IG Index Ltd v Cloete [2015] EWHC 3698 (QB)

[2015] EWHC 3698 (QB)Case No HQ13X03979
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 21 December 2015
Before
HIS HONOUR JUDGE RICHARD PARKES QCSitting as a Judge of the High Court
Between
IG INDEX LIMITEDClaimantJOHANNES HENDRIK CLOETEDefendant
David Mayall (instructed by Morton Law) for ClaimantDavid Hirst (instructed by Pinder Reaux & Associates) for DefendantHearing Hearing dates: 4 th December 2015
Approved JudgmentI direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic..............................

HHJ Parkes QC:

[1]This is an application by the defendant to strike out the claim pursuant to CPR 3.4(2)(b) on the grounds that the proceedings amount to pointless and wasteful litigation, the continuation of which to trial serves no useful purpose for the claimant, squanders the resources of the parties and the public resources of the court, and is contrary to the overriding objective and the principle in Jameel v Dow Jones & Co.

BACKGROUND

[2]The claimant carries on the business of online spread betting in currencies, commodities, shares and other securities. The defendant was until 3 July 2012 employed by the claimant as a network service engineer in its IT department. He had entered into a deed of covenant for the protection of confidential information relating to the business of the claimant and its clients. In the course of his employment, he twice raised concerns about the security of certain data held on a server in South Africa.[3]It later transpired that while still in the claimant’s employment the defendant had on 21 February 2012 reported what he regarded as data security breaches to the Information Commissioner’s Office (ICO), and that on 27 February 2012 he had sent the ICO hard copies of certain confidential documents which were said to illustrate those breaches. The documents included client lists relating to the claimant’s South African activities, including lists of customers’ bank payment details.[4]After repeated disciplinary proceedings, the defendant was dismissed on 3 July 2012.[5]On 2 October 2012 he began proceedings in the Employment Tribunal (ET). He alleged (inter alia) unfair dismissal, including automatic unfair dismissal for making a protected disclosure of information.[6]On 17 December 2012 he made a request to the ICO to be provided with any personal information which the ICO held about him, and in particular correspondence with the ICO sent from his email address and by post. This seems to have been treated by the ICO as a subject access request made under s7, Data Protection Act 1998, and on 16 January 2013 it sent the defendant an email which contained scanned electronic copies of the confidential information as TIFF attachments. There is an issue as to whether (by opening the attachments or otherwise) he knew that he had been sent the confidential information.[7]On 10 June 2013, the ET made an order for the parties to disclose documents relied upon in those proceedings. In accordance with that order, the defendant on 15 July 2013 hand-delivered to IG Index a USB stick containing his disclosed documents. Among those documents were the confidential documents which he had been sent in January 2013 by the ICO in accordance with his subject access request.[8]When the claimant’s staff examined the USB stick and found that the defendant had its confidential information in his possession, the present claim was issued, seeking an order for delivery up of all documents which were their property or which contained confidential information, an order for the destruction of any copies of such material held in digital form, an injunction to restrain the retention or use by the defendant of any confidential information and damages for breach of contract.[9]The claimant applied to this court for interim relief. Before the court were a witness statement dated 5 August 2013 by Jackie Bornor, the claimant’s head of human resources, and a witness statement dated 14 August 2013 by the defendant. Ms Bornor stated that on the USB stick were documents which were the claimant’s property and contained confidential information about its clients. It was her evidence that the defendant had no justifiable reason in the course of his employment for copying or retaining such information. She noted that the defendant had written to the ICO on 21 February 2012 to express concerns about the security of the claimant’s data, and she believed that he had enclosed with that letter some or all of the confidential material. She stated that the claimant intended to disclose to the defendant in the course of the ET proceedings documents similar to those contained in the USB stick, but with names and client details redacted. On 24 July 2013 she wrote to the defendant requiring him to return immediately the originals and copies of the documents, and to provide undertakings. If he did not return them by 31 July, the claimant would consider legal action. He did not respond. At paragraph 23 of her witness statement, Ms Bornor said this:
“Although I have no evidence that [the defendant] has used or disclosed these documents, other than to the Information Commissioner … , and to [the claimant] as part of the disclosure process in the employment tribunal proceedings, I am concerned that he may do so in further breach of the terms of the Deed of Covenant.”
[10]In his witness statement of 14 August, made at a time when he was unrepresented, the defendant confirmed that he had written to the ICO while still employed: that, he contended, did not amount to a breach of any obligation that he owed to the claimant. He said that he had not retained the documents from the time when he was employed, but that they had been sent to him by the ICO six months after his employment had been terminated. He said that he had reason to believe that the information had been provided under the Freedom of Information Act 2000, and as such was in the public domain. Since then, he had had them in his possession for a further period of almost 8 months (since January 2013), during which, he claimed, he had not reproduced them or disclosed them to any third party. He said that he had no intention of using them for any purpose other than the pending ET proceedings. In the course of the hearing before Singh J on 15 August 2013 he told the judge that even if an order was made, he could renew his request to the ICO for the information, but if he did that, he would not have it in time for the trial of his ET claim on 9 September. He repeated that he had no intention of using the information other than in the ET.[11]On 15 August 2013, Singh J, having heard both parties, made an order for delivery up of all documents and confidential information belonging to the claimants that were in the defendant’s possession or under his control, save for copies of such items held on any electronic storage medium; an order for the permanent deletion of all such material in his possession or under his control, and held on any computer or other electronic device, and an order that he should not retain any copies; an order for disclosure by witness statement and by disclosure of documents; and an injunction in the following terms:
“Until the trial of this action, the respondent shall not reproduce, copy, use, divulge, communicate or disclose or make use of (or attempt so to do) to any person, firm or company whatsoever any confidential information or trade secret concerning the business and or private affairs of the applicant of which he is or may become possessed and which came to his knowledge during his employment with the applicant, except as required by a court of law or any regulatory body or that which may be or become part of the public domain other than through any act or default by the respondent, or for the purposes of taking legal advice or, to the applicant, or its legal representatives, in connection with the respondent's claim against the applicant in the employment tribunal under claim number 2204349/2012.”
