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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Sly v Basis Technologies Group Limited & Ors (Royal Court : Hearing (Civil)) [2025] JRC 100 (7 April 2025) URL: https://www.bailii.org/je/cases/UR/2025/2025_100.html Cite as: [2025] JRC 100 |
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Before : |
Advocate David Michael Cadin, Master of the Royal Court |
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Between |
Phillip Derek Sly |
Plaintiff |
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And |
Basis Technologies Group Limited (In Liquidation) (a company incorporated in Jersey) |
First Defendant |
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OMBZ2020 Limited (a company incorporated in England) |
Second Defendant |
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Craig Douglas Oliver |
Third Defendant |
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Martin Edward Metcalf |
Fourth Defendant |
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Richard Anthony Bayliss |
Fifth Defendant |
Advocate R. S. Christie for the Plaintiff.
Advocate F. B. Robertson for the First Defendant.
Advocate S. J. Alexander for the Second Defendant.
Advocate C. F. D. Sorensen for the Third Defendant.
Advocate E. B. Davies for the Fourth and Fifth Defendants.
judgment
the MASTER:
1. This is my judgment in relation to an adjournment of the trial, certain matters of active case management, and the privilege status of four documents.
2. These proceedings concern a claim for unfair prejudice by Mr Sly, the Plaintiff, in relation to his shareholding in Basis Technologies Group Limited, the First Defendant ("BTG"), allegedly arising from the actions of the directors, Mr Oliver (the Third Defendant), Mr Metcalf (the Fourth Defendant) and Mr Bayliss (the Fifth Defendant). The Second Defendant, OMBZ2020 Limited ("OMBZ") is the corporate vehicle allegedly used by the Third to Fifth Defendants to acquire the principal assets of BTG in 2020, to the exclusion of the Plaintiff.
3. By an Act of Court dated 12 October 2022, the Royal Court ordered that BTG be wound up and gave permission to Mr Sly to bring proceedings against the Defendants.
4. Proceedings were instituted in February 2023. BTG has taken a neutral role in the proceedings which have been defended by the other Defendants. Through a combination of hearings and consent orders, the claim has proceeded through pleadings, and amendments to those pleadings, to discovery.
5. In August 2024, I gave substantive directions to progress this matter to a trial with a time estimate of 4 weeks, to take place after September 2025 and I further directed, amongst other things, that:
(i) there be a pre-trial review before the trial judge in January 2025 to consider, the venue for the trial and the use of technology;
(ii) witness statements be exchanged by 6 December 2024; and
(iii) expert reports be exchanged by 31 January 2025.
6. The trial was subsequently fixed for 4 weeks from 22 September 2025.
7. By a consent order dated 26 November 2024, the parties agreed to amendments to pleadings and extended the dates for exchange of both witness statements and expert reports but maintained the pre-trial review before the trial judge and the trial dates.
8. Thereafter, the Third Defendant changed representation at the end of November 2024, albeit that his new advocates did not come onto the record until January 2025. Following discussions, the parties decided not to exchange witness statements or expert reports and vacated the pre-trial review before the trial judge, seemingly on the basis that they all agreed the trial dates were no longer tenable.
9. On 20 January 2025, the Fourth and Fifth Defendants issued a summons for a variation of the directions previously given, and such further directions as the Court may think necessary in relation to expert evidence, together with an order for costs against Appleby, BTG's advocates.
10. Discovery in this case has proved to be challenging in terms of the volume of documents, the complexity of the issues, and the impact of legal professional privilege. Those challenges have been compounded as BTG, represented by Appleby, has repeatedly disclosed documents, which, on closer analysis, are privileged and should not have been disclosed. Although the summons issued by the Fourth and Fifth Defendants sought the costs of dealing with this issue, that aspect of the summons was adjourned by consent.
