England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT QUEENS BENCH DIVISION
MR JUSTICE TUGENDHAT
[2013] EWHC 3789 (QB)

		Royal Courts of Justice Strand, London, WC2A 2LL
		31/07/2014

LORD JUSTICE CHRISTOPHER CLARKE :

The problem

1. A company (C) dismisses its employee D. D brings a claim for unfair dismissal. D gives disclosure, as ordered by the employment tribunal, of various documents. These include a USB stick which has on it copies of some of C's highly confidential documents. C's staff recognise the documents for what they are. C brings proceedings in the High Court against D claiming an order for delivery up of its documents or copies thereof, deletion of the confidential documents from D's computer or other electronic device, injunctive relief and damages. C makes no application for permission to use the documents disclosed in the tribunal proceedings in support of its claim in the High Court.
2. The Court orders D, then unrepresented, (i) to deliver up any of the confidential documents that are in his possession save any held on an electronic storage medium and (ii) to delete any that are on his computer or other electronic device. It also makes a disclosure order and grants injunctive relief until the trial preventing, inter alia, use or copying of any confidential information of C and orders D to pay the costs of the application. D complies with the order.
3. Two months later D, now advised by solicitors, applies to strike out the entire action on the grounds that the proceedings amount to an abuse and a contempt because they were based on D's disclosure in the tribunal proceedings so that the claim was commenced in breach of CPR 31.22. What should the court do?
4. The answer to this question given by Tugendhat J was that the Court should, as he did, strike out the action as an abuse; revoke the order for D to pay C the costs of the application; and order C to pay D his costs of the application which were agreed at £ 26,089.35. The question in this appeal is whether he was right to do so.

The facts

5. C is IG Index Ltd (hereafter "IG Index"), the appellant. It carries on the business of spread betting in currencies, commodities, shares and other securities. Its clients access the service on line. D is Mr Johannes Cloete (hereafter "Mr Cloete"), the respondent. He was employed by IG Index as a network service engineer in the IT department. He entered into a number of covenants for the protection of confidential information relating to the business of IG Index and the dealings of its clients.
6. On 1 June 2011 he reported to the head of IG Index's legal department concerns he had over the security of certain data of IG Index. These concerns arose as a result of work he had done on a South African computer server where, according to him, a USB WI-FI network interface had been connected to the server which constituted a security risk. On 23 June 2011 the head of the legal department decided that it was not necessary to take any further action. In October 2011 IG Index took disciplinary action against Mr Cloete on the ground that he had carried out unauthorised work. On 1 March 2012 he reported to IG Index's Information Security Officer further concerns that he had about the security of the South African server.
7. Before then, on 21 February 2012, Mr Cloete had emailed the Information Commissioner expressing concerns about the security of IG Index's data. On 27 February 2012 he made hard copies of a number of documents ("the Confidential Documents") which he sent to the Information Commissioner's Office (ICO) as evidence of security breaches. These documents were described as follows:

i) a client list relating to IG Index's South African office;

ii) a list of its prospective clients;

iii) a list of its clients' bank payment details;

iv) a list of its broker/client list for South Africa.

As is apparent from the description the material was highly confidential. IG Index says that it has not been able to establish how Mr Cloete got copies of this database without triggering a security system alert and that he did not have any justifiable reason to copy the Confidential Documents.

