Harbro Supplies Ltd v Gordon Bernard Hampton and Others
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Saffman |
| Judgment Date | 06 June 2014 |
| Neutral Citation | [2014] EWHC 1781 (Ch) |
| Docket Number | Case No: 3NE30025 |
| Court | Chancery Division |
| Date | 06 June 2014 |
2014 EWHC 1781 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
LEEDS DISTRICT REGISTRY
The Court House
Oxford Row
Leeds LS1 3BG
His Honour Judge Saffman sitting as a Judge of the High Court
Case No: 3NE30025
Mr D Bayne for the Claimant
Mr S Goldberg for the Defendants
Hearing date: 12,13,14,17,18,19,20 March 2014
Introduction
The claimant, Harbro Supplies Limited (Harbro) for many years has traded as a supplier of tools and products for those working with stone, marble, granite and concrete. Its managing director is Mr David Breden. The first defendant, Mr Gordon Hampton was engaged by Harbro in the period February 2010 to December 2012. He was appointed a director on 5 January 2012 and was removed from that office on 7 December 2012. This followed his physical departure from Harbro's premises in October 2012 when Mr Breden asked him to leave and he did so.
The second defendant, Jeremiah Strongarm Limited (JSL) is a company incorporated on 22 January 2013. Mr Hampton is, I believe, its sole director and he lives at Shincliffe Hall, Co Durham. In his witness evidence he refers to JSL as "my company" 1. It is common ground that it trades in the same business as Harbro in that it supplies tools and products to same business sector as Harbro. That sector is predominantly memorial masons 2.
The third defendant, Mr Stephen Haines was employed by Harbro as a van driver/salesman from about 4 August 2010 to 22 February 2013 on which date he resigned. He was engaged by JSL from 25 February 2013, the next working day. His evidence is that he commenced work for JSL on an unpaid, trial basis but since August 2013 he has worked full-time for JSL as the memorial sales manager and thus he has a more executive role than that he fulfilled at Harbro. When working at Harbro he had a basic wage of about £16,000 a year supplemented by commissions which perhaps added a further £900 a month on average to his gross pay. His annual gross pay including commissions was therefore about £27,000 to £28,000.
Neither Mr Hampton nor Mr Haines are subject to any contractual restraints relating to the employment that they can undertake post termination of their relationship with Harbro.
It is common ground that during the time that Mr Hampton and Mr Haines were engaged by Harbro it operated a database known as the Harbro Multipac Database which included;
(i) The names and addresses of customers and details of their buying history and the price at which products were sold to them
(ii) The names and addresses of suppliers and details of Harbro's buying history and prices paid. 3
The claims and counter claims
Harbro, represented by Mr Dominic Bayne of counsel, has a number of complaints about the conduct of the defendants for which it seeks redress.
Claims against Mr Hampton
(i) Between March 2012 and September 2012, in breach of contract and his fiduciary duty to Harbro, Mr Hampton copied the Harbro Multipac database onto his own computer(s) and created a new database, called the Jeremiah Strongarm Database (the JS Database) which incorporated the customer and supplier information from the Harbro database. 4
(ii) That since about 22 January 2012, in breach of his contractual and fiduciary duty, Mr Hampton has supplied confidential information from the Harbro database and the JS database and/or copies of such information (whether confidential or not) to JSL and Mr Haines and that, along with Mr Haines and JSL, he has used that information to compete with Harbro and target its most significant customers. Harbro relies on 11 examples of such conduct 5. Insofar as the information is not confidential, Harbro contends that its use provided JSL with a springboard which enabled JSL to get a head start in its competing business at the expense of Harbro.
(iii) That on 3 occasions between 27 October 2010 and July 2011 without authority Mr Hampton used Harbro funds to pay personal expenses incurred in respect of building work at Shincliffe Hall and the cost of garage bills in respect of Mr Hampton's own motorcars. The expenses wrongfully claimed amount to £9006.26. 6
(iv) Prior to about September 2012, wrongfully and in breach of his fiduciary duty, Mr Hampton converted to his own use, along with Mr Haines, items of Harbro's stock amounting to £115.56 7
(v) That between March and September 2012 he copied Harbro's balance sheet to his own computer and altered it to show himself to be a 50% shareholder in, and a creditor of, Harbro. 8
Claims against JSL
It is alleged that:
(i) knowing the information to have been obtained unlawfully, JSL has used the confidential information contained in the Harbro and/or JS database to target and divert Harbro's customers.
