Julian Samengo-Turner and Others v J&H Marsh & McLennan (Services) Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rix,Lady Justice Arden,Lord Justice Tuckey,Lord Justice Lloyd |
| Judgment Date | 12 July 2007 |
| Neutral Citation | [2007] EWCA Civ 667,[2007] EWCA Civ 723 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2007/1257 |
| Date | 12 July 2007 |
[2007] EWCA Civ 667
Lord Justice Rix and
Lady Justice Arden
Case No: A3/2007/1257
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JUSTICE DAVID STEEL)
MR G DUNNING QC & MS C BLANCHARD (instructed by Messrs Elborne Mitchell) appeared on behalf of the Appellant.
MR A LENON QC (instructed by Messrs Herbert Smith LLP) appeared on behalf of the Respondent.
The application is brought by the appellants, three employees of a very large insurance broking group, the Marsh & McLennan group. These three employees have given notice to their employers to join a rival outfit, Integro, which is being set up in London. Apparently other employees in their department have also left with the same purpose or have threatened to do so. This has given the employers concern or suspicions that the three senior appellant employees are in breach of their fiduciary or other duties as employees. However, it is fair to say that other than those basic facts and the suspicions to which they have given rise, we have been presented with no hard evidence whatsoever of any wrongdoing. We bear that in mind. These factors have given rise to litigation first in New York beginning in May of this year and secondly here in London. The New York proceedings are brought to enforce the provisions of what I shall refer to as the “bonus contract” and in particular its clause 2E, the co-operation clause, which provides that employees will provide to “the company” such information as they have reasonably been requested to provide, to determine whether they are “in compliance with your obligations under this agreement”. There is also a claim in New York for a return of bonuses paid under that contract. That aspect, however, does not present any emergency difficulties at the moment.
The New York court has made orders to enforce the co-operation clause by way of disclosure of documents; the provision of interrogatories in writing; and the deposition of the three employees. One of them, Mr White, has gone through all those three processes, including deposition. The other two, Mr Samengo-Turner and Mr Hopkins, have provided documentary disclosure and interrogatories but are due to be deposed today and tomorrow here in London. The English proceedings are to enforce what is said to be the mandatory jurisdiction here in London, where the three employees are based, of section 5 of the Judgments Regulation. On 6 June 2007 David Steel J in the Commercial Court decided that issue against the employees. He ruled that the bonus contract upon which the Marsh & McLennan complainants in New York are suing are not contracts of employment. and that the New York complainants are not employers and that therefore section 5 of the Judgments Regulation is not involved.
The employees have applied for permission to appeal that judgment and yesterday on the papers I granted that permission. It is accepted by Mr Andrew Lenon QC, who appears on behalf of the respondent Marsh & McLennan companies, that there is a serious issue to be tried in that appeal on the question of jurisdiction, here or in New York. A question therefore now arises on the balance of convenience, as both parties accept. The determining question is whether, pending the hearing and decision of that appeal in London, this court should issue an interim anti-suit injunction against the complainants in the New York proceedings, in particular in relation to the depositions of the two employees which are due to start today. In that connection the issues which have been debated between Mr Lenon and Mr Graham Dunning QC on behalf of the appellant employees are issues of whether, first, it is too late for such an injunction to be sought because of delay by the appellants since the decision of David Steel J on 6 June, and secondly, whether in the absence of an injunction there would be prejudice to the employees in case they turn out to be right on jurisdiction and alternatively whether there would be prejudice to the company complainants on the other hand if they were to turn out to be right on jurisdiction.
As far as the submission that it is all too late, I do not accept that the appellants have been sitting on their hands. They had an important job to do to provide to the court a sufficiently compelling skeleton argument to earn them permission to appeal. On the other hand, if we are now in the position that we are in, right up against a deadline today, the fact of that situation is one which the appellants had to strive to anticipate. As it is, speaking for myself, I think that this is essentially a neutral factor. I do not accept the argument submitted in writing but not pressed orally that there has been acquiescence on the part of Mr Samengo-Turner and Mr Hopkins in relation to their depositions which should prevent them in limine from raising this application for an interim injunction.
So far as prejudice to the respective parties is concerned, the fact is that there is no evidence before us either that the Marsh & McLennan companies are suffering prejudice through the default of their employees, nor on the other hand that the employees are suffering or are likely to suffer prejudice arising out of the disclosure and deposition obligations imposed upon them by the New York court. That is subject only to an issue of privilege which has been raised before us not as a matter of evidence but as a matter of submission, and that is the possibility that material, whether oral or documentary, may be pressed for in the New York proceedings or depositions which is arguably privileged as a matter of English law. That possibility—and I stress that it is no more than a possibility—has been met by Mr Lenon offering to the court the undertaking not to press any request before the New York court for such disclosure as may arguably be privileged under English law.
Otherwise the argument so far as the employees and prejudice is concerned really comes down to this: it is submitted that the depositions which are ordered would not be within the contractual language, as at any rate interpreted by an English court, of the co-operation clause, and that the ordering of cross-examination by way of deposition would be an unlikely exercise of the English court's discretionary powers; at any rate at this stage and before written requests have been dealt with by written answers. Nevertheless, the fact is that, if the employees have nothing to hide, the depositions, although a nuisance and an undoubted burden and pressure—and I do not omit to consider the possibly unrecoverable financial expenses of these depositions which under the New York court lie at the expense of the employees—nevertheless, if they have nothing to hide, then subject to the point about privilege, this process is essentially harmless. If mandatory jurisdiction is established in England, then it is acknowledged that this court is likely to impose an anti-suit injunction, and it is foreseeable that in such circumstances the employees would not be made to bear the cost of the depositions, should the employees be able to establish that they should not have been required under the co-operation clause to undergo them.
In this connection I bear in mind that Mr White has already gone through his deposition without any complaint being made so far as evidence is concerned. I have mentioned the possibility of privilege and the way that that has been dealt with. I also bear in mind the oral submissions that there may have been questions at Mr White's deposition which could properly be objected to as questions but which the New York judge has nevertheless ordered have to be answered in the first place. The essential point however is that, even subject to those points, there is no evidence before us that Mr White has suffered anything untoward by undergoing his deposition.
On the other hand, and I bear in mind that there is no real evidence of wrongdoing to support the suspicions of the Marsh & McLennan companies, nevertheless if their suspicions of some wrongdoing were justified, then it is possible that in the absence of obtaining the information that they may properly be entitled to obtain under the contractual co-operation clause they could suffer incalculable damage to their business. Such damage, albeit speculative in the terms in which I have put it, is something which these three individuals, even though liable under a cross-undertaking in damages, would not be likely to be able to provide compensation for. It seems to me therefore on the one hand that the depositions which are immediately upon Mr Samengo-Turner and Mr Hopkins, albeit by a process which may go beyond what the English court would order, are nevertheless essentially in performance of their contractual obligations, wherever those obligations have to be litigated, and that if they have done nothing wrong the exercise is essentially harmless, and if they had done something wrong, then it is a necessary process in support of the Marsh & McLennan companies' fears.
On the other hand, on the basis that the Marsh & McLennan companies are entitled to jurisdiction in New York and that there is substance to their fears, then potential damages which they may suffer would be incalculable and essentially uncompensatable by these individuals. It seems to me that upon that basis the balance of convenience is not at this last moment to injunct the taking place of today's depositions. As it is this...
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