Scientific Ltd and David Thomas and Barbara Anne Thomas and Paul Downes
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE RICHARDS,Mr Justice Richards |
| Judgment Date | 11 January 2005 |
| Neutral Citation | [2005] EWHC 7 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ04X03011 |
| Date | 11 January 2005 |
[2005] EWHC 7 (QB)
HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand, London WC2A 2LL
QUEEN'S BENCH DIVISION
The Honourable Mr Justice Richards
Case No: HQ04X03011
Paul Downes (instructed by Gateley Waring) for the claimant
Nicholas Bard (instructed by Warners) for David Thomas
William H Henderson (instructed by Druces & Attlee) for Barbara Anne Thomas
Hearing dates: 17 and 18 November and 6 December 2004
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.
Mr Justice Richards
These are applications by the claimant, LTE Scientific Ltd (LTE) to commit the defendants, Mr and Mrs Thomas, for contempt of court.
The background is that Mr Thomas sold his business to LTE in 2001 on terms that included restrictive covenants. LTE alleges that he has been working for competitors in breach of one of those covenants. He accepts that he has been working as a consultant for a competing company called Astell Scientific Ltd (Astell) in prima facie breach of the covenant, but he disputes the validity of the covenant. LTE also alleges that Mr Thomas worked for another competing company, called ESTS (GB) UK Limited (ESTS). He denies this. There are other claims which it is unnecessary to recite.
In the course of proceedings relating to the alleged breaches of covenant, LTE obtained an interim injunction against Mr Thomas and disclosure orders against both Mr and Mrs Thomas. The matters before me are concerned only with the disclosure orders.
The most convenient way to deal with the issues that arise is to set out first the general factual framework, then to consider certain specific areas of factual dispute, before turning to the legal implications of the facts as I find them.
General factual framework
On Tuesday 14 September 2004 LTE applied without notice for a search order against Mr Thomas. This was refused by McCombe J. But the following day, Wednesday 15 September, the judge granted a disclosure order against Mr Thomas. The order included a penal notice in the usual form:
"IF YOU DAVID ANTHONY THOMAS DISOBEY THIS ORDER YOU MAY BE HELD TO BE IN CONTEMPT OF COURT AND MAY BE IMPRISONED, FINED OR HAVE YOUR ASSETS SEIZED.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS THE RESPONDENT TO BREACH THE TERMS OF THIS ORDER MAY ALSO BE HELD TO BE IN CONTEMPT OF COURT AND MAY BE IMPRISONED, FINED OR HAVE THEIR ASSETS SEIZED."
Relevant terms of the order included the following:
"4. This order must be complied with by—
(a) the Respondent;
…….
(c) if the Respondent is an individual, any other person having responsible control of the items to be disclosed.
……..
DELIVERY UP OF COMPUTERS, LAPTOPS AND ELECTRONIC STORAGE DEVICES.
6. The Respondent must immediately deliver up any computers, laptops and/or electronic storage devices located or situated at the premises listed in Schedule A ("the premises") or otherwise in his possession or control to the Supervising Solicitor.
7. The Respondent must permit the Supervising Solicitor to take the computers, laptops and/or electronic storage devices away and deliver them to the IT specialist for no longer than is necessary in order to take a forensic copy, being for the avoidance of doubt a mirror image, bit for bit copy and not merely a ghost copy, of all documents contained in the hard drives of computers, laptops and/or electronic storage devices located or situated at the premises. The copying must take place in the presence of the Supervising Solicitor. All reasonable steps shall be taken by the IT specialist to ensure that no damage is done to any computer or data.
……..
DELIVERY UP OF ARTICLES/DOCUMENTS
9. The Respondent must immediately hand over to the Applicant's solicitors any of the items listed at Schedule B, which are in his possession or under his control ("the listed items") …
…….
PROVISION OF INFORMATION
12. The Respondent must immediately inform the Applicant's Solicitors (in the presence of the Supervising Solicitor) so far as he is aware:
(a) where all the listed items are;
(b) the name and address of everyone who has supplied him, or offered to supply him, with listed items;
(c) the name and address of everyone to whom he has supplied, or offered to supply, listed items; and
(d) full details of the dates and quantities of every such supply and offer.
……….
PROHIBITED ACTS
14. Except for the purpose of obtaining legal advice, the Respondent must not directly or indirectly inform anyone of these proceedings or of the contents of this order, or warn anyone that proceedings have been or may be brought against him by the Applicant until 4.30 pm on the return date or further order of the court."
The "Supervising Solicitor" was defined in paragraph 5 as Mr Nicholas Carter, who gave the usual undertakings to the court, including an undertaking to "offer to explain to the person served with the order its meaning and effect fairly and in everyday language" and an undertaking to retain the items in the safe keeping of his firm until the court directed otherwise. The "Applicant's Solicitors" were defined as Mr Stephen Goodrham and Miss Louise Costello of Gateley Waring, the claimant's solicitors in these proceedings. The premises listed in Schedule A were the defendants' home, which is at Caldecott, near Market Harborough in Leicestershire. The listed items in Schedule B included documents relating to contracts or financial transactions with ESTS or Astell.
Paragraph 17 provided that the order might only be served between 9.30 am and 5.00 pm on a weekday and that it had to be served by the Supervising Solicitor.
At about 4.55 pm on 15 September, Mr Carter, together with Mr Goodrham and Miss Costello, attended at the defendants' home. Mrs Thomas was at home, Mr Thomas was not. Mr Carter handed over to Mrs Thomas the disclosure order and accompanying documents and explained to her the nature of the requirements imposed by the order, including the requirement to hand over computers and laptops and to hand over certain documents. He told Mrs Thomas that there were terms with which she might well be required to comply even in the absence of her husband, and drew her attention to paragraph 4(c). She was given an opportunity to take legal advice, but it took some time before her solicitor got back to her. During this time Mr Goodrham and Miss Costello had been waiting outside in the car. At about 7.00 pm Mr Carter brought them back to the house and there was a conversation outside the house with Mrs Thomas.
Mr Carter invited Mrs Thomas in the light of paragraph 12 of the order to inform the claimant's solicitors of the matters set out in that paragraph. Mrs Thomas said that she could not produce what she did not have and that there were no documents in the house that fell within any of the categories listed; nor did she have any knowledge of the whereabouts of any of the documents. Mr Carter then asked her to explain her position in relation to any computers. She said that her husband had a laptop with him in his car which he used for business purposes and that the only computers in the house were her personal computer, which she used for the purpose of emails, and the children's computers which they used for playing games. She said that she was not prepared to hand over those computers. Mr Goodrham asked if she was aware of the penal notice, to which she replied "I suppose I will be locked up …"
Mr Carter and the claimant's solicitors then left the defendants' home at about 7.15 pm. Immediately afterwards, by a telephone application, LTE obtained a further order from McCombe J in these terms:
"1. The time for service and execution of the disclosure order and interim injunction ordered by McCombe J on 15 September is extended to 9.00 pm on 15 September 2004.
2. After 9.00 pm and no later than 11.00 pm on 15 September 2004 personal service of the disclosure order and interim injunction may still be effected upon the Respondent outside the Respondent's premises [ie their home].
3. Service may otherwise be effected by posting the disclosure order and interim injunction through the letter box of the Respondent's premises."
Mr Carter and the claimant's solicitors waited outside the defendants' home until about 9.30 pm in order to effect personal service on Mr Thomas if he returned home. Thereafter a process server was instructed to wait outside. Mr Thomas did not, however, return home that night. The claimant's case is that he stayed away deliberately in order to avoid service of the order upon him. His case is that he visited his parents that evening (his mother was dying of cancer) and stayed overnight at their house because, by the time he learnt of the order, he had been drinking wine and it was unsafe for him to drive home. That is an issue considered in detail below. In considering it I shall also need to consider the evidence concerning communications by telephone between Mr and Mrs Thomas and between Mr Thomas and Mr Pennock (chairman of Astell) in the late afternoon and evening of 15 September.
The following morning, Thursday 16 September, Mr Thomas went straight from his parents' home to the premises of Astell. Again I shall consider his movements further when dealing with the issue of alleged evasion of service.
The same morning, at about 10.00 am, the process server served the disclosure order through the letterbox of the defendant's home in accordance with paragraph 3 of McCombe J's second order of 15 September.
In the course of 16 September LTE obtained a further disclosure order from McCombe J,...
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