Pccw - Hkt Telephone Ltd and Another v. David Matthew Mcdonald Aitken and Another
Read the full judgment text of CACV 194/2008 on BabelCite. This Court of Appeal judgment was delivered on 21 August 2008.
1. This is an interlocutory appeal mounted by the plaintiffs, upon an expedited basis, from a judgment of Deputy High Court Judge Au handed down on 10 July 2008, whereby the learned judge granted certain interlocutory injunctive relief to the plaintiffs against the 1 st and 2 nd defendants; the details of such relief, as then granted, are reproduced later in this judgment.
Cited by 2 cases · Cites 2 cases
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CACV 194/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 194 OF 2008 (ON APPEAL FROM HCA NO. 1089 OF 2008) ----------------------
---------------------- Before : Hon Tang VP, Le Pichon JA, and Stone J Dates of Hearing : 12 and 13 August 2008 Date of Judgment : 21 August 2008 ---------------------- J U D G M E N T ---------------------- Hon Stone J: This appeal 1.This is an interlocutory appeal mounted by the plaintiffs, upon an expedited basis, from a judgment of Deputy High Court Judge Au handed down on 10 July 2008, whereby the learned judge granted certain interlocutory injunctive relief to the plaintiffs against the 1st and 2nd defendants; the details of such relief, as then granted, are reproduced later in this judgment. 2.There is no Cross Appeal or Respondents’ Notice. 3.The plaintiffs are unhappy with what is viewed as unnecessarily limited relief as thus obtained at first instance, and wish to replace this with an Order which is in considerably wider terms, and which serves far more extensively to restrain the conduct of the defendants within the specific telecommunications sphere with which the 2nd defendant currently is intimately concerned, which for convenience of reference may be referred to as that of ‘Fixed Mobile Interconnection Charges’ (‘FMIC’). 4.However, let me start at the beginning. 5.The 1st and 2nd plaintiffs, which for present purposes I shall refer to as ‘PCCW’, are subsidiaries of PCCW Ltd, and are members of the PCCW Group. 6.As is well-known, the 1st plaintiff is a leading operator in Hong Kong in the field of fixed line telephone operations, a ‘Fixed Network Operator’ (‘FNO’) under a Fixed Carrier Licence issued by the Telecommunications Authority (‘TA’); the 2nd plaintiff provided employment services to the PCCW Group. 7.The 2nd defendant, ‘CSL’, is another leading player within the field of Hong Kong telecommunications, and is a major Mobile Network Operator (‘MNO’) under a Mobile Carrier Licence issued by the TA. 8.The 1st defendant, Mr Aitken, is the human subject of this flurry of litigious argument, which, we have been told, is unlikely to stop at this court. 9.Mr Aitken was, until 20 March 2008, employed by PCCW as General Manager, Regulatory Compliance. 10.On 25 March 2008, after leaving PCCW’s employ, Mr Aitken rejoined a previous employer, CSL, as Head of Regulatory and Corporate Affairs. 11.For reasons which will shortly be outlined, PCCW was and is vexed by Mr Aitken’s change of appointment at what is a sensitive period within the local telecommunications industry. 12.The matter is long on detail, but in essence a new regulatory regime has been proposed by the telecommunications regulator, the TA, for that which is known as Fixed Mobile Convergence (‘FMC’), which involves interconnection between FNO’s and MNO’s, and specifically therein the significant issue of FMIC. 13.At the end of the day, therefore, this is yet another Hong Kong dispute about very, very large amounts of money which are potentially to be earned by corporate players within the local telecommunications industry; the affidavit evidence indicates that there is at stake around HK$600 million per annum of revenues currently paid by MNO’s such as CSL to FNO’s such as PCCW. 14.At issue within this context, and indeed the subject of heated dispute between the FNO’s on the one hand and the MNO’s on the other, is the release by the TA of a final policy decision on FMC/FMIC in a Statement dated April 2007 (‘the April 2007 Statement’). 15.This April 2007 Statement indicated the TA decision to make important regulatory changes for FMIC, subject to a 2 year transition period which will expire in April 2009. 16.PCCW, as the leading FNO in Hong Kong, on various grounds vigorously objects to this anticipated new regime, and has taken legal proceedings in relation to it, including a March 2008 hearing against the 2007 Statement before the Telecommunications (Competition Provisions) Appeal Board; London leading counsel, Mr Pannick QC, has been engaged to advise and to act. In addition, CSL itself joined, in support of the TA and against PCCW, a judicial review brought by PCCW against the TA in relation to the FMC consultation process. 17.Clearly therefore this entire regulatory matter is a highly topical commercial issue, and PCCW is concerned that, having been on the ‘inside’ at that company, and now wearing his new hat with CSL, that absent sufficient and appropriate restraint Mr Aitken will use/misuse information obtained by him in confidence during his time with PCCW in relation to this proposed new regulatory regime, in particular regarding PCCW’s strategic and tactical approach thereto. This general description of the concern felt by PCCW is short on detail, but that at any rate is the thrust of their concern. 18.It is said on affidavit by PCCW that, during his time with PCCW, Mr Aitken closely was involved in these regulatory matters, and that he has been privy to important privileged and confidential meetings and communications in which PCCW’s legal, commercial and strategic positions in relation to FMIC issues arising in connection with the April 2007 Statement were “frankly discussed, advised upon and debated”; and that this included discussion and advice, within the specific FMIC context, as to the application of the provisions of the Telecommunications Ordinance relating to anti-competitive conduct, as well as judicial review options and commercial and regulatory strategies. 19.Although PCCW actually released Mr Aitken from serving his full contractual 3 month notice period, it is said that PCCW’s then understanding of the position was that Mr Aitken would be working primarily in corporate affairs and external relations, and that it had no idea that with CSL Mr Aitken would be working upon regulatory issues relating to FMC/FMIC. 20.That this was the situation is said to have become apparent to PCCW only on 25 May 2008 when, upon that date, CSL gave a press conference to announce that it had objected to a tariff increase governing FMIC for which, on 17 May 2008, PCCW-HKT had obtained the approval of the Office of the Telecommunications Authority (‘OFTA’); at that press conference CSL intimated certain legal challenges to this tariff increase, and further made allegations of anti-competitive conduct against PCCW. 21.In the event two representatives of CSL spoke at this press conference, one of which was Mr Aitken, and it is said in evidence by Mr Stuart Chiron, Director of Regulatory Affairs of PCCW Ltd (and Mr Aitken’s former boss within PCCW) that he was surprised by Mr Aitken’s involvement given his prior involvement with PMIC issues when working for PCCW, and in light of Mr Aitken’s indication, upon his departure from PCCW, as to his participation in a differing area of work within CSL. 22.Thereafter advice was taken by PCCW, not least since subsequent to the press conference Mr Chiron had been contacted by Mr Aitken, who had suggested a meeting to negotiate upon FMIC issues, and that Mr Aitken had told him that at CSL he was involved with FMIC, and indeed that he was “doing some regulatory work”. 23.At this stage PCCW took the position that it was impossible for Mr Aitken properly to be involved for CSL in FMIC matters arising out of or in connection with the April 2007 Statement, given his prior involvement for PCCW upon the other side of the same issues, and the confidential information of PCCW to which consequentially he had been privy – including, it is said, the advice in consultation of Mr Pannick QC – and that “his knowledge of these matters will inevitably influence his actions and his advice to CSL”. 24.Accordingly, after due exchange of solicitors’ correspondence, and after Mr Aitken had declined to proffer certain specific undertakings as requested by PCCW, the present action ensued; it may be useful at the outset to sketch the sequence of the proceedings which have culminated in this expedited interlocutory appeal. The procedural history 25.A generally-indorsed writ was issued by PCCW against Mr Aitken and CSL on 13 June 2008, claiming, inter alia, damages against Mr Aitken for breach of contract, breach of fiduciary duty and breach of confidence, and as against CSL for damages for counselling, procuring and/or assisting such breaches by Mr Aitken. 26.Upon the same day, 13 June 2008, PCCW mounted an application for injunctive relief, ex parte on notice, to Madam Justice Beeson, whom, I gather, upon that date was Duty Judge. 27.In light of the history of events, it is far from clear why it was considered appropriate to make this application upon an ex parte basis at all; as the situation then existed, I find it difficult to understand why an inter partes application upon two day’s notice, or even an inter partes hearing constituted on short notice, would not have sufficed, and, as will be seen, the decision to proceed ex parte was to have practical significance in terms of the subsequent decision of Deputy Judge Au. 28.Be that as it may. Upon entertaining the ex parte application by PCCW, Beeson J granted the plaintiffs’ application in terms of the draft Order placed before her. This was in extraordinarily wide terms; paragraph 2 of this Order, for example, reads thus:
29.For my own part it is difficult to imagine a clause in an Order of this court which could have been more objectionable in terms of lack of specificity, and, by virtue of such lack, as potentially prejudicial to the recipient thereof, who can have had no clear idea of what he could, or could not, legitimately do in purported compliance therewith. 30.During argument upon this appeal we have been told that this ex parte application, culminating in the Order as thus obtained, legally was premised upon the decision of the House of Lords in Prince Jefri Bolkiah v. KPMG [1999] 2 AC 222, a case in which their Lordships – Lord Millett delivering the main speech, with Lords Browne-Wilkinson, Hope, Clyde and Hutton agreeing – held that the defendant firm of accountants, KPMG, were to be enjoined from now acting for the agency of the Government of Brunei (which then was seeking to recoup assets of the Brunei Government which allegedly had been used by the plaintiff, Prince Jefri, for his own benefit) on the basis that KPMG previously had been retained by Prince Jefri to provide forensic accounting services and litigation support in major litigation in relation to his financial affairs, in the course of which the defendant accountants had performed many tasks usually undertaken by solicitors, and had been given access to highly confidential information concerning the extent and location of the Prince’s assets. 31.In essence, Bolkiah adopted the stance that KPMG stood in a position analogous to that of a solicitor acting for a former client, and thus the information which reposed in KPMG consequent upon their formerly acting for Prince Jefri was protected by legal professional privilege; in other words, that this was confidential information which also was privileged, and by reason thereof the burden was on the defendant, the recipient from the former client of such confidential information, to demonstrate that there was no risk of the disclosure or misuse of the information in question. 