High Court of England and Wales, Chancery Division

 

McKillen case to be heard in public

McKillen –v- Misland

Neutral Citation Number [2012] EWHC 1158 (Ch)

High Court of England and Wales, Chancery Division

Judgment was delivered on April 26th 2012 by Mr Justice David Richards

Judgment

Applications from Patrick McKillen to have his case against David and Frederick Barclay and their companies heard in private, and to withhold documents from them, were refused by the High Court of England and Wales.

Background

Two applications were made by the claimant: for the continuation of a confidentiality regime that had been partially imposed during pre-trial steps, and that the entire proceedings be heard in private. The confidentiality application was later modified to restrict access to information concerning Mr McKillen’s financial affairs to individual parties or representatives of corporate entities and to require undertakings to prevent misuse of the information acquired.

The proposal to have the proceedings heard in private was opposed by a number of British and Irish media organisations, including The Irish Times, the Irish Independent and RTÉ.

The proceedings arose from a battle for control of a company called Coroin, which owned three well-known hotels in London, Claridge’s, the Connaught and the Berkeley. Mr McKillen owns shares representing 36.8 of the equity of the company. The other major holdings were those of Misland Cyprus Investment Ltd and Derek Quinlan. Misland was bought by David and Frederick Barclay, who wished to take full control of Coroin.

Mr McKillen claimed that the putting of Misland up for sale triggered his rights to buy the shares on a pre-emption basis. The Barclays claimed he would have been unable to do so, and sought information about his financial affairs to substantiate this claim.

Mr McKillen said that the disclosure of such information in open court and to the parties would be damaging to his commercial affairs and a breach of his right to privacy about his personal finances.

Decision

Mr Justice Richards said that the principles of open justice and natural justice are fundamental features of the English legal system. Any departure is permitted only if necessary in the interests of justice. The burden of establishing if it is necessary rests on the party seeking it, and must be supported by clear and cogent evidence. Finally, sitting in private is a last resort and only if any other course is effectively unworkable.

Mr Justice Richards said: “What I think can be said with some degree of certainty is that the Barclay interests are prepared to use any means which appear to be lawful to obtain control of the company. The issue, however, is whether the evidence demonstrates a risk and, if so, how substantial a risk, that they will go further and interfere in the respects alleged. Whatever the possibilities, I do not consider any such risk to be substantial.” He declined to impose the restrictions sought.

Turning to the application for the trial to be heard in private, he said the main ground advanced was that the hearing would be concerned with confidential information relating to personal financial matters. He said a practice direction, 39APD, did provide for the hearing of some personal financial matters in private. These included possession claims by a mortgagee against an individual; by a landlord against a tenant of a residential property; and proceedings under the Consumer Credit Act, inheritance and protection from harassment matters.

They all fell within what one would normally understand to be personal financial matters. There was no obvious reason why mortgagees’ possession claims against individuals for possession of commercial premises should not be heard in public. The type of information Mr McKillen sought to protect concerned large-scale property investments, some conducted through companies and some in his own name. If the relevant business dealings had all been conducted through a corporate structure, it would not have been personal financial information.

The court had to conduct a balancing act between the right to privacy and the rights to open justice and to freedom of expression. The claim that this involved personal financial information was very weak. As against that, the claim to open justice and freedom of expression were very strong. The balance clearly came down in favour of the whole trial being conducted in public, and he dismissed the application.

The full judgment is on justice.gov.uk