England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		03/02/2017

MR. JUSTICE NUGEE :

1. I have before me a number of applications arising out of the attempts of the claimants, who are now judgment creditors, to obtain information as to the assets of the defendant, a Mr. Baadarani, who is now a judgment debtor.
2. One of the applications relates to a search order obtained by the claimants from Warren J on 21^st April 2016 on a without notice application. The search order provided for a return date which has been adjourned from time to time and this is now the return date.
3. Mr. Samek QC, who appears for Mr. Fakih and Leesdel Limited, who were respondents to the search order and who I will refer to as the "Respondents," seeks to set it aside in part on the grounds that the court had no jurisdiction to make the order in the form and scope as it did.
4. The background is as follows: The claim was first brought in 2009 by the claimants against Mr. Baadarani and another defendant. A jurisdictional challenge by Mr. Baadarani ultimately failed in the Supreme Court and he was ordered to pay certain costs. That included an order of the Supreme Court, dated 9th December 2013, ordering him to pay £150,000 on account of costs. To jump ahead, he initially defended the action on its merits, but after he had failed to comply with various unless orders Chief Master Marsh on 3rd June 2015 entered judgment against him, in favour of the third claimant, in default, in a sum of just over US$20 million. The claimants are therefore now in the position of judgment creditors under this default judgment as well as having the benefit of the Supreme Court's costs order and various other costs orders.
5. Going back, the claimants had, on the strength of the Supreme Court order for payment on account, obtained from Henderson J, on 18th March 2014, an order under CPR 71.2 that Mr. Baadarani attend before a master to provide information about his means and any other information needed to enforce the judgment. That order also required him to produce all documents in his control that related to his means of paying the judgment debt.
6. The examination started on 19th June 2014 before Master Bowles. It appeared that numerous documents had not yet been disclosed by Mr. Baadarani and the examination was adjourned part heard, Master Bowles making an order requiring Mr. Baadarani to give further disclosure to the claimants, with documents to be disclosed as set out in a list to be served on him by the claimants' solicitors. A detailed list, listing 53 classes of documents, was in due course served.
7. Mr. Baadarani produced some documents but the claimants took the view that he had failed to comply and applied to commit him for breach of Master Bowles' order. That application for committal was heard by Norris J in July 2015. He found Mr. Baadarani in certain respects in breach of the order and guilty of contempt and, by his order dated 24th July 2015, ordered Mr. Baadarani again to provide certain documents, those being listed in the schedule to his order, a rather shorter list consisting of 13 documents or classes of documents.
8. On 1st March 2016 the claimants obtained from Proudman J a worldwide freezing order against Mr. Baadarani. That required him, in the usual way, to disclose all his assets exceeding £5,000 in value. On the next day the claimants obtained, also from Proudman J on a without notice basis, a number of third party disclosure orders under CPR 31.17. One of them was directed at the Respondents, Mr. Fakih and Leesdel Limited, and a third respondent, a Mr. Lehrer, about whom no more need be said. The third party disclosure order required the Respondents to produce documents in a limited number of categories set out in paragraphs 1(a) to (f) of her order. I need not read them all out but they are focused on certain specific aspects of Mr. Baadarani's assets, in relation to which the claimants thought the respondents to the third party disclosure order could provide documents.
9. In particular the claimants had by then obtained a statement of Mr. Baadarani's assets and liabilities, signed by Mr. Baadarani and dated 17th April 2013, which they understood had been provided by Mr. Fakih to a bank, the National Bank of Kuwait International Plc ("NBK"), in connection with the remortgage in August 2013 of a long leasehold property at Flat 12, Hanover Gate Mansions in London, which was then owned by a Panamanian corporation called Hanover Place Corporation, the remortgage being supported by a personal guarantee given by Mr. Baadarani himself. The documents requested included not only a copy of that asset statement on the Respondents' files but any correspondence between the Respondents and NBK in relation to the property at Hanover Gate Mansions, the provision of the guarantee and the remortgage.
10. The Respondents did provide certain limited documents in response to that third party disclosure order. What the Respondents did not however appreciate was that the claimants had, on the same day, also obtained a third party disclosure order against NBK, and NBK provided considerably more documents to the claimants than the Respondents had. That suggested to the claimants that the Respondents had not properly complied with the third party disclosure order and indeed had conspired with Mr. Baadarani to backdate the asset statement, which had in fact been created in 2015, but was backdated to 2013.
11. I need not for the purposes of this application go into the question of whether these suspicions were well founded or not. They may be the subject of applications which have not yet been heard, but for present purposes what is significant is that on the strength of that the claimants applied to Warren J for a search order against the Respondents and he granted it.
12. That was, as is usual, a without notice application. It was put forward on two bases. One was a proposed claim against the Respondents in conspiracy. I need not go into the details of that as Warren J in the event did not base his judgment on that conspiracy claim. The other basis on which it was put, which was accepted by Warren J, was the judgment that the claimants had obtained. I will have to look at the precise reasoning of Warren J in due course, but in essence he accepted that a search order could be made post judgment against someone against whom a third party disclosure order had been made. He therefore granted the search order against the Respondents. That defined the scope of the search order by reference to listed items as defined. Those items were listed in schedule B to the order. They are all classes of document; they go very much wider than the documents sought by the third party disclosure order. Just taking one example, item (a) in the schedule is:

"Documents relating to the Defendant's Worldwide Assets, comprising all documents relating to or evidencing the existence, location and value of any Assets (as defined above) of the Defendant whether in his own name or not or whether held by nominees or howsoever save that this paragraph shall not apply to Assets with a value of £5,000 or less."

