Simpkin v The Berkeley Group Holdings Plc

On 1 September 2014 the claimant was asked to resign from his position as Group Finance Director of the Berkeley Group and statutory director of The Berkeley Group Holdings PLC. On 22 and 24 September 2014 the remuneration committee and the board of the defendant company reached decisions, the effect of which was that, on the termination of his employment, the claimant would not be treated as a “good leaver” for the purposes of two Long Term Incentive Plans (“LTIPs”) and a bonus scheme operated by the company. He was removed as director on 8 September 2014 and given notice of termination of his employment on 24 September 2014.

A summary of the background to the case was set out by Mr Justice Foskett in his judgment of 24 June 2016. It is not necessary to repeat that background here. In the order which followed, Foskett J directed that there would be a trial of a preliminary issue and identified the matters that would be addressed in that trial.

On 22 and 24 May 2017 I heard a series of applications by the parties relevant to trial of the preliminary issue. At the conclusion of the hearing on 24 May 2017 I gave an ex tempore judgment on the first and fifth applications. I granted the claimant’s application to strike-out significant passages in the defendant’s witness statements on the grounds that their inclusion was inconsistent with the terms of Foskett J’s Order of 29 June 2016. I also made an order on the defendant’s application for disclosure and inspection of documents produced in the claimant’s divorce proceedings.

That left three applications to be determined. First, the claimant applied for an order restraining the defendant from referring, in its witness statements or elsewhere, to the contents of a document that has been called the claimant’s “Synopsis”. Second, the defendant applied for inspection of two emails, dated 6 August 2014 and 11 August 2014 respectively, which it said were relevant to the claim for privilege in the Synopsis. Third, the claimant applied for inspection of redacted passages of the minutes of the two meetings of 22 and 24 September 2014.

It is also necessary for me to deal with one sub-issue arising out of the application by the claimant to strike-out parts of the defendant’s witness statement. It is convenient to deal with that matter first.

The claimant points out that he has a “whistleblowing” claim in the Employment Tribunal, which has exclusive jurisdiction over such claims. The defendant sought to address the whistleblowing claims in these proceedings in paragraphs 175-216 of the re-amended defence. The defendant’s evidence in reply to that of the claimant sets out in some detail the defendant’s case on those claims.

The whistleblowing allegations in themselves were excluded from the preliminary issue which is to be heard by this court in July. The defendant explains the fact that their evidence addresses this issue by pointing to paragraph 135 of the claimant’s first witness statement. In that paragraph the claimant refers to the allegations which form the subject matter of the Employment Tribunal claim. A summary of those allegations is set out which include allegations of serious financial wrong-doing by some of the defendant’s witnesses. The claimant also made reference to those allegations in paragraph 136 of his first statement and paragraph 35 of his responsive statement.

The defendant argued that the claimant should not have included this material in his witness statement. They say that the second witness statements of Mr Glyn Barker and Sir John Armitt, respond to those allegations with a view to explaining why the claimant’s position as set out in his witness statement is, in this regard, untenable. The defendant says that they have made clear in correspondence that they are prepared not to rely upon those statements if the claimant removes the relevant references from his statement.

The claimant has responded by proposing to remove some of the relevant material, but not all of it.

It is necessary to put this dispute in a little context. In paragraph 134 of his first statement the claimant said this:

“I did not sleep on the night of the 1 September 2014 at all. The following day, 2 September 2014, I telephoned Mr Perrins at approximately 10am and spoke to him briefly. I told him I was distressed and extremely anxious. I asked him how we were going to resolve the situation. I said something along the lines of “you and I both know that the allegations I have made are potentially serious and at best embarrassing.”

Paragraph 135 begins with this sentence:

“I was referring to whistle-blowing concerns that I had raised recently (these are the subject of separate Employment Tribunal proceedings)”.

He then provides further details.

