MR S HACKETT (instructed by Griffin Law) appeared on behalf Dynamo Recoveries Limited and Emerdata Limited.
JUDGE PELLING:
This is an application made without notice for what is now known colloquially as an imaging order. More particularly in the context of this case, what is sought is an imaging order against the respondent Mr Alexander Nix in relation to certain electronic data that inferentially he has stored on his phone, and in particular but not limited to text messages exchanged using the WhatsApp platform.
What is proposed is what is now basically the standard form of imaging order which will require the respondent Mr Nix to make available all his mobile or former mobile phones to be searched by an independent expert appointed by the claimant, referred to in the draft order as an independent computer specialist – CCL Solutions Group – working under the supervision of an independent solicitor of experience in relation to matters of this sort. What is anticipated is that the image will be taken by the independent computer expert, two copies prepared and retained by the independent computer expert and not revealed to anyone in any circumstances until after the return date. Furthermore, what is envisaged, since this is an application, as I explained in a moment, which is driven by unacceptable or allegedly unacceptable conduct in relation to disclosure and the preservation of documents, is that if the order is maintained at the return date, an electronic documents search will be carried out using the e-discovery platforms that have been established for the purpose of this litigation, and with the solicitors and the claimant not recovering any of the relevant information directly themselves, other than to the extent that documents are revealed using the search facilities provided by the e-disclosure platform when, of course, the documents revealed will be disclosable in the usual way.
There are, therefore, what are now the standard protections which are available in orders of this sort and what is proposed. That is to say that the work will be carried out by an independent expert. The independent expert will carry out his duties under the supervision of an independent supervising solicitor and the material obtained will not be available in any way, shape, or form to the claimants until after the return date when any submissions by the respondent as to why this material should not be released can be determined.
Against that background, I now turn to the circumstances of this dispute. In a judgment of this sort given on a without notice application, it is not appropriate for me, I think, to go into any detail in relation to the underlying claim. It is sufficient to say that the claimants are the assignees of various causes of action from the insolvency practitioners who have conducted ultimately the liquidation of a company of which the respondent to this application was a former director. Various directions were given in the usual way in relation to disclosure, including the disclosure of information contained on and by searching mobile phones. That much is apparent from the DRD document to which I was taken in the course of the submissions where question 3, within section 2, is precisely the same in each case, and yielded the answer a mobile phone in each case.
What then appears to have happened is that following the disclosure exercise, the solicitors who act for the claimants wrote to the solicitors who, at all material times, have acted for the respondent; that is RIAA Barker Gillette of London. The letter that I was taken to that is said to be relevant for present purposes is that of 6 September 2023, which, at para. 9 and following, refers to the disclosure exercise carried out by the respondent. It is critical of the disclosure which has been produced, in particular, noting at para. 10:
“10. Given that your client stood to make (and made) the life-changing sum of $8,775,000 from the series of transactions that became known as ‘Project Dynamo’, we would have thought that there would have been many more documents – including spreadsheets/Excel files, emails seeking advice/advices and relating to the solicitation of investment, valuations, and income, workflow and profitability projections – that your client would have commissioned, read, analysed, commented upon and retained in this regard. These documents, produced prior to completion of ‘Project Dynamo’, when your client was one of four directors of the holding company … and the sole director of its principal trading entity … go to the very heart of the issue upon which the parties’ experts are required to give evidence.
11. We would therefore invite your client, with your assistance and guided by your expertise, to look afresh at the documents he has disclosed and to consider (notwithstanding the zero filling of the laptop returned to the joint liquidators of the English subsidiaries of Emerdata Limited) where else he might have retained documents that ought to have been (and ought now to be) disclosed, including in hard copy form and digital copies held on his current/former iPhone(s), iPad(s), laptop/desktop computer(s)/tablet(s) and as may have been sent/received by him using work and/or personal email accounts, SMS text message, WhatsApp, Facebook Messenger, Telegram, Signal and/or other such means of communication.”
That resulted in a response from RIAA Barker Gillette in a letter dated 18 September 2023. The relevant part of what is quite a long letter is at para. 6 where they said this:
“For the purposes of this response to your letter, we have taken our client’s further instructions and he has reaffirmed that there are no additional sources of documentation to disclose or search. As we assume you are aware, our client was locked out of the companies’ servers after his suspension as director, and we would suggest that it therefore ought not to be surprising to you that the documents available to him are limited. We can also reconfirm, for the avoidance of doubt, the matters set out in the PD57AD disclosure statement. Our client will, however, of course continue to comply with his ongoing disclosure obligations and in the event further disclosable documents are discovered they will of course be disclosed and provided.”
What then happened was that there was a public examination of the respondent in the context of the insolvent liquidation of the company or companies of which he was a director. The insolvency practitioners concerned were represented by leading counsel, Miss Catherine Addy KC, and the respondent to this application was represented by junior counsel. The examination took place before an experienced Deputy Insolvency and Company Courts Judge with, I am told, and I have no reason to doubt, significant and firm resistance by counsel instructed by the respondent as to what questions could and should be asked.
Before turning to the relevant questions, I should perhaps refer, at least in passing, to what was referred to in the exchange of correspondence I quoted from a moment ago in relation to the zero filling of a laptop. Unsurprisingly, the respondent had a work laptop provided to him for the better performance of his duties as a director of the companies. Following a severance of the relationship between the companies and the respondent, he retained the relevant computer and ultimately it was returned. However, when it was returned it was found that its contents had been deleted, and a process known as “zero filling” had taken place by which any data which has been deleted was rendered practically impossible to retrieve by technical means that might otherwise have been available if only deletion had taken place. I return to that issue below because of the excuses and exonerations offered by the respondent in relation to that activity. It is sufficient to note at this point that two alternative explanations were offered, each of which is inconsistent with the other, and that it would appear that the zero filling took place after litigation was in contemplation and therefore after, it is to be inferred, advice was given by the solicitors who act for the respondent to the respondent concerning his obligations to preserve documentation.
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