Kieran Corrigan & Company Ltd v Onee Group Ltd
| Jurisdiction | England & Wales |
| Judge | Jonathan Hilliard |
| Judgment Date | 23 March 2023 |
| Neutral Citation | [2023] EWHC 649 (Ch) |
| Docket Number | Case No: BL-2020-001626 |
| Court | Chancery Division |
[2023] EWHC 649 (Ch)
Jonathan Hilliard KC sitting as Deputy Judge of the High Court
Case No: BL-2020-001626
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Jonathan Hill (instructed by TLT LLP) by the Claimant
Martin Budworth (instructed by Lawbriefs Ltd) for the Defendants
Hearing dates: 12–16 December 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Jonathan Hilliard KC sitting as Deputy Judge of the High Court:
Introduction and summary of conclusions
This claim is for misuse of information relating to the creation of a possible tax mitigation scheme by the Claimant, Kieran Corrigan & Co Ltd.
The claim is that in conjunction with experienced tax counsel, Michael Sherry, the Claimant devised a structure with several variants (the “Structure”) using the research and development ( “R&D”) relief provisions of the Corporation Tax Act 2009 (the “2009 Act”), that information relating to this structure was confidential, and that the Defendants have misused this information to their advantage to promote a structure of their own, which I shall refer to as the “Nemaura structure”. The Claimant therefore claims relief for (a) breach of confidence, (b) procuring breach of a contract, namely the non-disclosure agreement ( “NDA”) between the Claimant and a company in the First Defendant's group), and (c) unlawful means conspiracy. The relief sought in the Particulars includes a claim for an injunction and an order for delivery up, but they were dropped at trial, leaving a claim for an inquiry as to damages or equitable compensation, or at the Claimant's option an account of profits, together in either case with an order for payment of all sums found to be due pursuant to the inquiry or account.
Master Clark ordered on 18 November 2021 that there should be a split trial, with liability and quantum being decided separately. The hearing before me, which took place on 12 to 16 December 2022, dealt with liability only. I emphasise that and shall return to that point at the end. I asked during the trial for a number of written documents to be prepared, and the parties provided them to me after the conclusion of the trial, including an 11 January 2023 note on the relevant corporate tax analysis. I have carefully taken account of all the written and oral submissions, including the elegant closing submissions of Mr Budworth.
In my judgment:
(1) The First, Third and Fourth Defendants are liable for breach of confidence, but the Second Defendant, Mr Timol is not.
(2) The First, Third and Fourth Defendants are liable for unlawful means conspiracy in respect of acts committed on or after 5 October 2014. Again, the Second Defendant, Mr Timol is not.
(3) The Defendants are not liable for procuring breach of contract.
Structure of the judgment
I shall deal with the issues in the following order:
(1) the parties (paragraphs 6 to 10);
(2) the witnesses (paragraphs 11 to 14);
(3) summary of other matters dealt with at trial (paragraphs 15 to 17);
(4) the relevant corporation tax legislation (paragraphs 18 to 48);
(5) the relevant background facts (paragraphs 50 to 148);
(6) my impressions of the witnesses (paragraphs 149 to 164);
(7) my findings on some of the key factual issues (paragraphs 165 to 176);
(8) the legal principles to be applied (paragraphs 177 to 204);
(9) application of the legal principles to the facts (paragraphs 205 to 342);
(10) the correct court fee (paragraphs 343 to 375);
(11) the costs of the application in relation to the re-amended witness statements (paragraphs 376 to 380);
(12) remaining matters to be dealt with within the proceedings (paragraphs 381 to 383).
The parties
The Claimant, Kieran Corrigan & Co Ltd, is an Irish company, incorporated on 23 November 1998, that specialises in accountancy and tax advisory services. Its managing director and majority shareholder is Kieran Corrigan, who is a chartered accountant and barrister. He was a lecturer in tax law at Trinity College, Dublin from 1981 to 2007, established the tax course at University College, Dublin, and has written a two volume book on Irish revenue law.