(ii) Alternatively it ought to have known that Mr Hampton was acting wrongfully in supplying it with copies of confidential information.
(iii) Alternatively it has used information from the Harbro database to target Harbro's most significant customers 9.
Claims against Mr Haines
It is alleged;
(i) That he has made false expenses claims while working for Harbro totalling £967.47 10. Mr Haines no longer seeks to defend that allegation and recognises that this sum is due to Harbro subject to his counterclaim.
(ii) That, together with Mr Hampton, he converted to his own use stock to the value of £115.56 belonging to Harbro 11.
(iii) That he used Harbro confidential information namely the Harbro database and/or the JS database to target and divert customers knowing that the database was confidential to the claimant and unlawfully obtained or turning a blind eye to it 12.
The Defendants' position
All 3 defendants are represented by Mr Simon Goldberg of counsel. First, it should be said that Mr Hampton does not concede that he had any fiduciary duties to Harbro once he ceased to be a director. In addition it is argued that any contractual duties he had terminated when he left Harbro in October 2012 and, if not then, in December when his relationship with Harbro was completely severed by his removal from office as a director.
Secondly, Mr Hampton accepts that the Harbro database was on his personal computer and on a server at Shincliffe Hall but after he left Harbro he immediately sought to delete the database and in so far as that was apparently not successful, he has made no effort to access it in furtherance of the interests of JSL or indeed at all. He does not deny that JSL has contacted customers and suppliers of Harbro since February 2013 but the details of those customers and suppliers was known to him and/or Mr Haines in any event because it was knowledge inevitably and innocently picked up by their association with Harbro over more than 2 years.
Furthermore, all 3 defendants deny that the information that they are accused of using was confidential information in any event which can give rise to a claim for breach of confidence.
It is further contended that any information on Mr Hampton's or indeed Mr Haines computers/servers did not get there improperly. It was imported into the relevant computers/servers to enable daily use by Mr Hampton in the discharge of his duties to Harbro and as a remote backup so that data would not be irretrievably lost in the event of a catastrophic failure of the system at Harbro's premises.
Mr Goldberg contends that the reasons why the information ended up in the possession of Mr Hampton and Mr Haines is important. He argues that even a springboard claim based on use of non-confidential information is not sustainable where the non-confidential information was legitimately obtained.
As regards the claim against Mr Hampton for expenses relating to his home and his motor vehicles, his position is that he does not dispute that Harbro made the payments but that Harbro, through Mr Breden, agreed to pay them in consideration of his working initially for no remuneration and subsequently for modest remuneration.
As regards the allegation that he converted the claimant's stock to his own use, this is denied. Mr Haines adopts the same position.
As regards the allegation that he copied Harbro's balance sheet and manipulated it, first he does not concede that he was not entitled to copy a balance sheet since he was a director. Secondly, he makes no concession that he manipulated it and in any event he denies that any manipulated balance sheet was used in a manner that disadvantaged or caused loss to Harbro.
As regards the allegation of wrongful use of Harbro's information, the position of JSL accords with that of Mr Hampton. It is not, as I understand it, suggested that Mr Haines was a fiduciary but that essentially he dishonestly assisted Mr Hampton in utilising Harbro's information for the benefit of JSL. This is denied by Mr Haines.
Counterclaims
There are various counterclaims, some of which continue to be pursued whilst others do not.
Mr Hampton's counterclaims
(i) A 1/3 shareholding in Harbro 13. This is no longer pursued.
(ii) Monies for the use by Harbro of Mr Hampton's van 14. Harbro does not dispute that it used the van but contends that Mr Hampton
permitted its use in consideration of Harbro meeting Mrs Hampton's petrol costs.(iii) The proceeds of sale of items sold by Harbro but belonging to Mr Hampton 15. This claim has been settled on the basis that Harbro acknowledges that it owes Mr Hampton £273.
(iv) Delivery up of various items of computer hardware and the multipac programme software which Mr Hampton says belongs to him 16. In his final submissions, Mr Goldberg did not formally abandon the claim for delivery up of the software but acknowledged that realistically that claim may be confined to £50 in lieu which was the amount that...
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