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Cite as: [2014] EWHC 3495 (QB)

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Neutral Citation Number: [2014] EWHC 3495 (QB)
Case No: HQ14X01581

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
24/10/2014

B e f o r e :

HIS HON JUDGE CURRAN QC
sitting as a judge of the High Court

____________________

Between:
(1) PERSONAL MANAGEMENT SOLUTIONS LIMITED
(2) PERSONAL GROUP BENEFITS LIMITED


Claimants
--and--


(1) BRAKES BROS. LIMITED
(2) GEE 7 GROUP LIMITED
(3) GEE 7 WEALTH MANAGEMENT LIMITED
(4) MARK EATON




Defendants

____________________

Andrew Stafford QC and Simon Goldberg instructed by McDaniel & Co. for the claimants
Michael Lee instructed by Wragge Lawrence Graham & Co LLP for the second, third and fourth defendants

Hearing dates: 15, 16, 17 & 18 July 2014

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Contents

    Part 1
    Introduction
    Subject Paragraphs
    The nature of the case and introductory observations 1-2
    The need for care in balancing confidentiality & competition 3-5
    Burden and standard of proof and other general points 6-9

    Part 2
    Background and chronology
    The principal parties 10-14
    The fourth defendant 15-26
    The first defendant company 27-28
    Personal Group's investigation into Mr Eaton's activities 29-30
    The disciplinary hearing and the undertaking 31-36
    Mr Eaton's move to Gee 7 37-40
    Transmission of the PG contract by Brakes to Gee 7 41
    Brakes' contract with Gee 7 44
    Brakes' transmission of the List to Gee 7 45
    Brakes' invitation to PG to re-tender 49-51
    Mark Wilson 52-56
    Brakes' letter to employees of 21st of January 2014 57
    The alphabetically re-arranged version of the List 58

    Part 3
    Agreed Issues
    The list of agreed issues 62

    Part 4
    The witnesses
    Guidance on appraisal of the evidence of the witnesses 64-66
    The rival contentions as to the witnesses 67-75
    Mr Rooney 77
    Mr Scanlon 78-79
    Mr Wilson 80-92
    Mr Eaton 93-102
    Mr Pardoe 103-105
    Ms Atkins 106

    Part 5
    Issues of fact and findings of fact
    The importance of background 107
    When and why Mr Pardoe and Mr Eaton met in 2011 108-113
    Conclusions on the Pardoe-Eaton meeting in July 2011 114-119
    The reason for Mr Eaton's resignation from Personal Group 120-121
    Summary of the circumstances in respect of the resignation 122-123
    Brakes' provision of the PG contract to Gee 7 124-132
    The evidence on the provision of the List by Brakes to Gee 7 133-137
    Conclusions on the reason for the sending of the List 138-147
    Actual use of the List 148-156
    Provision of the re-arranged List to Mr Eaton and Ms Atkins 157-160

    Part 6
    The law
    Robb v Green 161
    Saltman Engineering 162
    Coco v Clark 163
    'Spycatcher' 164-169
    Faccenda v Fowler 170-171
    Lansing Linde v Kerr 172
    Imerman v Tchengui 173
    Royal Brunei v Tan 174
    Vestergaard 175
    Primary Group 176-177
    Authorities on unenforceability for restraint of trade 178-185
    The Kanchenjunga, and estoppel or waiver 186-188
    Specific performance 189
    Principles applicable to this case 190

    Part 7
    Conclusions on the main issues in the case
    Whether the List was the claimants' information 191-193
    Conclusions on the List as the claimants' information 194-195
    Whether the List was information of a confidential character 196
    Gee 7's 'conscience' in respect of the List 197-200
    Gee 7's use of the List to target the claimants' policyholders 201
    No countervailing public interest 202
    The claimants' entitlement to an injunction or other relief 203-204
    Damages 205-206
    'Clean hands' 207-215
    Enforceability of Mr Eaton's undertaking 216-225
    Waiver, equitable estoppel, and related issues 226-235
    Further or other relief against the Fourth Defendant 236
    Postponement of the assessment of damages 237

    JUDGMENT

    Judge Curran QC:

    Part 1
    Introduction
  1. This is an action by two associated claimant companies (together "Personal Group") for damages and for other relief. The claims have been consolidated as each is concerned with the alleged misuse of Personal Group's confidential information by the second and third defendant companies, through the agency of the first and fourth defendants, by receiving, disseminating and making use of a list of customers of the claimants ("the List") who were employees of the first Defendant company.
  2. The second and third defendant companies (together "Gee 7") are associated entities which their managing director, Mr Jon Pardoe, described as being a small but increasingly successful competitor to Personal Group. They competed in particular for the 'employee benefits' insurance business of the first Defendant company. Mr Pardoe said that by this litigation and other means Personal Group were attempting to crush Gee 7 at an early stage in its development.
  3. That suggestion raises at the outset the need for a cautious approach by the court. This was a point which Arnold J considered in Vestergaard Frandsen A/S & Ors v Bestnet Europe Ltd & Ors [2009] EWHC 657 (Ch) at first instance. He said, at paragraph 104,
  4. 'I entirely accept that, as Laddie J said in Ocular Sciences Ltd v Aspect Vision Care Ltd & Ors [1997] RPC 289, at 359,

    it is well recognised that breach of confidence actions can be used to oppress and harass competitors and ex-employees."

    'It follows that the courts must scrutinise such claims with care to see if they are well-founded or not, which is what I intend to do in the present case. It does not follow that all such claims are unfounded and harassing claims.'

  5. Moreover, in the Supreme Court in Vestergaard Frandsen A/S & Ors v Bestnet Europe Ltd & Ors [2013] 1 WLR 1556 Lord Neuberger, with whom all the other members of the court agreed, said at paragraph 44:
  6. '… in a modern economy, the law has to maintain a realistic and fair balance between (i) effectively protecting trade secrets (and other intellectual property rights) and (ii) not unreasonably inhibiting competition in the market place. The importance to the economic prosperity of the country of research and development in the commercial world is self-evident, and the protection of intellectual property, including trade secrets, is one of the vital contributions of the law to that end. On the other hand, the law should not discourage former employees from benefiting society and advancing themselves by imposing unfair potential difficulties on their honest attempts to compete with their former employers.'
  7. In approaching the issues I bear those observations firmly in mind, in particular as Mr Pardoe of the second and third defendant companies, and the Fourth Defendant, Mr Eaton, are ex-employees of Personal Group, now in competition with them.
  8. I also bear in mind throughout that the burden of proof lies upon Personal Group of the facts relied upon by them. The standard of proof they must achieve is to satisfy the court on the balance of probabilities.
  9. This judgment is unavoidably lengthy. Whilst the hearing occupied only four days, the case involved several thousand pages of documents, in many lever-arch files. At my request these were reduced, through the industry of all counsel, to a Core Bundle of some 600 pages, in two volumes, which are together referred to as "CB". Helpful opening and closing skeleton arguments were submitted, totalling almost 100 pages. In addition, a lever-arch file of authorities was produced, containing 25 reported cases. I was also grateful to be provided with four volumes of daily transcripts of evidence and argument. There are very many issues of fact and law which require resolution, and as counsel repeatedly stressed on both sides, it is impossible to define the issues without detailed examination of the background which provides the context within which those issues arose.
  10. The general background and sequence of events set out in the next Part consists mainly of matters which are common ground: indeed, much of it is indisputable. Also included, however, are facts asserted by one party which do not appear to be contested by another, and vice versa. In addition, reference is made to the documentary evidence: in some instances, when a document may not have been specifically referred to in the oral evidence, for example, the page reference in the Core Bundle used at trial is given. Where possible, however, the full terms of any important piece of such documentary evidence are set out below, and reference to the bundles should be unnecessary.
  11. I shall deal with such disputed matters of fact as are relevant to the issues in the case in a separate section of this judgment.
  12. Part 2
    Background and Chronology

  13. Personal Group Holdings is the holding company for a number of subsidiary companies, including the two claimant companies, which are active in the employee benefits and financial services industry. The business was founded some 25 years ago as a general insurance company but, as Mr Kenneth Rooney its deputy chairman said, in recent times it has concentrated on the provision of employee benefits insurance packages ("EBPs") to the employees of client companies and other businesses. Personal Group Holdings floated on the Alternative Investment Market in 2000.
  14. Mr Pardoe, now of Gee 7, began work in the financial services industry in 1986. In June 1991 he set up his own company, called Berkeley Morgan. Berkeley Morgan expanded and, Mr Pardoe said, had a turnover in excess of £16m at its peak. A cash offer for the business was received from Personal Group in December 2004. Mr Pardoe had been Chairman and Managing Director of what had become Berkeley Morgan Group Plc. After Personal Group bought the business he carried on as the managing director of Berkeley Morgan and he also became a main board director of Personal Group, until July 2006 when he left.
  15. Mr Pardoe said that Personal Group were upset and disappointed at his leaving, but that he had decided that having been in business all his life it was time "to give something back to the community" and in particular to help develop sporting excellence within the United Kingdom. This led him to involvement in a proposed high-level national swimming coaching programme. For various reasons that did not go ahead. The disappointment in that venture, however, coincided with an approach by people from his old company, Berkeley Morgan, who had become employees of Personal Group, and who asserted that Personal Group was,
  16. trying to sell them off to another company."