In the course of argument, Mr Martin Griffiths QC for the claimant, repeated the open offer he had made previously to delete the passage that follows the first sentence of paragraph 135. But he says he is not willing to concede the deletion of that first sentence, which he said was necessary in order to explain the preceding observation recorded in paragraph 134 to the effect that he had made allegations that were “embarrassing”. Mr Griffiths said that it would “simply not be fair” for the reference to “embarrassing allegations” to be left in the claimant’s statement, but the explanation that these amounted to whistleblowing concerns to be removed.

In response, Mr Andrew Clarke QC for the defendant argued that it would be unfair to the defendant to deny them the chance to rebut the suggestion that the “embarrassing” allegations to which Mr Simpkin referred were whistleblowing claims.

In my judgment, and consistent with the Order of Foskett J and the demands of fairness, it would be appropriate to strike out the whole of paragraph 135, 136 and 137 of the claimant’s first statement, with the exception of the first sentence of 135, unless those are removed by the claimant. As the claimant concedes, other than the first sentence, those extracts relate to the substance of the whistleblowing allegation and are outside the scope of the preliminary issue as defined by Foskett J. The first sentence, in my judgment, is properly and reasonably included; excluding it would leave an incomplete and unfair impression of the claimant’s account of the 2 September 2014 conversation.

However, it is also right to direct that defendant is not entitled to rely on either the second statement of Sir John Armitt or the second statement of Mr Barker. Neither of those two witnesses were party to the conversation to which the claimant refers in paragraph 134 and those two statements are directed to the substance of the whistleblowing allegations, which is excluded from the scope of the preliminary issue trial.

The defendant’s concern was that its case, to the effect that the conversation between the claimant and Mr Perrins did not relate to whistleblowing, would not properly be articulated if such an order was made. But that concern is met by the witness evidence that will remain: at paragraph 147 of his second statement, Mr Perrins himself asserts that Mr Simpkin “did not mention whistleblowing and I had no reason to believe he could be referring to that, the point never having been raised previously.” In my judgment that paragraph and the first sentence of paragraph 135 of the claimant’s first statement suffice to set out the disagreement between the parties on a subject that will be of only passing relevance to the determination of the issues identified for decision at the forthcoming hearing.

The effect of my Order will be that the two witnesses who were party to the conversation on 2 September 2014 can speak to whether it amounted to “whistleblowing”, but, in compliance with the Order of Foskett J, neither they nor other witnesses will be entitled to develop their contentions about the whistleblowing issues.

On 3 March 2017 the defendant’s solicitors wrote a lengthy letter to the claimant’s solicitors. In the course of that letter they referred to disclosure of two additional documents. The claimant maintains that those two documents were private, confidential and privileged. His solicitors made that point in a letter dated 23 March 2017. The following day the defendant served witness statements which referred to the allegedly privileged documents.

In those circumstances the claimant seeks an order striking out those parts of the witness statements and an order that the documents should not be relied upon further.

I was shown the documents in question, the parties having agreed that that action did not of itself waive privilege. The first document was document DL530 in the defendant’s list. It is a copy of an email from the claimant’s email account at his place of work with the defendant to his private email account. The email itself had no content other than a footer which read “This email including attachments is confidential, may be covered by legal professional privilege and is intended for the addressee only. If you are not the intended recipient you are prohibited from printing, copying or distributing it.”

The second document was the attachment to that email, disclosed by the defendant as DL531.

The claimant contends that both documents attract legal advice privilege and litigation privilege, both being categories of legal professional privilege. He argues that at the time DL530 was sent, on 11 August 2014, the claimant’s divorce proceedings were well underway. The claimant explains in his third witness statement his use of DL531. He says at paragraph 10:

“At 7.10am on 11 August 2014 I then emailed DL531 as an attachment from my work email account to my personal email account. This was in order to forward it onward to my solicitor at Mundays from my personal account, which I subsequently did. I showed DL531 to my solicitor in the course of seeking advice on assets that might be relevant to a future settlement of my divorce. I did not show DL531 to anyone else and nor was it used for any other purpose.”

