Thevarajah v John Riordan, Eugene Burke, Barrington Burke & Prestige Property Developer UK Ltd

I have to consider at this stage in this matter two questions, which are intimately connected. The first is whether the defendants have complied with an unless order made by Mr Justice Henderson on 21 June 2013 with respect to the disclosure of information required to be provided in aid and in order to ensure the proper release of a freezing order which had previously been made. The second is whether, if there was such a failure, the defendants should be afforded relief from that sanction under the jurisdiction conferred by CPR 3.9 which, I shall explain later, has recently been substantially redrawn.

I do not think it necessary to describe the context of the claim which relates to the purchase and sale of that property. In so far as necessary, if this judgment is required to be elaborated, the underlying facts are summarised in paragraphs 15 to 19 of the skeleton argument provided to me on behalf of the claimants.

I deal with each of the related questions in turn. So far as the question of whether Mr Justice Henderson's order has been complied with, I think it is fair to summarise the matter in this way: that although they criticised the manner of the presentation of the various deficiencies said to have been identified by the claimants (which were divided into some 39 points) as having, as they put it, painted an overly bleak picture and over-egged the pudding, sometimes in an inflammatory manner, the defendants are constrained to accept that in a number of respects the order has not been complied with.

The Defendants urge on me that their failures in this regard were de minimis. Further, or alternatively in other respects, they were the product of matters beyond their control. In particular, I would instance two areas of disclosure.

The first area is the charge documentation which was expressly sought from five financial institutions by letters which were, in fact, prepared by the claimant's solicitors and sent to those institutions as is recorded in the preamble to Mr Justice Henderson's order.

Suffice it to say, the position in that regard is less than satisfactory. The position, in reality, is, I think I am right in saying, that none of the charges has been made available. The excuse for that is that charges were granted in favour of the London office of the Bank of Cyprus, who have refused to co-operate in that regard through Mr Andrew Fouli who is their Recoveries Manager. I was shown correspondence in this regard and will return to that shortly.

The second instance, and I stress these are only instances, of a failure to comply with the unless order of Mr Justice Henderson relates to the requirement to provide proper detailed disclosure of documents as to the manner in which this litigation is funded on behalf of the defendants and the source of that funding. Again, there has been an obvious failure to provide the details which are required in order that the claimants and the court should be satisfied that the funds are coming out of a disclosed source and are being used only for purposes which are not inconsistent with the general tenor of the freezing orders that have been made.

Returning to the position of the Bank of Cyprus and the failure to disclose the various charges identified in correspondence in general terms, it has been urged upon me by Mr Davies of counsel, on behalf of the defendants, that the reason for that may be, and he fairly put this in terms of conjecture, that relations between the defendant and the Bank of Cyprus and Mr Fouli, in particular, are strained, have been worsened in consequence of the defendant's increasing indebtedness and notice of interlocutory orders, and that this and the bank's wariness may be the reason for the delay.

As I say, Mr Davies was most fair and measured in his presentation and simply put that as a matter of conjecture. I have to say that the test of the conjecture, which is provided by correspondence, does not encourage me to accept the excuse which is sought to be suggested. As I read it, at least as at 15 July, the email traffic between Mr Fouli and the defendants and their solicitor indicates a close and informal relationship with no suggested difficulty or impairment in providing whatever was required.

It is true that a subsequent email from Mr Fouli to Mr Fletcher, dated 31 July, is altogether more formal and suggests difficulties and emphasises quite forcefully supposed inaccuracies in the way that the manner has previously been put forward. Another explanation, since we are in the world of conjecture, is that Mr Fouli's correspondence rather reflects what he is given to understand may be the most appropriate response from the defendant's point of view.

Accordingly, although valiantly advanced, I do not consider the conjecture provides any sufficient justification for the failure in this regard.

When there is, added to that, two at least further factors, it does seem to me most difficult to reach any...