Express Delivery: Is there an implied duty to deliver-up confidential information?

In Eurasian Natural Resources Corporation Ltd v Judge, Eurasian sought a Court Order compelling a former director to return (‘deliver-up’) Eurasian’s confidential information.

 

The Court held that, in the absence of an express agreement to deliver-up, there was no implied term to do so.


Background

Judge was a director of Eurasian between 2007 and 2013, when he left in acrimonious circumstances.

His service contract provided that he would keep confidential all information acquired during his appointment, and that he would not disclose that information to any third party.

Eurasian suspected Judge of leaking confidential information, and following his departure issued proceedings against him: one of the orders they sought from the Court was that Judge should deliver-up all confidential information in his possession. There was no express term to do so in his service contract.


Held

In the absence of an express term to deliver-up confidential information upon request in the contract, Eurasian argued that there was an implied term to do so.

The Court rejected Eurasian’s argument as, in order for it to be an implied term, there would need to be proof that it was the parties’ intention when entering into the contract that the term would apply. There was no proof.

The Court noted that because such provisions are not standard in service contracts, it was unlikely that it would have been the parties’ intention that such a term would apply.

In reaching its decision the Court commented that directors often hold multiple directorships, and to require them to search all of their emails for confidential information would create too onerous a burden.


Conclusion

While there may be an implied duty of confidence owed by a director to a company to keep its information confidential there is no implied duty to deliver-up that confidential information upon cessation of a directorship or upon request.

Regardless of whether there is an implied duty of confidence owed by a director to a company, a written service agreement should be entered into under which that director’s responsibilities in relation to confidential information should be addressed comprehensively.

Where a company seeks to impose a duty on a director to deliver-up confidential information, it will generally only be enforceable where expressly agreed.