11. Recognising the difficulties presented by this discovery exercise, the parties have worked together to resolve issues wherever possible, in accordance with the Overriding Objective. From the Plaintiff's perspective that has involved creating two teams at Bedell Cristin, one comprising a paralegal and Counsel, to receive and review the disclosure and to address any matters arising, and the other comprising Advocate Christie and his associate who have thereby been insulated from seeing documents which, on closer analysis, should not have been disclosed. This is not an ideal situation, but in my judgment represents a pragmatic and proportionate response by the parties to the inadvertent disclosure of privileged documents by BTG.
12. The overwhelming majority of the issues around allegedly privileged documents have been resolved by agreement between the parties but there are four documents where agreement has not been reached. These documents, together with the parties' submissions in relation to those documents were uploaded to a confidential bundle to which the Plaintiff's advocates did not have access. The Plaintiff was to able make submissions based on the comments provided by his Counsel as to the privilege status of the documents which Counsel had seen, albeit that Advocate Christie had not. In addition, Advocate Christie had sight of a redacted version of the Second and Third Defendants' Skeleton Arguments filed in the confidential bundle.
13. Against that background, the parties have uploaded to Case Centre over 3,600 pages of material for the purposes of this hearing, where the only live summons is one for directions. Of the material filed, over 500 pages are copied from a textbook on privilege to which the only reference was to one paragraph, made by way of a footnote in a skeleton argument.
14. Although the use of Case Centre has revolutionised the manner in which court bundles are dealt with, that ease of use comes with its own disadvantages in that it can obscure the volume of irrelevant and/or unnecessary material that is filed with the Court for the purposes of applications. Had this bundle been in paper form, it would have comprised 8 large ring binders and it would, or should, have been obvious to the parties that either the volume of material was excessive, particularly given the indication that I should only allow "up to 3 hours for pre-reading", or the time estimate of half a day was inappropriate.
15. Case Centre is also not free and comes at a cost, currently met by the Court, assessed by reference to the amount of data uploaded. Uploading unnecessary material is both a waste of public money and judicial resources and will attract sanction from the Court, particularly given that such conduct is contrary to the provisions of Royal Court Rules 2004 ("RCR") 1/6(2)(e) and 1/6(4), and inevitably increases all parties' costs unnecessarily and unreasonably.
16. The parties were agreed that the trial dates should be vacated. The Court needed rather more persuasion.
17. Fixing a trial for 4 weeks involves a significant commitment on the part of the Court, blocking out the Court diary and preventing other cases being listed. In the ordinary course, a 4 week hearing should not be moved, particularly where the Court has given specific directions, and arranged further interlocutory hearings, to deal with whatever eventualities might arise and to ensure that the trial dates are met.
18. Moreover, once the Royal Court and Stamp Duties and Fees (Jersey) Amendment Law 202- is implemented, Court fees will no longer be refundable and there will be a significant sunk cost in re- fixing a 4 week hearing date.
19. In this case, it would appear that the parties decided in January that the trial dates were not viable and that they would not be complying with the directions previously given. However, they did not notify the Bailiff's Judicial Secretary of their decision, and nor did they issue a consent order for consideration by the Court. As at the date of this hearing, the trial is listed for 4 weeks commencing on 22 September 2025.
20. As this Court has repeatedly stated, it is not for the parties to litigation to decide which orders they will, and will not, comply with. If parties wish to vary directions previously given, they should follow the provisions of Practice Direction - RC 17/05. Where the proposed variation involves vacating a trial date of whatever length, parties should liaise with the Court as soon as practicable, pursuant to the Overriding Objective, given that the effective and efficient use of Court and judicial resources is a matter of public concern that extends far beyond the narrow interests of the parties to an individual piece of litigation.
21. Having heard submissions from the parties, I accept that the trial dates are no longer tenable and that to maintain them would cause prejudice to all parties and would probably not assist the Court. Accordingly, I agreed to vacating the trial dates.
