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Claim No. CFI 005/2021

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

(1) ANOOP KUMAR LAL
(2) PAUL PATRICK HENNESSY

Claimants

and

DONNA BENTON

Defendant

ORDER WITH REASONS OF JUSTICE ROGER GILES

UPON reviewing the Defendant’s Application No. CFI-033-2021/6 dated 10 November 2021 (the “Application”) for an Order compelling the Claimants to comply with the Document Production Order of Justice Roger Giles dated 31 August 2021

AND UPON reading the Order of the Registrar Nour Hineidi dated 6 December 2021 setting out the procedural timeline of the Application

AND UPON reviewing the Claimants’ evidence in answer to the Application dated 14 December 2021

AND UPON reviewing the Defendant’s evidence in reply dated 4 January 2022

AND UPON hearing Counsel for the Claimants and Counsel for the Defendant

IT IS HEREBY ORDERED THAT:

1. Order that within 7 days (by 4pm on 24 January 2022) each of the Claimants file and serve an affidavit:

2. Stand the Application over to a date to be fixed, with liberty (a) to the Defendant to apply within 7 days of the filing and service of affidavits in accordance with the preceding order to relist for purposes of an “unless” order; and (b) to any party to apply to relist to deal with costs.

3. Reserve all questions of costs.

Issued by:
Nour Hineidi
Registrar
Date of issue: 17 January 2022
Time: 3pm

SCHEDULE OF REASONS

1. On 31 August 2021, a Document Production Order (the “Order“) was made against the Claimants in relation to 11 categories of documents. The Order required that each of the Claimants “carry out a reasonable search to locate“ documents in the categories; produce any of the documents located as a result of the search; and identify any of the documents which were, but are no longer, in his possession custody or control and explain to the best of his knowledge and belief what has happened to them.

2. This began as an application for an order compelling compliance with the Order. It became also an application for an “unless“ order if there was not compliance.

3. The Claimants’ claims are for payments said to be due under agreements operating upon the sale by the Defendant of her shares in DATE Holdings Ltd (“DATE”) to GFH Group BSC (“GFH Group“). A substantial element in the business of DATE was the business of The Entertainer FZ LLC ("The Entertainer“), of which the Claimants were the chief operating officer and the chief executive officer. The defence to the claims includes allegations that the Claimants were in breach of various duties owed to The Entertainer and/or to DATE, by reason of an illicit attempted management buyout of The Entertainer (the “MBO“). It is alleged that in the course of the MBO, for which they engaged the assistance of a Mr Stephen Atkinson (“Mr Atkinson”), they charged MBO expenses to The Entertainer’s corporate credit card and disclosed The Entertainer’s confidential information to proposed third party investors. The Defendant also counterclaims, alleging that the disclosure of the confidential information included disclosure to GFH Group, the eventual purchaser of her shares, and prejudiced the sale price.

4. It is not in dispute that there was an abortive MBO, but there appears to be dispute over whether it was illicit or kept secret from the Defendant. In general terms, the 11 categories of documents are directed to what the Claimants did towards the MBO and in particular their communications between themselves, with Mr Atkinson, and with a Mr Ashford. It is evident that document production is an important tool in the Defendant establishing the Claimants’ activities in relation to the MBO, on her case otherwise unknown to her.

5. The Claimants’ compliance with the Order was initially unsatisfactory, with the first Document Production Statements followed by others on 1 November 2021 and a drip-feed of documents. This led to the filing of the application on 10 November 2021. At a Directions Hearing on 6 December 2021, the Registrar directed that each of the Claimants file and serve affidavit evidence inter alia “including an explanation of the extent of each Claimant’s compliance (or otherwise) with the Document Production Order“. Affidavits sworn on 14 December 2021 were filed, which can be treated as further Document Production Statements. But the Defendant maintains the application, as extended to include the “unless“ order, while confining it to the documents in categories 1, 2, 3, 7, 9 and 11.

6. At the hearing of the Application, I first invited submissions on the central question of the current state of compliance with the Order.

