PMD Business Finance Holdings Limited v Lee Schofield & Anor

This judgment provides the detailed reasons for the order I made on 19 November 2025 for pre-action disclosure pursuant to the provisions of CPR 31.16 and further to the power contained with section 33(2) of the Supreme Courts Act 1981 to order a potential defendant in subsequent proceedings to disclose documents which are likely to have or have had in their possession, custody or control. The application for the order against Mr Schofield and One Funding Limited was made on 30 July 2025.

The potential claim by PMD against Mr Schofield is primarily for breach of post termination restrictive covenants; whereas the potential claim against One Funding Limited, a company incorporated by Mr Schofield’s wife, is for inducing breach of contract and for inducing breach of contractual undertakings.

CPR 31.16 sets out the provisions for the granting of an order for disclosure before the commencement of proceedings. CPR 31.16 (3) provides that the court may make an order under this rule where:

Mr Schofield and One Funding accepted that the jurisdictional test for pre-action disclosure under CPR 31.16(3) (a) and (b) were made out, namely that both PMD and Mr Schofield and One Funding were likely to be parties to the proceedings. It was not accepted that either (c) or (d) of CPR 31.16 were satisfied.

The history of this matter is set out in the witness statement of Michelle Connor dated 30 July 2025. I also had the benefit of reading the witness statement of Lee Schofield dated 14 November 2025, the witness statement of Aidan Minogue dated 13 November 2025, and the witness statement of Thomas Brown dated 17 November 2025.

PMD is the holding company for PMD Leasing Limited, the trading entity, which was incorporated on 29 June 2007 and began trading in or around April 2020. PMD provides funding solutions through asset finance, business loans and structured finance to a wide range of sectors including haulage, construction, vehicle repair, leisure, beauty and waste industries.

PMD works with customers either directly or through suppliers, known as introducers, who direct customers to PMD. PMD relies upon the introducers to direct customers to PMD and thereby obtain repeat business and an income stream. The relationship between PMD and its introducers is therefore very important for establishing new business for PMD and is integral to its business.

Mr Schofield was appointed a director of PMD from 25 February 2021 and a Director of Leasing from 21 March 2016. He continued to hold office until 21 February 2024 pursuant to the terms of the Service Agreement entered into on 25 February 2021.

The Service Agreement provides in the interpretation clause that “confidential information” is information (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) relating to the business, products, affairs and finances of the company for the time being confidential to the company and trade secrets including, without limitation, technical data and knowhow relating to the business of the Company or any of its business contracts. Restricted Business is defined as being those parts of the business of PMD with which the employee was involved to a material extent in the 12 months before termination; Restricted Customer is any firm, company or person who, during the 12 months before termination, was a customer, introducer or prospective customer of, or was in the habit of dealing with the company with whom the employee had contact or about whom he became aware or informed of in the course of employment. Restricted Person is defined as anyone employed or engaged by the company or who could materially damage the interests of the company if they were involved in any capacity in any business concern which competes with any Restricted Business and with whom the employee dealt in the past 12 months before termination in the course of employment.

Pursuant to clause 4.2 the employee is to abide by any statutory, fiduciary or common-law duties to PMD.

Clause 22 of the Service Agreement contains restrictive covenants in order to protect the confidential information and business connections of PMD so that Mr Schofield covenanted with PMD not

One Funding was incorporated by Mr Schofield’s wife on 20 November 2023 and Mr Schofield is a 40% shareholder of One Funding. On 1 May 2024, Mr Schofield was appointed as a Director of One Funding.

On 22 December 2023, Mr Schofield had entered into a Share Purchase Contract with PMD pursuant to which he sold his shares in PMD for a total of £500,000 including £325,000 for the sale of shares back to PMD plus £175,000 in repayments of the Seller’s Loan (in tranches) subject to a set-off for a breach of restrictive covenants.

Mr Schofield also entered into a Settlement Agreement with PMD on 1 February 2024 which continued the post-termination restrictions so that Mr Schofield was restricted from trading with Restricted Customers, Restricted Suppliers and Restricted Introducers for 15 months – namely until 1 May 2025. The obligation was not limited to Mr Schofield undertaking on his own account but to any associate, including any firm or company in which he had an interest.

The application for pre-action disclosure was made by PMD on 30 July 2025, subsequent to Mr Schofield and One Funding responding to the written request for pre-action disclosure as being speculative. The application was made on the basis that PMD had concluded that Mr Schofield had various dealings with a “Restricted Entity” over the months since the Purchase Contract and Settlement Agreement had been entered into.

