Labour & European Law Review Weekly Issue 342 23 October 2013
Under the common law of principal and agent, an agent is obliged to pass over any documents of relevance to the principal, if required to do so. In Fairstar Heavy Transport NV v Adkins and anor, the Court of Appeal ruled that the true meaning of the word “document” extends to electronic documents, including emails.
Fairstar, a Dutch transport company based in Rotterdam, was taken over in July 2012 following a hostile bid by another shipping company. It terminated the services of Fairstar’s chief executive, Mr Adkins, who had been employed through his own management company.
Following the takeover, Fairstar lodged a civil claim alleging that Mr Adkins had mismanaged its affairs and needed access to the emails relating to its business to prove its case. However, under the system set up by Fairstar, all emails addressed to Mr Adkins at his company email address were automatically forwarded to his private address and deleted from the Fairstar server.
As Mr Adkins would not allow Fairstar to see the e-mails, it applied for a court order to inspect and copy all the business correspondence held by him. Mr Adkins argued that the content of the emails was "information", and as information could not be recognised as property under the law, the claim could not succeed.
High Court decision
And the High Court agreed with him. Relying on the decision in Boardman v Phipps, it concluded that, on the whole, the authorities pointed against any proprietary right in the content of information, and that included emails.
The company appealed, arguing that it was well established in law that if a principal (Fairstar) wanted to inspect and copy the content of documents held by their agent (Mr Adkins) acting on their behalf, they were entitled to require the agent to produce them. It was therefore entitled to inspect and copy correspondence held by Mr Adkins, as their agent, even if it was in electronic format.
Court of Appeal decision
The Court of Appeal agreed, holding that the High Court had considered the wrong issue. Instead of asking who owned the property, it should have looked at who could enforce their rights of access, based on the relationship that existed between the two parties at the relevant time.
That relationship, first and foremost, had been one of principal and agent, giving the principal the right to require the agent to produce documents of relevance to them.
While the word “document” in non-legal usage is commonly associated with information recorded only on paper, the true meaning of the word is far wider, extending to electronic documents, including emails. In that context “content” could not be separated from “form”, since a blank sheet of paper providing no information would not be a document and a blank electronic communication would not be an email.
The fact that the information was held on a computer was irrelevant as the form of recording or storage did not affect the substantive right of the principal to have access to the emails. Irrespective of who owned them, Mr Adkins was under a duty, as a former agent of Fairstar, to allow the company to inspect those that had been sent to or received by him that related to its business. The termination of the agency did not terminate the duty binding on Mr Adkins as a result of the agency relationship.