HML PM Ltd v Canary Riverside Estate Management Ltd & Anor

This is an application for an interim injunction to restrain the defendants from making use of what is said to be confidential information and in which (to some extent at least) it is said that the Claimant enjoys legal professional privilege.

On the banks of the River Thames as part of Canary Wharf there is a mixed-use development known as the Canary Riverside Estate (‘the Estate’). The Estate includes 280 residential flats, a hotel, a gym, a car park, a casino, restaurants and drycleaners. The 2^nd Defendant (‘Octagon’) is the freehold owner of the Estate. The 1^st Defendant (‘CREM’) is the head lessee of the Estate. CREM had appointed Marathon Estates Ltd (‘Marathon’) as managing agents for the Estate. The residential units are held under sub-leases, as are the commercial premises.

Some of the residential sub-tenants were dissatisfied with the management of the Estate and the Service Charges that they were obliged to pay. The Landlord and Tenant Act 1987 s.24 confers on the First-tier Tribunal (‘Ft-T’) (Property Chamber) the power to appoint a manager in respect of certain premises. Some of the residential sub-tenants made an application to the Ft-T for such an order. A leading part in these activities was taken by Ms. Angela Jezard. Ms Jezard is not herself a sub-tenant, but she lives with Dr Ashley Steel who is. From time to time, Ms Jezard has received assistance and encouragement from Mr Martin Boyd of Leasehold Knowledge Partnership. The resident/applicants asked for Mr Alan Coates of HML Andertons to be named as the manager. HML Andertons is the previous name of the Claimant by which it was known until September 2017. Mr Coates is now and has been at all material times both an employee and a director of the Claimant. In a decision dated 5^th August 2016 the Ft-T agreed to the appointment of Mr Coates as the manager of the residential units on the Estate (‘the Management Order’). At [108] of its decision of that date the Tribunal said,

Mr Coates’ appointment was for an initial term of three years with effect from 1^st October 2016 and it was therefore due to expire on 30^th September 2019. The Defendants had opposed the application for the appointment of a manager. The hearing which led to his appointment took some 5 days. Following the F-tT’s decision, the Defendants applied for permission to appeal and a stay. Those applications were refused by the F-tT on 15^th or 29^th September 2016 when the Tribunal also reviewed and amended its decision. It seems that the renewed applications for a stay and for permission to appeal were refused by Martin Rodger

In July 2018 the F-tT extended Mr Coates’s term of appointment so that it ran for 5 years from 1^st October 2016 (i.e. until 30^th September 2021), but, on 6^th June 2019 the Tribunal agreed that his appointment should expire at the original date of 30^th September 2019. It was anticipated that another manager would be appointed for the Estate in his place. I am told that this has occurred. The present manager has nothing to do with the present Claimant.

A great many other matters were subsequently litigated between the parties in the FtT and, on occasions the Upper Tribunal, and, as I shall show, in other fora as well.

On 20^th March 2018 Mr Coates suffered a burglary from his home. The only item taken was a laptop on which he had stored some documents relating to his role as manager of the Estate.

On 30^th April 2019 a ‘Mr Smith’ wrote by email to the F-tT, copied to Angus Storar of Downs, solicitors for Mr Coates, and to David Marsden of Freeths, the Defendants’ solicitors. In the email ‘Mr Smith’ was claimed to be a pseudonym for employees of HML Andertons (which, as I have already said, was the previous name of the Claimant). The author or authors of the email claimed to have worked with Mr Coates and were being asked

It is the Claimant’s primary case that ‘Mr Smith’ is not a pseudonym for employees of HML Andertons, but the information has been derived from the stolen laptop or, possibly, hacking into Mr Coates’s email accounts. Nonetheless, it is convenient to continue to refer to this correspondent as ‘Mr Smith’.

On 1^st May 2019, Mr Marsden of Freeths replied to ‘Mr Smith’ saying

On 2^nd May 2019, Mr Storar of Downs wrote to the F-tT (copied to Mr Marsden) and said,

Mr Marsden wrote a chasing email to ‘Mr Smith’ on 15^th May 2019. In response ‘Mr Smith’ wrote on 16^th May 2019 that the delivery of the material was being prepared.

