Coll v Floreat Merchant Banking Ltd & Ors [2014] EWHC 1741 (QB)

Case No HQ13X05679

[2014] EWHC 1741 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 03/06/14

Before

MR JUSTICE HICKINBOTTOM

Between

FEDERIKA COLLClaimant

FLOREAT MERCHANT BANKING LIMITEDDefendants

SW PROPERTY GROUP LIMITEDDefendant

JAMES CHARLES WILCOXDefendant

HUSSAM SHAFIQ AL-OTAIBIDefendant

THE SOLICITORS REGULATORY AUTHORITYIntervener

Chris Quinn and James Bickford Smith (instructed by Maclay Murray Spens LLP)

for Claimant and Third Parties

Jeffrey Chapman QC and David Drake (instructed by Mischcon de Reya)

for First to Fourth Defendants (except the committal application)

Andrew Bodnar (instructed by Berwin Leighton Paisner)

for First to Fourth Defendants (committal application only)

James Lewis QC (instructed by Robin Simon LLP)

for Proposed Fifth and Sixth Defendants

The Intervener making written submissions but not otherwise appearing

Hearing Hearing dates: 1 and 16 May 2014

Judgment

Mr Justice Hickinbottom :

Introduction

[1]There are before the court a number of applications, which involve two core issues.

[2]First, the Claimant seeks permission to bring committal proceedings against the Defendants and Proposed Additional Defendants for breach of a solicitor’s undertaking, which involves consideration of the scope of the jurisdiction of the court to commit for breach of an undertaking given by a solicitor other than an undertaking to the court; as well as whether the court should exercise any discretion it has to allow committal proceedings to be brought on the facts of this case.

[3]Second, the Defendants seek to bring claims against the Third Parties, which gives rise to the question as to whether those claims should be brought within these proceedings or by way of separate action.

Factual Background

[4]The First Defendant (“Floreat”) is a private investment company regulated by the Financial Conduct Authority and authorised to carry out regulated activities under the Financial Services and Markets Act 2000. The Third Defendant (“Mr Al-Otaibi”) is a Managing Partner of Floreat, as is the Fourth Defendant (“Mr Wilcox”) who is also a consultant with the Proposed Fifth Defendant (“Mishcon de Reya”), a firm of solicitors who are currently on the record in this claim for the First to Fourth Defendants.

[5]Mr Al-Otaibi and the First Third Party (“Mr Eggesbo”) were friends and, from about 2006, business associates. As I understand it, it is uncontroversial that they together launched the Second Defendant (“SWP”) as a vehicle for property investment. Mr Al-Otaibi contends they also founded a second company, Allegiance I A Limited (“Allegiance”), with a similar purpose; although Mr Eggesbo denies that Mr Al-Otaibi has any interest in that company.

[6]The Claimant is a Venezuelan national, and Mr Eggesbo’s sister-in-law. By an Employment Contract dated 7 April 2011, she was employed by Floreat as an environmental and social governance analyst, in which capacity she provided services to SWP.

[7]Under that contract, Floreat was to provide the Claimant with a laptop computer “for business and reasonable personal use” (paragraph8.1 ), and the Claimant agreed to return it at Floreat’s request or on the termination of her employment (paragraph

8.2 ). Floreat reserved the right to intercept and open any communication (including emails and telephone communications) sent or received using any of its systems (paragraph

21.1 ), and it made clear that such communications should not therefore be regarded as “private” (paragraph

21.2 ). There were provisions concerning confidential information (paragraph 13), which were supported by further provisions in a separate Non-Disclosure and Non-Circumvention Agreement signed by the Claimant and Floreat the same day.

[8]When she was first employed, the Claimant appears to have used her own laptop computer at work; but she was supplied with a desktop iMac computer which she used at the companies’ shared premises in Cadogan Square from 16 December 2011, when the computer was delivered there. That computer cost £1,000, and was part of a computer package which cost a total of £3,700. The ownership of the computer is in dispute. The Claimant contends that it was gifted to her. The Defendants contend that it was supplied to her under her employment contract, and owned by SWP. There is evidence that it was bought by Mr Eggesbo with Allegiance money; but for use on (amongst other things) Floreat and SWP work.

[9]Few things in this case are uncontroversial; but it is common ground that the Claimant was entitled to use the computer for personal as well as business use, and that she did so. In addition to business data, she kept personal photographs, details of friends and financial information on it. She also used the machine for personal emails; and it seems that it was synchronised with her iPhone so that her iMessages also appeared on the desktop computer unless and until deleted. Some of those too, she says, were personal.

[10]SWP did not flourish as had been hoped. Relations between Mr Eggesbo and Mr Al-Otaibi deteriorated, and Mr Eggesbo joined the Third Third Party (“Obligo”) which, the Defendants say, is a competitive rival of SWP. Mr Eggesbo resigned as a director of SWP in September 2012, but continued to be involved with Allegiance.

[11]Mr Al-Otaibi says that he became increasingly suspicious about Mr Eggesbo and the Claimant, and the potential conflict of interest given Mr Eggesbo’s new business concerns and the Claimant’s relationship with him. In early November 2013, she was put on paid leave; and on 12 November, told not to come into the office. On 19 November, she was given formal notice expiring on 31 December 2013.

[12]In particular, Mr Al-Otaibi says that he was concerned that the Claimant had been feeding Mr Eggesbo confidential information about SWP’s affairs for use in his new business; and her computer, which was left at the office after she was put on leave, was consequently the subject of discussion between them from 4 November. He was suspicious that it might have been used for wrongdoing with the company’s confidential information. On 12 November, the Claimant asked if she could go into the office, as she needed to work from her computer; but that request was refused. In turn, she was asked for her log in details, which she declined to give because of the personal information held on the computer. She said (in an email on 13 November 2013):

“You will appreciate that as my PC is a personal PC rather than a company one, it contains lots of personal and sensitive information including personal photographs, bank account details both for myself and my family as well as confidential information on my close friends and family. I am sure you understand the sensitivity of the matter and the reasons why I cannot provide you with the details or give my consent to access this personal information.”

[13]Despite much communication, there was then an impasse: Mr Al-Otaibi would not let the Claimant have access to her computer without being supervised, and the Claimant refused to give the Defendants access to the computer or to access it herself under supervision.

[14]On 18 November 2013, on instructions from Floreat and SWP, Mishcon de Reya arranged for computer experts (Proven Legal Technologies (“Proven”)) to take a copy or image of the contents of the computer, which was done that day; and then to extract all live email and user-generated files from the image and make them available to Floreat (Mr Al-Otaibi) and Mishcon de Reya. However, Mishcon de Reya did not at that stage tell the Claimant that that image or those investigations had been made.

[15]Solicitors became involved in the correspondence: Maclay Murray Spens LLP (“MMS”) for the Claimant, and Mishcon de Reya for the Defendants. At Mishcon de Reya, the Proposed Sixth Defendant (“Mr Morallee”) was the partner with day-to-day conduct of the matter, and the solicitor who conducted the correspondence.

