IG Index Ltd v Cloete
| Jurisdiction | England & Wales |
| Judge | Lord Justice Christopher Clarke,Mr Justice Barling,Lady Justice Arden |
| Judgment Date | 31 July 2014 |
| Neutral Citation | [2014] EWCA Civ 1128 |
| Docket Number | Case No: A2/2013/3730 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 2014 |
[2014] EWCA Civ 1128
Lady Justice Arden
Lord Justice Christopher Clarke
and
Mr Justice Barling
Case No: A2/2013/3730
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT QUEENS BENCH DIVISION
MR JUSTICE TUGENDHAT
Royal Courts of Justice
Strand, London, WC2A 2LL
David Mayall (instructed by Morton Law) for the Appellant
David Hirst (instructed by Pinder Reaux Solicitors) for the Respondent
Hearing date: 9 th July 2014
The problem
A company (C) dismisses its employee D. D brings a claim for unfair dismissal. D gives disclosure, as ordered by the employment tribunal, of various documents. These include a USB stick which has on it copies of some of C's highly confidential documents. C's staff recognise the documents for what they are. C brings proceedings in the High Court against D claiming an order for delivery up of its documents or copies thereof, deletion of the confidential documents from D's computer or other electronic device, injunctive relief and damages. C makes no application for permission to use the documents disclosed in the tribunal proceedings in support of its claim in the High Court.
The Court orders D, then unrepresented, (i) to deliver up any of the confidential documents that are in his possession save any held on an electronic storage medium and (ii) to delete any that are on his computer or other electronic device. It also makes a disclosure order and grants injunctive relief until the trial preventing, inter alia, use or copying of any confidential information of C and orders D to pay the costs of the application. D complies with the order.
Two months later D, now advised by solicitors, applies to strike out the entire action on the grounds that the proceedings amount to an abuse and a contempt because they were based on D's disclosure in the tribunal proceedings so that the claim was commenced in breach of CPR 31.22. What should the court do?
The answer to this question given by Tugendhat J was that the Court should, as he did, strike out the action as an abuse; revoke the order for D to pay C the costs of the application; and order C to pay D his costs of the application which were agreed at £ 26,089.35. The question in this appeal is whether he was right to do so.
The facts
C is IG Index Ltd (hereafter "IG Index"), the appellant. It carries on the business of spread betting in currencies, commodities, shares and other securities. Its clients access the service on line. D is Mr Johannes Cloete (hereafter "Mr Cloete"), the respondent. He was employed by IG Index as a network service engineer in the IT department. He entered into a number of covenants for the protection of confidential information relating to the business of IG Index and the dealings of its clients.
On 1 June 2011 he reported to the head of IG Index's legal department concerns he had over the security of certain data of IG Index. These concerns arose as a result of work he had done on a South African computer server where, according to him, a USB WI-FI network interface had been connected to the server which constituted a security risk. On 23 June 2011 the head of the legal department decided that it was not necessary to take any further action. In October 2011 IG Index took disciplinary action against Mr Cloete on the ground that he had carried out unauthorised work. On 1 March 2012 he reported to IG Index's Information Security Officer further concerns that he had about the security of the South African server.
Before then, on 21 February 2012, Mr Cloete had emailed the Information Commissioner expressing concerns about the security of IG Index's data. On 27 February 2012 he made hard copies of a number of documents ("the Confidential Documents") which he sent to the Information Commissioner's Office (ICO) as evidence of security breaches. These documents were described as follows:
i) a client list relating to IG Index's South African office;
ii) a list of its prospective clients;
iii) a list of its clients' bank payment details;
iv) a list of its broker/client list for South Africa.
As is apparent from the description the material was highly confidential. IG Index says that it has not been able to establish how Mr Cloete got copies of this database without triggering a security system alert and that he did not have any justifiable reason to copy the Confidential Documents.
Mr Cloete was dismissed by IG Index with effect from 3 July 2012. On 2 October 2012 he brought a claim for unfair dismissal.
