On 19 January 2021 the Court of Appeal handed down an important decision in Travel Counsellors Limited v Trailfinders Limited  EWCA Civ 38, clarifying the circumstances in which a recipient of confidential information will be subject to an equitable obligation of confidence. It held that a recipient will “know or have notice” that information was disclosed to it in breach of confidence when the reasonable person in the position of the recipient would make enquiries, but the recipient abstains from doing so. Whether the reasonable recipient would make enquiries, and if so what enquiries they would make, are context- and fact-dependent questions.
Travel Counsellors Limited (“TCL”) appealed from the judgment of HHJ Hacon in which he held that:
TCL’s most significant ground of appeal was that the judge applied the wrong legal test in holding that TCL owed an equitable obligation of confidence to Trailfinders in respect of the confidential information received by it from the sales consultants.
It is now established that the test is objective: a recipient will only be subject to an equitable obligation of confidence when they know or have notice that the information was confidential, assessed objectively by reference to the reasonable person in the position of the recipient: Matalia v Warwickshire County Council  EWCA Civ 991 and Lewison LJ’s judgment in the recent Court of Appeal case of The Racing Partnership Ltd v Sports Information Services Ltd.  EWCA Civ 1300.
TCL had submitted, unsuccessfully, at trial that the test should be subjective: a recipient must know that the information received is confidential (or at least have blind eye knowledge). On appeal, TCL accepted the objective test, but argued that what a reasonable person ought to know does not include what they would have learned if they had made reasonable enquiries.
Arnold LJ (giving the only judgment) rejected that submission, citing his judgment at first instance in Primary Group (UK) Ltd v Royal Bank of Scotland plc  EWHC 1082 (Ch) (cited with approval in Matalia and The Racing Partnership). Primary Group stated and The Racing Partnership implied that the court will consider the enquiries that the reasonable person in the position of the recipient would have made.
Arnold LJ rejected TCL’s further submissions that:
Case commentary by Bláthnaid Breslin (pupil at Littleton Chambers).