Bristol Groundschool Ltd v Intelligent Data Capture Ltd and Others (Defendants/ Part 20 Claimants) Alexander John Whittingham (Defendant to Part 20 Claim)
| Jurisdiction | England & Wales |
| Judge | Richard Spearman |
| Judgment Date | 02 July 2014 |
| Neutral Citation | [2014] EWHC 2145 (Ch) |
| Docket Number | Case No: HC11C01768 |
| Court | Chancery Division |
| Date | 02 July 2014 |
and
[2014] EWHC 2145 (Ch)
Richard Spearman Q.C.
(sitting as a Deputy Judge of the Chancery Division)
Case No: HC11C01768
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
Royal Courts of Justice
Strand, London, WC2A 2LL
Michael Hicks (instructed by Meade King LLP) for the Claimant and Part 20 Defendant
Robert Onslow (instructed by Willans LLP) for the Defendants
Hearing dates: 25, 26, 27, 28 February and 3, 4 March 2014
Richard Spearman Q.C.:
Introduction
In these proceedings, the Claimant ("BGS") seeks remedies against all the Defendants for infringement of copyright and against the First Defendant ("IDC") for breach of contract. By a counterclaim, all the Defendants except the Fifth Defendant ("Mrs Cownie") seek remedies against BGS and the managing director of BGS ("Mr Whittingham") for infringement of copyright, breach of confidence, circumventing copy protection, malicious falsehood, and conspiracy to injure by unlawful means.
At the heart of the proceedings are two agreements in writing made between IDC and BGS. The first in time ("the 1999 Agreement") related to materials for the UK Civil Aviation Authority training course for pilots, while the second in time ("the 2001 Agreement") related to materials for the EU Joint Aviation Authority training course.
The shape and content of the proceedings have changed as they have progressed. Some issues have been determined by the court or have fallen away as a result of being given up or compromised by the parties, but further issues have been added to the dispute. I shall not say much about the way in which these developments have occurred, even those which took place recently, as the issues which remain live are plentiful enough.
In accordance with the Order of Master Marsh dated 13 January 2014, the trial before me was intended to determine the issues and sub-issues set out in sub-paragraphs 10.1.1–10.1.3 and 10.2.1–10.2.3 of that Order, while the further issues set out in sub-paragraphs 11.1 and 11.2 of that Order were to be dealt with at some later date. By the end of the trial before me, the position had changed. The substantive issues which I was asked to determine had increased to over 20 in total (numbered 2.1–2.8, 4, 5.1–5.4, and 6–12; with numbers 1, 3 and 13 relating to issues which were no longer contentious).
When people fall out, feelings often run high. Where this gives rise to disputes that they are unable to resolve without resorting to litigation, the court must grapple with the issues raised. This is often regrettable, and, in my judgment, is particularly unfortunate in the present case. I consider that, with a reasonable amount of commercial common sense and pragmatic give and take, the parties could and should have been able to reduce the issues in these proceedings, even if not to resolve them completely. I am not able to form concluded views, not least because matters of quantum are not before me, and instead will be left over to be determined at another hearing. But I strongly suspect that, at least in some instances, the costs, stress and delay involved in litigating points in this case to the bitter end are disproportionate to the importance of what is at stake.
BGS and Mr Whittingham were represented by Michael Hicks, and the Defendants by Robert Onslow. I am grateful to both of them for their clear and helpful submissions.
The parties
Although framed as, in large part, a contest between companies, the main protagonists are two individuals. Mr Whittingham is the moving light behind BGS, and the Second Defendant ("Mr Cownie") is the moving light behind IDC.
The Third Defendant ("Propilot") is a wholly owned subsidiary of the Fourth Defendant ("Slate-Ed"). Those companies were incorporated on 7 April 2010 and 6 January 2010, respectively, at the instigation of Mr Cownie. Following the rift between IDC and BGS, Slate-Ed has published electronic books for the iPad, called PadPilot, directed to civil aviation pilot training, and Propilot has provided training to student civil aviation pilots using those electronic books. Mrs Cownie is the wife of Mr Cownie. Both of them are directors of IDC, and, together with Jacqueline Suren, of Slate-Ed and Propolit.
