Restraining disclosure of overheard private, business conversations – Eavesdroppers beware!
Businesses, and by default their directors and employees, are often exposed to confidential information when engaged in day-to-day work and may overhear discussions that are private and should remain so. The law protects this information and allows those whose privacy, or confidence, has been breached to bring claims for breach of confidence and/or for misuse of private information.
The recent High Court claim in the case of Clearcourse Partnership and others v Jethwa [2022] EWHC 1199 (QB) was brought in respect of both torts, in addition to a data protection claim pursuant to the GDPR, but what makes this case more interesting than most is that the confidential discussions were overheard by someone who was on the opposite side of a business acquisition which the claimant was involved in.
The judgment concerned an application for an injunction preventing disclosure of the content of the private, business conversations between representatives of the claimant, which were overheard by the defendant from another room during the course of the business acquisition meeting.
In April 2022, the High Court granted an interim non-disclosure order (known as an ‘INDO’) restraining disclosure of the private conversations and any recordings of them. The matter was returned to the High Court to determine whether the interim injunction should be continued. Note that the test for continuation of an INDO is not a full trial on merits, but simply that the Judge at the return hearing must be satisfied that the claimant would “more likely than not” succeed with its underlying claims if they were pursued to trial (Cream Holdings Ltd v Banerjee & Others [2004] UKHL 44).
Facts
Clearcourse, the claimant, concluded a sale and purchase agreement (SPA) concerning a company in which Mr Jethwa, the defendant, was a part-owner and then CEO. In the course of the negotiation of the SPA, Clearcourse’s CEO and one of its directors attended Mr Jethwa’s offices to negotiate the SPA. The room in which the negotiations were taking place contained a CCTV camera and Mr Jethwa’s office was next door to it. Mr Jethwa left the room for a short while to go to his office, during which the Clearcourse representatives had an “unguarded and candid” private conversation amongst themselves in which they discussed their strategy for the negotiation, their impression of Mr Jethwa and the possibility that Mr Jethwa might be fired in the event the target company was acquired.
Mr Jethwa argued that he clearly heard the conversation through the wall of his adjoining room and the matters discussed were not confidential. On his own evidence, Mr Jethwa took a screenshot of the live CCTV footage from the meeting room (the “Screenshot”) but claimed he had not recorded what Clearcourse were saying. At the time, Mr Jethwa stayed quiet about what he heard because he wanted the SPA to be completed, and in the likelihood he would be working with Clearcourse representatives, he sought to maintain good relations.
Following the conclusion of the SPA, disputes arose between the parties in relation to the SPA’s performance, which involved financial and intellectual property disputes.
In March 2022, Clearcourse sent Mr Jethwa an ultimatum to settle the disputes. At this point, Mr Jethwa replied, sharing the Screenshot, with the message “You should know this doesn’t do you any favours. Whilst I walked out and what you both say should be interest for social (sic)”, threatening to release what Clearcourse discussed privately on social media.
Following this, Clearcourse promptly made their application and the INDO was granted.
The underlying claims
Clearcourse made claims for breach of confidence and misuse of private information in relation to its private conversation. Clearcourse also claimed breach of data protection rules under the GDPR and (from 1 January 2021 the UK GDPR) (“GDPR”) in relation to the Screenshot.
Breach of confidence claim
In order to succeed with a claim for breach of confidence, the claimant must establish that the content of the discussions (i) has the necessary quality of confidence, (ii) that the defendant came to know of what was being said in circumstances importing an obligation of confidence and (iii) that there had been unauthorised use or a threat to use that information to the detriment of the owner of the information.
Regarding the first limb of the test, the Judge was satisfied that “a reasonable person in [Mr Jethwa’s] shoes would appreciate that a conversation held behind closed doors, between individuals on the opposite side to him in a business negotiation on these subjects, was both private and confidential”. Further, the Judge emphasised that “the duty of confidence does not arise only when a person actively seeks out private and confidential information” but also applies “when a person has notice that the information they receive is of a confidential…
