Illiquidx Ltd v Altana Wealth Ltd
| Jurisdiction | England & Wales |
| Judge | Master McQuail |
| Judgment Date | 19 March 2021 |
| Neutral Citation | [2021] EWHC 647 (Ch) |
| Date | 19 March 2021 |
| Docket Number | Case No: IL-2020-000079 |
| Court | Chancery Division |
[2021] EWHC 647 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELECTUAL PROPERTY LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Deputy Master McQuail
Case No: IL-2020-000079
Douglas Campbell QC and Daniel Selmi (instructed by Waterfront Solicitors LLP) for the Claimant
Tom Moody-Stuart QC and Ben Longstaff (instructed by Fieldfisher LLP) for the Defendants
Hearing date: 19 February 2021
Approved Judgment
Introduction
This is the Claimant's application for permission to amend its Particulars of Claim (“POC”). The application notice was issued on 5 January 2021. The brief evidence in support of Piers Strickland, partner with Waterfront Solicitors LLP who represent the Claimant, was included in the application notice.
The Defendants' solicitor, James Seadon of Fieldfisher LLP, filed a witness statement opposing the application dated 5 February 2021.
This prompted the service of witness statements in response on behalf of the Claimant made by Galina Alabatchka, a director of the Claimant, and by Piers Strickland both dated 12 February 2021.
The Claimant brings this action against the Defendants for breach of contract, breach of confidence, breach of trade secrets and copyright infringement relating to investment opportunities in Venezuela. The relief sought includes declaratory and injunctive relief, delivery up of material including confidential information or trade secrets and an inquiry as to damages or an account of profits.
The Claim Form was issued on 27 July 2020 and the POC bear the same date. The POC attach Confidential Annexes 1 to 7. The original Claim Form stated that no damages were being sought in the first instance and therefore that only the non-money claim court fee needed to be paid.
The Defendants served a Defence dated 22 October 2020 which attached Confidential Annexes 1 to 6. The Defendants served a Part 18 Request and a Notice to Admit Facts on the same date.
The Claimant responded to the Part 18 Request on 5 November 2020.
The Claimant formulated an Amended Claim Form now stating that the value of the damages claim was in excess of £10 million thus attracting a higher Court Fee and also proposed draft Amended Particulars of Claim (“APOC”) attaching Amended Confidential Annexes 1 to 6.
There was no objection to the Amended Claim Form and it was sealed on 12 January 2021.
The most significant proposed amendment in the APOC is to re-plead the allegation of breach of confidence in a manner said to be based upon the case of CF Partners (UK) LLP v Barclays Bank Plc & Ors [2014] EWHC 3049 (Ch) (“ CF Partners”) which the Claimant says is a case with numerous parallels to its claim.
In summary the amendments to the Claimant's breach of confidence case (and consequently to the claim to protection of its trade secrets) plead a “Big Idea” and underlying “Detail” using those terms as they are said to have been used in CF Partners. The Claimant says that the substance of its case has not changed.
The Notice to Admit was answered by the Claimant on 12 February 2021.
Permission to Amend
CPR 17.1(2) provides that once a party has served its statement of case it may only amend it with the written consent of the other parties or with the permission of the Court.
The notes at White Book 2020 17.3.5 point out that in considering whether to exercise its discretion to allow an amendment the Court must have regard to the matters mentioned in CPR r.1.1(2) in order to deal with the case justly and at proportionate cost.
The notes in the following paragraph refer to the case of SPR North Ltd v Swiss Post International (UK) Limited [2019] EWHC 2004 (Ch) which confirms that if an application to amend is opposed the test to be applied is that applicable to an application for summary judgment. The question is whether the proposed new claim has a real prospect of success.
The Defendants' substantial objection to the breach of confidence/trade secrets amendments is not that the proposed amended claim does not have a real prospect of success, although they would say that also, but that they fail adequately to particularise the Claimant's claim in confidential information or trade secrets and therefore constitute an abuse and the amendments should not be allowed for that reason. Implicit in what they say is that if the amendments were to be allowed a successful application to strike them out would follow.
