these sums (that is to say, “the Charged Sums”).

It follows, therefore, that, subject to Mr Sharma’s second point, the Claimants are in principle entitled to be provided, in support of the interim order, with information about “the location” (to use the language of CPR 25.1(1)(g)) not only of the proceeds of sale received by Finlaw (as Mr Sharma accepts), but also of sums received by Finlaw “by way of refinance .. or by other means”. I accept that these sums must have been received in connection with the Property or the flats, and not for some different purpose, but if they were so received, then they are “Charged Sums” which Finlaw is not entitled to dispose of, and about whose location the Claimants can ask to know.

As for Mr Sharma’s second objection, namely the November 2023 request for further information about Ms Lawson’s third witness statement goes outside the information sought in the original 9 October 2023 application notice, I accept that this is largely correct as a matter of fact, as will become apparent from the requests, which are set out below.

However, this is not a conclusive objection, because the request arises out of fundamentally important information in that witness statement which had not been made clear before (namely, the flats had apparently all been sold back in January 2023, and all the proceeds distributed). This understandably gives rise to considerable concern as to what has happened to all the other parts of the “Charged Sums” which are supposed to be subject to the restraining order I have made. Indeed, Finlaw appears to be saying that even if the Claimants do have a second charge (as they allege) there are no sums at all which are subject to it. And it would seem to follow from this that Finlaw is saying it has no money at all, and so the proceedings are pointless.

I should add that I do not see that any serious objection can be taken to the fact that the November 2023 request was made simply by way of request for further information, instead of by way of yet further application asking exactly the same questions as in that request.

In making the orders I do below, I take into account that the Finlaw Defendants do not appear to have told the Claimants, or indeed the court at the May 2023 hearing, that all the flats had been sold and the proceeds disposed of until this was eventually flushed out afterwards in Ms Lawson’s third and fourth witness statements. Further, they appear to be saying that Finlaw has no money at all, without actually saying this outright. I take the view, therefore, that it is important that the requests which I am prepared to order are not phrased in such a way that they could be subject to Finlaw’s own subjective interpretation on any point of possible ambiguity.

In his comments on the draft judgment Mr Sharma pointed out that in making this observation, I had not taken into account the Finlaw Defendants’ solicitors’ letter to the Claimants’ solicitors of 4 January 2023, in which (in summary) (a) they gave notice of the intended exchange of contracts on units 1 and 5 “on or after 11 January 2023” for £660,000 and £640,000 respectively, and on unit 8 for £660,000 “on 5 January 2023”, with completion (in the case of each of the three units) on or after seven days thereafter, depending on the terms of the contract; and (b) they gave notice of the intended completion on unit 4 (which had already exchanged before Mr Justice Meade’s order) on 4 January 2023, the same day as the letter. Therefore, the Claimants should have realised that the last four flats had indeed been sold by the date of the hearing.

However, this does not alter my view on this point, for three reasons.

Of course, it may be that what Finlaw told the Claimants’ solicitors on 4 January 2023 was sufficient to amount to compliance with the undertakings it had given to Mr Justice Meade. That, however, is a different point on which I express no view. But what I do find to be troubling is that it did not properly inform the Claimants or the court of facts which were obviously relevant to the issues which the Claimants had to meet and which the court had to decide at the May 2023 hearing.

Paragraphs 11 and 13 of Ms Lawson’s third witness statement say that the “total sum received by Finlaw’s conveyancing solicitor (Burgess Okoh Saunders) from all sales was £2,505,960. The sums that were received from them by Finlaw out of those proceeds …[totalled] £457,258.16. No sums were received by myself or Ms Cox personally. These funds were utilised for Project completion and costs”.

The Claimants make three requests of this.

It is convenient to take Requests 3 and 4 together.

Request 3 asks:

“Please state when Burgess Okoh Saunders are alleged to have been instructed on behalf of Finlaw."

Request 4 asks:

“Please provide an account of all sums paid into and out of Burgess Okoh Saunders’s accounts in respect of the development, the flats or their proceeds for the period from 1 July 2022 to date.”

It is evident that what these requests are driving at is what relevant sums have been paid into Burgess Okoh Saunders’s accounts from the time when that firm started acting for Finlaw. However, Mr Sharma objects that they are not about the proceeds of sale, that they are a “fishing expedition”, and that they are an attempt at pre-emptive cross-examination.

