Anglia Research Services Ltd & Anor v Finders Genealogists Ltd & Anor

Introduction

Background and Chronology

This application, and the existing and proposed claims to which it relates, arise from in the context of a history of disputes between two commercial rivals in the highly specialised and competitive business of “heir hunting”. This business, which has become widely known as the result of a recent television series, consists in essence of tracing the heirs to unclaimed estates which would otherwise be forfeit to the Crown as bona vacantia. Having traced the deceased’s next of kin, the “heir hunter” enters into an agreement with them to secure them the estate in return for a commission, generally a percentage of the amount recovered. The 1^st Claimant company is one such business; its principal is Mr Peter Turvey, and the 2^nd Claimant is his son Philip who is also a director of C1. The 1^st Defendant is a rival company, and its principal is the 2^nd Defendant Mr Daniel Curran.

It is important to make clear at the outset that this is simply a disclosure application, made at the earliest stage of proceedings. To decide it, it is necessary to understand the Claimants’ case, that is what allegations they are making against the Defendants and whether the disclosure sought is relevant to that case. It is not necessary, and would indeed be inappropriate, for the Court to reach any final decision at this stage as to the underlying merits of the Claimants’ case. The Defendants dispute that case to a substantial extent, and make counter-allegations of their own. The evidence on each side has gone further into the merits than I consider to be warranted on a disclosure application; but in this judgment I shall attempt to confine myself strictly to the questions before me. With that proviso, the sequence of events according to the Claimants is as follows.

Starting in July 2014, an anonymous Twitter campaign was pursued, first against Peter Turvey and then against C2, in each case under the disparaging name of “Purvey”. A Norwich Pharmacal application for third party disclosure later indicated that these Twitter accounts had been created by an employee of D1.

One aspect of C1’s business is that it not only locates the heirs but provides probate and administration services to realise the assets of the estate. In one such case, it became involved in removing squatters from a property in Charlton. In November 2014, the Claimants became aware that one of the squatters had published material defamatory of the Claimants on the petition website Change.org and on YouTube. The Claimants succeeded in having that material taken down from those websites. It is not suggested that the Defendants were involved in the initial preparation or publication of that petition. However, according to the results of further Norwich Pharmacal applications, D2 was later responsible for pseudonymous postings on the well-respected Which? website which gave a link to the defamatory petition, and also for a defamatory posting on Change.org’s own website. And a similar posting on the equally respected Money Saving Expert website, linking C1 to the Change.org petition, may have been made by an alleged agent of the Defendants (though the Defendants contend that he is independent of them).

On 31 July 2015 the Claimants’ solicitors sent a letter before action to D2. The Defendants’ solicitors replied on 14 August 2015. They admitted the authorship of the various items referred to above, but denied that these gave rise to actionable claims against their clients. They made a series of counter-allegations against the Claimants and Mr Turvey senior. But they stated that their clients had “little interest in adopting aliases to refer to your clients online and do not intend to do so in future”.

On 26 August 2015 an employee of D1 sent an email to a prospective client of C1, which named C2 and attached a PDF file containing much of the defamatory Change.org petition (which had by then been taken down from the Internet). When this email came to the Claimants’ attention, it appeared to them to be consistent with information provided to them earlier, in the course of a telephone conversation between their staff and another client on 3 June 2015. The transcript of that conversation records the client saying that somebody who he thought was “Bona Vacantia” but wasn’t had given him some adverse comments about Anglia. The adverse comments were plainly derived from the Change.org petition, and the reference to “Bona Vacantia” appeared to relate to a website under that name operated by D1.

These two incidents (and a third referred to at 3.5 below) suggested to the Claimants that despite their solicitors’ letter before action the Defendants were continuing to pursue a campaign of defaming and harassing them by bringing the contents of the Change.org petition to the attention of prospective clients. On that basis the Claimants prepared and issued the present application for pre-action disclosure.