His divorce solicitor, Mr Graham Coy, confirms that DL531 was the document sent to him on 11 August 2014 for the purpose of obtaining legal advice from him in connection with the divorce proceedings.

Much of the legal framework is not in dispute. The claimant points out that legal advice privilege and litigation privilege are “protected to the highest degree and by considerations of the most essential public policy”. Mr Griffiths refers to the judgments of Lord Taylor in R v Derby Magistrates Court Ex Parte B [1996] AC 487 at 507 and of Lord Hoffman in R (Morgan Grenfell) The Special Commissioner of Income Tax [2003] 1 AC 567 at 606. He argues that relevance is not the test (West London Pipeline v Total UK [2008] 2 CLC 258 at 277 and Three Rivers DC v Bank of England (No 6) [2005] 1 AC 610 at paragraphs 24-25, 93, 112). Mr Griffiths says that legal professional privilege is preserved even if the communication between client and solicitor passes through an intermediary (Three Rivers at paragraph 50) and that legal advice privilege extends to communications between solicitors and client which do not themselves contain legal advice (Three Rivers at page 680).

Mr Griffiths argues that the email was a private communication sent by the claimant to himself at his private email address. He points to the fact that it was accompanied by an express notice that it was confidential and might be privileged. He said Mr Simpkin had good reason to think that the document would not be seen by anyone else and there was no evidence that it was in fact seen by anyone else until the disclosure exercise was conducted. He says that the fact that the documents appear on a company server does not mean that the company can retain or use them (see Pennwell Publishing v Ornstein [2008] 2 BCLC 246 at 277). He argues, referring to the judgment of Simler J in Shepherd v Fox Williams LLP [2014] EWHC 1224 QB, that the confidentiality required to maintain privilege is not easily lost.

Mr Hodge Malek QC, who was instructed on behalf of the defendant in respect of the privilege issues, argues that the Synopsis presents a completely different account of the claimant’s expectations under the 2011 LTIP in 2014 from that described in his first witness statement in the present proceedings. He points to the fact that the claimant created the Synopsis as a Microsoft Word document on his computer at the defendant’s office at 7.17am on 11 August 2014 and saved it to that computer at 8.09am. Those timings are not now disputed by the claimant. It was then emailed to the claimant’s personal email address one minute later. He points out that the Synopsis contains an analysis by the claimant of the defendant’s 2011 LTIP and the defendant’s financial performance against the criteria to be met under that plan.

Mr Malek argues that when a privileged document has come into the hands of an opposing party in litigation there is nothing, as a matter of the laws of evidence, that prevents that party adducing secondary evidence of the document and privilege cannot be relied upon as an objection to the admission of the evidence (Calcraft v Guest [1898] 1 QB 759 at 764 and Lord Ashburton v Pape [1913] 2 Ch 469 at 473 and 476-7).

Mr Malek acknowledges, however, that the court has power to restrain the use of a privileged document, or the deployment of secondary evidence of its contents, under its equitable jurisdiction to restrain breaches of confidence (Lord Ashburton v Pape at 476-7). He says that to succeed in his application to restrain the use of the Synopsis the claimant needs to satisfy three conditions: first, that the Synopsis was confidential vis-à-vis the defendant; second, that it was prepared and communicated for the purposes of seeking legal advice or legal assistance and for the dominant purpose of being used in connection with the divorce litigation; and third, that the court ought to exercise its equitable discretion to restrain the defendant from using the document.

Mr Malek says that the claim fails because the Synopsis was not confidential vis- à -vis the defendant and that Berkeley was entitled in law to have access to it. He says that the claimant had no reasonable expectation of privacy. Second, he says that the claimant’s evidence on the creation and use of the Synopsis is unsatisfactory and does not establish that it was prepared and communicated in circumstances giving rise to legal professional privilege. Third, he says that the court should not in any event exercise its discretion in the claimant’s favour because there is significant risk, were it to do so, that the court would be misled at the hearing of the preliminary issue as to the claimant’s genuine expectations under the schemes in August and September 2014.