On 11^th June 2019 ‘Mr Smith’ sent to Mr Marsden three emails attaching the first batch of documents with which this application is concerned. The parties have referred to these collectively as the ‘Smith Documents 1’. Attached to the two emails was a series of scans. Again, the parties have conveniently numbered these scans and it is sensible to use that numbering, although in some cases, a single scan includes a number of different emails or documents. Smith Documents 1 comprised 14 scans with a total of 95 pages.

On 13^th June 2019 Mr Marsden forwarded what he had received from Mr Smith to Mr

On 14^th June 2019 CREM emailed a large number of the Smith Documents 1 to the residential sub-tenants and the commercial sub-tenants (what was sent were all of the scans except for Scans 2, 3, 8,13 and 14). In its cover email, CREM said,

On 14^th June 2019 Mr Storar emailed the F-tT (copying in Mr Marsden and others) commenting that the Smith Documents 1 appeared to derive from Mr Coates’ stolen laptop and asserting that many of the documents were subject to legal professional privilege. Mr Storar also expressed concern that some of the documents had been disseminated by CREM to the leaseholders on the Estate. He asked the F-tT to delete or destroy any copies which it had.

On 17^th June 2019, Mr Marsden wrote to the F-tT. He said that the Tribunal would have been aware from ‘Mr Smith’’s email of 30^th April 2019 that ‘Mr Smith’ had made serious allegations but, initially, had provided no proof. Mr Marsden, on behalf of his clients was interested in whether such proof existed. The first email from ‘Mr Smith’ had not indicated that the documents were privileged and the Defendants were entitled to pursue this inquiry. Having seen the Smith Documents 1, Mr Marsden agreed that two were privileged. He said they would not be relied upon and would be destroyed. The vast majority were not privileged and were in the public domain. Mr Marsden alleged that the documents showed that Mr Coates had been partial in the discharge of his duties as manager.

On 17^th June 2019 as well, Mr Coates wrote to the sub-tenants on the Estate commenting,

On 18^th June 2019 the FtT wrote to Freeths to say that the attachments to the email from ‘Mr Smith’ had not been read. It enquired whether Mr Coates would be applying to the Tribunal for an order under the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 SI 2013 No. 1169 r. 17. This gives the Tribunal power to make an order prohibiting the disclosure or publication of specified documents or information relating to the proceedings before the Tribunal. So far as I am aware, Mr Coates has made no such application.

On 28^th June 2019 Mr Storar wrote to Freeths maintaining that the Smith Documents 1 had come, not from employees of HML Andertons, but from Mr Coates’s stolen laptop and asking for an undertaking from the Defendants not to make any further use of the documents, failing which either Mr Coates or HML would seek urgent injunctive relief against the Defendants and Freeths themselves. In a second letter of the same date, Mr Storar denied that Mr Coates had behaved improperly.

On 1^st July 2019 Freeths responded that neither they nor their clients had behaved wrongly and they intended to rely on the non-privileged documents in support of an application for the appointment of a new manager by 4^th July 2019.

On 4^th July 2019 Mr Marsden of Freeths made a witness statement in F-tT proceedings which were then underway and referred to some of the Smith Documents

The Claimant first issued an application notice on 5^th July 2019. It sought an order restraining any further use of information contained in the Smith Documents 1 amongst other relief.

The application was to be made ex parte. On 4^th July at about 1.00pm, Kennedys (who are the Claimant’s solicitors) spoke to Mr Marsden and said that the Claimant intended to go that afternoon before Whipple J. in Court 37. At that stage no documentation was served on Freeths or the Defendants. Mr Marsden said that he was on his way to court in another matter. In the event, the Claimant was unable to be heard on 4^th July 2019. At 17.44 that afternoon, Kennedys emailed Freeths to say that they had not been able to be heard. They had instructions to go the following morning.

At 9.39 on 5^th July 2019, Kennedys emailed to Freeths the 1^st witness statement of Mr Coates (dated 5^th July 2019) and the application notice, among other documents, and said they would be attending before Whipple J. in Court 37 in the urgent applications list at 10.00am. Mr Grant QC, on behalf of the Defendants, asks me to note that Freeths are based in Birmingham. The application was due to be made at the Royal Courts of Justice in London.