[12]On 20 August 2013, the claimant served Particulars of Claim alleging breach by the defendant of his contract and of the deed of covenant, and of the Copyright and Rights in Databases Regulations 1997 (a claim that was later abandoned). There is an unparticularised claim that the claimant has suffered loss and damage, and a claim for relief which includes delivery up and (albeit without any pleaded case for threat or intention to continue with the impugned behaviour) an injunction.[13]On 27 August 2013, the defendant made a witness statement in accordance with the order of the judge. In that, he gave the following account of events: i) He said that on 21 February 2012 he had made a report by email to the ICO, without disclosing any files, and that on 27 February 2012, while still in the claimant’s employment, he had printed off and sent the documents to the ICO, because he did not believe that the claimant had properly addressed his security concerns. At that time he had only had in his possession hard copies of the documents. ii) The documents came back into his possession following the subject access request which he made to the ICO on 17 December 2012. The documents were attached to an email which he received on 16 January 2013 in response to his request. iii) However, he did not appreciate at the time he received the email that the documents were attached to it. He had expected to be sent the cover pages which he had typed to describe and explain the hard copy documents sent to the ICO on 27 February 2012, because they would have been his personal data, and would have sufficed to prove that he had made the report that he claimed to have made. iv) When he received the email on his iPhone, it was ‘not immediately apparent’ that he had received the confidential information, because he could not see that material as multi-page attachments in his iPhone. v) He had complied with the order of Singh J by deleting ‘all electronic copies’ of the claimant’s information, and had not retained any copies, and confirmed that he would comply with the terms of the injunction restraining use of the information.[14]He amplified his account of his knowledge, the steps which he took to deal with the confidential information sent to him by the ICO, and his reasons for not responding to the claimant’s letter before action, in his witness statement of 7 July 2015: i) He made the request to the ICO to rebut the claimant’s contention that the relevant data files did not exist and that he had never complained to the ICO in writing. It was a request for personal data held about him. When he received the 16 January 2013 email from the ICO, only the first page of each .TIFF attachment was visible, and those were his own typed cover pages, originally sent to explain the documents sent by him in hard copy, which he had expected to receive. The ICO email had referred to redactions made at the claimant’s request, and he assumed that the claimant had been consulted about the request and would have asserted confidentiality in respect of the data files which he had sent on 27 February 2012. Therefore he had neither known nor guessed that the claimant’s confidential material had been sent to him. ii) Moreover, at a case management hearing held in the ET proceedings in early 2013 and on other occasions, he had specifically asked for disclosure of the documents contained in the letter that he had sent to the ICO, which he would hardly have done had he known that he already had them in his possession. iii) In the course of disclosure in the ET proceedings he disclosed all the documents in his possession (including the ICO email of 16 January 2013) by copying them onto a USB drive from his laptop computer. He did not open the .TIFF attachments when he saved them to disc (he apparently means when he saved them to the USB drive) because he did not have time as he was at work. Nonetheless, he converted the text in the body of the ICO emails to .PDF files, placed it in a sub-folder on the USB drive, and put the attachments into further sub-folders, without reading them. iv) He kept on his laptop a ‘mirror copy’ of the material which he had copied onto the USB drive. In his witness statement dated 4 December 2015, he explained that the mirror copy was placed in a Dropbox folder. v) He had not received the claimant’s posted letter before action because he was moving at the time, nor Ms Bornor’s emailed letter before action, apparently because she did not use her ‘typical’ email and it was categorised as promotional material (presumably he means spam) by Gmail. He had not been telephoned about the threatened proceedings by Ms Bornor or Mr Morton, the claimant’s solicitor, although his number had not changed and Mr Morton had often called him about the ET proceedings. vi) He did not know that he had the confidential information in his possession until he was served personally on 7 August 2013 with the claimant’s notice of application. He was then able to ascertain, although it took him some time that week to work out what had happened, that the ICO had sent him the same information that he had himself sent to the ICO in hard copy on 27 February 2012. vii) At the time of the 15 August hearing, he had two electronic copies of the confidential information to use in the ET case. In compliance with the order of Singh J, he deleted the .TIFF files saved in his copy of the contents of the USB drive and in the original email from the ICO. He regarded the result of Singh J’s order as being that he was allowed to retain one copy for that purpose, but ‘went too far’ and deleted all the data. He had complied with the judge's order of 15 August 2013 by deleting all the files irretrievably and retaining no copies.[15]On 9 September 2013, the defendant withdrew his claim in the ET, and the tribunal entered judgment dismissing it.

