Ocado Group Plc & Anor v McKeeve

THE FACTS

The Applicants, together “Ocado”, are involved in a dispute with – amongst others – Mr Jonathan Faiman and his business, Project Today Holdings Limited (“Today”). On 3 July 2019, having discovered evidence of a conspiracy to misappropriate and misuse

Such an order – the “Search Order” – was granted ex parte by Fancourt J on 3 July 2019. There have been a number of subsequent inter partes hearings concerning the Search Order, but it is not necessary to describe these for purposes of this Judgment.

The Search Order was executed on 4 July 2019 on Mr Faiman by the independent supervising solicitor, as required by the Court. Upon being served with the Search Order, Mr Faiman contacted the Respondent to the present application, Mr Raymond McKeeve. Mr McKeeve was at all material times a partner at Jones Day LLP. Mr McKeeve spoke to both Mr Faiman and to the supervising solicitor.

Very shortly after this call, Mr McKeeve contacted the infrastructure architect – that is, the person responsible for information technology or IT – at Today, a Mr Martin Henery. Mr McKeeve contacted Mr Henery using a specialist private messaging system called “3CX”. This is, as I understand it, an application or “app” permitting voice over internet communications and messaging. The message sent read (according to Mr McKeeve) “burn it”; (Footnote: ²) according to Mr Henery, the message said “burn all”.³

There may have been subsequent communications to the same effect. (Footnote: ³) In any event, Mr Henery deleted or caused to be deleted the 3CX app and the messages on it, as well as several email accounts. Although the email accounts were digitally recovered, the 3CX messages were irretrievably destroyed. That is why there is a degree of controversy about exactly what Mr McKeeve told Mr Henery to do and – as will be seen – considerable controversy about the content of the deleted messages.

THE TERMS OF THE SEARCH ORDER

The Search Order is in largely standard form. Paragraph 7 provides:

“The Respondents and any Controller of Access must permit the Supervising Solicitor, the Independent Computer Specialist and the Applicants’ Solicitors identified in Schedule A to this order (together “the Search Party”) to:

(a)

enter the Premises;

(b)

access any containers within the Premises such as (without limitation) safes, boxes, briefcases and suitcases (“Containers”); and

(c)

access any electronic data storage devices at or accessible from the Premises, such as (without limitation) computers, tablets, PDAs, mobile telephones, server data (including fileshares and email), backup media (whether cloud-based, hard drive or tapes), USB storage devices, cloud-based IT Systems (including fileshares and email), online storage/data sharing platofrms such as (without limitation) Dropbox and webbased email accounts (not including anything which is the property of the Connaught Hotel, but otherwise irrespective of whether such items are the property of the Respondents or not) (“the Electronic Data Storage Devices”),

so that they can search for, inspect, photograph, electronically copy or photocopy, and deliver into the safekeeping of the Applicants’ Solicitors all the documents and articles which are listed in Schedule C to this order (“Listed Items”) or which the Supervising Solicitor believes to be Listed Items.”

The Listed Items in Schedule 3 all relate to Ocado’s confidential information: it is unnecessary, for present purposes, to set out the definition of Listed Items in any greater detail in this Judgment.

THE APPLICATION

This is an application for permission to make a committal application in respect of Mr McKeeve made pursuant to CPR Part 81.14. The application is thus for committal for interference with the due administration of justice, and the contempt alleged is a criminal contempt. (Had the Search Order been directed to Mr McKeeve as a party, doubtless Ocado would have considered proceedings under Part II of CPR Part 81, which would have been a civil contempt.)

Applications under CPR Part 81.14 must be made under CPR Part 8 (which the present application is) and include or be accompanied by:

In this case, the application comprises the Part 8 claim form itself, supported by an affidavit of Mr James Libson (“Libson 1”), a partner in the firm of Mishcon de Reya LLP, the solicitors retained by Ocado.

The CPR Part 8 claim form contains a penal notice, followed by the following details of claim:

“As set out in the Affidavit of Mr James Lewis Libson dated 24 September 2019, on 3 July 2019, the Claimants obtained a search and preservation of evidence order from Mr Justice Fancourt against Mr Jonathan Faiman, Project Today Holdings Limited (“Today”) and Mr Jonathan Hillary (the “Search Order”).

On 4 July 2019, having been informed of the Search Order and the search being executed thereunder of Mr Faiman, the Defendant contacted Mr Martin Henery of Today and instructed him to delete communications between inter alia Mr Faiman, Mr Hillary and the Defendant. Mr Henery acted upon the instructions given to him by the Defendant.