[16]The first solicitor’s letter was sent on 21 November 2013, when MMS wrote to Mr Wilcox at Floreat. The letter, sent by email, defined “the Computer” as “the iMac computer… which is in your possession and which is her property”; and, at least arguably, distinguished between the machine and the data held on it, because it stated that there was a dispute as to ownership of “the Computer” whereas it has never been disputed that the company data on the machine are corporate property and the Claimant’s personal data belong to her. The letter stated that the computer contained a great deal of the Claimant’s personal private data “which on any view you are not entitled to see and our client wishes to have it returned”; but it focused on the machine. As Mr Quinn accepted, the early focus was on the preservation of the computer and its contents. The letter said:

“Clearly there is now a dispute between the parties as to who the Computer belongs to and unless we have your confirmation that you will return it to our client within seven days (subject to the provision of the undertakings referred to below) our client will be left with no alternative other than to issue proceedings against you and the other parties involved for the conversion of our client’s property.”

The letter then went on to refer to invoices and shipment documents relating to the computer, and continued:

“Clearly until the matter is resolved by the Court or agreement the Computer needs to be preserved. Accordingly please provide the following undertakings by 4pm tomorrow: That you personally and SWP and/or Floreat by their servants, agents or otherwise will not 1. open or tamper with the Computer until agreement or further order and 2. that you will forthwith procure the delivery up of the Computer into our custody upon our undertaking to hold it and not to allow any deletion of any material contained in it pending agreement or further order. If we do not receive the undertakings by the deadline referred to we will immediately apply for an injunction to preserve the position pending the resolution of this dispute either by agreement or proceedings…”

That you personally and SWP and/or Floreat by their servants, agents or otherwise will not

[17]Mishcon de Reya (Mr Morallee) responded at 17.50 on Friday 22 November. The letter stated that the computer had been bought by the companies for the Claimant’s work purposes, and it was a corporate asset. If the Claimant wished to proceed, it asked for(i) documentary evidence for the Claimant’s claim that she owned the computer, and

(ii) the nature of the personal information on the computer. It concluded:

“Notwithstanding that your client is not entitled to any relief, our client is prepared to allow this firm to take safe keeping of the Computer pending resolution of this dispute. On any view this obviates the need for your client to seek any relief.”

[18]MMS were not satisfied with that. They wrote again on Monday 25 November:

“The offer in… your letter is wholly inadequate as you fail to offer any undertakings to preserve the Computer, to retain it and not to open or tamper with it. … To avoid an ex parte application today please confirm and/or provide the following: 1. Confirm the Computer has not been opened, accessed or tampered with in any way. If it has then please provide full details of what steps have been taken to access the Computer and what information has been downloaded or removed from it…. 2. An undertaking that your clients will deliver the Computer into the custody of Mishcon de Reya forthwith and no later than 4pm today…. 3. Mishcon de Reya hereby undertakes that until agreement or order of the court, the Computer will be held within its custody and control at all times and (a) Mishcon de Reya shall not part with possession of the Computer without agreement of the parties or the court and (b) the Computer will not be accessed, opened or interfered with in any way whatsoever until either agreement of the parties or court order.”

The letter asked for a response by noon that day, failing which (it said) an application to the court would be made. To avoid an ex parte application today please confirm and/or provide the following: (a) Mishcon de Reya shall not part with possession of the Computer without agreement of the parties or the court and (b) the Computer will not be accessed, opened or interfered with in any way whatsoever until either agreement of the parties or court order.”

To avoid an ex parte application today please confirm and/or provide the following:

[19]Mr Morallee responded, by email, at 11.06 that same day. The email noted that the Claimant had not provided any details of the nature of the personal information on the computer, and it attached a copy of the invoice for the computer showing it had been paid for by Allegiance and delivered to the corporate offices. So far as undertakings were concerned, it said:

“In relation to the undertakings requested, we confirm that: (i) our client will deliver the Computer to this firm as soon as reasonably possible and in any event by 6pm today; and (ii) that this firm will not part possession with the Computer, or allow any party to access, open or interfere with the Computer, other than by agreement of the parties or order of the court.”

[20]However, neither was that acceptable to MMS. The following exchanges of email ensued that day. MMS to Mr Morallee, at 11.52:

“I note that you once again have not offered undertakings nor have you confirmed whether or not the computer has been accessed a question we have been asking for some time now. Unless we receive properly enforceable undertakings and have an answer to the question we will have to ask for the court’s assistance today. … Please may I have the undertakings that I have requested so that we can avoid an application to court at 2 o’clock.”

Mr Morallee to MMS, at 12.23:

“We have given the undertakings requested at 2 and 3 of your letter notwithstanding that your client has not established title nor the type of information allegedly on the work computer. In the circumstances, our client has behaved beyond reasonably and we simply cannot understand why an application is or was necessary.”

MMS to Mr Morallee, at 12.35:

“As I read your email timed 11.06 you were offering promises rather than undertakings but now that you have offered undertakings then that is acceptable, subject to you answering the question as to whether the computer has been accessed in any way. We have asked this question many times now and your client has failed to address this. Please provide the confirmation.”

Please provide the confirmation.” Mr Morallee to MMS, at 12.40:

“Our client is under no obligation to give information to your client about what it has done, or not done, with its computer that your client used in the course of her employment only in circumstances where she cannot even begin to describe the nature of the information belonging to her that she claims is private; or to substantiate the claim to ownership (which is denied). The undertakings have been offered, for the avoidance of doubt, without any admission that your client is entitled to any relief whatsoever in respect of the computer – which it is not.”

MMS to Mr Morallee, at 13.06:

“We are greatly concerned by your equivocal response and you’re quite wrong to suggest that your client is under no obligation to provide information as to what it has or has not done with information on the computer particularly as the only document that your have produced shows that the computer does not belong to SWP. You will appreciate that if a court subsequently determines that this computer does not belong to your clients but to [the Claimant] then if your firm or your clients have accessed it then they will be liable to both civil and criminal sanctions. It is not open to you to continue to be equivocal in these matters and we respectfully suggest that you now provide direct answers to the following direct questions. If you do not do so then we will be applying to the court for an order that your firm does so forthwith: 1. Have your clients and/or your firm in fact accessed any of the information contained on the computer? 2. If so, when and what? 3. Also if so, have any copies been made of any information contained on the computer? In any event we seek a further undertaking by return that to the extent that any copies of any nature whatsoever have been made of any information contained on the computer, all such copies will also now be returned to/kept in safe custody of your firm and that no further attempt to access the same will be made without further agreement/order of the court.”

That made clear that MMS did not consider that they had received an undertaking that Mishcon de Reya and the Defendants would not access the contents of the computer or a copy thereof: because they specifically asked for such an undertaking. Mr Morallee responded to MMS, at 14.19:

“We refer to your previous emails and letters on this matter and suggest that before you start threatening to make further applications, in order to move this dispute forward, you provide the information requested in our letter of Friday 22 November.”

MMS to Mr Morallee, at 18.44:

“We do not understand the stance adopted in your email because you have conceded that undertakings are necessary to reserve the position until the dispute is resolved and yet you are refusing to state whether or not the computer has been accessed. If this has taken place, and we suspect now that it has given your client’s evasive answers, then there will be little point in preserving the computer if your client is accessing all of the data on it through other means. With the greatest respect, your client’s position is wholly illogical and we consider that the Court is likely to take a dim view of your offering of the undertakings in question if the reality is that your firm/your clients are accessing the material in question already.”