22. The Defendants sought to refix the trial on or after 17 November 2025, whereas the Plaintiff proposed a trial window commencing on 16 February 2026. In my judgment, if the trial is to be moved, it should only be moved once and it is critical that the dates fixed provide sufficient room for any slippage or unforeseen eventualities. In addition, the scheme of my Order dated 29 August 2024 provided a reasonable amount of time between each of the relevant stages leading up to trial. Under the Defendants' proposed timetable for trial in November 2025, those periods of time would be extended in the case of the Defendants and reduced in the case of the Plaintiff which does not, in my judgment, equate with the parties being placed on an equal footing. Conversely, with a trial date being fixed on or after 16 February 2026, those gaps between the various stages could be maintained.
23. I therefore fixed the trial window to start on 16 February 2026 and directed that the parties use reasonable endeavours to agree, by 11 April 2025, the appropriate procedural directions for that trial window.
24. The terms of the Overriding Objective are deliberately wide and are intended to assist the Court to manage cases justly and at proportionate cost. Active case management under RCR 1/6(6) requires the Court to use such soft power as it might have available to achieve that aim including deploying judicial encouragement, insight, and assistance. There are however limits to the exercise of such soft power and as the Deputy Bailiff noted in Patel v JTC Trust Company Limited [2023] JRC 152, "[t]he Court should not enter the fray". Moreover, the Court must also be wary of expressing a view too soon or too emphatically on the basis of incomplete information.
25. In this case, Advocate Christie raised en passant the following issues with a view to getting assistance from the Court:
(i) the need for the instructions to the experts to be agreed, along with the counter-factual positions upon which the experts are to opine;
(ii) on-going financial disclosure from the Second Defendant; and
(iii) a possible revisiting of the issues of privilege given the decision of the English High Court in December 2024 in Aabar Holdings SARL v Glencore PLC & Ors [2024] EWHC 3046 (Comm).
26. Advocate Christie was concerned to ensure that the parties' respective experts were opining on the same issues and that at a trial, if the Plaintiff were to prevail, the Royal Court would have such assistance as it may need to determine the value of Mr Sly's shareholding in accordance with whatever counter-factual assumptions it thought appropriate, reflecting the procedure adopted by the Royal Court in Pender v GGH (Jersey) Limited and Ors [2023] JRC 124:
27. There has been significant correspondence between the parties in relation to these issues and the last substantive correspondence was a letter from Carey Olsen on behalf of the Fourth and Fifth Defendants dated 24 March 2025, 3 days before the hearing. Whilst it is important that the reports of the experts address common issues and do not pass like ships in the night, this is still a live issue, which is being addressed by the parties appropriately and I do not think that the Court could give any specific assistance to them in this regard at this stage. I therefore directed that the parties use reasonable endeavours to agree the appropriate expert instructions and counter-factuals by 11 April 2025, and if agreement is not possible, a summons should be issued supported by such evidence as may be required.
28. In terms of on-going financial disclosure, this too is the subject of live discussions between the parties and the indication from Counsel was that it could be agreed over the coming weeks. Again, this is not a matter where the Court can give any specific assistance at this stage and I indicated that if issues remained after discussions between Counsel, the appropriate summons should be issued.
29. As to the issue of privilege, this issue arose the day before the hearing in correspondence between Appleby for BTG and Bedell Cristin for Mr Sly. Appleby noted that judgment had been handed down in Aabar Holdings SARL v Glencore PLC & Ors [2024] EWHC 3046 (Comm), that an appeal was due to be heard by the English Court of Appeal in January 2026, and that as matters currently stood, Mr Sly was not entitled to documents relating to the advice received by BTG from its lawyers, Walkers. Bedell Cristin responded stating that they did not accept Aabar applied in Jersey and further noting that, regardless of whether or not that was correct, it was possibly a little late to put the genie back in the bottle as "hundreds of documents" relating to the advice given by Walkers had already been disclosed. At the hearing, Advocate Christie pressed the other parties to the litigation to confirm that they agreed with the latter part of this analysis. They declined to do so indicating that this issue had only recently arisen, and they were considering it. In my judgment, this is a substantive matter of law that has just arisen, and the parties must have an opportunity to reflect on its implications for the proceedings. It is not a matter that the Court could, or should, determine sur le champ. If it remains a live issue between the parties, the appropriate summons should be issued in short order.
