Inplayer Ltd (Formerly Invideous Ltd) and Others v Jack Thorogood
| Jurisdiction | England & Wales |
| Judge | Lord Justice Jackson,Lord Justice Lewison,Lord Justice Treacy |
| Judgment Date | 25 November 2014 |
| Neutral Citation | [2014] EWCA Civ 1511 |
| Docket Number | Case No: A3/2014/0700 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 November 2014 |
[2014] EWCA Civ 1511
Lord Justice Jackson
Lord Justice Lewison
and
Lord Justice Treacy
Case No: A3/2014/0700
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MRS JUSTICE ROSE
HC13F00948
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Julian Milford (instructed by Lewis Silkin) for the Respondents
Mr Adam Tear (instructed by Duncan Lewis) for the Appellant
Hearing date: 21 st October 2014
This judgment is in six parts:
| Part 1. Introduction | Paragraphs 1 to 7 |
| Part 2. The facts | Paragraphs 8 to 16 |
| Part 3. The present proceedings | Paragraphs 17 to 31 |
| Part 4. The appeal to the Court of Appeal | Paragraphs 32 to 51 |
| Part 5. The appellant's skeleton argument | Paragraphs 52 to 57 |
| Part 6. Executive summary | Paragraphs 58 to 62 |
This is an appeal against a decision that the first defendant in a chancery action is guilty of two contempts of court by reason of untruthful statements in his affidavit. The main issue is whether the judge's findings of contempt can stand despite a number of procedural irregularities which are now admitted.
The claimants in the action and the respondents to this appeal are (1) Invideous Ltd ("Invideous"), (2) Invideous Dooel-Skopje ("IDS") and (3) Pierre Andurand ("Mr Andurand"). Invideous Ltd changed its name to Inplayer Ltd on 2 nd October 2014. I shall continue to refer to that company by its original name.
The defendants in the action are (1) Jack Thorogood ("Mr Thorogood"), (2) NOVP Dooel-Skopje ("NDS"), (3) Igor Micov ("Mr Micov"), (4) NOVP Ltd ("NOVP") and (5) NOVP LLC ("NL"). Mr Thorogood is the only defendant alleged to have been in contempt. He alone is appellant in this court.
Other companies who will feature in the narrative are Dolphin Television Ltd ("Dolphin") and Technicolor Media Services Limited ("Technicolor").
I shall refer to the European Convention on Human Rights as "ECHR". The ECHR article 6 provides:
" Right to a fair trial
1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.
…
3. Everyone charged with a criminal offence has the following minimum rights:
(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
(b) to have adequate time and facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;"
After these introductory remarks I must now turn to the facts.
Invideous Ltd ("Invideous") was incorporated on 1 st July 2010. The business of Invideous was concerned with monetising video content on the internet. The nature of that business is more fully described in paragraphs 8 to 12 of the judgment below, but the details are not relevant to the present appeal.
Invideous had a wholly owned subsidiary company, Invideous Dooel-Skopje ("IDS"), which was incorporated in Macedonia. IDS employed the technical people who designed and developed the products which Invideous marketed in the UK. Mr Igor Micov was the manager of IDS in Macedonia.
There were four principal shareholders of Invideous namely Mr Jack Thorogood, Mr David Goffin, Mr John Doyle and Mr Michael Wells. Mr Thorogood, Mr Goffin and Mr Wells were directors of the company.
Mr Thorogood was the active director of Invideous, who worked full time for the company and oversaw its operations. The other directors and shareholders provided financial backing through the medium of a company which they controlled called Dolphin Television Ltd ("Dolphin"). Between July 2010 and June 2011 Dolphin made interest free loans totalling £467,000 to Invideous.
In June 2011 a potential investor, Pierre Andurand, came onto the scene. Nicolas Granatino, an associate of Mr Andurand, approached Mr Thorogood. He said that Mr Andurand was willing to invest £900,000 in the business. A period of discussion and negotiations then followed.
