Paresh Kantilal Chohan v Prakash Dhanji Patel
[2023] EWHC 2907 (Ch)
Lowry Trading Limited & Anor v Musicalize Ltd & Ors (No 2)
8 April 2024
[2024] EWHC 773 (Comm)
High Court
Two companies won a court order against another group of companies for not properly disclosing their finances, even though the second group didn't have a lawyer. The judge ordered the financial information be given because there was some evidence of hiding money, balancing this need with the lack of legal representation for the second group.
Key Facts
- •Lowry Trading Ltd and SAS Financing Ltd (Claimants) sought disclosure and further information from Musicalize Ltd and others (Defendants) regarding compliance with freezing orders.
- •Freezing orders were granted in October 2021 and November 2022, permitting asset use in the ordinary course of business, requiring notification to Claimants.
- •Claimants alleged non-compliance, particularly concerning income from hospitality boxes at the O2 Arena and Wembley Stadium.
- •Defendants lacked legal representation at the time of the application.
- •The Claimants obtained summary judgment against the Defendants on the basis that they had no real prospect of successfully defending claims in fraud.
Legal Principles
Disclosure in the Business and Property Courts is governed by Practice Direction 57AD, not CPR Part 31 (save for limited exceptions).
Practice Direction 57AD
The court has wide powers to order extended disclosure under PD57AD, even without initial disclosure or a Disclosure Review Document.
PD57AD, Part 6
The court can order further information under CPR Part 18.1 if clarification is required on matters in dispute.
CPR Part 18.1
Outcomes
The court ordered the Defendants to provide disclosure of bank statements showing income from the hospitality boxes.
Prima facie evidence suggested potential breaches of the freezing injunctions. The court weighed the Defendants' lack of representation against the Claimants' evidence of non-compliance.
The court ordered the Defendants to provide further information under CPR Part 18, answering questions about asset dealings and the use of the hospitality boxes.
This was deemed necessary to clarify compliance with the freezing injunctions.
Costs were reserved.
Insufficient information was available to determine the reasonableness of the Defendants' failure to comply with the requests.