Mex Group Worldwide Limited v Adam Duthie & Anor [2025] EWHC 426 (KB)

[2025] EWHC 426 (KB)Case No KB-2024-001296
IN THE HIGH COURT OF JUSTICE
KING’S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 14 February 2025
Before
ANDREW KINNIER K.C.(Sitting as a Deputy Judge of the High Court)MEX GROUP WORLDWIDE LIMITED
Between
ADAM DUTHEIDefendantDUTHIE CONSULTANTS LIMITEDDefendantMR THOMAS GRANT KC, MR CALEY WRIGHT and MR DANIEL PETRIDES (instructed by Quillon Law) for Claimant/RespondentMR THOMAS ROE KC (instructed by Bellevue Law) for Defendants/Applicants
APPROVED JUDGMENTIf this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.Digital Transcription by Marten Walsh Cherer Ltd2 nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HPTel No: 020 7067 2900. DX: 410 LDEEmail: info@martenwalshcherer.comWeb: www.martenwalshcherer.comANDREW KINNIER KC sitting as a Deputy Judge of the High Court:
[1]The claimant makes an application under CPR 39.2(3) that I sit in private to hear the defendants’ application to vary the terms of undertakings that were given in July of last year. Three limbs of CPR 39.2(3) are relied upon: (a), (c) and (g). The defendants have adopted a neutral position.[2]Before dealing with the detail of each of those limbs, I should say that two fundamental principles are engaged. One is the bedrock principle that justice must be open and the public has a right to see what is going on in court; the second is the importance of the privacy and the alleged confidential nature of the information and materials that are being discussed before me today.[3]It seems to me that, bearing in mind the two fundamental principles and balancing the relevant considerations, there is much to be said for sitting in private today. If the matters were discussed openly, there is a risk that the purpose for which the undertakings were given and the litigation is pursued would be undermined. So, for that principal reason, I am satisfied that publicity would or may defeat the object of the hearing for the purposes of limb (a); secondly, I am satisfied that the hearing involves confidential information and publicity would damage that confidentiality for the purposes of limb (c), and generally, for the reasons already given, I am satisfied that limb (g) is also met.[4]We will come on to the question of the judgment, whether it ought to be given in open court or not, in due course. (See separate transcript for continuation of proceedings)[5]By an application dated 31 January 2025, Mr Adam Duthie and Duthie Consultants Limited, the first and second defendants respectively, seek to vary the terms of the undertakings they each provided to the court, and which are set out now in schedule 2 of the order of 26 July 2024 made by Sweeting J.[6]For the purposes of this afternoon’s hearing, for which a three-hour time estimate was given, I have been provided with three witness statements. The defendants rely on the third statement of Faye Moore, to which nearly 900 pages of materials are exhibited. The claimant relies on the third statement of Mark Hastings and the first statement of Louise Wright. The parties both lodged skeleton arguments yesterday evening. I have also received and read expert reports obtained by the defendants on certain aspects of criminal law in the British Virgin Islands and Germany. I have also read and received an opinion from Jonathan Brown, junior counsel retained by the claimant in the Scottish proceedings, litigation to which I will refer to again in due course, on certain aspects of Scottish procedural law as it concerns warrants for citation. The parties are agreed that, for the purposes of this application only, I can consider these latter materials de bene esse.[7]It is necessary to set out a short summary of the background to enable the issues in this application to be understood. I should emphasise, however, that it cannot be a full account of the complex and contentious pieces of litigation in which the parties are involved in this jurisdiction, in Scotland and elsewhere, whether as parties or otherwise.[8]The claimant is a Hong Kong-based company. It is the holding company of a group of companies trading under the name of Multi Bank. Its sole shareholder is Mr Naser Taher. The Multi Bank companies provide trading platforms for investors dealing in derivatives and are authorised to provide financial services in 14 jurisdictions but not including the United Kingdom.[9]Mr Duthie, the first defendant, is a solicitor. Duthie Consultants Limited is the company under which Mr Duthie provides or provided legal services. Under an agreement dated 1 May 2020, Duthie Consultants agreed to provide the claimant with legal advice including advice in relation to corporate commercial and dispute resolution matters, instructing counsel on behalf of the claimant, and managing services of external law firms engaged by the claimant. From 1 May 2020, Mr Duthie acted as the claimant’s general counsel and provided legal services under the agreement. That agreement itself was terminated on 11 May 2022.