8. Mr Cloete was dismissed by IG Index with effect from 3 July 2012. On 2 October 2012 he brought a claim for unfair dismissal.
9. On 17 December 2012 Mr Cloete made a request to the ICO to be provided with any personal information the ICO held about him and, in particular, correspondence with the ICO sent from his email address and by post. This was treated by the ICO as a "subject access request" made under the Data Protection Act 1998.
10. On 18 January 2013 the ICO sent Mr Cloete an email which contained 8 TIF attachments. One of them was the report which had been made by Mr Cloete in February accompanying the Confidential Documents. 5 of the attachments consisted of the Confidential Documents which had to be subdivided on account of their size. The email informed him that a letter from IG Group dated 14 December 2012, which was also attached, had been redacted on account of the fact that it contained some information which was confidential to them. All that was being disclosed were the elements of that letter which were Mr Cloete's personal data. That letter had been IG Index's explanation of what had happened, which identified a number of individuals.
11. The effect of this was that, after his dismissal, Mr Cloete secured possession of copies (in the form of TIF attachments) of the Confidential Documents copies of which he had himself sent to ICO. Whilst the despatch of copies to the ICO may have been legitimate (and is not what IG Index complains of), the retention of copies for the purposes of the employment tribunal proceedings would not be; although in due course Mr Cloete would be entitled to receive (as he did) redacted copies of these documents by way of disclosure by IG Index which he would be at liberty to use for the purpose of the proceedings.
12. On 10 July 2013 (although the letter is dated 10 June 2013) the employment tribunal directed the parties to fix a time and place for the exchange of documents within 7 days. On 15 July 2013 IG Index delivered their list of documents to Mr Cloete together with copies of the documents (redacted in relation to confidential details). Mr Cloete delivered to IG Index a USB memory stick containing copies of the Confidential Documents.
13. On 24 July 2013 IG Index wrote to Mr Cloete expressing extreme concern at finding on the USB stick documents containing sensitive and confidential information belonging to IG Index and relating to IG Index and its clients including the Confidential Documents. The letter required, inter alia, the return of any originals or copies of the Confidential Documents and requested undertakings. It expressed the view that Mr Cloete would not have had access to this information in the normal course of employment. The letter is said by Mr Cloete not to have reached him because he had changed address. It was, however, said to have been sent to the same email address as had been used to communicate with Mr Cloete in relation to the tribunal proceedings.
14. On 2 August 2013 IG Index wrote to the employment tribunal asking to be allowed to amend its response to Mr Cloete's unfair dismissal claim so as to include a reference to his having copied and retained the Confidential Documents.
15. On 7 August 2013 IG Index PLC began proceedings in the High Court against Mr Cloete by the issue of a claim form seeking (a) delivery up of all documents that were the property of IG Index or contained confidential information belonging to IG Index or copies thereof, and particularly the Confidential Documents or copies thereof; b) permanent deletion of the Confidential Documents from D's computer or other electronic device; (c) injunctive relief; and (d) damages.
16. On 15 August 2013 Singh J made the order summarised in paragraph 2 above. Mr Cloete was unrepresented. The judge was satisfied (i) that there was a well arguable case in favour of IG Index and a serious issue to be tried; (ii) that damages would not afford it an adequate remedy, whereas they would be an adequate remedy to Mr Cloete, and (iii) that the balance of convenience lay firmly in favour of IG Index who had an "obvious and pressing interest" to retain confidentiality for example with third party clients. Such legitimate interest as Mr Cloete had in the documents, namely to use them in the employment tribunal, would be preserved by an exception in the order which permitted any disclosure required by a court of law or a regulatory body and for the purposes of taking legal advice or, to IG Index, or his legal representatives, in connection with the tribunal proceedings.
17. No reference was made by counsel or the judge to CPR 31.
18. In a witness statement dated 27 August 2013 Mr Cloete confirmed (a) that the only copies of the Confidential Documents (referred to in the order of Singh J as "the Listed Items") which had been sent to ICO were those sent by post on 27 February 2012; and (ii) that he had deleted all electronic copies of the Confidential Documents irretrievably and that he retained no copies of them in his possession. He also paid the costs of the application in the sum of £ 2,500.
19. Thereafter Mr Cloete secured legal representation. No attempt was made to appeal the judgment of Singh J or to set it aside.
20. On 3 September 2013 Mr Cloete's solicitors suggested that the use of the Confidential Documents had been a breach of the implied undertaking in relation to the use of documents and proposed on his behalf that IG Index should discontinue the claim, repay him the costs ordered against him, which he had paid, and pay his costs of taking further advice. In exchange what he had said in his witness statement of 27 August 2013, which included confirmation that he would not disclose any information save as permitted by the injunction, could be made the subject of a formal undertaking. On 6 September 2013 IG Index's solicitors indicated that IG Index was prepared to discontinue its claim on payment by Mr Cloete of
    £ 5,000 by way of a contribution to costs and subject to the matters dealt with in the statement of 27 August 2103 being made the subject of a formal undertaking.
21. On 9 September 2013 Mr Cloete withdrew his unfair dismissal claim which was dismissed.
22. On 17 October 2013 Mr Cloete applied to strike out the action. On 11 December 2013 Tugendhat J did so, revoked the costs order in IG Index's favour of 15 August 2013 and ordered IG Index to pay Mr Cloete's costs of the action. As a result IG Index will, if the appeal fails, have to repay Mr Cloete the costs that he had previously paid to them and to pay him his costs before Tugendhat J. The costs order of Tugendhat J has been stayed pending appeal.

CPR 31.22

23. CPR 31.22 provides:

"(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where –

(a) the document has been read to or by the court, or referred to, at a hearing which has been held in public;

(b) the court gives permission; or

(c) the party who disclosed the document and the person to whom the document belongs agree.

