Coveris Flexibles UK Ltd v Mr Simon Brears
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henshaw |
| Judgment Date | 21 June 2022 |
| Neutral Citation | [2022] EWHC 1594 (QB) |
| Docket Number | Case No: QB-2021-001481 |
| Court | Queen's Bench Division |
[2022] EWHC 1594 (QB)
THE HONOURABLE Mr Justice Henshaw
Case No: QB-2021-001481
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Stuart Benzie (instructed by Gateley LLP) for the Claimant
Peter Gilmour (instructed by Clifford Johnston & Co) for the First Defendant
The Second to Fourth Defendants did not appear and were not represented
Hearing date: 20 June 2022
Approved Judgment
| (A) INTRODUCTION | 2 |
| (B) FACTS | 2 |
| (C) THE CONTEMPTS OF COURT | 6 |
| (D) PRINCIPLES | 7 |
| (E) APPLICATION | 11 |
| (F) COSTS | 19 |
| (G) CONCLUSIONS | 22 |
(A) INTRODUCTION
This judgment arises from the application by the Claimant (“ Coveris”) to commit the First Defendant (“ Mr Brears”) for 13 contempts of court, some including more than one instance of contempt. Mr Brears has in substance admitted the alleged contempts of court, and the hearing before me was essentially concerned with submissions as to sentence. The hearing included some oral evidence from Mr Brears, whose counsel called him to deal with certain matters arising from evidence recently served on both sides.
For the reasons which follow, I have concluded after careful consideration that the minimum sentence commensurate with the seriousness of these contempts of court is an immediate custodial term of 14 months overall.
(B) FACTS
The underlying substantive claims against Mr Brears arise from his activities while employed by Coveris in a senior capacity, and in the months following his resignation.
Mr Brears began working for Coveris in September 2015. While still employed by Coveris, on 30 April 2020 Mr Brears incorporated a company, the Second Defendant (“ Globe”), with the intention of competing with Coveris. Mr Brears now admits that he acted in concert with another agent of Coveris, referred to as “Nicole”, based in China; and a third party, Mr David Harbinson, who is the Third Defendant and who became a director of Globe in September 2020. The Fourth Defendant, H&H Print Solutions Limited, is a company in which Mr Harbinson has an interest. Coveris alleges that Mr Brears, together with his co-conspirators, dishonestly took steps to divert business from Coveris's customers to Globe, and did so at times using Coveris's suppliers and Coveris's facilities: for instance, Mr Brears instructed Coveris's design team to design the logo for Globe.
Coveris's claims against Mr Brears are for breach of contract, breach of confidence, breach of fiduciary duty, unlawful means conspiracy (with the alleged unlawful acts including theft and breaches of the Fraud Act 2006), unlawful interference and conversion (this claim relating to stock belonging to Coveris which Mr Brears allegedly stole and which was then supplied by Globe to a third party).
Mr Brears has confirmed that he no longer intends to defend the substantive claim, and accepts that judgment against him in that claim is inevitable. It is pertinent to record, though, that the evidence before me indicates that the Claimant's allegations are supported by a significant volume of contemporaneous documentation, particularly emails sent by the alleged conspirators. These include 40 emails which Mr Brears now admits he deleted after being served with Search Order granted by Martin Spencer J on 22 April 2021 (“ the Search Order”), but which the Claimant was subsequently able to recover with the help of forensic IT experts. The evidence indicates that the conspiracy commenced around 30 April 2020, when Globe was incorporated with Mr Brears as the sole director. Over the 7 1/2 months from then until the termination of his employment with Coveris on 18 December 2020, Mr Brears actively carried on a competing business, along with Mr Harbinson and with the assistance of Coveris's representative in China, Nicole. That activity continued even after Mr Brears had been signed off work on 15 September 2020 and shortly afterwards provided a doctor's certificate stating that he was unable to work due to depression.
Further, when Coveris and Mr Brears agreed the termination of his employment, Mr Brears having served notice of resignation on 18 November 2020, a Settlement Agreement was entered into on 18 December 2020. In that Agreement Mr Brears made representations to the effect that (a) he had not breached any duty that he owed to Coveris, (b) he had not committed any repudiatory breach of his contract of employment, and (c) he was not employed or self-employed in other capacity. The Settlement Agreement was signed on Friday 18th December 2020. On the same day, Mr Brears attended a meeting with T Quality Limited (“ TQL”), one of Coveris's most important established customers, and sought to divert their business to Globe.
