Vanden Recycling Ltd v Bevin Tumulty and Others
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cox |
| Judgment Date | 17 December 2015 |
| Neutral Citation | [2015] EWHC 3616 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ15X02455 |
| Date | 17 December 2015 |
[2015] EWHC 3616 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Cox
Case No: HQ15X02455
Chris Quinn (instructed by Dentons) for the Claimant/Respondent
Jonathan Cohen and Jamie Susskind (instructed by Sintons Law) for the Third Defendant/Applicant
Hearing date: 26 November 2015
In this "employee competition" litigation the Third Defendant has applied for the Claim against it to be struck out, as an abuse of the court's process or as otherwise likely to obstruct the just disposal of the proceedings; or alternatively for summary judgment to be entered in its favour, on the basis that the Claimant has no real prospect of succeeding in the claim against the Third Defendant. If that application fails there is a further application before the court for an order that the Claimant gives security for the Third Defendant's costs. Both applications are resisted.
At a hearing before Master Gidden on 5 November last, the Third Defendant's applications were released to be heard by this court on 26 November (with a one day time estimate). The Master also directed that his provisional trial directions (for a ten day trial fixed for June 2016), case management and costs budgeting were all to be considered and dealt with at this hearing if the strike-out application failed.
In the event the strike out/summary judgment application, which raises issues relating to joint liability and compromise, took up the whole of the court day. Judgment was reserved and the parties agreed to consider the best way forward depending on the outcome of that application.
The Relevant Background
The Claimant (Vanden) is an operating subsidiary of Vanden Global Ltd (VGL) based in Hong Kong. VGL is the holding company of a group of companies involved in plastic waste management, specialising in buying industrial and commercial plastic waste and selling it on to third party customers for a profit. The waste is sold either to companies that recycle the waste, or to companies that add value to the waste through a cleansing process, before selling it on for recycling at a higher price. Vanden is one of the largest brokers of plastic waste products operating in the United Kingdom.
As from 7 October 2013 the First Defendant, Bevin Tumulty, was employed by Vanden as a Business Development Officer. Her duties included the development of their European customer base, sourcing and developing purchaser relationships in Holland, Belgium, Germany and northern France, and establishing or maintaining supplier relationships in eastern England and Ireland.
The Second Defendant, Bolton Brothers Ltd (Bolton) is a waste management company based in Ipswich, which collects and disposes of both recyclable and non-recyclable waste, including plastic waste. Vanden had, on occasion, purchased plastic recyclable waste from Bolton.
The Third Defendant, Kras Recycling BV (Kras), is a Netherlands company which conducts a range of waste management services, including the purchase, cleaning and onward sale of plastic waste.
Before joining Vanden Ms Tumulty had been employed by Leinster Environmentals, a recycling business based in Ireland, where one of her key customer relationships was with Kras, one of the largest processors of plastic waste in the regions she was going to be targeting for Vanden.
Vanden and Kras then established a commercial relationship of mutual benefit, Vanden both purchasing plastic waste from Kras and selling it on to them. On 13 December 2013, VGL entered into a non-disclosure and non-competition agreement with Kras, the benefit of which applied to any of VGL's subsidiaries and the aim of which was the protection of Vanden's confidential information.
The circumstances surrounding the unlawful activity alleged against all three Defendants, during late 2014 and 2015, appear from the detailed second statement of Damien Van Leuven, a director of Vanden and VGL, dated 6 July 2015. It is clear from the detailed statements of Henk Kras, Commercial Manager, in response, that there is extensive factual dispute between these parties and that, so far as Kras is concerned, liability is very much in dispute. However, for the purposes of determining the application to strike out or for summary judgment, it is sufficient to record the following.
In mid March 2015 it was agreed that Ms Tumulty would in future focus solely on the purchase of plastic waste, rather than on its sale. However, on 8 April 2015, shortly after this agreed change of role, she gave notice of her resignation. Vanden became suspicious of the reasons for and timing of her resignation, which appeared to be designed to cause maximum disruption to their business, and were suspicious in addition of her conduct over the previous six months. They instructed FTI Consulting LLP, a specialist computer forensic company, to carry out an investigation and analysis of her work laptop and mobile phone.
Mr Van Leuven states that FTI's findings produced significant evidence of unlawful conduct, in that Ms Tumulty was providing confidential and commercially sensitive information to both Bolton and Kras, and that the three Defendants had all conspired to divert business away from Vanden and to set up Ms Tumulty in some sort of business arrangement to compete with Vanden.
Ms Tumulty was immediately placed on garden leave and her employment eventually terminated on 8 July 2015. Letters before action were sent to all the Defendants seeking immediate undertakings. The detailed letter before action to Kras was dated 8 May, with a deadline set of 13 May for undertakings to be given. A chaser letter was sent on 11 May, no response having been received. Complaint is made by Vanden as to the failure by Kras to offer any undertakings and respond to or engage with the allegations, and as to the adoption of what they regard as deliberately delaying tactics. A firm of Dutch advocates, Diepen van der Kroef, wrote to Vanden's solicitors, Dentons, on 13 May indicating that they were acting for Kras, that they needed time to consider the allegations and that they would respond "in the middle of next week." On Dentons seeking confirmation that Diepen had instructions to accept service of proceedings, Diepen replied in the negative.
Unwilling to wait any longer for a response from Kras, Vanden initially applied on notice, dated 18 May, for urgent interim relief only against Ms Tumulty and Bolton. They commenced their claim against all three Defendants by way of Claim Form dated 18 May with Particulars of Claim dated 19 May 2015. Vanden arranged service on Kras pursuant to Article 14 of the EC Service Regulation ( Council Regulation 1393/2007) and there was a delay before service was eventually effected on that Defendant on 4 June.
The Claim was limited to £100,000. In relation to remedies, Vanden sought, in relation to each of the Defendants, an injunction and an account of profits, or alternatively damages, in relation to Ms Tumulty's breach of contract and the procurement of that breach, and/or for breach of confidence and/or for conspiracy to harm Vanden by unlawful means. Vanden pleaded, at paragraph 28, that they would particularise the account of profits claim "following adequate disclosure by the Defendants." In relation to the alternative claim in damages they pleaded, at paragraph 29, that "quantum of such losses is not presently capable of particularisation and the Claimant will provide particulars of the same at the earliest practicable opportunity."
At an inter partes hearing on 22 May HHJ Seymour QC, sitting as a judge of the High Court, granted the orders for interim relief sought against Ms Tumulty and Bolton, all parties having given appropriate undertakings, including undertakings by both Defendants as to disclosure and delivery up of documents the property of Vanden and VGL. The judge also ordered a speedy trial of the claim against them, with permission to Vanden to apply in respect of its claim against Kras, the trial to be limited to the issues of liability and injunctive relief, with all other remedies to be dealt with at a separate hearing if required. The trial was set down to commence on Monday 6 July 2015, with a time estimate of 3 days, and appropriate case management directions were given to ensure that the trial date was adhered to.
However, after disclosure was given by the first two Defendants, and while correspondence with Diepen was continuing as to the undertakings being sought from Kras, negotiations with Ms Tumulty and Bolton resulted in a Consent Order being made in the case of each of those Defendants.
The first Order before Master Cook, dated 25 June, contained terms of settlement agreed by Vanden and the Second Defendant, Bolton. This provided, so far as is relevant:
1. The trial as between the Claimant and the Second Defendant presently fixed to commence on Monday 6 July 2015 be vacated.
2. ….
3. The Second Defendant is to pay the total sum of £275,000 in full and final settlement of the Claimant's claims against the Second Defendant in these proceedings together with interest and costs….For the avoidance of doubt should the Claimant be unable for any reason to recover costs from any other party to this action whether subject to an Order or otherwise the Claimant acknowledges that in consideration of the Second Defendant entering the Consent Order on these terms it shall not be able to recover any...
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