It is that which Mr. Samek says makes the search order too wide.

13. The jurisdiction to grant a search order is now found in section 7 of the Civil Procedure Act 1997, which puts what had been the practice of the court to grant Anton Piller orders on a statutory footing. I need not consider if Parliament, by enacting section 7 and thereby stepping into this particular area, has defined decisively the circumstances in which the court may grant relief of this type, or whether, as Mr. Penny QC, who appeared for the claimants, suggested might be the case, the court retained a jurisdiction outside section 7 matching the jurisdiction it previously had, as Warren J was clearly exercising, or purporting to exercise, the jurisdiction under section 7 and Mr. Penny did not attempt to justify the search order on any other basis.
14. Mr. Samek in fact had two alternative submissions. His first submission, advanced somewhat faintly, was that there was no jurisdiction under section 7 because of the terms of section 7(1) which reads as follows:

"(1) The court may make an order under this section for the purpose of securing, in the case of any existing or proposed proceedings in the court –

(a) the preservation of evidence which is or may be relevant, or (b) the preservation of property which is or may be the subject- matter of the proceedings or as to which any question arises or may arise in the proceedings."

I do not propose to read out the whole of the remainder of section 7 but it should be treated as incorporated in this judgment at this point.

15. Mr. Samek's submission was that after judgment had been obtained against Mr. Baadarani there were no "existing or proposed proceedings" against him at all. That was coupled with a submission that the mooted conspiracy claim against the Respondents could not be relied on to uphold the order as it has now become apparent that the claimants are not actively intending to pursue such a claim, although they reserve the right to do so. His submission was that where an applicant sought a search order on the basis that he proposed to bring proceedings against the respondents to the search order, then even if he genuinely had that intention at the time of the application, once it had become subsequently apparent that he was no longer intending to do so, this would undermine the foundation of the search order and it should be set aside: compare Dadourian Group v Simms [2009] EWCA Civ 169, which illustrates that a freezing order obtained on the basis of a particular cause of action will ordinarily be discharged if the claimant fails to establish that cause of action at trial, even if he establishes a different one. That means, Mr. Samek said, that in the present case the search order cannot be justified on the basis of the conspiracy claim and the Respondents are therefore what are sometimes called non-cause of action defendants, or what I will call third parties. That, he says, means the jurisdiction can only be invoked on the basis of proceedings against Mr. Baadarani and, as I have said, the submission was there were no such proceedings existing or proposed after judgment had been obtained.
16. I will assume, without deciding, that Mr. Samek is right that the claimants can now only justify their search order on the basis of there being existing or proposed proceedings against Mr. Baadarani. Nevertheless, I have no hesitation in rejecting this first submission of Mr. Samek's. I do not accept that for the purposes of section 7(1) proceedings against the defendant come to an end with judgment.
17. Mr. Penny said the proceedings which he relied on was the judgment and he referred to me in this context to what Steyn LJ had said in Mercantile Group Europe AG v Aiyela and Others [1994] QB 366 at 376, where he referred to a disclosure order post judgment against a third party as, "ancillary to the plaintiff's judgment." Put like that, I do not I think I entirely agree with Mr. Penny. A judgment or order would not normally be described "as proceedings," but once a claimant has obtained judgment he very often has to take further steps against a defendant (now a judgment debtor) to enforce that judgment. That may involve any number of applications to the court. As a matter of ordinary language those post judgment steps are proceedings against the defendant just as much as prejudgment steps are. Indeed, this is reflected in the CPR. To take just one example, CPR 70.3 is headed "Transfer of proceedings for enforcement" and reads:

"(1) Subject to rule 83.17, a judgment creditor wishing to enforce a High Court judgment or order in the County Court must apply to the High Court for an order transfering the proceedings."

18. That therefore reflects the normal use of the word "proceedings" to include proceedings post judgment. Not only is this the usual meaning of proceedings, that is that it is wide enough to include proceedings after judgment, there is authority which Mr. Penny referred me to, specifically deciding that an application for a third party disclosure order may be made after judgment. That is North Shore Ventures Limited v Anstead Holdings Limited [2011] EWHC 1178 (Ch), a decision of Floyd J. That in fact turned on the meaning of the word "claim" in section 34 of the Senior Courts Act 1981 and the word "case" in CPR 31.17(3)(a), which provides that the court may only make an order where the documents "are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings," the argument being that a party's case was what it relied on to establish liability and was not apposite to describe the position of the claimant seeking to discover the whereabouts of assets against which to enforce it after it has obtained a judgment. Floyd J rejected that at paragraph [15]. He said this:

"In my judgment section 34(2) of the Senior Courts Act does give the court jurisdiction to order disclosure against a non-party after as well as before judgment. First of all, the words, 'claim' in section 34 can only refer back to 'proceedings' and the two terms are used interchangeably. This seems to me to provide a very weak basis for suggesting that 'claim' has the narrow meaning which the third party suggests. 'Proceedings' is a term which plainly applies to proceedings both before and after judgment."