(2) The court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public"

24. The terms of CPR 31.22 (1) reflect the terms of the implied undertaking as to the use of documents that arose at common law. However in Smithkline Beecham v Generics [2004] 1 WLR 1479 this court held that CPR 31.22 is now a complete code in relation to the use of disclosed documents. It was common ground before us:

i) that that was so^[1];

ii) that the implied undertaking and, now the rule, applies not merely to the documents themselves but also to the information derived from those documents: see Crest Homes Plc v Marks [1987] 1 AC 829 where at p 854 Lord Oliver approved a holding by Scott J (as he then was) in Sybron Corporation v Barclays Bank Plc [198] Ch 299 to that effect; and

iii) that the rule applied when disclosure was given in the employment tribunal.

25. Point (iii) requires further consideration. The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, which applied until 29 July 2013, specified in Schedule 1 a set of Employment Tribunal Rules of Procedure. Rule 10 provided:

"10. - (1) Subject to the following rules, the chairman may at any time either on the application of a party or on his own initiative make an order in relation to any matter which appears to him to be appropriate. Such orders may be any of those listed in paragraph (2) or such other orders as he thinks fit. Subject to the following rules, orders may be issued as a result of a chairman considering the papers before him in the absence of the parties, or at a hearing (see regulation 2 for the definition of "hearing").

    (2) Examples of orders which may be made under paragraph (1) are orders -

….

(d) requiring any person in Great Britain to disclose documents or information to a party to allow a party to inspect such material as might be ordered by a County Court (or in Scotland, by a sheriff);" [sic]

26. The 2013 Rules made under the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 replace this provision by the following:

"Disclosure of documents and information

31. The Tribunal may order any person in Great Britain to disclose documents or information to a party (by providing copies or otherwise) or to allow a party to inspect such material as might be ordered by a county court or, in Scotland, by a sheriff."

27. The order made in this case was made on 10 July 2013 under the 2004 Rules and was that the parties should exchange documents. I accept that this was the equivalent of an order for standard disclosure; that the provision of the USB stick was a form of disclosure and that it, also, provided IG Index with immediate inspection.
28. There is, however, no express provision in either the 2004 or 2013 Rules restricting the use of disclosed documents. I would, however, regard it as implicit that the same restriction on disclosure by the recipient should apply as arises under CPR 31.22. The common law would necessarily imply some form of undertaking and the appropriate implication is that the person to whom disclosure is made pursuant to these Regulations should be under the same restriction as if he had given disclosure in the county court.
29. Mr Mayall for IG Index submitted to the judge, as he did to us, that in bringing their claim in the High Court IG Index did not use either (a) the Confidential Documents, which were theirs anyway, or (b) the information in those documents, which they already knew and which was also theirs. What they did was to use the information that Mr Cloete had the Confidential Documents in his possession. That information they learnt from the disclosure process. Nothing, he submits, in CPR 31 precludes a claimant from using information he has learnt from the disclosure process as opposed to using the document disclosed or the information contained in it.
30. The critical error, he submits, in the judge's reasoning is contained in the following paragraph [36]:

"In my judgment the Claimant has used information obtained from the disclosure of the Listed Items, namely, to use Mr Mayall's words "that the Defendant had, or at least had had, the Claimant's documents and information in his possession". And that information is information the use of which is prohibited by CPR r.31.22 (1), unless one of the exceptions applies. That interpretation of the rule is consistent with the policy considerations which have given rise to the prohibition, and with the words of Lord Oliver in Crest. It is only because of the Employment Tribunal Proceedings that the Defendant has had to disclose the fact that he was in possession of the Listed Items."

The words in bold, he submits, show that it was, on the judge's findings (from which there is no appeal) not the documents or the information in the documents that was used: it was the information that Mr Cloete had them; and that information derived from the fact that he disclosed them. Accordingly the judge was wrong to think that IG Index needed any permission – a need that did not occur to Singh J or to IG Index and its counsel.

31. Mr Mayall also submitted that the documents in question were the property of IG Index and that such documents are not caught by the prohibition. In this respect he relied upon the decision of this court in Process Development v Hogg [1996] FSR 45.

