England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION )
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE TUGENDHAT)

		Royal Courts of Justice Strand, London, WC2A 2LL
		24th March 2010

Lord Justice Pill:

1. This is an appeal by Mr Matthew Fiddes, the appellant, at present the applicant, against an order of Tugendhat J on 28 January 2010 refusing his application for specific disclosure in a libel action.
2. The application for permission to appeal has been referred on a consideration of the papers to this court. Permission to appeal is granted.
3. The order sought before the learned judge was in these terms:

"The second defendant do restore and then carry out a search of its back up tapes for the period between 1st March 2008 and 4^th July 2008 for e-mails and their attachments (if any) concerning the programme complained of and sent to or from or copied to the third defendant and/or Alice Bowden. (2) The second defendant do provide the claimant with disclosure by a list of documents found pursuant to the search carried out pursuant to paragraph one above by 11th February 2010.

4. The appellant had applied for an order, therefore, that Studio Lambert Limited, the respondents, carry out a search of its IT system's backup tapes for that deleted traffic. A trial date for the hearing of the action has been fixed. That is 10 June 2010. We are now a few days from the end of term. We have heard substantial submissions from Mr Sherborne for the appellant and Mr Nicklin for the respondent and are anxious that there be no risk of the hearing date being postponed. Having regard to the members of the court's own commitments during the last few days of this term, I will give judgment this afternoon.
5. The trial judge described the background in paragraphs 2 to 4 of his judgment, the reference to the claimant being to the present appellant.

"The action is in respect of a broadcast made on the 27^th November 2008 under the title The Jacksons Are Coming. It was about a visit of the family of the late Michael Jackson to Cornwall. The claimant knew the family and participated extensively in the broadcast. The third defendant, Miss Preston, is a journalist and film maker and she was engaged by the second defendant for the purpose of making the programme, which has been complained of. She was also the director and narrator of the programme. Alice Bowden was her assistant.

3. The meanings complained of by the claimant need not be set out. They are somewhat more serious than that pleaded by the defendant which the defendant is proposing to justify. The meaning pleaded by the defendant as true is as follows: 'The claimant had betrayed the trust that the Jackson family had placed in him and hypocritically deceived them by using his position as an apparent friend by seeking to exploit their fame for his own personal benefit and was a manipulative and dishonest individual. ' There are 43 sub-paragraphs of particulars of justification extending over many pages. The defendants also plead a defence of honest comment.

'Insofar as the words complained of conveyed or were understood to convey any or all of the following statements (a) the claimant had betrayed the Jackson family appallingly (b) that the claimant had sought to exploit the Jacksons' fame for his own personal benefit and/or (c) that the claimant was manipulative, then they are honest comment on a matter of public interest namely the claimant's behaviour in relation to the Jackson family and the making of the programme'.

4. All the statements of case to which I refer have been amended and I refer to the amended versions. There is a reply that covers some 44 pages which pleads in detail to the particulars of justification. It denies the meaning sought to be justified and it includes also in response to the plea of comment, a plea of malice. It includes two passages which give the substance of the claimant's case in this action. The first is as follows (paragraph 9)

' The second and/or third defendants manipulated the underlying footage which they had recorded so as to create or reinforce this false and defamatory allegation and/or chose to omit or distort in the final edited version of the programme a series of key facts or matters which if referred to in the broadcast would have completely undermined the allegations complained of and/or utterly destroyed the credibility of the programme itself.'

In paragraph 12, under particulars of malice, there is pleaded:

'The third defendant and the second defendant (through its vicarious liability for Stephen Lambert) knew that the central message of the programme was completely untrue and/or had no honest belief in the same. There was no betrayal of trust by the claimant. He was not guilty of betraying the Jacksons for his own benefit or otherwise by leaking stores to the press or seeking publicity before and during their trip despite their wishes to avoid any publicity. This message was conveyed or reinforced by the way in which the programme and/or the underlying footage was selected or edited as referred to in paragraph nine above."

6. The second defendant's list of documents is in standard form with a number of riders. Among the documents listed as no longer being in their control are e-mails between:

"…the third defendant…and others for the approximate date range March 2008 to June 2008 on the Studio Lambert email account. These documents are at last in the control of the third defendant in approximately August to October 2009 when she deleted them due to lack of storage space on the account"

7. Also listed under that heading are e-mails between Alice Bowden and others from April to July 2008. These documents were said to have been deleted by Alice Bowden in July 2008 when she left the employment of Studio Lambert. A disclosure statement signed by the third defendant, Miss Preston, is in substantially similar terms.
8. The appellant's solicitors have subsequently been notified that Miss Bowden did not in fact use the e-mail facilities provided by her employers during the relevant period. That being so, if they are sure that is the position -- and that has not been authoritatively resolved this afternoon -- they agree having deleted from the application the words I cited relating to Miss Bowden.
9. Civil Procedure Rule 31.7 provides :

"(1) When giving standard disclosure, a party is required to make a reasonable search for documents falling within rule 31.6(b) or (c).