In June 2024, PMD were concerned that Mr Schofield had entered into a contract with Go Live Data Limited (“Go Live”) for the provision of email marketing services which was the same basis upon which PMD also used Go Live. Such a transaction would have been contrary to the provisions of clause 8.1.2 and 8.1.3 of the Purchase Contract and the restrictive covenants therein which provide, inter alia:

“8.1.2

from the date of this Agreement until the 15 month anniversary of Completion, have any dealings with, solicit or entice away or endeavour to solicit or entice away from any Group Company any person, firm, company or other organisation who was a supplier (each a “Restricted Supplier”) or introducer (each a “Restricted Introducer”) to or a customer (each a “Restricted Customer”) of or in the habit of doing business with any Group Company at any time during the Interim Period and at any time during the period of 27 months preceding Completion …”

“8.1.3

from the date of this Agreement until the 15 month anniversary of Completion, have any dealings with, solicit or entice away or endeavour to solicit or entice away from any Group Company any person, firm, company or other organisation who is or was in the process of negotiating, transacting with or doing business with any Group Company whether as a prospective customer, prospective introducer or prospective supplier or otherwise (including, but not limited, to the Restricted Parties) at any time during the Interim Period and at any time during the period of 9 months preceding Completion;”

PMD, through its solicitors, expressed its concern as to what other breaches may have occurred and requested termination of the relationship with Go Live and on 24 January 2025, a second letter was sent on PMD’s behalf by its solicitors informing Mr Schofield that there was evidence that One Funding had completed a funding transaction with another Restricted Customer, C Simm Commercial Services Limited. That letter also informed Mr Schofield that two calls had been received by PMD from two individuals unwilling to reveal their identities notifying PMD that Mr Schofield had been targeting PMD customers, and was working with HaulTech and D Gawthorpe and Elite Motors. I have seen the transcripts of the two calls which appear to be from different people and neither seem to be vindictive, but setting out what they consider not to be “fair”.

In the letter dated 24 January 2025 a request is made for Mr Schofield to provide an affidavit setting out what confidential information he was in possession of, the confidential information he had been in control of but was no longer in his control and what has happened to that information and whether it has been shared with third parties and, if so, who. PMD also requested the affidavit to disclose details of any dealings with HaulTech and D Gawthrope and any dealings with others to solicit or entice away, or endeavour to solicit or entice away, from PMD. PMD also sought a deed of undertaking.

Mr Schofield’s solicitors responded on his behalf on 31 January 2025 admitting to having dealings with three Restricted Entities, but denying deliberate targeting. He refused to provide the affidavit sought and indicated that he was willing to give limited undertakings which reflected the contractual arrangements between PMD and Mr Schofield.

A letter before action was also sent to One Funding on 27 January 2025 and in response signed contractual undertakings were provided in the form requested by PMD setting out that it had not induced Mr Schofield to breach any of its obligations to PMD and that it would not do so.

There was further correspondence between the respective solicitors in February and March 2025, and a draft application for a springboard injunction was provided to the solicitors for both Mr Schofield and One Funding. No satisfactory undertakings or affidavit were provided so far as PMD was concerned. Instead of proceeding with interlocutory relief or seeking a springboard injunction by way of relief PMD decided to proceed with by seeking pre-action disclosure in order to ascertain whether it is appropriate to proceed with a claim for interlocutory relief on 30 July 2025. The reason for taking that course was that PMD recognised that it did not have a clear picture with respect to what has been happening and it wanted to be more certain of its grounds before launching into litigation.

I was very grateful for the oral and written submissions of both Ms Shiu for the Applicant and Mr Taylor for the Respondent. Having heard from both Counsel I came to the conclusion that the order should be granted but with some limitation from what had been sought as to precisely what the Respondents were obliged to disclose. The order has been made in these terms:

The Respondents shall each disclose and permit the Applicant to inspect the following documents which are or have been within the Respondents’ control:

Any emails, letters and electronic messages sent to or from Restricted Customers, Restricted Suppliers or Restricted Introducers (as defined in the Share Purchase Contract extract at Error! Reference source not found. and Settlement Agreement extract at Error! Reference source not found.) including but not limited to those listed in Error! Reference source not found. to this order from 12 November 2023 to 1 May 2025;

Any purchase orders and invoices sent to or from or otherwise involving Restricted Customers, Restricted Suppliers or Restricted Introducers (as defined in the Share Purchase Contract extract at Error! Reference source not found. and Settlement Agreement extract at Error! Reference source not found.) including but not limited to those listed in Error! Reference source not found. to this order from 12 November 2023 to 1 May 2025;

Any telephone logs recorded, calendar entries of meeting, notes of telephone calls and meetings with Restricted Customers, Restricted Suppliers or Restricted Introducers (as defined in the Share Purchase Contract extract at Error! Reference source not found. and Settlement Agreement extract at Error! Reference source not found.) including but not limited to those listed in Error! Reference source not found. to this order from 12 November 2023 to 1 May 2025; and

The Respondents shall specify when providing disclosure of the documents described in clause 0:

which documents are no longer in their control and what has happened to those documents; and

the documents in respect of which they claim a right or duty to withhold inspection.