32.It does not appear to have been the case upon the ex parte application before Beeson J that the court was addressed upon those authorities which are regarded by practitioners as the ‘usual’ restraint of trade cases, including, for example, the well-known authority of Faccenda Chicken v. Fowler [1987] 1 Ch. 117, and the cases frequently associated with this line of argument: viz.: Printers & Finishers Ltd v. Holloway [1965] 1 WLR 1; Balston Limited v. Headline Filters [1987] FSR 330; G D Searle & Co Ltd v. Celltech Ltd & ors [1982] FSR 92; In Re a Firm of Solicitors [1997] Ch 1; Lock International Plc v. Beswick [1989] IRLR 22; Lawrence David Ltd v. Ashton [1989] IRLR 22, to name several of the relevant authorities. 33.Consequent upon the Order granted by Beeson J, PCCW issued an inter partes summons dated 13 June 2008 seeking in terms the like relief as had been obtained ex parte, and in response thereto the 1st and 2nd defendants also issued summonses, respectively dated 25 June and 27 June 2008, seeking discharge of the Order of Beeson J, and further seeking orders for an inquiry as to damages, together with costs against the plaintiffs upon an indemnity basis. 34.It was with these three summonses that Deputy Judge Au was seized at the hearing that took place before him on 3, 4 and 5 July 2008, and consequent thereon a detailed and closely-argued judgment of 61 pages was handed down on 10 July 2008; I mean no disrespect to what, if I may say so, is a thoughtful and analytical document – wherein the judge carefully considered and evaluated the background facts and, in light thereof, the consequent issues of a serious question to be tried, the balance of convenience, and whether damages would be an adequate remedy – if I seek to do no more than to summarise the most significant aspects. 35.Upon the 1st and 2nd defendants’ summonses to discharge, Deputy Judge Au acceded to the applications on behalf of Mr Aitken, the 1st defendant, and of CSL, the second defendant, to set aside, with costs, the ex parte orders granted against them by Beeson J, and further made an order giving liberty to Mr Aitken and CSL to apply for directions as to an inquiry as to damages suffered by them consequent upon the grant of the ex parte injunction. 36.Such setting aside was granted on the basis of that which the learned judge found (at paragraph 109) to have been a case of material non-disclosure at the ex parte hearing; the judge referred to 4 categories of non-disclosure, but for immediate purposes I need refer in particular only to paragraph 109(2) of the judgment, which reads:
37.However, after thus discharging on the basis of material non-disclosure, the learned deputy judge entertained, and further acceded to, an application by PCCW to regrant injunctive relief. In this connection he said (at para 123 of his judgment): “For the reasons set out in this judgment, I am minded to regrant the interlocutory judgment, subject to what I see as the proper and reasonable terms that should be incorporated to protect the plaintiffs’ confidential information at this interim stage.” 38.The plaintiff’s application to regrant was on the basis that the court should continue the injunction granted ex parte by Beeson J some 27 days earlier. However – and perhaps this is the one aspect which does not find its way into the learned deputy Judge’s otherwise admirable judgment – it transpires that during argument Mr Whitehead QC, then appearing for PCCW, had whilst on his feet proffered to the Bench a piece of paper upon which was a re-drafted clause 2 of the existing Order, the original terms of which have been quoted above (at paragraph 28 herein). 39.Suffice it to say that this redraft purported to add some specificity to the extraordinarily wide (and practically wholly unenforceable) order contained within the original paragraph 2, as had been granted ex parte. I further note that it is this revision of the original paragraph 2 which PCCW, in its present role as appellant before this court, now seeks to uphold, together with the balance of the ex parte Order as granted by Beeson J on 13 June 2008. 40.But this is to get a little ahead of the story. 41.Faced with the terms of the original Order, as thus amended, the deputy judge pointedly declined a regrant in those terms: he considered that the terms of the injunction as now sought inter partes were far too wide with regard to the existing paragraphs 1 and 3, and in relation to the relief sought under paragraph 2 (as now amended), and paragraph 4 of the existing Order, the terms of this part of the ex parte Order not only were “too vague and general”, but should, he said, not be granted for the reasons he had adumbrated earlier in his judgment (at paragraphs 51 to 53). 42.In this part of his judgment the judge carefully had examined the law in the context of a claim for an injunction to protect confidential information – focusing in particular upon a summary of the law of confidential information within an employer/employee relationship, as set out in the celebrated ‘five propositions’ contained in the judgment of Neill LJ in Faccenda Chicken, op cit. – and, after considering the opposing arguments in the case before him, he had arrived at the conclusion that there remained a serious question to be tried as to the cause of action under the allegations of breach of contract and breach of confidence; at paragraph 60 of his judgment he observed:
43.Analytically thus armed, and after considering problems arising by virtue of that which he perceived as the lack of particularity of the relevant confidential information sought to be protected, the deputy Judge then embarked upon his own analysis of “the plaintiffs’ descriptions and categorizations of the relevant confidential information they say Mr Aitken has been imparted with, [as] set out in various parts of the affidavits of Mr Chiron and Mr Crosswell [deponents for PCCW]”. 44.I pause to observe that this effort by the learned deputy judge to impart a modicum of form and analysis into the profusion of factual allegation then laid before him has met with dissatisfaction on the part of the plaintiffs, Mr Sussex SC referring during argument, it seemed to me somewhat archly, to “the injunction drafted for us by the learned judge”. Whilst I appreciate that this relief was not what the plaintiffs were after, and that in their view it falls well short of that to which they consider they are entitled, it strikes me that this effort at synthesis of the variegated affidavit evidence placed before him was an admirable effort by a deputy judge, who was prepared, in very short order it must be said, to wrap a metaphorical wet towel around his head and to get to grips with the evidence in order to provide some degree of protection which, pursuant to the principles of law which he accepted as operable, he considered consonant with the broad justice of the situation. The fact remains that there is no cross-appeal from this synthesis, and in my view the judge is not to be subject to criticism because he disagreed with the legal premise advanced by the plaintiffs, and thus did not grant the extremely wide relief as then sought; absent alternative formulation from counsel, a less diligent tribunal simply would have dismissed in toto the plaintiffs’ application as it then stood, and would have thought no more about it. 45.In the event, after considering this profusion of data and allegation, the deputy judge proffered his own summary of the categories of confidential information which he had been able to divine from the accumulated affidavit evidence. He stated that, so far as he could see, this fell into no less than 12 categories, and thereafter he set them out (at paragraph 66, subparagraphs (1)-(12)). 46.After thus examining/categorizing this material, and noting (at paragraph 67) that it was Mr Aitken’s case that he had obtained no relevant confidential information at all – a contention the judge rejected, observing that “there is at least a triable case on whether Mr Aitken was actively and centrally involved in all the above activities and meetings as alleged by the plaintiff” – the judge observed that the “crucial question” he had to decide was whether the evidence before him provided sufficient particularity to support a triable claim in confidential information. 47.His conclusion upon this rhetorical question is set out (at paragraph 71), wherein he arrived at the view that the descriptions or classes of information as set out in paragraphs 66(1) to (4) “are too general and vague” and that “as so phrased and described, these classes or groups of information do not constitute arguably any confidential information recognized in and protectable by the law of confidence”. Moreover, he accepted the suggestion of Mr Burns SC, leading counsel then, as now, for Mr Aitken, that certain information, even if once justifying the rubric ‘confidential’, in the circumstances must now be regarded as ‘spent’. 48.Accordingly, the deputy judge rejected the submission that there was a triable issue as to any alleged enforceable right in terms of the information as set out in the first 4 subparagraphs of paragraph 66. 49.However, he did find “that the classes of information set out at paragraphs 66(5) to (12) are sufficiently particularized to support at least a triable claim in confidential information”, and added that he was “satisfied that the groups and nature of this information constitutes at least arguably trade secrets or trade secret equivalent confidential information.” 50.It followed from this, therefore, that in his view there was a need for protection of these categories by a suitably drafted interlocutory injunction, concluding (at para 72) that there is a serious question to be tried that:
51.In so holding, the deputy judge opined (at paragraph 77) that he found “considerable force” in the submissions of Mr Burns SC, for Mr Aitken, which were based upon the principles set out in Faccenda Chicken, op cit., which itself had approved the judgment of Cross J Printers & Finishers Ltd v. Holloway [1965] 1 WLR 1, at 6, whom in that case had stated:
whilst in like context the judge also referred to the equally well-known authorities of Balston Ltd v Headline Filters [1987] FSR 330, and G D Searle & Co Ltd v. Celltech Ltd [1982] FSR 92, at 99. 52.The judge also relied on Mr Burns’ submission that Mr Aitken’s employment contract with PCCW had contained a 3 month non-compete clause – which allegedly had been waived by the plaintiffs – and observed that the injunctive relief as now sought by the plaintiffs, at least under paragraphs 1 and 3 of their summons, was “even wider” than the contractual 3 month non-compete provision, and that consequently the plaintiffs never could obtain such relief as it would have amounted to a permanent restraint of the activities or trade of a former employee, “which no court would grant”. 53.These first instance submissions on the part of leading counsel for Mr Aitken were echoed with some force in the instant appeal. 54.More important, perhaps, within the ambit of the present appeal, is the firm rejection by the learned deputy judge of the submissions of Mr Whitehead SC, then acting for PCCW – whose arguments also are echoed upon this appeal by leading counsel now acting for PCCW, Mr Sussex SC – that the principles which should guide the court in a case such as the present are those set out by the House of Lords in the speech of Lord Millett in Bolkiah, op cit. 55.In this connection the deputy judge considered the facts of Bolkiah, and referred also to the summary of the principles to be derived therefrom as set out in the judgment of Clarke LJ (as he then was) in Koch Shipping v. Richards Butler [2002] 2 All ER (Comm) 957, at 962-963. He referred to the fact that Bolkiah was followed and applied in Marks and Spencer Group PLC v. Freshfields Bruckhaus Deringer [2005] PNLR 4, wherein the English Court of Appeal had confirmed an injunction granted to restrain the defendant firm of solicitors, Freshfields, which formerly had acted for Marks & Spencer, from acting for another client which was a potential purchaser of M&S, on the basis that the Freshfields were in possession of their former client’s confidential information which might be of relevance to the potential buy-out transaction, and thus to avoid any risk of disclosure Freshfields were to be restrained from acting for this new client. 56.Mr Whitehead’s argument that these authorities were of general application, and clearly supported the grant of an injunction to restrain a person’s activities if he is shown to be in possession of highly confidential and privileged information, was not accepted by the deputy judge, who accepted the contrary contention by Mr Burns and Mr McLeish, (then acting for the 2nd defendant, CSL) that Bolkiah principles are to be limited to a solicitor/client relationship, or, as was the factual position in Bolkiah, to an analogous professional relationship such as the former litigation support accountants in that case, KPMG. 57.In short, therefore, the deputy judge accepted that Bolkiah principles did not run in this case, and that, in an employer/employee relationship, the governing principles remained those as delimited in Faccenda Chicken and associated authorities. He observed (at paragraph 87 (2)) that “all subsequent cases applying Bolkiah are ones involving solicitors obtaining confidential information in the course of their professional commitments”, and summed up his view thus (at paragraph 87(3)):
58.The deputy judge then proceeded to consider a number of other, usual matters arising within the context of an application for the grant of an interlocutory injunction, but I have taken the opportunity to focus on the aspect of his judgment dealing with the competing Faccenda Chicken/Bolkiah approaches because, as earlier observed, the argument below reflects to a very substantial extent the argument as mounted upon this appeal. 59.In the event, therefore, upon the plaintiffs’ summons, the learned judge saw fit to regrant an interlocutory injunction, ordering that until trial or further order that Mr Aitken shall keep confidential, and shall not disclose the stipulated categories of confidential information to, or use for the benefit of, anyone, including CSL, and its directors, servants and/or agents. 60.The precise terms of his Order in this regard are set out in his judgment at subparagraphs (i)-(ix) of paragraph 125(4), and are reflected thus at paragraph 1 of the engrossed Order dated 10 July 2008. They read as follows:
61.By paragraph 2 of his Order the plaintiffs’ summons for injunctive relief against the 2nd defendant, CSL, was dismissed, paragraph 3 provided that the parties were to have leave to apply, including making application for direction for a speedy trial, and paragraph 4 dealt with the issue of costs. 62.As to costs, the judge made an order nisi that the plaintiffs’ costs of the plaintiffs’ summons as against the 1st defendant, Mr Aitken, be in the cause of the action, and that the 2nd defendant’s costs in relation to the plaintiffs’ summons be in the cause of the action, such order nisi to become absolute within 14 days unless application be made by any of the parties so to vary. 63.This, however, was not to be the end of the procedural saga prior to the present substantive hearing of this appeal. 64.What then happened was that the plaintiffs, PCCW, who clearly were unhappy at the relief they had achieved before the deputy judge, by Notice of Appeal dated 15 July 2008 then mounted an urgent application to the Court of Appeal (Deputy Judge Au having granted a 7 day stay of execution of his own order) for that which, as Le Pichon JA observed in the Reasons for Judgment handed down after that hearing, effectively was a temporary injunction pending the substantive appeal to this court from the Order of Deputy Judge Au of 10 July 2008. 65.This urgent interim application was heard, and decided, on 18 July 2008, by a differently constituted Court of Appeal, consisting of Le Pichon JA and Hartmann J. 66.In the course of that hearing the Court of Appeal entertained argument from the parties, who were represented by the same counsel who had argued the case at first instance before Deputy Judge Au. 67.Pending the opportunity to argue the appeal proper, the plaintiffs wished to hold the position in terms of the injunctive relief, as amended, which they had sought to obtain from the deputy judge at first instance – in other words, they wished to retain the ex parte relief granted by Beeson J on 13 June 2008, as now amended (in terms of paragraph 4(2)), by Mr Whitehead SC at the inter partes hearing at first instance. 68.This application for a temporary injunction in the terms thus sought was granted by the Court of Appeal, the Reasons for Decision being handed down on 23 July 2008, in the judgment of Le Pichon JA. 69.Her Ladyship also took the opportunity to direct that the substantive appeal from the Order of Deputy Judge Au be expedited, and that the first available dates for the hearing of this appeal (with an estimated length of 2 days) be taken without consulting counsels’ diaries. 70.Hence the hearing of this appeal upon these dates within the court vacation, and hence the introduction into the forensic fray of alternative counsel who are available for this expedited hearing, namely Mr Sussex SC for PCCW (in place of Mr Whitehead SC, who had appeared below), and of Mr Strachan for CSL (in place of Mr McLeish, who had appeared for the 2nd defendant below). Mr Burns SC remains as the forensic common denominator, and once again appears for Mr Aitken, as he did before Deputy Judge Au. The relief now sought by the plaintiffs 71.Before turning to the argument, it may assist to set out in full the ambit of the interlocutory injunctive relief as now sought by the plaintiffs upon this appeal. As earlier observed, this is no more, and no less, than revisitation of the ex parte Order as granted by Beeson J on 13 June 2008, save as amended in terms of paragraph 2 thereof at first instance by leading counsel for PCCW. 72.The relief as thus sought is contained within paragraph 4 of the plaintiffs’ Notice of Appeal dated 15 July 2008, which is the operative document with which this court has been seized. Paragraph 4 thereof requests an Order that the following orders be made upon the plaintiff’s summons dated 13 June 2008:
The central issue in this appeal 73.In moving this appeal, Mr Sussex SC made no bones about his position in terms of applicable principle. 74.The issue which divided these parties, he said, was one of law, namely, was the limitation placed upon the applicability of the principles espoused in Bolkiah, op cit., by the learned deputy judge in the court below, correct? He respectfully suggested not. 75.His unequivocal position was that the principles concerning privileged information enunciated in Bolkiah “plainly” were and are applicable to the present case, and the court was asked to allow the plaintiffs’ appeal and to make the Order requested in the Notice of Appeal, with costs to the plaintiffs, both here and below. 76.This was not a case about trade secrets, he submitted, nor should these particular facts be moulded to fit into the various Faccenda Chicken categorizations. 77.This was, and always had been, he said, a case about, and involving, legal professional privilege, and the manner in which, over the centuries, the common law jealously had guarded the right of a client to confer with his legal advisers untrammelled and absent fear of revelation of the content of that information/advice. 78.Moreover, this was a fundamental legal and, indeed, constitutional right, which was a pillar of our legal system; it was important to bear in mind that this was a privilege of the client, not that of his lawyer, and it was, and is, a privilege attaching to the nature of the information in question. 79.It followed, therefore, argued Mr Sussex, that any information thus subject to legal professional privilege is protected by the law, and is permanently so protected. 80.In pressing upon the court the absolute nature of the doctrine of legal professional privilege, Mr Sussex referred in some detail to the House of Lords case of Regina v. Derby Magistrates’ Court, Ex parte B [1996] AC 487, in which their Lordships variously had reviewed the provenance and importance of the doctrine of legal professional privilege. In the speech of Lord Lloyd of Berwick, for example, his Lordship observed (op cit., at 509):
and, later in the same speech, in commenting upon the submission of leading counsel that times now had changed, and that greater emphasis now is to be placed upon the court being put in possession of all relevant information in order to arrive at the truth, his Lordship noted:
81.Thus, said Mr Sussex, privileged information falling within the rubric of legal professional privilege was a special species of confidential information, which always was to be protected. 82.It arose in this case, he submitted, because Mr Aitken, qua employee of PCCW, by virtue of his senior position in that company, and by reason of the fact that he had been in possession of confidential information imparted, for example, at consultations with leading counsel with regard to diverse aspects of FMIC, thus was placed in possession of information protectable by legal professional privilege, and it mattered not for these purposes that Mr Aitken was not a solicitor, albeit he was in fact foreign qualified even if not employed as such. 83.Whilst Mr Aitken was not a solicitor, Mr Sussex submitted (although as it happened he was legally qualified), nevertheless his position was governed by the principles as laid down in Bolkiah, op cit., which, he maintained, was an ‘information based’ and not a ‘relationship based’ case, and wherein the principles adumbrated within the speech of Lord Millett were of general and broad application. 84.In short, he said, “anything involving a risk” of Mr Aitken revealing information protected by legal professional privilege is to be enjoined, with the result that Mr Aitken permanently can be removed and taken “out of the arena” of the specific area to which such information – which never under any circumstances can be revealed – is relevant, or is likely to be so. 85.Thus, leading counsel argued, it was legitimately open to the plaintiffs, PCCW, in the particular situation which now had arisen in terms of Mr Aitken’s employment with CSL, and his dealings with FMIC and associated regulatory matters, to ask the court wholly to remove him from this situation: hence the breadth of the terms of the injunctive relief sought by PCCW upon this appeal. 86.In this regard, Mr Sussex made particular reference to a passage in Lord Millett’s speech in Bolkiah, wherein his Lordship observed that he regarded the criticisms made of the test as propounded in Rakusen’s case [1912] I Ch 831 as well-founded, and had continued (op cit., at 236):