In the event, the application was heard on 5^th July 2019 by Mr Peter Marquand, sitting as a Deputy Judge of the High Court. The Defendants were not present or represented, but Circus Apartments Ltd, (‘Circus’) as an Interested Party, were represented by Tom Croxford QC. Circus is the under-tenant (from CREM) of a block of 45 serviced apartments on the Estate. Circus claimed that in one of the Smith Documents1 they had a common interest litigation privilege. This was an email exchange in May 2016 (and so in the course of the application by certain residents for the appointment of Mr Coates as manager). The exchange had included Ms Amanda Gourlay, counsel then acting for the tenant applicants, and David Stevens of Norton Rose Fulbright, solicitors for Circus.

I have seen a transcript of Mr Marquand’s judgment on 5^th July. He asked himself the questions required by American Cyanamid Co v Ethicon Ltd [1975] AC 396 and so first considered whether there was a serious issue to be tried. He had been directed to the requirements in Coco v A N Clark (Engineers) Ltd [1969] RPC 41. He was not satisfied on the evidence before him that the information in question had the necessary quality of confidence. On closer consideration, he said, the test might be satisfied, but for the purposes of an interim injunction he was not satisfied since ‘the cat might already be out of the bag’. He was also not satisfied that damages would be an inadequate remedy. He refused the injunction on the evidence before him, which injunction he was also reluctant to make in the absence of the Defendants, but rather than dismiss the application, he directed that there should be no order and the Claimant had permission to re-submit or re-present the application on 2 clear days notice to the Defendants.

Mr Vassall-Adams QC, on behalf of the Claimant, accepts that Mr Marquand was not given all the assistance that he ought to have been by his junior, Mr McNae, who represented the Claimant at that hearing. Mr Marquand was not told of the potential relevance of Human Rights Act 1998 s.12(2), which limits the circumstances in which relief which impinges on the right of freedom of expression in Article 10 of the European Convention on Human Rights can be granted ex parte. Nor was Mr Marquand’s attention drawn to s.12(3).

So far as material, s.12 of the 1998 Act says,

The effect of s.12(3) was considered by the House of Lords in Cream Holdings Ltd v Banerjee [2005] 1 AC 253. Subject to immaterial qualifications, the subsection means that the Claimant has to show, before being granted such interim relief, that it is more likely than not that he or it will succeed in obtaining such an injunction at trial.

Pursuant to the liberty which Mr Marquand had granted the Claimant, it re-presented the application on 24^th July 2019, though the draft order which it then sought was in somewhat different terms. Before it served the further evidence on which it wished to rely, it sought undertakings from the Defendants about the use which they would make of that evidence. The Defendants refused to give any such undertakings and the Claimant did, in the event, serve the Defendants on 2^nd August 2019 with the 2^nd witness statement of Mr Coates (dated 24^th July 2019), the witness statement of David Stevens (dated 19^th July 2019) (Mr Stevens is a solicitor with Norton Rose Fulbright who are solicitors for Circus Apartments Ltd), the first witness statement of Matthew Blanshard (dated 24^th July 2019) (Mr Blanshard is the IT and Infrastructure Manager for the Claimant).

On 15^th August 2019 CREM wrote to ‘Mr Smith’ saying,

On 4^th September ‘Mr Smith’ provided a further batch of documents to Freeths and CREM (‘Smith Documents 2’). Smith Documents 2 comprised 64 scans extending over 227 pages.

In a third witness statement (dated 4^th October 2019) Mr Christou, who is an in-house solicitor of the Defendants, has explained that Freeths asked a separate solicitor (Mr Hoskins) to review the Smith Documents 2 to consider whether any of them were privileged. Mr Hoskins identified 6 documents which he considered to be privileged. Those were set aside. The remainder were given to Mr Marsden. On 6^th September 2019 Mr Marsden emailed Mr Storar to notify him that Freeths had received further documents from ‘Mr Smith’. Mr Marsden similarly informed Kennedys and included a list of the Smith Documents 2. There was further correspondence from Mr Storar and Kennedys asserting confidentiality and privilege in the Smith Documents 2.

The hearing of the Claimant’s re-presented application was first listed for one day on either 4^th or 5^th September 2019.

On 30^th August the Defendants served two witness statements (both dated 30^th

On 7^th October 2019 the Claim Form was issued. It was served on 21^st October 2019.

Mr Coates has made two further witness statements: his 3^rd dated 25^th October 2019 and his 4^th (also dated 25^th October 2019). Mr Blanshard made a 2^nd witness statement on 25^th October. The Claimants on 25^th October 2019 also provided a draft of the order in the form which they now seek.