[10]I now turn to the English freezing order proceedings. A concise history of the English freezing order proceedings was provided by Males LJ at paragraphs 7 to 19 of his judgment dismissing the claimant’s appeal against the discharge of the freezing order by Deputy High Court Judge Tinkler. I gratefully adopt that summary but do not repeat it here given the constraints of time this afternoon.[11]For present purposes, I should record briefly that in October 2023 the claimant also issued proceedings in this jurisdiction for a worldwide freezing order. The order was made without notice by Lavender J on 20 October 2023, and on the return date the application came before Deputy High Court Judge Tinkler who, following a hearing in December 2024, declined to continue it. The deputy judge held that the claimant had established a good arguable case, but it had failed to show a sufficient risk that the respondents would unjustifiably dissipate their assets. He also held that it was inexpedient to grant a freezing order absent any connection with England and Wales and as the claimant had failed in its duty of full and frank disclosure when making the application to Lavender J. Accordingly, the freezing order was set aside against some, but not all, of the defendants. The appeal against that decision was heard and dismissed by the Court of Appeal last year.[12]The Scottish proceedings. In October 2023, the claimant also commenced proceedings in Scotland. These consisted of a commercial summons in which the claimant made a substantive claim for damages for conspiracy against the defendants and a petition in which the claimant sought a warrant, which is the Scottish equivalent of a search order, against individual residents in Scotland, the co-defendants with business premises there together with the Scottish defendants.[13]The unlawful means on which the claimant relies consists principally of causing Mex Securities unlawfully to renege on a settlement and consent order at the instigation of the defendants; the making of false allegations about the circumstances of the negotiations and provision of a financial inducement to do so. The case is that as a result of claims made in bad faith in litigation in the British Virgin Islands, the details of which were summarised by Males LJ as indicated earlier, and the false allegations concerning the circumstances in which the consent order was agreed, the claimant incurred significant legal costs and, even more substantially, significant lost profits in business due to reputational damage which it suffered, including having to postpone a bond issue which would otherwise have taken place but which did not occur due to the claimant’s inability to obtain a satisfactory rating. The damages are alleged to amount to as much as 85 million euros.[14]The present proceedings. On 23 April 2024, the claimant issued proceedings in this court against the two defendants. In brief, it is alleged that on an ad hoc basis from July 2019, and under the agreement from 1 May 2020 onwards, the defendants received substantial quantities of the claimant’s confidential information. It is alleged that the defendants breached their respective contractual and other duties in four principal respects.(1) In December 2023 and April 2024, Mr Duthie filed witness statements in the English freezing order proceedings, litigation to which neither defendant was or is a party, which made extensive reference to the claimant’s confidential information.(2) In April 2024, Mr Duthie attended hearings in the Scottish proceedings before the Court of Session, at which he was seen to be communicating with the Scottish defendants and their counsel in a manner from which it was inferred by the claimant that he was disseminating the claimant’s confidential information.(3) It is inferred that Mr Duthie helped the Scottish defenders in the drafting of a statement served by Mr Stewart Ford on 3 April 2024, which is said to replicate the content of Mr Duthie’s first statement in the English freezing order proceedings.(4) In light of his involvement in the English freezing proceedings and the Scottish proceedings, Mr Duthie has assisted or sought to assist the defendants in those claims by divulging confidential information to them, and in any event, information received by him in his former capacity as the claimant’s general counsel.[15]In the present proceedings, pleadings have been exchanged, voluntary particulars provided and an application to strike out parts of the defence has been issued and set down to be heard for two days starting on 17 March 2025.