19. Then he went on to consider a number of other points. That is direct authority both for the purposes of section 34 of the Senior Courts Act 1981 and CPR 31.17, both of which use the term "proceedings", that proceedings includes proceedings after judgment. I see no reason not to give it the same meaning in section 7 of the Civil Procedure Act 1997 and every reason to do so.
20. The power in section 7 of the CPR is by its express terms to be exercised for the purpose of securing the preservation of evidence which is or may be relevant. As the facts of North Shore and equally the facts of the present case illustrate, a claimant seeking to enforce a judgment may very well wish to obtain, and have preserved, evidence for that purpose. Indeed, if Mr. Samek is right, it would mean that one could not obtain a search order under section 7 even against the defendant himself after judgment. That would be a significant limitation on the court's powers. In Distributori Automatici Italia SPA v Holford General Trading Company Limited and Another [1985] 1 WLR 1066, a case predating the enactment of section 7, Leggatt J held that there was jurisdiction to grant an Anton Piller in aid of execution. He said at 1073E:

"Where there is a real risk of justice being thwarted by a defendant intent on rendering any judgment nugatory the need for an Anton Piller order may be even greater in aid of execution than of judgment. In my judgment the court has jurisdiction to make an Anton Piller order after judgment for the purpose of eliciting documents which are essential to execution and which would otherwise be unjustly denied to the judgment creditor."

That was based on section 37 of the Supreme Court Act 1981 and did not involve any decision as to the meaning of the word "proceedings", but it would be surprising if section 7 had had the effect of taking away this valuable power.

21. Gee on Commercial Injunctions (6^th edition), at §17-005 says of section 7:

"Since there is nothing in the section seeking to cut down on the existing inherent jurisdiction or limit its availability and peers were assured by the Lord Chancellor that there was no intention to do this, and since section 7 is a provision which equips the court with a statutory jurisdiction to do justice, section 7(1) should be given a liberal and generous interpretation."

I need not decide whether that is right as a general statement but I accept that there is nothing in section 7 which begins to suggest an intention to cut down the availability of what had been Anton Piller relief, and was now to be a search order, after judgment had been obtained.

22. On the facts of the present case there cannot be any doubt that at the time of the application to Warren J, and indeed today, the claimants were and are continuing to try and pursue Mr. Baadarani under the judgment. Indeed, the whole purpose of this exercise has been to seek to obtain information about his assets so as to be able to execute the judgment. For all these reasons I reject Mr. Samek's first submission.
23. Mr. Samek's second submission, alternatively to his first, is that assuming a search order can be granted against third parties in principle there is no authority that suggests that it can be done in the absence of an actual or intended third party disclosure order; that the ratio in Warren J's judgment was that the search order was being ordered to preserve the material which the Respondents had been ordered to disclose under the third party disclosure order; and that therefore the scope of the search order had to track the scope of the third party disclosure order.
24. That submission, on analysis, runs together two slightly separate points, one based on what can be done in principle under section 7, and one based on what Warren J was actually doing. I will deal with these two limbs of the submission separately but will say straightaway that I do not accept this submission either, whichever limb it is based on.
25. Looking first at the first limb, namely what the scope of section 7 is in principle, Mr. Samek said there was no authority permitting a search order to be granted against a third party except, as he put it, tethered to some substantive right against the third party. It is I think accepted by Mr. Penny that until the decision of Warren J in the present case there was no authority directly on the point. Mr. Penny however referred me to Gee at §17-008 to §17-009, which reads as follows:

"Anton Piller relief could be granted against someone against whom the claimant did not have a substantive cause of action. Thus e.g. such relief could be granted when there was a right to assistance from a person under the Norwich Pharmacal principle, because he had been "mixed up" in wrongdoing, whether innocently or not. Alternatively, it could be said that as long as there is an existing cause of action against someone an order could be made under s. 37(1) of the Senior Courts Act 1981 against a non-party which is ancillary to and for the purposes of prosecution or enforcement of that cause of action.

The section would authorise the making of an order against such a person. The assistance which can be ordered is not limited to obtaining the names of wrongdoers. For example, it can include providing information about what has happened to assets so as to enforce a judgment or assets to which the claimant says he is entitled, or articles which have been made through infringing intellectual property rights.

In using the words "any person" section 7(3) would appear to go further and confer jurisdiction to make an order against anyone with respect to any premises in England and Wales. If an applicant sought an order which was in respect of premises owned and occupied by innocent third parties then in practice this would be very relevant, (if not decisive) as to why the order sought should be refused as a matter of discretion."

