DSM SFG Group Holdings Ltd & Ors v Kelly

Confidential information obtained covertly or otherwise improperly must not be deployed to support separate claims before the user has established a right to use it. The confidentiality issue should be resolved first, in a separate and anterior determination. Admissibility in later proceedings does not answer the equitable claim to restrain use. A party may use the material to defend the existing claim where the undertakings permit that use. Release from an undertaking requires special circumstances, ordinarily a significant subsequent change that was not contemplated or foreseeable. Foreseeable review of privileged material and litigation delay did not meet that threshold. Future case management could not cure the unfairness of prior deployment. The appeal was allowed and the original undertakings restored.

The appellants sought injunctive relief concerning covert recordings made by the respondent on their premises, including recordings of confidential and privileged communications. A consent order restricted use of the recordings to defending the claim and established safeguards pending an expedited trial. The High Court, in [2019] EWHC 2082 (QB), released the respondent from parts of those undertakings and permitted use of the recordings for counterclaims and related proceedings. The appeal concerned whether confidential material could be deployed before the respondent established a right to use it, and whether the circumstances justified release from the original undertakings.

Simon LJ, with Davis LJ agreeing, allowed the appeal. The respondent’s revised undertakings were set aside and the original undertakings in the February order were restored.

1. Equity restrains publication, copying and use of confidential information obtained improperly or surreptitiously. In Lord Ashburton v Pape [1913] 2 Ch 469, the fact that material might be admissible in other proceedings was not treated as answering the owner’s claim to restrain its publication or copying. The principle was reinforced by D v L [2003] EWCA Civ 1169 and Seager v Copydex Ltd [1967] 1 WLR 923.
2. Where covertly obtained confidential or privileged information is proposed for use in separate claims, the right to use it must be established before deployment. The breach of confidence issue is separate and anterior to the proceedings in which the information is to be used. Simon LJ adopted the principled approach in British American Tobacco Australia Ltd v Peter Gordon and anor [2007] NSWSC 230. The respondent’s right to use the recordings to defend the existing claim was distinct and remained permitted.
3. The court has an inherent jurisdiction to release a party from an undertaking and may accept a fresh undertaking in different terms. The discretion is not at large. Applying Birch v Birch [2017] UKSC 53 and Di Placito v Slater [2003] EWCA Civ 739, release ordinarily requires special circumstances, normally a significant subsequent change which, by its type or gravity, was not contemplated or foreseeable when the undertaking was given.
4. The independent-counsel review was foreseeable because the recordings included lawyers’ communications. The delay was not attributable to the appellants, and further possible claims did not justify release. Future case management could not adequately substitute for deciding confidentiality before deployment. D v L did not provide useful guidance on that issue because confidential material there was disclosed for the first time at trial.
5. Holding the respondent to the original undertakings caused no comparable prejudice because they already permitted use of the recordings to defend the claim. The claim was directed to proceed to trial at the earliest practicable date, and the parties were to agree a Minute of Order.

1. Court of Appeal (Civil Division) allowed the appeal, restored the original undertakings and directed that the claim proceed to trial at the earliest practicable date: [2019] EWCA Civ 2256.
2. High Court, Queen’s Bench Division Murray J allowed the respondent’s application to replace parts of the original undertakings with revised undertakings permitting use of the recordings for counterclaims and related claims: [2019] EWHC 2082 (QB).