Pleading Breach of Confidence
Mr Campbell QC and Mr Moody-Stuart QC referred me to the judgment of Laddie J in Ocular Sciences v Aspect Vision Care (No. 2) [1997] RPC 289, 359–360. The Judge there pointed out that the rules as to the proper particularity of pleading apply to breach of confidence claims as they apply to all other proceedings, that the potential for breach of confidence actions to be used to oppress or harass competitors is well recognised and that the courts are careful to ensure claimants give full and proper particulars of all confidential information on which they intend to rely. The Judge referred to the John Zink case in which the Court of Appeal [1973] RPC 717 ordered particulars before defence and the High Court [1975] RPC 385 subsequently struck the claim out. The Judge went on:
“if a plaintiff wishes to seek relief against a defendant for misuse of confidential information it is his duty to ensure that the defendant knows what information is in issue. This is not only for the reasons set out by Edmund Davies L.J. in John Zink but for at least two other reasons. First, the plaintiff usually seeks an injunction to restrain the defendant from using its confidential information. Unless the confidential information is properly identified, an injunction in such terms is of uncertain scope and may be difficult to enforce: See for example P.A. Thomas & Co. v. Mould [1968] 2 Q.B. 913 and Suhner & Co. AG v. Transradio Ltd. [1967] R.P.C. 329. Secondly, the defendant must know what he has to meet. He may wish to show that the items of information relied on by the plaintiff are matters of public knowledge. His ability to defend himself will be compromised if the plaintiff can rely on matters of which no proper warning was given. It is for all these reasons that failure to give proper particulars may be a particularly damaging abuse of process.
“These principles do not apply only to the question of the content of the pleadings. Just as it may be an abuse of process to fail properly to identify the information on which the plaintiff relies, it can be an abuse to give proper particulars but of information which is not, in fact, confidential. A claim based even in part on wide and unsupportable claims of confidentiality can be used as an instrument of oppression or harassment against a defendant. It can be used to destroy an ex-employee's ability to obtain employment or a competitor's ability to compete. The wider the claims, the longer and more expensive the litigation.”
Mr Moody-Stuart QC submitted that the terms of the Disclosure Pilot including the need to identify issues for disclosure is a further reason for requiring proper particularity in pleadings.
He also pointed out that the judgment of Arnold LJ in Celgard v Shenzhen Senior Technology [2021] F.S.R. 1 makes clear that the considerations identified by Laddie J in Ocular Sciences apply with equal force to claims brought under the Trade Secrets Regulations as they do to claims brought in equity.
CF Partners
In CF Partners the Claimant claimed damages in relation to the misuse of confidential information in the context of the acquisition by the First Defendant (Barclays) of the Second Defendant (Tricorona). CFP said that Barclays had misused information that it had given to Barclays subject to a duty of confidence, when Barclays was a client seeking lending facilities and advice, and had subsequently exploited the information to acquire Tricorona for itself.
The Claimant says that is parallel to the situation here.
Mr Campbell QC referred me to paragraphs 124–126 of the judgment of Hildyard J in CF Partners as setting out the relevant law on duties of confidence:
“124 The basic attribute or quality which must be shown to attach to the information for it to be treated as confidential is inaccessibility: the information cannot be treated as confidential if it is common knowledge or generally accessible and in the public domain. Whether the information is so generally accessible is a question of degree depending on the particular case. It is not necessary for a claimant to show that no one else knew of or had access to the information.
“125 A special collation and presentation of information, the individual components of which are not of themselves or individually confidential, may have the quality of confidence: for example, a customer list may be composed of particular names all of which are publicly available, but the list will nevertheless be confidential. In the Saltman case (supra) Lord Greene MR said:
““…it is perfectly possible to have a confidential document, be it a formula, a plan, a sketch, or something of that kind, which is the result of work done by the maker on materials which may be available for the use of anybody; but what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same...
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