Commercially Sensitive Conversation 'Overheard Through Flimsy Partition Wall'

In modern offices where CCTV is ubiquitous and partition walls are flimsy there is an obvious risk of commercially sensitive conversations being overheard. In a guideline decision, the High Court pondered the legal consequences of such an incident.

Two executives of a technology acquisitions business were engaged in negotiations with a view to purchasing a target company. The case concerned events during an office meeting between them and the target's then CEO. When the latter stepped out of the room, the executives said that they had held an unguarded and candid conversation of a commercially sensitive nature.

The CEO was alleged to have overheard the conversation and the executives and their business succeeded in obtaining an interim injunction against him, restraining him from disclosing what he had heard to third parties. In their underlying claim, they alleged breaches of confidence and data protection legislation together with misuse of private information.

In his defence, the CEO said that he could hardly help but overhear the conversation through a thin partition wall. There was nothing covert about a CCTV bubble in the ceiling of the meeting room and the executives were warned that CCTV was in operation when they entered the building. He in any event denied that he had a video or audio recording of the conversation, that the conversation was confidential or that he had threatened to disclose what he had heard to others.

Ruling on the matter, the Court emphasised that the proceedings were at an early stage and that it was making no definitive findings of fact. It ruled, however, that the executives were likely to succeed in establishing that parts of their conversation were confidential and that the CEO heard what they said. It was likely that the CEO was watching a livestream from the CCTV bubble during his absence from the room at the same time as listening to the executives through the wall. He stored a souvenir of the alleged surveillance on his mobile phone in the form of a screenshot from the livestream.

The Court emphasised the important public interest in protecting the confidentiality of private and commercially sensitive information. Whether or not the CEO was actively eavesdropping, the Court noted that the duty of confidence does not arise only when a person actively seeks out private and confidential information. Anyone who is on notice that information they receive is of a confidential nature may be subject to such a duty.

Disclosure of the contents of the executives' private discussion to others, whether or not relayed accurately or truthfully, was likely to be detrimental to them and their business. The Court could see no countervailing public interest in favour of such disclosure. The injunction was extended in modified form so that it covered only those aspects of the conversation likely to be viewed as confidential.