(2) The factors relevant in deciding the reasonableness of a search include the following –

(a) the number of documents involved;

(b) the nature and complexity of the proceedings;

(c) the ease and expense of retrieval of any particular document; and

(d) the significance of any document which is likely to be located during the search.

(3) Where a party has not searched for a category or class of document on the grounds that to do so would be unreasonable, he must state this in his disclosure statement and identify the category or class of document.

(Rule 31.10 makes provision for a disclosure statement)"

10. Electronic disclosure is further considered in paragraph 2A of the Part 31 Practice Direction. That provides, so far as is relevant:

"[2A.1

Rule 31.4 contains a broad definition of a document. This extends to electronic documents, including e-mail and other electronic communications, word processed documents and databases. In addition to documents that are readily accessible from computer systems and other electronic devices and media, the definition covers those documents that are stored on servers and back-up systems and electronic documents that have been 'deleted'. It also extends to additional information stored and associated with electronic documents known as metadata.

2A.2

The parties should, prior to the first Case Management Conference, discuss any issues that may arise regarding searches for and the preservation of electronic documents. This may involve the parties providing information about the categories of electronic documents within their control, the computer systems, electronic devices and media on which any relevant documents may be held, the storage systems maintained by the parties and their document retention policies. In the case of difficulty or disagreement, the matter should be referred to a judge for directions at the earliest practical date, if possible at the first Case Management Conference.

2A.3

The parties should co-operate at an early stage as to the format in which electronic copy documents are to be provided on inspection. In the case of difficulty or disagreement, the matter should be referred to a Judge for directions at the earliest practical date, if possible at the first Case Management Conference.

2A.4

The existence of electronic documents impacts upon the extent of the reasonable search required by Rule 31.7 for the purposes of standard disclosure. The factors that may be relevant in deciding the reasonableness of a search for electronic documents include (but are not limited to) the following:–

(a) The number of documents involved.

(b) The nature and complexity of the proceedings.

(c) The ease and expense of retrieval of any particular document. This includes:

(i) The accessibility of electronic documents or data including e-mail communications on computer systems, servers, back-up systems and other electronic devices or media that may contain such documents taking into account alterations or developments in hardware or software systems used by the disclosing party and/or available to enable access to such documents.

(ii) The location of relevant electronic documents, data, computer systems, servers, back-up systems and other electronic devices or media that may contain such documents.

(iii) The likelihood of locating relevant data.

(iv) The cost of recovering any electronic documents.

(v) The cost of disclosing and providing inspection of any relevant electronic documents.

(vi) The likelihood that electronic documents will be materially altered in the course of recovery, disclosure or inspection.

(d) The significance of any document which is likely to be located during the search.

2A.5

It may be reasonable to search some or all of the parties' electronic storage systems. In some circumstances, it may be reasonable to search for electronic documents by means of keyword searches (agreed as far as possible between the parties) even where a full review of each and every document would be unreasonable. There may be other forms of electronic search that may be appropriate in particular circumstances."

11. The respondents accept that, had the emails of Miss Preston and Miss Bowden not been deleted but had remained on computers available to be searched, they would have been searched for the purpose of disclosure.
12. The judge continued at paragraph 8 :

"It has subsequently appeared that there are some emails of Miss Preston and perhaps all of the emails of Miss Bowden which may be retrievable from a number of back up tapes, which probably number about three. It may be that there were more than three, possibly as many as six relevant back up tapes. The laptop of Miss Preston has been lost. The claimant is not satisfied as to the explanation for that, but that is the factual position. I am not concerned with that matter today. The tapes that are the subject of this application are thus those which would include emails for the period March to June 2008 and the two ladies named. Of course, the back up tapes would also include a vast quantity of other material as well."