The First Defendant, OneE Group Ltd ( “OneE Group”), is an English company, incorporated on 30 January 1997, that is the parent of a group of companies which collectively develops and markets tax efficient investment products. Three of the subsidiaries of Group, all of which are English companies, are (1) OneE Tax Ltd ( “OneE Tax”), incorporated on 1 June 2006, which was a party to the NDA referred to above but entered voluntary liquidation on 10 March 2015, (2) OneE Consulting Ltd ( “OneE Consulting”), incorporated on 20 September 2012, which the Defendants allege developed the Nemaura structure, and (3) OneE Investments Ltd ( “OneE Investments”), which the Defendants allege promoted the Nemaura structure. Where the evidence does not refer to a specific OneE group company, I shall simply refer to “OneE” in this judgment.
The Second Defendant, Bashir Timol, has been a director of OneE Group from 30 January 2007 to date, was a director of OneE Tax from 1 June 2006, was a director of OneE Consulting from 20 September 2012 to 15 July 2014, and was a director of OneE Investments from 16 August 2013 to 1 June 2015.
The Third Defendant, Dominic Slattery, has been a director of OneE Group from 4 August 2014 to date, was a director of OneE Tax from 23 March 2011, has been a director of OneE Consulting from 20 September 2012 to date, and was a director of OneE Investments from 16 August 2013 to date.
The Fourth Defendant, Timothy Johnson, was a director of OneE Consulting from 1 April 2014 to 15 November 2015, and a director of OneE Investments between the same dates. Mr Johnson was an inhouse tax expert at OneE from before 2014 until 31 July 2022.
The witnesses
Mr Corrigan and the Second to Fourth Defendants all gave evidence before me.
The Claimant called one other witness, Michael Sherry, an experienced tax barrister at Temple Tax Chambers. He referred Mr Corrigan to OneE, provided tax advice to the Claimant, and was also approached by OneE Tax in 2013 to provide advice and OneE Investments in 2014.
The Defendants called two other witnesses:
(1) Richard Freeman, a solicitor and chartered tax adviser who worked for OneE as an employee from July 2012 to April 2014 leading its technical team in developing tax strategies for clients across a range of taxes; and
(2) Adam Owens, who was employed by OneE Group from April 2010 to around 2017. He worked initially as a graduate trainee tax assistant, implementing tax advisory solutions, then from around 2012 in a technical development role, providing research and analysis to help develop new tax advisory solutions. Around one to two years after that his role changed to providing more traditional tax consultancy services to OneE's referral network of accountants.
I shall set out my views on the witness evidence after setting out the relevant factual background.
Other points dealt with at trial
This is a convenient point to deal with a number of other issues that arose at trial, including in relation to the Defendants' witness statements. Among other things:
(1) The Defendants' witness statements had all been prepared in a manner that failed to comply with PD57AC in significant respects, and re-amended witness statements had been submitted on 1 December 2022, accompanied by an application for relief from sanctions.
(2) In their skeleton for trial, the Defendants argued for the first time that, while they had been pleaded to in the defence of 17 March 2021 and featured in the list of issues agreed at the 18 November 2021 case and costs management conference, the Claimant should not be allowed to bring claims (b) and (c) in paragraph 2 above. The Defendants' argument was run on the basis that, while these claims had been included in the Claimant's particulars of claim dated 18 January 2021, such claims had not been included in the original claim form dated 5 October 2020. Mr Budworth was not the Counsel for the Defendants at these earlier stages.
(3) The Defendants submitted in opening that the Claimant's claim was a money claim rather than, as the Claimant had assumed, a non-money claim for the purposes of calculating the correct Court fee, so the claim should be stayed if the Claimant did not pay the correct fee by the close of its evidence.
Therefore, I dealt at trial with these and the other issues that arose. Taking the above questions in turn:
(1) Exercising the Court's powers under paragraph 5.2 of Practice Direction 57AC, I ordered that (i) permission to rely on the Defendants' original witness statements be withdrawn, and (ii) the Defendants have permission to rely on its revised witness statements. I also granted liberty to the Defendants under paragraph 4.4 of the Practice Direction to dispense with the certificate of compliance in respect of the short witness statements of Richard Freeman and Adam Owens, given that those statements were not prepared with the input of a legal representative, and that it would assist the Court in determining the correct factual position to have those statements in evidence. I received written submissions on costs following the close of the hearing. I deal with that at paragraphs 376 to 380 below.
(2) As to the argument run in respect of claims (b) and (c), while I understood the point taken by Mr Budworth and that he was not retained at the time of...
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