THE IMPLIED UNDERTAKING ISSUE

[16]After the hearing before Singh J, the defendant sought legal advice, and on 3 September 2013 his solicitors suggested that the claimant’s use of the disclosed documents for the purposes of these proceedings was a breach of the implied undertaking, now contained in CPR r.31.22, not to use disclosed documents except for the purpose of the proceedings in which they were disclosed, except by agreement, by permission of the court, or where the document had been read out or referred to in a public hearing.[17]On 17 October 2013 the defendant applied for an order under CPR r.31.22(2) prohibiting the claimant from suing on the material obtained on disclosure, and for a consequential order striking out the claim. That application was granted, and permission to use the material for the purposes of these proceedings was refused, by Tugendhat J on 11 December 2013 ([2013] EWHC 3789 (QB)). It was his view that there was nothing of substance which the claimant was seeking to achieve by the continuation of the action: all the substantive relief which it sought had been obtained by the order for delivery up and destruction. The claim for damages appeared to him to be without substance. There had been no suggestion before him of any continuing need for an injunction, and he inferred that the real issue that remained in dispute between the parties was costs.[18]On 31 July 2014, the Court of Appeal ([2014] EWCA Civ 1128) allowed the claimant’s appeal from the order of Tugendhat J. The court upheld the conclusion of the judge that it had been necessary for the claimant to obtain the permission of the court to make use of the disclosed documents, but held that he had been wrong to refuse retrospective permission to do so.[19]Christopher Clarke LJ (with whom the other members of the court agreed) pointed out that the effect of the judge’s rulings was that although the defendant had obtained possession of highly confidential documents of the claimant, and although Singh J had thought it right to make the orders that he did, including an order that the defendant should pay the costs of the application, the claimant had ended up in a position where it had no order or undertaking in its favour precluding the defendant from using the confidential information, nor any prospect of obtaining one in the action, and was required to pay all of his costs. Given that the failure to ask for permission was neither deliberate nor reckless, and given that Singh J would have granted permission had he been asked to do so, it seemed to the Lord Justice wrong(i) to characterise the whole action as an abuse of the process of the court sufficient gravity to justify striking it out ab initio, thereby undoing such of the order of Singh J as could be undone,(ii) to treat the striking out of the action as involving no injustice to the claimant (which seemed to have no option but to abandon the relief claimed and to pay the defendant’s costs), and(iii) to regard to the order made by the judge as one that justice required.[20]Moreover, in the light of the information before the Court of Appeal, Christopher Clarke LJ did not accept that the continuation of the action was without useful purpose. While it was the defendant’s case that there was no reason to suppose he would make use of the confidential documents, and that the only copy he possessed was the redacted version produced on discovery by the claimant, that was not accepted by the claimant, whose position was that it could not be satisfied that the defendant - whom it characterised as a disgruntled employee - might not seek to deploy this highly confidential information under some guise or other. In the Court of Appeal, the claimant drew the court’s attention to three matters: firstly, an assertion in his defence that any member of the public could request the confidential documents from the ICO again under the Freedom of information act; secondly, a claim in his witness statement of 14 August 2013 that the documents were in the public domain; and thirdly, his argument before Singh J that even if an order was made, he could, having complied with the order, lawfully obtain the documents again from the ICO by a subject access request. Against that background, Christopher Clarke LJ regarded it as possible that the ICO might (even though they had been wrong to do it the first time) again make the mistake of releasing the documents in response to a subject access request. He also referred to the claimant's highly sceptical view of the defendant’s claim that he had been unaware for almost eight months that the ICO had sent him the confidential documents. While the Court of Appeal could not reach a concluded view on such matters, the Lord Justice thought it wrong to suppose that there was no issue to be tried, or that there could be no useful purpose in the continuance of the proceedings, or that the claim for a permanent injunction could now be seen to be barren of practical utility. That was particularly so when Singh J had determined, on an interlocutory basis, that injunctive relief should be granted (as well as making an order for delivery up and destruction), and when what was in issue was not only the use of physical copies of the confidential information but also of the highly confidential information contained therein.[21]Even though the Court of Appeal considered the practical utility of proceeding to trial for a permanent injunction, it declined to hear argument from Mr Hirst based on the approach adopted in cases such as Jameel v Dow Jones and Co [2005] EWCA Civ 75 to applications where, having regard to the overriding objective and principles of proportionality, a claim might properly be struck out because ‘the game was no longer worth the candle’. That had not been argued before Tugendhat J and required a respondent's notice (permission for which was refused) if it was to be argued in the Court of Appeal.