The Claimants’ Application

The application is for pre-action disclosure under CPR 31.16 / s. 33 Senior Courts Act 1981 of all documents (within the meaning of CPR 31.4) in the Defendants’ possession or control in the following classes:

The application included a draft minute of order somewhat amplifying the above classes, making clear that what is sought includes all emails, letters, word-processed documents and drafts thereof which attach or refer to the PDF file or the URL and their contents.

The application was supported by a Witness Statement of C2, setting out more fully the background summarised at (2) above, and stating at para. 29 his belief that the email of 26 August 2015 “represents merely the tip of the iceberg in terms of the Respondents’ use of the defamatory Change.org petition as a means of defaming me and Anglia’s business”. At para. 40 he anticipated the legal arguments to be considered below by stating:

The Defendants responded with a Witness Statement of D2 dated 8 December 2015, which like their earlier solicitors’ letter went into some detail about earlier occasions when (it alleged) the Claimants had misconducted themselves towards the Defendants. On the specific question of the retention and use (if any) made of the URL and PDF material sought to be disclosed, the Witness Statement said little except at paras 46 to 48. Mr Curran said that he had been sent a copy of the petition material in the post and had saved it as a PDF, not for marketing but because he liked to “keep an eye on things which are being said” about his firm and its competitors. He accepted that the 26 August 2015 email should not have been sent (but gave no explanation as to how it had happened). He had apologised and given an undertaking not to do so again, and he stated that there had been no similar incidents since. But he was silent as to whether there had been any similar publications earlier, or as to what material was still retained by the Defendants.

Following the first hearing on 11 December 2015, the Claimants’ solicitor Mr Garner filed a Witness Statement dated 15 December 2015 in which he exhibited evidence of a further alleged incident in late June/early July 2015 when an employee of D1 had apparently telephoned a client who had moved from D1 to C1 and said she would send the client a “package” containing evidence of C1’s wrongdoings and shoddy work (though no such package was in fact sent). This incident had been referred to in correspondence, but not included in the original evidence in support of the application. The Claimants invite the inference that the package would have included the Change.org material.

The Pre-Action Disclosure Jurisdiction

The starting point is s. 33(2) of the Senior Courts Act 1981, headed Powers of High Court exercisable before commencement of action, which provides as follows:

“(2)

On the application, in accordance with rules of court, of a person who appears to the High Court to be likely to be a party to subsequent proceedings in that court, the High Court shall, in such circumstances as may be specified in the rules, have power to order a person who appears likely to be a party to the proceedings and to be likely to have or to have had in his possession, custody or power any documents which are relevant to an issue arising or likely to arise out of that claim:-

a.

to disclose whether those documents are in his possession, custody or power; and

b.

to produce such of those documents as are in his possession custody or power to the applicant or, on such conditions as may be specified in the order, to: (i) the applicant’s legal advisers…”

The relevant rule made pursuant to s.33 (2) is CPR 31.16, which so far as is material reads as follows:

“31.16

Disclosure before proceedings start

1.

This rule applies where an application is made to the court under any Act for disclosure before proceedings have started.

2.

The application must be supported by evidence.

3.

The court may make an order under this rule only where –

a.

the respondent is likely to be a party to subsequent proceedings;

b.

the applicant is also likely to be a party to those proceedings;

c.

if proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and

d.

disclosure before proceedings have started is desirable in order to –

i.

dispose fairly of the anticipated proceedings;

ii.

assist the dispute to be resolved without proceedings; or

iii.

save costs.”

The Existing Proceedings

The terms of the Act and the rule make it clear that they are directed to disclosure in circumstances where proceedings have not yet been commenced. As above stated, in this case a set of proceedings, between the same parties and relating to at least some of the same subject matter as the application, had been issued one day after the application itself was issued and about two weeks before it was heard. Whether that fact is a bar to this court’s jurisdiction to hear and determine the disclosure application may depend in large part on the precise scope and nature of that set of proceedings.

