Winters v Mishcon De Reya, Court of Appeal - Chancery Division, October 15, 2008, [2008] EWHC 2419 (Ch)

Resolution Date:October 15, 2008
Issuing Organization:Chancery Division
Actores:Winters v Mishcon De Reya

Neutral Citation Number: [2008] EWHC 2419 (Ch)Case No: HC08C02015IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONRoyal Courts of JusticeStrand, London, WC2A 2LLDate: 15/10/2008Before :THE HONOURABLE MR JUSTICE HENDERSON- - - - - - - - - - - - - - - - - - - - -Between :- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -Mr Alastair Wilson QC and Mr Jeremy Reed (instructed by George Davies LLP) for the ClaimantMr Justin Fenwick QC and Mr James Collins (instructed by Mishcon de Reya) for the DefendantHearing dates: 3, 4 and 5 September 2008- - - - - - - - - - - - - - - - - - - - -JudgmentMr Justice Henderson: Introduction1. In 1996 the claimant, Mr Simon Winters, became the Chief Executive of the United Kingdom branch of a prominent Jewish charity known as the JNF Charitable Trust (``the JNFCT'') or, more simply, the Jewish National Fund (``the JNF''). He continued to hold that post until at least June of this year, when his present solicitors, George Davies LLP, wrote to the then President of the JNF, Mrs Gail Seal, on 25 June claiming that his position as Chief Executive had been undermined by changes being made to the management structure of the JNF, and that the JNF had fundamentally breached his contract of employment. On 27 June a reply to this letter was sent by the JNF's regular solicitors, Mishcon de Reya (``Mishcons''), denying that the JNF had acted in breach of Mr Winters' contract of employment and informing him that the JNF had decided to suspend him from his duties with immediate effect. The letter went on to explain that the suspension was in connection with various allegations of financial misconduct in his role as Chief Executive, and that the purpose of the suspension was to enable the JNF to carry out an investigation into those allegations, and also into two other matters concerning the establishment of an Israeli charity, Nes Eretz Israel, and the bugging of the office of the new Chairman of the Trustees of the JNF, Mr Samuel Hayek. The investigation was being conducted in conjunction with a team of forensic accountants, and was expected to take no more than three weeks. Mr Winters was told that the investigation and any subsequent disciplinary procedures would be handled in accordance with the JNF's disciplinary code. The letter concluded:``Following the conclusion of the investigation, a decision will be made as to whether a disciplinary hearing should be convened. Our client believes that the allegations are so serious that, subject to the findings of the investigation, one potential outcome of the disciplinary hearing will be dismissal.''2. On 1 July 2008 Mr Winters' solicitors sent a letter of complaint to Mishcons, alleging that it was improper for Mishcons to act for the JNF in relation to the employment dispute with Mr Winters. The letter asserted that Mr Winters was a client of Mishcons, and that Mishcons had advised him in the past about the same or substantially similar matters to those in relation to which they were now acting against him. They claimed that Mishcons were in possession of confidential information about Mr Winters, and that four named individuals at Mishcons had advised Mr Winters in his personal capacity, namely Dr Anthony Julius, Mr Daniel Naftalin, Mr Daniel Morrison and Ms Victoria Pigott. The letter referred to and set out ``a selection of written advice given by various partners and a consultant at your firm (Mr Julius)'', and said:``It is impossible to see how your firm considered that it was entitled to act against a client that it had acted for, in circumstances where not only does your firm have confidential information but some of that information relates to actions taken upon your advice. We appreciate that these are very serious allegations. We assure you that they are not made lightly.''An undertaking was sought that Mishcons would cease acting for the JNF immediately. 3. On 4 July Mishcons responded, saying that at all times they had acted for the JNF and not for Mr Winters, with the sole exception of an occasion when Mr Winters instructed Mr Morrison at the same time as the JNF instructed him to discover the author of certain letters defamatory of Mr Winters. It was said that those instructions were given by Mr Winters ``in order to have the nexus to obtain the information''. Subject to that exception, Mishcons maintained that the claim they had acted for Mr Winters in his personal capacity:``... depends on a very unbalanced representation of the evidence. The emails and the excerpts are taken out of context and do not represent the true nature of the relationship this firm had with Mr Winters, which was not one of client and solicitor.''The writer went on to say that he was unable to find any confidential information which Mishcons had obtained from Mr Winters which was relevant to the current issue. In conclusion, he said he