Particulars of Claim followed the Claim Form on 4^th November 2019. Since they are relatively recent there is, as yet, no defence.

Mr Christou has made a 4^th witness statement dated 14^th November 2019. Mr VassallAdams contends that Lavender J. on 6^th November 2019 had given the Defendants permission only to serve any further evidence in relation to the second set of documents and he alleges that Mr Christou’s 4^th witness statement exceeds that purpose.

Skeleton arguments were exchanged on 20^th November 2019.

The hearing of the application before me began on 26^th November 2019. At the Claimant’s request and without opposition from the Defendants, I made a temporary order under Contempt of Court Act 1981 s.4(2) prohibiting the publication of any report of the proceedings until further order. The purpose was to prevent the whole purpose of the Claimant’s application being undermined before I had had the opportunity to consider its merits. With that order in place, it was possible for the great bulk of the hearing to take place in open court (save for short periods when we sat in camera while I heard submissions on the contents of the documents themselves). The hearing was originally listed for two days. During the hearing it became apparent that this was too short a time to do justice to the parties, therefore the hearing continued into a third day.

Three days after his appointment took effect (so on 4^th October 2016) Mr Coates issued proceedings in the County Court against the Defendants requiring them to comply with the Management Order. On 4^th October 2016 in the Central London

As part of the hand-over of the management of the Estate, CREM provided Mr Coates with the only proxy card machine and all of the spare security cards for premises on the Estate. Mr Coates used these to block CREM’s access to the Estate premises. As part of her judgment on the appeal against Judge Madge’s order Judge Walden-Smith made clear the Management Order of the F-tT did not preclude CREM from having access to their property.

Prior to Judge Walden-Smith’s comments, the Defendants began High Court proceedings (‘the Access proceedings’). In part these were resolved by a consent order made by Mr Murray Rosen QC, sitting as a Deputy Judge of the High Court on 16^th December 2016. The remainder of the claim was transferred to the Central London County Court. The Defendants applied to amend their claim form and particulars of claim to seek a declaration that Mr Coates was not acting fairly and impartially in his role as manager. On 22^nd September 2017 Mr Recorder Lawrence Cohen QC gave the Defendants permission to amend. Mr Coates filed an Amended Defence and Counterclaim in which he stated that he had acted independently and had not taken instructions from the residents of the Estate. The same order of 22^nd September 2017 required Mr Coates to make standard disclosure by 27^th October 2017.

Mr Coates did not comply with the disclosure order. Instead, he applied to strike out the amendments for which Mr Recorder Cohen had given permission and applied for a stay of the order for disclosure. CREM applied for an ‘unless’ disclosure order, which was granted by HHJ Bailey on 8^th January 2018. A specific disclosure order was also made. However, on 15^th January 2018 Judge Bailey, on Mr Coates’s application, set his specific disclosure order aside.

At a hearing in the Central London County Court on 22^nd January 2018 HHJ Gerald considered Mr Coates’s strike out application. Mr Coates abandoned his defence to much of the claim (except for the allegation that he had failed to act impartially). He was ordered to bear the bulk of the Defendants’ costs up to that stage. At a later hearing on 9^th May 2018 HHJ Gerald ordered that all further proceedings (including Mr Coates’s counterclaim) in Claim D10CL312 should be stayed. The present Defendants were ordered to pay Mr Coates’s costs after the January order.

In yet further High Court proceedings, the Defendants took action against Mr Coates in relation to a fire enforcement notice which had been issued and which, they said, he had not complied with. The proceedings were resolved by agreement except for costs.

In the course of proceedings in the F-tT Mr Coates and the Defendants made an agreement whereby Mr Coates would provide copies of certain documents. The Defendants alleged that Mr Coates did not abide by that agreement and, in January 2019, issued proceedings in the Birmingham County Court to enforce that agreement. In his defence dated February 2019 Mr Coates denied that he was in breach of the disclosure agreement. It is part of the Defendants’ case that the Smith documents show that this part of Mr Coates’s defence in the Birmingham proceedings was wrong.

