The consequences of a party seeking to rely on documents in an action when they have been obtained by irregular means

03/03/2010

The most recent judgment given in connection with divorce proceedings which commenced in December 2008 and which were quickly followed by injunctive proceedings brought a husband against the wife's brothers and companies after they obtained documents and information from the husband's computers addresses the ramifications for the wife who received the documents.

The husband is a businessman who claimed, amongst other things, to his wife and her brothers before the divorce proceedings that they would never find his money which had been placed in "revolving trusts".

The husband shared various business interests and office premises with the wife's brothers and following the separation the brothers ejected the husband and his staff from the premises and copied vast amounts of material from the husband's computer, including information about his family trusts.

The information obtained by the brothers amounted to somewhere between 250,000 pages and 2 ½ million pages and was sent to the wife's solicitors' firm where much of it was read. Some of it was also read by the wife's junior counsel who sought to separate out any material which might be subject to legal privilege.

The husband commenced proceedings in the Queen's Bench Division and prohibitory injunctions were granted by Mr. Justice Eady to prevent the communication or disclosure of three categories of documents that were said to be confidential to any third party and to prevent the copying of those materials or use of them in any other way.

The husband sought summary judgment in the Queen's Bench Division and it was held that the husband was entitled:

"to have the information in question back or rather to take it out of circulation and to restrain its use or onward transmission by others. That was irrespective of how it was originally obtained and by whom. Any argument the respondents might have had as to public interest or protecting [the husband]'s wife's rights under art.6 of the Convention (as at the time of obtaining the information) should not be pre-judged. However, the wife's rights would not be compromised by the grant of the orders sought by [the husband], since the wife already had available the lever arch files of certain documents in question supplied to her solicitors and preservation orders could be made in relation to other categories of documents said to be relevant if there was solid evidence to justify doing so...there was no reason why an order protecting [the husband]'s rights in the instant court need inhibit or impede in any way the steps open to a Family Division judge."

Following that decision the parties agreed an order that the respondents deliver up all copies of any hard-copy document of such information, except for material subject to legal professional privilege. The agreed order was approved by the court. No application was made to vary or discharge its terms. Delivery of the confidential information did not occur and the husband issued an application for an unless order.

The defendants submitted that (1) some of the documents were protected by legal professional privilege; (2) some of the documents needed to be retained for their pending application for permission to appeal to the Court of Appeal; (3) some documents were required for the preparation of outstanding issues not covered by the summary judgment; (4) some of the documents needed to be retained for insurance purposes.

The Court rejected the application for an unless order but also rejected the defendants' arguments:

(1) The protection of legal professional privilege did not extend to hard-copy papers returned by counsel merely on the ground that they had been part of their instructions. Pre-existing documents did not become privileged just because they were submitted to lawyers for the purpose of advice or litigation. Counsel's annotations on the relevant documents could be appropriately redacted.
(2) The defendants' position in relation to the pending application for permission to appeal could be adequately covered by their retention of the summary judgment bundles and written submissions.
(3) If further documents were required for further trial preparation an application for disclosure could be made.
(4) It was not the intention of the husband's solicitors that the files returned should be destroyed. The documents delivered up would be kept securely and, in the event of an insurance issue arising in the future, they could be made available if necessary.
(5) Delivery up of documents would be ordered to occur by a certain date, but it would be inappropriate to make an unless order because there was a great deal of material.

More recently, in the family court proceedings, although the parties were yet to exchanged their respective Form Es (financial statements) and the court heard various applications from both parties, the principal one being that made by the husband, who had applied for the return of seven files of documents containing confidential information belonging to him. The wife was ordered to return the files to enable the husband to remove material said to be privileged, and the husband was then to return the balance of the files to the wife's solicitors.

Further issues included (i) whether the wife should delete permanently from her computer systems any documents in the seven files, and cause her solicitors and anyone holding such material on their computer systems on her behalf permanently to delete those documents, without reading or re-reading them; (ii) whether the wife should pay the costs of the applications and if so, on an indemnity basis, and, further, whether she should make an interim payment.

The Court held that:
(1) The wife's solicitors' firm had provided a letter which showed that there would be significant practical difficulties if an order was made that the offending material held on its back-up tapes had to be deleted.
(2) It would be wrong to put the wife in a better position than she would have been in had she not received the irregularly obtained material alleged to be privileged. It was for her to seek to satisfy a court that discovery or inspection of the documents should be afforded, and only then, if the husband sought to assert a claim to privilege, would the court have to determine whether that claim was made out.
(3) The wife had to pay indemnity costs of and incidental to the application. Reference was made to Jones v. University of Warwick, where an insurer had obtained secret tape of an employee in a personal injury claim. The Court of Appeal held in that case:

"The court must try to give effect to what are here the two conflicting public interests.
The weight to be attached to each will vary according to the circumstances. The significance of the evidence will differ as will the gravity of the breach of article 8, according to the facts of the particular case...This is not a case where the conduct of the defendant's insurers is so outrageous that the defence should be struck out. The case, therefore, has to be tried. It would be artificial and undesirable for the actual evidence, which is relevant and admissible, not to be placed before the judge who has the task of trying the case. We accept Mr. Owen's submission that to exclude the use of the evidence would create a wholly undesirable situation...For these reasons we do not consider it would be right to interfere with the Judge's decision not to exclude the evidence...While not excluding the evidence it is appropriate to make clear that the conduct of the insurers was improper and not justified... The fact that the insurers may have been motivated by a desire to achieve what they considered would be a just result does not justify either the commission of trespass or the contravention of the claimant's privacy which took place...Excluding the evidence is not, moreover, the only weapon in the court's armoury. The court has other steps it can take to discourage conduct of the type of which complaint is made. In particular it can reflect its disapproval
in the orders for costs which it makes..."

In this case, the Family Court went on to say that:
"The conduct that resulted in the husband's information being obtained irregularly and the volume of the information obtained was at the extreme end of the range of behaviour that the court had seen during the previous 30 years. The wife's brother had conducted an extreme pre-emptive strike, which the wife had sought to take advantage of by being permitted to make use of the information contained within the files. It was always open to a party who considered that such a pre-emptive strike was necessary to apply for orders for information to be disclosed or protected from destruction. No such application was made by the wife. The order for costs ought primarily to reflect the assessment of the conduct that had led to the substantial sum of £1 million being spent in order to determine the issues that had resulted from the husband's information being obtained as it was. There would be no order for any interim payment as the court was not in a position properly to assess the impact of requiring the wife to make such payment."

(Imerman v. Imerman (2010) EWHC 64 (Fam))

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