Cef Holdings Ltd and Another v Brian Mundey and Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE SILBER |
| Judgment Date | 01 June 2012 |
| Neutral Citation | [2012] EWHC 1524 (QB) |
| Docket Number | Case No: HQ12X0155 |
| Court | Queen's Bench Division |
| Date | 01 June 2012 |
[2012] EWHC 1524 (QB)
Mr Justice Silber
Case No: HQ12X0155
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
David Reade QC, Thomas Kibling and Charlotte Davies (instructed by Nabarro) for the Claimants
Simon Devonshire QC (instructed by Gateley (Scotland) LLP) for the First, Third, Fourth, Seventh, Eighth, Ninth, Eleventh, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth and Nineteenth Defendants
Gerard Clarke and Amelia Walker (instructed by Bond Pearce) for the Second, Fifth, Sixth, Tenth and Twelfth Defendants
Robert Howe QC and Nick De Marco (instructed by CMS Cameron McKenna) for the Twentieth and Twenty-First Defendant
Hearing dates: 30 April 2012 and 1–4 May 2012
Further written submissions served until 11 May 2012
Approved Judgment
I. Introduction
CEF Holdings Limited owns all the issued shares in City Electrical Factors Limited and I will refer to these companies jointly as "CEF". CEF operates domestically and worldwide as a wholesaler and manufacturer of electronic components in the United Kingdom. It has some 400 outlets with further operations in Europe, North America, Canada, the Middle East and Australia. They have been represented by Mr. David Reade QC, Mr. Thomas Kibling and Ms Charlotte Davies.
The First to Nineteenth Defendants ("the individual defendants") are former employees of CEF, while the Twentieth and Twenty-First Defendants are trading companies, which according to CEF were set up to compete directly with CEF in the United Kingdom and which use the trading name of Yesss Electrical. The Twenty-Second and Twenty-Third Defendants were ultimate beneficial owners of CEF along with other members of the Mackie family and still retain a minority interest. The Twenty-Fourth Defendant was an employee of CEF until June 2011 and he is a part of the senior management of the Yesss Electrical businesses. I will refer to the First, Third, Fourth, Seventh, Eighth, Ninth, Eleventh, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth and Nineteenth Defendants collectively as "the Gateley Defendants" and they are represented by Mr. Simon Devonshire QC. The Second, Fifth, Sixth, Tenth and Twelfth Defendants, who I will refer to collectively as "the Bond Pearce Defendants", are represented by Mr. Gerard Clarke and Ms Amelia Walker. The Twentieth and the Twentieth-First Defendants are represented by Mr. Robert Howe QC and Mr. Nick De Marco.
On 20 April 2012, Collins J heard an application made by CEF without proper notice to the defendants, but which was attended by one counsel on behalf of the individual defendants, namely Mr Gerard Clarke. The judge made orders to which I will refer in greater detail later in this judgment when dealing with the substantive issues, but they can conveniently at this stage be summarised as orders:—
(a) Restraining "until the conclusion of the adjourned application dated 19 April 2012 or further order in the meantime" the individual defendants by themselves, their servants, agents or otherwise howsoever from soliciting or inducing CEF's employees to leave the employment of CEF;
(b) Restraining "until the conclusion of the adjourned application dated 19 April or further order" the Twentieth Defendant by itself, its servants or agents from in any way inducing or continuing to induce any employee of CEF to breach their contractual obligations owed to CEF;
(c) Requiring the First to Nineteenth defendants to deliver up to CEF by no later than 4pm on 25 April 2012 all physical property belonging to CEF including discs and all documents in whatever form (including notes and minutes of meetings, customer lists, diaries and address books, computer printouts, plans, projections) together with all copies (irrespective of by whom and in what circumstances such copies were made) which are in the possession of the First to Nineteenth Defendants or under the control of the First to Nineteenth Defendants;
(d) Requiring the First to Nineteenth Defendants to preserve intact and unaltered all documents or information in electronic form and stored on whatever kind of media (including computer hard drive, portable drive, disc, email, server or cloud-based facility) which belonged to CEF and were created or accessed or transferred or in any way copied by the First to Nineteenth Defendants during the course of their employment by CEF (including for the avoidance of doubt, all emails and attachments) which remain in the possession or control of the First to Nineteenth Defendants (The items referred to in sub paragraph (c) and this sub paragraph will be referred to as "Listed items");