    They saw an opportunity to build a new business, and sought to persuade him to lead them. After some deliberation, he said, he agreed.

  17. Mr Pardoe had shares in a company which since 1972 had been based in Shrewsbury, called R.E. Gee & Co. Ltd. It had been part of the Berkeley Morgan Group, but at the time of the purchase by Personal Group of the Berkeley Morgan business, it was not included in the acquisition and merger. On 22nd September 2006 R.E. Gee and Company Limited changed its name to Gee & Company (Financial Planning) Limited.
  18. On the 8th June 2011 the Second Defendant company was incorporated. On the 7th July 2011 Gee & Company (Financial Planning) Limited changed its name to Gee 7 Wealth Management Limited. On the 19th July 2011 a company known as Gee 7 Plus Limited was incorporated. The Second Defendant company is the owner of 100 per cent of the issued share capital in Gee 7 Plus Limited and Gee 7 Wealth Management Limited.
  19. The Fourth Defendant

  20. Until late in 2011 one of the directors of Personal Group was Mr Mark Eaton. Mr Eaton had been employed by Personal Group from the 20th February 1995. In 1997 he was made an Executive Director of a minor subsidiary, and then in 2006 he was appointed to the board of the first claimant company. As a director, he had a duty of confidentiality to the company. There was also an express confidentiality clause in his contract of employment, which in clause 13 defined 'confidential information' as including the company's transactions and also "particulars of the Company's…policyholders."
  21. In about July 2011, having made it clear for some time that he wanted the challenge of greater responsibilities still, Mr Eaton was promoted to head the 'Key Account Team' at Personal Group, putting him in charge of two other directors. His job description became 'Key Contacts Director.'
  22. At about the same time, at the invitation of Mr Pardoe, three of Personal Group's highly-regarded financial advisers left Personal Group to join one of the Gee 7 companies, although Mr Pardoe said that they were to work in a "wealth management" business and not on EBPs.
  23. It was just after this that a meeting took place between Mr Eaton and Mr Pardoe, at the latter's suggestion, on 22nd July 2011. That meeting is characterised by Personal Group as being of considerable significance in the light both of what had gone before it and of what occurred after it took place. If the date is correct, it was six weeks after the second Defendant company was formed, three days after Gee 7 Plus Limited was formed, and nine days before the 31st July 2011 when Mr Pardoe was appointed as a Director of Gee 7 Wealth Management Limited. Exactly seven weeks after the date of the meeting Mr Eaton resigned from Personal Group.
  24. Mr Pardoe's account of the meeting on 22nd July was given in his witness statement as follows:
  25. "Personal Group's allegation that Mr Eaton and I met in July 2011, whilst he was still employed by Personal Group, to discuss competing against Personal Group, and Mr Eaton coming to work for Gee 7 is simply not true. What I recall from that meeting is that much of it became a discussion about our involvement with sports coaching. We did briefly chat about him taking up the opportunity of working with Gee 7 and I did wonder if this was something that Mr Eaton would be interested in, but at that stage I hadn't even decided that I was going to involve myself heavily within Gee 7. We certainly didn't discuss competing against Personal Group and Mr Eaton joining Gee 7 in order to do so."

    In cross-examination Mr Pardoe agreed that by this stage he had indeed recruited the three other members of Personal Group's staff to work for Gee 7.

  26. Mr Eaton's evidence was that when he met Mr Pardoe on that occasion,
  27. "… to my knowledge Jon was not working within the financial services industry at all and hadn't been since 2006 when he had stopped working for Personal Group."

    Mr Eaton went on to say that at the meeting they spoke mainly about sports coaching (his own interest is in football) and that whilst they did "chat briefly" about business Mr Pardoe mentioned only that he was,

    "… considering getting back into the industry via a financial services company he was involved in called Gee & Co."

    He said that Mr Pardoe had indeed asked him whether this would be something which he would be interested in joining, but,

    "[a]t this time I was totally focused on my job with Personal Group but I remember replying that I thought it was an interesting concept and said nothing further on the matter …. At no time was any offer made to join [Gee 7]. Jon wasn't even working for Gee 7 at this point so he wouldn't have been able to make any offer."