The letter then set out details of why the Claimant claims ownership of the computer, and, by repeating the Claimant’s email of 13 November, the personal information on the computer. It then concludes:

“Now that we have answered your letter we expect you to answer the questions posed in our emails of today and in particular the email times 13.06. If we do not hear from you with the information we have requested by 12 noon tomorrow then we reserve the right to make an application to court.”

[21]On the following day, MMS emailed Mr Morallee at 12.39 asking if, as the time had expired, they would accept service of proceedings. Mr Morallee replied at 12.40, confirming he had instructions to accept service, but saying:

“… Given that you have received the undertakings as to preservation, I simply cannot understand what order you would be applying for, or what the need for urgency is which does not allow this firm proper time to respond to correspondence.”

MMS replied, at 14.19: “The urgency is because you have refused to say whether the Computer has been accessed or not. For all my clients know the information on the Computer has been copied, accessed and disseminated to all and sundry…”.

[22]There was no further relevant correspondence before the following day, 27 November 2013, when the Claimant issued these proceedings, for the delivery up of the computer “and any copies of any nature of any contents of the computer”, damages for conversion of and trespass to the computer and its contents, and a permanent injunction restraining the Defendants from making use of any personal information of the Claimant obtained by accessing the computer.

[23]That day (27 November 2013), Proven uploaded the image of the contents of the computer onto a platform that enabled Mr Al-Otaibi, Mr Wilcox and Mr Morallee to review it and run searches. On inspection the following day, it appeared to them that the Claimant had copied over 2,000 files belonging to SWP and its associated companies. Proven were asked to investigate this further; and they identified a file (“synclog.txt”) which showed that, on 11 September 2013, the Claimant had used the computer to access a remote site which enabled her to download the contents of the computer to a cloud store. The contents of the computer was downloaded to that store site on 11 September, and on a further 4 occasions, the most recent being 4 November 2013. The Defendants say that files had also apparently been transferred to USB drives and other cloud storage devices such as iCloud and Dropbox. The files transferred apparently included confidential business plans, financial models and commercial deals information. The taking of the copy and those investigations were, of course, unknown to the Claimant at the time.

The Claim

[24]On the same day as issuing the claim, the Claimant issued an application for interim relief, seeking (amongst other things) an order that:

“(1) The computer the subject of this claim be forthwith delivered up by the [Defendants’] solicitors to the [Claimant’s] solicitors to be retained by them for safekeeping pending the speedy trial provided for below. (2) All copies made by the [Defendants] of the contents of the computer similarly be forthwith delivered up to the [Claimant’s] solicitors to be retained by them for safekeeping pending the speedy trial provided for below. (3) To the extent that any such copies as have been made by the [Defendants] are in electronic form, such copies are forthwith to be permanently and irretrievably deleted. … (5) By 4pm on Friday 6 December 2013 the [Defendants] are each to file and serve an affidavit setting out both the dates of and nature of any and all access which they have made/has been made on their behalf to the contents of the computer and all use that has been made by them of the same.”

[25]In response, the Defendants made an application on 3 December 2013, seeking delivery up of their confidential information. That application was accompanied by statements from Mr Al-Otaibi and the Managing Director of Proven setting out details of the taking of the image of the computer contents, the investigations of that image that had taken place, and the results of those investigations.

[26]The matter came before His Honour Judge Seymour QC sitting as a Judge of the High Court, on 4 December 2013. An order was made, in which: i) The Defendants and Mishcon de Reya undertook(a) to deliver up the computer to MMS, and

(b) “not to access the Claimant’s personal data either on the image of the Computer… or by any other means whatsoever”: “the Claimant’s personal data” was defined in terms of the Claimant’s email of 13 November 2013 (i.e. “personal photographs, bank account details both for myself and my family as well as confidential information on my close friends and family”: see paragraph 12 above), and expressly excluded “documents and communications passing to and from [SWP]”. ii) The Claimant and MMS undertook (a) to retain the computer at MMS’s offices, and (b) to access only her personal data and no Confidential Information or SWP’s property as defined in the Order. iii) Otherwise adjourned the matter to 13 December 2103, with directions for service of further evidence.

[27]On 13 December, again before Judge Seymour, those undertakings were continued; and the Claimant also undertook to delete all data transferred to the identified cloud account. The matter was otherwise adjourned to 20 January 2014, and reserved to Judge Seymour.

[28]In the substantive claim, the Defendants filed a Defence and Counterclaim on 20 December 2013. This, amongst other things: i) denied the computer belonged to the Claimant, averring that it belonged to SWP; ii) relied upon the Claimant’s contractual obligations of confidentiality, including those contained in a Non-Disclosure and Non-Circumvention Agreement; iii) admitted that the contents of the computer had been imaged and, on inspection on 28 November, the contents were found to include evidence that the Claimant had copied over 2000 confidential files belonging to Floreat or SWP to a cloud server account, with five synchronisations, the last being on 4 November 2013; and iv) counterclaimed for breach of the Claimant’s duty of confidentiality, in copying those confidential files to the cloud account and providing confidential information to Mr Eggesbo.

[29]At the hearing on 20 January 2014, the previous undertakings were discharged, and replaced. It had by this time become apparent that iMessages were recoverable from the computer (and image), and these included fragments of messages between the Claimant and Mr Eggesbo. The judge appears to have accepted that the earlier order was not clear, and had not covered such iMessages. “The Claimant’s personal data” was therefore redefined to include iMessages and text messages, but not “any documents or communication passing between the Claimant and Bjarne Eggesbo which the Claimant is bound to disclose under CPR Part 31.6 because it is a document which adversely affects her own case, adversely affects the Defendants’ case or supports the Defendants’ case” (paragraph (4)). It was also ordered (in paragraph (2)) that the Defendants and Mishcon de Reya limit access to the image to Mr Morallee, his assistant (Victoria Wilson) and Counsel (“the Confidentiality Club”)

[30]On 4 April 2014, the Defendants applied for permission to bring a Part 20 claim in this action against Mr Eggesbo and the other Third Parties; and to amend their claim to include a claim against those parties, on the basis that they had been involved in the receipt of confidential information from the Defendants via the Claimant. At a without notice hearing that day, Master Eastman granted that application that day.

The Current Applications

[31]There are now before me applications by the Claimant dated 9 April 2014, by the Defendants dated 24 March and 16 April 2014, and by the Claimant and Third Parties dated 17 April 2014. These comprise the following. Application 1: The Claimant applies under CPR Rule 81.11 for permission to apply for the committal of the Defendants, including Mr Morallee and/or Mishcon de Reya whom they seek to join into the action as additional defendants for that purpose. The basis of the application is that they breached the undertakings given by Mr Morallee to MMS on 22 and 25 November 2013. Application 2: The Claimant applies to amend her Particulars of Claim. This is closely linked to Application 1, because the main proposed changes are to bring into issue the imaging of the computer contents and subsequent searches, and to add the two additional defendants and seek an order for committal of all six defendants for contempt of court. Application 3: The Claimants and the Third Parties, joined by the Order of Master Eastman dated 4 April 2014, apply to set aside that order. Application 4: The Defendants apply to amend their Defence and Counterclaim, to include the allegations involving the Part 20 Third Parties. Application 5: The Defendants apply for an expansion of the Confidentiality Club, to include individuals within the firm dealing with the claim against the Third Parties. Application 6: The Defendants apply to amend the timetable to accommodate the Part 20 claim. Application 7: The Claimant applies for an order that the Defendants serve a proper Electronic Documents Questionnaire (“EDQ”), on the basis that the EDQ they have served is inadequate.