THE PRESENT APPLICATION

[22]It is on the Jameel line of cases that Mr Hirst now relies, and both parties maintain that the position has changed since 31 July 2014. The defendant says that the concerns expressed by the claimant in the Court of Appeal are no longer sustainable, while the claimant says that further evidence, especially expert evidence, tends to show that those concerns are more justified than ever.[23]Mr Hirst makes a number of points in support of his case that a permanent injunction is not necessary.[24]Firstly, there was never any evidence of any threat of use or disclosure of confidential information beyond the scope of the ET proceedings. The furthest that the evidence of Ms Bornor went (witness statement 5 August 2013) was to express the concern (see [9] above) that the defendant might further breach the terms of the deed of covenant which he had signed as an employee.[25]Secondly, the defendant had, in accordance with the order of Singh J, deleted all copies of the documents in his possession (i.e. those which had been supplied to him by the ICO).[26]Thirdly, it then became necessary for his solicitors, in order to give him legal advice, to request disclosure of the documents under CPR 31.14 on the basis that they had been referred to in the Particulars of Claim. Those copies were disclosed by the claimant to the defendant’s solicitors, have remained in his lawyers’ possession since then, and will be returned to the claimant at the conclusion of these proceedings. Their use for any other purpose than the defence of these proceedings would, of course, be prohibited by the implied undertaking to the court preserved by CPR 31.22, breach of which would carry similar penalties to those applied for breach of an injunction.[27]Moreover, Mr Hirst submits, the concerns expressed by the claimant to the Court of Appeal were not, or are no longer, valid. The defendant had told Singh J that the claimant’s confidential information could be obtained lawfully from the ICO or (per his witness statement of 14 August) was ‘in the public domain’. If the transcript of the hearing before Singh J is examined, it appears that the defendant was addressing the judge in the context of his need to keep a copy of the documents for the ET hearing, and was saying to the judge (wrongly) that he could lawfully repeat his request to the ICO for disclosure of the same documents, but that if he did so the material would not be in his hands in time for the ET hearing on 9 September. His witness statement of 14 August 2013 was to similar effect: his reference to the information being in the public domain was, as Mr Hirst observes, wrong, but he used the expression to describe the effect of the confidential information being available from the ICO, as he thought, under the Freedom of Information Act. The gist of his witness statement, as of his oral submissions to Singh J, was that for him to be ordered to destroy his copy of the documents would achieve no more than to prejudice him in the prosecution of his ET case, since others would still be able to obtain the information, and he would not be able to replace it in time for the hearing. But whatever he was trying to say, at a time when he was unrepresented, Mr Hirst submits that it no longer matters, since the ICO has recently informed the defendant’s solicitors by letter dated 20 November 2015 that all records which they held on his case had been deleted in accordance with their ‘usual retention schedule’, namely two years from the last ‘meaningful interaction’ in the matter, which had been a letter of 16 January 2013. That potential means of obtaining the claimant’s confidential information was therefore closed off with effect from 16 January 2015.[28]Moreover, Mr Hirst also relies on the report of the jointly instructed computer experts, Navigant, that the .TIFF files containing the confidential information had metadata consistent with being created on 29 February 2012 using a Kofax device. The ICO have confirmed that they use Kofax to process and scan inbound postal correspondence, turning it into a searchable electronic form. 29 February 2012 was two days after the defendant posted hard copies of the documents to the ICO. It therefore appears highly probable that the claimant’s confidential information, as disclosed by the defendant on his USB drive in the course of ET disclosure, was (as he has maintained) the same as that which he had posted to the ICO on 27 February 2012. Indeed, it is accepted by Mr Mayall on behalf of the claimant that the ICO was the source of the files which the defendant disclosed.[29]Mr Hirst therefore submits that there is no necessity for a permanent injunction. There is no means by which the defendant could again obtain the claimant’s confidential information from the ICO; there is no evidence that he took any confidential information away with him from the claimant when he was dismissed; and his evidence that he intended only to use the confidential information for the purposes of the ET proceedings, which have long been dismissed, has been consistent. There is, says Mr Hirst, no evidence whatever that the defendant has had any access to or made any use of the confidential information since 2013, except to the extent that his solicitors have had possession of that information for the purposes (and only for the purposes) of these proceedings.[30]In the circumstances, Mr Hirst submits, the issue before the court at trial would be a slender one, focusing on the question of whether, between 16 January 2013 and August 2013, the defendant was in breach of the contractual restriction on his making any use of the claimant’s confidential information. It is common ground that this would depend on whether he was aware that the material sent to him by the ICO included the confidential information, or whether he was the unwitting recipient of information which he should not have had. But, Mr Hirst contends, given that the copies received from the ICO were all permanently deleted or delivered up in August 2013, it is hardly a matter of great moment, over two years later, whether he knew or did not know what he had received.[31]Mr Hirst points out that costs budgets have been approved for the parties to spend £75,000 on a trial which, he contends, will take several days and involve a day or more of judicial reading-in time, where the claimant has suffered no loss, where there is no evidence of a threat or risk of misuse of confidential information, and where the law already restrains the defendant (by virtue of the implied undertaking applying to the copy held by his solicitors for the purposes of these proceedings) from any misuse of the claimant’s information. In the circumstances, he submits that there is a gross disproportion between the time and expense involved in going to trial and the benefit which could be obtained by the claimant, even if successful.[32]Mr Mayall rightly stresses the importance to the claimant of protecting, and being seen to protect, the confidential information of its clients. He describes the defendant as a disgruntled and dishonest ex-employee who, he said, has lied about how he got hold of the claimant’s information, what he has done with it, and what he knew. No undertaking is on offer (except on terms as to payment of his costs), and a final injunction is necessary in order to prevent the defendant from using the claimant’s information, including information in his head.[33]Mr Mayall’s emphasis was on the defendant’s credibility. In short, he argues, the defendant has said that he did not know that the ICO had sent him the claimant’s confidential information, and that he has destroyed all copies of it. If he is lying about the first, then it is more likely that he is lying also about the second. The defendant’s case is, as I have said, that he did not open the attachments to the email which he received from the ICO on 16 January 2013, and therefore did not know that they contained confidential information, something that he only discovered when served with the claimant’s application for an interim injunction. Mr Mayall contends that this is obviously untrue, and that it is necessary to consider with care the evidence about the defendant’s state of knowledge.[34]Mr Mayall casts doubt on what it was that the defendant was truly asking for when on 17 December 2012, after he had been dismissed by the claimant, he requested the ICO to supply him with any personal information that they held about him:
‘specifically, correspondance (sic) with your office in relation to case Ref. ENF0436322. I am requesting information sent from this email address: henry.cloete@gmail.com and also a postal submission with the Royal Mail tracking number: ZX010297257GB’
. That, Mr Mayall submits, could only have been a request for the confidential information. The defendant maintains (fourth witness statement, para 83a) that he was using standard wording which sought only his own personal data, not the confidential information. He wanted the covering pages of his communications with the ISO, in order to show that those communications were in writing, a matter which was in issue in the ET. I cannot decide what he was intending to ask for, but there is plainly an argument that the wording of the request, read as a whole, may have asked for rather more than the defendant says he wanted.[35]What the defendant received by email from the ICO dated 16 January 2013 was a number of attachments, which, as the writer explained in his covering letter, were ‘split across several emails due to the large number and size of documents’. There were eight .TIFF attachments of sizes varying between 35kb and 4040kb. Mr Mayall contends that a man of the defendant’s IT skills must have realised from the file sizes that the attachments comprised more than his covering letters, even if he never opened them. To that the defendant, in a sixth witness statement dated 4 December 2015, insists that the Gmail app which he used on his iPhone to read email did not display file sizes, and that in any event the files were not large. He appears to gain some support from the Navigant expert report, which states (para 2.3.8c) that it is only under some circumstances that the Apple iOS mail app will display the size of an attachment and (para 2.3.8d) that the Gmail app only shows the attachment size when the attachment is opened.[36]The email was sent to the defendant’s Gmail account, which, as Mr Mayall says, could have been accessed from any computer, laptop or tablet. The defendant says in his fourth witness statement dated 7 July 2015 that he read the email on his iPhone, and that he did not realise ‘at the time’ that the attachments were scanned copies of the documents that he had sent to the ISO in February 2012. Only the first page of each .TIFF file was displayed, and those, he says, were the cover pages which he had himself generated and which he had expected would be sent to him. The defendant maintains that he was unable to view the multi-page TIFF attachments on his iPhone, which was why it was not apparent to him that that he had received multiple pages. That does seem to reflect a difficulty with the iPhone operating system, confirmed by the jointly instructed experts, Navigant, at paragraph 2.3.7 of their report. Moreover, he explained in his witness statement, he knew from the ICO’s covering letter that certain information had been redacted, and believed that ICO could not send personal data about third parties in response to subject access requests, so he had no reason to suppose that data files containing confidential information would have been attached to the email. Mr Mayall argues that it is implausible to suppose that – having requested the information – the defendant would not have opened up the attachments, by using a computer or other device if his iPhone was not able to do so. The Navigant expert report shows that the files were copied to the USB stick on 15 July 2013 from a Mac OS X system (i.e. not from an iPhone), and moreover that they had been created on a Mac OS X system on 1 June 2013. That, Mr Mayall contends, contrasts with the defendant’s assertion in his fourth witness statement at paragraph 83b that he ‘only ever opened the documents on (his) phone until they were transferred to the USB stick for disclosure, and on that occasion (he) did not open the files (he) was disclosing’. However, in the same witness statement the defendant explained that he had saved the ICO email and attachments on his laptop, and had copied the material from his laptop to the USB drive, so the discrepancy may be more apparent than real. Moreover, in his final witness statement dated 4 December 2015, the defendant explained that the email attachments could not be transferred directly from an iPhone to a USB stick as the iPhone had no USB port or suitable interface for file transfer. What he did, as I understand his evidence, was to download the email and attachments from Gmail to his Mac laptop via the Chrome browser, to be saved at a nominated location without opening them. That would have happened on 1 June 2013. He saved them to a folder in preparation for putting them on a USB stick, which he did while at work on 15 July, simply plugging the stick into his laptop and copying the folder which contained all the documents in his possession which were connected with his employment. In the case of the ICO material, he converted the text in the body of the emails to .PDF files and saved them to the USB drive. He claims that he did not open the attachments when he saved them: he did not have the time, as he was at work when he carried out this exercise. But he could have opened them at any time (in particular, when he copied them onto his laptop), and Mr Mayall urges that it is implausible to suppose that he did not.[37]Mr Mayall made a number of other points regarding the defendant’s evidence about his knowledge or otherwise of the contents of the .TIFF files which he received from the ICO. He pointed out that the defendant did not mention in his purported Defence and Counterclaim, served on 14 August 2013, nor during the hearing in front of Singh J, that he had not known that he had the documents in his possession; and (witness statement 14 August 2013 [30]) that he had had the documents in his possession for almost eight months but had taken no steps to use or disclose them. Mr Mayall argues that it is inconceivable that the defendant, had he truly been unaware for many months that he had the documents in his possession, would not have said so. I am not sure that it is ‘inconceivable’ – the defendant might not have appreciated the significance of his state of knowledge – but the point is not without force. And I agree that the defendant’s claim not to have used the documents for eight months is a curious use of language if he did not know that he had them.