Brake & Anor v Guy & Ors

This is a first-instance judgment dismissing the claim for a final injunction and damages based on alleged accessing, retention and deployment of emails held in three email accounts. The court decided key preliminary factual and legal questions: ownership of the domain and of the email accounts, the characterisation of the material in the principal account (the "enquiries" account), and whether the claimants had a reasonable expectation of privacy or an enforceable obligation of confidence in respect of the material retained by the defendants.

The judge concluded that the relevant 2015 Exchange email accounts were assets of the company carrying on the Axnoller business (Sarafina/Axnoller Events Limited) and, in any event, that the claimants were estopped from asserting ownership against the defendants. Applying established principles for breach of confidence and misuse of private information, the court held there was no reasonable expectation of privacy or obligation of confidence in respect of the enquiries account as a whole (the account was used predominantly for business and was accessible to others). On that basis the equitable and privacy causes of action failed and the claim was dismissed. The court accepted the defendants would delete a specific subset of emails agreed to be private and left to a later trial only the defendants’ pleaded "iniquity" defence (so-called public interest/iniquity defence) in relation to a further subset of documents.

Background and procedural posture

• The claimants (Mr and Mrs Brake) sought a final injunction and damages for alleged misuse of private/confidential emails said to be stored in three email accounts, principally enquiries@axnoller.co.uk. The claim was tried in part because the court postponed trial of the defendants’ "iniquity" defence; the judge tried all other issues and a preliminary point whether the iniquity defence is available as a matter of law. The hearing was remote (Zoom) and took place November–December 2020.

Core facts

• The Axnoller domain was originally registered on Mrs Brake’s instructions in 2009. The partnership and later companies ran the wedding/holiday business. In August 2015 new Microsoft Exchange accounts were set up for the axnoller domain and hosted by Fasthosts. Sarafina (later renamed Axnoller Events Ltd, owned by the defendants) paid the hosting invoices from 2015/2017 onwards.
• The claimants used the enquiries account for some personal emails but it was also the principal business contact address for the company and was used by staff. After the claimants’ employment ended in November 2018 the defendants took steps to secure the accounts and reviewed their contents in the context of litigation and insolvency-related enquiries. Copies of material were disclosed to the defendants’ lawyers, to persons advising on media relations and, in response to requests, to insolvency office-holders or their advisers.

Nature of the application and issues framed

• (i) Relief sought: a final injunction restraining use and requiring destruction of material in the accounts, and damages for misuse of private/confidential information.
• (ii) Issues framed: ownership of the domain and accounts; whether particular emails had the necessary quality of confidence; whether the claimants had a reasonable expectation of privacy; the effect of employment contracts, sale warranties and the confidentiality agreement with the IT provider; whether the defendants’ disclosures were lawful or defensible (including the iniquity/public interest defence); and appropriate remedies.

Court’s reasoning and material findings

The judge made detailed factual findings about the history of domain registration, the migration to Exchange accounts in August 2015, who paid invoices, who had access to accounts, and the content and categorisation of emails following a joint review process. He divided the enquiries account into agreed business material, agreed private items (5,511 emails to be deleted by the defendants subject to legal process), and disputed categories, some of which the defendants retained for asserted evidence of wrongdoing and for disclosure to insolvency office-holders.

On ownership, the court concluded (primarily) that the 2015 Exchange accounts and the axnoller domain were assets of the company carrying on the business (Sarafina/AEL), and that, even if residual rights had remained with Mrs Brake, she was estopped (Ramsden v Dyson principle) from asserting them against the purchaser and its successors. The registration of the domain in Mrs Brake’s name in 2019 did not improve her position.

On breach of confidence, the court applied the Coco test: the judge held that, because the enquiries account was predominantly a company business account, most of the material did not have the necessary quality of confidence or had been imparted in circumstances not importing a duty of confidence. As a result the equitable claim failed.

On misuse of private information, the court applied the reasonable-expectation test. Considering the totality of circumstances (business ownership of the account, others’ access, lack of segregation or passwording of particular items, and the claimants’ conduct), the judge held there was no reasonable expectation of privacy in respect of the account as a whole and therefore the privacy claim failed. The court recorded that limited distress had been caused but that the damage was modest in the context and that disclosure to legal advisers and to office-holders was not actionable in the circumstances described.

The judge refused the claim for procuring breach of contract against the defendants in respect of the confidentiality agreement with the IT provider because the account was a company asset and the IT provider was entitled to comply with the purchaser/company instructions.

Outcome and consequential matters

• The claim was dismissed in its entirety. The defendants agreed to destroy the emails they had accepted were private. The court did not at this stage try the iniquity defence or award substantive damages (the judge observed that, if misuse had been made out, damages would likely have been modest).

First instance: The claim is dismissed. The court held that the 2015 Exchange email accounts (and, on the primary view, the axnoller domain) were assets of the company carrying on the Axnoller business (Sarafina/AEL) and, alternatively, that the claimants were estopped from asserting ownership against the defendants. Applying the Coco test and the reasonable-expectation test for privacy, the judge held that most of the material in the principal enquiries account was either business material or was not imparted/retained in circumstances importing an enforceable obligation of confidence or a reasonable expectation of privacy. The defendants agreed to destroy a defined subset of emails; the defendants’ retention of other documents (including some retained for alleged evidence of wrongdoing or for disclosure to insolvency office-holders) was not finally unlawful on the material before the court; the separate iniquity/public-interest defence was left to be tried if necessary.