26. Mr. Samek disputed that the cases cited in support of the statement in Gee that an order could be made against non-parties were directly in point. They were listed in footnote 29 and he said that they were all examples of the Chabra jurisdiction, under which relief can be obtained against a non-party who holds assets which may or may not belong to a defendant against whom there is a freezing order. I was taken to one example which is the Aiyela case which I have already referred to. This was not concerned with an Anton Piller at all. It was a case where judgment had been obtained against the first defendant, Chief Aiyela, by way of a compromise. His wife, Mrs. Aiyela, had been joined as the fourth defendant but as part of the compromise the plaintiffs had abandoned any cause of action against her, so she was thereafter in the position of a non-cause of action defendant or third party. She was ordered to disclose information about her own and her husband's financial affairs. She accepted however that it was arguable that she held property on trust for him.
27. The Court of Appeal held that the order for disclosure was properly made, basing it on the Norwich Pharmacal jurisdiction. I accept that this is not directly applicable to section 7 but it is illustrative of the fact that non-parties often have information that is relevant to proceedings.
28. Mr. Samek said that it was a case of disclosure, not of a search order, and that there was a significant difference between the two. As he put it, a search order is an entirely different beast, being brought without notice, with provision for a supervising solicitor, and upon the basis of a whole host of undertakings. I accept of course that the mechanics of an order for disclosure and a search order are very different, but I do not see that this has the consequences Mr. Samek sought to attach. He said that disclosure was about listing documents, whereas a search order was about preserving evidence. That much is true but again I do not see any significance in the difference. They are both means to obtain the same end, which is to provide a party to proceedings with access to documents so as to enable him to advance his case. I do accept however that the Aiyela case is not directly on point on the scope of section 7. Since it is agreed that there is no authority apart from Warren J's decision I propose to consider the scope of section 7 as a matter of principle.
29. First, there is nothing in the language of section 7 that restricts the persons against whom a search order can be made. On the face of it therefore a search order can be made against persons who are not defendants and against whom no cause of action lies. The purpose of an order made under section 7(1)(a) is the preservation of evidence. Although it is true that this is not confined to documentary evidence - it would extend for example to real evidence such as counterfeit goods - in practice, as in this case, what is very often sought is the preservation of documentary evidence.
30. While a defendant to an action will often be the main source of documentary evidence sought by a claimant, there is no logical reason why the defendant should be the only person to hold relevant documents and very often a third party will hold documents that provide relevant evidence. That indeed is reflected in the fact that the court has for a very long time had power to compel the attendance at trial of a witness who can produce documentary evidence which is relevant for trial by way of a subpoena duces tecum, now replaced by a witness summons to produce documents, and that such a summons can now be issued to produce documents on a day before trial (see CPR 34.2 and 34.3).
31. It is also reflected in the Norwich Pharmacal jurisdiction, which can be exercised against those who become mixed up in wrongdoing by others and give relevant information; also, rather more recently, by the terms of CPR 31.17, which now includes any third party who has documents that may assist the applicant for the order in the establishment of his case.
32. I see nothing in the language of section 7 or in the authorities which would prevent section 7 being used to grant a search order against a respondent who holds such relevant evidence. Of course, the court is only likely to grant such an order if persuaded that it is a sufficiently strong case, which in practice means that the court has to be satisfied that there is a real risk of destruction or concealment of evidence. An Anton Piller was, as Mr. Samek reminded me, described as one of the law's two nuclear weapons. I accept that a search order will never be granted as a matter of routine and only in circumstances which justify it.
33. But if there is a case where a third party holds relevant evidence and a court concludes that if it was sought from him voluntarily, or by way of a Norwich Pharmacal application or under CPR 31.17, or by a witness summons to produce documents on a date before a trial or at the trial, there is a risk that the evidence will be destroyed or concealed, there is no reason why the court should not have power to grant a search order. It might prove a very useful way to preserve evidence that otherwise might be lost. In these circumstances, I see no reason to read section 7 as subject to an implied limitation. In my judgment, section 7 is wide enough to enable an order to be made against any person who holds evidence that is or may be relevant to proceedings and where the order is made for the purpose of securing that evidence.
34. In reply, Mr. Samek said that the limitation of section 7, which he argued for, was not so much the persons against whom an order could be made but the material that could be sought. Again, that does not find any expression in the language of the section. Section 7(1)(a) refers to the preservation of evidence "which is or may be relevant." That fairly plainly means relevant to the proceedings just as the power under section 7(1)(b) to secure the preservation of property "which is or may be the subject-matter of the proceedings or as to which any question arises or may arise in the proceedings" plainly refers to the existing or proposed proceedings referred to in section 7(1).
35. So long as the evidence that is sought is or may be relevant to the existing or proposed proceedings referred to in section 7(1), therefore, I do not find in the language of section 7 any further limitation.
36. That brings me to what I have called the second limb of Mr. Samek's argument, which is based on what Warren J actually did. For that, one needs to go to his judgment [2016] EWHC 971 (Ch). One should bear in mind that it was an extempore judgment, and the relevant parts are as follows. At paragraph [6] he referred to the two approaches which the claimants relied on for the search order, one being conspiracy and then he said:

"And the second is to rely on the judgments against Mr. Baadarani, coupled with the disclosure orders to which I will come which have already been made against the respondent."

37. At paragraph [12], having considered the conspiracy claim, he said:

"It seems to me that the more principled route to the jurisdiction for the search order in the present case arises out of orders which have already been made. There have been two disclosure orders of relevance. The first was made by Master Bowles on 19th June 2014. This was an order against Mr. Baadarani to disclose a large number of categories of document. There was a further order of Norris J at the end of a committal application against the defendant which he made on 24th July 2015. Again, that is another disclosure order against the defendant, Mr. Baadarani."