[38]Moreover, Mr Mayall submits that the transcript of the hearing before Singh J shows that the defendant knew that he had the documents. That is true, but then the defendant’s own case is that he knew before the hearing, after he had been served with notice of the application. I am not convinced that the transcript shows knowledge before that point, except knowledge with the benefit of hindsight. Mr Mayall makes the valid point that even in his 27 August 2013 statement, made in compliance with Singh J’s order, the defendant still did not say that he had been unaware that he had the claimant’s documents when he handed over his USB stick, but only that it had not been ‘immediately apparent’ to him that he had been sent the claimant’s files: it was only in the witness statement dated 17 October 2013 made by his solicitor, Mr Spyrou, that the defendant’s case – that he had never been aware that he had been sent the claimant’s information – was clearly stated.[39]Mr Mayall also relies on the language used by the defendant at the hearing before Singh J. He told the judge that he could ask the ICO to send him the information again, even if the judge granted an injunction, which Mr Mayall categorises as a threat. But, he asks, why would the defendant threaten to ask for the information again, if he maintains that he did not ask for it (beyond his personal data) in the first place?[40]Mr Mayall refers to the different dates given by the defendant for the moment when he realised that he had the claimant’s information. They are variously given as 7 or 9 August 2013 (in either event, when he was served with the claimant’s application for an interlocutory injunction) and 12 August 2013 (witness statement 13 November 2013: he says that after he received the draft order he checked his copy of the files on 12 August and realised that he did have the claimant’s information in his possession). Moreover, Mr Mayall observes that on 2 August 2013 the claimant emailed an application to the ET to amend its form ET3 in the light of the discovery that the defendant had copies of its confidential information. That was copied to the defendant, who must have received it before he replied on 7 August. Given that the defendant certainly knew at some point between 7 and 12 August 2013 of the claimant’s contention that he had disclosed its confidential documents, I doubt that much turns on the defendant’s recollection of when, as he would put it, he learned the truth. His account in his 7 July 2015 statement may resolve the discrepancy between 7 and 12 August, because there he states (para 55) that he did not know that he had the confidential information in his possession until he was served on 7 August, but that it took him ‘some time that week to establish what in fact happened’. However, Mr Mayall suggests that had he truly been unaware that he had the claimant’s information in his possession he would have checked immediately his copy of the material which he had disclosed, and would hardly have waited until 12 August.[41]Mr Mayall seeks to cast doubt on the defendant’s evidence that he had destroyed all copies of the claimant’s confidential information. The defendant said in his witness statements of 27 August 2013 and 7 July 2015 that he kept on his laptop a ‘mirror copy’ of the folder which he had copied and provided to the claimant. He explained in his 4 December 2015 witness statement that the ‘mirror copy’ was a Dropbox file. That is consistent with the findings of the Navigant report, which at para 4.1.18 concluded that the files had metadata consistent with having been uploaded to or downloaded from Dropbox. Dropbox is explained by Navigant as allowing users to create a special folder on multiple computers which are then synchronised so that the folder appears to be the same folder with the same contents regardless of which computer is used to view it. Mr Mayall made a good deal of the defendant’s reference to Dropbox. He showed that the defendant had never (until 4 December 2015) mentioned having used Dropbox in connection with the claimant’s documents. That is true (except to the extent that on 1 June 2013 he had written to the claimant’s solicitors suggesting disclosure of documents in the ET proceedings by way of Dropbox), but it is fair to recall that the defendant had (as set out above) twice earlier referred to keeping a ‘mirror copy’ of the material, which in his 4 December 2015 statement he explained as being a Dropbox file. Mr Mayall contended (without the benefit of evidence) that if the defendant had uploaded the files to Dropbox, deleting the copy on his laptop and even deleting the email itself would not have had any effect, because the files could still have been accessed from any computer. The defendant maintained in that Mr Mayall did not understand Dropbox, and that when he deleted the Dropbox file in accordance with Singh J’s order, the file ceased (because of synchronisation) to be available on any device on which Dropbox was installed. That is not a dispute that I can resolve on this application. It remains the defendant’s evidence that he complied with Singh J’s order by deleting irretrievably all the copies of the claimant’s files which were in his possession, since when he has had no copies of the claimant’s information (except for the copy held by his solicitor for the purposes of these proceedings, which can be used for no other purpose).[42]What do these contentions about the defendant’s state of knowledge add up to? Mr Mayall submits that they show ‘on the clearest possible evidence’ that the defendant had been ‘completely untruthful’ about his dealings with the claimant’s information. I disagree with that submission, but I accept that the material which he seeks to deploy might well enable him to conduct productive cross-examination of the defendant at trial, with a view to exploiting seeming inconsistencies and in the hope of establishing that the defendant had in fact known that the ICO had sent him the claimant’s confidential information, and had accordingly been in breach of his covenants to the claimant until he deleted the files in accordance with the order of Singh J. It is conceivable that such a cross-examination might persuade the trial judge that the defendant’s denials of knowledge could not be believed, and that he must have been knowingly in possession of the claimant’s confidential information for all or most of the period between January and August 2013.[43]Mr Mayall boldly submits that it is likely that the defendant still has copies of the claimant’s confidential information. Even if the claimant could establish that the defendant had, notwithstanding his denials, known that he had received confidential information from the ICO, it seems to me that even damaged credibility would be a very weak basis, absent any positive evidence, for a contention that the defendant had retained a copy of any of the claimant’s confidential information. The defendant’s own evidence has always been that he complied fully with Singh J’s order and deleted all copies of the material irretrievably. There is simply no evidence to the contrary (notwithstanding Mr Mayall’s assertions as to the effect of using Dropbox). It seems to me, as Mr Hirst submitted, no more than speculation to suppose that he did not do so.[44]Mr Mayall also relies on the defendant’s failure or refusal to provide a permanent undertaking as support for an inference that, unless restrained, he will further misuse the claimant’s confidential information. The defendant did offer a permanent undertaking on 3 September 2013, but only on condition that his costs (including the costs ordered against him by Singh J) were paid, an offer which Mr Mayall derided. The claimant made an open offer on 11 March 2015 to accept £8000 on account of costs and a permanent undertaking. Mr Mayall argues that had the defendant accepted the offer and given the undertaking sought, he would have had to pay only a fraction of the costs already ordered against him (by Singh J and the Court of Appeal). Given that the defendant has professed to be prepared in principle to give an undertaking, his failure or refusal to do so in circumstances in which that failure or refusal could be of no possible benefit to him entitles the court (so Mr Mayall submits) to draw ‘the obvious inference’. I disagree. His preparedness to offer an undertaking, albeit on terms unacceptable to the claimant, argues against such an inference. I cannot judge why the defendant refused the claimant’s offer, but it seems to me highly probable that (as Tugendhat J inferred in December 2013) the real issue in these proceedings is costs.

