CAPITAL DOCUMENT SOLUTIONS LTD AGAINST HIGHLAND COPIERS LTD AND MICHAEL RAE
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 140
P890/15
OPINION OF LADY SCOTT
In the cause
CAPITAL DOCUMENT SOLUTIONS LIMITED
Petitioner
against
HIGHLAND COPIERS LIMITED
First Respondent
and
MICHAEL RAE
Second Respondent
Petitioner: J MacKenzie (sol adv); Shepherd & Wedderburn LLP
Respondents: Young; Harper Macleod LLP
11 October 2016
Introduction
[1] This case called before me in an opposed motion by the petitioner to seek
(a) The expenses of the petition including all expenses of the Commission in favour on the petitioner as the same shall be taxed by the Auditor of Court and
(b) An award of an additional fee in terms of RCS 42.14 (3)(b) (c) and (g)
History of Proceedings
[2] The petitioner is a company which provides, by sale or lease, photocopiers, printers, scanners and other office equipment throughout Scotland. The second respondent was an executive employed by a company based in Inverness which was acquired by the petitioner in 2013. After acquisition the second respondent left and set up and incorporated the first respondent.
[3] The petition was raised on the basis that, in August 2015, the petitioner obtained evidence that the second respondent was in possession of and had made use of, a confidential spreadsheet belonging to them, which they say contained highly sensitive commercial information detailing business arrangements with customers.
[4] The petition sought interdict ad interim and interdict against the respondents making use of or disseminating the confidential spreadsheet. The petition also sought an order in terms of section 1 of the Administration of Justice (Scotland) Act 1972 for commission and diligence for the recovery of documents (specified in schedule 11of the petition) which inter alia sought orders for the commissioner to take possession of, or preserve, the material recovered and to consign the recovered material with the Deputy Clerk of Session and further to authorise the petitioners to inspect the material recovered by the Commissioner.
[5] The relevant procedure that followed was:
o On 19 August 2015 the orders sought in the commission and diligence were granted.
o On 24 August 2015 interdict ad interim was granted.
o On 8 July 2016, after a very protracted commission process, with numerous court hearings over many months (all listed in the chronology produced by the petitioner) the final report by the commissioner was produced. The respondents challenged various steps within this process of recovery and they were found liable for the expenses of the process from 7 October 2015 to 24 March 2016.
o After the documents had been recovered, on 29 June 2016, the petitioner sought and was granted interdict against the respondents making use of the Confidential Spreadsheet. The motion for interdict was unopposed.
Petitioners Submissions
[6] The petitioner’s submissions were straightforward. He sought expenses for the petition and the commission on the basic principle that expenses follow success. All the orders sought under the petition had been granted. The basis of the petition on all fronts was wrongdoing by the respondents. The actions of the respondent in respect of the confidential information, as set out in the petition, were in breach of his contract of employment, in breach of confidence and in breach of the provisions of the Data Protection Act 1998. The recovery of the confidential information in the commission process was of assistance in obtaining interdict.
[7] Further information recovered in the commission process suggested further wrongdoing in respect of payments for confidential information and the police were now involved.
Respondents Submissions
[8] The respondents resisted recovery at numerous stages of the commission process. An additional fee was sought as set out in the motion on the basis of urgency, the number of documents involved and the steps taken to narrow the issue by the petitioner. Both the interdict and the commission and diligence proceedings prevented legal wrongs and the respondents in not opposing the award of interdict conceded this.
[9] The respondents’ opposition focussed on the motion to award the expenses of the commission and diligence procedure. The additional fee sought was also opposed.
[10] The procedure of recovery here was carried out under section 1 of the 1972 Act. The purpose of that statutory provision was to enable recovery of evidence for future proceedings. This was not connected here to the interdict also sought under the petition. To obtain an order and commission process under section 1 the petitioner has to satisfy the court that there are prospective proceedings which in the terms of the provision “likely to be brought” and that there is a stateable prima facie case for them. Here the “likely” prospective actions pled were recovery, delivery and damages.
[11] No such proceedings had been brought and in submissions the suggestion was now that they were only “in contemplation”. Had that been the position when seeking the section 1 order it was unlikely it would have been granted.
[12] The respondent submitted the proper position was that at that stage of the petition the petitioner must bear his own expenses for the commission and seek recovery in the subsequent proceedings. If proceedings were brought then the successful party would be awarded expenses including those involved in the commission. Further the respondent will defend any future proceedings and they dispute they used any of the information from the Confidential Spreadsheet. At this stage I was urged to reserve the question of expenses.
Discussion
[13] The respondents opposition rested on the view that an order under s1 of the 1972 Act and the recovery which followed rest upon or are “justified” by the future proceedings and as such expenses for this procedure follow success in those proceedings – which could be in settlement of any such action.
[14] I consider this takes too restrictive a view. All that section 1 requires is that there is prima facie case for proceedings which are likely to be brought. Not that they require to be brought. And the fact that the position changes as to their likelihood - such as here where they are now only being contemplated - does not detract from the position at the time the section 1 order was sought and granted.
[15] Here both the interdict procedure and the commission procedure related to the same confidential information. Both were based on the same averments of wrongdoing and were directed to preventing wrongful use of the confidential spreadsheet. It was only after recovery of the documents from the commission process was made, that the respondents conceded to the interdict being granted. The grant of interdict on 29 June 2016 relates to making use of the confidential information recovered. Accordingly both aspects of the petition were based on seeking recovery and preventing damage. Both were successful. It was only after recovery and inspection could be made that the petitioners were in a position to assess future action.
[16] In these circumstances, in a practical and simple sense, the ordinary principles expenses should be applied to all the orders under the petition. The shared principal purpose of the petition – prevention of use and recovery of the confidential information - was achieved by the both orders and it was only after recovery of the documents the respondents conceded the interdict which was based upon their wrongdoing. The costs of the Commission were reasonable and necessary for the recovery of the confidential information sought and assisted in establishing the basis for interdict being awarded. I am satisfied that both aspects of the petition form a common cause whereby expenses as a whole on the petition are justified.
[17] Further I was not persuaded that expenses for a Commission under section 1 order are necessarily dependent upon subsequent proceedings. I did not find the references to English authorities (which all related to innocent third parties) was of assistance here where the grant of interdict was based upon established wrongdoing by the respondent.
[18] I am also troubled by the practical result of the respondents’ principal submission. If future proceedings are not brought the petitioner could not recover expenses. Whilst this may be appropriate in many cases, I am not persuaded it is appropriate here.
[19] Cleary there could be situations where as a result of swift action preventing wrongdoing, such as taken here, the result of success is that further litigation is rendered unnecessary. If the cost of that success rests with the petitioner, that does not seem to me to be commensurate with the interests of justice. It is liable to deter the conduct of reasonable litigation. It may also have the effect of encouraging unnecessary or inappropriate litigation in order to try to seek recovery for the Commission expenses (Young v Nith Commissioners (1880) 7 R 891; Wood v Wood’s Trustees (1903) 11 SLT 565).
Decision
[20] For these reasons I am satisfied that I should exercise my discretion in favour of awarding the expenses of the whole petition to the petitioner.
[21] I am not persuaded an additional fee is justified. I agree with the respondents that urgency is always involved in s1 orders by their nature, that the bulk of the task in review of the documents rests with the Commissioner and nothing was submitted to suggest that steps taken regarding narrowing the issues were of significance. In respect of the claimed resistance or obstruction by the respondents to the recovery process, expenses were awarded in that process to reflect same.
[22] For the reasons stated, I find the respondents liable to the petitioner in the expenses of the petition process, including the Commission expenses, as taxed.