Pccw - Hkt Telephone Ltd and Another v. David Matthew Mcdonald Aitken and Another

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)

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BETWEEN

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 Before: Hon Tang VP, Le Pichon JA and Stone J in Court

Date of Hearing: 20 October 2008

Date of Decision : 20 October 2008

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DECISION

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Hon Tang VP:

1.Between August 2005 and February 2007, the 1^st defendant was the employee of the plaintiff.  Shortly thereafter, he became employed by the 2^nd defendant.  The plaintiff and the 2^nd defendant are competitors. 

2.On 13 June 2008, the plaintiff obtained an ex parte injunction in wide terms, effectively, as Mr Sussex, appearing for the plaintiff put it, to take the 1^st defendant “out of the arena”.  On 10 July 2008, after a 3-day hearing, Deputy Judge Au discharged the ex-parte injunction.  However, he granted a narrower injunction.  These injunctions were granted on the basis of a line of established authorities, the best known of which is Faccenda Chicken Ltd v Fowler [1987] 1 Ch. 117.  Faccenda is authority that post-termination an employee must not use or disclose any trade secrets or other information which is of a sufficiently high degree of confidentiality as to amount to a trade secret, and that an appropriate injunction would be granted if necessary to restrain the employee from doing so.  The plaintiff was not satisfied with the narrower injunction.  The plaintiff had wanted a wider injunction, which it sought to justify on the basis of the decision of the House of Lords in Prince Jefri Bolkiah v. KPMG [1999] 2 AC 222; in particular, it relied on the dictum of Lord Millett which has been quoted by Stone J in his judgment at para. 86 and which I will not repeat.  Stone J has dealt with that authority extensively in his judgment. 

3.The plaintiff contended that when Lord Millett said “a solicitor or other person”, Lord Millett meant “any person”.  That submission has been rejected by a majority of this court.  We have also said that the wider injunction sought was, in any event, not sufficiently specific in identifying the privileged and confidential information which the plaintiff had sought to protect. 

4.Now the plaintiff wants leave to Court of Final Appeal.  It is said that two points of great general or public importance are involved.  I can deal with the second point first, which is, “how specific a plaintiff needs to be when identifying the privileged and confidential information which he seeks to protect”.  I am not satisfied that this is a point of great general or public importance.  How specifically identified the privileged or confidential information must be will depend on all the circumstances of the case.  It goes without saying that the person to be enjoined must know precisely what it is that he has been enjoined from doing.  How clearly that must be stated will vary from case to case. 

5.As for the first question, I do not believe it involves a question of great general or public importance suitable to be dealt with on an interlocutory basis by the Court of Final Appeal.  It is in my view, not even arguable.  But even if an apparently untenable point could be regarded as a point of great general or public importance, it does not follow that leave should be granted.  We are concerned with an interlocutory appeal, and it is a matter of discretion whether leave should be granted.  We have our discretion to exercise.  The Court of Final Appeal has the ultimate say in the matter.  But it is right that we should exercise our discretion.  In exercising our discretion, we are entitled to take all relevant matters into consideration.  One of them is the merits of the appeal.  In assessing the merits, we must of course be as objective as we can.  Here, Le Pichon JA was of the view that the point is not unarguable.  However, Le Pichon JA did not find that the plaintiff’s submission was right, only that it was arguable.  As Mr Sussex accepts, the Court of Appeal will deal with the matter substantively.  They are unlikely to wish simply to decide whether or not the point is arguable; they probably will wish to decide whether the point is right.  The majority in this court has felt able to decide the point. 

6.Although the point of law has been neatly summarised, and persuasively put by Mr Sussex, if I may say so with respect, the point might in fact be ‘fact sensitive’ and certainly needs to be heavily qualified.  We are concerned with materials which are said to be covered by legal professional privilege, but how and the circumstances under which they were communicated might well be relevant to the existence, and if so, the extent of any such duty of confidentiality, as well as whether an injunction should be granted, and if so in what terms.  It will be recalled that the learned judge in fact has granted an injunction, limited to what might be described as the equivalent of ‘trade secrets’, so the wider injunction is concerned with information which does not amount to the equivalent of trade secrets, but nevertheless is said to be covered by legal professional privilege.  I do not believe that the Court of Final Appeal is likely to wish to deal with such a broad question upon assumed facts.  I believe that the Court of Final Appeal would prefer the case to be ‘fact specific’.  In the course of the plaintiff’s submissions, it was accepted, for example, that an employee who had sat in at a consultation with counsel where advice was given regarding the interpretation of a statutory provision or instrument would not be restrained from working for a competitor in matters where the interpretation of such provision may be relevant.  I think the examples can be multiplied.  The point that I wish to make is that, if there is to be the very broad privilege contended for by Mr Sussex, it is likely to be one which needs to be qualified, and that there will be important exceptions to the protection to be afforded to such privilege.  In such circumstances, I do not believe this is a case suitable for leave to appeal upon an interlocutory basis to the Court of Final Appeal. 

7.Moreover, the point would not cease to be relevant after trial.  If the plaintiff should succeed and the point remains relevant, the Court of Final Appeal would still have the opportunity to deal with the matter. 

8.I also wish to add that the first instance judgment in this case was given by Deputy Judge Au on 10 July 2008.  There has been no application by the plaintiff for an early trial, which could have been asked for without prejudice to the then intended appeal.  Had an early trial been applied for, and granted, the trial might well have taken place before this matter could be dealt with by the Court of Final Appeal, even should leave were to be granted by us today.  And as I have said, trial is important because there the court will be able to examine the evidence and see what was said to be covered by the legal professional privilege, but not covered by the existing injunction, and then to decide whether an injunction should be granted in such circumstances, a conclusion which would depend on a host of considerations. 

9.I return again to the second point now relied on, that is how specific a plaintiff needs to be when identifying the privileged and confidential information which it now seeks to protect.  Had we been with the plaintiff on the other point, we would then have to decide on the facts of this case whether the privileged and confidential information had been sufficiently identified and if not, whether in such circumstances, an injunction nevertheless should have been granted. 

10.So for these reasons, I would refuse leave to appeal to the Court of Final Appeal.

Hon Le Pichon JA:

11.For my part, I consider that this case does raise a novel question.  In para. 176 of the judgment, I sought to state in a concise way what that novel question is.  In my view, it is a matter that is of great general or public importance.  It concerns the scope of legal professional privilege where an employee becomes privy to privileged information but has no solicitor-client or analogous relationship with the party entitled to assert that legal professional privilege and what the appropriate remedy would be.  This is a matter that is not covered by existing case law and is a matter that is of relevance in the context of employee / employer relationships generally.  For my part, I will grant leave.

Hon Stone J:

12.I agree with the judgment of Tang VP and have nothing to add.

Hon Tang VP:

13.By a majority, leave is refused with costs.

Mr Charles Sussex, SC, instructed by Messrs Herbert Smith, for the plaintiffs.

Mr Ashley Burns, SC, instructed by Messrs JSM, for the 1^st defendant.

Mr Mark Strachan, instructed by Messrs Freshfields Bruckhaus Deringer, for the 2^nd defendant.