Personal Management Solutions Ltd and Another v Brakes Bros. Ltd and Others

JurisdictionEngland & Wales
JudgeJudge Curran QC
Judgment Date24 October 2014
Neutral Citation[2014] EWHC 3495 (QB)
Docket NumberCase No: HQ14X01581
CourtQueen's Bench Division
Date24 October 2014

[2014] EWHC 3495 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

His Hon Judge Curran QC

sitting as a judge of the High Court

Case No: HQ14X01581

Between:
(1) Personal Management Solutions Limited
(2) Personal Group Benefits Limited
Claimants
and
(1) Brakes Bros. Limited
(2) Gee 7 Group Limited
(3) Gee 7 Wealth Management Limited
(4) Mark Eaton
Defendants

Andrew Stafford QC and Simon Goldberg instructed by McDaniel & Co. for the claimants

Michael Lee instructed by Wragge Lawrence Graham & Co LLP for the second, third and fourth defendants

Hearing dates: 15, 16, 17 & 18 July 2014

Introduction

Subject

Paragraphs

The nature of the case and introductory observations

1–2

The need for care in balancing confidentiality & competition

3–5

Burden and standard of proof and other general points

6–9

Background and chronology

The principal parties

10–14

The fourth defendant

15–26

The first defendant company

27–28

Personal Group's investigation into Mr Eaton's activities

29–30

The disciplinary hearing and the undertaking

31–36

Mr Eaton's move to Gee 7

37–40

Transmission of the PG contract by Brakes to Gee 7

41

Brakes' contract with Gee 7

44

Brakes' transmission of the List to Gee 7

45

Brakes' invitation to PG to re-tender

49–51

Mark Wilson

52–56

Brakes' letter to employees of 21 st of January 2014

57

The alphabetically re-arranged version of the List

58

Agreed Issues

The list of agreed issues

62

The witnesses

Guidance on appraisal of the evidence of the witnesses

64–66

The rival contentions as to the witnesses

67–75

Mr Rooney

77

Mr Scanlon

78–79

Mr Wilson

80–92

Mr Eaton

93–102

Mr Pardoe

103–105

Ms Atkins

106

Issues of fact and findings of fact

The importance of background

107

When and why Mr Pardoe and Mr Eaton met in 2011

108–113

Conclusions on the Pardoe-Eaton meeting in July 2011

114–119

The reason for Mr Eaton's resignation from Personal Group

120–121

Summary of the circumstances in respect of the resignation

122–123

Brakes' provision of the PG contract to Gee 7

124–132

The evidence on the provision of the List by Brakes to Gee 7

133–137

Conclusions on the reason for the sending of the List

138–147

Actual use of the List

148–156

Provision of the re-arranged List to Mr Eaton and Ms Atkins

157–160

The law

Robb v Green

161

Saltman Engineering

162

Coco v Clark

163

' Spycatcher'

164–169

Faccenda v Fowler

170–171

Lansing Linde v Kerr

172

Imerman v Tchengui

173

Royal Brunei v Tan

174

Vestergaard

175

Primary Group

176–177

Authorities on unenforceability for restraint of trade

178–185

The Kanchenjunga , and estoppel or waiver

186–188

Specific performance

189

Principles applicable to this case

190

Conclusions on the main issues in the case

Whether the List was the claimants' information

191–193

Conclusions on the List as the claimants' information

194–195

Whether the List was information of a confidential character

196

Gee 7's 'conscience' in respect of the List

197–200

Gee 7's use of the List to target the claimants' policyholders

201

No countervailing public interest

202

The claimants' entitlement to an injunction or other relief

203–204

Damages

205–206

'Clean hands'

207–215

Enforceability of Mr Eaton's undertaking

216–225

Waiver, equitable estoppel, and related issues

226–235

Further or other relief against the Fourth Defendant

236

Postponement of the assessment of damages

237

Judge Curran QC

Introduction

1

This is an action by two associated claimant companies (together "Personal Group") for damages and for other relief. The claims have been consolidated as each is concerned with the alleged misuse of Personal Group's confidential information by the second and third defendant companies, through the agency of the first and fourth defendants, by receiving, disseminating and making use of a list of customers of the claimants ("the List") who were employees of the first Defendant company.

2

The second and third defendant companies (together "Gee 7") are associated entities which their managing director, Mr Jon Pardoe, described as being a small but increasingly successful competitor to Personal Group. They competed in particular for the 'employee benefits' insurance business of the first Defendant company. Mr Pardoe said that by this litigation and other means Personal Group were attempting to crush Gee 7 at an early stage in its development.

