Choudhrie v Choudhrie

A wealthy businessman (C) brought a claim for a declaration as regards the nature, extent and scope of the equitable duty of confidence owed to him by his estranged wife (D) in relation to certain allegedly confidential information that she received during the course of their marriage and separation (“the Information”).

The Information was said to relate to (1) an investigation conducted into Rolls Royce, as part of which C and his father had been arrested and questioned by the Serious Fraud Office (“SFO”) in February 2014, and (2) information relating to his and his family’s business and financial interests and assets, including a group of family companies in respect of which C claimed no longer to own any shares.

The first category of information included the fact that in October 2017 C had been interviewed a second time by the SFO, which was described in the judgment as ‘the October 2017 event’. (It was subsequently announced by the SFO that no action would be taken against them.) The 2014 arrests had been reported widely in the media.

The second category was almost entirely absent from the Particulars of Claim as originally pleaded, but was sought to be introduced by way of a substantially amended Particulars of Claim, for which permission was sought at the hearing.

C had also sought an order that D disclose, on affidavit, details of any persons to whom she had disclosed the Information, although this part of the claim was abandoned on the eve of the strike-out hearing, leaving only a claim for declaratory relief.

D had made it clear in correspondence that she understood her duties of confidence and that she had not disclosed the Information. It was her case that the claim against her was factually and legally misconceived – not least because C had not identified the Information with any precision or clarity.

Notably, there was neither a claim for damages for any alleged past breach of confidence by D, nor a claim for an injunction to restrain D from disclosing the Information in the future.

1. Whether the claim should be struck out as disclosing no reasonable grounds for pursuing the relief; and

2. Whether the claim was an abuse of the Court’s process.

The claim disclosed no reasonable grounds for pursuing the relief sought and was an abuse of the Court’s process.

The Judge accepted D’s argument that, in all the circumstances, the claim should be struck out under CPR Part 3.4(2)(a) as it was ‘bound to fail’, and under CPR3.4(2)(b) as an abuse of the Court’s process of the kind recognised by the Court of Appeal in Jameel v Dow Jones & Co Inc. [2005] QB 946. He held that the claim for a declaration in the very generalised and wide terms pleaded by C would serve no useful purpose and, as such, thatthere was no prospect of the Court granting any such relief at trial. There was no clear and crystallised dispute between the parties, only a contingent and speculative one. ([70]-[87])

The Judge also rejected an attempt by C to amend his claim so as to expand the definition of his “confidential information” to include entirely new categories of business and financial information that had not been mentioned in his original complaint, holding that the proposed expanded claim suffered from the same defects as the original one.

In consequence, the Judge struck out the entire claim and ordered C to pay D’s legal costs, which the Court was told were over £235,000, as well as £118,000 on account of those costs. He dismissed C’s application for permission to appeal to the Court of Appeal, holding that it had no real prospect of success.

Before turning to the substance of the application, the Judge addressed two subsidiary points that arose for consideration but which were not determinative of the outcome:

(1) whether the ‘October 2017 event’ could properly be characterised as confidential information, and

(2) whether C could seek a declaration in relation to information concerning the business or financial affairs of third parties, such as family companies or other family members or their business associates, which was disclosed to his wife in the course of the marriage.

The Judge found for D on the first issue and C on the second, as only the latter satisfied the test in Coco v AN Clark (Engineers) Ltd [1968] FSR 415 in that it possessed the necessary quality of confidence and was imparted in circumstances importing a duty of confidence. A duty of confidence was owed to, and enforceable by, the subject of the information as well as the person communicating it ([55]-[69]).

This case is a rare example of a Jameel abuse argument succeeding in a breach of confidence claim. It is clear that a claimant must have reasonable grounds to obtain the relief sought, especially where this relief is declaratory, in that there must be a real and crystallised dispute between the parties. Should the claimant fail to do so, they may see their claim struck out.

Secondly, this case clarified that a spouse has a right of confidentiality over genuinely confidential information disclosed in the course of a marriage, but only where it is disclosed in circumstances imposing a duty of confidence. The marriage is not sufficient in itself to impose a duty of confidence. The fact that a spouse has been interviewed by investigating authorities a second time in connection with an ongoing criminal investigation is not in itself likely to be protectable as confidential information, at least not where it “adds little, if anything, of substance to matters that are already in the public domain” ([62]).