The claim form is endorsed as follows:

“Brief details of claim

The Claimants claim:

(1)

Damages (including aggravated damages in respect of the Second Claimant) for libel in respect of words published by the Defendants in respect of the publications set out in the attached Schedule to this Claim Form

(2)

An injunction to restrain the Defendants, whether by themselves or their servants or agents or otherwise howsoever from publishing, causing, or authorising to be published the words complained of, or any other words to the same or any similar defamatory effect in respect of the Claimants

(3)

Relief under s.12 of the Defamation Act 2013 for the Court to order the Defendants to publish a summary of any judgment in the Claimants’ favour

(4)

The Claimants’ costs of the action.

SCHEDULE TO CLAIM FORM

The publications that are the subject of the Claimants’ claim are as follows:

1.

A posting published by or at the instigation of the Defendants on or around 4 December 2014 under the username “DT77” on the website “conversation.which.co.uk” within the conversation thread that accompanied an article entitled “Are heir hunters cheating us out of our inheritance?” at the following URL [stating it]

2.

An automated email notification of the posting identified at (1) above, containing the full text of that posting, which was sent to 22 unique email addresses on or around 4 December 2014

3.

Two postings published by or at the instigation of the Defendants on or around 28 November 2014 under the username “John Davies” at the following URL [as per 3.1(a) above].”

The Claim Form has not yet been formally served, though copies have been provided to the Defendants and the Court for the purposes of the disclosure application. (A draft Claim Form for an anticipated second action was also produced at the resumed disclosure hearing and will be considered below.)

Does the Court have Jurisdiction to grant the Disclosure Order sought?

The leading case on the application of CPR 31.16 is Black v. Sumitomo [2001] EWCA Civ 1819. This establishes that a two-stage approach is called for. First the court should consider whether the specific requirements of the rule and the statute are met, including whether in principle there is a real prospect of a disclosure order being desirable in terms of disposing fairly of the proceedings, or assisting it to be resolved without proceedings, or saving costs. If that preliminary or jurisdictional threshold is passed, then the court will move to the second stage and consider whether on a detailed consideration of all the material facts the jurisdiction should or should not be exercised. The fact that at stage 1 the order may appear “desirable” is not determinative of the manner in which the jurisdiction should be exercised at stage 2. This paragraph and paragraph 7 below are addressed to the stage 1 exercise only.

If no claim form had been issued, then on the basis of the evidence summarised above the jurisdictional questions in this case would be fairly straightforward.

But all of those questions are premised on the proceedings not yet having been issued. How can or should they be approached if apparently relevant proceedings have been issued before the disclosure application is decided? There was little or no decided authority on this problem when the application was first listed. But by the time of the second hearing on 16 December 2015 a Lawtel case-note had appeared of an extempore decision of Morgan J on 10 December 2015 in Personal Management Solutions Ltd v. Gee 7 Group Ltd. (no citation number available) and the parties had helpfully been provided with counsels’ notes of the Judge’s oral ruling.

PMS was an appeal to the Judge from a Master’s decision, refusing to hear an application under CPR 31.16 because proceedings had already been commenced so that no such jurisdiction existed. The Judge dismissed the appeal and explained an earlier line of authority, beginning with Arsenal FC v. Elite Sports [2002] EWHC 3057 (Ch) and thought to authorise such applications post-issue, as having been misinterpreted. Having dealt with the specific question before him, the Judge helpfully went on to state, obiter, his analysis of how CPR 31.16 should be applied in various situations that had been canvassed in argument before him.