87.Mr Sussex submitted that when Lord Millett’s speech is properly analysed, it becomes clear that the emphasis is on the nature of the information as privileged, and that the relationship giving rise to that information should not be the determining factor in whether such legal professional privilege attaches. He said that the phrase “or other person”, as emphasized in the foregoing passage, makes this evident. 88.If this contention be right, as it “clearly is”, Mr Sussex maintained, thus it followed inexorably that Mr Aitken indeed was in the position of such “other person” in possession of confidential and privileged information, and thus was able to be enjoined in the admittedly wide terms of paragraph 4 of his Notice of Appeal, because not to do so would admit of the risk of disclosure, witting or unwitting, and the policy of the law was to ensure that in instances of confidential information the subject of legal professional privilege that such a risk was to be negated. 89.I have no doubt but that the point was expressed more elegantly, but that at any rate was the thrust of leading counsel’s argument upon the benchmark issue in this appeal. 90.For the defendants, Mr Burns and Mr Strachan begged to differ with Mr Sussex’s analysis. Indeed, they thought that it was nonsense, and duly said so. In this regard they accepted all that he had said about legal professional privilege, and its importance within our system of law, but maintained and that this case had nothing whatever to do with that concept. 91.In their submission the instant case merely was one in a long line of restraint of trade cases, albeit one with unusual facts which appeared to have opened the door to a ‘legal professional privilege’ argument – an argument, they said, which should be roundly rejected by this court, as indeed it had been at first instance. 92.Both Mr Burns and Mr Strachan placed before the court detailed and informative skeleton arguments, and I mean no disrespect if I do no more than outline their conceptual position. An expedited appeal mandates an expedited judgment, and it is clear that if and in so far as Mr Aitken remains wrongly subject to a quite extraordinary level of restraint – and the present position is that he presently is subject to such wide restraint consequent upon the temporary injunction granted by the appellate court at the urgent interim hearing on 18 July 2008 – then the sooner that he is relieved of this burden the better, and that the time necessarily taken to decide the important issues raised in this appeal should not unduly serve to extend the terms of the existing injunction. 93.As I have indicated, counsel for the 1st and 2nd defendants took the firm view that this was, in effect, a particular type of ‘trade secrets’ case, which fell to be decided upon usual principles, and that the correct and authoritative statement of the law relating to an employee’s duty of confidentiality – with which, counsel emphasized, this case solely is concerned – is to be found in the judgment of the English Court of Appeal in Faccenda Chicken, op cit., wherein that court had stressed that the primary obligations of an employee to his erstwhile employer are contract based, and rest upon the content of the particular contract of employment. 94.Thus, Mr Burns pointed out that the Court of Appeal in Faccenda expressly had approved the judgment of Cross J in Printers & Finishers Ltd, op cit., to the effect that if an employer considers that there are trade secrets to be protected after the termination of the employment, the proper and accepted manner of the employer protecting its position would be to exact a covenant from the employee restricting the employee’s field of activity after termination of the employment, and not “by asking the court to extend the general equitable doctrine to prevent breaking confidences beyond all reasonable bounds”: the latter being words of Cross J quoted in Faccenda Chicken, op cit., at 137G-138A. 95.Thus, Mr Burns submitted that Mr Aitken’s obligations to PCCW as regards confidentiality fell exclusively to be determined by reference to his employment contract, which contained (vide the ‘Confidentiality Undertaking’’, at clause 3 therein) an express covenant on his part concerning the use and disclosure of “trade secrets or other confidential information” both during and after termination of employment, and that on the established authorities the covenant is unenforceable post-termination other than as regards information which was of a sufficiently high degree of confidentiality as to merit the epithet ‘trade secret’. Moreover, the other relevant contractual provision in the employment contract (clause 9), contained a post-termination restrictive covenant restraining him from engaging in any activities competitive with PCCW during a 3 month period post-termination, and thus, other considerations apart, upon any basis this non-compete PTR would not have extended beyond 20 June 2008. 96.And yet, said Mr Burns, here was PCCW, upon the supposed premise of protection of privileged confidential information, purportedly invoking, via the medium of Bolkiah, the concept of legal professional privilege in order to take Mr Aitken out of his chosen calling, or at least from participation in this particular vital area – clause 1 of the relief now sought from this court, for example, referred to a restraint against Mr Aitken having “any involvement, whether direct or indirect, in fixed-mobile interconnection issues related to or arising out of” the April 2007 Statement – upon an entirely open-ended basis, and certainly upon a basis far more stringent than that set out within his contract of employment. 97.As to the extended discussion of Bolkiah, which formed the “cornerstone” of PCCW’s case, leading counsel submitted that properly understood – and indeed, as the learned deputy judge correctly had concluded – that Bolkiah was concerned entirely with the relationship between solicitor and client or (as on the particular facts of Bolkiah) a relationship analogous thereto, and the duties which arise from such a relationship, and that this authority has and can have no application to a situation such as the present which concerns the relationship of employer, PCCW, and its former employee, Mr Aitken. 98.Accordingly, Mr Burns submitted that in no sense did this line of argument fall within the rubric of a ‘serious issue to be tried’. 99.For the 2nd defendant, CSL, Mr Aitken’s present employer, which, in terms of the currently temporary relief, currently was enjoined until trial or further order “(a) from involving the First Defendant, whether directly or indirectly, in any way in FMIC issues and (b) from discussing or permitting discussion of FMIC issues in the presence of the First Defendant and (c) from requiring or permitting the First Defendant from acting contrary to paragraphs 2, 3 and 4 above”, Mr Strachan was equally dismissive of the plaintiffs’ case. 100.He accepted in principle that if the plaintiffs’ argument was seriously triable, then injunctive relief must follow against his client, since CSL was knowingly employing Mr Aitken. But – and from Mr Strachan’s viewpoint this was a big ‘but’ – the case mounted by the plaintiffs in this regard simply did not get off the ground. 101.In his helpful argument – which as matters transpired turned as much into dialectic as direct submission – Mr Strachan necessarily revisited much of the ground covered by Mr Burns, maintaining that absent a restrictive covenant, the most that the court will do is to restrain the employee from divulging or using trade secrets, and that the court will only do that if such trade secrets properly can be defined. 102.This aspect of appropriate definition gave counsel the opportunity heavily to criticise the terms of the current temporary relief as now in force, which he variously characterised as “flabby” and “wholly unacceptable”, emphasizing the practical absurdities which would arise if relief of this extraordinary dimension were to be continued in its present form, and he suggested that if the court were to be persuaded to apply to the employer/employee situation the established principle preventing a solicitor from acting for a second client when there remains a risk of disclosure/misuse of confidential information earlier acquired from a prior client, so to do effectively would be to “drive a coach and horses through the principles applicable to employer/employee cases, and would, in particular, involve jettisoning the restraint of trade doctrine as it applies in that context”. 103.As to the suggested applicability of Bolkiah to the present case, Mr Strachan maintained first, that Bolkiah was a case applicable to a solicitor/client (or analogous relationship) alone, and that to apply Bolkiah to the employer/employee situation would be to confuse two distinct and long-standing lines of authority which refer to different situations and are underpinned by different public policy considerations – which was precisely why the Bolkiah approach never had been applied (or sought to be applied) in the employer/employee situation. 104.Accordingly, with regard to his client, CSL, Mr Strachan asked that the injunction currently in force be set aside, and that the court approve and uphold the judgment of the learned deputy judge, which the 2nd defendant did not seek to disturb. Decision 105.This has been an interesting and diverting appeal – aided, it must be acknowledged, by the conviction and fluency with which Mr Sussex SC invested his argument, and indeed by the very high standard of advocacy upon all sides – but in my view the fundamental premise of the plaintiffs’ case is flawed. 106.I bear in mind, of course, that this is no more than an interlocutory appeal, and hence, subject to other considerations such as the balance of convenience and the remedial adequacy of damages, that the relevant benchmark is that of a serious issue to be tried, or whether the issue is ‘seriously arguable’, but for my part I venture to suggest that this conceptual watershed has not been met by the appellant plaintiffs. 107.I entertain no doubt but that this is the case. 108.In my view, in their reliance upon Bolkiah the plaintiffs have fastened upon a passage in the speech of Lord Millett – quoted herein at paragraph 84 above – and via the reference of his Lordship to the phrase “or other person” have extrapolated otherwise unexceptional (and wholly accepted) principles to principles of general application outwith the intended context, which is and was solicitor/client and analogous relationships. 109.With respect, it seems plain that the phrase “or other person” appearing within that particular paragraph of Lord Millett’s speech (op cit., at 238F-H) only could have been intended as a reference to a relationship between a client and an entity such as KPMG, which, if not a solicitor, is – or at least was on the facts of that case – in an analogous position, and thus was held to be treated in like manner as a formal solicitor-client relationship. 110.It is unsurprising that this should be so. Indeed, I agree with Mr Strachan’s passing remark that Bolkiah is not a ‘stand alone’ case, and in itself does not establish any new principle; in substance, the decision in Bolkiah is no more than a recent manifestation of existing principle in terms of legal professional privilege, and stands in a long line of cases which define the circumstances in which the court will prevent the solicitor from acting for a client: see, for example, Rakusen v. Ellis, Munday & Clarke [1912] 1 Ch 831 (the principal authority prior to Bolkiah); David Lee & Co v. Coward Chance [1991] Ch 259; In re A Firm of Solicitors [1992] 1 QB 959; In re a Firm of Solicitors [1997] Ch 1; Bolkiah, Newman v. Phillips Fox (1999) 21 WAR 309; Koch Shipping v. Richards Butler [2002] 2 All ER (Comm) 957; Marks & Spencer Group v. Freshfields [2005] PNLR 4; Time Success Profits v. Andrew Lam [2004] 1 HKC 214. 