In his 4^th witness statement in the present proceedings, Mr Coates addresses these allegations. He says,

There was some lack of clarity in the submissions made by Mr Vassall-Adams and his junior, Mr McNae at the hearing. I asked for the position of the Claimant to be clarified in a post-hearing note. Mr Vassall-Adams responded on 5^th December 2019. The Claimant’s case was that Mr Coates was referring in this section of his witness statement to the Smith 1 and Smith 2 Documents. There were, though only four (or five as Mr Vassall-Adams put it in his Note) of those documents which ought to have been disclosed in accordance with the recitals to the F-tT order.

There is also before me a separate application notice issued by the Defendants seeking permission to make use of Mr Coates’s 4^th witness statement in these County Court proceedings ‘or generally’. It became clear during the course of the present hearing that there would not be time to deal with that matter. I agreed that the matter should be reserved to me if, after seeing this judgment, the application remained contentious.

On 20^th November 2018 Palm Tree Holdings Ltd (a sub-tenant of a residential flat on the Estate) applied to remove Mr Coates as manager of the Estate. Mr Coates, in turn applied to discharge himself. Other applications have been made to the F-tT for the appointment of a new manager, and I understand that a new manager, unconnected with Mr Coates and HML has been appointed.

The Claimant in these proceedings is HML PM Ltd. Mr Coates himself is not a party.

In Fraser v Evans [1969] 1QB 349 CA the Plaintiff was a public relations consultant to the Greek government. He prepared a report on a public relations exercise for his client. A copy of the report was leaked to the ‘Sunday Times’. The newspaper also interviewed Mr Fraser. In advance of publication, Mr Fraser sought an injunction against, among others, the editor of the Sunday Times to restrain what was feared to be material defamatory of him and a breach of confidence. Shaw J. granted an ex parte injunction. On the return date, Crichton J. refused relief in defamation (on the basis of the well-known rule against prior restraint in Bonnard v Perryman [1891] 2 Ch 269 CA), but granted an injunction on breach of confidence grounds. The defendants’ appeal was allowed by the Court of Appeal (Lord Denning M.R., Davies and Widgery LJJ). Lord Denning referred to Albert (Prince) v Strange (1849) 1 Mac

It was the Greek Government and not Mr Fraser to whom the duty of confidence was owed. There was evidence before the Court that the Greek Government would not be happy if publication took place and that they would, as a matter of practice, keep the material confidential. Lord Denning added (also at p.361),

Davies LJ gave a short judgment agreeing with Lord Denning and Widgery LJ agreed with both.

Although Fraser v Evans was decided over 50 years ago, the parties were agreed that it still represented the law.

The Claimant’s skeleton argument had said little in regard to standing, but, on the first day of the hearing, Mr Vassall-Adams produced a note on the issue dated 26^th November 2019. He argued in his Note and orally as follows:

While these arguments were ably advanced by Mr Vassall-Adams, I do not accept them. Since the relief which the Claimant is seeking might (at the very least) affect the exercise of the Defendants’ right to freedom of expression, s.12(3) of the Human Rights Act 1998 prohibits the Court from granting interim relief unless the Claimant is likely to establish at trial that publication would not be allowed. In the present context that means or includes that the Claimant must show at this stage that it is more likely than not to establish that it has standing to complain of breaches of confidence. In my view, it has not established that this is the case.

The Claimant also alleges that the Smith documents (or at least some of them) are protected by legal professional privilege. More specifically, it is said that they are covered by litigation privilege. The Defendants accept that some (fewer in number than the Claimant claims) would be protected by litigation privilege, but they deny that even in those cases, this gives the Claimant a right to the injunction which it seeks.

In my judgment, the Defendants are right in this regard. The core purpose of legal professional privilege is to allow a litigant (or someone who expects to be a litigant) to speak candidly to a lawyer in order to obtain informed advice about his rights (or lack of them) – see for instance R v Derby Magistrates’ Court ex parte B [1996] 1 AC 487 per Lord Taylor CJ at p.507D. None of the Smith Documents were brought into existence with the dominant purpose of the Claimant seeking such advice. I accept that there may be occasions when a person other than the immediate beneficiary of the privilege may choose to assert it (or, on occasions, may be obliged to assert it) in response to an attempt by a third party to compel disclosure. In such circumstances, another person’s privilege is relied on as a shield. But that is not what the Claimant is trying to do in these proceedings. Rather, it is seeking to use another person’s privilege as a sword. For that purpose, it must establish its own right to the remedy which it seeks. I have considered and rejected the asserted right based on breach of confidence. That being so, another person’s privilege, even if it exists, is no substitute. Mr Vassall-Adams could show me no authority for the proposition that another person’s privilege may be used as a sword where no other right existed.