Process Development v Hogg

32. In that case the plaintiffs obtained an Anton Piller order. They gave an undertaking "not without the leave of the court to use any information or documents obtained as a result of carrying out this order except for the purpose of these proceedings or to inform anyone else of these proceedings until after the return date".
33. When the order was executed a number of items were delivered up to the supervising solicitor. They included (a) different components belonging to the plaintiff and (b) a number of drawings "accepted for present purposes as being the plaintiff's". The plaintiff took the view that the recovery of its own property from the defendant's house was something that it wished to pass on to the police in order for them to consider a possible prosecution for theft but that it was not free to do so without further order of the court. It applied to Rattee J for permission to disclose to the police the fact that its property had been recovered from the defendant's house. Rattee J granted permission.
34. Sir Thomas Bingham, MR, with whom Rose and Hobhouse LJJ agreed, held that there were 3 principles that fell for consideration. The first was that documents disclosed by an opposing party in litigation should not, without leave of the Court, be used for any purpose other than the litigation in which the discovery is obtained. That rule was the offspring of two principles (a) that the administration of justice is in general promoted if opposing parties make full discovery of all relevant documents whether helpful or unhelpful; and (b) that disclosure of a party's own private documents to an opponent represents an invasion of his personal rights to keep his documents to himself. That rule was not in issue when the material in question was not the defendant's own personal property but goods and information relating to goods which the defendant had stolen from the plaintiffs.
35. The second rule was the allied rule that documents obtained from a defendant on execution of an Anton Piller order should only be used for the litigation in which the order was made without the leave of the court. This was in part an accelerated discovery process in the sense that the items obtained on execution of the order would ordinarily be liable to production in due course. Insofar as the items seized were not the defendant's property, but the plaintiff's, there was some invasion of the defendant's private rights but "these are not the rights which the rules which have developed on discovery are intended to protect". There was no violation of the ordinary principles which the rule was intended to safeguard.
36. The third rule was the rule against self incrimination, which it is not necessary further to consider.
37. As Lord Bingham held, the disclosure to the police that the plaintiff's items had been recovered and the handing over of them to the police involved no breach of any of these rules. Hence there was no ground for criticising the judge's exercise of his discretion. As to that he said "It would be quite wrong to lay down any general rule that disclosure in circumstances such as these should be made but nor, in my view is there any general rule that disclosure should not be made".
38. Despite Tugendhat J's acceptance of Mr Mayall's reference to "the Claimant's documents and information in his possession" the documents which Mr Cloete disclosed were not in fact the property of IG Index. Mr Cloete, according to his evidence, made hard copies of the Confidential Documents, which he sent by post to ICO. ICO scanned (and thereby copied) them and then sent back to Mr Cloete TIF images of these documents in electronic form. Mr Cloete presumably downloaded them from his computer onto a USB stick, thereby making another form of copy of those images. He then produced the USB stick to IG Index. That was his property. He had not stolen it from IG Index.
39. Mr Mayall submitted that this was far too fine a distinction and that the principles to which Lord Bingham was referring would apply equally to copies of the IG Index documents. I do not agree. Lord Bingham was (i) addressing a situation where the material in question belonged to the plaintiff and had been stolen from him and (ii) considering, in that context, the exercise by Rattee J of a discretion to permit what would otherwise have been a breach of the undertaking. I note, also, that it was not suggested that the undertaking given did not apply.
40. I also do not accept that there is, in the present context, a distinction to be made between (a) documents and information contained in documents on the one hand and (b) information obtained from the disclosure process itself. This is too fine for me. What the rule precludes is the use of the document(s) disclosed. "Use" is a wide word. It extends to (a) use of the document itself e.g. by reading it, copying it, showing it to somebody else (such as the judge); and (b) use of the information contained in it. I would also regard "use" as extending to referring to the documents and any of the characteristics of the document, which include its provenance.
41. It seems plain to me that IG Index made use of the copies of the Confidential Documents disclosed. Their staff reviewed the content of the USB stick which contained such copies. Since they recognised the documents as copies of IG Index's documents, the information which reviewing and reading them revealed to them was that it was very likely that Mr Cloete had illicitly made or retained, a copy of IG Index's Confidential Documents. When IG Index wrote to Mr Cloete on 24 July 2013 they identified the Confidential Documents and their contents in support of their claim. That letter was exhibited to the statement of Ms Bonsor put before Singh J in support of the claim for relief. Her witness statement referred to the "USB containing [Mr Cloete's] documents for disclosure in the employment tribunal proceedings" and explained of what they consisted. That was a use of the documents disclosed.