111.Accordingly, although Bolkiah is a case in which long-established principle is, perhaps, set out in its most authoritative and refined form, the underlying principle has been well-known to our law for the past 200 years, which is that the court will prevent solicitors from acting for client 2 if they previously have acted for client 1 and if they have obtained confidential information from client 1 and if client 1’s interests are adverse to those of client 2 – albeit the same solicitors would be able to act for client 2 if it could be shown that there is no real risk of disclosure of client 1’s information to client 2. 112.Viewed thus, I fail to see that it can have been intended by their Lordships in Bolkiah that the remedial approach adopted in the particular circumstances of that case would, or should be regarded as, appropriate in respect of the employer/employee relationship, itself a repository of established legal principles referable to that sphere of human activity as were developed during the 20th century, wherein the established case law shows itself to be resistant to any return, via the medium of the protection of confidential information, to a new form “of servitude or serfdom” whereby the employee is precluded from transport of his acquired skills within the labour market: in this context see, for example, the trenchant observations of Scott LJ (as he then was) in 1987 in Balston Limited v. Headline Filters (op cit., at 351). 113.Nor is it surprising that by reason of the special rights and obligations inherent in the relationship of solicitor/client, and relationships analogous thereto, that the burden of proof in Bolkiah is stated by Lord Millett (op cit., at 237A-B) to lie upon the solicitor, the recipient of the privileged and confidential information: “I prefer simply to say that the court should intervene unless it is satisfied that there is no risk of disclosure. It goes without saying that the risk must be a real one, and not merely fanciful and theoretical. But it need not be substantial…” 114.In my judgment there is, and can be, no question of the ‘Bolkiah approach’, if I may term it thus, being transmuted to an overriding general approach to be adopted in every case involving confidential information which also may be characterised as information subject to legal professional privilege. 115.In the judgment of Lightman J in Re a firm of Solicitors [1997] Ch 1 – which judgment effectively was approved by Lord Millett in Bolkiah – it was said to be precisely the nature of the solicitor/client relationship which gave rise to extraordinary duties, duties which upon no basis properly can fall upon a mere employee, however well qualified. As Lightman J expressed the position (op cit., at 13E-G):
116.Likewise, in the present case the restraining Order of the learned deputy judge – which represents his ‘distillate’ of the mass of evidence placed before him, and which pointedly has not been appealed by the defendants – has sought to prevent the disclosure or use of the specified categories of information as set out in the 9 subcategories of paragraph 1 of his Order, and has not sought completely to ‘take Mr Aitken out of the FIMC arena’, which represents the desired position of PCCW. 117.In my view, it would have been wholly unjustified for the learned judge to have purported to have gone further in the circumstances, and indeed it seems to me that the extrapolation of Bolkiah to protection of confidential information within the employer/employee context effectively would render irrelevant the public policy against covenants in restraint of trade, which are void and unenforceable unless justified – and within the context of ‘trade secrets’ properly so-called are permitted by the courts to stand if spatially and timeously justified on the particular facts; in fact, were the position to be otherwise an employer would be able to restrain a former employee’s competitive activities by the simple expedient of exposing him to information allegedly deserving of the characterization ‘confidential and privileged’, and on the basis of a risk, however slight, that disclosure was possible in any competitive activity in which that employee subsequently may choose to participate. 118.Upon Mr Sussex’s formulation, the logical conclusion would be that whenever an ex-employee was possessed of confidential information which arguably also is privileged, absent any restrictive covenant the former employer could ban the employee from engaging in activities to which the information is relevant, and such a ban could be permanent: to revisit the quote of Lord Lloyd in Regina v. Derby Magistrates’ Court, ex parte B, (cited at paragraph 79 above) “once the privilege is established, the lawyer’s mouth is “shut for ever””. 119.In the instant case, therefore, the proposed ban would be permanent, the 1st defendant, Mr Aitken, would be completely precluded from having any future involvement in FMC/FMIC issues, which are agreed to be the current most important issues affecting the telecommunications industry in Hong Kong in the foreseeable future, and such a ban would stand in stark contrast to the 3 month express restrictive covenant to which Mr Aitken personally contractually was subject under his employment contract with PCCW, which period expired in June 2008. 120.It also seems to me that should the plaintiffs’ fundamental argument be accepted, the range of potentially affected employees would be large; all employees privy to privileged information thus could have their post-employment activities curtailed, and any employee who had been involved with litigation in which the former employer had been engaged (from senior management downwards) could be affected. This may well be the reason for the fact, as counsel for the defendants repeatedly have pointed out, that no case has been discovered which thus has sought to extend Bolkiah principles in the manner as now contended for by the plaintiffs. 121.Nor do I consider that the plaintiffs’ strong reliance upon a decision of Blackburne J in the case of Ablitt v Mills & Reeve(a firm) & another (unrep), transcript of judgment dated 24 October 1995 – to which Mr Sussex made reference upon several occasions during argument – suffices to change the view I that have formed. 122.Ablitt was a case wherein the papers of counsel, Mr Andrew Sutcliffe, who had been advising the plaintiff in an insurance dispute, inadvertently were sent by a junior clerk in his chambers to the defendant firm, which were the solicitors acting on the other side in that particular litigation. These papers (some 7 lever arch files) packed in two cardboard boxes contained many documents attracting legal professional privilege, the contents of which were highly confidential to the plaintiff, including advice from counsel on the merits and on evidence, draft witness statements and a substantial quantity of privileged correspondence between solicitor and client and solicitor and counsel. 123.Upon the specific instructions of the client insurance company, these papers were read by the defendant firm to which they mistakenly had been delivered, and thereafter were sent back to counsel’s chambers with the words ‘Sent to us in error’ typed upon an envelope accompanying the boxes. When the plaintiff realized what had happened, litigation ensued and injunctive relief was sought seeking, inter alia, delivery up of any information in whatever form the defendant’s solicitor had derived from their inspection of the papers as enormously thus mistakenly had been delivered, and an injunction restraining the defendant firm, Mills & Reeve, from acting as solicitors for the defendant insurer, Norwich Union, in the forthcoming proceedings. 124.Blackburne J granted interlocutory relief in order to restrain the defendant firm from continuing to act in the litigation, relying, inter alia, upon the authorities of David Lee & Co (Lincoln) Ltd v. Coward Chance (a Firm) [1991] Ch 259 and In re a Firm of Solicitors [1992] QB 959 as were cited to him, and rejecting the argument on behalf of the insurer, Norwich Union, that great prejudice would be caused because it would be expensive and disruptive to instruct a new firm. 125.With respect, I do not consider that this case takes the current debate any further forward. Ablitt strikes me as a straightforward case of direct infringement of legal professional privilege consequent upon the inadvertent opportunity that had arisen, and I surmise that it can have come as little surprise to anyone that in the event the judge saw fit to ensure that the defendant firm, which on the facts deliberately had taken the opportunity to acquaint itself with the information within the documentation as had been mistakenly delivered, and as a consequence was ordered to be removed from further participation within that litigation. 126.I am, however, unable to accept the parallel now sought to be drawn with the position of Mr Aitken, qua former employee of PCCW (to whom it is accepted he gave no advice), and who now is, on PCCW’s case at least, to be restrained, upon an open-ended and ‘blanket’ basis, in the extremely wide terms of the injunction currently in force, in circumstances wherein the learned deputy judge nevertheless has seen fit to grant interlocutory injunctive relief to PCCW specifically designed to allay concern as to the use/misuse of any category of such confidential information as is said to attract legal professional privilege. In short, I do no consider that Mr Aitken properly is be considered to be in a position analogous to the defendant solicitors, Mills and Reeve, in Ablitt, with the consequence that, qua former employee, he now is to be moved completely ‘out of the FMC/FMIC arena’ upon a general application of ‘Bolkiah principles’, and in disregard of the body of jurisprudence which has developed over the past century in terms of restraint of trade and the employer/employee relationship. 127.It follows ineluctably from the foregoing that I am unable to accept the primary thesis underpinning Mr Sussex’s submission, highly persuasive though he made his proposition sound, and I reject unequivocally his suggestion that, in accepting the defendants’ arguments, that the court thus would be adopting a “blinkered employment law approach”. 128.The evidence in this case discloses that there is a frequent movement of staff between telecommunications operators in Hong Kong, and that such movement commonly includes staff in very senior positions: indeed, as Mr Strachan pointed out, PCCW itself has been the beneficiary of such movement of staff. Moreover, the industry, and thus the wider public interest, benefit from this free movement of personnel, and there is resonance in the submission that the proposed extraordinarily wide scope of the proposed fetter upon Mr Aitken’s activities runs counter to these interests. It is also difficult to identify any justification for imposing such a draconian ban upon an employee privy in some way to privileged information when upon long-established principle no such ban would be imposed upon an employee privy to confidential information, such as a ‘trade secret’ in the accepted sense, which is equally important to the former employer. 129.Having thus rejected the ‘benchmark point’ in this case, I move briefly to deal with subsidiary arguments raised in this case by the plaintiffs. 130.Mr Sussex’s fall-back position was that if his primary contention was not accepted by the court, his submission was that in any event Mr Aitken was in an ‘analogous relationship’, within Bolkiah principles, just as in that case KPMG was held to be in such a position, and thus Mr Aitken could continue to be enjoined upon this basis alone and in terms of the currently imposed and extremely wide temporary restraint. 