13. Over 500 e-mails have been disclosed by the respondents, including about 70 composed by Miss Preston. These have been retrieved from storage devices of the addresses to which they were sent. That included other employees of the second defendants, though also many were sent to the appellant.
14. From those it became clear that not all her emails during the relevant period had been retrieved in that way. The judge stated that the issue was to be decided by addressing a list of factors set out in CPR 31.7 and expanded in paragraph 2A of the Practice Direction. It appears likely, the judge said, that the number of e-mails "seems likely to be nearer hundreds rather than thousands, possibly in the relatively low hundreds".
15. The judge described the action as relatively complex for a libel action. He stated that the cost of retrieval would be "something up to £10,000, possibly more, but a figure of that general order". The judge was told that costs to date in the action were "of the order of £1,000,000", and the court is told that about half of that sum has been incurred by each side.
16. It is said on behalf of the appellant that with Miss Bowden's elimination from the scene for this purpose the cost would be lower, and a figure of between £5,200 and £6,300 has been put in in evidence. That excludes VAT and of course it is a statement of the technical costs of retrieval and there would in addition to that be the consequential legal costs.
17. Before the judge and in this court the appellant has been critical of aspects of the disclosure. A disclosed document described as "contemporaneous diary by Jane Preston" turned out not to have been contemporaneous but to include substantial additions by Miss Preston at a later date, including during the edit of the programme, and also considerable deletions. A shorter and truly contemporaneous version of her diary was later disclosed. It is submitted that the respondent's conduct in that respect throws light or may throw light on the state of mind of the third defendant.
18. Two other matters were raised by the appellant as demonstrating, he submits, the need for further disclosure. The defendants have been asked to take steps to preserve electronic documents following the discovery of the deletions. The day before the laptop was to be collected, the third defendant's home is said to have been broken into and the laptop stolen. This aspect of the case does not appear to have been pursued before the judge. The submission is made that it could have been possible to determine authoritatively from the machine the precise dates on which the changes between the contemporaneous diary and the much more substantial document first disclosed had been made. The appellant also draws attention to Miss Preston's first explanation for deleting her e-mails, namely that it was in order to free up space on the server, whereas her later explanation was that she had not sent any emails during the relevant period.
19. The judge expressed his conclusions at paragraph 20 and 21:

"I have to observe that it is a matter of great concern that the costs of this libel action should have reached the figures that they have. By reference to that figure, Mr Sherborne for the appellant is able to say that a sum of the order of £10,000 is hardly significant. Indeed, as I observed in the course of submissions, it may well be that the cost of this application exceed that figure, but that is not the right approach. On that basis, there would be little ground for attempting to limit costs in libel actions at all. Searches of back up tapes are not required in every case and are not to be encouraged as a general rule. Whether they are required or not must depend on the facts of each particular case. On any view, the total cost of this action illustrate the general public concern as to the cost of libel actions. Only about four jury actions per year are fought, and a roughly similar number tried by judge alone out of some 200 or more claims that are issued, or have been issued, in each of the most recent years. Those actions that are fought have given rise to great public concern as to their costs.

21. I accept that in an ideal world, the claimant should have disclosure of the e-mails sought but it is not an ideal world. In this case, it is a matter of speculation whether the search that he requests I order would produce anything relevant, and if it did, whether it would help the Claimant's case or undermine it. There will undoubtedly be cases where retrieving and searching back up tapes will be a proportionate exercise in a libel action. But in this case, it seems to me, that the issues in the action will be most likely to be resolved on the contemporaneous documents that have been disclosed and the oral evidence of the Claimant and third Defendant, if the case gets that far. In my judgment, the claimant cannot in the present case show that there is a sufficient likelihood of retrieving any email that is both relevant and significant and on that basis, I dismiss this application.

20. I comment very briefly on the judge's use of the expression "ideal world". In my judgment, an ideal world does require that limits be placed on disclosure but that is I daresay a philosophical issue which need not be debated further this afternoon.
21. For the appellant it is submitted that the judge adopted the wrong approach to the factor in paragraph 2A.4(d) of the Practice Direction, wrongly elevating it to the status of a decisive factor. A question of principle is raised in this appeal, submits Mr Sherborne: what is the correct approach to the factors to be considered when considering what is a reasonable search for electronic documents? The judge has placed, Mr Sherborne submits, the hurdle to be jumped by the appellant far too high. He accepts that the judge did take account of the relevant factors but the judge was wrong to regard paragraph 4(d) as decisive. The appellant does not know what would be found on disclosure but that does not itself make the application a fishing expedition.
22. Because the court cannot rule out the possibility that something of significance might emerge from the restored e-mails the court should in the circumstances of this case make an order for disclosure, it is submitted. That is particularly so because Miss Preston's state of mind is central to the litigation having regard to the allegation of the appellant against her. The judge, it is submitted, failed to consider the disputed category of documents in the context of what had not been searched. The matter is put in issue by the pleadings as in the centrality of Miss Preston. The cost involved is modest especially in relation to the very high costs incurred in this case. If they see fit, the respondents, he submits, are able to protect themselves against liability in costs, this being a claim to which a conditional fee agreement applies.
23. I deal with that point now. For the respondents, Mr Nicklin says that the relevant insurance policy has not been disclosed to the respondents and they cannot be said to be unreasonable in failing to take out further insurance. I do not regard the issue of insurance as central to the outcome of this appeal.
24. Mr Sherborne's central submission is that in the circumstances the search of the deleted documents sought by the appellant is necessary and appropriate. This is an appeal against a case management decision by a High Court judge. The test to be applied was stated by Lord Fraser of Tullybelton in G v G [1985] 1 WLR 647 at 652:

"The appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution which is different from an alternative imperfect solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which a reasonable disagreement is possible"

25. In support of his submissions Mr Sherborne relies on the decision of Morgan J in Digicel Ltd & Ors v Cable and Wireless Plc & Ors [2009] 2 All ER 1094, where a similar question arose on the recovery of emails. It was a case involving an allegation of conspiracy. Morgan J referred at paragraph 46 to the importance of contemporaneous documents in that context. He referred to the decision of this court in Nichia Corporation v Argos Limited [2008] EWCA Civ 741. At paragraph 65 Morgan J stated:

"The converse is that if one restores a back-up tape and searches the e-mail account of a specified individual, one may find relevant e-mails which went to persons other than those whose e-mail accounts have survived and been searched. One will also find e-mails from the specified individual to third parties outside the Defendant companies. The Defendants submit that there will be very few additional documents which turn up as a result of restoring the back-up tapes to search the e-mail accounts of the 7 individuals. The Defendants accept, as they must, that they cannot rule out the possibility that there will be additional material. In that case, they cannot rule out the possibility that the additional material might be of great significance. In my judgment, it is very difficult to predict the scale of the additional material which will be found on a search of 7 further e-mail accounts. However, I am not able to rule out the need for a further search just because some part, perhaps even a large part, of what will emerge has already been disclosed."

26. The appellant has relied as a further factor on Miss Bowden's change of position which has occurred since the decision of the judge. He submits that that is further evidence of the unsatisfactory nature of the respondents' disclosure.
27. The majority view of the court in Nichia Corporation to which Morgan J referred was that the extent of discovery should be decided on a case by case basis. Rix LJ stated at paragraph 72:

"A reasonable search should be tailor-made to the value and significance of the likely product of such a search."

He considered that there should not be "a blanket prima facie rule against any standard disclosure" Rix LJ added at paragraph 73 that the concerns of Jacob LJ, who dissented: "…might be met by a rigorous application of the rationale of standard disclosure". I stated at paragraph 82 that the judge should consider:

"…the features of the particular case with a view to making an order tailored to achieving a just outcome, which includes limiting, as far as possible, the costs incurred."

I added at paragraph 91 that:

"…consideration should be given to the needs of the particular case."

28. That still appears to me to be the correct approach. Analysis of the particular circumstances is required and, applying the rule and the Practice Direction, a decision should be reached on the basis of their application to the facts of the particular case.
29. We have been referred to an authority on the importance of contemporaneous documents, Lord Goff in Grace Shipping v Shark and Co [1987] 1 Lloyds Rep 207 at 215-6. That, I accept, is particularly so when a case may turn on the state of mind of a party.
30. The disclosure in this case has already included over 500 e-mails from the period of the project, 70 of those from Miss Preston. The respondents submit that the appellant has not been able to point to any e-mail, incident, meeting or telephone call which lays any foundation for a submission that something of significance might be found in the deleted emails. Nothing has been produced to support a case that restoration and search of the deleted emails would locate anything of significance. It is submitted that the suggestion in this case on the material available that Miss Preston might have wanted to conceal her state of mind, while engaged on filming, in the e-mails sought, suggests a degree of cunning of Machiavellian proportions. The pattern of communication revealed in the documents, it is submitted, does not give rise to any real prospect that the emails will be relevant to an allegation of malice.
31. As to costs Mr Nicklin submits that the judge did take the figure into account when making his decision. He took it into account in relation to the overall figure which had been spent to date. He submits that a judge should not be deterred from proper case management when an application like this comes before him by the costs in the action already having risen to £1 million. The judge took the appropriate factors into consideration. The appeal in essence is on the basis that he gave more weight to one factor than other judges might have done and that does not found a successful appeal in this court.
32. The diaries to which I have referred have loomed large in the submissions today. The nature of the document first disclosed has become clearer in the course of submissions. I referred to the very substantial additions made to it and some deletions, as now presented. We have been referred to entire pages where the text is by way of addition to the contemporaneous record. Mr Nicklin submits, and I accept, that the word "diary" is something of a misnomer. This was the working document of the third defendant who was the director of the programme and also the narrator. It was entirely predictable, he submits, that making such use as she could of what is a truly contemporaneous diary, she would wish, when preparing her narrative for the programme and when considering what should and should not be in the programme, to have a much fuller account based on what she could remember it at that time. It is a journalist's working document, not in any sense a personal diary. The dates of the amendments, he submits, are ascertainable without the computer being available.
33. The diary issue was before the judge, who considered it on the basis of submissions made to him. It was put to Mr Sherborne that he had not before the judge referred to any disclosed documents which could form the basis for a belief that the undisclosed emails might be relevant to the issues in the case. On pressed in this court to refer to any documents he relied on, he has referred to a very small number.