  28. On the 6th September 2011, Mr Eaton sent an e-mail to his personal e-mail address at 11.11am marked 'test', and, just over an hour later, sent to his personal e-mail address a contact list which consisted mainly of his personal contacts, but which also included the e-mail addresses of his "corporate contacts" i.e. people in other companies with whom he had done business on behalf on Personal Group, and details of some other clients, prospective clients and staff. One of his corporate contacts was Miss Sue Beale (now Mrs Reader). Mrs Reader was then, and may still be, the 'Human Resources Administrator' at Brake Bros, the first defendant company, ("Brakes.")
  29. On 9th September 2011 Mr Eaton and Mr Rooney of Personal Group had a meeting, which is referred to in an e-mail from Mr Rooney to Mr Eaton sent on 10th September 2011 at 10:11 a.m., to be found at Core Bundle ("CB") p. 75:
  30. "Further to our meeting yesterday when you tendered your resignation, I am, as I stated, very disappointed with your decision and, if I am to believe what you say about having no other position lined up, I find it hard to understand the timing of it when, after years of wanting more responsibility, you resign shortly after being given that extra responsibility."

    He concluded by saying that the matter must remain "completely confidential" for the time being.

  31. Mr Eaton replied almost instantly, also at 10:11 that day,
  32. "Hi Ken,

    I totally understand your disappointment it's a huge decision for me, and no problem regarding the need for confidentiality….

    Kind regards,

    Mark."

    (CB 76)

  33. Next day, on the 11th September 2011, Mr Eaton formally resigned from Personal Group. In his witness statement he described this as a very difficult decision, as he had given much of his working life to the company but, he said, ultimately he felt he could no longer continue to work for Personal Group. His main reason for leaving was:
  34. "… a complete breakdown in my relationship with Ken Rooney."

    Mr Rooney said in evidence that the 'breakdown' was something of which he was unaware.

  35. In his witness statement Mr Eaton said that at the time he resigned he did not have another job to go to. He said that his plan was then to weigh up his options whilst he worked out the six-month notice period provided for in his contract.
  36. Ten days after Mr Eaton first announced his resignation, on 19th September 2011, he sent to his personal e-mail account a copy of a Personal Group benefit options document and the passwords to the demonstration links to what were known as "Flex sites", which are designed to provide employees of corporate clients of Personal Group, who have opted for particular plans or programmes, with the facility of selecting their own benefits in return for foregoing part of their salary.
  37. The first defendant company

  38. Brakes are a very large company with thousands of employees throughout the UK. In 2008 a contract was made between Personal Group and Brakes for the arrangement of EBPs for their employees, including, for example, a "hospital benefits scheme" under which cash could be paid for a period of in-patient care. This contract was varied in 2011 and 2012. Under its terms the contract was to come to an end in December 2013. The contract contained a confidentiality clause (clause 3.1) which referred to confidential information as including:
  39. information relating to the Programme; information relating to the parties' employees; information relating to each other's business; trade secrets; customers; … and any other information in whatever form received or obtained by any party, from another party, as a result of entering into or performing the Agreement."

    Brakes were at all material times until January 2014 clients of Personal Group, who provided EBPs for such of Brakes' employees as wished to sign up with Personal Group for the insurance policies they offered. Until his resignation, Mr Eaton was the key contact for Personal Group at Brakes, dealing principally with Mrs Reader (nιe Beale).

  40. It should be pointed out at this stage that Brakes took no part in the hearing, as proceedings in respect of the claim against them have been stayed by consent under a Tomlin order, the terms of which have not been disclosed.
  41. Personal Group's investigation into Mr Eaton's activities

  42. Soon after his resignation, Mark Eaton's activities in sending the e-mails to his personal e-mail address came to the attention of the other directors of Personal Group, and Mr Rooney decided to begin an investigation. In carrying out that investigation he had a meeting with Mr Eaton on 27th September 2011.
  43. Mr Eaton had told Mr Rooney that he was going to the United States to look at opportunities for his next career move but was "just looking at things at the moment." He admitted, however that he had been in contact with Jonathan Pardoe and that the latter had told him about plans for a new business venture which included setting up a wealth management company and possibly providing employee benefits in the future. Mr Rooney asked Mr Eaton why he had not disclosed this to him earlier, when he had tendered his resignation, and Mr Eaton said it was all "very informal" and that he had not "really heard any more."
  44. The disciplinary hearing and Mr Eaton's undertaking