Policy

42. I do not regard this conclusion as inconsistent with the policy behind the rule. One of the reasons for the rule is that compulsory disclosure is an invasion of a person's private right to keep one's documents to oneself and should be matched by a corresponding limitation on the use of the document disclosed: Riddick v Thames Board Mills [1977] 1 QB 881, 896; Process Development. That principle seems to me to be in play here. IG Index obtained disclosure in the employment tribunal proceedings of Mr Cloete's copy of their documents on the basis of which they sought to make claims against him in different proceedings. Even if he ought not to have retained the copy, the copy was his private document. Whilst permission, if sought, might readily be granted, the need to obtain it seems to me to fall within the rationale of the rule.
43. Another reason for the rule is in order to encourage those with documentation to make full and frank disclosure of it, whether helpful or not – on the footing that, subject to exceptions, it will not be used save for the proceedings in which it is disclosed: Riddick; Process Development.
44. In his witness statement of 13 November 2013 Mr Cloete said that when he disclosed the USB stick he was not aware that the Confidential Documents were on it. He received the email on his iPhone but could not see more than the first page of the .TIF files and was not aware that there were others. This was because of a bug which prevented multiple pages in files in this format being displayed. As a result he was unaware that he was in possession of copies of the Confidential Documents when he received ICO's email of 16 January 2013 and only realised that he had them when he received the draft order in respect of the injunction application on 12 August 2013. If this is true, it would mean that he was not in any way influenced to make full disclosure of the Confidential Documents by any restriction on their use if disclosed. That would, however, be an unusual circumstance. The reach of the rule must be assessed so as to cater for the usual case where the person obliged to disclose is aware of what he is disclosing.
45. It is, also true that in the light of CPR 31.2 ("A party discloses a document by stating that the document exists or has existed") the rule is applicable even when disclosure is entirely voluntary. That does not, however, as it seems to me, alter the rationale of the rule insofar as it applies to compulsory disclosure.
46. When the judge referred to information obtained from the disclosure of the Listed Items he was not, in my view, accepting that there was a critical distinction between (a) use of the document or the information in it and (b) use of the fact of disclosure. The two are almost umbilically linked. The mere fact that Mr Cloete disclosed a document tells one nothing relevant unless you can know what is in the document. The perusal of the document and the discovery of what is in it (leading to the conclusion that Mr Cloete had improperly obtained or retained the document) is, itself, a form of use. The information obtained by IG Index from the disclosure and the document disclosed was that it was a copy of what belonged to it. The judge was not, in my view, accepting that IG Index had neither used the document nor any of the information contained it.
47. It follows, in my judgment, that he was right to hold that it was necessary for IG Index to obtain the permission of the court. No application had been made by IG Index for such permission until the proposal appeared in its skeleton argument before Tugendhat J.

Retrospective permission

48. The judge, in my view rightly, rejected the submission of Mr Hirst for Mr Cloete that IG Index did not need to issue separate High Court proceedings and could have made an application to the employment tribunal for an order preserving the confidentiality of the Confidential Information. As the judge held, an application to the tribunal would not have given IG Index the remedy to which the judge held it to be entitled in order to protect its own commercial or trade secrets and those of its clients.
49. The judge referred to some observations of Rimer J, as he then was, in Miller v Scorey [1996] 1 WLR 112. In that case documents disclosed in one action had been used for the purposes of a separate action (the 1995 action) in breach of the implied undertaking (as it then was). Rimer J observed that, if the court had jurisdiction to grant retrospective leave, it seemed to him that the circumstances in which it would be proper to do so would be rare. However, he said:

"If, in principle, I considered it just to allow the plaintiffs to use the discovered documents for the purposes of a separate action raising the same claims as the 1995 action, then, absent any special considerations pointing in a different direction, there would in my view be much to be said for declining to strike out that action and for giving leave to the plaintiffs to make use of the documents for its further prosecution. Such an order would, no doubt, amount to a de facto validation of what had happened to date, although the court could perhaps reflect its disapproval of that by the making of appropriate costs orders".

In the event Rimer J declined to take that course because to do so would deprive the relevant defendant of a Limitation Act defence and he struck the 1995 action out.