The Respondents shall by 20 January 2026 provide to the Applicant’s solicitors, CG Professional Limited of St Georges House, St. Georges Street, Chorley, PR7 2AA, a list of documents disclosed and a disclosure statement, together with a copy of each of the documents contained in the list.

It was clear that the Applicant had evidence to properly give rise to a concern that there had been a breach or breaches of contractual agreements entered into by Mr Schofield and One Funding, but the limited evidence available (including some documents provided by the respondents which had been redacted) had not assisted the Applicant in being able to assess the extent of its potential claim, or the potential quantum, against the Respondents, and had only served to support the suspicions of the Applicant.

Having issued the application for pre-action disclosure on 30 July 2025, the Respondents agreed, on condition that the application be withdrawn, to disclose invoices issued to the entities listed and the Purchase Orders submitted to One Funding by the listed entities. That offer was plainly significant as it did provide an acknowledgment by Mr Schofield and One Funding that PMD required further information with respect to the transactions that had been taking place, but it was not sufficient to satisfy PMD as it did not recognise that the invoices are issued directly to Restricted Entities but result, along with the purchase orders, from transactions with Restricted Entities.

Documentation was then provided by Mr Schofield and One Funding under cover of a letter dated 22 October 2025 which included supplier invoices and customer invoices involving, respectively, Restricted Suppliers and Restricted Customers within the Restricted Period. The redactions to those documents did not enable PMD the opportunity to understand the volume of breaches and the volume of opportunities lost.

As I have set out above, the granting of an order for pre-action disclosure is governed by the rules contained in CPR 31.16. It is necessary to first establish that the respondent is likely to be a party to subsequent proceedings and that the applicant is also likely to be a party to those proceedings. That is uncontroversial in this matter.

The other issues are whether the disclosure sought would fall within standard disclosure and whether it is desirable for there to be disclosure pre-action to “(d)(i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without proceedings; or (iii) save costs.

Blair J summed up the principles as follows in Assetco Plc v Grant Thornton UK LLP [2013] EWHC 1215:

The court must consider whether, in the round, the pre-action disclosure meets the requirements of CPR 31.16 and whether it is in furtherance of the overriding objective (see Hands v Morrison Construction Services Ltd [2006] EWHC 2018). It was accepted on behalf of Mr Schofield and One Funding that there was enough evidence to bring a claim. One Funding and Mr Schofield contended that in those circumstances it was unnecessary for there to be pre-action disclosure, but that contention fails to deal with the fact that a purpose of pre-action disclosure is to enable issues to be narrowed or resolved without the need for costly litigation.

In this matter I was satisfied that the substantive claim is properly arguable. It is not for the court, in the context of this application, to embark upon a determination of substantive issues in the case (see Rose v Lynx Express Ltd [2004] EWCA 447).

The disclosure I have ordered falls within standard disclosure as it is entirely related to the activities of Mr Schofield and One Funding in relation to the Restricted Entities – customers, suppliers and introducers. While I limited the disclosure, I did not do so to the extent argued for by the Respondent and included various communications – including telephones and recorded meetings. The disclosure ordered will enable PMD to ascertain the extent of the claim (if any) and the potential quantum of any claim, with the potential of any claim being resolved without the need for the bringing of proceedings and the potential costs savings for all involved.

PMD are currently holding back payment of the monies due under the Share Purchase Agreement relating to the instalments for the payment of the Seller’s Loan. PMD are doing this because of the alleged breaches. If PMD are incorrect about there being any breach then those monies will need to be paid swiftly and in accordance with the agreement; if there have been breaches the these payments may properly be used as a set off; if there have been breaches but they are having significantly more impact than the retained monies then it will be in furtherance of the overriding objective for that information to be disclosed as soon as possible as it has the potential to avoid the necessity of proceedings or, at the very least, limit the costs.

The documentation I have ordered to be disclosed does not support “a fishing expedition” and is not merely speculative. The Applicants have sufficient evidence already to support the potential of there being some evidence of wrong doing, albeit I am not making any findings at this stage. That was accepted on behalf of the Respondents and I accepted the contention made on behalf of the Respondents that using the words “related to” would have made the order too wide. By narrowing the wording of the order sought, the order for pre-action disclosure is now (in my judgment) proportionate to the issues involved.

Having already made the necessary order for pre-action disclosure, and for the costs of the application and the costs of carrying out the pre-action disclosure, there are no further orders to be made.

This application for pre-action disclosure was properly made. The provisions of CPR 31.16 were satisfied and, upon a proper judicial exercise of discretion, the order has been made, with some limitations upon what was originally sought.