30. As noted above, in providing discovery, BTG inadvertently disclosed a number of documents over which one or more of the other Defendants assert privilege which has not been waived.
31. BTG's approach to privileged material was set out in an email to the parties dated 28 February 2024 in the following terms:
"Documents potentially privileged in favour of the Company -
Where it appears to us that the Company would, in normal circumstances, have a claim to privilege over a document, we have concluded that it may only withhold those documents from Mr Sly in these proceedings if they pertain to hostile litigation or other hostile matters between the Company and Mr Sly. Such documents would include, for example, any advice given to the Company in respect of oppositional claims brought by the Company against Mr Sly or Mr Sly against the Company, but not extending for example to proceedings in which the Company is effectively a neutral party and/or which are in substance between Mr Sly and the other Defendants (such as the J&E winding up proceedings).
Documents privileged in favour of the other Defendants -
Where it appears to us that the Company has in its possession material which is privileged in favour of other Defendants and not the Company, we have sought to withhold all such documents to enable any claims to privilege, as the Defendants may have, to be maintained. We do not consider the privilege in these documents is affected by Mr Sly's status as shareholder precisely because it is not the Company's claim to privilege which is being maintained."
32. Whilst OMBZ has waived privilege in relation to the advice it took concerning the specific transactions about which the Plaintiff complains in the Order of Justice, OMBZhas specifically confirmed in both email and affidavit that:
"[OMBZ] does not waive privilege in relation to any other advice taken by it or its subsidiaries, including, but not limited to, advice of and incidental to the English proceedings brought against the Plaintiff by Basis Technologies International Limited, the winding up proceedings issued by the First Defendant, these unfair prejudice proceedings (or the prospective proceedings first threatened by the Plaintiff's English counsel in the period immediately following the OMBZ Transaction), or any business-as- usual matters on which advice was obtained (which in any event bear no relevance to these proceedings)."
33. The privilege claimed by OMBZ on its own behalf and in relation to its subsidiaries is both litigation privilege and legal advice privilege. It was accepted by the parties that in relation to issues of privilege, it is appropriate for Jersey law to refer to English authorities, as was acknowledged by the Court of Appeal in Deripaska v Chernukhin and Navigator Equities Limited [2021] JCA 206.
34. A convenient summary of the relevant principles is to be found in the English Court of Appeal decision in Director of the Serious Fraud Office v ENRC [2018] EWCA Civ 2006:
35. At paragraph 102 of Director of the Serious Fraud Office v ENRC, the Court of Appeal held that:
36. The Defendants all agree that the four documents I have to consider are privileged and should not have been disclosed; the Plaintiff disagrees.
37. This is an email sent by the Fourth Defendant to the Fifth Defendant on 10 December 2018 which OMBZ submits was:
(i) created by its subsidiary, Basis Technologies International Limited ("BTI"), for the purposes of seeking legal advice from its lawyers, Bird & Bird LLP;
(ii) made for the dominant purpose of existing litigation and in particular, the prospective settlement of that litigation.
38. The Plaintiff's position is that:
(i) the document is not privileged because "the English Proceedings are discussed in the email, but that litigation is not the dominant purpose of the communication". The purpose, according to the Plaintiff, is "not the litigation itself but planning for conduct to forfeit [the Plaintiff's] shareholder rights if the litigation has a particular outcome".
(ii) Alternatively, litigation privilege only applies to certain parts of the email.
39. The Court has had the benefit of considering the document itself, and doing so in the light of what was occurring at the time:
(i) proceedings had been brought by BTI against Mr Sly in the English High Court and were listed for trial in January 2019. A mediation had taken place on 22 November 2018 and on 3 December 2018, Mr Sly made a settlement proposal to BTI by way of an email addressed to the Third and Fourth Defendants;
(ii) Bird & Bird had been retained by BTI in relation to that litigation;
(iii) the email is a draft communication from the Fourth Defendant to Bird & Bird, sent between directors of BTI, with the relevant question set out in the subject matter line, namely "Should I send this, or do you already know the answer?"