[32]At the hearing, Chris Quinn and James Bickford Smith appeared for the Claimant and Third Parties; Jeffrey Chapman QC and David Drake for the First to Fourth Defendants, on all issues save for the committal permission application and the linked amendment application in respect of which Andrew Bodnar appeared for those parties; and James Lewis QC for the Proposed Fifth and Sixth Defendants. In addition, because of the potential impact of the Claimant’s contentions in relation to solicitors’ undertakings for the solicitors generally, I invited the Law Society and the Solicitors’ Regulatory Authority (“the SRA”) to intervene and make written representations on that issue, which the SRA did.

Application 1: The Application for Permission to Make a Committal Application

[33]The Claimant applies under CPR Rule 81.11(2) for permission to make an application to commit each of Defendants, and Mr Morallee and Mishcon de Reya (whom she seeks to join as additional defendants) for breach of solicitor’s undertakings, namely the undertakings given in the emails of 22 and 25 November 2013. I will deal with the precise breaches alleged in due course; but the Claimant contends that, in accessing and inspecting the image after 27 November, Mr Morallee and Mishcon de Reya acted in breach of solicitor’s undertakings, and each of the Defendants acted in contempt of court (paragraphs 16A and 16B of the draft Amended Particulars of Claim). In his oral submissions, Mr Quinn submitted that, in acting as they did with regard to the image, each of the Defendants, Mr Morallee and Mishcon de Reya were both in contempt of court and in breach of solicitor’s undertakings. These submissions require some consideration of the court’s powers in relation to contempt and over solicitors.

[34]In addition to specific statutory powers, the High Court has inherent powers in relation to the control of its own proceedings, and the power to coerce and punish those guilty of contempt of court by imposing custodial and non-custodial sanctions. Contempt can take a wide variety of forms, including disobedience of court judgments and orders, which for these purposes includes an undertaking to the court which, it is well-established, is equivalent to an injunction and can be enforced by committal (Bishlawi v Minrealm Limited

[2007] EWHC 2204 (Ch)

; see also White Book paragraph 81.4.6). Such undertakings may be given by, and enforced against, anyone including parties and solicitors.

[35]The procedure for applications to commit for contempt is now found in CPR Part 81; but, importantly, the rules are only concerned with procedure and expressly do not in themselves confer or alter any power of the court to make a committal order or impose some other sanction for contempt (CPR Rule 81.2(1)).

[36]However, over and above those powers in relation to contempt, the High Court exercised an inherent disciplinary jurisdiction over solicitors as officers of the court. That jurisdiction is entirely separate from the court’s contempt jurisdiction (although, of course, the same conduct by a solicitor might be both a breach of discipline and a contempt). It is expressly maintained by section 50(2) of the Solicitors Act 1974.

[37]This jurisdiction of the High Court is in addition to, and runs parallel to, the regulatory functions of the Law Society in relation to the discipline of solicitors which, under the Legal Services Act 2007, are now performed by the SRA. Under provisions of the SRA Code of Conduct (Outcome O (11.2)), a solicitor is required to perform an undertaking given as a solicitor, within the agreed timescale or within a reasonable time; and a failure to do so is a regulatory breach. The SRA has the power to warn, rebuke or fine (up to £2,000) a solicitor or a firm for regulatory breaches (section 44D of the Solicitors Act 1974, added by the Legal Services Act 2007). If, following investigation, the SRA considers a solicitor’s conduct is sufficiently serious to warrant a sanction or order that the SRA is not empowered to make, it may refer the matter to the Solicitors Disciplinary Tribunal. The tribunal’s powers are set out in section 47 of the Solicitors Act 1974, and include imposing an unlimited fine, a reprimand, or suspension from practice, or striking the solicitor from the Roll.

[38]The disciplinary jurisdiction of the High Court over solicitors includes the power to strike a solicitor off the Roll, to order him to deliver up money or documents received by him as a solicitor (Ex parte Cobeldick

(1883) 12 QBD 149

) or, importantly, to order him to pay costs (if, for example, he has commenced or defended proceedings without authority (e.g. Re Grey

(1891) 65 LT 743

)) or otherwise compensate a person who has lost money or money’s worth as a result of the solicitor’s conduct. That is important because the SRA does not have the power to order compensation, nor does the court in its contempt jurisdiction.

[39]The court also has the power to enforce an undertaking given by a solicitor, even if not given to the court. In the past, these claims have been brought by the recipient beneficiary of the undertaking by way of Originating Summons for an order requiring the undertaking (usually for the payment of money) to be honoured. For example, in United Mining and Finance Corporation Limited v Becher

[1910] 2 KB 296

, Becher (a solicitor) received £2,000 from a party with whom his Russian client was negotiating, on his undertaking that, if the negotiations were unsuccessful, he would pay it back. The negotiations were unsuccessful, but Becher would not repay the money, because there was an argument that his client was due that sum from those with whom he had been negotiating in any event. They issued an Originating Summons, on which Hamilton J ordered Becher to perform his undertakings. If Becher had then not complied with that order of the court, he would of course have been guilty of a contempt on usual principles; and would have been liable to committal for that contempt.

[40]An undertaking given by a solicitor or clerk in the course of the business of a firm is enforceable against the firm for which he works (Myers v Elman

[1940] AC 282

; United Bank of Kuwait v Hammond

[1988] 1 WLR 1051

[41]Where the undertaking has become impossible of performance so that a solicitor cannot carry it out, the court may order the solicitor to pay compensation to any person who has lost out by the failure to comply (Udall v Capri Lighting Limited

[1988] QB 907

). This jurisdiction is compensatory and not punitive; although “it still retains a punitive slant”, i.e. it is only available to make good loss where the solicitor is guilty of inexcusable misconduct such as to merit reproof (see, e.g., R & T Thew Limited v Reeves (No 2) (Note)

[1982] QB 1283

at page 1286 per Lord Denning MR, and Udall at page 917 per Balcombe LJ; although it has been suggested that any misconduct may suffice, see Jackson & Powell on Professional Liability, 7th Edition (2007) (Sweet & Maxwell) at 11-070. That point does not arise in this application.).

[42]The court’s summary jurisdiction over solicitors is extraordinary, and therefore should only be exercised sparingly(i) if justice requires this procedure to be adopted, as opposed to some other procedure (e.g. disciplinary proceedings through the SRA, or an ordinary civil claim) (see Geoffrey Silver & Drake (a firm) v Baines (trading as Wetherfield Baines and Baines) (a firm)

[1971] 1 QB 396

at page 405 per Megaw LJ) and

(ii) in a clear case (ibid at page 402F-G per Lord Denning MR).