38. Then he said at paragraph [13] that the result of the disclosure was not really satisfactory.
39. At paragraphs [17] to [20] he said as follows:

"17. Having said that, I return to the way in which the justification for the search order can be put. It is well established that a freezing order can be granted, and such orders frequently are granted, post - judgment against the defendant as part of the asset recovery exercise.

18. It is also clear that Norwich Pharmacal relief or third party disclosure orders can be made against persons who are not parties and that can be done after judgment as well. Indeed, in the present case, it has been done in that there is an order, as I have said, of 2nd March against the respondents as well as against the bank.

19. I see no reason in principle why under section 7 of the Civil Procedure Act 1997 a search order should not be made against a person against whom a third party disclosure order can be made if it is thought that that third party is likely to destroy or hide the relevant material once he knows that he is going to have to provide it.

20. Section 7, in my judgment, clearly gives a jurisdiction for the court to make an order and although it may be exceptional to exercise the discretion under that provision to make a search order, I have no doubt that, in the present case, on the material before me, it is appropriate to do so in order to preserve the documents which may well exist in Mr. Fakih's office or on his computers or in websites to which he has access. There is a real fear that relevant material might be destroyed."

40. Then at paragraph [21] he referred to the fact that the orders that had been made, namely document disclosure orders, worldwide freezing orders, worldwide asset disclosure orders and third party disclosure orders had:

"been met by a consistent assertion by Mr. Baadarani that he has no assets anywhere in the world to satisfy these judgments. That is why the material which is sought is so important."

41. Mr. Samek's submission was that the ratio of this part of Warren J's judgment was to be found in paragraphs [19] and [20] and he said that the ratio was as follows:

"There having been made a third party disclosure order against the third party, the court can grant a search order if 'the relevant material, that is the material ordered to be disclosed by the third party disclosure order, was not forthcoming."

42. He said that that was crystal clear from the reading of paragraphs [19] and [20]. In other words, he said that the search order was, as he put it, tethered to the third party disclosure. That being the ratio, the scope of the search order had to track the scope of the third party disclosure order.
43. I do not accept this submission. I agree that paragraphs [19] and [20] of the judgment contain the ratio of this part of Warren J's judgment but paragraph [19] does not say that a search order can be made against a person against whom a third party disclosure order has been made. Instead, what it says is that a search order can be made against a person against whom a third party disclosure order can be made. When, therefore, it goes on to say "if it is thought that that third party is likely to destroy or hide the relevant material once he knows that he is going to have to provide it," I do not read that as referring to the material which he has been ordered to disclose by a third party disclosure order. I read the words "the relevant material", in paragraph [19], as a reference back to evidence which is relevant within the meaning of section 7 of the Civil Procedure Act 1997, which as I have already said means evidence relevant to the existing or proposed proceedings.
44. It seems to me when one reads this judgment as a whole and considers what he did -- and I have had the benefit of being taken to parts of the transcript of the hearing before him -- it is perfectly obvious that he did not think that what he was doing was granting a search order in order to enforce, as it were, the third party disclosure order that had been made, because he was taken through the schedule of listed items in the search order and even a cursory glance at them, as I have already explained, shows that they are obviously very much wider than the rather limited class of documents governed by the third party disclosure order.
45. It seems to me that it is impossible to believe that Warren J thought that what he was doing was to grant a search order, as it were, by way of reinforcement of a third party disclosure order that had already been made. That is not what he says he was doing in paragraphs [19] and [20]. I see no reason to read those paragraphs in the limited way in which Mr. Samek would have me do.
46. I think that in paragraph [19] Warren J was assuming that a third party disclosure order could have been made against the respondents in relation not just to the limited material that Proudman J's actual third party disclosure order ordered them to disclose but in relation to any other material that could have been ordered to be disclosed under a third party disclosure order. Therefore, when he refers to relevant material, it means the material which is, as I have already said, relevant to the proceedings as referred to in section 7. Read in that way, when in paragraph [20] he refers to the documents which may well exist in Mr. Fakih's office, or on his computers, or on websites to which he has access, that is not intended to be limited to the material specified in Proudman J's third party disclosure order but extended to all material relevant to the enforcement of the judgment, and the disclosure orders which have already been made against Mr. Baadarani, which he referred to, as I have read, and which he said had not been satisfactorily answered.
47. Mr. Penny said that the limits suggested by Mr. Samek in the jurisdiction under section 7 were not to be found in section 7, were not supported by the commentary in Gee, were not logical in principle and were contrary to common sense. There was no need to obtain a Norwich Pharmacal order first or a third party disclosure order first. Indeed if the fear is that the respondents will destroy or hide relevant material, then it might be self-defeating to do so. I agree.
48. Mr. Samek, in reply, said that in such a case one could avoid alerting the respondent by getting a third party disclosure order at the same time as the search order. That to my mind illustrates that in the end his submission collapses into a purely technical one. If a third party disclosure order could be made against the respondents then, on Mr. Samek's submission, the question whether a search order was valid or not would depend not on any substantive question but on a purely procedural one of whether the court was in fact asked to make a third party disclosure order at the same time as the search order or not. I see no sense in implying such a requirement.
49. If there is to be a search order, there will usually be no need for a third party disclosure order as well. It seems to me quite unnecessary to require the court to go through the ritual of making an otherwise unnecessary third party disclosure order as a precursor to making a search order. In my judgment none of this is necessary.
50. In my judgment, if a respondent, who is not a defendant, has relevant evidence within the meaning of section 7(1)(a) and there is good reason to grant a search order in order to preserve that evidence, section 7 gives the requisite jurisdiction whether or not a third party disclosure order has already been made, or, if it has, whether its terms are more limited than the search order sought.
51. I therefore dismiss this application to set aside in part the search order.
[Further argument]