  45. Following the investigation, on 12th October 2011, a disciplinary hearing was held. At that hearing Mr Eaton conceded that on 7th January 2009 and 2nd June 2011 he had disclosed information to a former employee of Personal Group named Reynolds, and that on or after 6th September 2011 he had transferred information to his home e-mail address. He said in evidence that at the hearing he disputed that any of this information had been confidential, but the letter of 14th October 2011 from the Managing Director, Mr Lothian which records what was said at the hearing, the finding and the sanction, contains the following sentence:
  46. "The contacts list you explained you did download because you were planning to resign and wanted to retain your contacts. You disputed that this was confidential information as it was information you could get from making a call to 118118. However you admit that the contacts included a vast array of contacts available from the company e-mail system many of which were not your personal friends or contacts but are company contacts."

    (CB 120)

  47. Shortly after the conclusion of the disciplinary hearing, Mr Rooney made a finding that whilst Mr Eaton had been in breach of his duties of confidence to the company, on the evidence which Mr Rooney had then seen, he was not satisfied that Mark Eaton's actions had been "deliberately malicious," and so he was prepared to deal with the matter by way of a "Level 2 warning." (CB 119-122) He informed him that he had a right of appeal against both the finding and the sanction to the Chairman of the Board. Mr Eaton did not exercise that right of appeal.
  48. An undertaking was sought from Mr Eaton in respect of all the confidential information belonging to Personal Group which he had in his possession, requiring him to list it, to provide details of the use he had made of it, and to state to whom outside Personal Group he had divulged it. After consulting the solicitors who then represented him, Mr Eaton signed the undertaking. Clauses 1, 2, and 3 of that document read as follows:
  49. "1. … I will forthwith… return all confidential information (as defined in clause 13.1 of my contract of employment…) and/or other property of [Personal Group] … including but not limited to any document or copy document containing confidential information.

    2. … By 5 pm on 12 October 2011, I shall: 2.1 verify in writing to [Personal Group's solicitors] that I have complied with paragraph 1 above; 2.2 list all and any confidential information belonging to the company … I had in my possession; 2.3 state what use I have made of the confidential information until the time that I provided this undertaking, save insofar as I used it for legitimate performance of my duties… …3. That I shall not use or disclose to any third party or allow to be used by any third party any confidential information." (CB 111)

  50. Later on the 12th October 2011 the solicitors then acting for Mr Eaton, Maclay, Murray & Spens, wrote to the solicitors for Personal Group, enclosing a slightly modified undertaking signed by Mr Eaton (with no material difference for present purposes). They continued by saying that,
  51. "In accordance with that undertaking our client has asked us to confirm to you that:–
    (1) it is impossible for Mr Eaton to list all the confidential information which he has had in his possession prior to this point as the undertaking requested covers the entire period of his employment by Personal Group;…."
    (CB 118: emphasis added)
  52. The only logical inference which any objective reader of that letter would draw, it seems to me, is that which it appears was drawn by the claimant companies: i.e. that Mr Eaton was saying that there had been so much confidential information which had passed through his hands over the time that he had worked for Personal Group that it would be an impossible task to list it all, but that, as the letter was written "in accordance with that undertaking" he would do his best to list such confidential information as it was possible for him to identify. In fact, it later transpired that none at all was ever listed by him. There was no suggestion that the home computer no longer existed, and nothing was said to explain why such information as might remain on it could not be provided, but Personal Group did not at that stage press the matter. (That omission to press the matter, it should be noted, is now relied upon by Mr Eaton as the basic foundation for a plea of waiver or equitable estoppel.)
  53. Throughout the investigation and disciplinary process Mr Eaton had been placed on 'garden leave'. He resigned as a director of Personal Group on 24th October 2011, but remained on such leave until he ceased to be an employee on 9th March 2012. Under the terms of his contract of employment there were post-termination restrictions, which expired on 14th October 2012.
  54. Mr Eaton's move to Gee 7

  55. On 14th October 2012, the day those restrictions expired, Mr Eaton began formally to work for Gee 7. Within a short time of beginning work he was in touch with Mrs Reader at Brakes. On 21st January 2013 Mr Eaton was appointed a director of the second defendant company.
  56. On 25th January 2013 Mrs Reader e-mailed Mr Eaton (CB 157-158) to inform him that an internal meeting was to take place at Brakes on 15th February 2013 to review their benefits scheme and to consider alternative providers to Personal Group. In a further e-mail on 29th January 2013 (CB 159-160) Mrs Reader asked Mr Eaton to confirm that the cost of a possible "hospital scheme" would be ten per cent less than that then being provided to Brakes by Personal Group, with more benefit, and she asked for some evidence of this.
  57. Mr Eaton replied on 7th February 2013, attaching a table of various benefits (CB 184) comparing the respective premium prices of Gee 7 and Personal Group.
  58. On 19th February 2013 Mrs Reader e-mailed Mr Eaton inviting him to a meeting on 26th February "… to show what Gee 7 can do." She added,
  59. "We are now in a position to consider changing our provider, but before we decide whether to make the change from Personal Group we have some questions we want to cover off, and want to make sure you can help us achieve our objectives through this change." (CB 185-186)