7. The Claimants’ affidavits are replete with assertions to the effect that there are no further documents to be produced, but the Order mandates “reasonable search“ to locate documents, and compliance includes explanation of the search undertaken in order that it can be seen that it was reasonable search. Rules of the DIFC Courts (“RDC”) r.28.43 itself requires, amongst other things, that there be set out the extent of the search made to locate the documents. As explained by Justice Sir John Chadwick in Taaleem PJSC v National Bonds Corporation PJSC [2010] DIFC CFI 014 (14 January 2013) at [36]-[38], it is not enough to state that “no documents have been located as a result of the search“, because that does not tell the requesting party, or the Court, what has been done in carrying out the search which is said to have been carried out. When it is said that no documents have been located, that is stated (at [36]) –

“… in the context of a search which [the party] has been ordered to make and the extent of which has been specified. That provides a context in which the Court and the requesting party can see what has been done to find the documents; and can take a view as to whether the fact they have not been located after a search is a reliable indication that they probably do not exist (or, at least, that they could not be found without a search which amounted to an unreasonable burden)…“.

8. In addition, compliance with the Order requires attention to documents which were, but are no longer, in the possession, custody or control of the Claimant. In a case such as the present, where it appears that communications with and between the Claimants were substantially if not wholly electronic, compliance in this respect is of particular importance because documents may have been deleted from the electronic files.

Categories 1, 2 and 3

9. These categories are, in summary, all correspondence between the Claimants; between the Claimants and Mr Ashford;and between the Claimants and Mr Atkinson, during the period from 1 January 2017 to later dates relating to the Claimants’ proposed MBO. In submissions, three areas of non-compliance were asserted.

10. The first related to specific email attachments. The Claimants provided a number of emails, but initially omitted the attachments to 13 of the emails. Six attachments were subsequently provided. The Defendant said that the other seven had not been provided, being those identified in paragraph 12(c) of the Fourth Witness Statement of Antonia Birt.

11. In their affidavits, the Claimants say that the six attachments were originally “accidentally omitted”; they do not satisfactorily address the remaining seven, saying that they do not understand the reference to 13 email attachments. In submissions, Counsel for the Claimants said that they had not been able to do anything further because the emails to which the seven attachments related “have not been exhibited with the Defendant’s evidence”. That is not satisfactory. The emails are identified and had previously been identified to the Claimants’ lawyers, and it was incumbent on the Claimants to particularly search for the attachments and explain the search.

12. The second related more generally to emails. The Defendant submitted that the production in relation to emails was deficient in that the Claimants had not properly addressed their private email accounts, as distinct from The Entertainer email accounts. WhatsApp messages exchanged with Mr Atkinson referred to communications by the private email accounts, as had been pointed out to the Claimants’ lawyers, and it was particularly important that reasonable search extending to the private email accounts was shown; this, the Defendant said, had not been done.

13. In contending that the Order had been complied with, Counsel for the Claimants referred to paragraphs in their affidavits most of which are no more than assertions to the effect that no documents had been withheld; but at their height was (from the First Claimant’s affidavit) –

“ 23. In my search for electronic documents and correspondence responsive to all categories of documents requested by the Defendant, I have used all of the keywords provided by the Defendant in paragraph 9 of her Request to Produce. All documents and correspondence that I found as a result of such a search have been produced pursuant to the Document Production Order. I have not withheld any documents or correspondence that I discovered through such search.“

14. In his affidavit, the First Claimant first says that any email correspondence in connection with the MBO was done using The Entertainer email account, but then contradicts this by saying that “whatever limited correspondence was conducted“ using or forwarded to private email addresses had been produced. Both Claimants say that they have reviewed the references to private emails “but have not been able to find any emails in my private email box that have not already [been] produced pursuant to the Document Production Order“.

15. It is evident that the private email accounts are potential sources of document to be produced. Reading matters together, I think the affidavits amount to saying that the private email accounts have been searched using the keywords, and with the references in the WhatsApp messages in mind. As I indicated to Counsel for the Defendant in the course of the hearing, search using the keywords provided by the Defendant for search of electronic databases could be regarded as reasonable search. However, what is missing is identification of the private email accounts – that is part of showing reasonable search. In this respect, compliance with the Order is lacking.

16. The third related to WhatsApp messages. Mr Atkinson set up a WhatsApp group chat “Operation Black Cod“. The Claimants exchanged WhatsApp messages outside this group chat. Both Claimants say that they have searched through the direct WhatsApp communications outside the Black Cod chat “and have not found any communications that are relevant to the Defendants Request to Produce“, using the keywords provided by the Defendant in the search.

17. In this respect, prima facie there has been compliance with the Order. However, there is more. The Defendant points to references in letters from lawyers for Mr Atkinson to WhatsApp correspondence between Mr Atkinson and the Second Claimant which would fall within category 3 (and perhaps more particularly category 7, a subset of category 3). These references were communicated to the Claimants’ lawyers in October 2017, as part of complaint of failure in production. They are not specifically addressed in the affidavits. They indicate that keyword search of the WhatsApp messages did not capture all documents within the category, and that reasonable search required more – search which would locate the WhatsApp correspondence identified in the letters. In this respect, there has not been compliance with the Order. Further search is required, if necessary, by examination of all WhatsApp exchanges.

