Seatreiver International Holdings Ltd v Andrew Daly
| Jurisdiction | England & Wales |
| Judge | His Honour Judge,Stephen Davies |
| Judgment Date | 17 September 2018 |
| Neutral Citation | [2018] EWHC 2424 (Ch) |
| Docket Number | Case No: D30MA569 |
| Date | 17 September 2018 |
| Court | Chancery Division |
[2018] EWHC 2424 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS & PROPERTY COURTS IN MANCHESTER
BUSINESS LIST (Ch D)
Manchester Civil Justice Centre,
1 Bridge Street West, Manchester M60 9DJ
HIS HONOUR JUDGE Stephen Davies
SITTING AS A JUDGE OF THE HIGH COURT
Case No: D30MA569
and
Kelly Pennifer (instructed by Pannone Corporate LLP, Manchester) for the Claimant
Martin Budworth (instructed by Birketts LLP, Ipswich) for the Respondents
Hearing dates: 10, 12 September 2018
Draft judgment circulated: 14 September 2018
Judgment Approved
Introductory
In this case the existing claimant and applicant, Seatriever for short, together with the proposed additional claimants, Illoom Balloon Limited and Illoom Balloon USA LLC, seeks interim injunctive relief against the intended additional defendants and respondents, Sun Bay, Jupiter Light and Mr Stieler for short, including a 12-month springboard injunction. Whilst the respondents consent to being joined into the proceedings and do not object to interim injunctive relief being ordered against them as regards their alleged – although disputed — misuse of confidential information, they do object to the springboard injunction and to certain of the ancillary orders sought as regards the disclosure of information. Neither the existing defendants nor the respondents object to the joinder of the additional claimants.
Because the case concerns confidential information, part of the hearing was held in private and other orders have been made to ensure that the claimants' confidential information is not prejudiced.
The application was made on 25 June 2018. It was supported by the third witness statement and the confidential fourth witness statements of Mr Andrew Vickerstaff, Seatriever's in house lawyer and by the second witness statement of Mr Paul Radford, Seatriever's head of finance. It was also accompanied by a draft amended claim form and draft particulars of claim setting out the claimants' case against the respondents.
Because the respondents are two Danish companies and a Danish individual respectively it was necessary for them to be served out of the jurisdiction. Due to difficulties with service the original hearing date of 1 August 2018 had to be vacated and relisted for 10 September 2018. The time allowed was insufficient and the hearing was adjourned part heard to 12 September 2018, with this judgment being circulated in draft prior to 17 September 2018 being the date listed for judgment to be handed down.
The time allowed was insufficient because there was a dispute about the validity of service which had to be determined first and also because in response to the first witness statement of Mr Stieler made on 31 August 2018 in response to the application the claimants served a substantial fifth witness statement from Mr Vickerstaff made on 6 September 2018 and a further sixth witness statement made on 7 September 2018. Although the respondents did not object to the claimants relying on those witness statements nor did they seek an adjournment Mr Budworth did make certain responses to some of their content on instructions and, prior to the resumption of the hearing on 12 September 2018, Mr Stieler made a second witness statement and Mr Vickerstaff made a seventh witness statement on 11 September 2018, both of which were put in evidence without objection by the other side.
I am grateful to the claimants' solicitors for the preparation of the five files containing the evidence and to the respondents' solicitors for their cooperation in that process. I pay tribute to both Ms Pennifer for the claimants and Mr Budworth for the respondents for their skilful deployment of their respective clients' cases. There was no appearance by or on behalf of the existing defendants, Mr Daly and his company AMTD Consultants (Seatriever having already discontinued as against the original second defendant Mrs Daly) with whom the claimants had already reached agreement so far as this application is concerned.
I begin by saying something about the parties and the business in which they are engaged. The claimants are part of a group business, founded and predominantly owned by Mr James Haliburton and now a successful business operating worldwide predominantly in the supply of illuminated party balloons which it markets under the brand name “ILLOOMS”. It has a number of major retail clients both in the UK and USA as well as in Europe and elsewhere, typically large supermarket chains. It also has a number of distributors of its products. The corporate respondents are also part of a group business, founded and solely owned by Mr Stieler and, since 2011 – 2012, one of the claimants' major competitors in the illuminated party balloons business, also supplying illuminated party balloons under various brand names including “WAKADABALLOON” and “Q-LITE”. It appears from the evidence that until 2011 there had been a cooperative relationship between the two businesses in which one of Mr Stieler's companies manufactured balloons for the claimants but in 2011–2012 the relationship came to a fractious end with the claimants transferring to another manufacturer and the respondents beginning to manufacture and sell their rival products. Since that time there has been a history of dispute and litigation between the respective businesses which, fortunately, it is not necessary for me to investigate or detail for the purposes of this judgment.
The existing claim was launched in June 2017 against Mr Daly, who had been Seatriever's global sales director, raising allegations of breach both prior to his departure in March 2017 and subsequently, the latter alleging breach of contractual post termination restraints and misuse of confidential information. Seatriever obtained interim relief on a without notice application on 12 June 2017 which was continued thereafter. Directions were given with a view to a trial taking place in July 2018. At this stage none of the allegations made concerned or involved the respondents in any way. However, as a result of disclosure given by Mr Daly over the period from late March to late May 2018 it was discovered that Mr Daly had been in contact with the respondents in April, May and early June 2017 offering to provide them with confidential information relating to the claimants and to act as their consultant in undertaking business competitive with the claimants.
It was as a result of this discovery that the claimants wrote a detailed letter before action to the respondents on 4 June 2018 setting out their case against the respondents and seeking undertakings in substantially the same form as now claimed. The response from Mr Stieler dated 8 June 2018, which the claimants castigate as wholly inadequate as a response, simply stated that: “I don't recognise these claims you make in your mail and of course can't sign anything”. It was following that response that the instant application was produced and issued.
Subsequent to the issue of the application, Mr Daly made his seventh witness statement on 6 July 2018 in order, as he put it, to “clarify my actions following the termination of my employment with the claimant on 17 March 2017 [and] … to explain my dealings with … [the respondents]”. Although the claimants do not accept that Mr Daly has still fully come clean as to the full extent of his actions they do rely upon this witness statement in conjunction with the disclosed documents in support of its case against the respondents.
The relevant legal principles
It is, unsurprisingly, common ground that the principles established in American Cyanamid v Ethicon Ltd [1975] AC 396 apply. I must be satisfied that the claim for relief is not frivolous or vexatious, in other words that there is a serious issue to be tried. If there is a serious issue to be tried, I must consider whether damages would be an adequate remedy on either side if the relief is refused or granted and consider where the balance of convenience lies.
It is also common ground that in relation to springboard injunctions the relevant principles are helpfully and conveniently summarised in the judgments of Haddon-Cave J in QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 & 116 respectively, to which I have been referred and have regard.
Since in QBE Haddon-Cave J was considering the position at the conclusion of an expedited trial it was unnecessary for him to consider how the applicable principles should be applied in the context of an interim injunction where the facts are disputed. That was, however, considered by Arnold J in Vestergarard Frandsen A/S v Bestnet Europe Ltd [2009] EWHC 1456 (Ch) where, having reviewed the authorities, he said this at [93]:
“The conclusions which I draw from this review of the authorities are as follows:
i) In general, the remedy for past misuse of confidential information is a financial one. Where appropriate, the claimant can claim a restitutionary remedy, namely an account of profits, which deprives the defendant of the benefit of his wrongdoing.
ii) As the law presently stands, it is not clear whether an injunction can be granted to prevent a defendant from benefiting from a past misuse of confidential information. Laddie J in Ocular Sciences interpreted Lord Goff in Spycatcher as having concluded that the answer was no, but I am less confident of this. Bullivant and Universal Thermosensors suggest that the answer is yes, and Laddie J did not consider those cases.
iii) In my view, it is significant that Terrapin, Bullivant and Universal Thermosensors are all cases about interim injunctions. When an...
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