    Transmission of the Personal Group contract by Brakes to Gee 7

  60. On 27th February 2013 at 13:00, Mrs Reader sent Mr Eaton an e-mail, headed "Subject: Private & Confidential" saying,
  61. "Hi Mark,
    As discussed the Personal Group contract, thanks.
    If you think something is missing, let me know, I can probably dig it out." (CB 187-189)

    Copies of the 2011 and 2012 versions of the Personal Group-Brakes contract were enclosed. As originally drawn, each was marked "Commercial, in confidence. " At 15:49 that afternoon, Mr Eaton forwarded the e-mail and attachments to Gillian Cheal, head of 'Compliance' at Gee 7 under the same heading with the simple message: "Here's the Personal Group contract from Brakes." (CB 192)

  62. On 19 March 2013, Mrs Reader e-mailed the accounts manager at Personal Group, Sarah Plested. She said that Brakes had decided to "to change provider of our benefits scheme." The reasons given were "… a combination of cost, updating the website, and ease of use in terms of registration." Mrs Reader acknowledged that the decision by Brakes to move their EBPs to another provider "…may come as a surprise…." However, the contract still had some time to run. (CB 197)
  63. On 4th April 2013 Mrs Reader sent Mr Eaton an e-mail showing him the information sent by Brakes to Personal Group each month in respect of payroll deductions. The second and third sentences of that e-mail read as follows:
  64. "We don't receive any information from them [Personal Group] advising us of the level of cover the employee has chosen, just the instruction for the cost of the reduction. Is this going to make it difficult to determine a like-for-like cover?" (CB 201)

    No answer to this question is to be found in the disclosed documents.

    Brakes' contract with Gee 7

  65. The next day, 5th April 2013, Brakes entered into a contract with Gee 7 to provide EBPs in place of Personal Group. The commencement of business under the contract had to be postponed to 1st January 2014 as Personal Group refused to agree to early termination of their contract with Brakes. (CB 332.)
  66. The sending of the List to Gee 7 by Brakes

  67. On 29th May 2013 Mrs Reader sent the following e-mail and attachments to Mr Eaton.
  68. "Hi Mark,
    Please find attached two spreadsheet [sic]. Needless to say, they both hold very sensitive information to be used only for the purposes listed below and for no other exercises. Thanks Mark.
    1) A current complete list [referred to at the hearing as 'the second list'] of all Brakes employees with their date of birth for you to trial the activation code method.
    2) A list ['the List'] of all employees currently in the [Personal Group] hospital plan we currently offer and their premium, for you to calculate an alternative premium for them. …. Please pass these reports onto the relevant people with your own instructions, reiterating the sensitivity of the info. Thanks again." (CB 223)

  69. On 21st June 2013 Mark Eaton e-mailed Mrs Reader and Brakes' purchasing manager for 'Group Capital Services,' Pem Hulusi, as follows:
  70. "Just following up on our discussions yesterday regarding the roll-out of the new Brakes My Staff Shop programme [Gee 7's name for its EBP] and the subsequent contractual restrictions that have now come to light.
    As Pem explained at our meeting my understanding is that the 'exclusivity' restrictive covenant within your terms of business remains in force for a fixed term of two years from the 'relaunch' date which is stated as December 2011. Assuming that the first month that you pay Personal Group under these varied terms was December 2011 my understanding is that this two year fixed term will expire at the end of November 2013." (CB 376-381)

    The e-mail went on to make a number of suggestions as to a strategy to be followed which included the launch of the Gee 7 'My Staff Shop' scheme from Monday 2nd December 2013. Employees could also join an 'NHSXtra' group product with payroll collections from 1st December 2013. The e-mail concludes as follows:

    "If all of the above is acceptable I suggest we amend our existing agreement to reflect these timescale changes and no payment to Gee 7 will be due until the end of your exclusivity period with your previous supplier." (ibid.)

