Unlawfully obtained evidence: Ras Al Khaimah Investment Authority v Azima

The first instance decision

In this case, the Claimant (RAKIA, which is the state investment entity of the emirate Ras Al Khaimah) alleged that the Defendant (Mr Azima) had induced it to enter into a settlement agreement by making fraudulent representations, and sought damages for an alleged unlawful means conspiracy. In seeking to make out its case, RAKIA relied heavily on confidential emails that had been obtained through the hacking of Mr Azima’s email accounts (the hacking of which was common ground). However, the first instance judge found that Mr Azima had acted fraudulently, that the hacking could not be shown on the balance of probabilities to have been procured by RAKIA and that, even if it had, he would not necessarily have excluded the emails or struck out RAKIA’s claim.

The Court of Appeal decision

Mr Azima appealed on a number of grounds, with the main focus of those grounds being an attack on the first instance judge’s findings in relation to the responsibility for the hacking. In support of his appeal, Mr Azima sought to introduce new evidence to show that RAKIA had procured the hacking, asserting that – if the first instance judge had found that RAKIA was responsible for the hacking – the first instance judge ought to have excluded the unlawfully obtained evidence or struck out RAKIA’s claim as an abuse of process. In the alternative, Mr Azima argued that the issue as to whether RAKIA was responsible for the hacking should be remitted for a retrial.

In considering whether the first instance judge ought to have excluded the evidence obtained through hacking or struck out RAKIA’s claim as an abuse of process, the Court of Appeal considered the hypothetical scenario that: (i) RAKIA was responsible for the unlawful hacking; (ii) its case would have failed without the unlawfully obtained evidence; and (iii) at least some of RAKIA’s witnesses gave dishonest evidence as to how RAKIA obtained such evidence. However, even on the basis of these hypotheticals, the Court of Appeal unanimously agreed with the approach taken by the first instance judge and has held as follows:

• cases of evidence procured by torture aside (as to which see this post), the general rule of English law is that evidence is admissible if it is relevant to the matters in issue. If it is relevant, it is admissible, and the court is more concerned with its evidential value rather than how it was obtained; relevant evidence is admissible even if it has been stolen (see Kurama v R [1995] AC 197);
• whilst Part 32.1 of the Civil Procedure Rules (the CPR) gives the court power to exclude evidence that would otherwise be admissible, that is a power rather than a duty;
• when deciding whether to exclude unlawfully obtained evidence, the court must balance “two potentially conflicting public policies […]: the achieving of justice in a particular case on the one hand; and promoting the observance of the law on the other” (see Jones v University of Warwick [2003] EWCA Civ 151);
• when deciding whether to strike out a claim, a distinction should be drawn between “a claim which is itself fraudulent or fraudulently exaggerated on the one hand, and a claim which, although well-founded, is supported by collateral lies.” In this case, the Court of Appeal held that any unlawful conduct by RAKIA in obtaining the emails was not central to its underlying claims, but instead done to support genuine and well-founded claims;
• “[n]o case ha[d] been brought to [the Court’s] attention in which a claim was struck out solely because of the manner in which evidence was obtained, even though the underlying claim was both genuine and well-founded; let alone a case in which the unlawfully obtained evidence has demonstrated fraud on the part of the defendant”;
• the unlawfully obtained evidence comprised “documents” as defined by CPR Part 31 which were within Mr Azima’s control. As such, those documents ought to have been disclosed by Mr Azima in due course in any event (save for inspection being withheld if there was a legitimate assertion of privilege);
• the unlawfully obtained evidence revealed serious fraud on the part of Mr Azima, which would have been a very serious bar to the grant of equitable relief in his favour (as noted in Istil Group Inc v Zahoor [2003] EWHC 165 (Ch)), whilst to strike out RAKIA’s claim would similarly leave Mr Azima with the benefit of his fraud; and
• accordingly, the trial judge was “entirely correct” in his decision that: “if [he] had found that RAKIA had hacked Mr Azima’s emails, [he] would not necessarily have excluded the illicitly obtained evidence as, without it, RAKIA would have been unable to prove its claim and Mr Azima would have been left with the benefit of his seriously fraudulent conduct”, whilst to strike out RAKIA’s claim would have been “wholly disproportionate”.

That said, the Court of Appeal has allowed Mr Azima’s application to adduce new evidence (allegedly showing that RAKIA had procured the hacking) and, as such, the issue as to whether RAKIA was responsible for the hacking has been remitted for retrial by the Chancery Division of the High Court. 

Conclusion

This case therefore serves as an important reminder that the English courts’ view (insofar as the matter stands to date) is that justice is upheld by considering all relevant evidence, even where there has been a breach of law in obtaining that evidence. We will follow this retrial, which we anticipate will deal with some of the risks that a party involved in hacking may face by way of counterclaim; watch this space…