The Claimants subsequently issued a claim against Mr Faiman, Today and Mr Hillary with claim number BL-2019-001252 (the “Underlying Claim”). As the contempt set out below was in connection with the Underlying Claim, the Claimants rely on documents and evidence from that claim.

The Claimants seek:

(a)

permission to make and pursue a committal application against the Defendant; and

(b)

to the extent necessary, permission to rely in these proceedings on documents disclosed, and Affidavits sworn, in the Underlying Claim.

…

PARTICULARS OF CONTEMPT

In the circumstances summarised above and set out in the Affidavit of James Lewis Libson, the Defendant intentionally interfered with the due administration of justice by:

1.

Intentionally causing the destruction of documentary material which is of relevance to the claim by the Claimants against Mr Faiman, Today and Mr Hillary.

2.

Intentionally causing destruction of documentary material which is of relevance to a potential claim by the Claimants against the Defendant.

3.

Intentionally causing the destruction of documents which constituted a “Listed Item” within Schedule C of the Search Order.

4.

Intentionally causing the destruction of information which constituted “confidential information” within Schedule C of the Search Order.”

PERMISSION UNDER CPR PART 31.22(1)(b)

Ocado was, quite properly, concerned that the present CPR Part 8 claim constituted proceedings separate and distinct from the Underlying Proceedings (i.e. “collateral”). Accordingly, Ocado sought permission (for both Ocado and Mr McKeeve) to use such material pursuant to CPR Part 31.22(1)(b).

The parties suggested that an order pursuant to CPR Part 31.22(1)(b) was not necessary because the present CPR Part 8 claim could not be regarded as “collateral” to the Underlying Proceedings, and that use of the documents in the Underlying Proceedings in these proceedings was for the purpose of the Underlying Proceedings.

In support of this proposition, the parties relied upon the decision of the Court of Appeal in Dadourian Group International Inc v. Simms (No 2), (Footnote: ⁴) which itself refers to the decision of the House of Lords in Crest Homes plc v Marks,⁶ where Lord Oliver stated:

“My Lords, although I have, for my part, found the appellants’ arguments less than convincing, they can and do fairly say that it is not for them to advance reasons why the implied undertaking should not be released but rather for the respondents to demonstrate cogent and persuasive reasons why it should be released. To that I now turn. Mr Henderson, on behalf of the respondents, whilst accepting the importance, as a matter of general policy, of preserving the integrity of undertakings given to the court as the price of discovery, submits that there is an equally important countervailing consideration of public policy that orders of the court should be obeyed. I accept that, but if what was in issue here was the revelation of a civil contempt in some wholly unrelated proceeding I would not for my part consider that the importance of ensuring obedience to the court’s orders outweighed that of ensuring the continued observance of an undertaking given to the court by the party obtaining discovery. Your Lordships have been referred to a number of reported cases in which application has been made for the use of documents obtained under Anton Piller orders or on general discovery for the purpose of proceedings other than those in which the order was made. Examples were Halcon International Inc v. Shell Transport and Trading Co, [1979] RPC 97 and Sybron Corporation v. Barclays Bank plc, [1985] Ch 299. I do not, for my part, think that it would be helpful to review these authorities for they are no more than examples and they illustrate no general principle beyond this, that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery. As Nourse LJ observed in the course of his judgment in the instant case…each case must turn on its own individual facts. In the instant case, the determinative point to my mind is that it is purely adventitious that there happened to be two actions. That has been brought about partly by purely technical considerations and partly, as Crest allege, by the appellants’ failure to make full and frank disclosure under the 1984 order, and the fact that the parties to the two actions are not identical is quite immaterial. The cause of action is the same in each and the first and second appellants are defendants in both. The remaining defendants could equally well have been joined as defendants in a single set of proceedings. Thus it is a pure technicality that the 1985 order happens to have been made in proceedings other than those in which Crest seek to move to enforce the undertakings. It has been submitted that proceedings for contempt of court are always to be regarded, for the purpose of the implied undertaking on discovery, as “collateral” to the action in which they are launched, so that even if the 1985 order had been made in the 1984 action it would still have been necessary to seek the leave of the court to use the material thus discovered for the purposes of the motion for contempt in that action. My Lords, I find myself quite unable to accept that submission. The proper policing and enforcement or observance of orders made and undertakings given to the court in an action are, in my judgment, as much an integral part of the action as any other step taken by a plaintiff in the proper prosecution of his claim. The normal procedure where the contempt complained of is that of a party to the action is to apply for committal by motion in that action as an incidental step in the action. There is, in my judgment, nothing “collateral” or “alien” about enforcement of the court’s order in the action in which discovery is obtained and I do not entertain any doubt at all that documents disclosed on discovery in the action can perfectly properly be used for the purpose of taking such a step without in any way infringing the implied undertaking and without the necessity of obtaining the prior leave of the court.”

