Murray v Turcan Connell WS

JurisdictionScotland
JudgeLord Brailsford
Judgment Date07 March 2019
Neutral Citation[2019] CSOH 21
Date07 March 2019
CourtCourt of Session (Outer House)
Docket NumberNo 25

[2019] CSOH 21

Outer House

Lord Brailsford

No 25
Murray
and
Turcan Connell WS
Cases referred to:

Bolkiah (Prince Jefri) v KPMG (A Firm) [1999] 2 AC 222; [1999] 2 WLR 215; [1999] 1 All ER 517; [1999] 1 BCLC 1; [1999] CLC 175; [1999] PNLR 220

Ecclesiastical Insurance Office plc v Whitehouse-Grant-Christ [2017] CSIH 33; 2017 SC 684; 2017 SLT 697

Georgian American Alloys Inc v White and Case LLP [2014] EWHC 94; [2014] 1 CLC 86

Koch Shipping Inc v Richards Butler (A Firm) [2002] EWCA Civ 1280; [2002] 2 All ER (Comm) 957; [2003] CP Rep 10; [2002] Lloyd's Rep PN 604; [2003] PNLR 11

Marks and Spencer plc v Freshfields Bruckhaus Deringer LLP [2004] EWCA Civ 741; [2005] PNLR 4

Administration of justice — Solicitors — Divorce — Partners of husband's solicitors firm previously advising wife in respect of prenuptial agreement and other private client matters — Whether conflict of interest barring husband's solicitors firm from acting in divorce

Kae Alexandra Tinto or Murray petitioned the Court of Session for interdict against a firm of solicitors from acting in divorce proceedings raised by her against her husband. A hearing on the petition and answers took place, on 2 November 2018, when the court considered the issue of confidentiality. The hearing was adjourned to enable the respondent to provide further information and a further by order hearing took place, on 30 November 2018.

In May 2018, the petitioner instigated divorce proceedings against her husband whom she married in 2011. The respondent had acted for the husband in the negotiation and preparation of a prenuptial agreement. The petitioner had been represented in connection with that agreement by a solicitor, Noel Ferry, in another firm. Mr Ferry subsequently joined the respondent in 2013 and became a partner from April 2015. The petitioner also was advised during the marriage, by another partner of the respondent, Peter Littlefield, in relation to trust and tax matters. In the divorce proceedings, the petitioner sought to set aside the prenuptial agreement. The respondent represented the husband in those proceedings. The petitioner sought interdict against the respondent so acting.

The petitioner argued that the respondent possessed information confidential to her, in the form of the knowledge retained by Mr Ferry from his involvement in the preparation and negotiation of the prenuptial agreement, and files compiled by Mr Littlefield when giving private client advice, electronic copies of which were retained by the firm. All of the information contained in Mr Littlefield's files was said to constitute material which might be relevant in the divorce proceedings, knowledge of which was potentially prejudicial to the petitioner's interests.

The respondent argued that an undertaking by Mr Ferry not to disclose any retained information was sufficient to eliminate any risk which might exist. The material contained in Mr Littlefield's files was of a general nature, and some of which would be public knowledge or within the knowledge of her husband. In any event, the petitioner would be obliged to disclose most of the material in the divorce proceedings. Even if some of the material were to be regarded as confidential, the respondent had put sufficient protections in place to obviate any risk of disclosure.

Held that: (1) the court had an inherent power to regulate the conduct of officers of court, such as solicitors, which could be exercised where a fair-minded person would conclude that an officer of court should be prevented from acting in order to protect the integrity of the judicial process and the due administration of justice, including the appearance of justice, and the court required to intervene when there was a real risk that relevant confidential information might come into the hands of a person with an interest adverse to that of the applicant (paras 38, 39); (2) the court would take a strict approach to the operation of its inherent power in such circumstances in order to ensure that solicitors did not disclose inadvertently, or otherwise, information confidential to a client or former client which might result in prejudice to them (para 52); (3) where a firm of solicitors wished to act for a party with an interest adverse to that of a former client, and where they held information confidential to the former client, an adequate and effective information barrier had to exist to protect the former client's position, and ad hoc arrangements were unlikely to be as robust as permanent arrangements which operated automatically, and were already in operation when a conflict emerged (para 51); (4) a conflict, or potential conflict, should have been obvious to the respondent from the date of service of the divorce summons against a continuing client of the firm (para 51); (5) Mr Littlefield's files contained information such that any reader would gain a reasonable understanding of the petitioner's finances, which would be of advantage to the other party in settlement negotiations for a divorce action (para 42); (6) Mr Ferry's undertaking regarding the information retained in his memory was satisfactory and sufficient to eliminate any risk of disclosure by him, the force of which was strengthened by his status as an officer of the court (para 45); (7) it had not been shown that the risk of disclosure of information from Mr Littlefield's files had been reduced to an acceptable level (paras 46–48, 50, 51); and interdict granted as craved.