40. In my judgment:
(i) this email exchange was part of the process undertaken by BTI to refine the questions to be asked of their lawyer and the dominant purpose of this communication was to obtain legal advice in relation to the settlement of the extant proceedings between BTI and Mr Sly;
(ii) whilst the draft email does consider potential outcomes of the proceedings, it does so as part of the dynamics for settlement of that litigation rather than planning for a potential future state;
(iii) the dominant purpose of that document was to obtain legal advice in relation to then-extant litigation and it is plainly privileged;
(iv) it would be wholly artificial and inappropriate to try to deconstruct the email by redaction to create a document which was not privileged and could be disclosed and I decline so to do.
41. This document comprises a chain of three emails, all dated 13 April 2021.
42. Having originally stated in correspondence that the document was "Probably litigation privileged, by [sic] we may be able to challenge", the Plaintiff's submissions at the hearing were that:
"Privilege claim challenged.
Email from SEP to Bird & Bird on 13.04.2021 (email 1) forwarding some draft text (email 2). SEP is not Bird & Bird's client, so no legal advice privilege attaches to the communication. Its purpose is the SEP Transaction. The substantive draft paragraphs 4-6 in email 2 indicate that they should be reviewed by lawyers, but apparently not lawyers acting for SEP. While it may be said that the purpose of that part of the communication is legal advice with a view to preventing litigation (which may have been in reasonable contemplation), that is not the same as the purpose being use in the litigation itself, or the taking of advice on whether or not to litigate. The document which was being prepared was an incident of the SEP Transaction itself, not (e.g.) a letter of claim or response thereto in relation to a dispute that might arise afterwards."
43. In response OMBZ notes that:
(i) whilst Scottish Equity Partners LLP ("SEP") was not Bird & Bird's client, OMBZ was;
(ii) the transaction, called the "SEP Transaction", completed on 9 April 2021 and thereafter, a Mr Davidson, a partner at SEP, was appointed a director of OMBZ;
(iii) the first email is an internal email from the General Counsel at SEP to Mr Davidson; that communication is then provided to Bird & Bird by Mr Davidson (the second email) following a call with Bird & Bird, and the Fourth Defendant (who is copied in) forwards that email chain to the Fifth Defendant (the third email);
(iv) the whole email exchange is a communication from OMBZ to Bird & Bird for the dominant purpose of seeking legal advice in relation to litigation that was reasonably in contemplation at the time, namely litigation the Plaintiff had threatened against OMBZ and the Third to Fifth Defendants after a transaction called "the OMBZ Transaction" which occurred in July 2020 and in respect of which the Plaintiff pleads in his Amended Order of Justice:
"74. Following the OMBZ Transaction, the Plaintiff made clear in pre-action correspondence that he considered that the Directors had acted in breach of their duties to the Company in causing the Company to enter into the OMBZ Transaction
75 By a letter dated 13 April 2021 ("the 13 April Letter"), OMBZ notified the Plaintiff that SEP V LP (an entity related to SEP) had acquired a controlling interest in OMBZ on 9 April 2021 ("the SEP Transaction"). The 13 April Letter contained a proposal by OMBZ to purchase the Plaintiff's shares in the Company on terms which would have required the Plaintiff to enter into "mutual ... releases" and would have valued the Plaintiff's shares on the basis that the OMBZ Transaction and the SEP Transaction had not involved any breach of duty by the Directors. It is to be inferred from the pre-action correspondence which took place prior to the 13 April Letter that such mutual releases would have included a release by the Plaintiff of the claims pleaded herein."
