1. ReachLocal UK Ltd and Another v 1. Jamie Bennett and Others

Hearing dates: 23 rd June 2014.

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.

This is the hearing of an application by the 1 ^st and 3 ^rd Defendants for relief from sanctions. The Claimants claim damages and an injunction for libel, slander, malicious falsehood, breach of confidence, breach of contract and conspiracy. The Claim Form was issued on 12 ^th March 2014. Particulars of Claim were served on 27 ^th March 2014. Following an application on notice at which only the 1 ^st Defendant appeared, Sir David Eady, sitting as a Deputy High Court Judge, granted an interim injunction on 28 ^th March 2014. He also gave directions which included requiring defences to be served by 22 ^nd April 2014. None were. The Claimants gave notice of another hearing on 30 ^th April 2014. None of the defendants appeared. Tugendhat J. extended time for the defences to 6 ^th May 2014 and ordered that a defendant who did not serve a defence by that time would be debarred from defending. Still no defences were served. The Claimants issued a further application seeking judgment in default. Since the relief they sought included injunctions, this had to be on application to the court – see CPR r.12.4(2). The matter again came before Sir David Eady on 9 ^th June 2014. At this hearing the 1 ^st and 3 ^rd Defendants appeared in person. No other defendants appeared or were represented. Sir David directed that, if any defendant wished to seek relief against sanctions, an application would have to be made by 16 ^th June 2014, and a witness statement filed and served explaining why none of the previous opportunities had been taken for serving a defence and what the nature of their defence would be. In the event, the 1 ^st and 3 ^rd Defendants did issue such applications and did file and serve witness statements indicating the nature of their defences. None of the other Defendants has made any similar application and none of the others appeared or were represented at the hearing before me.

The Claimants are part of an international group of companies which provide internet marketing services. The 1 ^st Claimant is a UK company. The 2 ^nd Claimant is based in the Netherlands. One of the Claimants' clients was the 5 ^th Defendant with whom they signed an agreement in March 2013. The 3 ^rd Defendant signed the contract on behalf of the 5 ^th Defendant. He and the 4 ^th Defendant are directors of the 5 ^th Defendant. The 1 ^st Defendant is not a director of the 5 ^th Defendant, but he styles himself as 'managing partner' of Yoda London and, when asked by the Claimants' solicitors, Norton Rose Fulbright, if he was authorised to respond on behalf of the 5 ^th Defendant, said he had full authority to respond 'with the blessing of our owners'.

The essence of the claims is that the Defendants are alleged to have accused the Claimants, in a variety of communications, of trickery and defrauding their clients by either not revealing the full extent of the fees they charged their clients or dramatically understating how much they were taking for themselves. In broad terms, the 1st Defendant would wish to defend these allegations as true (the Claimants deny that they are). The 3 ^rd Defendant's position is that the publications were nothing to do with him and he has not been responsible for any of the other matters of which the Claimants complain.

In his statement explaining why he had not filed a defence and which he made on 16th June, the 1st Defendant said,

"the defence for my case was not filed due to a number of personal family issues; I recently split with my fiancée and was involved with sorting out a new house and custody issues with my daughter. I did state that it was due to being away. The reason I said this was due to not wanting to disclose this matter, as it was personal and I was very upset, as I'm sure you can imagine it was something that hit me hard. I have spent the last three months helping her sort a new house as well as locating one for myself. To add insult to injury, her mother died which hit my family and I extremely hard. It's been a very difficult and emotional couple of months, which with this case has taken its toll on me. If I'm honest the last thing on my mind was this case although I should have filed my defence. As I'm sure you can appreciate my main concern was looking after my daughter and her mother while she grieved."

The passage 'I did state that it was due to being away' refers to comments which the 1st Defendant had made to Sir David Eady on 9th June 2014. Although he was not then sworn (or affirmed) as a witness, there was a lengthy exchange with Sir David. The 1st Defendant said the reason he had not filed a defence was that he had been away with his family in Turkey. They had left in the beginning of May and returned at the beginning of June.

In his statement the 3rd Defendant said that he had written to the Court on 25th April 2014 (and he produced a copy of that letter). In that letter, he said that the 5th Defendant had operated for only 3 months in the beginning of 2013. He had not been involved with the day to day running of the company which had ceased trading in March 2013 when he and the 1st Defendant had suffered a breakdown in their relations. Another of his companies, J.D. Chauffeurs Ltd, went into liquidation in August 2013. That company had signed a lease for premises at 49 Skyline Villages, London E14 9ST but the lease of those premises was then cancelled. The letter said that the landlord had recently brought to the attention of the 3rd Defendant that a large amount of mail had recently arrived and it was only then that he had discovered that the Claimants had brought these proceedings. He said he had no knowledge of the accusations contained in the legal documents. In his 16th June statement, the 3rd Defendant said that he thought this letter of 25th April was a correct filing of a defence or response to the allegations which the Claimants were making against him. His defence of 16th June 2014 repeated that he had nothing to do with any of the actions alleged. He believed there may have been confusion between the 5th Defendant (Your Online Digital Agency Ltd) and Yoda London, an organisation run by the 1st Defendant.

In his skeleton argument for the purposes of this hearing, Mr Singla, on behalf of the Claimants, made it clear that they did not accept that either witness statement was truthful. In those circumstances, it seemed to me to be fair that both the 1st and 3 ^rd Defendants should be given the opportunity to have their evidence tested by cross examination. Both agreed to do so and they were both cross examined by Mr Singla. After each had been cross examined I gave them the opportunity to add anything in explanation or elaboration in the same way that, if they had been represented, their counsel or solicitor would have been able to re-examine them.

The 1st Defendant produced some papers which had been sent to him by solicitors acting for his former girlfriend. They showed that proceedings in the Family Court had been issued on 30th April 2014 for a prohibited steps order in relation to his young daughter (now aged 18 months). Those papers said that the 1st Defendant and his girlfriend had separated on 24th March 2014. The hearing of the application was listed on 23rd May 2014. All these papers had been sent to the 1st Defendant under cover of the solicitors' letter dated 6th May 2014. In his evidence the 1st Defendant said his girlfriend's mother had died just after his girlfriend's birthday on 18th March 2014. He said that he had been off work for about two and half months. He was asked about two emails dated 1st April 2014 which had been written to customers of the Claimants asking to make contact with them. They appeared to be signed by 'Jamie Bennett' and they came from an email address that used his name, but in evidence he said he did not send either email. They had been sent by Liam Shepherd who worked for him and to whom he had given his password so that he could operate his email account.

The 1st Defendant was asked why he had not attended the hearing before Tugendhat J. on 30th April 2014. He said, initially, that he gave priority to the Family Court proceedings in relation to his daughter which were on the same day. However, on looking again at the documents which had been sent by his girlfriend's solicitors, he accepted that 30th April was the date the family proceedings were issued, the hearing was on 23rd May and the papers had only been sent to him on 6th May. He was asked about an email which he had sent to Norton Rose Fulbright on 29th April 2014 (the day before the hearing in front of Tugendhat J.). That said, 'I've just come back from being away for a couple of weeks as I have been working on an important deal to take my business to the next level.' Although his answers were at times equivocal, I understood his final position to be that this statement was true and he had been away working in the two weeks prior to that email. The last sentence of the same email said, 'I have not even begun to underdress your client yet and have many more things up my sleeve so look forward to more up and coming public...