A deletion in an entry for Thursday 15th at page 159 of the bundle as to whether "there aren't enough Jacksons going to Devon".

A deletion, page 170 of the bundle, when a reference was made to "Jackie and Siggie leaving for Los Angeles", of the words "for business".

At a later stage he referred to narrative added, at page 163 of the bundle, dealing with the possible relationship between two of those involved in the programme.

An added reference at page 163 to the writer "still awaiting to hear who else will come", that is to Devon.

And the reference at 166 added: "I hope this doesn't bode badly for Devon."

34. Now that we have had such help as is available on that subject by way of detail in support for the appellant's submission, I cannot see that this, in the main and I use the colloquialism "folksy", material provides a basis for a belief that there is some prospect that evidence of malice would appear in the undisclosed emails. The document appears to me to be, as amended, an entirely predictable document which a person in the third defendant's position is likely to prepare, and to do so on the basis of an earlier contemporaneous note that will be amended in many ways as this one has been.
35. With respect to the persuasive submissions of Mr Sherborne, I can find nothing in the material which was before the judge and to which he has referred as laying a basis for a sinister approach to Miss Preston's undisclosed communications during the relevant period.
36. I do not consider that the appellant is prejudiced by the loss of the computer or by the changed position of Miss Bowden. The changed position of Miss Preston as to why she deleted does require analysis, but on analysis it does not in my judgment provide the support which the appellant needs if this appeal is to succeed.

Conclusion

37. I do not accept that the judge applied the wrong test. It is not suggested he has failed to have regard to any factor. He has given weight, as he was entitled to give weight in the circumstances, to the contents of 2A.4(c)(iii), the factor being the "likelihood of locating relevant data" and 2A.4(d), the significance of any document which is likely to be located during the search. I have made comments of my own on the material. However, the essential question is whether this is an appropriate case in which to reverse the finding of the judge. Tugendhat J is a judge experienced in this field. What is more he had the handling of the case and he conducted earlier interlocutory hearings, which would have made him well familiar with the issues in the case and the impact of the application made. His conclusion in the last sentence of his judgment was in my judgment justified :

"…the claimant cannot in the present case show that there is a sufficient likelihood of retrieving any email that is both relevant and significant, and on that basis, I dismiss this application."

38. The judge had all the relevant material before him and heard the submissions on it. He had a broad discretion. Other judges might possibly have reached a different conclusion but, having considered the material before the court and his judgment, this is not in my judgment a case in which the court should interfere with or reverse his decision.
39. For those reasons I would dismiss this appeal.

Lady Justice Smith:

40. I agree.

Lord Justice Wilson:

41. My mind has wavered in the course of today's arguments. Like Shakespeare's "feather for each wind that blows", it has been swayed this way and that by two particularly powerful advocates. In the end I have had firmly to remind myself that in this court we do not sit in the shoes of the judge. I am far from sure that, had I been ruling on the application at first instance, I would have reached the conclusion which he reached. But our task is to review his discretionary case management decision from what one might compendiously describe as the distance identified in the well-known jurisprudence. It is therefore not enough for me to consider, as I do, that the judge's decision may not have been right. Mr Sherborne accepts that, in that the judge paid at any rate some regard to all the factors specified in Rule 31.7(1) and in paragraph 2.4 of the Practice Direction supplementary to Part 31, he must persuade us that the decision is plainly wrong. Like my colleagues, I conclude that, for the reasons which Pill LJ has given, he has failed to do so. Irrespective of the hour, 5.01pm, there is in these circumstances simply no value in my proceeding to identify the points made by Mr Sherborne which most appealed to me.

Order: Application granted.