Singla v Stockler & Anor

A solicitor may be restrained from acting against a former client where the solicitor holds confidential information belonging to that client which is, or may be, relevant to the new matter and the interests of the new client are, or may be, adverse. The ordinary obligation of confidence may be displaced by express agreement or by mutual conduct. A close common interest alone is insufficient, but it may provide the context for an inferred agreement that information may be shared. Routine disclosure, with the client’s knowledge, of all normally confidential material may establish that no confidence remains between the client and the third party in relation to the matter. Summary judgment is appropriate where the claimant has no real prospect of establishing that confidential information remains protected.

The claimant, an insolvency practitioner, appealed against an order striking out his claim and granting the defendants summary judgment. The defendants had acted for him in English proceedings brought as liquidator of 9 MD (UK) Limited and had provided limited initial assistance in related Californian proceedings. The claimant sought to restrain them from acting for One Step Beyond CC in a misfeasance application arising from the liquidation, and from disclosing his confidential information.

The defendants argued that information had been shared with the creditor throughout the relevant matters, either because of their common interest or by the claimant’s conduct. The central issues were whether confidential information remained protected and whether the claimant had a real prospect of establishing a right to injunctive relief.

1. Applicable test. The court’s jurisdiction to restrain a solicitor acting against a former client protects confidential information. The claimant had to show that the solicitor possessed information confidential to him, disclosed without consent, and that it was or might be relevant to the new matter in which the other client’s interests were or might be adverse. The burden remained on the claimant, although it might not be heavy. The principles in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 were applied.
2. Displacement of confidence. In a joint retainer, communications will generally not be confidential between the joint clients, subject to agreement. A similar result may arise where a third party has a sufficiently close community of interest, through express agreement, necessary implication or mutual conduct. A close alignment of interests is not, by itself, enough to displace confidence. The reasoning in CIA Barka de Panama SA v George Wimpey & Co. Limited [1980] 1 Lloyd’s Law Rep 598 and Winters v Mishcon de Reya [2008] EWHC 2419 (Ch) was considered and explained.
3. English proceedings. The routine transmission by the defendants to the creditor of instructions to counsel, draft witness statements, draft submissions and written advice, with the claimant’s full knowledge and without objection, supported the strongest inference that the ordinary obligation of confidence had been wholly displaced as between the claimant and the creditor. This was not merely ad hoc disclosure of selected documents.
4. Californian proceedings and outcome. Although the defendants had briefly provided initial assistance, the documents showed that the material exchanged was shared with the creditor and concerned only preliminary matters. The claimant identified no specific oral communication or confidential information requiring protection. He therefore had no real prospect of establishing that confidential information remained in the defendants’ possession or that they should be restrained from acting for the creditor. Shared confidence could not authorise wider disclosure without the consent of all persons entitled to it, but no such wider disclosure was threatened. The appeal was dismissed.

• High Court (Chancery Division): On appeal, Mr Justice Briggs dismissed the claimant’s appeal against the order of Deputy Master Mark dated 28 October 2011, which had struck out the claim and granted summary judgment for the defendants.