[16]In May 2024, following the issue of an application by the claimant for an interim injunction and, after some detailed negotiation between the parties which is accurately summarised in paragraphs 29 to 39 of the claimant’s skeleton argument, the defendants agreed to provide undertakings. Those undertakings are set out in the order of 29 May 2024 made by Sweeting J.[17]The undertakings contained five relevant provisions. The defendants agreed not to:(1) Disclose to any person or make use of any confidential information which is the subject of the claim and identified in schedule 1 of the order other than by way of disclosure to the defendants’ legal advisors for the purpose of carrying the order into effect or as required by law.(2) The defendants agreed not to assist the defendants in the English freezing order proceedings, the Scottish proceedings, or in any related proceedings in the defence of those proceedings.(3) Except to the extent that it is reasonably necessary for the first defendant to receive updates on the status of proceedings in his capacity as a director of the fifth defendant in the Scottish and English proceedings, the defendants agreed not to communicate with the defendants in the proceedings concerning any matters relating to their subject matter or the subject matter of any related proceedings involving Multi Bank Group in any jurisdiction.(4) Except in the present proceedings, the defendants agreed not to rely upon or deploy the two witness statements prepared by the first defendant in the English freezing order proceedings which I referred to earlier; namely those dated December 2023 and April 2024.(5) The first defendant agreed not to produce any further witness evidence in the proceedings or any litigation other than the present proceedings and the application involving the Multi Bank Group in any jurisdiction.[18]At this stage, I note four points relating to the drafting and the final versions of the undertakings.(1) The reference to “a court” in the defendants’ original proposal was replaced by reference to “the court”. In my judgment, that means the English Court which is seised of the present proceedings.(2) The defendants accepted the addition of an express and absolute prohibition against lending assistance to any of the Scottish defendants or communicating with them in relation to the subject matter of the proceedings (which were widely defined in the undertakings), except to provide updates.(3) The defendants accepted the addition of an absolute and express prohibition on filing further witness evidence in the Scottish proceedings.(4) The defendants accepted the deletion of a qualification which would have allowed them, in any jurisdiction, to seek directions on the disclosure of confidential information.[19]Following some discussion about, and then rejection of, the practicability of an expedited trial, the undertakings were again given, in identical form, and recorded in the order made by Sweeting J on 26 July 2024. It is notable that the defendants agreed to the continuation of the undertakings until trial in full knowledge that this might be some distance off and probably after the trial of the Scottish proceedings which had been issued more than six months earlier.[20]The next relevant event was on 7 November 2024. On that day, Lord Sandison, the commercial judge in the Court of Session, granted a warrant for the citation of Mr Duthie. Although there was considerable debate in correspondence about the meaning and effect of the citation, it is the equivalent of a witness summons. On its face, the minute for warrant of citation (or what I shall call the Scottish summons), simply requires Mr Duthie to attend trial as a witness. It does not require the prior disclosure of any documents by him and it does not require the production of a witness statement before he gives evidence, or indeed any witness statement.[21]I now turn to the defendants’ application. In light of the receipt of the Scottish summons, the application now seeks to vary the terms of the defendants’ undertakings given in May and July of last year to allow Mr Duthie to obey the witness summons and to participate in the process by giving a witness statement which is required to be served by 7 March 2025.[22]In his concise and economical skeleton argument, Mr Roe KC, who appears for the defendants today, contends that there has been a significant change of circumstance: the making of the Scottish summons justifies the varying of the undertakings. Alternatively, it is submitted that the court is entitled to take an overall merits-based judgment where the defendants’ undertakings ought to be varied. Under that limb, Mr Roe submits that two factors are particularly relevant. First, the scope of the undertakings are “extraordinarily restrictive” and go beyond what a court might reasonably order. That is a strong indication, it is argued, that no injustice will be done if Mr Duthie is giving the limited release that he seeks. Secondly, if Mr Duthie is not released from his undertakings, the efficient and fair progress of the trial in the Scottish proceedings, which is due to start in June, would be substantially disadvantaged. That is because Mr Duthie will not be able to adduce documents or other evidence to answer the allegations made by the claimant in the condescendence in the Scottish proceedings.