50. Tugendhat J indicated that he would adopt the approach suggested in the paragraph I have quoted. But he decided not to grant retrospective permission on the ground that there was nothing of value that IG Index could now achieve in the present action. It had obtained delivery up and destruction. The claim for damages appeared to be without substance and was unparticularised and the claim for an injunction was not supported by evidence of any real risk that Mr Cloete would use the Confidential Documents or any confidential information contained in them otherwise than by retaking copies for the purposes of the tribunal proceedings or for disclosure to a regulatory body. There had, he said, been no suggestion that there was any continuing need for an injunction. Accordingly no injustice would be done to IG Index by striking out the action. There was a strong argument that IG Index should pay the costs but that was a matter for further submission. In the event, in the light of his judgment, IG Index agreed the costs order set out in [4] above. His overall conclusion was that the justice of the case required him to order that the claim be struck out.
51. Mr Hirst sought to uphold the judge's decision upon the footing that, whether or not permission was needed under CPR 31, the action should be struck out in accordance with the approach adopted in cases such as Yousef Abdul Latif Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75 having regard to the overriding objective, because "the game was no longer worth the candle". This suggestion, which appeared in a skeleton which was filed three months late, was not something that was argued before the judge (nor the subject of any application notice) and required a Respondent's notice, for which we refused permission.
52. The refusal of the judge to grant retrospective permission was an exercise of judicial discretion which is not lightly to be interfered with. I have nevertheless come to the conclusion that it cannot stand.
53. It is, first, necessary to stand back and examine the result of the judge's rulings. Their effect is that, although, after his employment had ended, Mr Cloete got into his possession (at his request) copies of highly confidential documents of IG Index, and although Singh J thought it right (a) to order the destruction of the electronic copies thereof; (b) to grant an interlocutory injunction against copying and use; and (c) ordered Mr Cloete to pay the costs of the application, IG Index have ended up in a position where they have no order or undertaking in their favour precluding Mr Cloete from using the Confidential Information, nor any prospect of obtaining one in the action, and are required to pay all of Mr Cloete's costs.
54. I recognise that the rule that disclosed documents are not to be used in other proceedings without the leave of the court is an important one; that its importance may mean that those who proceed without permission may find themselves subject to serious sanction even though, had they asked for permission in advance, it might well have been given. At the same time the result of the judge's order seems to me difficult to square with the overriding obligation to deal with cases justly. The failure to ask for permission was in no sense either deliberate or reckless. It plainly never occurred to IG Index or its advisers (or the judge) that permission should have been sought. No doubt the fact that the documents in question were copies of its own documents contributed very significantly to that oversight. Tugendhat J found, in terms, that Mr Mayall was not at fault [41].
55. Further, if permission had been expressly sought from Singh J it is clear to me that he would have granted it. He thought it right to grant the relief because the balance of convenience was "firmly" in IG Index's favour. Mr Hirst was hard pressed to suggest any reason why Singh J would not have granted permission and, given that it appeared that the documents disclosed were copies of highly confidential material which had been wrongly retained and he thought it right to make the order that he did, it is difficult to see on what basis he would or should have declined to do so. Such invasion as there was of Mr Cloete's privacy was a consideration greatly outweighed by the fact that what was private was evidence of his retention of copies of highly confidential documents of IG Index. In addition no attempt was made to invite Singh J to review his decision or to appeal it and Mr Cloete complied with it.
56. In those circumstances it seems to me simply wrong (i) to characterise the whole action as an abuse of the process of the court of sufficient gravity to justify striking it out ab initio, thereby undoing such of the order of Singh J as could be undone; (ii) to treat the striking out of the action as involving no injustice to IG Index (which by the logic of the judge's order appears to have had no option except to abandon the relief obtained and pay Mr Cloete's costs); and (iii) to regard the order made by Tugendhat J as one that justice required.
57. Further in the light of the material before us (which was also before the judge) I do not accept that the continuation of the action was without useful purpose.
58. The effect of the striking out of the action is, as I have said, that IG Index have no undertaking from Mr Cloete and no order of the Court restraining him from making any use of the Confidential Documents, even though Singh J's order clearly contemplated that the injunction would continue until trial (when the merits of any application for a permanent injunction would be considered) and that it would do so after the orders for delivery up and deletion had been complied with.
59. It is Mr Cloete's case that there is no reason to suppose that he will make use of the Confidential Documents and that the only copy he possesses is the redacted copy produced on discovery by IG Index., which is protected by the rule in CPR 31.22. That is not accepted by IG Index. They say that they cannot be satisfied that Mr Cloete, whom they characterise as a disgruntled employee – a description he disputes – may not seek to deploy this highly confidential information under some guise or another. In this respect they direct attention to three matters.
60. First, in paragraph [4] of his defence Mr Cloete averred that requesting him to delete the documents would still allow a member of the public to request them again under the Freedom of Information Act 2000.
61. Second, in paragraph [30] of his witness statement of 14 August 2013, which was before Singh J, he said that the documentation was in the public domain – a dubious proposition which amounts to a claim that Mr Cloete could use the documents and the information in them for whatever purpose he wished.
62. Third, at the hearing before Singh J, after Mr Cloete had confirmed to the judge that the ICO returned the documentation to him in January 2013, there was the following exchange:

"MR JUSTICE SINGH: Your case is that you did not retain it [the Confidential Documents) after you ceased to be employed

Mr Cloete: Yes

MR JUSTICE SINGH :Right, but then you presumably kept it from then…

MR CLOETE: Yes

MR JUSTICE SINGH…until now

MR CLOETE: It is information that I can request from them again through a subject access request so the claimant's order asks me to delete physical, delete digital copies; but then I can request it from them.

MR JUSTICE SINGH: Yes. So is your point that the order, if I made it today, would be a complete waste of time because you could tomorrow, having complied with my order…

MR CLOETE: Yes

MR JUSTICE SINGH: … lawfully obtain the data from the ICO".