  71. On 25 June 2013 Pem Hulusi e-mailed Mr Eaton as follows:
  72. "Hi Mark,
    It would be okay to promote the website to our employees prior to the official launch date. What we cannot do is provide a similar service via another provider while contract with Personal Group is still in place, so no actual service could be supplied by Gee 7 until after the expiry date of 19 December 2013 ….
    ….
    I can understand the frustration here Mark but we're not in the position to expose our liability here. We are asking you to be patient and allow us to exit it in the correct way." (ibid.)
  73. On 26th June 2013, Mr Eaton e-mailed his response to Pem Hulusi as follows:
  74. "… we have had a meeting at our offices regarding the launch data of the new Brakes programme and I have spoken to Sue today. Given the situation our suggestion is that we launch the new programme in January 2014… this way it's nice and clean with no contract disputes and no going back to the previous supplier.… We will adjust our agreement with Brakes to include the new start date and schedule. I hope this meets with your approval…" (CB 376)

    Brakes' invitation to Personal Group to re-tender

  75. On the 15th July 2013, Pem Hulusi sent an e-mail to David Walker, Commercial Director of Personal Group, asking for his "proposals" saying that she (Ms Hulusi) was keen "to finalise the tender process." Personal Group, having been led to understand that a perfectly genuine re-tender process was being undertaken, provided a full submission to Brakes on the 16th July 2013.
  76. On 18th July 2013 Gee 7 sent a "private and confidential" letter to Brakes, under the name of Mr Pardoe, and apparently signed by him (CB 382-383.) This reads as follows.
  77. "Contract dated 5th of April 2013 between [Gee 7] and Brakes…
    Since we entered into the above contract… with you certain events have occurred as a result of which you have requested that we delay the launch of our employee benefits scheme.
    With effect from the date of this letter the contract shall be read and construed as though the following deletions amendments and additions have been made to it:
    1. Clause 1 "the launch date" shall be 1st January 2014 …."

    (CB 382-383)

  78. Brakes did not respond to Personal Group's "re-tender" proposal until 29th October 2013, when Personal Group received an e-mail from Pem Hulusi serving notice that Personal Group would no longer be the company that provided their EBPs, and that another provider (Personal Group later discovered this was Gee 7) would be taking over provision of the service. Mr Scanlon of Personal Group, in the light of all the information now available, described the "re-tender" invitation from Brakes, in cross-examination, as a "charade."
  79. Mark Wilson

  80. Mark Wilson, a former employee of Personal Group, who had left them in July 2011 to work as a self-employed roof cladder, but whose venture into that business had proved unsuccessful, joined Gee 7 as a salesman on 11 December 2013. He was given training by 'Compliance' staff about how to conduct interviews with client companies' employees before starting on site, which included prohibiting him (a) from giving 'advice' to such employees and (b) comparing Gee 7's policies to those of other providers. He was assigned to the Brakes contract. The role involved going onto Brakes' sites to visit their employees to discuss with them what had been offered as EBPs.
  81. On 7 January 2014 Mrs Reader e-mailed Mr Eaton asking, amongst other things, this question:
  82. "How are you covering the options for employees to change from the old Personal Group plan to yours? …. Please can you assure me that your offering is still 10% lower than our current [Personal Group] one, and how you demonstrate this? By this I mean, how is this determined? Does it not depend on anyone's particulars?" (CB 499)

  83. Unknown to Gee 7, during his employment with them Mr Wilson was meeting former colleagues from Personal Group on a social basis. In particular he met Mr Wayne Jones, a regional manager, to play squash. Mr Wilson discussed various aspects of Gee 7's business with Mr Jones, who passed the information on to others at Personal Group. It is clear that Personal Group intended to use Mr Wilson to obtain further information about Gee 7. That is demonstrated, in particular, by the contents of an e-mail dated 10th of January 2014 in which Mr Jones made a record of his meeting with Mr Wilson for a game of squash. Mr Jones sent the email to a member of senior management at Personal Group, Mr. Lothian.
  84. "…. Mark W has indicated he will show me the [Gee 7] presentation and benefit website, but didn't have it on him. He was a little hesitant but he will relent. …. In time I will get to fully see their presentation, but he said they would kill him if he showed me. However, he feels loyal to me and will relent and I will get more information. He is desperate to come back to Personal Group, I have told him I don't think it will ever be possible and told him where I was disappointed with him. He has massive regrets. I think he is only there out of desperation and doesn't want to be. I believe we can get any information we need from him in the future and with time." (CB 501.)