He did submit that the Court should nonetheless intervene, even at the instance of HML rather than Mr Coates. Quite what the basis for such intervention would be was rather opaque. In any event, however, the Defendants have disavowed any intention to use the information in those documents in which they accept Mr Coates would have litigation privilege. I have considered the wider category of documents which the Claimant maintains are also privileged. In my view, even setting aside the distinction between Mr Coates and the Claimant, the argument is unfounded. I have considered each of the scans in which this claim is made individually. It is not appropriate to give my detailed reasons, save to say this. For the most part, litigation privilege concerns communications between a lawyer and a client. That goes back to the purpose of the privilege which is to allow the client to be open and frank with his or her lawyer and the lawyer to be uninhibited in rehearsing his or her client’s instructions. There are limited circumstances when the privilege may extend beyond such lawyer/client communications (litigation privilege may, for instance, extend to communications with third parties, where that is for the purpose obtaining information or advice in connection with existing or contemplated litigation – see for instance Three Rivers DC v Governors of the Bank of England (No.6) [2005] 1 AC 610 at [102]), but I agree with Mr Grant that none of the contentious communications in which Mr Coates asserts privilege come within that limited category. Mr Coates’s evidence on this topic regarding the Smith Documents 2 was summarised in a schedule (Annex 1 to Mr Coates’s third witness statement, as updated for the hearing). Where privilege is claimed it is said to be on the basis that the document in question was ‘made for the dominant purpose of litigation’. But that is not a sufficient basis for a document to be privileged. In Rawlinson and Hunters Trustees SA v Akers [2014] EWCA Civ 136, [2014] 4 All ER627 CA at [13] Tomlinson LJ cited Thanki The Law of Privilege (2^nd ed 2011) para. 3.68ff for the principle that ‘For a communication to be subject to litigation privilege it must have been made with the dominant purpose of being used in aid of or obtaining legal advice from a lawyer about actual or contemplated litigation [emphasis added].’ Likewise, in Re Barings plc, Secretary of State for Trade and Industry v Baker [1998] Ch. 356 at 366, the Court said,

There is one document in the Smith Documents 1 group which deserves separate mention. Scan 2 includes some notes. The author of the notes is not identified. Mr Vassall-Adams submitted that Mr Coates had attached to his email a note regarding disclosure which Mr Coates said in a witness statement had been prepared by Angus Storar, who is Mr Coates’s own solicitor and whose firm is Downs. Mr Grant is entitled to comment that the notes are unsigned and, in themselves are not attributed to a solicitor. Mr Storar has not provided a witness statement confirming the fact. Ordinarily, if the client says that the document was prepared by his solicitor, that might be sufficient, but I agree with Mr Grant that the tactics proposed in the document are such that that ordinary course is not sufficient. Thus, at one point the author of the document says,

I have said above that the Defendants have disavowed any intention to make use of the information in the documents which they accept are privileged (although not privileged for the benefit of the Claimant). Mr Vassall-Adams invites me not to accept that assertion. He observes that the Defendants had also agreed to destroy the documents which they agreed were privileged, but they have not done so. Mr Grant relies on the evidence of Mr Christou (the Defendants’ in-house lawyer). He says that the Smith Documents were received as attachments to a cover email. It is not possible to delete the selected attachments and leave the cover email. Mr Christou says that the Defendants have no hard copies or printouts of the documents which they accept are privileged. Mr Vassall-Adams submitted that an email from Freeths dated 10^th September 2019 is inconsistent with that proposition since Mr Marsden there suggests that individual documents can be separated out. In my view the email in question will not bear the weight that Mr Vassall-Adams sought to put on it. There is no evidence to rebut this part of Mr Christou’s evidence and I see no reason to reject it. Indeed, the Claimant has served two witness statements from Matthew Blanshard, its IT Infrastructure Manager. Mr Blanshard does not address this issue. The evidence as to the difficulty in deleting only some attachments from an email was made by Mr Christou in his 4^th witness statement on 14^th November 2019. That was a month after

In view of my conclusions regarding the Claimant’s lack of standing, it follows that the application for an injunction fails.