131.I regret that I am unable to accept this contention either, nor do I accept that this alternative formulation constitutes a serious issue to be tried. 132.Although Mr Aitken happens to be qualified as a solicitor, being entitled to practice only in New South Wales, he never has been admitted as a solicitor in Hong Kong and it is common ground that he was not employed by PCCW as a solicitor; accordingly, there never has been a relationship between PCCW and Mr Aitken other than that of employer/senior employee. 133.The fact that Mr Aitken is said to have been privy to confidential information, including information protected by legal professional privilege – albeit that Mr Aitken himself denies that this is factually the position – does not serve to convert his role from employee to that of solicitor or, to use Mr Burns’ expression, ‘quasi-solicitor’ engaged (as KPMG was in Bolkiah) to provide litigation support services. 134.In any event, in specific relation to FIMC issues – Mr Aitken’s involvement with which providing the immediate impetus for this case in its current form – the evidence from Mr Chiron states expressly that Mr Aitken was not required to give any advice by reason of the heavy involvement of PCCW’s external solicitors and counsel and by PCCW’s Group Legal Office. Thus the alternative proposition that there existed between Mr Aitken and PCCW a relationship analogous to the solicitor/client relationship does not stand scrutiny, since there was no ‘client relationship’: simply put, Mr Aitken’s relationship with PCCW was on the basis of a contract ‘of service’, and not one ‘for services’. On any basis, qua employee of PCCW, Mr Aitken was part of the client team, and it is the outside legal firm, Messrs Herbert Smith, which in this factual matrix occupies a position analogous to that of KPMG in Bolkiah. 135.Thus, I am unable to accept that the facts of this case conveniently can be recast to fit the ‘analogous position’ scenario with which Bolkiah factually was concerned. In my view, the deputy judge was right to find that “it cannot seriously be suggested” that there was between Mr Aitken and PCCW a duty of strict confidentiality such as would encourage full and frank disclosure from PCCW, as exists in a solicitor/client relationship. 136.In my judgment Mr Sussex’s ‘fall back’ argument must be rejected also. 137.At the end of his submission Mr Sussex also ventured the suggestion that on any basis the terms of the ‘distillate’ as drawn by the learned judge did not in fact match his findings in his judgment, referring in this context to paragraph 2.3 of the Notice of Appeal, which states that the learned judge’s conclusion in paragraph 71(6) of his judgment as to information which is deserving of protection by injunction is contradicted by the order made in paragraph 125(4) of his judgment which, even on its face, fails to provide any protection against the disclosure or misuse of information. 138.However, although raised, the point was not seriously pursued, and no alternative formulation of the judge’s order was proffered. Alternatively, it may be that Mr Sussex simply was keeping his powder dry on the point, and effectively reserving argument to when he has sight of the judgment herein. In any event, for present purposes I am able to take this point no further. 139.During the course of submission various other matters were raised by the defendants. As earlier noted, Mr Strachan spent some time upon an analysis of the precise terms of the relief sought by the plaintiffs (and indeed currently in force), and was particularly scathing about the lack of specificity within, and the extraordinary width, of paragraphs 1 and 3 of the Order, as sought now to be confirmed. 140.Suffice to say that in my view these criticisms were and are entirely well-founded, since, for example, the relief sought in paragraph 1 would prevent Mr Aitken, wearing his ‘corporate affairs hat’, even from issuing a press release to the effect that CSL was in negotiations on FMIC with a particular operator, although, as Mr Strachan pointed out, by no stretch of the imagination could such conduct involve any disclosure of PCCW’s privileged information, whilst the relief as sought in paragraph 3 would have the absurd result of preventing Mr Aitken from talking at the dinner table about anything connected with FMIC issues, even if such conversation had nothing whatever to do with PCCW. 141.However, since these submissions, with which I agree, were advanced on the premise that the court accepted the application of Bolkiah to this case – which for my part I do not – in light of the rejection of the plaintiffs’ primary argument there is nothing to be gained in further dealing with these secondary issues. 142.As to CSL’s own position, as earlier observed, Mr Strachan made it clear on behalf of its client that if, contrary to his primary case, the Bolkiah approach nevertheless was held to apply, and if there thus was a serious issue to be tried that the 1st defendant could be prevented, on the ‘blanket basis’ now propounded, from having any involvement in FMIC issues, it would therefore follow that there was also a serious question to be tried for procurement/inducement as against CSL, given that CSL was put on notice of the position by PCCW’s pre-action letter of 5 June 2008. 143.However, said Mr Strachan, if the ‘Bolkiah approach’ did not apply in this case, he submitted that the analysis and conclusion of the deputy judge to the effect that CSL did not procure any breach of duty on the part of Mr Aitken was “impeccable”. 144.I agree. 145.Finally, in terms of that which usefully may be termed ‘miscellaneous matters’, I mention in passing the issue of material non-disclosure. 146.The deputy judge held that upon the ex parte application that, inter alia, PCCW should have drawn the attention of Madam Justice Beeson to the competing line of employer/employee authorities, and not (as seems to have been the position) simply to have chosen to stand its ground uponallegedly applicable Bolkiah principles. 147.In the wider context of this case I confess that I find it difficult to become exercised over an aspect which, at its highest, is peripheral only, given the discretion exercised by the learned deputy judge to regrant injunctive relief in new form, albeit upon a basis not welcomed by the plaintiffs. 148.Had I been seized with this application at first instance, with respect I do not think that I should have classified this as ‘material non disclosure’, but this is the appellate court, and in my respectful view the learned deputy judge committed no error of principle in coming to the conclusion that he did in this regard. Accordingly, had such been relevant, I would not have interfered with this decision, and in the circumstances I see no reason to consider the matter further, nor to elevate it to an importance it does not deserve. Proposed Order 149.For my part, for the reasons outlined herein I would have no hesitation in dismissing the plaintiffs’ appeal, and accordingly I would make an order nisi that costs thereof are to be to the 1st and 2nd defendants, such costs to be taxed if not agreed. 150.The effect of this, therefore, would be that the injunctive relief as granted by the learned deputy judge henceforth will replace the interim temporary injunctive relief which was ordered to remain in force pending determination of this appeal. Proposed Interim Stay 151.At the conclusion of his reply submission, Mr Sussex made it clear to the court that if and in so far as his arguments did not succeed, his instructions were immediately to make application for leave to take the matter to the Court of Final Appeal, and concomitant with such application, to make further application that the injunctive relief as currently in force do remain extant pending such appeal. 152.At the conclusion of this appeal Mr Sussex clearly could do no more than indicate the current state of his instructions, although he led the court to believe that further interlocutory applications were a virtual certainty. 153.Accordingly, certain practical considerations arise, not least but that all parties should have an opportunity to digest the judgment of this court before dealing with any consequential application. 154.In the circumstances, a convenient and practical solution would be that an interim stay of an order dismissing this appeal should be granted for a period of 6 working days only from the date of the handing down of this judgment, and that as a condition of such interim stay, the plaintiffs should be required to mount such further applications as they see fit to make within this period; inquiries have revealed that it would be possible for this court, as presently constituted, to be made available to hear such applications, if mounted. Hon Le Pichon JA: 155.I have had the advantage of reading in draft the judgment of Stone J. I regret that I am unable to agree with the conclusions reached by the majority of this court. I set out my reasons below but I propose to confine the background only to what is necessary for this judgment given that the full procedural history as well as the parties’ contentions have been fully rehearsed in the judgment of Stone J. Introduction 156.This is an appeal from an order of Deputy High Court Judge Au dated 10 July 2008 made on the plaintiffs’ inter partes summons filed on 16 June 2008 for interim injunctive relief. The judge set aside the ex parte order of Beeson J dated 13 June 2008 (“the ex parte order”), replacing the injunctions that had been granted pending trial or further order with a more limited form of injunction. At the conclusion of the hearing judgment was reserved. 157.The telecommunications industry in Hong Kong as elsewhere is highly regulated. The participants are either Fixed Network Operators (“FNOs”) or Mobile Networks Operators (“MNOs”) all of whom operate under licences issued by the Telecommunications Authority (“TA”) and are subject to guidelines and regulations issued by it. 158.The plaintiffs are companies within the same group and are major participants in the telecommunications industry. For convenience, hereafter they will be referred to collectively as “PCCW”. 159.PCCW is by far the largest of the FNOs with a two-thirds market share of that business sector. The remaining one-third is shared by no more than a handful of other FNOs. The second defendant (“CSL”) is also a participant in the telecommunications industry. As I understand it, it is the largest of the MNOs. 160.The first defendant is a solicitor admitted to practise in New South Wales in 1997. He was General Manager - Regulatory Compliance of the Regulatory Affairs Department at PCCW from 5 March 2007 to 20 March 2008. His contract of employment included a confidentiality undertaking which the first defendant gave, agreeing not to divulge or communicate any trade secret or other confidential information of or relating to PCCW. This undertaking was to survive any termination of employment and was without limit in point of time. There was also a restrictive covenant of 3 months prohibiting the first defendant from working for PCCW’s competitors post-termination. 161.Prior to joining PCCW, the first defendant had been employed by CSL for about 18 months. He rejoined CSL after leaving PCCW and shortly thereafter became its Head of Regulatory and Corporate Affairs, a position he currently holds. Background 162.As a preliminary matter, the terminology used in relation to the issues arising should be explained.