Further Judgment on Disclosure Documents

52. I now have to consider an application, by the claimants, to be released from a number of undertakings.
53. I will not repeat the background to the case, which I referred to in a judgment I delivered this morning, which I will treat, to the extent necessary, as incorporated in this judgment as well.
54. As there appears, the claimants have conceived that the Respondents, by which I mean Mr. Fakih and his company Leesdel Limited, and also Mr. Baadarani, have committed a number of breaches of court orders and, indeed, a number of other alleged contempts, consisting of knowingly signing documents containing a statement of truth, which were in fact untrue, and an allegation of acting in a way contrary to the administration of justice.
55. It is not, as both parties have recognised, the purpose of this hearing for me to form any more than a very preliminary view on the strength of those allegations and I will simply say that I am satisfied that the material I have been shown indicates that the claimant's belief that contempts have been committed is not one which can be shown, at this stage, to be obviously ill-founded.
56. In the course of arguments, all of which will appear on the transcript, I have raised a query in relation to at least one aspect of the proposed contempt, which, put shortly, is whether a credit which the claimants say was owing by the Respondents to Mr. Baadarani, could be treated as an asset held by them. It is not necessary for me to go into it because I am satisfied that the points which Mr. Penny wishes to put are at least arguable.
57. The undertakings concerned are threefold. The first and, in fact, the only one which the application directly addressed, is an undertaking in Mr. Justice Warren's search order, which was given to the court by the applicant, in the form of schedule C, paragraph 5, as follows:

"The applicant will not, without the permission of the court, use any information or documents obtained by as a result of carrying out this order for any criminal proceedings in any jurisdiction or committal application."

58. It is undoubtedly the case that the claimants therefore cannot use any of the documents or, indeed, any information obtained under the search order for a committal application without the permission of the court.
59. The other two undertakings were given in the third party disclosure orders. The one against the Respondents themselves, an order of Mrs. Justice Proudman of 7th March, contained an undertaking in this form:

"The claimants will not, without the permission of the court, use any documents or information obtained as a result of this order, except for the purposes of commencing or continuing civil proceedings against any person to pursue enforcement of their judgments, as described in the evidence before the court."

The one in relation to the third party disclosure order against NBK was, I believe, in materially identical form.

60. Mr. Penny, in the course of argument, accepted that the purpose of using documents obtained as a result of a third party disclosure order for committal was not within the exception in those orders or, at any rate, could not safely be said to be so, and accepted therefore that he did need a release from both those undertakings. He also accepted a point which was put at the forefront of his submissions by Mr. Samek, that in relation to the NBK order, NBK, whose documents they are, have an interest in the question whether those documents should be available to be used and the claimant should be released from their undertaking, and accepted that the application therefore needed to be provided to NBK, and NBK be given an opportunity to object.
61. He predicted, although he has no evidence at this stage, that NBK would either consent or, at any rate, would not oppose it, but accepted that he cannot ask for an order today until he has given NBK that opportunity, although he asked me to rule on the application, as a matter of substance, as between the claimants and the respondents, reserving the position of NBK. That seems to me to be a sensible way forward, as a matter of case management. No such difficulty arises with the release of the undertaking in the third party disclosure order against the respondents because they are, of course, represented before me by Mr. Samek.
62. I was referred, by way of authority, on the principles applicable to another Dadourian case, this time called Dadourian Group International Inc v Simms [2006] EWCA Civ 1745, in which each of the members of the Court of Appeal gave a separate judgment. I think that the judgment of the Chancellor, Sir Andrew Morritt, was very much on his perception of the facts of that case and does not lay down any particular principles of general application. Lady Justice Arden, however, does lay down, at some length, the principles that are applicable. The passage which I have in mind, in particular, is from paragraphs [20] to [25], which is too long to read into this judgment, but I have read the entirety of those paragraphs and they should be treated as incorporated.
63. Lord Justice Longmore took a slightly different view and you can find his approach in paragraphs [37] to [39]. In summary, his position in relation to the information obtained, in that case pursuant to a Freezing Order, was that:

"Permission to use that should be granted where it is convenient for that information to be used for the purpose of establishing the contempt."

At paragraph [40]:

"The question should primarily be, therefore, whether it is appropriate for the claimant to be permitted to use the documents for the purpose of establishing the alleged contempt on which the committal application is founded."

