The High Court has refused an application by Lindelauf Consultancy BV, Roger Lindelauf and Vertex, Inc to narrow an existing discovery order in a dispute over the development of VAT software. The court left in place an order requiring documents about Vertex’s VAT offering created on or after 26 June 2019.
Meridian Global VAT Services Limited claims it developed software to automate complex VAT determinations. It says a 2010 consultancy agreement with Lindelauf Consultancy BV, controlled by Roger Lindelauf, imposed obligations concerning confidential information, and that it owns copyright in material created under the agreement. Meridian alleges that Vertex later offered a VAT solution with the same functionality and methodology, using its confidential information or copyright material. The defendants reject the allegations and say the claim is baseless. These claims were not decided in this application.
In February 2021, the court ordered discovery under Category 6: documents created from 26 June 2019 recording Vertex’s development of a VAT offering, including code, strategy documents, meeting records and material concerning specified tools and system connections. The defendants later estimated compliance would cost about €710,000 and sought to replace the order with a supervised system demonstration, backed-up code from selected dates, and discovery limited to an eight-person core development team plus Mr Lindelauf.
The defendants argued that the burden had proved greater than anticipated. The court found, however, that they had not estimated the likely number of custodians or document volume before the February hearing, despite an obligation to take reasonable preparatory steps. The failure to make that estimate did not establish good reason to revisit the order.
The judge also considered whether the defendants’ proposed alternative was sufficient. He found the documents highly relevant to the central dispute over whether Vertex’s offering used Meridian’s confidential information. The proposed code files were limited to snapshots and raised unresolved issues about searchability and metadata. The affidavits also conflicted over whether the defendants’ systems could produce other code versions; the court said it could not resolve that conflict on the evidence before it. The proposal to limit discovery to a core team was unsupported by enough detail about those employees and the other identified custodians. A supervised demonstration would not provide the same access to the full range of responsive documents.
The application under Order 31, rule 12(11) was refused. The court therefore did not vary the February order. The ruling addressed the discovery application only; it did not determine the underlying allegations.