On 17 December 2012 Mr Cloete made a request to the ICO to be provided with any personal information the ICO held about him and, in particular, correspondence with the ICO sent from his email address and by post. This was treated by the ICO as a " subject access request" made under the Data Protection Act 1998.
On 18 January 2013 the ICO sent Mr Cloete an email which contained 8 TIF attachments. One of them was the report which had been made by Mr Cloete in February accompanying the Confidential Documents. 5 of the attachments consisted of the Confidential Documents which had to be subdivided on account of their size. The email informed him that a letter from IG Group dated 14 December 2012, which was also attached, had been redacted on account of the fact that it contained some information which was confidential to them. All that was being disclosed were the elements of that letter which were Mr Cloete's personal data. That letter had been IG Index's explanation of what had happened, which identified a number of individuals.
The effect of this was that, after his dismissal, Mr Cloete secured possession of copies (in the form of TIF attachments) of the Confidential Documents copies of which he had himself sent to ICO. Whilst the despatch of copies to the ICO may have been legitimate (and is not what IG Index complains of), the retention of copies for the purposes of the employment tribunal proceedings would not be; although in due course Mr Cloete would be entitled to receive (as he did) redacted copies of these documents by way of disclosure by IG Index which he would be at liberty to use for the purpose of the proceedings.
On 10 July 2013 (although the letter is dated 10 June 2013) the employment tribunal directed the parties to fix a time and place for the exchange of documents within 7 days. On 15 July 2013 IG Index delivered their list of documents to Mr Cloete together with copies of the documents (redacted in relation to confidential details). Mr Cloete delivered to IG Index a USB memory stick containing copies of the Confidential Documents.
On 24 July 2013 IG Index wrote to Mr Cloete expressing extreme concern at finding on the USB stick documents containing sensitive and confidential information belonging to IG Index and relating to IG Index and its clients including the Confidential Documents. The letter required, inter alia, the return of any originals or copies of the Confidential Documents and requested undertakings. It expressed the view that Mr Cloete would not have had access to this information in the normal course of employment. The letter is said by Mr Cloete not to have reached him because he had changed address. It was, however, said to have been sent to the same email address as had been used to communicate with Mr Cloete in relation to the tribunal proceedings.
On 2 August 2013 IG Index wrote to the employment tribunal asking to be allowed to amend its response to Mr Cloete's unfair dismissal claim so as to include a reference to his having copied and retained the Confidential Documents.
On 7 August 2013 IG Index PLC began proceedings in the High Court against Mr Cloete by the issue of a claim form seeking (a) delivery up of all documents that were the property of IG Index or contained confidential information belonging to IG Index or copies thereof, and particularly the Confidential Documents or copies thereof; b) permanent deletion of the Confidential Documents from D's computer or other electronic device; (c) injunctive relief; and (d) damages.
On 15 August 2013 Singh J made the order summarised in paragraph 2 above. Mr Cloete was unrepresented. The judge was satisfied (i) that there was a well arguable case in favour of IG Index and a serious issue to be tried; (ii) that damages would not afford it an adequate remedy, whereas they would be an adequate remedy to Mr Cloete, and (iii) that the balance of convenience lay firmly in favour of IG Index who had an " obvious and pressing interest" to retain confidentiality for example with third party clients. Such legitimate interest as Mr Cloete had in the documents, namely to use them in the employment tribunal, would be preserved by an exception in the order which permitted any disclosure required by a court of law or a regulatory body and for the purposes of taking legal advice or, to IG Index, or his legal representatives, in connection with the tribunal proceedings.
No reference was made by counsel or the judge to CPR 31.
In a witness statement dated 27 August 2013 Mr Cloete confirmed (a) that the only copies of the Confidential Documents (referred to in the order of Singh J as "the Listed Items") which had been sent to ICO were those sent by post on 27 February 2012; and (ii) that he had deleted all electronic copies of the Confidential Documents irretrievably and that he retained no copies of them in his possession. He also paid the costs of the application in the sum of £ 2,500.
Thereafter Mr Cloete secured legal...
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