In this case, the Claimants have issued proceedings relating to three specific alleged libels published in November and December 2014 (the first action). They do not propose to discontinue those proceedings, but they are contemplating the issue of a second set of proceedings, a draft claim form for which was produced at the second hearing of this application. It includes Mr Turvey senior as a 3^rd Claimant. In summary, it relates to the following causes of action:

Adopting Morgan J’s approach in PMS (above), it is clear that this court now has no jurisdiction to hear a 31.16 application in respect of the causes of action complained of in the first action, because that had been commenced by issue before the application came on for hearing. Two jurisdictional questions arise in respect of the proposed second action:

For the following reasons I do not consider that it would be an abuse of process for the second action to be commenced while the first action was extant:

The next question is whether the 31.16 application relates to the second proceedings as opposed to the first. The original application and the evidence in support were prepared before the first proceedings were issued, and are at many points phrased in such a way as to indicate that they are addressed to pre-action disclosure in contemplation of an action similar to the first proceedings. (This is a matter which may well be important on the question of costs in due course.) But, like the preceding solicitors’ correspondence, they also refer expressly to the proposed claims in harassment which form no part of the first proceedings, and to other defamatory publications such as the 26 August 2015 email which also form no part of the first proceedings.

I bear in mind the overriding objective, and the Court’s obligation to avoid wasteful duplication of proceedings and to identify and resolve the real points of dispute between the parties. I consider that the application as made related to a bundle of potential causes of action, including both those comprised in the issued first action and those contemplated in the proposed second action. In this situation, developing the approach adopted in PMS (above) I conclude that the proper course is for the Court to disregard for the purposes of pre-action disclosure those causes of action which form the subject of the first action, but to accept and so far as appropriate exercise the pre-action disclosure jurisdiction in respect of the additional and separate causes of action contemplated in the second action. (For the avoidance of doubt, if a given fact or matter such as the “John Davies” posting is relied on in both proceedings, but in respect of distinct causes of action, I see no compelling reason to disregard it in respect of disclosure directed towards the second proceedings merely because it has already been sued on in the first proceedings in a different way.)

Are the jurisdictional requirements of CPR 31.16 (3) met?

Having decided that the issuing of the first proceedings is not of itself a bar to the existence of the pre-action disclosure jurisdiction in this case, I return to the three questions set out at 6.2 above, the answers to which will indicate whether or not the Sumitomo stage 1 test has been passed.

First, are the parties to the application likely to be parties to subsequent proceedings? (i.e. the draft second action or proceedings of a similar nature). Given that the first proceedings have already been issued and that the parties are now locked in what has every appearance of a serious and substantial dispute, I have no difficulty in concluding that it is likely that such proceedings will be commenced in the near future unless the dispute can be settled by agreement. I note that unless such proceedings are issued, the defamation limitation period, in respect of the later publications complained of, will expire in the course of 2016.

Second, if such proceedings are commenced, will the documents now sought be discloseable in that action by way of standard disclosure? I remind myself that the test for standard disclosure, as laid down by CPR 31.6, requires a party to disclose (among other categories) documents which adversely affect his own case or support another party’s case. I note that both the defamation and harassment claims in the proposed second action expressly include reference to the circulation by the Defendants to third parties of the Change.org petition, and to injunctive relief against further publication of such material. In these circumstances I am satisfied that if the documents now sought by this application are in the Defendants’ possession or control then they would be discloseable by way of standard disclosure in the proposed second action, both as supporting the Claimants’ case and as adversely affecting the Defendants’ case.

Third, is there a real prospect in principle that pre-action disclosure of those documents at this stage will be desirable in order to dispose fairly of the second action if commenced, or to assist in the dispute being resolved without proceedings, or to save costs? For the purposes of the stage 1 decision, it suffices to say that in the present case, unlike many others, the Claimants are at present uncertain of the nature and extent of the Defendants’ wrongdoing (if any) and the harm it may have caused them. This is because the Defendants’ activities complained of appear, on present evidence, to have been conducted either in public but under pseudonyms, or in private in circumstances where it is a matter of chance whether the other party (typically a prospective client of either business) will bring the communication to the Claimants’ attention. It is therefore a real possibility (to put it no higher at this stage) that early disclosure of documents likely to indicate the extent of publication and damage will contribute to one or more, perhaps all, of the three objectives specified by sub-rule (3) d.