On 22 nd November 2011 Mr Thorogood entered into a written service agreement with Invideous, setting out his obligations as director. Mr Thorogood was also appointed manager of IDS. In December 2011 Mr Andurand invested the promised £900,000 in Invideous. On 8 th December 2011 Mr Doyle, Mr Goffin, Mr Wells, Mr Andurand, Mr Thorogood and Invideous entered into a shareholders' agreement. Under that agreement Mr Goffin and Mr Andurand each held 30% of the shares of Invideous. Mr Thorogood held 11.65 %.
During 2012, unknown to the other directors and shareholders, Mr Thorogood and Mr Micov set up another business operating in the same field as Invideous. Mr Thorogood established three companies to run the new business. They were NOVP Ltd ("NOVP"), a UK company, NOVP Dooel-Skopje ("NDS"), a company incorporated in Macedonia, and NOVP LLC ("NL"), a company incorporated in Delaware, USA. Mr Micov became the manager of NDS. I shall refer to the new business operation which Mr Thorogood and Mr Micov set up as the "NOVP business".
In February 2003 there was a falling out between Mr Thorogood and his colleagues in Invideous. On 25 th February 2013 Mr Thorogood resigned as a director of Invideous. On 28 th February 2013 he resigned as director of IDS.
At about the same time the other directors of Invideous discovered about the NOVP business which Mr Thorogood had been operating since 2012. They took the view that this was a serious breach of his duties as director and under the shareholders' agreement. Accordingly they commenced the present proceedings.
On 1 st March 2013 Invideous, IDS and Mr Andurand made a "without notice" application for an injunction. The matter came before Mr Justice Mitting, who granted an interim injunction restraining Mr Thorogood from competing with the claimants and requiring him to deliver up all material belonging to the claimants.
On 8 th March 2013 the claimants issued a claim form in the Chancery Division of the High Court, naming Mr Thorogood as first defendant, NDS as second defendant and Mr Micov as third defendant. Shortly afterwards they joined NOVP as the fourth defendant and NL as fifth defendant.
The return date for the interim injunction was 8 th March 2013. There seems to have been a short delay. The next hearing took place on 11 th March. On that occasion the court made an order by consent continuing the injunction until trial or further order. This order plays a crucial role in the present appeal. I shall refer to it as "the consent order". Paragraph 8 of the consent order provided:
"The First Defendant do within 7 (seven) days of the date of this order provide and swear an Affidavit detailing each and every breach by him of the Shareholders' Agreement, including:
a. Details of discussions or correspondence (in any form) that the First Defendant (or anyone acting on his instructions or on his behalf) has had with each employee of the First and/or Second Claimants in the preceding 6 months in connection either with the termination of their employment with the First and/or Second Claimants or any offer of employment with the Second Defendant;
b. Details of any discussions or correspondence (in any form) that the First Defendant (or anyone acting on his instructions or on his behalf) has had with any client or partner of the First and/or Second Claimants in connection either with the termination of the provision of services to that client or partner by the First and/or Second Claimants, or in connection with the transfer (or possible transfer) of that client or partner's business to the Second Defendant or any other business (including, for the avoidance of doubt, any attempt by the First Defendant (or anyone acting on his instructions or on his behalf) to solicit or entice the client or partner to do business with someone other than the First and/or Second Claimants (whether that attempt was successful or not)."
On 15 th March 2013 Mr Thorogood filed an affidavit, as required by paragraph 8 of the consent order. In paragraph 10 he stated:
"NOVP did not begin trading until November 2012. Until very recently, it has had only one client, and that client is not a client of IL or ID (nor has it ever had any connection with IL or ID)."
It is common ground that the client to whom Mr Thorogood was referring in that paragraph was Technicolor.
In paragraph 14 of his affidavit Mr Thorogood stated that he had terminated the employment of numerous employees of IDS in or around February 2013. He gave the names of those employees and summarised the conversations which he had had with each person.
On 28 th March 2013 Mr Justice Sales made an order reformulating the existing injunction, so as to clarify what Mr Thorogood was prohibited from doing. Paragraph 15 of Mr Justice Sales' order stated that a business would be in competition with Invideous if it involved:
"The provision to clients of online video platforms and/or online video platform services, including, in the context of provision of such platforms, and/or services, online pay-per-view, online advertising software, monetization solutions, online storage, transcoding, embeddable players,...
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