That being the case it is not strictly necessary for me to consider the other grounds on which Mr Grant sought to resist the application. In the circumstances, it is sufficient if I briefly give my views on them.

Mr Vassall-Adams accepted that it was a necessary condition for the Claimant to establish a claim in breach of confidence that the material was still confidential. Mr Grant argued that the Smith Documents 1 lacked that characteristic. The Defendants had circulated those documents to the residential and commercial sub-tenants on the Estate. If that action was in breach of the Claimant’s right, it might expose them to liability in damages, but it did not detract from the argument that an injunction against the Defendants would be futile. It was a case of the cat already being out of the bag. Mr Coates in his own letter to the sub-tenants on the Estate had spoken of the circulated documents now being in the ‘public domain’. He was right.

I am in partial agreement with Mr Grant. I agree that it is not material for the purposes of deciding whether injunctive relief should be granted if such confidentiality as the information had has been lost through the actions of the Defendants themselves (see Vestergaard Frandsen v Bestnet Europe Ltd [2009] EWHC 1456 (Ch), [2010] FSR 2 at [76] and BBC v HarperCollins Publishers Ltd. [2010] EWHC 2424 (Ch), [2011] EMLR 6 at [62]. After all, the Defendants’ rights of freedom of expression can only be curtailed consistently with Article 10(2) of the European Convention on Human Rights if the restriction is ‘necessary in a democratic society.’ Consistently with this, the Human Rights Act 1998 s.12(4) requires the Court to consider the extent to which the material in question has already become available to the public. Some 300 copies of most of the Smith Documents 1 have been distributed on the Estate. That was not to the world at large, but it was a distribution to those who are most likely to be interested in the information. Furthermore, even if the injunction is granted against these Defendants, the recipients of the earlier copies will not, as such, be restricted from making use of the information. I also see the force of Mr Grant’s point that on 17^th June 2019 Mr Coates himself circulated an email to the residents of the Estate. This, amongst his other comments, engaged with the substance of the case which the Defendants were making. It gave fresh currency to the disclosure.

However, while I go this far in agreement with Mr Grant, I agree with Mr Vassall-

The parties were agreed that, in this regard, the law has developed from its Victorian origins. In Gartside v Outram (1857) 26 LJ Ch (NS) 113, 114 it was said that ‘there is no confidence in iniquity’. Now the test is broader and more nuanced. The Court must consider whether the public interest in dissemination of the information outweighs the public interest in protecting the confidentiality of the information.

The Defendants argue that is so. They submit that the Smith documents show that Mr Coates has behaved in a partial manner, that, contrary to what he has said in pleadings and witness statements in various litigation in which he has been engaged, he has taken instructions from Ms Jezard, and other residents and from Mr Martin Boyd (of an organisation called Leasehold Knowledge Partnership). They submit that the Smith documents show that Mr Coates failed to make all the disclosure that he should have done either in consequence of the agreement to make disclosure in the F-tT proceedings or because of the court order of Mr Recorder Cohen in the County Court proceedings that I have described above. They would have wished to use the Smith Documents (or some of them) to bring contempt proceedings against Mr Coates.

Had it been necessary, I would have been unpersuaded by these arguments. They may very well have supported qualifications to a general restraint on the use of the information so as to allow the Defendants to deploy them in the fora which would have the responsibility for deciding whether the Defendants’ allegations are wellfounded. I make it clear Mr Coates vigorously denies that he has carried out his duties as manager in a biased or partial manner. He denies that he has taken instructions from any of the residents or from Mr Boyd. He denies that he was in contempt or is guilty of any other impropriety. He accepts that he had not fully complied with his disclosure obligations, but he has made an open offer to re-do the disclosure exercise. I emphasise that it is not for me to resolve these disputes. I have said that the arguments to do with public interest which Mr Grant raises would be the responsibility of the F-tT or the Court in which the Defendants allege that Mr Coates has misbehaved. The problem for the Defendants in their public interest argument is that they do not merely seek a qualification to the requested injunction to allow them to deploy the relevant Smith documents in Court or Tribunal which would have the task of determining their complaints, but wish to be free to use them more generally. Mr Grant submits that the wider community of tenants on the Estate also have a right to this information. To some extent, they already have it in the form of the Smith Documents 1 which were sent to them by the Defendants. Had it been necessary, I would not have been persuaded that their interest in the right to receive the Smith Documents 2 or a repetition of the Smith Documents 1 was sufficiently great to outbalance the remaining interest of confidentiality.