(e) Restraining the First to Nineteenth Defendants from publishing or disclosing to any person whatever or otherwise making any use of (and shall use their best endeavours to prevent the publication, disclosure or use of) the Listed items, or any information contained in or derived from the listed items, save in so far as that information is accessible to the general public;
(f) Restraining the First to Nineteenth Defendants from revealing to any person, firm, company or organisation or otherwise making use of any of the trade secrets or any confidential operations or dealings or any confidential information (other than that within the public domain) concerning the organisation, business, finances, transactions or affairs of CEF (including lists of customers or clients) of CEF which came to the First to Nineteenth Defendants' knowledge during their employment with CEF;
(g) Requiring the First to Nineteenth Defendants to serve a witness statement by 4pm on 25 April 2012 giving the best particulars practicable in time available on the following matters:-
(i) the use or disclosure by them (other than on behalf of CEF), of any Listed Item or information contained in the Listed Items, in particular (but without limitation) (a) setting out what date the particular Listed Item or information was disclosed; (b) to whom it was disclosed; (c) the means or medium by which it was disclosed; (d) in so far as the First to Nineteenth Defendants were aware, the current whereabouts of the Listed Item or information; and (e) each and every use that has been made of the Listed Item or information by the Defendants or any Third party; and
(ii) confirming that they have complied with the Order set out in paragraphs (c) to (f) above and if they have not so complied or if any of the listed item was but is no longer in their possession or control, stating where any such Listed Item is and providing the names and addresses of anyone who has any Listed Item or copies thereof.
The orders were made until the present hearing, which started on 30 April 2012, when I also heard applications by the First to Twenty-First Defendants to discharge the order of Collins J on a number of grounds including that of non-disclosure and the Court's lack of jurisdiction to make orders against the individual defendants, who were domiciled outside the jurisdiction. CEF had not served Particulars of Claim when the matter came before Collins J and they were ordered to do so. The draft was served but subsequently amended but after repeated requests from me and from counsel for the Defendants, CEF finally produced its third draft on 2 May 2012, which was the third day of the hearing in front of me. At this time, the Twenty-Second to Twenty-Fourth Defendants were added as parties, but they were not represented at the hearing before me and I will refer to them by their names rather than by their designation in this judgment.
The individual Defendants have delivered up the items specified in Collins J's order and they have also made the required very detailed witness statements. No complaint has been made that any of the individual defendants have not complied with the order of Collins J. It is also not suggested (let alone proved) that any of the individual defendants had wrongfully used any of the material contained in the documents returned to CEF pursuant to Collins J's order.
II. The Factual Background
CEF is privately owned by some members of the Mackie family and its customers are predominantly businesses and tradesmen working in the electrical trade. Domestically, CEF operates in six designated geographical areas with five of them being based in England and one being based in Scotland.
To understand the background to this dispute, it is necessary to explain a little about the Mackie family. Thomas Louis Mackie, who founded CEF in 1951, died in January 2012. Gerald Mackie and Georgina Mackie are two of his children, while Adam and Ashley Mackie are sons of Gerald Mackie and therefore his grandchildren. Another of Mr Mackie Senior's grandsons is Thomas Hartland Mackie, whose mother is Georgina Hartland. He is the most senior member of CEF, and he has overall management control of CEF.
A dispute arose within the Mackie family, and by early 2011, Adam and Ashley Mackie together with their father Gerald Mackie were removed by Mr Mackie Senior from further involvement in CEF. Prior to that date, all three of them had been engaged as consultants providing services to CEF with Gerald doing it through a Jersey company. CEF contend that the consultancy agreement was terminated on 9 January 2011 and it...
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