KB-2025-001228 - [2025] EWHC 2506 (KB)

In assessing whether further disclosure is necessary for the fair disposal of the proceedings, it is important to bear in mind the extensive disclosure exercise that has already taken place. There are two relevant aspects to this.

First, there is force in the Claimants’ general point that documents which prove whether or not Mr Friend has threatened to breach and/or has breached his obligations will at least primarily be documents in the possession of Mr Friend himself, showing the discussions he has had with customers and potential customers. Moreover, any correspondence between the NEC Custodians and Mr Friend should have already been reviewed and disclosed by Mr Friend.

Second, the Claimants have already disclosed the results of searches of the material held by their “internal” custodians, including others on the Claimants’ boards. This has included communications involving the NEC Custodians, acting in their capacities as NEC-nominated directors on the boards.

It follows that any order for specific disclosure of communications between the NEC Custodians and Mr Friend or between the NEC Custodians and the Claimants’ internal custodians would be duplicative of material that has already been disclosed and thus inconsistent with the overriding objective. Accordingly, the specific disclosure application was limited to communications solely between the NEC Custodians or between the NEC Custodians and third parties which did not involve others on the Claimants’ boards. I refer to these, respectively, as “intra-NEC” and “NEC/third party” communications.

Mr Mansfield KC submitted that it was highly likely that the NEC Custodians would have communicated between themselves and with third parties (not least NEC) about the business of the Claimants and about the matters of dispute with Mr Friend, given that at the heart of the claim is - on the Defendants’ analysis (not accepted by the Claimants) – a dispute between NEC’s appointees and Mr Friend and his family. 

In my judgment this submission overstated the position, given the explanation of the nature of the role of the NEC Custodians while acting in their capacity as Investor Directors given in Birkby 1 at [12].

There, Ms Birkby explained that the Investor Directors have no executive authority within FMTS or Friend MTS. Their interface with the companies takes place through the company boards and the corporate governance structure. Whilst the role of Chairman entails some additional responsibility in overseeing the functioning of the board and interaction with shareholders, it is still a board level role. The Investor Directors when carrying out the Investor Director role therefore primarily communicate with the other directors on the board and receive documents (such as board packs) through the executive management of Mr McCarthy and Mr Scotter and the company secretary function. Ms Birkby confirmed at [15] that for these reasons it would be “rare” that the Investor Directors would be discussing matters without involving the wider board; and any such documents would already likely to be found within the company’s own disclosure. She also explained that the Investor Directors do not communicate or interact with third parties on its behalf.

In considering applications of this kind, it is necessary to consider the documents sought in the context of the issues in the case as evidenced by the pleadings: again, see the White Book at paragraph 31.12.2.

The parties characterised the overarching issue in this case in different ways. The Defendants’ case, set out in Samuels 1 at [59], is, as I have alluded to, that at the heart of the claim is a conflict as to the management of the Claimants’ business between, on the one hand, NEC and its appointed directors (the three NEC Custodians) and, on the other, Mr Friend and his family members. That may be well be right by way of background, but in my judgment the Claimants were right to assert that the focus of the October trial will be whether Mr Friend has breached his duties and obligations to the Claimants as a result of contact with customers and other industry organisations, misuse of confidential information and the establishment of the Second Defendant in January 2025.

The alleged breaches of duty by Mr Friend are set out in the Particulars of Claim (“POC”) at [58]-[63]. It is alleged at [58.1] that he has had repeated and detailed discussions with customers, prospective customers and potential partners, the content of which he has refused to disclose to the Claimants, in the ways set out in the preceding paragraphs [44]-[50].

Samuels 1 contends that there are frequent references to the NEC Custodians in the pleadings. Again, this overstates matters. There is mention in the pleadings of discussions or meetings between Mr Friend and Mr Parker on 19 July 2024, 11 December 2024 and 8 January 2025. There is reference to Mr Friend discussing the topic of “inorganic growth” and mergers and acquisitions with Mr Parker and Mr Skinner. I cannot see that there is any reference to Mr Joseph in the key paragraphs. This is perhaps unsurprising as he resigned as a director of the Second Claimant on 18 January 2023 and the First Claimant on 26 June 2024, before the majority of the events which are in issue took place and nearly a year before the claim was issued.

I turn now to the specific categories of documents sought in the draft order.

Paragraph 2.a of schedule 1 to the draft order seeks “all documents referring or relating to the proposed “Rebrand” of the “Friend Group” and the requirement and subsequent failure to obtain approval for it under the “Joint Consent” mechanism. Paragraph 2.e(x) also seeks communications and documents concerning a Zoom call between Mr Friend and Mr Parker on 10 May 2024, which relates to the Rebrand issue.

The Rebrand issue features in the POC at [43.4]. It is advanced as an example of Mr Friend preferring his interests over those of the Friend Group. This is not said to be an example of a discussion with customers, prospective customers and potential partners or as a specific breach of duty. Accordingly, I agree with Mr Oudkerk KC that this does not appear to be a key issue in dispute for the purposes of the October trial. Rather, it is said to part of the factual background.

In my judgment there is no clear basis, beyond assertion, for the proposition that it is likely that there were intra-NEC or NEC/third party communications about this issue. As far as paragraph 2.e(x) is concerned, I note that the Vice-President of Marketing was said to be on the relevant Zoom call as well as Mr Friend and Mr Parker. It is therefore reasonable to infer that the Claimants’ correspondence on this issue has already been reviewed and disclosed where relevant.