[43]In each of these cases (including Udall), the beneficiary of the relevant undertaking sought to enforce it by applying to the court for an order that the giver of the undertaking effectively carry it out. Where such an order was made, as I have indicated, the solicitor would have been in contempt of court had he not complied with it.

[44]It appears that the question of whether the court has jurisdiction to commit for a breach of solicitor’s undertaking other than one made to the court has never been determined. None of the Counsel before me, despite their diligent researches, has discovered a single case in which such an order has been made. The position now seems to be the same as it was in 1966, when Pennycuick J had before him an application to commit a solicitor for breach of an undertaking to hold five leases to the order of a bank, in circumstances in which he had not got all five leases, one of which had been lost and another of which was in the hands of a mortgagee (In re A Solicitor

[1966] 1 WLR 1604

). Pennycuick J said:

“When one comes to look at the cases it seems that in all of them what happened was that the person to whom the undertaking was given sought from the court an order upon the solicitor to do the act which he had undertaken to do, that being an act which it was within his power to do – for example, the payment of money, the entering of an appearance, or the like. In one case the application was for committal, but that part of the application was stood over, the court making an immediate order on the solicitor to perform the undertaking. It therefore appears that in the exercise of this jurisdiction, what in practice has always been done is that the court, if the circumstances warrant it, makes an order upon the solicitor to do the act which he has undertaken to do. Then if the solicitor disobeys that order, no doubt an application for committal would follow and the order would be made. No case was cited in which the court made an order for committal upon direct application to commit for breach of the undertaking without having first made an order to perform the undertaking. I do not say that there is no jurisdiction to make such an order, but neither counsel was able to point to a case in which such an order had been made. There is a further difficulty that the court could not, it seems to me, make an order upon a solicitor to do an act except an act which lies in his power to do.”

In the event, in that case, the applicant abandoned his committal application for other relief.

[45]I was referred to a great number of authorities (including those referred to above), and from them and principle, the following propositions can be derived. i) The court’s jurisdiction over solicitors is conceptually very wide, being curtailed only to the extent that legislation limits it. ii) However, although now maintained by section 50 of the Solicitors Act, the jurisdiction is one which the High Court has taken to itself as part of its inherent powers in pursuit of its duty to supervise the conduct of solicitors as officers of the court. The court has, in practice, imposed boundaries on the exercise of its own jurisdiction. iii) The jurisdiction has both punitive and compensatory elements. However, given that solicitors are now the subject of a comprehensive and sophisticated regulatory regime through the SRA, the jurisdiction will only usually be exercised where someone has lost out as a result of the solicitor’s conduct and the court is the appropriate forum to require that loss to be put right on a summary basis. The jurisdiction is therefore primarily compensatory, although in a disciplinary context. However, whilst misconduct is necessary, simply because there has been misconduct is not sufficient for the jurisdiction to be exercised. Whether the court intervenes in a particular case is always a matter for the court’s discretion. iv) Where another forum is more appropriate than the court for the investigation of misconduct by a solicitor and the subsequent imposition of a sanction, then the court will not exercise its discretion to act against that solicitor. The SRA is appointed by Parliament to investigate and deal with allegations of misconduct by solicitors: the court will not exercise its disciplinary function over solicitors if the alleged misconduct conduct can be as, or more, appropriately dealt with by the SRA. v) Where a solicitor has given an undertaking to the court, like anyone else, if he breaches that undertaking, he is liable to committal for contempt. vi) However, the courts have a general power summarily to enforce any undertaking given by solicitors as solicitors. Therefore, where a solicitor has failed to perform a positive undertaking (e.g. to pay money) then usually the appropriate course will be to issue proceedings under Part 8 for an order of the court that he performs the undertaking. An appropriately speedy hearing of the Part 8 claim can be obtained, in cases that warrant such a hearing. If the application is successful, then, if the solicitor fails to comply with the resulting order, the beneficiary of the undertaking will be able to pursue committal proceedings against the solicitor. vii) Where a solicitor is unable to comply with a positive undertaking (e.g. because it is impossible of performance), then it is open to the beneficiary of the undertaking to seek compensation for breach of undertaking. It will usually be appropriate for that too to be dealt with by way of a Part 8 claim, but by a Part 7 claim if (e.g.) there are likely to be significant disputes of fact. viii) Where a solicitor has failed to perform a negative undertaking – an undertaking that he would not do something – then the appropriate course will be to seek an injunction (or undertaking to the court in lieu) preventing him from further non-compliance, which, if breached, will found an application to commit. It may also be appropriate to report the solicitor to the SRA for the breach of the regulations that require a solicitor to comply with undertakings he gives as a solicitor. It will not usually be appropriate to seek to commit the solicitor straightaway, because these other steps will usually be available. ix) Furthermore, there would be considerable difficulties in the court now exercising a jurisdiction to commit a solicitor for breaching an undertaking not to the court. Such proceedings would be criminal proceedings for the purposes of

article 6 of the European Convention on Human Rights

. Consistent with

article 7(1) of the Convention

(cross-headed, “No punishment without law”), in R v Rimmington and Goldstein

[2005] UKHL 63

at [33], Lord Bingham, after reviewing the relevant authorities, said this:

“There are two guiding principles: no one should be punished under a law unless it is sufficiently clear and certain to enable him to know what conduct is forbidden before he does it; and no one should be punished for any act which was not clearly and ascertainably punishable when the act was done.”

In R v Jones (Margaret)

[2006] UKHL 16

, he expanded upon that, identifying:

“… what has become an important democratic principle in this country: that it is for Parliament representing the people of the country in parliament, not the executive and not the judges, to decide what conduct should be treated as lying so far outside the bounds of what is acceptable in our society as to attract criminal penalties. One would need very compelling reasons for departing from that principle.”

Given the other procedures available, in my judgment, there will generally be no compelling reason for seeking to commit a solicitor in these circumstances. One can never say “never”; but, as presently advised, I cannot conceive of circumstances in which immediate committal proceedings would be appropriate. x) Furthermore, such proceedings should generally in any event be discouraged, on grounds of public policy, as they may be harmful to the interests of justice by unreasonably disrupting the legal affairs of that solicitor’s client, particularly if the solicitor is conducting litigation for that client. There is clear potential for tactical mischief by a party seeking to commit a solicitor, which application might require that solicitor, at least temporarily, to withdraw from acting from his client.

[46]Those are the principles. I now turn to the application before me.

[47]The Claimant’s case in relation to the solicitor’s undertakings is set out in her draft Amended Particulars of Claim. In paragraph 16A, she sets out the undertakings upon which she relies, namely:

“(a) On 22 November 2013 Mr Morallee/Mishcon de Reya whether acting on behalf of the First-Fourth Defendants or otherwise undertook to the Claimant that they would take safe-keeping of the Computer pending resolution of this dispute. He stated that: ‘On any view this obviates the need for your client to seek any relief’. (b) On 25 November 2013 Mr Morallee/Mishcon de Reya whether acting on behalf of the First-Fourth Defendants or otherwise undertook that Mishcon de Reya would not part possession with the Computer, or allow any party to access, open or interfere with the Computer, other than by agreement of the parties or order of the Court.”

