Andrew Sutcliffe QC and William Day successfully overturn interim injunction at breach of confidence trial

Andrew Sutcliffe QC and William Day, instructed by Ian Gatt QC, Harry Spendlove, Frances Baird and Beata Moskova of Stewarts, defended two companies (The Chedington Court Estate Ltd and Axnoller Events Ltd) and their shareholder and director (Dr Geoffrey Guy) in a 5 day trial involving allegations of breach of confidence and misuse of private information.

The claim is part of a wider long-running dispute between the parties. Andrew and William successfully obtained the dismissal of various insolvency applications in the course of 2020 (see here), largely upheld by the Court of Appeal in November 2020 ([2020] EWCA Civ 1491), and an application for permission to appeal to the Supreme Court is currently outstanding.

In the breach of confidence claim, the allegations focus on an email account which the defendants said belonged to the business, but the claimants (two former employees of the business) said belonged to them personally. The defendants argued that emails within the account showed that the claimants had implemented a scheme to hide assets from their bankruptcies and their partnership’s liquidation estates and in breach of freezing injunctions.

After a heavily contested application in late 2019, an interim injunction was ordered over the email account pending trial: see [2019] EWHC 3332 (Ch).

Trial judgment

However, at trial, in what is likely to become a leading authority on property rights and rights of confidence and privacy in email accounts, HHJ Paul Matthews (sitting as a Judge of the High Court) held that:

• The email account was owned by the business, or at the very least the claimants were estopped from claiming otherwise
• The fact that the claimants held the password to the account did not give them rights of confidentiality or privacy – “Confidentiality is not dependent upon locks and keys or their electronic equivalents. And the converse is true.”
• The claimants had failed to prove the necessary quality of confidence and privacy in most of the relevant documents within the account, not least because the Court had not been taken through the disputed documents in an appropriately systematic way
• The documents had not been accessed by the defendants in circumstances that would create any confidentiality obligations, because they understood (correctly) that the email account was owned by the business
• In any event, documents from the account had not been misused – in particular, it was not a misuse to have provided documents to solicitors or other professional advisers to obtain advice on those documents, nor to hand the documents over voluntarily to relevant insolvency officeholders and creditors

The judgment was handed down on 25 March 2021 and can be found at [2021] EWHC 671 (Ch).

Public interest defence

In a further judgment handed down on the same day, the Judge considered that, if he had been wrong on the trial judgment, the defendants had a properly arguable public interest defence in law on the basis of their pleaded case that the documents contained evidence of an unlawful scheme to hide assets from the related bankruptcy and liquidation proceedings. In particular, the Judge held:

• A defence of public interest (or “iniquity”, to use more traditional language to describe the defence) is as available for a privacy claim as it is for a breach of confidence claim
• A defence of public interest or iniquity is not limited to cases where the information was lawfully received – it could apply where information had been unlawfully taken
• The public interest or iniquity defence is available where there are allegations of past commissions of civil wrongs

For these reasons, had the Judge reached a different view at trial, he would have ordered a second trial to determine whether a public interest or iniquity defence was available to the defendants on the evidence. The judgment can be found at [2021] EWHC 670 (Ch).