163.The current regulatory regime stems from Statement No. 7 issued in March 2002. That applied the Mobile Party Network Pays (“MPNP”) policy which required the mobile operators to pay the interconnection charges. For the last six years, the MPNP policy has generated revenues of $600 million from MNOs which are shared by the FNOs with PCCW receiving two thirds of such revenues. 164.Technological advances have blurred the distinctions between fixed and mobile networks and services. By April 2005, the TA made it known to the industry that it was proposing to review and make possible changes to the regulatory regime introduced by Statement No. 7 and to create a regulatory environment under which FMC would be permissible. A consultation process followed. In general terms, MNOs favour the withdrawal or amendment of the MPNP ‘guidance’ which if accepted by the TA would all but obliterate the interconnection charges currently borne by them. Not surprisingly, FNOs hold very different views. 165.Prior to the commencement of the first defendant’s employment by PCCW, PCCW had instituted two sets of proceedings, precipitated by a direction issued by the TA in November 2006 relating to the terms of interconnection between PCCW’s network and another FNO i.e. Wharf T&T Ltd:
Upon joining PCCW in March 2005, the first defendant became involved in those proceedings from late March to October 2007, participating in confidential and privileged meetings and being privy to communications (both oral and written) with PCCW’s legal advisers. The 2007 Statement 166.Approximately a month after the first defendant joined PCCW, on 27 April 2007, the TA issued a statement (“the 2007 Statement”) introducing a new regulatory regime, the essence of which (in the context of FMIC) is that (1) the basis and rates of FMIC charges are deregulated with effect from April 2009. During the two-year transition period, FNOs and MNOs are to negotiate new FMIC arrangements to replace the MPNP; but (2) at the same time the A2A interconnection obligation (which in PCCW’s case arises under its Fixed Carrier Licence referred in § 162 (4) above) remains regulated. Regulatory intervention by the TA at any time (during and post-transition) continues to remain a possibility. 167.The immediate effect of the 2007 Statement was to render FMC/FMIC issues “the single most important issue” between FNOs and MNOs in Hong Kong “for at least the next 12 months and probably for some time to come thereafter”. The post-2009 FMIC arrangements to replace MPNP, in particular, is likely to occupy ‘centre-stage’, being crucially important because of the amounts at stake and highly contentious by reason of the fact that FNOs and MNOs have diametrically opposed interests in reaching any resolution of the issue. 168.Beyond that, an aspect of the 2007 Statement is whether a level playing field has been created for the negotiations that are meant to take place between FNOs and MNOs given that the per se interconnection requirement imposed on PCCW by the A2A policy, preserved and continued by the new regulatory regime, could result in PCCW being compelled to interconnect with MNOs notwithstanding the absence of any agreement to replace MPNP. The first defendant’s involvement 169.Following the 2007 Statement, PCCW took legal advice from its external legal advisers on wide-ranging issues in formulating PCCW’s legal, commercial and strategic positions in relation to the 2007 Statement. The first defendant was closely involved in the key legal analysis, the development of options and major strategic decisions relating to FMIC and the 2007 Statement that were taken in the weeks and months following April 2007. He attended numerous meetings both internal and external, he was privy to correspondence, e-mails and communications with legal advisers where options open to PCCW in relation to the 2007 Statement were discussed and considered. These discussions and communications “served to inform not only PCCW’s immediate actions of specific cases but also to materially shape the longer-term litigation, regulatory and commercial strategy to be implemented by PCCW” concerning FMIC. 170.As a result, one of the immediate steps taken by PCCW was to file an appeal to the Appeal Board on 11 May 2007 against the 2007 Statement (“Appeal 25”). This involved issues including “whether the TA had imposed a mandatory obligation on licensees to interconnect as a remedy against potential competition law breaches by operators in FMIC negotiations”. The first defendant was privy to privileged and confidential information in relation to Appeal 25. This litigation is still ongoing: although PCCW’s appeal for want of jurisdiction was dismissed, its application for a case to be stated to this court has yet to be decided by the Board. 171.It is said on behalf of PCCW that while Appeal 24 and HCAL 6 of 2007 (being between FNOs) did not directly involve FMIC, as a result of the 2007 Statement some of the issues raised in those proceedings became equally significant and relevant in the FMIC context, such as the scope of the TA’s authority to regulate the terms of interconnection of a fixed network operator with other operators, the scope of the A2A policy and interconnection obligations and that as a result of the first defendant’s involvement in Appeal 24 and HCAL 6 mentioned in § 165 above, he became aware of PCCW’s understanding of its legal position on those issues and of the relationship between those cases and the broader FMIC issues. 172.Legal advice rendered by Messrs Herbert Smith, PCCW’s solicitors, and to which the first defendant is said to be privy is summarized in § 9 of the Mr Crosswell’s third affidavit:
The judgment below 173.The judge identified 12 groups or classes of relevant confidential information from the affidavits filed on behalf of PCCW but considered that only the categories of information set out in § 66 (5)-(12) of his judgment were sufficiently particularised to constitute confidential information equivalent to a trade secret which under the relevant legal principles are recognised and protected. Those categories are described in the following terms:
174.In order to preserve the confidentiality of that information, the judge made the following order:
(The additional subparagraph in the order is explained by the fact that paragraphs e. and f. together address the information contained in § 66 (9) of the judgment.) 175.But the judge refused relief in respect of the following four categories or groups of information imparted to the first defendant:
The judge’s refusal was on the basis that the descriptions were too general and vague and that they did not constitute arguably any confidential information recognised in and protectable by the law of confidence. This appeal 176.The novel question that presents itself and which the facts of this unusual case bring into sharp focus is the scope of legal professional privilege: whether legal professional privilege is protectable where the person (in the present case, a former employee) who during his employment becomes privy to information to which that privilege attaches has no solicitor-client or analogous relationship with the party entitled to assert legal professional privilege and, if so, what the appropriate remedy would be. Is it the character of the information that is determinative? 177.In essence, it is PCCW’s case that legal professional privilege attaches to all 12 categories of information set out by the judge in § 66 of his judgment, and that PCCW is entitled to an injunction to preserve the confidentiality of that information and to restrain the first defendant from misusing the same. 178.As Lord Nicholls explained in Reg. v Derby Magistrates’ Court, Ex p. B. [1996] 1 AC 487, 510:
In the present case, the first defendant, a senior executive of PCCW while so employed and acting as one of PCCW’s agents, became privy to information covered by legal professional privilege. What is novel is whether and if so, the extent to which legal professional privilege may be asserted against an employee (with whom the client whose privilege it is had no solicitor-client or analogous relationship) after the termination of his employment. 179.The substantive relief sought is expressed as follows:
Paragraphs (1) and (3) of the relief is modelled on the principles stated in Prince Jefri Bolkiah v KPMG [1992] 2 AC 222 which is considered below. 180.As stated earlier, the judge considered that 8 of the categories of information (i.e. those in § 66 (5)-(12) of the judgment) were deserving of protection by way of an appropriately drafted injunction. In this connection it is to be noted that there is no respondents' notice, the first defendant and CSL presumably accepting that those categories of information merited protection by an injunction in the form granted. 181.The relevant legal principles to which the judge alluded when granting relief in respect of the 8 categories are the well-known propositions stated in Faccenda Chicken Ltd v Fowler [1987] 1 Ch. 117, 135F-137F he had discussed earlier in his judgment. It is the leading authority on confidential information in the context of an employer-employee relationship. Of immediate relevance in the present context is the proposition that there is an implied term imposing an obligation on the employee post-termination of his employment not to use or to disclose any trade secrets or other information which is of a sufficiently high degree of confidentiality as to amount to a trade secret. Adopting the shorthand reference of Mr Burns SC who appeared for the first defendant, this proposition will hereafter be referred to as “Faccenda Category III”. 182.The judge approached the matter on the footing that what required protection was confidential information within Faccenda Category III. But given the nature of the information involved in this case, I have some difficulty with so classifying or characterizing that information. ‘Trade secret’ would not normally be apt to describe that type of information. That expression normally connotes some secret formulae, design, methodology or processes in manufacture or production belonging to the employer and used by him in his business. No such information is involved in the present case. Strategy, be it commercial or legal or a combination of both, developed with the assistance of external legal advice and shaped by that advice is confidential information that may or may not amount to a trade secret. At any rate, not all such information is a trade secret or its equivalent. Indeed, it is my understanding that Mr Burns SC who appeared for the first defendant was prepared to accept that part of the confidential information at least may not be or amount to a “trade secret” or its equivalent. 183.Analytically, in respect of such of the information as is not a “trade secret” or its equivalent, the only other available juridical basis for granting protection would be legal provisional privilege. I can conceive of no other. Legal advice obtained by an employer would be covered by legal professional privilege whether or not it amounts to a ‘trade secret’ and the cases show that persons who have come into possession of such privileged information, who are not themselves in any fiduciary relationship with the client whose privilege it is, may be enjoined. See, for example, English & American Insurance Co. Ltd v Herbert Smith [1988] FSR 232; Ablitt v Mills & Reeves, No. 95 A620, 24 October 1995, (transcript of judgment). It is to be noted that to the extent that the proper juridical basis for any of the relief granted was legal professional privilege, the granting of relief is nonetheless considered and accepted to be appropriate. 184.Turning to the information in § 66 (1)-(4), the first matter to consider is whether legal professional privilege attaches to the information therein described. There can be no question that it does so far each of § 66 (1)-(3) is concerned: in each case, the information was not only confidential but also privileged, having been obtained via meetings, conferences and communications that were themselves privileged. 185.In relation to the information described in § 66 (4), it raises the question whether legal professional privilege in relation to the matters therein described extends to internal discussions by the PCCW team (including the first defendant) concerning PCCW’s FMIC strategy in respect of which legal advice had been taken and given. Whilst internal discussions could constitute confidential information, that would not of itself merit protection under legal professional privilege. But in the circumstances of the present case and having regard to the subject matter in question, in my view, no meaningful distinction could usefully be drawn between such internal discussions/communications and discussions/communications on the same subject matter with PCCW’s external legal advisers. Put differently, given the facts, such internal discussions/communications would necessarily have interfaced or interacted with the legal advice already given or subsequently received such that it could not realistically or meaningfully be compartmentalised into something that is quite separate from, and independent of, the legal advice obtained. 186.PCCW, like any other corporation, can only act through human agents in its dealings with its external legal advisers. The small team within PCCW including the first defendant acted on its behalf in seeking external legal advice in relation to the 2007 Statement. Assume that the advice was to initiate Appeal 25. Information gained by the first defendant (as part of the small PCCW team handling the matter for PCCW) in relation to Appeal 25 would have been acquired through his being privy to privileged and confidential communications between PCCW and its external legal advisers. Plainly legal professional privilege arises and would attach to that information. The privilege, as such, would belong to the client i.e. PCCW. 187.As to the criticism of lack of particularity, on the somewhat unusual facts of this case, as a matter of principle, I am unable to see what other particulars could or should be provided before an injunction would be granted to preserve the confidentiality of that privileged information. The subject matter cannot be said to be imprecise: it is a specific piece of litigation. I do not share the judge’s view that any of those categories of information lacks specificity. I cannot but agree with Nettle J that the principle that the information has to be identified with precision “need to be applied with a degree of flexibility” and that in certain situations “less precision of description may be required where more would annihilate the confidence sought to be protected”. See Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at §§ 67 and 69. 