You could create a custom-template with a blank 50LocalLDAP file, then signal-event email-update. Now all users should only see their personal address book. This will effect all users, even staff.
I have created a new file and named it 50LocalLDAP in the template-custom directory and ran the CLI as specified above but the change has not been applied. Is there something that I'm missing??
Yes, you need to read the admin guide on how the templates system works,
http://wiki.contribs.org/SME_Server:Documentation.
Here it is spelled out
mkdir -p /etc/e-smith/templates-custom/home/httpd/html/horde/turba/config/sources.php
touch /etc/e-smith/templates-custom/home/httpd/html/horde/turba/config/sources.php/50LocalLDAP
signal-event email-update
Login to webmail, no ldap address book
John