For these reasons I am not persuaded that these documents areof such relevance that disclosure of them is necessary for the fair disposal of the proceedings.

The same considerations apply to paragraph 2.e(iii) of the draft order which seeks communications and documents concerning the proposal to set up a “rapid prototyping team”. This issue features in the preceding paragraph of the POC to the Rebrand issue, at [43.3].

Paragraphs 2.c, 2.e(ii) and 2.e(xii) of the draft order seek documents recording concerns or complaints raised by Sky Group Limited, which relate to a potential warranty dispute that was the subject of an exchange between Mr Parker and Mr Friend on 19 July 2024 referred to in the POC at [46]. Again, this is part of the factual background as it is Mr Friend’s alleged response to the exchange – namely threatening to contact Sky and other key customers – which is the adverse conduct relied on. Again, there is no clear basis for concluding that there were intra-NEC or NEC/third party communications about this issue.

Paragraph 2.d seeks “all materials recording Mr Friend’s comments about his conversations with Sky and the Premier League at the FMTS board meeting on 6 February 2024”. Again, this is part of the factual background, referred to in the POC at [44]. It is to be assumed that Mr Friend’s comments were recorded in the board meeting minutes which will already have been disclosed if relevant. Again, there is no clear basis for concluding that there were intra-NEC or NEC/third party communications about this issue.

Paragraph 2.e(i) seeks all communications and documents concerning the termination of Mr Friend’s employment. While I can see that there might be some relevance to this material, again, there is no clear basis for concluding that there were intra-NEC or NEC/third party communications about this issue.

Paragraph 2.e(iv) seeks communications and documents concerning the suspension of Mr Friend’s access to the Friend Group’s IT systems, the remote locking of his laptop and the alleged lifting of the IT suspension on 3 August 2024. Again, this is part of the factual background. It is particularly hard to see why there would be any intra-NEC or NEC/third party communications about this issue.

Paragraph 2.e(v) seeks communications and documents concerning Mr Friend’s meeting with Sky on 3 December 2024. Paragraph 2.e(vi) seeks communications and documents concerning his meeting with the Premier League on 16 December 2024. Paragraph 2.e(vii) seeks communications and documents concerning disparaging comments made by Mr Friend. The Claimants accept that the fact of these meetings and the content of Mr Friend’s discussions with Sky and the Premier League, and the fact and extent of Mr Friend’s disparaging comments about the Claimant companies, are all relevant to the question of whether he has breached his obligations to the Claimants entitling them to injunctive relief, which is the key issue for resolution at the October trial. However, I accept Mr Oudkerk KC’s submission that the relevant documents in relation to these meetings and alleged comments are likely to be those held by Mr Friend, not by the Claimants or NEC. Again, there is no clear basis for concluding that there were intra-NEC or NEC/third party communications about these issues.

Paragraph 2.e(viii) seeks communications and documents concerning Mr Friend’s alleged involvement in ending discussions between the Claimants and the Motion Picture Association (“the MPA”) at the end of 2024. Paragraph 2.e(ix) seeks communications and documents received regarding Mr Friend’s attendance at the MPA conference in March 2025. The Claimants accept that the fact and extent of Mr Friend’s discussions with the MPA, as well as the fact of his attendance at the MPA event, and the content of his discussions whilst there, are relevant to the question of whether he has breached his obligations to the Claimants. The issue of whether this resulted in the ending of discussions between the Claimants and the MPA is relevant to both liability and quantum so is partly relevant to the October trial. However again the relevant documents are principally those held by Mr Friend, not the Claimants or NEC; and there is no clear basis for concluding that there were intra-NEC or NEC/third party communications about this issue.

Paragraph 2.e(xi) seeks communications and documents concerning a conversation between Mr Friend and Mr Parker on 10 December 2024 and their subsequent meeting on 8 January 2025. The Claimants accept that the content of the discussion between Mr Friend and Mr Parker is relevant to whether Mr Friend has breached his obligations to the Claimants. Again, though, if this was discussed amongst those with management responsibility for the Claimant companies, those emails will have been reviewed and disclosed where relevant as part of the board-level material. Again, there is no clear basis for concluding that there were intra-NEC or NEC/third party communications about this issue. This is principally an issue for the witness evidence of Mr Friend and Mr Parker.

Paragraph 2.e(xiv) seeks communications and documents concerning instructions to Mr Friend not to contact clients. The Claimants accept that the instruction to Mr Friend to cease contact with customers is relevant to whether he has breached his obligations to the Claimants. To the extent that the Defendants seek instructions given to Mr Friend, these are already in his possession. Otherwise, this is not relevant to the key issues in dispute.

Paragraph 2.e(xv) seeks communications and documents concerning any discussions of investment opportunity in OpSec, IP House, Synamedia, Vermatrix and/or NEC’s or the NEC’s Custodians’ views on inorganic growth opportunities for the Claimants. This is only potentially relevant to the issue of whether, had Mr Friend introduced the opportunity to purchase OpSec, the Claimants would have pursued that opportunity. This is an issue for any trial on quantum and not for the expedited trial on liability.

Overall, therefore, I am not satisfied that the material sought is of such relevance that disclosure is necessary for the fair disposal of the proceedings and/or that there is a clear basis for concluding that intra-NEC or NEC/third party documents existed in any of the categories sought, especially bearing in mind the nature of the Investor Directors’ role.