[48]These are, of course, the undertakings in the emails quoted above (see paragraphs 17 and 19). In the course of debate, Mr Quinn narrowed the claim, relying only on paragraph (ii) of the 25 November email. He was right to do so.

[49]The undertaking of 22 November clearly only related to the “safekeeping of the Computer pending resolution of this dispute”, and not non-interference with the data; and MMS took it to mean precisely that, responding that Mishcon de Reya’s response was “wholly inadequate” as it had failed to offer any undertakings “to preserve the Computer, to retain it and not to open or tamper with it”; and they repeated their request for the undertakings they wished to receive to prevent an application to court being necessary. Even if, as Mr Quinn suggested, Mr Morallee’s statement that what he had given obviated the need for the Claimant to seek any relief from the court was disingenuous or even designed to mislead, MMS entirely appreciated its obvious limits.

[50]Similarly, Mr Quinn does not suggest any breach of paragraph (i) of the 25 November email, which merely undertook that the Defendants would deliver the computer to Mishcon de Reya as soon as possible.

[51]He therefore relied solely upon paragraph (ii) of that email, that:

“… [Mishcon de Reya] will not part possession with the Computer, or allow any party to access, open or interfere with the Computer, other than by agreement of the parties or order of the court.”

He submitted that, in breach of that undertaking, Mr Morallee and the Defendants inspected the image on 28 November 2013, having been served with proceedings the previous day. Mr Quinn submitted that the true construction of those undertakings was that that they extended to data, and thus to the image of the contents of the computer: in other words, they precluded searching the image (as well as the physical computer itself), as Mishcon de Reya, Mr Al-Otaibi and Proven had done.

[52]However, I am entirely unconvinced that it would be appropriate to grant permission to proceed with a committal application in this case, on that basis, for the following reasons.

[53]First, in terms of construction of the undertaking, I accept the submissions of Mr Quinn (reflecting Jackson & Powell at paragraph 11-073) that(i) the approach is generally objective, i.e. the question is how would the undertaking reasonably have been understood by the recipient in the circumstances he received it; and

(ii) where the construction of an undertaking is in doubt, then it will be construed in favour of the recipient beneficiary. However, (i) any ambivalence was arguably interjected by the Claimant: the undertaking was given in a series of emails in which “Computer” was at the outset a term defined by MMS as “the iMac computer”, and apparently used by them to mean the machine (see paragraph 16 above); and (ii) in any event (and more importantly), MMS did not consider, for a moment, that the undertaking in paragraph (ii) of the 25 November email was an assurance that no copy of the contents of the computer had been taken and, if it had, that no further searches of the data would be undertaken. That is quite clear from their following emails (see paragraphs 20-21 above). The undertaking, clearly and obviously, studiously avoided giving any undertaking about what actions had been taken with regard to the contents of the computer; and MMS’s immediate response to the undertakings given on 25 November was, not to thank Mishcon de Reya for their undertakings, but to make clear that they did not understand the undertaking to cover past and future access to the data, including any copies of the data that might have been taken – and to press for such undertakings, failing which (they said) they would apply to the court (MMS emails at 13.06 and 18.44 on 25 November 2013, quoted at paragraph 20 above). When that further undertaking was not received, they duly commenced proceedings seeking an injunction of any searches of any copies, and details of any copies taken and searches done. Any undertaking has to be construed in the circumstances in which it was received; and, in the circumstances of this case, it was objectively clear (and in fact clear to MMS) that the sole undertaking upon which the Claimant relies did not cover data, either in its original form on the computer or in an image; and MMS appreciated that deficiency, and knew that an application was required to prevent any further searches or use of the data and to find out details of the searches that had been undertaken on the contents of the computer or any copy. That application was duly made on 27 November. Of course, the order eventually made was restricted to the personal data of the Claimant, there being no doubt that the Defendants were entitled to both their own data and any data on the computer or image that would in any event be disclosable in this claim.

[54]For those reasons alone, the Claimant cannot pursue any action on breach of the undertaking of 25 November 2013. Whilst there is no specific test for granting permission to make an application for committal for breach of a solicitor’s undertaking, where there is no reasonable prospect of the applicant proving that the relevant solicitor breached an undertaking (and there is no other good reason to allow the application to proceed), permission should not be granted. This is such a case. In my judgment, on the basis of her application, the evidence she has lodged and all that I have seen and heard, there is no reasonable prospect of the Claimant showing, to the criminal standard of proof (or, indeed, any lower standard), that Mr Morallee breached a solicitor’s undertaking.

[55]But in any event, this means of pursuing any breach of undertaking is inappropriate in the circumstances of this case. I understand that the Claimant made a complaint to the SRA on 18 February 2014; and the SRA have now acted on the documents sent with the invitation to intervene in this claim, sending the matter for consideration and, if appropriate, investigation (SRA letter dated 13 May 2014). The Claimant’s application of 9 April 2014 seeks permission to make a committal application, i.e. an application to commit Mr Morallee, Mishcon de Reya and the Defendants to prison (see CPR Rule 81.3(b)). The application seeks no alternative or other sanction. Any breach of undertaking was complete by 4 December 2013, when the undertakings in correspondence were overtaken by various undertakings to the court. An injunction is therefore inappropriate. Although it seems that the Claimant is seeking damages against all six proposed Defendants, no special damages are claimed and it is not suggested that any special damage has been suffered.

[56]It was submitted on behalf of the Defendants and Proposed Additional Defendants that this application has been made solely to disturb the Defendants’ camp, and to make their preparation of the substantive proceedings more difficult. Those submissions were forcefully made. However, I need not go so far. Given the words of caution in Rimmington (see paragraph 45(ix) above), in the clearest and strongest terms and from the highest court in the land, I would only find that it would be appropriate to allow committal proceedings to be made if driven to do so by principle or authority. Particularly on the facts of this case, principle and authority in fact drive me firmly in the other direction. In this case, despite his considerable efforts, Mr Quinn has singularly failed to persuade me that this case remotely approaches the threshold necessary for permission to make a committal application.

[57]In the circumstances, I can deal with other matters that fell within this ground shortly.

[58]First, Mr Bodnar submitted that the application was doomed to fail against the current Defendants, because none except Mr Wilcox was a solicitor – and Mr Wilcox was never acting as such. So far as an application for permission to commit for breach of a solicitor’s undertaking is concerned, that submission must be correct: we are here dealing with a disciplinary jurisdiction over solicitors as officers of the court, which cannot apply to their clients even if those clients instruct the solicitors to breach an undertaking. It might be possible – at a theoretical level, at least – for a client to commit a contempt of court, by instructing a solicitor to breach a court order or undertaking to the court; but, if a solicitor is instructed to breach an undertaking given by him as a solicitor other than to the court, his professional obligation is clear. He has no obligation to comply with those instructions, and must resist. It is not a contempt of court to seek to persuade him to fail in his duty; and, in any event, for the reasons I have given, there was no breach of undertaking here.

