Flowcrete UK Ltd v Vebro Polymers UK Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Nigel Cooper,Mr. Nigel Cooper |
| Judgment Date | 11 January 2023 |
| Neutral Citation | [2023] EWHC 22 (Comm) |
| Docket Number | Case No: LM-2021-000086 |
| Court | Queen's Bench Division (Commercial Court) |
[2023] EWHC 22 (Comm)
Mr. Nigel Cooper KC sitting as a High Court Judge
Case No: LM-2021-000086
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
LONDON CIRCUIT COMMERCIAL COURT (KBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Charles Dougherty KC (instructed by Kennedys) for the Claimants/Respondents
Mr. Matthew Bradley KC (instructed by JMW) for the Defendants/Applicants
Hearing dates: 16 December 2022
Approved Judgment
This judgment was handed down remotely at 10.30am on 11 th January 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).
Mr Nigel Cooper KC
Mr. Nigel Cooper KC sitting as a High Court Judge:
Introduction
The dispute in this action centres on the polymer flooring industry. In essence, the Claimants assert that various former employees of the First Claimant set up business in competition with their former employer and that in doing so those employees misappropriated and misused confidential information belonging to one or other of the Claimants with the Third and Fourth Defendants acting in breach of covenants found in their employment contracts in the process. The Defendants deny the claims and counterclaim relying on a cross undertaking in damages provided by the Claimants when they sought injunctive relief in a springboard form.
The dispute described above is listed for a trial of 14 days in April and May 2023.
In the present application, the Defendants seek injunctive relief (i) to prevent the Claimants' use of certain communications, which the Defendants say are privileged and were inadvertently disclosed, (ii) to require the destruction by the Claimants of those communications and (iii) ancillary orders. The Defendants also seek an order that the Claimants pay the costs of this application on the indemnity basis and invite the Court to consider making a wasted costs order against the Claimants' solicitors.
At the beginning of the oral hearing for this application, both parties asked me to order that the hearing should be in private in order to prevent inadvertent publication of the contents of communications which are or might be privileged. In this regard, the general rule is that hearings are to be in public ( CPR Rule 39.2(1)) and that a hearing should only be held in private if and only to the extent that the Court is satisfied that one or more of the matters set out in CPR Rule 39.2(3)(a) to (g) are satisfied. I was not satisfied that it was appropriate to order that the hearing generally should be held in private. However, I was satisfied that it was appropriate to make a less restrictive order to protect any privilege that might exist in the communications, which are at issue on this application taking into account the matters listed at Rule 39.2 (a) and (c). Accordingly, on 16 December 2022 I ordered that:
i) No transcript and no report of the hearing on 16 December 2022 is to be released without the permission of the court pending the hand-down of this Judgment or further order.
ii) Pursuant to CPR 31.22(2), other than for the purposes of these proceedings, no use could be made of any document which has been disclosed on the basis that it has been read to or by the court, or referred to at the hearing on 16 December 2022, without the permission of the court or further order.
The Procedural Background
Proceedings in this action were issued on 18 March 2021. Simultaneously, the Claimants applied for certain interim relief, some of which was granted by HHJ Pelling QC (as he then was) sitting as a Judge of the High Court on 19 April 2021.
As part of the order of 19 April 2021, the Defendants were required to carry out searches for certain documents. The Defendants did not identify or provide any documentation pursuant to these searches. The searches were undertaken by Ms. Rebekah Jones, Vebro's marketing director and formerly a senior employee of the Claimants without the assistance of the Defendants' solicitors, JMW. The Claimants say that Ms. Jones is implicated in the misappropriation of the Claimants' confidential information.
Extended disclosure was exchanged on 14 June 2022. The Defendants disclosed some 3,788 documents, which were then reviewed by the Claimants' solicitors, Kennedys.
The Claimants say that there are manifest deficiencies with the Defendants' disclosure. The Claimants' complaints include a failure by the Defendants to disclose native documents and attachments, a failure to disclose documents, which the Claimants deduce must exist and the provision of documents by way of extended disclosure, which should properly have been disclosed at the time of the injunction hearing or pursuant to the 19 April 2021 order. The Claimants' complaints are the subject of a disclosure application issued on 22 September 2022 and due to be heard on 18 January 2023.
The Defendants' extended disclosure included two pdf documents, titled JMW3546 and JMW3547 respectively, which were both compilations of other documents and totalled 800 pages. The two documents included documents which were not disclosed elsewhere in the Defendants' disclosure and documents which were only provided in the pdf documents but not in their native format.