In my judgment Mr Malek is correct in his first and third contentions. Accordingly, it is not necessary for me to determine the second. (The claimant’s evidential foundation for issue two is not wholly satisfactory but had it been necessary for me to reach a view on the point, I would have been minded to find that it was prepared and communicated in circumstances giving rise to legal professional privilege.)

It is common ground that it is a pre-condition to a claim of privilege that the document in question is confidential as against the person against whom the privilege is claimed (see Three Rivers at paragraph 24 and BBGP v Babcock and Brown [2010] EWHC 2176 (Ch) at paragraphs 45-50). As Mr Malek contends, the touchstone of confidentiality is a reasonable expectation of privacy (Campbell v MGN Ltd [2004] UKHL 22 at paragraph 21 and 85). In my judgment, the Synopsis was not confidential as against the defendant.

First, the claimant signed a copy of the company’s IT policy which made clear that emails sent and received on its IT system were the property of Berkeley. Berkeley’s IT department had access to all the company’s computers and email accounts and did not need authorisation before accessing their computers or accounts. The claimant’s employment contract makes clear that his emails were subject to monitoring by Berkeley without his consent.

Second, I accept Mr Malek’s arguments that the Synopsis was created in the course of the claimant’s employment. The Synopsis contained an analysis of the defendant’s financial performance by its group finance director, created on, and transmitted via, its IT system whilst the claimant was at its office. He prepared it using the defendant’s financial information. It appears he prepared it over the course of almost an hour whilst working at the defendant’s offices in the early morning of 11 August 2014. He prepared it using the defendant’s IT system and used the defendant’s email account to email it to his personal account.

Third, it is impossible to maintain that the claimant had any reasonable expectation of privacy as regards the preparation of this document. The claimant saved the Synopsis to his folder on one drive of Berkeley’s central servers. As Mr Malek contends, the claimant was, or should have been, aware that documents in that file were stored centrally. The Synopsis was not password protected and was not segregated from the claimant’s work related documents.

As the claimant would have been well aware, the contents of his email account would also have appeared in his personal assistant’s email account and she had direct access to his email folder where this email and the Synopsis were stored. Even if she did not in fact have occasion to look at those emails, the fact that she had access to them undermines the suggestion that the claimant had a reasonable expectation of privacy as against the defendant.

It is acknowledged by the claimant’s solicitors that neither the Synopsis, nor the email under cover of which it was sent to his own account, indicated on their face that they were prepared for the purpose of seeking legal advice. In my judgment, the fact that the computer used by the claimant automatically produced a standard Berkeley footer does not assist the claimant. The purpose of that footer was to protect Berkeley’s confidentiality not to protect the confidentiality of Berkeley’s employees against their employer.

Fourth, in my view, Mr Malek is right when he points to the third statement of Mr Simpkin as suggesting that the claimant was well aware that he was not entitled to privacy in using the defendant’s IT systems. In that third statement the claimant asserts that he sent an email on 6 August 2014 from his personal email address to the same email address “because although I required a copy to be stored the content was confidential and for my lawyer and I did not want to save a copy on my work computer”.

In those circumstances I fail to see how it can possibly be said that the claimant had any reasonable expectation of privacy in the document produced on Berkeley’s IT system.

The authority on which the claimant places particular reliance in this regard, Shepherd v Fox Williams, does not assist him. In that case the claimant’s partner was a former employee of the second respondent. She had brought tribunal proceedings against the second respondent. The first respondent solicitor acted for the second respondent in those proceedings and gave disclosure of several documents which related directly to the claimant’s personal affairs. In response to the claimant’s request to explain those documents, the second respondent said they had been lawfully obtained during an examination of its own computer system. It was common ground at the hearing that the documents had been on the second respondent’s server, having been stored there as a result of the claimant’s partner viewing or opening them on her work computer during her employment with the second respondent after the claimant had emailed them to her.