APPLICABLE LAW

[45]There is no dispute as to the applicable law. Mr Hirst relies now, as he was not able to do before the Court of Appeal, on the line of authority which flows from the case of Schellenberg v BBC [2000] EMLR 296, a defamation action which was almost identical to two others which the claimant had settled on disadvantageous terms. Eady J regarded it as necessary to apply the overriding objective even in the context of litigation where there was a right to trial by jury. That required him to have regard to proportionality, and the possible benefits which might accrue to the claimant so as to render the expenditure of tens of thousands of pounds potentially worthwhile. The requirement of proportionality in the overriding objective obliged him to consider whether “the game is worth the candle”, and he concluded at p319:
“I am afraid I cannot accept that there is any realistic prospect of a trial yielding any tangible or legitimate advantage such as to outweigh the disadvantages for the parties in terms of expense, and the wider public in terms of court resources.”
[46]That approach was endorsed by the Court of Appeal in Wallis v Valentine [2003] EMLR 175, and in Jameel v Dow Jones & Co [2005] EWCA Civ 75; [2005] QB 946. Jameel was a defamation case in which the claimant accepted that there had been minimal publication of the article complained of within the jurisdiction. Lord Phillips MR, giving the judgment of the court, observed that even if the claimant succeeded in the action and was awarded a small amount of damages, it could perhaps have been said that he would have achieved vindication for the damage done to his reputation in this country, but both the damage and the vindication would have been minimal:
“[69] …. The cost of the exercise will have been out of all proportion to what has been achieved. The game will not merely not have been worth the candle, it will not have been worth the wick. [70] If we were considering an application to set aside permission to serve these proceedings out of the jurisdiction we would allow that application on the basis that the five publications that had taken place in this jurisdiction did not, individually or collectively, amount to a real and substantial tort. Jurisdiction is no longer in issue, but, subject to the effect of the claim for an injunction that we have yet to consider, we consider for precisely the same reason that it would not be right to permit this action to proceed. It would be an abuse of process to continue to commit the resources of the English court, including substantial judge and possibly jury time, to an action where so little is now seen to be at stake.”
[47]The court then considered whether the continuance of the action could be justified for the sake of the claim for an injunction, but concluded that there was no likelihood of actionable repetition of the article complained of, and that in any event that remedy had not been the object of the action. The possibility of obtaining an injunction did not justify permitting the action to proceed. However, as Mr Mayall observed, the case shows (see [74]) that there may well be justification for pursuing proceedings for an injunction even when libel damages are likely to be small. That would require the claimant to show a threat or real risk of wider publication.[48]It appears from (for instance) the decision of the Court of Appeal in Sullivan v Bristol Film Studios Ltd [2012] EWCA Civ 570; [2012] EMLR 27 that the Jameel principle has been applied outside the confines of the law of defamation. Sullivan was a copyright claim brought against the defendant, which the claimant (described as a hip-hop artist) had commissioned to produce a video to accompany a recording of one of his songs. The defendant was to be paid by profit share from sales of the video, and uploaded the finished product on to YouTube. The claimant did not like the video, and complained that it had been uploaded without his consent, infringing his copyright and his performance and moral rights. The defendant removed the video from YouTube after five days and destroyed all copies of it. The claimant nonetheless issued a claim against the defendant, claiming that the value of his claim was £800,000. The judge struck the action out on the grounds that even if it succeeded, the maximum possible recovery was £50, there was nothing to be gained by the claim for an injunction (all copies of the video having been destroyed except for one copy in the hands of the defendant’s solicitors for the purposes of the proceedings, which they were willing to undertake not to use), and the costs of fighting the action were out of all proportion to the amount which the claimant was likely to recover. The claimant’s appeal was dismissed. There was a real prospect of success, but despite that, the recoverable damages would have been very modest and the amount of the court’s time that would be taken up in determining the case would have been disproportionate.[49]Citation plc v Ellis Whittam Ltd [2013] EWCA Civ 155 was a claim in slander and malicious falsehood based on words alleged to have been spoken by an employee of the defendant about the claimant, its competitor. The only issue of importance to the claimant was an injunction, the critical question being whether there was an arguable case that there was a real risk of repetition of the alleged slander. The defendant had offered an undertaking to use reasonable endeavours to ensure that there was no repetition. The Court of Appeal concluded that there was no material before the court from which it could be inferred that there had been any further publication or that there would be in the future. Moreover, there was no substance to the claim for damages. It would not have been proportionate to allow the claim to proceed to trial.[50]Mr Hirst referred also to Lilley v DMG Events Ltd [2014] EWHC 610 (IPEC), a copyright claim by a technical writer who licensed his material to a specialist publisher. His articles were licensed by the defendant to a third party without the claimant’s permission. He put an inflated value on them. The defendant applied successfully to strike out on Jameel grounds. The judge found that the maximum quantum of damages was £83 and that there was no value in an injunction, the last actionable infringement having taken place eight years earlier.