64. There is a slight tension between that and one of the things Lady Justice Arden says at paragraph [21], where she says the approach of the court may be different, that is less receptive to an application for permission, where the party who obtained a freezing order simply wants to bring contempt proceedings in order to persuade the court to impose a sanction on the subject of the Freezing Order for his non-compliance. I do not propose to resolve that tension.
65. Mr. Penny derived, from Lady Justice Arden's judgment, that the principles were that the following matters should be taken into consideration by the court: the fact of non-compliance with an order of the court, or alleged non-compliance; the seriousness of the alleged non-compliance; whether the evidence that is sought to be used is material to the committal proceedings; what the purpose is of seeking the contempt proceedings; whether the use of the material would be unfair and; whether the court, in the exercise of its discretion, thinks it appropriate.
66. Mr. Samek did not dissent from that summary of the principles, although he drew my attention not only to the passage I have already referred to in paragraph [21] that the approach of the court might be different, where the party simply wanted to bring contempt proceedings effectively to punish the Respondent, and to a passage in paragraph [22], where Arden LJ said this:

"Obviously, the court should refuse permission to use information obtained under the freezing order if it can see at that stage that the committal proceedings would be bound to fail, or if the information in respect of which the release from the undertaking is sought would not be material in the committal proceedings."

67. Subject to one point which I will call the global point, which I will explain in a moment, it seems to me that Mr. Penny is right that the principles which he has identified in Arden LJ's judgment do point to the claimants being released from their undertakings.
68. This is a case where there appears on face of it to be an arguable case that there has been non-compliance with the orders of the court. It is not necessary or appropriate for me to go into the detail at all.
69. This is a case where such non-compliance, if it is proved, is serious, the allegation being, among other things, that Mr. Baadarani and Mr. Fakih effectively acted together to mislead the court by fabricating fictitious documents and that is necessarily a serious allegation.
70. The evidence, subject to the global point, is on the face of it, likely to be material to the committal application, the global point, which I will explain now, being that Mr. Samek says that what in accordance with the principles to be derived from Arden LJ's judgment should have been done is to identify the particular material which was relevant to each particular allegation of contempt and that that has not been done and has not been sought to be done. Instead, what has been sought is a global release from the undertakings in respect of all the documents.
71. That is a point which I will have to come back to, but I am satisfied that in general there is information not only provided under the two third party disclosure orders but in the search order material which is material to the committal proceedings.
72. The other points are whether it is unfair and the exercise of the court's general discretion, taking into account all the circumstances. Given that the material obtained on the third party disclosure order against the respondents was what they themselves provided in response to the court order, it seems to me to be manifestly fair that in considering whether they have complied with that order the court should have regard to what they did provide and I have no difficulty with saying it is appropriate for the undertaking given in the third party disclosure order against the respondents to be released.
73. So far as the third party disclosure order against NBK is concerned, subject to any particular interest of NBK, which of course will be reserved for them to make whatever points they wish to, I do not see that it is unfair to the respondents that the material, which consists I was told of some 80 or so documents which NBK provided as having been correspondence received from Mr. Fakih in relation to the remortgage and the guarantee and the like, I do not see that that is unfair to be adduced in the committal proceedings, the thrust of the committal proceedings being indeed based on the fact that the material which was provided from NBK's files in relation to such correspondence, which should have matched the material to be provided by the respondents under their third party disclosure order, was very much more extensive and that forming the springboard of the entire basis of the applications brought against the respondents. I do not see that that is unfair.
74. That leaves the question of the material derived from the search order. Mr. Samek said that he could not really be expected to make any more focused submission than his broad submission that the claimants have gone about it in a wrong way because what they should have done is identify the material which they wished to use and that they had not done that and thereby they had put the court in the position of being unable to carry out the exercise that Arden LJ envisaged in paragraph [22] of her judgment, namely that the court should carefully consider the materials which are sought to be released and see to what extent they were material to the breaches alleged.
75. I was told that there are some 2500 to 3000 electronic documents which were discovered as a result of the search order and 5 to 10 hard copy files. It is obviously the case that if the claimants are required to list by individual documents those documents which they say to be material to the committal applications, that will be a time consuming and expensive process.
76. If the committals are to proceed that is something that they will have to do at some stage because the onus of course lies on them to prove the committal and they will have to choose what evidence to adduce and the respondents to the committal are under no obligation to give evidence in their own defence, although if they do so they are likely to be available to be cross-examined.
77. Mr. Penny's primary submission was that it was not necessary in this case for that to be done. The court could see at this stage that the material as a whole obtained on the search order was material to the contempts which are alleged, but that if it were necessary to be done the court should decide the other points as a matter of principle and adjourn this hearing to enable such an exercise to be undertaken.
78. I go back to the way in which Arden LJ put it in paragraph [22] of her judgment. I will read this sentence again:

"Obviously, the court should refuse permission to use information obtained under the freezing order if it can see at that stage that the committal proceedings will be bound to fail, or if the information in respect of which the release from the undertaking is sought would not be material in the committal proceedings."