63. Mr Hirst submitted that the ICO was in error in providing the Confidential Documents in response to the subject access request. Whether that is so or not, it seems to me at least possible that, if asked, they may do so again – either by oversight of the caseworker or because they feel obliged to do so.
64. IG Index is also highly sceptical of Mr Cloete's claim in his witness statement of 13 November 2013 that he was unaware that he had had the Confidential Documents for almost 8 months. In paragraph [30] of his statement of 14 August 2013 he had said that he had had the documents in his possession for that length of time, had taken no steps to disclose them to any third party and no intention of using the documents otherwise than for the pursuit of his claim in the employment tribunal. IG Index suggests that this latter statement is irreconcilable with any suggestion that he did not know that he had the Confidential Documents when he received the ICO email in January 2013 and only learnt that that was so in August.
65. We cannot reach a concluded view on these matters. They are something that can only be determined at a trial. However it seems to me wrong to suppose, on the present material, that there is no issue to be tried or that there can be no useful purpose in the continuance of these proceedings or that the claim for a permanent injunction can now be seen to be barren of practical utility. This is particularly so when Singh J had determined, on an interlocutory basis, that injunctive relief should be granted (as well as an order for delivery up and destruction) and when what was in issue was not only the use of physical copies of the Confidential Documents but of the highly confidential information contained therein.
66. In my respectful view the judge was in error in failing to take into account the matters to which I have referred in the preceding paragraphs and in coming to the conclusion to which he did. In fairness to him it seems likely that the considerations relevant to the question whether retrospective permission should be granted were not adequately ventilated before him, not least because the suggestion only appeared in IG Index's skeleton argument.
67. In the light of the submissions that we have received and the further and fuller considerations which have been put before us, I would allow the appeal and set aside the orders (a) striking out the action as an abuse; (b) revoking paragraph 10 of the Order of Singh J, which required Mr Cloete to pay the costs of the application to Singh J; and (c) giving Mr Cloete the entire costs of the application and the action. I would, if they need it, give IG Index retrospective permission to use the Confidential Documents in the present action.

Implied permission

68. I say "if they need it" because the question arises as to whether Singh J must be regarded as having impliedly given permission for the use of the Confidential Documents.
69. At the hearing before him in August 2013 all concerned proceeded on the basis that it was open to IG Index to use the Confidential Documents disclosed. Everyone (including the judge: see para [6] of his judgment) knew that IG Index had learnt that Mr Cloete had copies of the Confidential Documents because he had given disclosure of them in the employment tribunal proceedings. Until the point was raised by Arden LJ IG Index had never suggested that there was any question of Singh J having given implied permission to make use of the Confidential Documents. When the point was first raised Mr Mayall thought that he would be in some difficulty in saying that Singh J had impliedly granted permission. However, he warmed to the idea and we gave permission to IG Index to amend its Notice of Appeal to make that claim.
70. I am sure that at the August hearing Singh J never considered CPR 31.22. The point that permission might be needed under that rule simply never surfaced. In those circumstances, Mr Hirst submits, it would be wrong to hold that he gave some implied permission, particularly when the application was heard in vacation as a matter of urgency against an unrepresented litigant. A decision to grant permission is the exercise of a discretionary jurisdiction which requires the court to address all relevant considerations. Permission should not be held to have been impliedly given when none of them have been considered, and when no such exercise has even purportedly been undertaken.
71. On the other hand, the order that Singh J made necessarily proceeds on the (buried) assumption that it was legitimate for IG Index to use the copies of the Confidential Documents which it had obtained on disclosure and the information contained therein. If it was not, no order should have been made. In those circumstances, Mr Mayall submits, Singh J undoubtedly did permit IG Index to make use of the document and the information disclosed therein.
72. In Shlaimoun v Mining Technologies [2012] 1 WLR 1126; a company obtained a Bankers Trust/Norwich Pharmacal order requiring two banks to disclose information about the applicants' bank accounts. These documents formed an important part of the company's claim in foreign proceedings for the return of $ 2 million which it had provided to the applicants. The applicants sought an injunction to restrain the use of the documents in those foreign proceedings on the ground that they had been disclosed within the meaning of CPR 31.2 (as the judge held to be the case), so that the company was bound by the rule to use the documents only for the purpose of the proceedings in which they had been disclosed.
73. Coulson J held that where an order requiring a third party to disclose documents is sought on the express basis that subsequent proceedings were likely the court in making the order was implicitly giving permission to use the documents in those subsequent proceedings for the purpose of the rule, and that, since the affidavit supporting the company's applications for disclosure had made it plain that there might well be subsequent proceedings, the company's use of the documents had not been a breach of the collateral undertaking since the court had implicitly given permission.
74. Mr Hirst submits that this case is readily distinguishable. The use of the disclosed document outside the proceedings in which it was disclosed (i.e. the Norwich Pharmacal/Banker's Trust proceedings) was expressly contemplated by the nature of the application, which was granted, for the disclosure in question. The case resolved the practical difficulty that Norwich Pharmacal/Banker's Trust applications invariable envisage the use of documents disclosed in some proceedings other than the Norwich Pharmacal/Bankers Trust proceedings themselves - such that any application for leave to use the documents disclosed would be a mere formality. The position is different where a court or tribunal makes an order for standard disclosure which does not envisage any use of documents outside the proceedings in which they are disclosed. The relevant circumstances for implying permission must be those in which disclosure was ordered (here those relating to the employment tribunal) and not those in which the document was used without permission (here the proceedings before Singh J).