At paragraph 60-61 Simler J said:

“The sensitivity of the documents must have been obvious to anyone receiving them. Given the relationship between them, and in light of their witness statements, it is inevitably to be inferred that the claimant would have expected Ms Liebling to be particularly sympathetic and sensitive to their confidentiality, and is unlikely to have been relaxed about any subsequent disclosure or use of them in a manner inconsistent with their sensitivity and confidentiality. There is no evidence that the claimant asked Ms Liebling to forward them to her work email or to copy them to her employer's server; he merely asked her to review and comment on them. Ms Liebling was aware that the documents were privileged, highly confidential and contained sensitive personal data. She did not realise or appreciate that the documents would be stored on the server as a result of her actions. It is fanciful to suggest that the claimant knew that Ms Liebling would or that he would have expected her to forward them to FJI's server. After all, he sent the emails to her personal address and not to her work address. There is certainly no basis for inferring that he authorised or requested this.

61 Nor am I persuaded that FJI's electronic information policy helps in this regard. There is no evidence that the claimant had notice or knowledge of the policy relied on by FJI. He is not and has never been employed by FJI. Given the terms of the policy, it is not sufficient for the purposes of this argument for the defendants to assert that the policy is an industry standard and that everyone knows that employers have electronic information policies of this kind. The terms of the policy make clear that its purpose is to preserve privacy and confidentiality whilst enabling the employer to carry out legitimate monitoring and accessing of electronically stored material for appropriate business purposes. It is not obvious to me that a fair reading of the policy would have led the claimant to conclude that privilege and confidentiality in documents, sent to his girlfriend's personal email but forwarded to her work email address for a limited purpose, would be invaded and jeopardised as a consequence. The fact that Ms Liebling personally might not be able to assert rights of privacy against FJI does not mean that the claimant cannot assert rights to confidentiality and privilege in respect of the Privileged Documents against FJI. Confidentiality is not lost simply because Ms Liebling forwarded the documents to her work email (my emphasis).

The observation underlined in that quotation was obiter, but makes clear, first, that the facts of that case were different from the present and second, that Simler J doubted that an employee in the position of the claimant’s girlfriend in that case would be able to assert privilege.

In those circumstances I accept Mr Malek’s submissions that the Synopsis was never confidential as against Berkeley or, if it was, it lost its confidentiality when it was processed on the defendant’s IT system.

That is sufficient to dispose of the claimant’s application in this regard. For the sake of completeness, and in case this matter goes further, I should indicate my reasons in addition for preferring Mr Malek’s argument in respect of the exercise of the equitable jurisdiction to restrain use of a privileged document.

Mr Malek refers to the decision of Lawrence Collins J in ISTIL Group Inc v Zahoor [2003] EWHC 165 (Ch) (a decision cited with approval by the Court of Appeal in Imerman v Tchenguiz [2010] EWCA Civ 908). At paragraph 88 Lawrence Collins J identified the question:

“What, then, is the extent of the discretion in the exercise of the Lord Ashburton v. Pape line of authorities to restrain breach of confidence in relation to documents which have already been disclosed, but which would otherwise be privileged? In particular, can the court conduct a balancing exercise, and if so, on the basis of what factors?”

At paragraphs 89-94 Lawrence Collins J then set out six principles:

“89.

First, the starting point is that the essence of legal professional privilege is that it entitles the client to refuse to produce documents which are covered by the privilege, or to answer questions about privileged matters. But it has been said that once a privileged document is disclosed, the privilege itself is lost: see Guinness Peat Properties Ltd v. Fitzroy Robinson Partnership [1987] 1 WLR 1027, 1044, per Slade LJ accepting argument to this effect. In Black & Decker Inc v. Flymo Ltd [1991] 1 WLR 753 Hoffmann J said that once a privileged document was disclosed the question was one of admissibility, and not privilege.