[59]Second, the Claimant also complains of a breach of the undertaking in the 4 December 2013 Order, that Mishcon de Reya and the Defendants would not investigate or search the personal data of the Claimant. Mr Quinn submits that they must have done so, because they subsequently found the iMessages between the Claimant and Mr Eggesbo. Whilst those messages would have been disclosable in this action in any event – and were retrospectively covered by Judge Seymour’s later Order – Mr Quinn submitted that the Defendant would have had to searched through all the iMessages (personal and all) to identify those.

[60]However, there is no merit in this point. iMessages were not included in the definition of “personal data” in the 4 December 2013 Order, and the Defendants and Mishcon de Reya were therefore not in breach of the undertaking to the court when they found such iMessages. In any event, there is no evidence that the Defendants have sought to make any use of any personal data they may have seen – they have expressed no interest in such data – and, again, an application for committal is not the appropriate way of proceeding with such a challenge. At the following hearing, Judge Seymour did not seem impressed by the contention that the Defendants and Mishcon de Reya had thus acted improperly; and he accepted that the earlier order was unclear.

[61]Third, those acting for the Defendants, actual and proposed, submitted that, even if it were right to allow the application to commit to proceed, it should not be heard with the substantive trial. Given my findings in relation to the application, it is unnecessary to deal with those submissions, save to say that I agree for all the reasons advanced.

[62]Finally, Mr Quinn contends that the Claimant is bringing this application in the public interest, and has taken on “an unaccustomed role in quasi-criminal proceedings”, the alternative being “to let disreputable, indeed outrageous, conduct go unchecked” (28 April 2014 skeleton argument, paragraph 47(e) and 13 May 2014 skeleton argument, paragraph 2.6). However, I do not consider there is any force in that contention. If the Claimant was concerned about the conduct of Mr Morallee, it was always open to her to report him to the SRA, which she did on 18 February 2014. The SRA are now taking the appropriate steps on that complaint. An application seeking to commit Mr Morallee was, quite clearly, neither the only nor the most appropriate course for the Claimant to take. It has resulted in the expenditure of enormous costs, without progressing the substantive issues at all. I do not accept for a moment that public confidence in the solicitors’ profession would be undermined by the court not taking action; nor do I accept that the statutory scheme of regulation of solicitors, which can result in a fine of unlimited amount and a solicitor being struck off the Roll of Solicitors (with the result that his professional career and livelihood will be ended) has inadequate sanctions at its disposal.

[63]For those reasons, I refuse permission to bring the committal application.

Application 2: The Claimant’s Application to Amend Particulars of Claim

[64]The Claimant applies to amend her Particulars of Claim. This is closely linked to Application 1, because the main proposed changes are to bring into issue the imaging of the computer contents and subsequent searches; and to add the two additional defendants and seek an order for committal of all six defendants for contempt of court.

[65]The main amendments proposed are to plead the contempt that is the subject of the first application. Given my ruling in relation to that, those amendments (even if they were an appropriate form for allegations of contempt) are inappropriate.

[66]With regard to the other proposed amendments, I consider none to be necessary or viable as currently pleaded. I have found that there was no breach of a solicitor’s undertaking; but, even if there were, no particulars of damage have been pleaded upon which the court’s jurisdiction summarily to order compensation could bite. A breach of contract claim is suggested on the basis of the same breach of undertaking; but, leaving aside my earlier finding, no terms of contract are pleaded that could found such a claim. I simply do not see how a contractual claim could possibly be fashioned from the exchanges of emails etc which I have set out above, as Mr Quinn sought to do. Nor do I understand the claims for trespass and/or conversion of the image, as opposed to breach of confidentiality in the data contained therein; the Claimant having no ownership rights in the image. In any event, such claims do not add substantively at all to the claims the Claimant currently pursues.

[67]For those reasons, I refuse the Claimant’s application to amend her pleading. Application 3: The Application by the Claimant and Third Parties to Set Aside the Order of Master Eastman to add the Third Parties Application 4: The Defendants’ Application to Amend their Defence and Counterclaim

[68]I can conveniently deal with these two applications together. On 4 April 2014, Master Eastman gave the Defendants permission to bring the expanded counterclaim against the three Third Parties. The Claimant seeks to set aside that order on the basis that those claims should be dealt with separately. For their part, the Defendants seek to amend their Defence and Counterclaim, to include a Part 20 claim against those Third Parties, Mr Eggesbo and two companies with which he is associated, on the basis that he has obtained confidential information from SWP of value to the business of those companies.

[69]The proposed claims against Mr Eggesbo claim that, in breach of various obligations that he owed to SWP contractually, as a result of his fiduciary duties and pursuant to the Companies Acts (and duties he owed to Mr Al-Otaibi as a result of an alleged joint venture or partnership between them), Mr Eggesbo instigated a dishonest scheme to misappropriate confidential information from SWP and Floreat for the benefit of himself and his new enterprise. The Defendants claim a half share in Allegiance prior to its dissolution, and an account of profits against the Third Parties.

[70]Mr Quinn strongly objects to the addition of these parties and claims to these proceedings. In short, he submits: i) There is little overlap between the claims against the Claimant (which concern the computer and her data on it), and the claims against the Third Parties (which are wide claims concerning the whole business relationship between Mr Al-Otaibi and Mr Eggesbo over several years, including claims under the Companies Acts and for an account, in respect of which the Claimant has no interest). ii) The trial of the Claimant’s claim is set to be heard later this year: a trial window of October to December 2014 was fixed by paragraph 23 of the Order of Judge Seymour sealed on 7 February 2014. By joining in the claims against Mr Eggesbo and his companies, that claim will be delayed by 6-12 months and last, not one week, but 2-3 weeks. Furthermore, the Eggesbo claims involve matters such as partnership accounts and intellectual property claims, which will mean not only delay and additional expense, but the Claimant becoming embroiled in lengthy, time consuming and expensive Chancery Division proceedings. iii) The Defendants are trying to evade the normal processes of pre-action disclosure and the implied undertaking as to collateral use of documents disclosed in proceedings, by relying on information obtained from the computer – Mr Quinn says, information improperly obtained. iv) That poor conduct was compounded by the application to amend to include the Part 20 claims being made without notice, in circumstances in which the Defendants well knew that the Claimant would oppose such a move (because MMS had made that clear in correspondence). In the event, he submits, justice requires that the claims are kept separate; and the Claimant’s claim proceeds to trial with the trial date later this year being kept.

[71]The addition of claims to extant proceedings is governed by CPR Part 20. Unsurprisingly, the purpose of the provisions is expressly to serve the overriding objective, and to enable claims to be “managed in the most convenient and effective manner” (CPR Rule 20.1). Rule 20.9 applies when the court is considering whether to admit an additional claim to be made or whether to require it to be dealt with separately (CPR 20.9(1)). CPR Rule 20.9(2) sets out matters to which the court may have regard, namely:

“The matters to which the court may have regard include – (a) the connection between the additional claim and the claim made by the claimant against the defendant (b) whether the additional claimant is seeking substantially the same remedy which some other party is claiming from him (c) whether the additional claimant wants the court to decide any question connected with the subject-matter of the proceedings – (i) not only between existing parties but also between existing parties and a person not already a party; or (ii) against an existing party not only in a capacity in which he is already a party but also in some further capacity.” (i) not only between existing parties but also between existing parties and a person not already a party; or (ii) against an existing party not only in a capacity in which he is already a party but also in some further capacity.”