Was permission by the High Court possible?

75. In this respect Mr Hirst relies on a further point. Permission under CPR 31.22 should, he says, be given by the court seized of the proceedings in which disclosure has taken place. That court is best able to determine whether or not it would be fair to allow the recipient of disclosure to make use of the documents in different proceedings. He referred us to Osuji v Holmes [2011] EWCA Civ 476 where this court held that the provisions of CPR 38.2 (2), which require a claimant to obtain the permission of the court "if he wishes to discontinue all or part of a claim in relation to which (i) the court has granted an interim injunction", only apply where the action is proceeding in a court which is the court that has granted the interim injunction.
76. This submission raises the problem that CPR 31.22 provides an exception to the rule when "the court" gives permission. The employment tribunal is not a court and is certainly not a court as specified in the CPR. CPR 2 (3) provides:

"3) Where the context requires, a reference to 'the court' means a reference to the County Court, a District Registry, or the Royal Courts of Justice."

In those circumstances it does not seem to me that it is open to the employment tribunal to give permission. At the very least it must be open to the High Court to do so.

77. A similar, but not identical problem arose in McBride v The Body Shop International S.A. [2007] EWHC 1638 (QB). The claimant brought libel proceedings in respect of an email written by one manager to two others in response to a grievance by the claimant. She made a claim to the employment tribunal that she had been victim of disability discrimination and, after she had been dismissed, that her dismissal was unfair. These claims were in the event withdrawn. The email on which the libel claim was brought was only obtained by her as a result of the compulsory disclosure process in the tribunal proceedings. The employment tribunal had been asked to make an order prohibiting the claimant from suing on the e-mail obtained by way of disclosure. The tribunal decided that it was not "our place to make [an] order restricting/prohibiting litigation in a higher court" and that any application should be made to the High Court. (I do not propose to consider whether that was too narrow a view of the employment tribunal's then powers). In those circumstances Eady J decided that he would make an order under CPR 31.22 (2) prohibiting the use of the disclosed document for the purpose of claiming damages.
78. In short, the High Court was a court which could give permission.

Conclusion on permission

79. I have, however, come to the conclusion that it would be wrong to treat Singh J as having impliedly given permission for the purposes of CPR 31.22. Whilst he may be said to have permitted the use of the Confidential Documents in the sense that he did nothing to prevent or object to the deployment of them or the information to be derived from them, it seems to me that what is required by CPR 31.22 is that there should have been what can be recognised as the making by the court of a decision, which is conveyed or notified to the person who needs the permission. The decision to permit may be implicit in a wider decision which the court has made, as in Shlaimoun where the court plainly made and communicated a decision to grant Norwich Pharmacal/Banker's Trust relief which carried with it (implicitly) an acceptance that the documents obtained should be used for proceedings other than the Norwich Pharmacal/Banker's Trust application.
80. But the court should not be treated as having given permission when, in truth, it has made no decision on the question because the need to do so was in no way apparent to it. I note that in Miller v Scorer at 1131C Rimer J rejected an argument about implied permission to similar effect as that now relied on; and that in Hollander on Documentary Evidence, 11th edition at para 27.09 the author comments on Shlaimoun is as follows:

"Whilst in one sense this provides a neat solution ….the "implied consent" never actually obtained from the court nor asked for needs to be restricted to cases where it is a necessary implication as a result of the order made".

81. I agree. It does not seem to me appropriate in this case to treat the court as having made a decision or given a permission which, in truth, it was not conscious that it was making or needed to make, and when it allowed the material to be deployed without being aware that there might be any reason not to. Further, too ready an acceptance that the Court had impliedly given permission might well lead to unacceptable laxity in relation to the need to obtain permission before use or, if that has not been done, to seek it retrospectively.
82. In short Mr Mayall's first thoughts were best. Singh J is not to be regarded as having impliedly given permission.

Mr Justice Barling

83. I agree

Lady Justice Arden

84. I also agree.

Note 1   Smithkline Beecham has been followed in the High Court decisions Dendron GmbH v Regents of the University of California [2005] 1 WLR 200; Shire Pharmaceutical Contracts Ltd v Mount Sinai School of Medicine of New York University [2012] FSR 18; Shlaimoun & Anor v Mining Technologies International Inc [2012] 1 WLR 1126; Caldero Trading Ltd v Beppler & Jacobson Ltd [2012] EWHC Ch 1609.    [Back]