For the above reasons I conclude that the threshold requirements of Sumitomo stage 1 have been passed. The Court does have jurisdiction to make a pre-action disclosure order here (to the extent specified at 6.9 above) and I should now proceed to stage 2, considering the exercise of that discretion in detail and on the basis of all the facts.

The Exercise of Discretion under CPR 31.16

The pre-action disclosure sought is confined relatively narrowly to any documents which contain or refer to the defamatory Change.org petition whether by means of the URL, the PDF file, or some other version of all or part of its contents. The Claimants hope that such disclosure will indicate what use the Defendants have made of that material, what their purpose was in doing so, and what damage to the Claimants and their business may have resulted.

This hope is not merely fanciful. Putting aside disputed matters, D2 accepts that he was responsible for publishing such material or links to it on the Which? website under pseudonyms in December 2014. And the Claimants have produced credible evidence that on three separate occasions known to them in mid-2015 (on 3 June, in late June/early July, and on 26 August) three different employees of D1had contacted three different prospective clients of C1 and made reference to what was or (in one case) is likely to have been the contents of the Change.org petition. This gives rise to a strong prima facie case, which the Defendants have not so far refuted, that the Defendants may well have both retained and made systematic use of the Change.org petition for the purposes of competition with the Claimants.

Those three instances have become known to the Claimants only because in each case the client had some doubts and told them about the allegations. It is a legitimate inference that there may well have been other such instances in which the client did not contact the Claimants, for example because they were persuaded to sign up with the Defendants as a result.

The Defendants point out, correctly, that this is an exceptional jurisdiction. The Claimants have enough material already to commence both the first and indeed the second actions. I have already held that if they do bring the second action they will eventually obtain the material now sought in the ordinary course of standard disclosure. What special need for urgency is there, such that the Court should order pre-action disclosure now?

Looking as I should only at the proposed second action, I give particular weight in this case to the fact that both causes of action, defamation and harassment, have a threshold requirement of seriousness. In defamation it is imposed by statute, s.1 of the Defamation Act 2013, which requires all claimants to prove that they have suffered serious harm to reputation, and trading corporations in addition to prove financial loss as a result. In harassment it derives from the interpretation of the civil provisions of the 1997 Act by the House of Lords in Majrowski v. Guys and St Thomas’s NHS Trust [2006] UKHL 34, in which Lord Nicholls stated at para 30 that to sustain civil liability “…the gravity of the misconduct must be of an order which would sustain criminal liability under s.2”.

In either case, therefore, a person contemplating litigation in respect of a campaign of unknown extent finds themselves in a particularly difficult position. Not merely the value of their claim but the very validity of the cause of action may depend on how serious the campaign and its effects have been. But in the particular circumstances of this case, those are matters difficult if not impossible to assess without the disclosure now sought. It is entirely possible that by misuse of the Change.org petition the Defendants may have secured the business of a client at present unknown to the Claimants, who would otherwise have engaged them, and earned them a substantial commission by reason of the size of the estate. That fact alone might suffice to tilt the “balance of seriousness” in the Claimant’s favour, on an application to strike out or a preliminary issue. Of course, by that stage standard disclosure may well have been given; but the decision whether to sue has to be made now, or (so far as defamation is concerned) within a relatively short period to come.

This consideration engages all three of the sub-rule (3) d. factors. The Defendants already know whether they have the material sought, and if so what it reveals. The Claimants do not. Once both sides are on an equal footing in this respect then:

I have considered whether the proposed order would be unfair or oppressive to the Defendants. I am satisfied that it would not be. The Claimants’ present evidence of a campaign against them is sufficiently strong that they cannot fairly be described as “fishing”. The Defendants will have to give the disclosure anyway if proceedings are commenced, so it is an issue of timing rather than principle. And all that is required by the order sought is a reasonable and proportionate search, likely to be carried out by a fairly straightforward interrogation of the Defendants’ own computers.

For the above reasons my conclusion is that the Claimants have made out a clear and strong case for the exercise of the Court’s discretion to order pre-action disclosure in their favour, and I so order.