(1) British Sky Broadcasting Group Plc (2) British Sky Broadcasting Group Ltd and Others v (1) Digital Satellite Warranty Cover Limted ((in Liquidation)) (2) Nationwide Digital Satellite Warranty Services Ltd ((in Liquidation)) and Others

JurisdictionEngland & Wales
CourtChancery Division
JudgeTHE HON MR JUSTICE ARNOLD,MR JUSTICE ARNOLD
Judgment Date27 October 2011
Neutral Citation[2011] EWHC 2662 (Ch)
Docket NumberCase No: HC10C01262
Date27 October 2011

[2011] EWHC 2662 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Hon Mr Justice Arnold

Case No: HC10C01262

Between:
(1) British Sky Broadcasting Group Plc
Claimants
(2) British Sky Broadcasting Group Limited
(3) Sky Subscriber Services Limited
(4) Sky Income Service Limited
and
(1) Digital Satellite Warranty Cover Limted (in Liquidation)
Defendant
(2) Nationwide Digital Satellite Warranty Services Limited (in Liquidation)
(3) Bernard Freeman
(4) Michael Sullivan
(5) Paul Marrow
(6) David Steele T/a Daltons Data
(7) Michael Walters T/a London Data
(8) Michael Sibbald
(9) David Reynolds (in Bankruptcy)
(10) Steven Lee

Thomas Moody-Stuart (instructed by Herbert Smith LLP) for the Claimants

Douglas Campbell (instructed by Brabners Chaffe Street LLP) for the Third, Fourth and Fifth Defendants

Hearing date: 10 October 2011

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HON MR JUSTICE ARNOLD MR JUSTICE ARNOLD

Introduction

1

I have before me two applications for summary judgment. The first is an application by the Claimants (collectively "Sky") for summary judgment against the Third, Fourth and Fifth Defendants (Mr Freeman, Mr Sullivan and Mr Marrow, collectively "the Personal Defendants") on all of Sky's claims against the Personal Defendants. The second is an application by the Personal Defendants for summary judgment in their favour in respect of one of Sky's claims.

2

Sky is the well-known pay television satellite broadcaster and communications service provider. Satellite television equipment supplied by Sky comes with a standard 12 month warranty. Sky's authorised provider markets "extended warranty" service plans to cover Sky equipment once the standard warranty expires. Prior to late 2006 or early 2007 the Second Defendant ("Nationwide 2") and from then until the summer of 2010 the First Defendant ("DSWCL") traded in the provision of service plans for Sky satellite television equipment in competition with Sky's authorised provider. I will refer to Nationwide 2 and DSWCL collectively as "the Corporate Defendants". From about August 2010 to 16 November 2010 Mr Freeman and Mr Sullivan carried on the same business trading in partnership under the name Satellite Services. I will refer to the Corporate Defendants and Satellite Services collectively as "the Businesses".

3

On 16 November 2010 the Businesses were placed in provisional liquidation by order of Newey J. On 31 January 2011 Warren J ordered that they be wound up on public interest grounds. At the time of writing this judgment, judgment is awaited from Court of Appeal on an appeal against that order. As matters stand, however, proceedings against the Corporate Defendants have been stayed pursuant to section 130(2) of the Insolvency Act 1986.

4

Sky advance two groups of claims in these proceedings. The first concerns the use by the Businesses of substantial quantities of customer data which Sky contend was unlawfully obtained from Sky's customer databases. Sky claim that, by obtaining and using such data for the purposes of marketing service plans for Sky satellite equipment, the Businesses have acted in breach of confidence and infringed Sky's database rights. Secondly, Sky claim that in the course of marketing their service plans the Businesses have infringed Sky's registered trade marks and passed themselves off as connected with, or authorised by, Sky.

5

Mr Freeman was a director of Nationwide 2. He was also a director of, and a 25% shareholder in, DSWCL. Mr Sullivan was the sole shareholder in, and company secretary of, Nationwide 2. He was also company secretary of, and a 25% shareholder in, DSWCL. Mr Marrow was a 25% shareholder in DSWCL. Sky allege that the Personal Defendants are jointly liable for the acts of the Corporate Defendants.

6

Before proceeding further, it should be noted that the procedural situation in the present case is unusual in one respect. After Sky had launched their application for summary judgment, the Personal Defendants applied to stay the proceedings on the ground that a settlement agreement had been concluded during a telephone conversation on 13 September 2000. That application necessitated consideration of a series of without prejudice communications between the parties. On 7 July 2011 Peter Smith J directed the trial of a preliminary issue as to whether a binding settlement agreement had been concluded. He also ordered that the summary judgment application be heard immediately after the trial of the preliminary issue. It was agreed between the parties on that occasion that the same judge could hear both applications (and hence that the without prejudice materials would be before the judge hearing the summary judgment application). I heard the stay application on 6 and 7 October 2011, and dismissed it by a judgment given on 7 October 2011.

Principles applicable to summary judgment applications

7

There is no dispute about these. They were conveniently summarised by Lewison J (as he then was) in the contexts of defendants' applications in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]:

"As Ms Anderson QC rightly reminded me, the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:

i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success: Swain v Hillman [2001] 2 All ER 91;

ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8].

iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman.

iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10].

v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550.

vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63.

vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725."

8

This summary was cited with approval by Etherton LJ (with whom Sullivan LJ and Wilson LJ, as he then was, agreed) in AC Ward & Son v Catlin (Five) Ltd [2009] EWCA Civ 1098, [2010] Lloyds Rep IR 301 at [24].

Liability of the Businesses

9

As is obvious, the Personal Defendants cannot be held jointly liable for the wrongful acts of the Corporate Defendants unless it is first established to the requisite standard that the Corporate Defendants have committed such wrongful acts. It follows that I must first consider whether Sky are entitled to summary judgment in respect of each of the four causes of action they rely upon as against the Corporate Defendants. Since I do not understand it to be disputed that Satellite Services essentially continued the business previously carried on by DSWCL, it is convenient to consider the liability of Satellite Services at the same time.

Breach of confidence

10

Counsel for the Personal Defendants conceded in the light of the evidence now available that each of the Businesses was liable for breach of confidence. In the light of that concession, it is not necessary for me to describe the evidence relied on by Sky in any detail. It suffices to say that it demonstrates convincingly that large quantities of confidential customer data used by the Businesses emanated from Sky's customer databases.

...

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