Space Airconditioning Plc v Mr Adrian Guy and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice Rimer,Lord Justice Sullivan |
| Judgment Date | 14 December 2012 |
| Neutral Citation | [2012] EWCA Civ 1664 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2011/2794 |
| Date | 14 December 2012 |
[2012] EWCA Civ 1664
Lord Justice Mummery
Lord Justice Rimer
and
Lord Justice Sullivan
Case No: A3/2011/2794
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
THE HON MRS JUSTICE PROUDMAN
HC11C00308
Royal Courts of Justice
Strand, London, WC2A 2LL
MR PAUL GOULDING QC (instructed by Barlow Robbins LLP) for the Appellant
MR RICHARD SPEARMAN QC and MR ANDREW TABACHNIK (instructed by Harvey Ingram LLP) for the Respondents
Hearing date: 25 th July 2012
Introduction
This Court decides most appeals without citing CPR Part 52.11 (3), which states when it will allow an appeal:-
" Hearing of appeals
(1) …
(2) …
(3) The appeal court will allow an appeal where the decision of the lower court was –
(a) wrong; or
(b) unjust because of a serious procedural error or other irregularity in the proceedings in the lower court."
In this case exceptional circumstances suggest that particular attention should be paid to the scope of Part 52.11(3) and to the consequences of its application. Allowing this appeal would involve the prospect of a re-trial. Dismissing this appeal would involve this court in affirming an order based on a judgment which contains a plainly wrong finding of fact. When the error was pointed out in the lower court after the judgment had been handed down, the judge acknowledged that the finding was wrong, but declined to correct it as a typographical slip and refused permission to appeal. The parties continue to disagree about the significance of, and the explanation for, the admitted unamended error. Is the erroneous finding and are the circumstances in which it remains uncorrected sufficient to justify the conclusion that the decision of the lower court was "wrong", or that it was "unjust" as a result of an "irregularity in the proceedings"?
While the circumstances giving rise to the appeal are extremely unusual, the cause of action is not: it is the alleged wrongful extraction, retention and use of confidential customer information by an employee, who sent in his notice and went to work for a competitor. The confidentiality of customer information and the duty of an employee not to make or disclose unauthorised copies of documents which embody the information, and not to misuse the information, either during his employment or after its termination, were central to the claim. Every judge who has heard interim applications is familiar with urgent requests for immediate relief of a drastic nature in this kind of case: an ex parte injunction, a search and seize order, disclosure and delivery up of documents and materials to be followed by an expedited trial. This is such a case.
The trial took place within months of the initial blast of orders in the Chancery Division. The case has ended up in the Court of Appeal with leading counsel neither of whom appeared in the court below. The difficult situation confronting the court and the parties stems from the unfortunate combination of circumstances in which (a) the judge handed down a written judgment dismissing the action without the prior confidential circulation of a draft judgment to counsel for consideration of typing corrections and obvious errors in writing; (b) the order appealed was made some time later after the judge agreed to make certain corrections to the handed down judgment; and (c) the judge refused an application for permission to appeal, having also declined to make a further amendment to correct the finding that key documents relied on by the employer did not contain the confidential information in question, which finding the judge accepted was "plainly wrong."
The appeal is from an order of Proudman J dated 10 October 2011 dismissing an action by Space Airconditioning plc (Space) against a former internal sales manager, Mr Adrian Guy, and his new employer, Smith Brothers Stores Limited (SBS).
The judge's refusal of Space's application for permission to appeal was on the understandable ground that her judgment was fact-based. However, the judge added that her refusal of permission was "despite a finding which was plainly wrong at the start of [39] of the judgment." i.e the finding that relevant confidential information was not in certain documents printed out by the employee in disputed circumstances before he left his employment. The judge, who did not accept the respondent's submission that that finding was the result of a typographical error capable of correction by her, explained that "The inferences which the claimant asked the court to draw could not be drawn from the facts found."
Lloyd LJ granted permission to appeal on 15 December 2011. He correctly commented that an appeal on fact alone faces difficulties. The crucial question is whether this really is an "appeal on fact" and whether, in all the circumstances, it is a case in which the court should allow the appeal and order a re-trial.
There are exceptional cases in which, on a "lack of reasons appeal", this court may, before deciding the appeal and in order to avoid a possibly unnecessary re-trial, seek from the trial judge amplification of the reasons for the appealed order: see English v. Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 at [25]. However, as explained below, that option is unavailable in this case and, in any case, neither side has asked the court to take that course. In my judgment, this court is faced with a stark choice between either allowing the appeal and ordering a re-trial or dismissing the appeal on the ground that the admittedly incorrect finding of fact does not make the judge's decision "wrong" or constitute an "irregularity" that makes the decision "unjust."
Any order for a re-trial is bound to give rise to further argument about the costs incurred in these proceedings. It seems unlikely that, if ordered, any re-trial would actually take place. The reality probably is that this appeal is about which party is liable to pay the very substantial costs incurred in the interlocutory proceedings, the 5 day hearing at first instance and of this appeal.
Outline facts
Mr Neil Afram is the Managing Director of Space, which was appointed the UK distributor of air conditioning products manufactured by Daikin Europe NV (DENV). The other UK distributor is a DENV subsidiary, Daikin Air Conditioning UK Limited (Daikin UK).
Mr Guy began his employment with Space on 8 September 2003. His position as internal sales manager gave him access to Space's confidential customer information. He resigned on 11 November 2010 with effect from 31 December 2010. During the notice period he was placed on "garden leave" at home.
Mr Guy admits that (1) on 24 June 2010 he printed 23 Space documents, including customer summaries; and (2) on 26 July 2010 he printed 81 Space documents, including customer contact reports. The printings were not repeated between then and when Mr Guy gave notice in November 2010.
The documents printed on 24 June contained information about discounts given to customers. Space's case was that the information would be enormously beneficial to a competitor, as it shows the value of the customer, the value of unfulfilled quotes and the quote and discount information, which would enable a competitor of Space to pitch its first quote at a figure that would be lower than that quoted by Space, thereby undercutting Space and seeking to win an order.
Mr Guy's explanation for the printing was that an issue had arisen about the credit limit of one customer (Callisia) and whether that limit had been exceeded. Mr Guy's evidence was that he printed the sheets to show to Mr Afram that other customers were over the limit and that, as against them, Mr Afram had not taken the robust approach that he took towards Callisia. However, Mr Guy did not show the documents to Mr Afram, as he considered it unlikely that Mr Afram would resile from his firm stance about Callisia. Mr Guy said that he had thrown the printed-out documents away. Space disputed Mr Guy's evidence about the printings. It alleged that he had acted in breach of contract by printing out its customer documents for purposes other than his employment with Space.
The judge accepted Mr Guy's evidence about the 24 June print outs as plausible and as consistent with the contemporaneous documents showing that there was a dispute with Callisia about credit limits. There were many calls between Mr Guy and Callisia at that time; there were emails between Mr Afram and Mr Guy; and there were entries in Space's log book about their dealings. Further, however, the print outs showed customers all over the country, not just the three customers allocated to Mr Guy.
The judge also accepted Mr Guy's evidence about the 26 July print outs. His evidence at trial was that he started on the process of re-allocating accounts after an increase in workload. He was moving some of his accounts on. A Mr Hale was appointed for customers in the M3 corridor. That was not, however, the same explanation as was provided by Mr Guy's solicitors Herrington & Carmichael in their letter of 4 February 2011, which referred to his making out a case for a salary increase.
On the next day, 27 July 2010, Mr Guy visited and met Mr Simon Goswell and Mr Darren Thomas in Thurrock. They are employees of SBS, which is a competitor of Space, though it did not, at that time, supply the higher value air conditioning products of the kind manufactured by DENV, in particular chillers and Variable Refrigerated Volume (VRV). It was...
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