Ecclesiastical Insurance Office plc v Whitehouse-Grant-Christ 2017 SC 684 followed and Prince Jefri Bolkiah v KPMG (A Firm)[1999] 2 AC 222applied.

At advising, on 7 March 2019—

Lord Brailsford— [1] The petitioner seeks to interdict a firm of solicitors, Turcan Connell (‘TC’), from acting in divorce proceedings she has raised against her husband, Sir David Murray (‘SDM’).

Background

[2] The background to this petition can be stated briefly. The petitioner and SDM were married in 2011. Prior to their marriage they entered into a prenuptial agreement regulating financial affairs in the event of the marriage terminating in divorce. TC are a Scottish firm of solicitors specialising in private client work. They were formed in 1997 and since that time had acted on behalf of SDM in connection with his private affairs. They acted for SDM in the negotiation and preparation of the prenuptial agreement. The petitioner was represented in the negotiation and preparation of the prenuptial agreement by a solicitor, Noel Ferry, then head of family law in another firm of solicitors, Maclay, Murray and Spens. In 2013 Mr Ferry joined TC initially as a senior associate and from April 2015 as a partner working in that firm's Glasgow office in the field of family law. Since joining TC Mr Ferry has not acted for nor had any dealings with the petitioner. Since her marriage to SDM the petitioner has on a number of occasions instructed and obtained advice from another partner of TC, Peter Littlefield. Mr Littlefield is a partner dealing primarily with trust and tax matters for private clients. It was in this area of expertise that the petitioner sought the advice of Mr Littlefield. On 22 March 2018 the petitioner and SDM separated. The petitioner instigated divorce proceedings in this court against SDM by summons signeted on 22 May 2018. The petitioner was represented in the divorce proceedings by a firm of solicitors specialising in family law, SKO. Defences were lodged on behalf of SDM on 19 June. He was represented by TC. In the divorce proceedings the petitioner seeks to set aside the prenuptial agreement and, further, makes financial claims both in relation to capital and aliment. That action proceeded uneventfully throughout the summer of 2018. By interlocutor of 12 July a proof date was fixed for 5 February 2019 and seven subsequent days. At a scheduled by order case management hearing on 11 September the petitioner raised the issue of potential disclosure of information confidential to her by TC. On 14 September the petitioner sought to introduce by way of minute the contention that it was inappropriate for TC to continue to act in the divorce. The minute, as a step in the divorce proceedings, was directed at SDM albeit that it was formally intimated to TC for any interest they may have. I declined to allow the minute to be received on grounds of competency. Subsequently the present petition was presented on 18 September.

[3] The petition raises issue of the appropriateness of TC continuing to act in the divorce proceedings when they are contended to possess information confidential to the petitioner. The information claimed to be confidential falls into two broad categories. First, information in the nature of ‘retained knowledge’, that is information for which there are no documents but which depends on the memory of a person. In the circumstances of the present matter the petitioner contends that Mr Ferry has retained knowledge in relation to the petitioner's affairs arising from his involvement on her behalf, albeit when employed by a different firm of solicitors, in the preparation and negotiation of the prenuptial agreement. The second category is information of a confidential nature said to be contained in two files compiled by Mr Littlefield when giving private client advice to the petitioner during the tenure of her marriage. It is to be noted that although the hard copies of these files were passed by TC to SKO in implement of a mandate in June 2018, TC retain within their information technology (‘IT’) system electronic copies of the files.

[4] Procedurally, as a result of concerns expressed by the petitioner, an arrangement was made, with the approval of the court, to allow counsel instructed on behalf of TC and a named partner of that firm to consider the two files said to contain information confidential to the petitioner. The partner permitted to have access to the files had no previous involvement in the...

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