44. In my judgment:
(i) litigation was clearly in contemplation between the Plaintiff and the Second to Fifth Defendants;
(ii) whilst the first part of the email chain refers to the SEP Transaction, it expressly refers to the need for the contents to be reviewed by Bird & Bird's litigation team;
(iii) the second email in the chain is between Mr Davidson and the litigation partner at Bird & Bird, and directly references the first email;
(iv) the dominant purpose of these two email exchanges was for OMBZ to obtain legal advice in relation to litigation that was in contemplation between the parties and those emails are privileged;
(v) the forwarding of the email exchanges by the Fourth Defendant to the Fifth Defendant does not waive any privilege in the document.
45. This comprises a chain of three emails exchanged between 7 December and 10 December 2018. The Plaintiff accepts that the first two emails are privileged but submits that:
(i) the last email, dated 10 December 2018 from Bird & Bird to the Fifth Defendant is not privileged, alternatively, only the last two words of the first line and the first word of the 2nd line are privileged;
(ii) although the context behind the last email is litigation, the subject matter and purpose of that email is a commercial proposal by SEP.
46. OMBZ's position is that the last email is a communication from Bird & Bird to its client BTI, for the dominant purpose of providing legal advice in relation to litigation that was in existence at the time.
47. In my judgment:
(i) the Plaintiff's acceptance of the fact that the first two emails in the chain are privileged informs consideration of the last;
(ii) this last email was sent as part of a chain of communications dealing with matters which the Plaintiff accepts were subject to litigation privilege, and that had had attached to them, draft documents relating to that litigation;
(iii) on its face, the last email deals with a matter relating to the litigation and contains advice from Bird & Bird as to how BTI might proceed in the light of the situation then presenting;
(iv) the dominant purpose of that email is the obtaining of timely legal advice in relation to litigation and the document is privileged.
48. This too comprises a chain of three emails, dated 25 March 2021, in relation to which OMBZ claims legal advice privilege and common interest privilege.
49. The first in time of these emails is from the litigation partner at Bird & Bird to the Fourth and Fifth Defendants. That email was then forwarded to Mr Davidson by the Fourth Defendant, and Mr Davidson then replied.
50. The Plaintiff's submission is that:
(i) legal advice privilege in the first email was lost by its disclosure to SEP;
(ii) it would be unfair for privilege to be maintained in the first email after it has been shared with SEP; and
(iii) alternatively, if the confidentiality in the first email was not destroyed by its disclosure to SEP, the content of the second email is not privileged in any event.
51. As noted above, the SEP Transaction completed on 9 April 2021 and at the time of this email exchange, Mr Davidson was not a director of BTI. However, on 16 July 2020, SEP had entered into a non-disclosure agreement with OMBZ for the purposes of a potential investment by SEP into OMBZ, pursuant to which it agreed, amongst other things:
"(a) to hold the Confidential Information in confidence and not to disclose or permit it to be made available to any person, firm or company (except to other Discloses) without the Discloser's prior consent;"
52. The "Confidential Information" to which the agreement referred was defined as "certain information relating to [the Second Defendant] in relation to [the potential investment by SEP]" and OMBZ submits that that includes the first email. Having provided that email to SEP pursuant to the non-disclosure agreement, any waiver of privilege was limited in accordance with the principles set out in Hollander, Documentary Evidence (Sweet & Maxwell, 15" Ed) at 24-01:
53. In my judgment, disclosure by OMBZ to SEP of legal advice falling with the scope of the non-disclosure agreement amounts to a limited waiver of privilege only and OMBZ can continue to claim privilege against the Plaintiff. Nor do I think it unfair to maintain privilege in such circumstances.
54. Insofar as the Plaintiff submits that the second email "is not privileged in any event", I disagree given that the second email expressly refers to the contents of the first email. However, save for the second substantive paragraph (ending with the word "below"), it does not appear to me that any privileged material is being disseminated by either the second or third emails and that these documents can be simply disentangled from any privileged material.
55. Accordingly, I order that:
(i) the first email (timed at 19:19) be redacted in its entirety;
(ii) the second email (timed 19:40) be redacted by the deletion of the second substantive paragraph (ending with the word "below");
(iii) the third email (timed at 11:03pm) be disclosed unredacted.