could see no reason why Mishcons could not continue to act for the JNF. 4. Following some further debate in correspondence, Mishcons refused to give the undertaking sought and on 16 July Mr Winters issued a claim form and an application notice for an interim injunction. His claim was described on the claim form as being ``for a threatened breach of confidence'' by Mishcons, and the injunction which he sought was to prevent Mishcons from acting for the JNF against him ``in relation to [his] employment by the JNF and the termination thereof'', together with other relief as set out in the draft order annexed. The application was supported by Mr Winters' first witness statement dated 16 July. On 22 July witness statements in answer were filed by Dr Julius and by three partners of Mishcons, Mr Libson, Mr Morrison and Mr Naftalin. 5. On 23 July the application came on for hearing before Blackburne J, with a one hour time estimate. In their skeleton argument for Mishcons, counsel then instructed (Mr Vernon Flynn QC and Mr James Collins) argued, among other things, that Mr Winters had failed to identify in his evidence any information allegedly provided by him to Mishcons which was confidential to him, as opposed to confidential to the JNF. In the event, the application for an interim injunction was not pursued, and directions were instead given by consent for a speedy trial of the action on 3 and 4 September, without service of any particulars of claim, defence or reply, and with a timetable for the service of further evidence in August. 6. Further evidence for Mr Winters was then filed, mainly comprising his second and third witness statements dated 1 August 2008. His third witness statement was confidential, and was served subject to undertakings restricting its circulation to certain named individuals within Mishcons. In it he describes certain information which he alleges that he imparted in confidence to Dr Julius at a time when Dr Julius was acting for him personally. Mr Winters also relies on a short witness statement dated 5 August 2008 by an Israeli lawyer, Mr Dror Zamir. 7. The written evidence was then completed by the service of witness statements in reply from Mr Naftalin and Dr Julius. 8. The hearing of the action took place before me on 3, 4 and 5 September 2008, and lasted for a full three days, the two-day time estimate having proved seriously inadequate. I heard oral evidence from all of the witnesses on each side, and detailed submissions on the facts and the law from leading counsel (Mr Alastair Wilson QC, leading Mr Jeremy Reed, for Mr Winters, and Mr Justin Fenwick QC, leading Mr James Collins, for Mishcons). 9. Since one of Mr Winters' prime objects in this litigation is to preserve the confidentiality which he says attaches to the material contained in his third witness statement, and to prevent the risk of its being used against him by the JNF in the context of the employment dispute, I acceded to applications made on his behalf that I should hear the relevant part of his oral evidence, and the relevant parts of counsels' closing submissions, in private. For the same reason, I will deal with those parts of the evidence, and the submissions relating to them, in a confidential appendix to this judgment, circulation of which will be restricted to counsel on both sides, to Mr Winters and his solicitors, and to the named individuals at Mishcons who have been permitted to see his third witness statement. 10. With this introduction, I shall now fill in some uncontroversial background before moving on to my assessment of the witnesses and my findings of fact about the relationship between Mr Winters and Mishcons. In the light of my findings of fact, I will then consider the relevant legal principles and state my conclusions. Background11. The JNF is an unincorporated association with objects which are charitable under English law. Its affairs are run by a board of Trustees. The JNF was founded over a hundred years ago as a vehicle for collecting money for charitable purposes in Palestine, which was then part of the Ottoman Empire, with a particular view to the establishment there of a Jewish homeland. Over the years, individual autonomous branches of the JNF grew up in many different countries, but it is only the UK branch with which the present case is directly concerned. There is also a Scottish branch, which as I understand it was a subsidiary part of the UK organisation at the dates when it features in the present story, although steps are now under way for the formation of an autonomous Scottish branch. 12. In Israel there is an associated charity which is usually called KKL, an abbreviation of the Hebrew Keren Kayemeth Le'Yisrael. KKL was often (although not exclusively) used as the vehicle through which the JNF's funds were applied for charitable purposes in Israel. Unfortunately, however, disputes arose between the JNF and KKL, including in particular an intellectual property issue about who had the right to the name JNF. Underlying this...

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