CONCLUSION

[51]There is no evidence that the defendant has retained any copies of the claimant’s confidential information, save for the one copy which was disclosed to his solicitors and which may be used only for the purposes of this litigation. That copy is subject to the restrictions imposed by CPR 31.22, which encapsulates the old implied undertaking with respect to disclosed documents. The defendant’s evidence that he complied with the order of Singh J for the return and deletion of the claimant’s information is uncontradicted except in the literal sense that the claimant disputes it, and even though Mr Mayall challenges its credibility.[52]There is no longer any available channel by which the defendant could, if he wished, obtain further copies of the claimant’s information, because the ICO has destroyed its relevant files. Therefore the defendant’s threat, if that is what it was, to obtain further copies by that route, could not now possibly be made good.[53]It is possible that, at a trial, Mr Mayall could persuade the judge that the defendant had indeed, contrary to his assertions, been well aware for at least some of the period between January and August 2013 that the ICO had sent him the claimant’s confidential documents. That would show that the defendant had indeed sought to make use of the claimant’s information for an unlawful purpose, namely his prosecution of the ET proceedings, and it would no doubt have implications for costs.[54]But even in that event, an injunction is a discretionary remedy. As the editors of Clerk & Lindsell observe, albeit in the context of torts, “The mere proof of a legal wrong done in the past is insufficient to entitle the claimant to an injunction. The court must be satisfied that the interference with the claimant’s right is continuing … or that it is likely to be repeated unless restrained”: Clerk & Lindsell on Torts, 21st edition, para 29-06. The highest that the claimant has been able to put the likelihood of repetition, which is not even part of its pleaded case, is the words of Ms Bornor in her witness statement of 5 August 2013 (see [9] above), namely ‘concern’ that the defendant might use the documents in some different way in the future. Well over two years later, there is still no evidence that the defendant has retained or misused any of the claimant’s information since his apparent compliance with Singh J’s order. There is no ‘threat or real risk’ (Jameel, above, at [74]) of such conduct.[55]It is not suggested that the claim for damages, still unparticularised, has any substance.[56]However, let it be assumed that the claimant would succeed at trial in obtaining a permanent injunction to restrain the defendant from making any use of its confidential information. How would that injunction give it, in substance, greater protection than it already has? There is no means by which the defendant could obtain further copies. Even if his solicitors were, most improbably, prepared to release to his possession the disclosed copy which they hold, misuse of that copy for any purpose other than these proceedings would be a breach of the implied undertaking, or of the terms of CPR 31.22, by which, as the defendant well knows, he is bound. It is not in issue that such behaviour would be punishable as a contempt of court. If, as Mr Mayall suggests is likely, but for which there is no evidence, the defendant had in fact retained a copy of the confidential information notwithstanding the order of Singh J, his retention of that copy, and any use of it, would at once demonstrate that he had been in breach of Singh J’s order, which would visit him with the same penal sanctions for disobedience as would apply to disobedience of a permanent injunction. Mr Mayall spoke somewhat faintly of the need to prevent the misuse of the claimant’s information in so far as it is in the defendant’s head: but it is highly improbable that after such a long lapse of time the defendant would have retained in his head any confidential details of the claimant’s South African clients, let alone that he would have any wish to make use of it, given that the only purpose canvassed for its use was the ET proceedings, which were dismissed by consent in September 2013.[57]In the circumstances, it is very difficult to see how the claimant could obtain anything of value from a trial of this action. In my judgment, it would be wholly disproportionate to allow the time of the court to be taken up, and so much expenditure to be incurred, to so little purpose. In the words of Eady J, the game is not worth the candle. However, Mr Mayall was right to make the point that, if I was against him on this application, the order could be made on terms. The action is not being struck out ab initio as it was by Tugendhat J: the effect of this order will be simply that it will not go to trial. I will wish to hear counsel on the terms that should apply, and in particular on the question of costs.

Cited in 1 later judgment