188.I have not a shadow of doubt that the parties as well as all affected industry participants understand what the FMIC issues arising out of or in connected with the 2007 Statement mean as described in § 66 (1) and, in reality, (2)-(3) are no more than specific subsets of the information described in (1). Approaching the matter with a measure of common sense, it is both unrealistic and unreasonable to require detailed chapter and verse for each item of confidential communication where there has been a continuum of external legal advice over an extended period on wide-ranging issues, precipitated by the new regulatory regime scheduled to commence in April 2009. 189.For those reason, I do not consider the subject matter of § 66 (2) to be “too general and vague”. The same applies to Appeal 24 and HCAL 6 which together form the subject matter of § 66 (3). In fact, Appeals 24 and 25 and HCAL 6 and the issues arising thereunder can be subsumed under § 66 (1) as discrete parts of the larger canvas. It follows that, prima facie, all the 12 categories of information identified by the judge would attract legal professional privilege. 190.Nevertheless, legal professional privilege is capable of being lost, for example, by waiver. In this connection the question that arises is whether there has been any waiver, specifically, as regards HCAL 6 of 2007. The judicial review has been heard and dismissed and the settlement reached in relation to the proposed appeal must necessarily mean that that is the end of the road for HCAL 6 of 2007. In relation to such of the matters as have come into the public domain as a consequence, any confidentiality will have been lost. Once confidentiality has gone, privilege can no longer be claimed. For this reason, legal professional privilege can no longer attach to information that has been made public as a result of HCAL 6. 191.To sum up, I do not consider that the central thesis of Mr Sussex SC’s argument can be dismissed out of hand as not raising at least a triable issue as to whether, when information to which legal professional privilege attaches is imparted to a person (such as a former employee of the client) who is not in a solicitor-client or analogous relationship with the client entitled to the legal professional privilege, it is nonetheless protectable. 192.If there is such a triable issue, it will become necessary to consider the appropriate remedy. It will have become apparent that, at a minimum, the remedy granted by the judge was inadequate and left much to be desired inasmuch as relief ought also to have been granted in relation to the categories of information set out in § 66 (1)-(4) of the judgment, save and except information that has come into the public arena by reason of HCAL 6 of 2007. In my view, in principle, PCCW must be entitled to the relief sought in paragraph (2) subject to a suitably worded exclusion for HCAL 6 matters that are in the public domain. Mr Strachan’s criticism of the paragraph 2 relief of “flabby” is unfair and entirely misplaced for the reasons stated in § 187 above. 193.In terms of the remaining remedies sought, there has been much debate in this court as to whether the principles stated in Bolkiah are applicable. In summary, those principles relate to remedies and are directed at closing off all possible risk of disclosure in the interest of maintaining the integrity of legal professional privilege. 194.Bolkiah is the foundation or correction for the relief sought paragraphs (1) and (3), essentially to restrain the first defendant from “being involved” on FMIC issues relating to or arising from the 2007 Statement. I accept that this amounts to an embargo on the first defendant, stopping him from working on the same subject matter for the opposite party whose interest is adverse to that of PCCW’s. But as Mr Crosswell explained in his third affidavit, if the first defendant is permitted to work on FMIC issues arising out of or relating to the 2007 Statement at CSL, he will, in reality, be working on the very same matter on the MNO side of the industry when he had formerly worked for PCCW on the FNO side and as a result of which he became privy to PCCW’s confidential legal and commercial discussions and advice as to its options and strategy for dealing with the matter, including assessments of strengths and weaknesses of particular arguments. To any MNO, that information must be invaluable. If the first defendant were to be allowed to be involved in FMIC issues arising from or in relation to the 2007 Statement, the risk of inadvertent or unintentional disclosure is obvious: it would be ever-present given the first defendant’s knowledge of PCCW’s strategic positions and/or modus operandi, that being part of his subconsciousness. That would be the outcome absent any appropriate embargo. In the context of the administration of justice, one would question whether that would be either just or fair or a desirable state of affairs. 195.The debate focused on the effect of such an embargo, it being the submissions of both Mr Burns SC and Mr Strachan that it would have the effect of circumscribing or limiting an employee’s field of activity and would not be permissible, being in unlawful restraint of trade. Further, it was contended that for Bolkiah principles to apply, there has to be a relationship between solicitor and client or a relationship analogous thereto such as that in Bolkiah itself (where KPMG had provided litigation support services and was in an analogous position as a solicitor), that the duties considered in that case do not arise absent such a relationship and, in any event, it has no application in the context of an employer and employee relationship. 196.In Bolkiah, the question that arose for consideration in that case was whether KPMG which had previously provided litigation support services to Prince Jefri and in consequence had in its possession information which was confidential to him could undertake work for another client with an adverse interest. The court’s intervention was founded on the protection of confidential information. In the course of his speech, Lord Millett made the following observations (236F-H):
197.Mr Sussex submitted that Lord Millett was there dealing with three situations:
It is clear from the passage cited that Bolkiah relief would be available in the first two situations. As regards the third situation, Mr Sussex submitted that given the public policy considerations underlying legal professional privilege which is a substantive human right, there is no reason why Bolkiah relief should not be available where, as here, there is a real risk of misuse of the information to which legal professional privilege attaches. 198.The principal attack on the application of Bolkiah in the present case was in the restraint of trade context. It was said that if the wider relief sought in paragraphs (1) and (3) were granted, it would have the effect of curtailing the first defendant’s range of activities as an employee and thus achieve through the back door what PCCW is unable to achieve through the front door. The point sought to be made was that, if effect, PCCW was indirectly seeking to have the benefit of a restrictive covenant when the contract of employment either failed to make any provision for a restrictive covenant at all or failed to make an effective one. 199.The argument assumes that the integrity of legal professional privilege to be maintained and protected can be achieved through an appropriately framed post-termination restrictive covenant. But as I will endeavour to explain, despite a degree of overlap, these are entirely separate and different matters. 200.A restrictive covenant prohibits an employee from working for competitors in the same field of work for a period of time. Whether the covenant will be upheld or struck down would depend on whether the restriction is considered to be reasonable in all the circumstances. Great care is normally taken to ensure that the period of restraint is no more than strictly necessary: the longer the period of restraint, the more difficult it would be to justify and uphold. It is relevant to note that the restrictive covenant in the first defendant’s contract was only one of three months’ duration. 201.CSL is a competitor in the sense that in relation to FMIC, its interest is diametrically opposed to that of PCCW. On the evidence, it is plain that PCCW had no problem with the first defendant moving to CSL. Indeed, at the first defendant’s request, PCCW even agreed to waive the restrictive covenant so that the first defendant could join CSL much earlier. It is unnecessary to go into the circumstances of the first defendant’s departure from PCCW or why PCCW agreed to waive the non-compete clause. To treat the relief being sought as equivalent to an injunction in the form of restraint of trade misses the point entirely. As the judge found when he was considering whether damages would be a sufficient remedy for the first defendant if an injunction were to issue, the first defendant would not lose his job at CSL by reason of the injunction, the FMIC issues being but a few of the many functions and duties he has to perform at CSL, albeit that the 2007 Statement has made FMIC issue a ‘hot’ or ‘topical’ issue. See § 104-105 of the judgment. This case is not about preventing the first defendant from deploying his skills or from working for CSL or for any other competitor: rather, it is about preserving the confidentiality and integrity of information that is subject to legal professional privilege and how that is to be achieved. 202.Assuming I were wrong about this, and “non-involvement” in FMIC issues (which would be the effect of paragraphs (1) and (3) of the relief sought) is tantamount to, or indistinguishable from, a restraint of trade, I would ask, rhetorically, whether and if so how, in circumstances such as the present, an employer would be able to preserve the legal professional privilege to which he is undoubtedly entitled vis-a-vis a former employee who became privy to such privileged and confidential information during his employment? In the course of the hearing I did put the question to Mr Burns. His answer was this:
203.I do not accept for one moment that a restrictive covenant would do the trick: for it would have meant extracting a restrictive covenant of a length that would, in all probability, be difficult if not impossible to justify when, in any event, it was not and is not the objective to prevent the employee from working for a competitor. As to the suggestion of an implied term, it merely serves to highlight the inadequacy of a remedy limited to prohibiting disclosure and/or misuse. At the end of the day, the question is whether the Bolkiah remedy, closing off all avenues of risk of disclosure, should be available in relation to privileged information. In my view, the Bolkiah point is arguable and it follows that there is a serious issue to be tried. For these reasons I would allow the appeal. I would accede to the relief sought subject to revisions necessitated by HCAL 6 of 2007. Hon Tang VP: 204.I have had the advantage of reading Stone J’s judgment in draft. I agree with it and would also dismiss the appeal. In deference to the different opinion of Le Pichon JA, whose judgment I also have had the advantage of reading in draft, I will add a few words. 205.Lord Millett’s dictum, in Bolkiah quoted in para. 86 above, is the foundation of Mr Sussex’s submission. He submitted that when Lord Millett said “a solicitor or other person”, he meant “any person”. With respect, I do not agree. Nor do I think that seriously arguable. 206.Apart from the other subsidiary and alternative submissions which Stone J has dealt with in his judgment that is Mr Sussex only basis for the extensive injunctions. 207.With respect, the learned deputy judge was right to have applied Faccenda Chicken. Faccenda Chicken is authority that not all confidential information would be protected by an injunction after termination of the employment. “Trade Secret” is a helpful description of the class of confidential information which would continue to be protected, though not to the extent of restraining the employee from working for a competitor. I agree with the learned deputy judge that highly confidential information equivalent to trade secrets could be protected by a suitably worded injunction even after the termination of employment. 208.Once it is accepted that the learned deputy judge was right on Bolkiah. I can see no basis upon which we can interfere with his well balanced decision. 209.By a majority, the appeal is dismissed. We make an order nisi that the 1st and 2nd defendants are to have the costs of the appeal, such costs to be taxed if not agreed. 210.We also grant an interim stay of the order dismissing the appeal for 6 working days from the date of the handing down of this judgment. The plaintiff should make such further applications as may be advised within this period.
Mr Charles Sussex SC, instructed by Messrs Herbert Smith, for the plaintiffs/appellants Mr Ashley Burns SC, instructed by Messrs JSM, for the 1st defendant/1st respondent Mr Mark Strachan, instructed by Messrs Freshfields Bruckhaus Deringer, for the 2nd defendant/2nd respondent Plaintiff's leave to appeal to Court of Final Appeal refused by majority of Court of Appeal. Please refer to CACV194/2008 dated 20 October 2008 |
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