Had the Claimant been able to establish standing and had it been successful in showing that it was more likely than not to succeed in rebutting the putative defences of public domain and public interest, it would still have had to show that the Court should exercise discretion in its favour - see for instance Linklaters LLP v Frank

The Claimant was aware on or about 14^th June 2019 that the Defendants had received the Smith Documents 1. It was not until 4^th July 2019 that it first sought injunctive relief. While some time could properly be taken in establishing whether the Defendants were willing to give appropriate undertakings, this is not the pace of litigation with which the Court is used to encountering when relief is needed to prevent the dissemination of confidential information.

After the hearing before Mr Marquand, Mr Grant is justified in describing the

It is also remarkable that the Claim Form was not issued until 7^th October 2019. Practice Direction 25A to Part 25 of the CPR says at paragraph 4.4

No such undertaking was given by Mr McNae on the Claimant’s behalf nor was one incorporated into the order which Mr Marquand made (although it is fair to note that the draft order attached to the application did include such an undertaking). No directions were made by him, but it does not seem (from the transcript of the hearing) as though the Practice Direction was drawn to his attention. It is right that Mr Marquand granted no positive relief. CPR r.25.2(3) says that ‘Where it grants an interim remedy before a claim has been commenced, the court should give directions requiring a claim to be commenced.’ The rule thus conditions the obligation on the grant of relief, but the Practice Direction is not so limited. In any event, the delay in issuing the claim form (and serving the particulars of claim) means that the time for service of defence had not expired by the time that the hearing before me took place.

Nonetheless, all of this has meant that the first inter partes hearing took place some 5 months after the distribution of material to the residents of the Estate by the Defendants. By any measure that is a remarkable length of time for the hearing of an application for measures for which there is said to be a ‘pressing social need’ and which are said to be ‘necessary in a democratic society’.

Mr Grant lists these as follows:

Mr Vassall-Adams submitted that any deficiencies in this regard had no effect since Mr Marquand granted no relief. I agree with Mr Grant that, while Mr Marquand granted no substantive relief, he did not dismiss the application but permitted the Claimant to re-present the application on at least 2 days notice to the Defendants. That was of some advantage to the Claimant since it meant that the Defendants could not argue that a repeated application seeking the same relief was a second bite at the cherry and therefore an abuse of process.

In the event, the Claimant’s application fails anyway, but, as I have said, I agree that if it had otherwise been sound, delay and the shortcomings of the hearing before Mr Marquand would have been formidable obstacles to the grant of relief. Mr VassallAdams argues that, on the other hand, when the balance came to be struck, would have been other factors: that these documents derived from wrongdoing – the theft of Mr Coates’s laptop or the hacking of his email account; the Defendants were on

In the circumstances it is not necessary for me to determine a further issue canvassed between the parties, namely whether it was necessary for a claimant advancing a claim for breach of confidence had to show that disclosure of the information would be to its detriment.

The hearing of this application concluded on 28^th November 2019. I reserved judgment. I had nearly completed the draft of this judgment when, on 8^th December 2019 my clerk received a consent order of that date. The Consent order recorded that the application had been withdrawn by the Claimant and various provisions had been made as to the costs of the application. In the circumstances I invited submissions as to whether I should, nonetheless, exercise my power to hand down the judgment anyway (see Prudential Assurance Co. Ltd. v McBains Cooper [2000] 1 WLR 2000 CA).

Both parties replied on 10^th December 2019. The Claimant said it was content to leave the matter to me. The Defendants urged me to hand down the judgment. On the same date I also received a notice of discontinuance of the underlying which had been entered that day by the Claimant.

Guidance as to when a Court should hand down a judgment, notwithstanding the settlement of the dispute between the parties was given by Lord Neuberger MR in Barclays Bank plc v Nylon Capital LLP [2011] EWCA Civ 826, [2012] 1 All ER (Comm) 912 CA at [74]-[77]. Among the relevant considerations were:

In this case:

In all the circumstances, I decided that the judgment should be handed down.

The Claimant’s application is dismissed.