[23]In a much longer, but certainly helpful, skeleton argument, the claimant resists the sought-for variation. First, it is said that no special or significant circumstances have arisen which are sufficient to justify the proposed variations. In particular, it is said that the undertakings were freely given and in full knowledge of the existence of the Scottish proceedings.[24]Further, the undertakings do not prevent Mr Duthie from complying with the Scottish summons and attending the trial of the Scottish proceedings. The claimant’s submissions, forcefully reinforced by Mr Grant KC in oral argument, helpfully put flesh on the bones of these essential propositions.[25]The parties are, to some extent, agreed that the law can be summarised thus: special or significant change of circumstances since the giving of the undertakings are needed to justify their variation. Also, the case-law that flows from the case of Chanel Ltd v FW Woolworth& Co Ltd [1981] 1 WLR 485 governs the court’s consideration of such applications.[26]There is some dispute about whether the requirement for a special or significant circumstance to justify a variation of an undertaking is an absolute rule: I shall deal with this argument later in my judgment.[27]Overall, in considering the case law, I drew particular benefit from Potter LJ’s statement of principle in Di Placitov Slater [2004] 1 WLR 1605, who said at paragraph 31 of his judgment:
“I prefer the phrase ‘special circumstances’ because, in my view, it is more apt to emphasise that the discretion is not simply a discretion at large, but is to be exercised only in a situation where circumstances have subsequently arisen which, by reason of their type or gravity, were not circumstances which were intended to be covered or ought to have been foreseen at the time the undertaking was given.”
[28]Having read the Chanel case and the other authorities cited by the parties in their skeleton arguments (including Di Placito’s case), for three principal reasons I am not persuaded that any special or significant change has happened since the undertakings were given that are sufficient to justify the variations that are sought:(1) Mr Duthie is an experienced solicitor, and indeed a former senior partner of Withers. There is no suggestion that he did not fully understand or appreciate the nature or scope of the undertakings that were agreed in May 2024 and again confirmed in July 2024. In short, the undertakings were freely given and, importantly, in full knowledge of their nature, extent and effect.(2) The substance of the undertakings were the subject of extensive negotiation and consideration by the parties. As indicated earlier, the defendants accepted the addition of an express and absolute prohibition against lending any assistance to any of the Scottish defendants or communicating with them in relation to the subject matter of the Scottish proceedings except to provide updates. The defendants accepted also, as I noted earlier, the addition of an express and absolute prohibition of filing further witness evidence in the Scottish proceedings. Again, I note that they accepted the deletion of the qualification which would have allowed them to seek directions about the disclosure of confidential information in any jurisdiction. Those restrictions were accepted by Mr Duthie in full knowledge of the existence and substance of the Scottish proceedings.(3) The undertakings were given when there was, in my judgment, more than a mere possibility that Mr Duthie might give evidence in the trial of the Scottish proceedings. Mr Duthie’s unilateral service of two statements (one in December 2023, the other in April 2024) in the English freezing order proceedings show that he wanted, indeed was keen, to give evidence in the defendants’ interests against the claimant. For that reason, given the similarity in substance and the parties between the Scottish proceedings and the English freezing order proceedings, in my judgment, it was at the very least likely that Mr Duthie would want to give evidence at the trial of the Scottish proceedings at the time that he gave the undertakings. Mr Roe KC described that prospect as a significant possibility at the time the undertakings were given in May and then again in July 2024, but given Mr Duthie’s wish to give evidence against the claimant, and what appear to be his close ties to at least some of the Scottish defendants, that prospect was certainly more akin to a likelihood (if not more) when the undertakings were negotiated and given in May and again in July 2024.