Sir Frederick Barclay’s nephews reportedly sold the Ritz hotel for ‘half the market price’ after bugging the building and secretly recording his conversations.
Sir Frederick, 85, and his daughter Amanda are suing three of his twin brother Sir David’s sons – Alistair, Aidan and Howard – and Aidan’s son Andrew for 94 hours of recordings made over several months.
The High Court previously heard the ‘elaborate system of covert recording’ only came to light in January when Alistair was filmed on CCTV ‘handling the bug placed in the conservatory at the Ritz’.
At a further preliminary hearing, conducted remotely on Wednesday, Mr Justice Warby heard that the recording of Sir Frederick and Amanda Barclay’s conversations was ‘commercial espionage on a vast scale’.
Hefin Rees QC, representing Sir Frederick and Ms Barclay, said in written submissions that the recordings ‘captured over 1,000 separate conversations over a period of months’, including conversations with the claimants’ lawyers as well as ‘bankers and business people’.
He added ‘a separate Wi-Fi bug was also used’, which was supplied by private investigations firm Quest, which ‘invoiced for 405 hours of their time to listen and transcribe the recordings’, with transcripts reportedly shared among the defendants and others.
The court was told that Sir Frederick, who had ‘placed great trust’ in Aidan and Howard Barclay to run his and his brother’s business empire, is ‘now left to contemplate his nephews’ betrayal’.
Sir Frederick and Ms Barclay are bringing a legal action alleging misuse of private information, breach of confidence and breach of data protection laws, against their four relatives and Philip Peters, who ‘holds a board position’ in the Barclay group of businesses.
Mr Rees submitted that material previously disclosed to his clients ‘reveals beyond doubt that the defendants derived significant financial and commercial advantage from the unlawful use of the recordings’.
He added that they were made at a time ‘when there were significant ongoing commercial disputes between the parties concerning, among other things, the sale of the Ritz hotel, the financial performance and management of the group, (Amanda Barclay’s) continuing financial interests in the group, and Sir Frederick’s divorce proceedings’.
In March, Sir Frederick said he had received competing bids to buy the Ritz for more than £1 billion, adding that any move to sell the establishment for ‘below the proper value would give rise to further litigation’.
The Ritz has since been sold to an unnamed Qatari investor for an unknown price, reported to be around £750 million.
Mr Rees told the court the defendants heard ‘Sir Frederick’s conversations with Sidra Capital, which at the time had made an initial offer of some £1.3 billion for the acquisition of the Ritz hotel’.
He added: ‘Despite this, the defendants sold the Ritz hotel to another buyer from Qatar at a price that appears to be for half the market price. One is left to speculate why.’
Mr Rees argued the recordings allowed the defendants ‘to anticipate the claimants’ every move in advance, plan their business strategy around that, including knowing what legal advice the claimants were seeking and getting at this crucial time when their business and personal relationships had broken down, and the respective interests of the claimants and the defendants were in conflict’.
At the hearing in February, Heather Rogers QC, representing all five defendants, argued there was ‘a lot of information that would have been in the possession of my clients… which they have got completely free of the recordings’.
She added that her clients had ‘ample opportunity’ to ‘spread it about before an injunction’ was granted, but there was ‘no evidence of dissemination’.
Mr Justice Warby will continue to hear submissions on Wednesday afternoon.
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