90.

Second, since the decisions from Lord Ashburton v. Pape to the modern decisions involve the equitable jurisdiction to grant injunctions to protect breach of confidence, it follows that the normal rules relating to the grant of equitable remedies apply. In Goddard Nourse LJ expressly mentioned (at 685) delay as a factor (and this was repeated by Slade LJ in Guinness Peat, at 1046). It must also follow that other equitable principles on the grant of injunctions apply, such as consideration of the conduct of the party seeking the injunction, including the clean hands principle.

91.

Third, in such cases the court should “ordinarily” intervene: Guinness Peat at 1046.

92.

Fourth, Nourse LJ was not saying in Goddard that the court should never apply the general principles relating to confidential information. What he was saying was that in this context (protection of privileged documents under the Lord Ashburton v. Pape principle) the court was not concerned with weighing the materiality of the document and the justice of admitting it. That was also the view of Vinelott J and Dillon LJ in Derby v. Weldon (No. 8) and of Mann LJ in Pizzey v. Ford Motor Co. Ltd.

93.

Fifth, there is nothing in the authorities which would prevent the application of the rule that confidentiality is subject to the public interest. In this context, the emergence of the truth is not of itself a sufficient public interest. The reason why the balancing exercise is not appropriate is because the balance between privilege and truth has already been struck in favour of the former by the establishment of the rules concerning legal professional privilege: see The Aegis Blaze [1986] 1 Lloyd’s Rep 203, 211; R v. Derby Magistrates Court, ex parte B [1996] AC 487, 508.

94.

Sixth, other public interest factors may still apply. So there is no reason in principle why the court should not apply the rule that the court will not restrain publication of material in relation to misconduct of such a nature that it ought in the public interest to be disclosed to others: Initial Services Ltd v. Putterill [1968] 1 QB 396, 405 per Lord Denning MR, who quoted Wood V-C in Gartside v. Outram (1856) 26 LJ Ch 113, 114 : “There is no confidence as to the disclosure of iniquity”. But the defence of public interest is not limited to “iniquity”: Lion Laboratories Ltd v. Evans [1985] 1 QB 526, applying Fraser v. Evans [1969] 1 QB 349, 362, where Lord Denning MR said that iniquity is merely an instance of just cause or excuse for breaking confidence. See also Attorney General v Guardian Newspapers (No.2) [1990] 1 AC 109, at 268–269, per Lord Griffiths; and Ashdown v. Telegraph Group Ltd [2002] Ch 149, approving Hyde Park Residence Ltd v. Yelland [2001] Ch 143, 172, per Mance LJ.”

It follows from the fifth of those principles that the emergence of the truth is not, of itself, of sufficient public interest to out-weigh the public interest in respecting the privileged nature of the documentation. However, as the sixth principle demonstrates, that is not an end to the matter. Other public interest factors may still operate in a way that leads the court to decline to restrain the breach of confidence in relation to documents that have already been disclosed.

Here, in my judgment, there is a stark conflict as to an issue recognised by both parties as relevant to this claim between the account put forward in the first of the claimant’s witness statements and that set out in the Synopsis. As Mr Malek put it “the claimant is seeking to avoid these stark inconsistencies being revealed to the court and wishes to put forward the account in Simpkin 1 without being exposed to cross-examination on the basis of a document that prima facie is a contemporaneous record of his expectations.”

The claimant’s lack of “clean hands” in this regard is directly connected with the equitable remedy which he seeks. Had I concluded that the Synopsis was confidential and privileged as against the defendant, I would have exercised my discretion to refuse the relief the claimant claims.

In those circumstances the application for a restraining order in respect of the Synopsis is refused.