79. It does seem to me that what Arden LJ was envisaging was not necessarily a detailed analysis of each and every document. Indeed that case was a case where what was sought to be adduced in the committal proceedings was the result of cross-examination ordered in relation to a freezing order. It was not a case of documents that had been obtained.
80. I read the sentence as a whole as envisaging a preliminary look at the use that was sought to be made of the material to see whether it could be said that the committal was bound to fail and that the material sought to be adduced would not be relevant.
81. I do not read it in the way that Mr. Samek invited me to read it as being one in which the court should at this stage examine each and every document and satisfy itself that it was material in practice. That would require an application for permission in a case like this to descend to the sort of level of detail that would be required for the trial of the committal itself.
82. That seems to me to be an unnecessary duplication of effort and a failure to comply with the overriding objective which requires proceedings, among other things, to be dealt with at proportionate cost and without consuming a disproportionate amount of the court's resources. To require one judge at a permission stage to go through the material document by document and then require another judge hearing the committal to identify whether the documents are not only material but prove the committal seems to me not to be what Arden LJ envisaged and not something which makes for sensible case management.
83. I can see that if there were documents obtained for example on the search order which dealt with four discrete areas and the committal was confined to one of those four discrete areas, it would be appropriate for the applicant to make that clear and to confine his application to the material which related to that discrete area. I am satisfied for the reasons Mr. Penny explained in reply, that this case does not really fall into that category.
84. The claimants' suspicion is that Mr. Fakih was acting in a very much closer relationship with Mr. Baadarani than either of them say they were and had a great deal more information about Mr. Baadarani's assets than he chose voluntarily to disclose pursuant to the third party disclosure order and that that was deliberate and contumacious.
85. It does seem to me that in those circumstances there is nothing wrong in the claimants wishing to use the material obtained on the search order on a global basis to form the basis of their committal application. That does not mean that they will adduce in evidence all 5000 documents or however many it was, on the committal application, but it does seem to me that there is no reason why it is unfair in a case of this type for them to be given permission in a global way to use the material obtained on the search order.
86. That leaves one further point which is why the claimants are pursuing the committals. I have already averted to the fact that there appears to be something of a tension between the approaches of Longmore LJ and Arden LJ. It is the case that one of the reasons put forward by the claimants for committal is to punish the contempt that has happened.
87. As I read the judgments, Longmore LJ regarded that as being a reason for allowing the undertaking to be lifted. The court of course has its own interests in seeing that those who deliberately break its orders are punished, not only in the interests of the particular parties before the court but in the interests of the administration of justice.
88. Generally, the entire system of the administration of justice depends upon the fact that court orders are to be obeyed and those who deliberately disobey them ought to be punished as an encouragement to others.
89. But even if one looks at Arden LJ's judgment, she does not say that a desire to punish is a reason not to give permission. What she says is that the approach of the court may be different where the party simply wants to bring contempt proceedings in order to persuade the court to impose a sanction.
90. Mr. Penny has said that that is not the only reason why they wish to do it. They continue to wish to press Mr. Fakih for further information with the ultimate aim of tracing assets against which they can enforce the judgment they have obtained against Mr. Baadarani.
91. That, he said, could be put under two heads: first, to ensure continued compliance of a search order. I am left in some doubt to what extent there is really evidence before the court that there is continuing non-compliance with the search order. The primary obligation on the respondent is to allow the claimants' search party to search, something that has already taken place, but there are obligations in the search order to disclose further documents and it is possible that pursuing Mr. Fakih by contempt may lead to some further compliance with the search order.
92. He also said that the claimants had in mind an application to appoint receivers by way of equitable execution over two alleged assets of Mr. Baadarani's, one being a claim by Mr. Baadarani against Mr. Fakih or his company Leesdel for the balance standing on various accounts between them and the other being an application to appoint a receiver over an alleged interest that Mr. Baadarani may have in the leasehold property at Hanover Gate.
93. He said that in circumstances in which they were still pursuing Mr. Fakih for further information, the purpose of pursuing contempt proceedings was to bring home to him the consequences of failing to comply with court orders.
94. I proceed on the basis that, although I note that Longmore LJ said the court can hardly decide what the purposes of bringing an application are, but I proceed on the basis that this is not a case where, as I put it in argument, the case is all done and dusted and over, and the only purpose of pursuing the respondents by way of contempt application is simply to punish them, but where the claimants perceive, whether rightly or wrongly, that it will be of value to them in their continuing attempts to enforce the judgment they have obtained in the way that I have explained.
95. In those circumstances, having considered all the principles to be derived from the judgment in the Dadourian case, which, as I say, were not significantly disputed, it does seem to me that they all point in the same direction, which is that the claimant should be given permission to use the documents, both under the third party disclosure orders, subject of course in the case of the NBK order to any objections by NBK, and in the search order for the purposes of the contempt applications which they seek to bring.
[Further argument]

Judgment on Costs

96. I now have to deal with the costs of the application for permission. The application was brought in September. The claimants invited the respondents to consent to it. They have opposed it. The opposition, as articulated by Mr. Samek, has taken some perfectly sensible and arguable points but, as he accepts, they have failed in that. The general principle under Part 44 is that the costs of the successful party will be ordered to be paid by the unsuccessful party, although the court may make a different order.
97. The starting point, therefore, would be that the respondents should pay the claimants' costs of this application. Mr. Samek suggests that it would be fairer to reserve those costs to the judge hearing the committal application because, if it turns out on the committal application that much of the material is not used or a fortiori if the committal is unsuccessful, it is not fair that his client should pay the costs.
98. I do have some sympathy with the idea that for an individual such as Mr. Fakih to be faced with a bombardment of applications and correspondence can put him in a difficult position. Nevertheless, it does seem to me that having chosen to oppose this application, root and branch, and having failed, there is not sufficient reason to depart from the general principle that the costs of the successful party should be paid by the unsuccessful party.
99. I will order the respondents, Mr. Fakih and Leesdel, to pay the costs of the claimants on the standard basis to be subject to detailed assessment.