3

That suggestion raises at the outset the need for a cautious approach by the court. This was a point which Arnold J considered in Vestergaard Frandsen A/S & Ors v Bestnet Europe Ltd & Ors [2009] EWHC 657 (Ch) at first instance. He said, at paragraph 104,

'I entirely accept that, as Laddie J said in Ocular Sciences Ltd v Aspect Vision Care Ltd & Ors [1997] RPC 289, at 359,

"… it is well recognised that breach of confidence actions can be used to oppress and harass competitors and ex-employees."

'It follows that the courts must scrutinise such claims with care to see if they are well-founded or not, which is what I intend to do in the present case. It does not follow that all such claims are unfounded and harassing claims.'

4

Moreover, in the Supreme Court in Vestergaard Frandsen A/S & Ors v Bestnet Europe Ltd & Ors [2013] 1 WLR 1556 Lord Neuberger, with whom all the other members of the court agreed, said at paragraph 44:

'… in a modern economy, the law has to maintain a realistic and fair balance between (i) effectively protecting trade secrets (and other intellectual property rights) and (ii) not unreasonably inhibiting competition in the market place. The importance to the economic prosperity of the country of research and development in the commercial world is self-evident, and the protection of intellectual property, including trade secrets, is one of the vital contributions of the law to that end. On the other hand, the law should not discourage former employees from benefiting society and advancing themselves by imposing unfair potential difficulties on their honest attempts to compete with their former employers.'

5

In approaching the issues I bear those observations firmly in mind, in particular as Mr Pardoe of the second and third defendant companies, and the Fourth Defendant, Mr Eaton, are ex-employees of Personal Group, now in competition with them.

6

I also bear in mind throughout that the burden of proof lies upon Personal Group of the facts relied upon by them. The standard of proof they must achieve is to satisfy the court on the balance of probabilities.

7

This judgment is unavoidably lengthy. Whilst the hearing occupied only four days, the case involved several thousand pages of documents, in many lever-arch files. At my request these were reduced, through the industry of all counsel, to a Core Bundle of some 600 pages, in two volumes, which are together referred to as " CB". Helpful opening and closing skeleton arguments were submitted, totalling almost 100 pages. In addition, a lever-arch file of authorities was produced, containing 25 reported cases. I was also grateful to be provided with four volumes of daily transcripts of evidence and argument. There are very many issues of fact and law which require resolution, and as counsel repeatedly stressed on both sides, it is impossible to define the issues without detailed examination of the background which provides the context within which those issues arose.

8

The general background and sequence of events set out in the next Part consists mainly of matters which are common ground: indeed, much of it is indisputable. Also included, however, are facts asserted by one party which do not appear to be contested by another, and vice versa. In addition, reference is made to the documentary evidence: in some instances, when a document may not have been specifically referred to in the oral evidence, for example, the page reference in the Core Bundle used at trial is given. Where possible, however, the full terms of any important piece of such documentary evidence are set out below, and reference to the bundles should be unnecessary.

9

I shall deal with such disputed matters of fact as are relevant to the issues in the case in a separate section of this judgment.

Background and Chronology

10

Personal Group Holdings is the holding company for a number of subsidiary companies, including the two claimant companies, which are active in the employee benefits and financial services industry. The business was founded some 25 years ago as a general insurance company but, as Mr Kenneth Rooney its deputy chairman said, in recent times it has concentrated on the provision of employee benefits insurance packages ("EBPs") to the employees of client companies and other businesses. Personal Group Holdings floated on the Alternative Investment Market in 2000.

11

Mr Pardoe, now of Gee 7, began work in the financial services industry in 1986. In June 1991 he set up his own company, called Berkeley Morgan. Berkeley Morgan expanded and, Mr Pardoe said, had a turnover in excess of £16m at its peak. A cash offer for the business was received from Personal Group in December 2004. Mr Pardoe had been Chairman and Managing Director of what had become Berkeley Morgan Group Plc. After Personal Group bought the business he carried on as the managing director of Berkeley Morgan and he also became a main board director of Personal Group, until July 2006 when he left.

...

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2 cases
  • Aviva Insurance Ltd v David Oliver
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 11 November 2019
    ...review of the applicable law set out by HH Judge Curran QC in Personal Management Solutions Ltd & another v Brakes Bros Ltd & others [2014] EWHC 3495 (QB) at [161] – [190]. There is liability for breach of confidence if there is unauthorised use of information which is confidential in natu......
  • Adinop Co Ltd v Rovithai Ltd and another
    • Singapore
    • High Court (Singapore)
    • 30 May 2018
    ...would be as comprehensive as the Key Customers List. In Personal Management Solutions Ltd and another v Brakes Bros Ltd and others [2014] EWHC 3495 (QB) (“Personal Management Solutions”), two associated claimant companies brought claims in respect of the defendants’ misuse of their group’s ......

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