The billionaire Sir Frederick Barclay, whose businesses include the Daily Telegraph and the Ritz hotel, was secretly recorded for several months after his nephew bugged the hotel’s conservatory, the high court has heard.

The 85-year-old businessman and his daughter Amanda claim that his twin brother Sir David’s three sons – Alistair, Aidan and Howard – as well as Aidan’s son Andrew were parties to the recording of their private conversations over several months.

Barclay and his daughter 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.

According to PA Media a high court judge sitting in London was told on Monday that the “elaborate system of covert recording” only came to light last month when Alistair was filmed “handling the bug placed in the conservatory at the Ritz”.

Desmond Browne QC, representing Frederick and Amanda Barclay, said: “We all remember Tolstoy saying ‘each unhappy family is unhappy in its own way’.

“Here, the children of Sir Frederick and Sir David have been at odds ... concerning the family trusts, and cousin, sadly, has been pitched against cousin.”

He told Mr Justice Warby: “It is alleged that the defendants have surreptitiously recorded the conversations of Sir Frederick and his daughter Amanda, both between themselves and with others, over a period of months.”

Browne said it was not clear how long the recordings were made for, but they “could go back as far as September last year”.

He continued: “The defendants knew the conversations were private and confidential, but they nevertheless recorded them, commissioned transcripts and then conducted discussions about them.”

He argued there was a strong case that there had been “illegal activity over a long period of time”, which he said had produced recordings of “tremendous value” to the defendants.

Browne added: “The matter came to light when the first defendant, initially the only defendant, Alistair Barclay, was filmed late on the night of 13 January handling the bug placed in the conservatory at the Ritz, which was known to be often used by Sir Frederick. I gather it was somewhere he could go to smoke a cigar.”

Browne asked the court to make an interim non-disclosure order, preventing the defendants from disclosing the recordings.

Heather Rogers QC, representing all five defendants, submitted that 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”.

Rogers argued that there was therefore no need to make an interim non-disclosure order.

Giving a short ruling dismissing the application for a non-disclosure order, Warby said the claim “stems from the falling-out between elements of the families of Sir Frederick and Sir David Barclay”.

He said that “substantial parts of the business enterprises” the twins had built up “are now owned by trusts, beneficiaries of which include” Amanda, Alistair, Aidan and Howard Barclay.

The judge added that the “vexed litigation” arose “over the governance and direction of the group businesses”.

He said the information Frederick and Amanda Barclay were seeking to protect included “discussions about potential acquisitions and disposals of business assets”, and “personal financial matters including matters relating to the family trusts”.

Warby declined to make the order sought, ruling that “there was no intention and no evidence of any intention” to disclose the recordings.

The Barclay Brothers who, have owned the Telegraph newspaper group since 2004, are reportedly conducting a review of their many businesses, which also include the Ritz in London.

Profits at Telegraph Media Group slumped to £900,000 last year, in the middle of a turnaround plan led by the chief executive Nick Hugh.