It is BGS's case that all the Defendants were parties to a common design to publish materials which infringed BGS's copyrights, and so are jointly liable for infringement. It is also BGS's case that IDC acted in breach of contract. IDC has recently conceded some points concerning ownership and infringement of copyright, as recorded in the non-contentious Issues 1 and 3 before me. That aside, all these allegations are denied.
It is the Defendants' case that Mr Whittingham and BGS are jointly liable for various torts, all of which are denied. If, contrary to that denial, those torts are held to have been perpetrated, Mr Whittingham does not dispute that he is jointly liable for the same. That concession is recorded in the non-contentious Issue 13 that is before me.
The witnesses
Mr Whittingham, alone, gave evidence on behalf of BGS and on his own behalf. Mr Cownie was the principal witness called on behalf of the Defendants. I do not consider that their evidence was in any way dishonest. However, I consider that each of them was susceptible to persuading himself of matters which suited his case in this litigation. Accordingly, I do not regard either of them as being an entirely reliable witness.
Based on his demeanour and some of what emerged in evidence, Mr Whittingham was prepared to go to considerable lengths to further his interests and those of BGS. He also gave me the impression of having thought through his position to the point of taking notable care to give away as little as possible in his answers to cross-examination. So far as concerns Mr Cownie, I consider that there is substance in Mr Hicks's submissions to the effect that (1) Mr Cownie's strong feelings about this dispute have at the very least clouded his recollection of events, and (2) it was a less than satisfactory feature of his evidence that in a number of instances it only emerged in cross-examination.
Fortunately, I believe that not much turns on many of the differences between them. Where it is necessary to resolve conflicts between them, it is often possible to take into account the contents of contemporary documents when deciding who to prefer.
The other witnesses who were called to give evidence on behalf of the Defendants were Jacqueline Suren, Kevin Brown and Mrs Cownie. Ms Suren's evidence went largely to her shareholding in Slate-Ed, and her role as managing director of Propilot and as a director of Slate-Ed. Mr Brown's evidence concerned his role in developing software in conjunction with IDC, explaining aspects of how that software worked, and his investigation of a software patch developed and supplied by BGS to enable circumvention of copy protection installed by IDC (which forms part of IDC's counterclaim). Ms Suren and Mr Brown were transparently honest and helpful witnesses, and Mr Hicks did not suggest the contrary. Mr Hicks submitted that Mrs Cownie was clearly and naturally keen to defend IDC's position where possible. In my judgment, Mrs Cownie was plainly loyal to her husband (and to IDC). Further, Mrs Cownie shared her husband's feelings that they had not been treated well by Mr Whittingham. However, I do not consider these factors made her evidence unreliable.
General background
In his opening written submissions, Mr Hicks referred to part of the judgment of Master Marsh, delivered when determining a number of issues prior to making his Order referred to above, as providing a convenient summary of the general factual background to this dispute. I did not understand Mr Onslow to quarrel with that description.
Accordingly, I gratefully adopt the following paragraphs of that judgment, and I shall use the same abbreviations in this judgment:
"[3] … Both Mr Whittingham and Mr Cownie were formerly officers in the RAF. Mr Whittingham ended his flying career at an early age due to a medical condition and then re-trained as a Ground Instructor. Mr Cownie was a Pilot and later a Flight Instructor. Mr Whittingham left the RAF in 1990 and Mr Cownie left in 1998.
[4] BGS was set up [under the name Performance Training (UK) Limited] in 1992 and over a period of time it became a highly regarded company specialising in the training of commercial pilots for the Airline Transport Pilots Licence ("ATPL") then under the auspices of the UK Civil Aviation Authority ("CAA").
[5] IDC was set up by Mr Cownie and his wife in 1996 at a time when he was still an RAF Officer. He was hoping to negotiate a contract with the RAF to convert its training documents to electronic format. But his bid to the RAF was unsuccessful. In 1997 Mr Whittingham and Mr Cownie met for the first time when Mr Cownie attended a classroom based course at BGS's premises in Bristol. There are some minor differences of recollection between them about the circumstances of their meeting but they are not matters of any significance for the purposes of the preliminary issues. Mr Cownie suggested to Mr Whittingham that BGS's existing training manuals could be converted into an electronic format with animated diagrams. The two companies worked together and later entered into an agreement dated 1 September 1999 ("the 1999 Agreement"). The agreement formalised the existing arrangement between BGS and IDC. IDC was to create static artwork paid for by BGS and copyright vested in BGS. The...
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