It seems to me that Lord Oliver was not going so far as to say that where, as here, separate proceedings have had to be commenced because the alleged contemnor was not party to the original proceedings in which the order giving rise to the alleged contempt was made, those separate proceedings are (without more) to be regarded as incidental to or the same as the original proceedings and not collateral. Rather, Lord Oliver was saying that where the separate proceedings constitute an application for committal relating to an order made in other proceedings, the court should not be slow in releasing a party from its implied undertaking. He was not saying that the implied undertaking did not have to be released.

In these circumstances, it seems to me entirely right that Ocado made the application under CPR Part 31.22(1)(b). It is also right that, on the facts of this case, the application be granted. Here, the allegation is that a critical order in the Court’s armory was wilfully flouted by a third party to the Underlying Proceedings. There was no choice but for Ocado to commence separate proceedings, and it is obviously necessary that both parties have access to the documents in the Underlying Proceedings for the purposes of this application, which is a not unimportant one: the Court necessarily attaches great weight to the due execution of search orders like the present.

ELEMENTS OF CRIMINAL CONTEMPT

As I have noted, the present application is for committal for interference with the due administration of justice, and the contempt alleged is a criminal one.

There was little (albeit some) difference between the parties as to the relevant principles to be applied. Essentially, to establish the contempt, it must be shown that the respondent, the alleged contemnor, had:

The burden of proving these elements is (i) on the applicant and (ii) to the criminal standard. Although, of course, we are only at the permission stage, the court must have well in mind the question of whether these elements can, in due course, properly be satisfied.

Here, there was a difference between the parties as to the standard to be applied when considering an application for permission to make a committal application. Mr McKeeve contended that a strongprima facie case was required, whereas Ocado contended that it must show at least a prima facie case. The distinction, and the reason for it, was considered by the Court of Appeal in Solicitor General v. Holmes. (Footnote: ⁵) Coulson LJ articulated the following points:

I can see the force in this reasoning and, although the reasoning in Holmes is strictly obiter, (Footnote: ¹⁰)at least a prima facie case is the standard that I propose to apply here.

In addition to being satisfied that there is a prima face case, I must be satisfied that it is in the public interest that an application to commit should be made.

Both elements – prima facie case and the public interest – can be broken down into other factors, which tend to overlap. (Footnote: ¹¹) In this case, Mr McKeeve contended that Ocado had failed to demonstrate a prima facie case both as regards the actus reus and mens rea for the contempts alleged. He also contended that the public interest requirement was not satisfied. I shall consider these three points in turn.

ACTUS REUS AND MENS REA

The problem faced by Ocado is that each of the particulars of contempt alleged makes very specific averments regarding the content of the material deleted or caused to be deleted by Mr Henery at the instance of Mr McKeeve. I set out below the four grounds of contempt averred, highlighting the assertions being made:

Thus, as part of the actus reus, it is averred that material of a specific sort was destroyed. Yet it is extremely difficult to see how Ocado could make good this very specific averment:

In these circumstances, it is difficult to see how – beyond a hope that Mr McKeeve’s evidence will be disbelieved in the witness box – Ocado can improve their case against Mr McKeeve. The problem is that Ocado has assumed the burden of showing that specific types of document were destroyed, when evidence regarding these documents is going to be hard to adduce, and when the inference that such documents did in fact exist is both fragile and disputed. It may be that the evidence in the Underlying Proceedings will improve the case, but I do not consider that I can factor so speculative a point into my consideration, and I do not do so.

These weaknesses feed into the mens rea allegations. Clearly, Ocado must make good not merely that Mr McKeeve’s actions in fact resulted in the destruction of the types of document alleged in the particulars of contempt, but also that Mr McKeeve intended to thwart the operation of the Search Order in this way. For the reasons already articulated, this case is both fragile and disputed:

For these reasons, I consider that the grounds of contempt do not disclose a prima facie case, and that for this reason alone I should refuse the application.

THE PUBLIC INTEREST REQUIREMENT

I do not consider that it would be appropriate to consider this requirement further. It is obvious that the public interest is coloured by the requirement that there be a prima facie case. Had I been persuaded that there was a prima facie case, then it is likely that I would have considered that ensuring that the search order regime is upheld and respected would have rendered this application in the public interest. However, I do not consider that it is either appropriate or necessary to consider in any detail the points made in relation to the public interest requirement where I have found the requirement of a prima facie case not to be satisfied.

CONCLUSION

It follows that the application must be refused.

In the course of submissions, two other points were raised, which I consider it appropriate briefly to address: