England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION,
LEEDS DISTRICT REGISTRY, MERCANTILE COURT
(HIS HONOUR JUDGE KAYE QC)

		Royal Courts of Justice Strand London, WC2
		19th March 2006

1. LORD JUSTICE LATHAM: This is an application for permission to appeal a decision of HHJ Kaye QC of 9 February 2006. He granted to the company, who were the claimants in an action before the Queen's Bench Division of the Leeds District Registry, an injunction in the following general terms in relation to solicitors who were at that time acting for the defendants to the company, namely that those solicitors should be restrained from acting in relation to the action and should be restrained from disclosing any confidential or privileged information. The circumstances in which that injunction was applied for were that up until 2005 the solicitors had acted on behalf of the claimants in the claim. It is apparent, however, that the nub of the application was not so much that they had acted for the claimants up to 2005, but that they had acted for the claimants in relation to issues which were raised in the action both in previous proceedings and in general advice over a significant period from 1996 at least until 2003.
2. The issue in respect of which the solicitors were said to have acted was the process whereby contracts were made between the claimants, who are manufacturers of clothing, and the customers to whom they sold that clothing. The position in the action with which these proceedings is concerned was the question, which as Mr Maclean QC, on behalf of the applicants has made plain, is not an uncommon issue, namely where two companies trade, each hopefully on their standard terms and conditions, whose standard terms and conditions should prevail when they are in conflict? In this case the specific conflict, without needing to descend into detail, relates to the question of whether or not incorporated in the contract was the claimants' retention of title clause.
3. There is no doubt that the solicitors had acted on behalf of the claimants in two previous actions, one in 1996 and the second in 2001, in which a similar if not identical question had arisen. The first was in a dispute relating to a company called Oakdale Ltd, and the second in relation to a dispute with a company called Ciro Citterio. But that is not the only basis upon which it is asserted by the claimants that they were entitled to the relief which they sought. In the evidence in support of their application for the injunction, provided in a statement from a Mr Jonathan Lowe, dated 12 December 2005, it was made plain that the solicitors had provided both general and specific advice in relation to the contractual documentation which was necessary in order to ensure that the claimants were able to impose the terms and conditions they wished to impose, and also implicit in what he says, the process and procedures which the claimant should adopt in order to ensure that the documentation – that is, their documentation – ultimately prevailed.
4. The matter goes further than merely a general assertion that the solicitors acted on the claimants' behalf on relation to those issues; it is that a particular solicitor, GD, was the solicitor who acted in relation to both of the previous pieces of litigation, was involved in the giving of advice, as were other members of the firm, and that it is her (her initials being GD) that is the partner who is now seeking to act for the defendants to the action brought by the claimants.
5. The judge, in what is quite clearly a carefully considered judgment, makes it plain that he was referred to and took into account the relevant authorities. He identified the principles as being those laid down in Prince Jefri Bolkiah v. KPMG (A Firm) [1999] 2 AC 222, and in particular referred to the speeches of Lord Merritt and Lord Hope. He accepted that there is no rule of English law which precludes a solicitor from acting in relation to any matter in circumstances where he is acting against a previous client. The rule is only that a solicitor should not so act if he is or might be in possession of information which is confidential and/or privileged which might be relevant in the main action and there is a risk that such information might come into the hands of the client for whom he now seeks to act, to the detriment of his former client.
6. I do not understand Mr Maclean to assert that the judge misunderstood the law; he simply asserts that the judge failed to apply it properly to the circumstances of this case, particularly bearing in mind the warning of Tuckey LJ in Koch Shipping v Richards Butler [2002] 2 All ER (Comm) 957 at 972, where he said as follows:

"In these days of professional and client mobility it is of course important that client confidentiality should be preserved. Each case must depend on its own facts but I think there is a danger inherent in the intensity of the adversarial process of courts being persuaded that a risk exists when, if one stands back a little, that risk is no more than fanciful or theoretical. I advocate a robust view with this in mind so as to ensure the line is sensibly drawn."

7. Essentially, it is upon that dictum of Tuckey LJ that Mr Maclean bases his criticism of the judge's approach. He submits that the issue in the present case – that is, in the main action – was a perfectly simple issue common to many commercial actions where there is a battle of the forms. In the present case it is indeed even narrower than is so often the case because, quite simply, the issue is as to whether or not what might be called the "last document" was indeed submitted by the claimants, as they say, or was not, as the defendants to the action say. He accordingly says that, taking a robust view – and this is putting it, I accept, in somewhat simplified form, but nonetheless I think it encapsulates his submission – where on earth is the confidential or privileged information which could be in the possession of his clients, which they might be at risk of disclosing to the defendants to the detriment of the claimants? The issues in the two actions in which GD acted on behalf of the claimants were matters which were fully disclosed in pleadings and in the other public documents, and accordingly cannot attract confidentiality or privilege.
8. The question, again, he asked rhetorically is: in those circumstances, bearing in mind that this present action it is said by the claimants, by reason of the fact that they have made an application under order 24 for summary judgment, that is if that could be confidential in relation to the two issues between the parties in this case. He submits that one litmus paper test of that is the extent to which the claimants have made any application for the court to consider in private the material which they say is confidential – they did not – and that is contrary to the practice of what would be expected to have been adopted if in truth there was confidential or privileged information exemplified in the case of Mannesmann v Goldman Sachs, of which we have a transcript, in which Lightman J gave judgment on 18 November 1999 and SmithKline Beecham v Connaught Laboratories Inc [1999] 4 All ER 498. He submits, accordingly, that realistically speaking there is nothing upon which the claimants' injunction could sensibly bite, and that there is no evidence to show what confidential material about which the claimants could feel concern.
9. It is correct to say that the claimants do not purport to identify any specific material which is either confidential or privileged, beyond the general description of it as being information relating to the claimants' ordering process, which the claimants assert must have been disclosed to GD when she was acting for them both in relation to the actions and advice given in relation to this issue. It is submitted that the information is not necessarily information which would be included in documentary form, but could well be information which was gleaned by way of a general appreciation as a result of the instructions that GD received from the clients as to the procedures adopted and the basis upon which decisions were taken in relation to the ordering process.
10. The judge accepted these arguments. In his view, although generally stated in the way I have stated it, nonetheless that was sufficient, he considered, to justify the conclusion that confidential and/or privileged information was made available to GD so as to meet the first leg of the two-leg test before a claimant in these circumstances can get the claim for an injunction off the ground.
11. He then turned to the second question, which is whether or not that information is or may be relevant to the matter with which the action is concerned; he concluded that, since the subject matter essentially was the same as that of Oakdale and Ciro Citterio, and he accepted and acknowledged that the Oakdale case was some ten years old, and the Ciro Citterio case was some five years old, nonetheless the ages of those two cases did not of themselves justify the conclusion that there was no real risk of there being still relevant confidential material, or privileged material, which could be of relevance to the present action.
12. He accordingly concluded that the claimants had met the two stage test, which then required him to consider whether or not there was a risk of disclosure of such material, the burden being on the solicitor to satisfy him that there would be no such risk, and he concluded that there was a risk He bore in mind the dictum of Lord Millett in his speech in Bolkiah that:

"It is of overriding importance for the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer should remain secret. That is a matter of perception as well as substance."

13. He accordingly concluded, as is implicit in the fact that he granted the injunction, that the claimants had established all the requirements which justified the grant of that injunction. Having considered with care the submissions of Mr Maclean, which I have summarised earlier in this judgment, it seems to me impossible to say that the judge misdirected himself as to the law. Although I fully understand the concerns expressed that the court should act robustly, as indicated by Tuckey  LJ, I am not satisfied that we could properly interfere with the judge's conclusions at the end of the day, he having directed himself properly, that the appropriate requirements for the grant of an injunction had been properly made out. It is not necessarily the case that the material here fell clearly in the category of material which was bound to result in an injunction, but the judge's approach to this material and the conclusions that he reached cannot in my view give rise to any issue with which this court would be likely to interfere, and accordingly I would refuse permission to appeal.
14. LORD JUSTICE GAGE: I agree. Notwithstanding Mr Maclean's able arguments, I am not persuaded that an appeal has any real prospect of success. On the first issue of confidentiality, it seems to me that the nub of the judge's decision is to be found in paragraph 55 and 56 of his judgment:

"55. GD accepted in a witness statement, having acted for Albion in relation to the Oakland and Ciro Citterio litigation, both of which involved ROT issues, and in having reviewed the provision of general advice about the incorporation of ROT clauses following the former, she also accepted that she would have gained some knowledge of Albion's ordering process in relation to the contract with Oakland, which denies it is of any relevance to the main action.

"56. It seems to me a reasonable inference on the material that I have seen, and a good deal of which I have referred to above, that Albion did indeed impart confidential and indeed privileged information to the respondent on a wide variety of matters over the many years of their professional relationship. Moreover, it is a further reasonable inference in my judgment that such information was imparted specifically to the following solicitors, no doubt amongst others, namely GD, DJ and TS."

15. It is relevant to note that GD still acts in this matter for the other party.
16. In the circumstances, in my judgment, the judge was quite entitled to draw the inferences to which I have referred and in the circumstances, on the first issue, in my judgment there is no real prospect of success. So far as the second and third issues are concerned, relevance and the risk of disclosure, there is nothing that I need to add to what my Lord has already said. There is, in my judgment, no real prospect of success in relation to those two issues. I too would reject this application.

Order: Application refused.