However, in my judgment:

I have reduced these requests so as to limit them to refinancing sums, proceeds of sale and income from the Property, because otherwise the request is oppressive, as it could cover any sums which were paid into the Burgess Okoh Saunders’s account even if they could not conceivably have been caught by the Claimants’ alleged charge.These requests, as reduced, will enable the Claimants to identify the sums paid to Finlaw which constitute the “Charged Sums” under the order, so that (a) they can ensure that these sums or their proceeds will not be disposed of, or at least (b) they can find out what has happened to them if they have been disposed of, with a view to making further applications if (and I emphasise “if”) appropriate. This is not a mere “fishing expedition” or a pre-emptive order for cross-examination: it is an order for information made to give better effect to the interim injunction.

It will be seen that I have taken out the provision for information about the payments out, because that is dealt with in other requests which I suggest below, and also because the request as made was too involved.

Request 5 reads:

“Please provide particulars of any sum paid, in the period from 1 July 2022 to date, by or on behalf of Finlaw to:

a.

ARE;

b.

Ms Cox;

c.

Ms Lawson;

d.

Mr Smith.

Finlaw objects to this request on the basis that it is beyond the scope of CPR 25.1(1)(g), and that, so far as it concerns ARE and Mr Smith, the Claimants have settled their claim against them. However in my judgment it is a legitimate request.

First, the request is within CPR 25.1(1)(g), because its purpose is to obtain information about “the location” of refinancing sums, proceeds of sale or income from the Property, that is to say, what has happened to the sums that were (on the Claimants’ case) charged to them. I accept that the request is not in terms limited to asking about whether the refinancing sums, proceeds, and income were paid to these four persons, but a request so framed would leave too much to the interpretation of the Finlaw Defendants of what was the source of the sums so paid to them. In my judgment, therefore, the Claimants are entitled to a request along these lines in order to obtain information that may reasonably assist them to work out whether sums from such sources are indeed likely to have been paid to these four persons.

Second, although the Claimants have settled their claim against ARE and Mr Smith, this does not disentitle them to an order for this information to be provided to them. I do not know the terms of the settlement, and it is perfectly possible that if it turns out that further sums which (on the Claimants’ case) were charged to them were paid out to ARE and to Mr Smith, which have not so far been revealed, then the Claimants would be entitled to relief in respect of those further sums from ARE or Mr Smith. Further, if they were wrongly paid out by Finlaw to ARE or to Mr Smith, in breach of the Claimants’ rights under their alleged charge, I do not see why that information should not be made known to the court now under CPR Part 18.1, on the footing that this would clarify “any matter which is in dispute in the proceedings”, namely, what sums should Finlaw account for to the Claimants by reason of their alleged charge.

Paragraph 14 of Ms Lawson’s third witness statement says:

“Finlaw sent these sums to:

…..

VARIOUS SUPPLIERS, PROFESSIONAL FEES AND BUSINESS FEES FOR PROJECT COMPLETION”.

The sums in question of which this question is asked are the sums totalling £457,258.16 received by Finlaw out of the proceeds of sale.

Requests 6 and 7 ask:

“6.

Please explain why Finlaw appears to be paying sums to suppliers, professionals and business after the date of completion of the sale of the Flats.

7.

Please identify and provide invoices and/or other supporting documentation evidencing the purpose of such payments. In addition, please provide a statement of account recording all payments to the Brook Consultancy LLP, Barnes Design, JGL Projects Limited, Green Dawn Build and Flexiform Business.”

I shall order an answer to request 7 but not to request 6.

As to request 7, Mr Sharma objects that it is blatant “fishing”. I disagree. It simply asks, please provide invoices which support Finlaw’s assertion that the monies in question, which on the Claimants’ case would otherwise be charged to them, were indeed paid to suppliers. If the documents show that they were so paid, then there is unlikely to be an issue in the case, but if they don’t, or no such documents exist, then the Claimants would be entitled to make further inquiries, in support of their interim injunction, as to precisely what has happened to these sums.

As for request 6, the mere fact, if this is so, that sums said to have been paid to suppliers were paid after rather than before the date of completion of the sale of the flats is on the face of it of little significance. If on the provision of documents which I have ordered under request 7 there is real reason to suppose that the payments are not genuine, the fact, if it be so, that they were made after completion may be a matter for a further application. But I am not prepared to order an answer at this stage.

In paragraphs 15 and 16 of her third witness statement, Ms Lawson says (in summary) that the amount of the sums transferred to ARE by Burgess Okoh Saunders were £889,812.84 and £139,812; and that payments were made on 31 January 2023 and 5 April 2023.