18. In relation to these categories (as in all categories) the Claimants have not properly addressed documents which once were, but are no longer, in their possession, custody or control (“documents no longer held”). Emails and WhatsApp messages may have been deleted. There are statements in the Document Production Statements that the Claimants have produced all documents that “have been in [my] control“, but that does not identify documents no longer held or explain to the best of the Claimants’ knowledge and belief what has happened to them.

Category 7

19. This category is “all documents and correspondence relating to the Claimants entering into an agreement with Mr Atkinson dated 5 September 2017 for the services related to the MBO”.

20. The Claimants each say that they remember that they and Mr Ashford signed an agreement with Mr Atkinson on 5 September 2017 “setting out the terms of his compensation in the event of a successful MBO“ (italics as in affidavits), but that they “have not been able to find any correspondence or documents responsive to this request“. The position is as for the WhatsApp messages in the categories last considered, including the failure properly to address documents no longer held.

Category 9

21. This category is “all documents and correspondence relating to the Claimants’ use of The Entertainer’s corporate credit card for the expenses relating to the proposed MBO during the period from 1 January 2017 to 26 July 2018“.

22. It appears to have been assumed that communications between the Claimants, and between the Claimants and Mr Atkinson and/or Mr Ashford, would be by electronic means. That is not necessarily so in relation to any documents and correspondence in category 9. Other than the explanation of search by keywords, the Claimants do not explain what search was undertaken to find documents within this category. Explanation is required of a search related to the sources of documents and correspondence, as the corporate credit card was used and its use generated documents, which might show the relevant use. It is also necessary that the Claimants properly address documents no longer held.

Category 11

23. This category is “all correspondence between Mr Atkinson and GFH Group where the Claimants have been copied during the period 1 January 2017 to 26 July 2018”. In their affidavits, the Claimants say (in different words) that other than correspondence produced by the Defendant and a single forwarded email that has been produced, they have not been able to find any documents.

24. There may be an initial difficulty. The obligation is to produce documents in the possession, custody or control of the Claimants; that is not done by saying that the Defendant already has the document, let alone by a general reference to documents produced by the Defendant without identification of which of the documents produced by the Defendant answers the description in the category. That a document is in the position of a party can be a relevant matter. This was not raised in submissions, and it may be that the position is understood between the parties. Since it was not raised, I will make no order in this respect, but if the position is not understood between the parties, it should be addressed.

25. The assumption is that the Claimants would have been copied electronically. Any document in this category should be captured by the keyword search, in the circumstances a reasonable search. But again, it is necessary that the Claimants properly address documents no longer held.

26. On the question of the current state of compliance with the Order, then, in the respects above there is non-compliance. As I indicated to Counsel at the hearing, I do not think it appropriate to move at this point to whether or not there should be an “unless“ order. Rather, I will make orders intended to be tailored to the deficiencies in compliance and with a view to their rectification, while reserving to the Defendant the ability to press for an “unless” order. I will also reserve all questions of costs for a subsequent occasion in the light of future events. The Application will be stood over to a date to be fixed, but may be re-listed for the purposes of an “unless” order or to deal with costs; if appropriate, the questions of costs can be left until the substantive hearing.

27. The timetable leading to the substantive hearing is presently suspended. The parties should confer to agree upon a revised timetable having regard to the orders now made and compliance with them.

28. I should record that Counsel for the Claimants submitted that there were “threshold deficiencies” in the Application prior to entering upon whether there had been compliance with the Order. I confess to some difficulty in understanding the submission. It was said that the Defendant’s statement, at the time of applying for the Order, that the documents requested were not in her possession, custody or control, was incorrect, and that this undermined the Request to Produce and this Application. I find it difficult to accept that (for example) communications between the Claimants as requested in category 1 were within the possession, custody or control of the Defendant, and I think that on interrogation Counsel retreated from his proposition; but the more fundamental point is that the Order was made, and has not been appealed, and the present question is whether or not it has been complied with. It was also said that considerations of necessity and proportionality should lead to rejection of the application. That may or may not become relevant if the Defendant presses for an “unless” order, but it is not relevant when the Order has been made, the Claimants must comply with it, and the question is whether or not they have done so.

Orders

29. I make the following orders: