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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Personal Management Solutions Ltd & Anor v Brake Bros. Ltd & Ors  EWCA Civ 1635 (12 July 2018)
Cite as:  EWCA Civ 1635
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE HONOURABLE MRS JUSTICE WHIPPLE DBE
Strand, London, WC2A 2LL
B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE PETER JACKSON
THE RIGHT HONOURABLE LADY JUSTICE ASPLIN DBE
| PERSONAL MANAGEMENT SOLUTIONS LIMITED
PERSONAL GROUP BENEFITS LIMITED
|- and -
|BRAKE BROS. LIMITED
GEE 7 GROUP LIMITED
GEE 7 WEALTH MANAEGMENT LIMITED
Mr Andrew Stafford QC and Mr Simon Goldberg (instructed by McDaniel & Co Solicitors) for the Respondents
Hearing dates: 3rd July 2018
Crown Copyright ©
Lord Justice Longmore:
"205. The claimants invite the court to adjourn the assessment of damages in the case. They point to the best evidence of actual damage which was only to be found in the late disclosure of the recordings in which Mr Wilson, in particular, made use of the List [a document provided by Brakes to the defendants in May 2013]. Counsel for the defendants submitted that given the limited numbers of policyholders who might conceivably have been involved, and whose loss to the claimant companies should be compensated by damages, to have further disclosure and a further hearing would be "totally disproportionate." If it were suggested that there was some form of wider dissemination of the List than was being suggested, he submitted that Mr. Pardoe had not been challenged on his evidence about its being disseminated any more widely than he had said in his evidence. Nor was there any other evidence to suggest that it was disseminated any more widely.
206. In my view the balance of convenience on this point favours the claimant companies. I have found that they have been the subject of unlawful and potentially injurious competition by the defendant companies. The extent of that competition in terms of actual damage is probably much less then they originally feared. However, they are entitled to have time to consider the evidence disclosed recently and to formulate their claim more precisely. It may very well be that when their re-considered claim is formulated, little dispute over quantum may result."
"237. In my view there is evidence that the claimant companies will to some degree have suffered loss. As I have said, I consider that such loss is probably smaller than they originally feared. For the reasons given by counsel, however, the evidence of the extent of such loss is neither clear nor complete, partly as the result of late disclosure of the audio recordings. With all respect to Mr Lee's submission that adequate evidence was given at the hearing on the issue of damages, I consider that the claimant companies are entitled to make further enquiry into the matter, and I decline to assess the quantum of damages at this stage."
1) Brakes served notice of termination of the (exclusive) contract between Brakes and the claimants with effect from 16th December 2013 (para 11);
2) the amount of premiums payable by each of Brakes' employees and/or the deductions from pay made by Brakes in respect of such premiums attracted a duty of confidence (para 18);
3) Mrs Reader of Brakes on 27th February 2013 sent to Mr Eaton of the defendants information about the contractual arrangements which existed between the claimants and Brakes (para 18A);
4) Mrs Reader on 29th May 2013 in breach of Brakes' duty of confidence sent to Mr Eaton a list of Brakes employees with the amounts deducted from their pay in respect of premiums (para 19);
5) the commercial value of the information in the list included the amount of deduction each employee was paying (para 19B);
6) the defendants used the list to target Brakes' employees to seek to persuade them to change provider from the claimants to the defendants (para 20A);
7) the defendants obtained an unlawful "head start" in their attempts to solicit the business of the employees on the list (para 21C); and
8) "by reason of the matters aforesaid" the claimants suffered loss and damage and sought compensatory damages (para 22).
"It is the Claimant's primary case that but for the [Defendants'] breach of confidence in using the List provided by Brakes on 29 May 2013 in the manner set out in those paragraphs, the [Defendants] would have been unable to poach the business of those Brakes employees with the Claimant's EBPs, and certainly not to the extent that occurred".
"Since at least 1st January 2014, the [Defendants have] been actively seeking to persuade Brakes employees with the Claimant's insurance policies to take out replacement [Defendants'] policies. On the Claimant's case, this competition was unlawful by reason of the [Defendants'] misuse of the Claimant's confidential information in the form of the list.
The Claimant's damages claim is for loss of profits arising from the loss of insurance premium income caused by the Brakes employees switching to [Defendants'] policies".
"The Claimant's loss is the profit it would have made on the premium income it has lost as a result of the Claimant's poaching of Brakes' employees".
"The claimants' primary case is that, if it were not for the use of the information comprised in the list, Gee 7 would not have entered into the Service Agreement, would not have provided EBPs to Brakes employees under the Services Agreement, or have contracted with any of the claimants' policyholders employed by Brakes. In short, the claimants would have continued to provide EBPs to Brakes employees on an exclusive basis as it had done under the Contract since 2008."
No doubt this clarified the claimants' case but it was a case that had been pleaded from the beginning. The Points of Claim attached as Appendix 1 an updated claim in the same form as that attached to the original pleading but now claiming a loss of £918,529.
The hearings below
"enlarged the damages claim to include not just the poaching or flipping of employees but also the switching of the Services Agreement from the claimant to the defendants."
He then said (para 16) that the claim as reformulated was "an impermissible departure from the terms of reference for the assessment". He went on to order that the damages hearing was to be confined to the misuse of the confidential information contained in the list provided by Brakes on 29th May 2013.
Submissions in this Court
1) the claimants' assertion that the defendants' misuse of confidential information had caused the claimants to lose their exclusive contract with Brakes was "entirely new";
2) if it was not "entirely new", it should have been (but was not) the subject of determination by HHJ Curran QC and it was too late for it to be determined now;
3) the claim was, in any event, wholly specious and was bound to fail; and
4) the judge was wrong to interfere with what was either a case management decision or a multi-factorial evaluation by the Master.
1) the wide claim had always been on the pleadings;
2) it was effectively determined by HHJ Curran's QC decision that the defendants had misused information confidential to the claimants;
3) neither side should be precluded from adducing evidence (if they wished to do so) on what was essentially an issue of causation and thus part of any adjudication on quantum but the findings of the judge would probably be sufficient; and
4) any argument that the wide claim would fail was a matter for the tribunal assessing damages.
Now too late to rely on the wide claim?
"a broad, merits-based judgment which takes account of the public and private interests and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all circumstances, a party is misusing or abusing the process of the court in seeking to raise before it the issue which could have been raised before."
Claim bound to fail?
"that argument, advanced with considerable energy before me, seems to miss the claimant's point that the Gee 7 contract was concluded as part of the "continuing dialogue" and in expectation of receipt of the List. This needs to be adjudicated."
Re-hearing or review of the Master's decision?
Lord Justice Peter Jackson:
Lady Justice Asplin:
Case no.: A2/2017/0948
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE HON. MRS JUSTICE WHIPPLE DBE
Before the Right Hon. Lord Justice Longmore, the Right Hon. Lord Justice Peter Jackson and the Right Hon. Lady Justice Asplin DBE
B E T W E E N :-
(1) PERSONAL MANAGEMENT SOLUTIONS LIMITED
(2) PERSONAL GROUP BENEFITS LIMITED
(1) BRAKE BROS. LIMITED
(2) GEE 7 GROUP LIMITED
(3) GEE 7 WEALTH MANAGEMENT LIMITED
(4) MARK EATON
UPON the 2nd and 3rd Defendants' appeal against the Order of Whipple J. dated 15th March 2017 ("the Appeal")
AND UPON hearing Leading Counsel for the Claimants and Leading Counsel for the 2nd and 3rd Defendants
IT IS HEREBY ORDERED AND DIRECTED:
Dated: 12th July 2018