Request 8 asks for particulars of any sum transferred to ARE or Mr Smith from 1 July 2022 to date, with supporting documents. However, I have already ordered this information above, so there is no need to order it again under this request.

Request 9 asks whether it is the Finlaw Defendants’ case that the sums paid to ARE are the only sums paid by Finlaw or Burgess Okoh Saunders on Finlaw’s behalf from the proceeds of sale and refinancing of the Property; and if not, particulars are sought of any other payment made from the proceeds and the refinancing.

Finlaw opposes this request on the same bases as it opposes the other requests, but adds that it appears to be lining up a new in personam claim against them. However, in my judgment, the request is legitimate. First, it is simply asking in its first part, what is Finlaw’s case on the point (in particular, on the question of the use of refinancing monies, which it has not yet dealt with in Ms Lawson’s witness statements). There cannot be any objection to that. Second, if Finlaw did make payments to other parties from the proceeds or the refinancing, then on the face of it these need to be justified (and of course they may very well be entirely justified), but the Claimants are entitled to know what they were, so that if they were not justified they can take steps if appropriate against such other parties to protect their rights over the sums paid away now rather than later, just as they were entitled to an interim order in respect of the proceeds of sale of the flats. And further, this information would clarify “any matter which is in dispute in the proceedings”, under CPR Part 18.1, namely, what sums should Finlaw account for to the Claimants by reason of their alleged charge.

In paragraph 17 of her third statement, Ms Lawson says that all the documentation “can confirm” that Finlaw has been transparent in providing information in these proceedings.

Perhaps not surprisingly, given the evident failure (on current evidence) to mention the sales of the last four flats or the disposal of the proceeds back in January 2023 until Ms Lawson’s October 2023 witness statement, the Claimants have asked Finlaw in request 10 to identify what documents “confirm” this. In request 11 they go on to ask Finlaw to explain whether it is the Defendants’ case that they provided advance notice of the exchange of contracts and sales of the last four flats in early 2023, as required by their undertaking given to Mr Justice Meade on 22 December 2022; or that they informed the court at the hearing before me in May 2023 of the sales or disposal of the proceeds.

However, I am not prepared to order answers to these requests for three reasons. First, they are unnecessary, because all relevant documents will have to be disclosed, and it is likely to be obvious from them whether or not the Finlaw Defendants have been transparent and provided the relevant information. Second, the Finlaw Defendants have not actually asserted that it is their case that they have provided the relevant information (indeed, they have refused to answer the question in their submissions). Third, I am anxious that the real purpose of this question is simply to strengthen a potential application to commit the Finlaw Defendants for contempt of court by reason of an alleged breach of the undertaking given to Mr Justice Meade on 20 December 2022, which the Claimants have flagged as a possibility in their submissions. In my judgment, this being so, it would not be appropriate to make an order for the provision of this information in these proceedings, rather than, if appropriate, in an application to commit for contempt of court.

Accordingly, I make no order on requests 10 and 11.

As said above, on 28 September 2023, Master Shuman gave permission to the Claimants to re-re-amend their particulars of claim to take into account the effect of the settlement of their claim against ARE and Mr Smith; and on 13 November 2023, the day before the re-re-amended claim was to be served, the Claimants sought an extension of time for doing so until after the Finlaw Defendants’ provision of the further information sought in the Claimants 9 October 2023 application. The reason for this was so that instead of having two rounds of amendments, the first to take into account the settlement, the second to take into the further information, there would be just one round of amendments.

In my judgment, seeking to avoid two rounds of amendments was a sensible and proportionate way of going about things, and I reject the Finlaw Defendants’ arguments to the contrary. As to these, in summary:

Accordingly, I shall order Finlaw to provide the further information I have ordered above within 28 days from the hand down of this judgment, for the Claimants to file and serve a re-re-amended particulars of claim within 21 days thereafter, the Finlaw Defendants a re-amended defence within 21 days of that, with a reply from the Claimants if so advised 14 days after that. That will take the close of pleadings till about early April 2024, which will leave enough time so as to ensure that the existing timetable is not materially prejudiced.

For these reasons:

The parties may make further brief submissions to me on (a) the notice period which Finlaw must give if it wishes to sell part of the Property, (b) the forms of the requests where I have made suggested alterations, (c) the proposed revised timetable resulting from the Extension Application, and (d) on the question of costs of the Claimants’ October 2023 application and November 2023 request for further information, and of their Extension Application. In the first instance, I invite the parties to address me in writing on whether this should be at a short oral hearing, or by written submissions.