[72]The practical effect of joining claims together, in terms of delay etc, is also clearly a material – indeed, an important – factor (see, e.g., Borealis AB v Stargas Limited

[2002] EWCA Civ 757

, and Alfred McAlpine Limited v SIAC

[2005] EWHC 3139 (TCC)

at [41] per Jackson J (as he then was)).

[73]Mr Quinn submitted that focus of the proceedings brought by the Claimant is the iMac computer used by her during the course of her work, and as a personal computer. The ownership of that computer is, clearly, an issue in the Claimant’s claim: she claims it belongs to her, and is seeking an order for delivery up. However, the physical computer is worth, perhaps a few hundred pounds. The applications before me now have taken two days of argument, generated fifteen lever arch files of paper, at (by my calculation) an estimated aggregate cost of something over £300,000. It is obvious – and has been obvious from an early stage – that this claim is not simply about who owns this machine. It is about information. And, whilst I do not seek to minimise the Claimant’s rights over her confidential information on the machine, it is primarily about the confidential information of SWP and the other group companies.

[74]Thus, since the initial evidence was filed by the Defendants on 3 December 2013 and the initial Defence and Counterclaim were filed on 20 December 2013, it has been a key allegation of the Defendants that, in breach of confidence, the Claimant made use of SWP’s confidential information by (amongst other things) giving Mr Eggesbo access to it (see, e.g., the particulars of paragraph 43 of the Defence and Counterclaim). Equally, it is a central allegation in the proposed pleading against Mr Eggesbo and the other Third Parties that Mr Eggesbo instigated and pursued a dishonest scheme involving the misappropriation of confidential information from SWP, via the Claimant. A core allegation – indeed, the core allegation – in the claim and the proposed Part 20 claim are essentially the same. Indeed, although a lesser point in practice, the background to the business relationship between Mr Al-Otaibi and Mr Eggesbo (central to the wider allegations in the Part 20 claims) will also be relevant to the issue of the ownership of the computer, which, it appears was bought by Mr Eggesbo with Allegiance money. Mr Al-Otaibi claims a share in Allegiance as a result of his business partnership with Mr Eggesbo.

[75]Furthermore, the evidence that will be required to deal with those issues will be essentially the same – there will certainly be a very considerable overlap. The witnesses for the Defendants are likely to be the same. The Claimant and Mr Eggesbo will be central witnesses in each case. Although, I accept, there will be more documents and other evidence required for the wider issues in the Part 20 claim than in simply the current claim, the documents and evidence on these core issues are likely to be similar. I also note that, at least for the time being, the Claimant and the Third Parties share legal representation.

[76]Furthermore, although Mr Eggesbo has offered to accept findings in any first trial if it proceeds without him as a party, if and insofar as he does not give proper disclosure for that first trial, there is a real risk of a second trial making findings inconsistent with the findings in a first trial. In any event, without Mr Eggesbo as a party in the first trial, there is a real risk that important issues will be determined without optimal evidence; and there is in any event a real risk of two trials, with the additional costs that that would entail, compared with a single trial covering all issues.

[77]Therefore, there are powerful reasons to have the claims against Mr Eggesbo and the other Third Parties proceed and be heard with the current claims as between the Claimant and the Defendants. On the other hand, I accept that, by allowing the Third Party claims to remain as Part 20 claims in this action,(i) the trial will be adjourned for 6-12 months,

(ii) the trial of all of the claims will be significantly longer than the trial of the current claims only,

(iii) the trial of all issues will contain some issues – particularly as to the consequences of Mr Eggesbo’s alleged wrongdoing – in respect of which the Claimant will have little interest,

(iv) there is the possibility of the Third Parties making claims of their own against either the current parties or possibly (as yet unidentified) yet further parties, and

(v) the Third Parties may in due course be separately represented.

[78]Nevertheless, I consider the balance comes down, very firmly, in favour of these claims being dealt with in a coordinated manner, in a single claim and a single trial.

[79]I am unimpressed by the procedural objections raised by Mr Quinn. So far as disclosure is concerned, he does not suggest that the documents obtained from the computer are irrelevant to the Defendant’s claim against the Claimant, or that they would not have been properly disclosable in that claim in due course. So far as the application to join the Third Parties is concerned,(i) the usual procedure is for such applications to be made without notice (even where objection is likely), with any objections being dealt with on a return date;

(ii) I am unconvinced that there was any material non-disclosure of the procedural position to the Master: indeed, there appears to have been adequately full disclosure; and

(iii) in any event, as I have found the current claim and the Part 20 claims should be dealt with together, any deficiencies in the application before Master Eastman (of which I can see none) would be immaterial.

[80]For those reasons, I refuse the Claimant’s application to set aside the Order of Master Eastman of 4 April 2014 to add the Third Parties; and I grant the Defendants’ application to amend their Defence and Counterclaim to include the allegations against those Third Parties.

Application 4: The Defendants’ “Confidentiality Club” Application

[81]This is a modest application. Under the current orders of the court, no one at Mishcon de Reya can have access to the personal data from the computer; and the members of Mishcon de Reya who can have access to the non-personal information (i.e. the Defendant’s own information, plus material that the Claimant is bound to disclose in any event) are restricted to the so-called “Confidentiality Club”. Mishcon de Reya wish to use more people, particularly to prepare the Part 20 claims.

[82]There can be no objection to that in principle. They will only have access to their clients’ own data, and material that the Claimant is bound to disclose in any event. Indeed, the Claimant’s objection to the application is somewhat incongruous, based as it is on the premise that Mr Morallee, in respect of whom an application has been made that he should face imprisonment for breaching undertakings in relation to data use, should have access to the data but other, identified members of his firm should not.

[83]I allow that application in the terms sought, which identify the relevant additional individuals. Application 6: The Defendants’ Application to Amend the Procedural Timetable to accommodate the Part 20 claims Application 7: The Claimant’s Application for an Order in respect of the Defendants’ EDQ

[84]Again, these applications can be conveniently dealt with together.

[85]As I have allowed the Part 20 claims to proceed within this action, it is agreed that the directions hearing fixed for June and the trial window later this year should be vacated, and the claim transferred to the Chancery Division. Subject to any submissions on the form of the Order, I propose transferring the claim, and directing there to be a hearing for directions before a Chancery Master. I ask the parties to liaise, and agree directions through to that hearing.

Coda

[86]I have had reason to comment on the enormous costs that have been expended on these applications, and on the litigation as a whole to date. I understand that the business relationships between the protagonists have some degree of complexity, and that the individuals, who used to be friends and business partners, have substantially fallen out.

[87]I remind the parties that it is incumbent on them all, and their representatives, to cooperate to ensure that the overriding objective – of dealing with these claims justly and proportionately – is met. Judge Seymour referred to “quite colourful allegations flying round in both directions in the hearing in this matter that [he] presided over” on 20 January 2014 (Transcript, page 18 lines 36-7). They continued before me. These claims include serious allegations, directed at a number of individuals. However, hyperbole, from whomsoever, does not assist, either a party or the court.