Kennedys accordingly wrote to JMW on 19 July, 22 July and 01 August 2022 setting out their concerns about the Defendants' disclosure, including JMW3546 and JMW3547.
JMW responded to Kennedys almost a month later on 17 August 2022 asserting in relation to documents JMW3546 and JMW3547 that both documents were subject to legal advice privilege and litigation privilege. The Claimants say, and I find, that JMW provided no proper explanation in their letter of 17 August 2022 as to the bases for the claims to privilege or how the documents came to be inadvertently disclosed. JMW also asserted that all otherwise relevant documents within JMW3546 and JMW3547 had been disclosed elsewhere although the Defendants now accept that this assertion was incorrect. In their letter of 17 August, JMW asked that the Claimants delete JMW3546 and JMW3547 and that any reference to their contents should be redacted from any correspondence placed before the Court.
Kennedys responded to JMW on 24 August 2022 saying that it did not appear that the documents had been provided by mistake or that they were obviously privileged. They sought a further explanation of the reasons privilege was claimed in the documents. JMW responded on 26 August 2022 saying that their letter of 17 August 2022 addressed the inadvertent disclosure of privileged documentation. Kennedys also asserted that in any event privilege had been waived.
As already noted, the Claimants issued their application in relation to the Defendants' disclosure on 22 September 2022. In a letter sent on 21 September 2022 prior to issuing the Claimants' application, Kennedys made clear their intention to refer to JMW3546 and JMW3547 for the purposes of their application and pointed out that if the Defendants wished to prevent the Claimants from referring to the documents, the Defendants were at liberty to make a cross-application.
The first occasion on which the Defendants specifically set out which individual documents in JMW3546 and JMW3547 they alleged were privileged was 26 September 2022.
On 30 September 2022, the Defendants agreed to review JMW3546 and JMW3547 and gave notice of their intention to issue the present application. The Defendants gave disclosure of non-privileged documents in JMW3546 and JMW3547 (which should have been disclosed previously) on 11 November 2022.
The Defendants issued their present application on 04 October 2022.
The scope of the present application
By the time of the hearing before me, the scope of the Defendants' application had narrowed so that I was only concerned with the following individual documents within JMW3546 (collectively referred to hereafter as “the Disputed Documents”):
i) Pages 145 – 146 of JMW3546 – e-mails addressing projects lost as a consequence of the injunction put in place on 19 April 2021 for the purpose of the return hearing on 21 June 2021, the Counterclaim and compliance with the Order of 19 April 2021.
ii) Pages 366 – 371 of document JMW3546 – e-mails relating to the identification of projects to be carved out of the undertaking put in place on 19 April 2021.
iii) Pages 364 – 365, 391 – 392, 399 and 474 – 480 of JMW3546 – emails relating to the drafting and execution of the Fourth Defendant's witness evidence for the purpose of the Claimants' applications for injunctive relief.
Legal Principles
Where a party alleges that a document has been disclosed by mistake, there are essentially two issues:
i) Was the relevant compilation or document privileged? and
ii) If so, what is the consequence of the inadvertent disclosure to the other party?
Privilege – Litigation Privilege
The only relevant privilege now relied on by the Defendants is litigation privilege. In this regard, the question is whether the individual Disputed Documents are privileged. There is no wider privilege in the compilation documents JMW3546 and JMW3547; see Sumito Corp. v. Credit Lyonnaise Rouse Ltd [2001] 1 WLR 479 and The Supreme Court Practice 2022 at 31.3.11.
There was on the face of the parties' skeleton arguments a debate as to whether the Disputed Documents fell within the scope of litigation privilege on the basis that they were not documents passing between the Defendants or their solicitors and third parties. However, by the...
To continue reading
Request your trial
-
When Can A Party To Litigation Use A Document Disclosed By Mistake?
...UK Ltd v Vebro Polymers UK Ltd [2023] EWHC 22 (Comm), the High Court considered when it would be just and equitable to grant an injunction to restrain the use of privileged documents which had been disclosed by mistake. The judgment gives some useful guidance on when the court will refuse t......
-
Commercial Litigation Round-Up ' August 2023
...the court may intervene to prevent their use where there has been an 'obvious mistake'. In Flowcrete UK Ltd v Vebro Polymers UK Ltd [2023] EWHC 22 (Comm) the Court emphasised (i) that the burden is on the disclosing party to establish inadvertent disclosure, and when making an application f......