Mr Brears now admits that his dealings with TQL were in concert with Globe (he does not mention his co-director Mr Harbinson) and had the intention of diverting business away from Coveris. Mr Brears also admits that over a period of months he encouraged Nicole to take steps in China with the intention of sabotaging Coveris's ability to produce products for TQL, and to allow Globe to replace Coveris as TQL's supplier.
An example of these activities was the engagement of Nicole to negotiate with a supplier in China for the provision of packaging products for the fast-food chain Taco Bell. Coveris had instructed its employee to negotiate a 5% price reduction in favour of Coveris; however, Mr Brears, instructed Nicole instead to negotiate a 5% rebate to be paid to Globe, thus in effect diverting the benefit from Coveris to Globe. This arrangement was referred to in an email dated 9 September 2020 from Mr Brears to Nicole (copied to Mr Harbinson), which included the following passage (with Mr Harbinson's interpolated response the same day shown in bold): “All noted with Taco Bell, understand Coveris has that work so just need ensure Globe have 5% of all Coveris sales on Taco pots……….. Love this mate, cash for free………..up there for thinking down there for dancing ☺ from Mingle then Globe will go for the work directly with Taco Bell at a later date”.
Coveris commenced proceedings against Mr Brears on 21 April 2021 and the Search Order was granted the following day. The order included injunctions restraining Mr Brears from, among other things, (a) directly or indirectly informing anyone about the proceedings or the Search Order save the purpose of obtaining legal advice, (b) destroying or tampering with any of a list of items, which included any documents evidencing his or Globe's dealings with Coveris's customers, potential customers or suppliers, or (c) endeavouring to solicit orders from Coveris's customers or to influence in any way the relationship between Coveris and any of its suppliers or employees (I refer to this latter restraint as the “ prohibitory injunction”).
The Search Order was served at Mr Brears' home address on 23 April 2021 but no search took place as Mr Brears said he had Covid-19 and refused access.
Solicitors for Mr Brears contacted Mr Warner of Coveris's solicitors the same day and sought to arrange an appointment for the execution of the Search Order on Monday 26 April 2021, saying that Mr Brears would provide access to his online email account on 24 April 2021. However, Mr Warner said the search would proceed on 24 April.
On the evening of 23 April 2021, Mr Brears made searches including: “ mobile phones near me for sale” and “ how to open a Samsung S20 phone”. At some point thereafter, but before the actual search, Mr Brears acquired a new Samsung A21 mobile telephone that he subsequently handed over during the search, having transferred the SIM card from his existing Samsung phone into the new phone.
During the early morning of 24 April, the day of the rescheduled search, Mr Brears searched for and deleted incriminating emails using the search terms “ Coveris” “ Globe” and “ Globe Imports”.
The search took place on the afternoon of 24 April 2021. Mr Brears was accompanied by a solicitor representative.
At the return date for the Search Order, before Murray J on 29 April 2021, the order was continued by consent, with an agreed exception whereby Mr Brears/Globe would be permitted an exception to the prohibitory injunction so as to allow Globe to complete pending orders.
Despite the making of the prohibitory injunction, and the agreed defined exception to it, Mr Brears and Globe continued during April, May and June 2021 to solicit orders from customers of Coveris, including TQL, in the respects detailed by Coveris in its Statement dated 31 August 2021 setting out specific allegations of contempt of court. In Schedule A to that Statement, Coveris sets out details of 15 orders solicited from TQL and the value of those orders, which total approximately £362,362 plus US$ 88,000. It also sets out details of five other emails or exchanges of emails evidencing solicitation of orders.
On 13 May 2021 Mr Brears swore an affidavit pursuant to paragraphs 22 and 23 of the Search Order that included the statement that Mr Brears had not misused the Claimant's confidential information. Mr Brears now admits that that statement was untrue.
Mr Brears served his Defence on 4 August 2021, with a Statement of Truth signed by him. He now admits that it contained 24 false statements.
Coveris made a Part 18 request of Mr Brears on 9 August 2021. On 18 August 2021 Mr Brears responded to an email from Coveris's solicitors about inspection of documents with a voicemail left for Ms Canning of Coveris's solicitors in which he used vulgar abuse, for which Mr Brears apologised during the hearing before me (saying...
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