Mex Group Worldwide Limited v Adam Duthie & Anor

On an application for strike out or summary judgment, the court must assess the pleaded and evidential case at its highest for the opposing party, subject to inadequate pleading or a case that is fanciful or inherently incredible. The iniquity exception to legal professional privilege is fact-sensitive. It may apply where the client has abused the lawyer-client relationship and the conduct falls outside the ordinary scope of the professional engagement. Whether the exception applies ordinarily requires a trial and assessment on the balance of probabilities. A waiver defence may remain arguable despite general pleading, but reference to legal advice or deployment of litigation material does not automatically waive privilege. Wrongful retention of client documents may justify summary judgment for delivery up even where the remedy is deferred pending trial.

Mex sued its former in-house solicitor, Adam Duthie, and his service company, Duthie Consultants Limited, alleging breaches of contractual, equitable and tortious duties of confidence and wrongful retention of client documents. The defendants relied on the iniquity exception, waiver arising from material deployed in related litigation, statutory and regulatory duties to disclose wrongdoing, de minimis disclosure and an absence of disclosure.

Mex applied under CPR rules 3.4 and 24 to strike out the defence and counterclaim or obtain summary judgment. The central questions were whether the defendants’ factual case was properly pleaded and arguable, whether the iniquity exception or alleged duty to disclose could apply, whether waiver and other defences were arguable, and whether summary relief should be granted for retention of client property.

1. Summary judgment principles. The court applied the approach in Easyair Ltd v Opal Telecom [2009] EWHC 339 (Ch). The opposing party’s factual case is ordinarily taken at its highest, but a case may be rejected if inadequately pleaded, fanciful or inherently incredible. The court must not conduct a mini-trial.
2. Iniquity exception. The defendants’ allegations concerning the alleged sham settlement, the role of Mr Duthie and alleged abuse of the solicitor-client relationship raised serious factual disputes. Following the analysis in Al-Sadeq v Dechert LLP [2024] KB 1038, the abuse of the lawyer-client relationship is a prerequisite, and the exception is not engaged merely because a client gives the solicitor an untrue account for use in litigation. The defendants had a realistic prospect of proving on the balance of probabilities that the relationship had been abused and that the exception deprived some or all of the material of confidentiality. The issue was fact-sensitive and suitable for trial.
3. Other defences. The alleged positive duty to disclose wrongdoing, based on solicitors’ statutory and regulatory obligations, was arguable and fit for trial, although it might add little to the iniquity issue. The waiver defence was weak but not necessarily doomed. The de minimis and no-disclosure defences were also weak but just arguable, with their resolution overlapping the iniquity defence.
4. Client property. There was no arguable defence to the admitted wrongful retention of Mex’s documents. DCL’s separate corporate personality did not assist Mr Duthie, and absence of financial loss was no defence to the claim for delivery up or destruction. Summary judgment was therefore granted on liability, but the remedy was deferred because immediate return or destruction would be futile while the documents remained disclosable and protected by continuing undertakings.
5. The applications to strike out the defence and counterclaim and for summary judgment were otherwise refused. The delivery-up issue was adjourned until trial or further order.