[29]I now turn to consider Mr Roe KC’s alternative argument that the case law allows the court to take an overall merits-based approach to the application. I have heard some (but inevitably time-limited) argument on the point before me today but in summary Mr Grant KC submitted that the authorities do not support the merits-based approach which Mr Roe asks me to adopt. It is sufficient, for present purposes, for me to conclude that, if Mr Roe’s submission is right and the authorities allow me to take an overall merits-based approach, nonetheless I am not persuaded to accede to the application on that basis. The overall merits will take into account the points I have already set out above and they weigh against allowing the application.[30]In inviting me to take an overall merits-based approach, Mr Roe KC relied on two points. The first is that the scope and burden of the undertakings are, in his words, extraordinarily restrictive. The answer is short and direct. First, Mr Duthie agreed to the scope and burden of those undertakings. In that regard, I would repeat my earlier findings and conclusions that he is a senior and experienced solicitor who knew full well what he was agreeing to and in full knowledge of the existence and substance of the Scottish proceedings. Secondly, I accept Mr Grant’s submission that it is not at all clear whether the undertakings are unduly restrictive, extraordinarily or otherwise, bearing in mind the nature, extent and burden of the obligations of confidentiality owed by a lawyer to his client.[31]The second point relied upon by Mr Roe KC was presented, if I may say so, attractively. Essentially, the sought-for variation is a measure to ease the efficient and fair case management of the trial of the Scottish proceedings but also, substantively, to allow Mr Duthie to refute the various allegations or to help the defenders refute those allegations which are said to include Mr Duthie in the condescendence in the Scottish proceedings. On reflection and bearing in mind my conclusions above, I reached the view that it is not for this court to vary the undertakings in an attempt to assist the efficient and fair trial management of the trial. Those are exclusively matters for the trial judge. The questions that can be properly put to Mr Duthie; the answers that he can properly give; the materials on which he can properly rely in support of any answer are all matters for the judge trying the Scottish proceedings. It will be for that judge to hear and decide those points, based on full argument from the parties, the evidence adduced by them and the live forensic issues as they arise.[32]Privilege will almost certainly be a contentious issue in deciding what questions may be answered by Mr Duthie. The trial judge will be better placed to take a view on what questions are permitted in light of the relevant principles governing privilege and the undertakings. It is not clear how, given the complexity of the likely arguments, this court would help the judge’s task by seeking to define the nature and scope of the undertakings or varying the undertakings as Mr Roe asked me to do today.[33]During submissions Mr Roe KC asked me not to take upon myself the role of defining, indicating or suggesting what Mr Duthie may say in answer to questions put to him at trial. I accept that invitation. It is not for this court to give any indication on those matters because it is for the trial judge to decide what questions are to be put to a witness at trial.[34]A final point is significant and it weighs against allowing the application should an overall merits-based approach be adopted. As Mr Grant KC submitted, if I allowed the application, it would effectively decide the questions of privilege and breach which go to the heart of these proceedings which have not yet been properly considered by a judge whether at a strike out application or at trial. Allowing the application would, as Mr Grant put it, denude the claimant of its privilege on the back of a three-hour application. That result would be unjust. As I said, this factor has some significant weight and it counts against granting this application.[35]Given the constraints of time this afternoon, these are my summary reasons for dismissing the application. If I adopt the approach that the applicants must demonstrate a serious or significant or special circumstance to justify variation of the undertakings, no such circumstance has been established and so I do not accede to the application. Alternatively, if I take an overall merits-based view, the application is dismissed for the reasons I have given. (See separate transcript for continuation of proceedings). POSTSCRIPT 36. Following consideration of the transcript of the judgment and under para. 2 of the Order of 14 February 2025, the Claimant’s solicitor confirmed that it had no objection to making the judgment public. 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Cited in 1 later judgment