  85. On 17th January 2014 a compliance officer at Gee 7, Kate Brookstein, sent an internal e-mail to Messrs Pardoe and Eaton concerning Mark Wilson and his sales pitch to employees in respect of the Gee 7 policies. She said that she had been listening to audio recordings to ensure compliance with procedures. She expressed concern at the way in which Mr Wilson was comparing benefits of the Gee 7 scheme with the Personal Group scheme. She concluded by saying,
  86. "I'm going to continue listening to recordings and feedback; but so far from a compliance point of view considering the letter received from Personal Group this morning– this is not good." (CB 502-503)

  87. On the same day, 17th of January 2014, David Walker, the commercial director at Personal Group, wrote to Pem Hulusi. In that letter Mr Walker pointed out that within the terms of the Personal Group-Brakes contract it was provided that notwithstanding termination of that contract, Brakes should continue to deduct gross premiums from its payroll in respect of employee clients of Personal Group who had not transferred their payment method to direct debit. Mr Walker went on to mention that there was an ongoing dispute between Personal Group and Gee 7:
  88. "It is our experience that they operate on a 'substitutional-sale' basis, and actively encourage cancellation of your employee's payroll deductions. This is indiscriminate and regardless of the type of range of cover we currently provide. We have already suffered instances of other customer locations where policyholders are completely confused as to who is providing cover and whether or not cover remains in place. We specifically want to avoid this situation happening at Brakes …." (CB 504-505)

    Brakes' letter to their employees of 21st of January 2014

  89. On 21st January 2014 Brakes sent a letter to all their employees who paid for insurance plans with Personal Group saying that Gee 7 and its underwriter would offer the same level of cover as the employees had had at 31st December 2013, for the same premium. They informed the employees that they were switching provider, and were stopping payroll deductions in favour of Personal Group at source. Employees would be treated as having opted into the new Gee 7 scheme unless they expressly told Brakes that they had opted out. One heading in the letter was "What happens to your Personal Group policy?" The text continued:
  90. "Your premiums for Personal Group will be paid through payroll up to the 28th February 2014, at which point we will stop further deductions and payment on your behalf… and begin payments to Gee 7 NHSXtra from 1st March 2014. You may have received a letter from Personal Group explaining that you may continue to renew your policy through them, and that they will collect your premiums by direct debit. If you intend to do so please follow the instructions in their letter and complete the form overleaf to confirm you wish to stop deductions via the Brakes payroll."

    The alphabetically re-arranged List

  91. Mr Wilson said that he found that Brakes' employees who had Personal Group policies were confused about the changes taking place. His evidence was that he asked Mark Eaton for a list of the employees who had policies with Personal Group and their premiums so that he could tell them, when they saw him, what they were currently paying. It is clear that Mr Eaton mentioned the matter to Mr Pardoe and that Mr Pardoe spoke to a member of the clerical staff, Ms Annie Davies, about the matter. She evidently had a conversation with Mr Wilson about it as she sent him the following e-mail on 28th January 2014:
  92. "The information that we were talking about on the phone before, I have now got it and sorted it by surname. Jon [Mr. Pardoe] has asked that I just send a hard copy so I am getting two copies, one for you, one for Nina in the post today first class." (CB 516.)

    The "information" she referred to was the List. The "hard copy" which Mr Wilson and Miss Atkins each received, was the List transposed into alphabetical order. It was indeed sent to them in hard copy form only, and in neither of their cases was the List also sent in digital or "soft copy" form as an attachment to an e-mail.

  93. Mr Wilson said that when an employee who had a Personal Group Policy came to see him he would then be able to look him or her up on the List and could confirm what premium they had paid or were paying. He would then talk to them about the new Gee 7 "My Brakes Plan" and if they decided to take up that offer, he would fill in their details on a computer and would tick a box on the machine which would specifically ask that the Personal Group payroll reductions be cancelled and Gee 7 deductions be put in its place.
  94. On 6 February 2014 Mr Scanlon of Personal Group attended a meeting with Mrs Reader and Pem Hulusi of Brakes. The main purpose of the meeting was to discuss whether there was anything that could be done to rescue the relationship between Personal Group and Brakes. Personal Group had been attempting to resolve issues with Brakes for some time. However, the attempts came to nothing.
  95. Mr Wilson said that after working for Gee 7 for only a short time he found a number of reasons for dissatisfaction with his position. Foremost amongst these was his realisation that the practical application of the Gee 7 salary and expenses arrangements meant that his remuneration was insufficient for him to support himself. He had further contact with Personal Group, discussed the possibility of rejoining them, and provided them with a copy of the List. He handed in his notice on the 19th February 2014, telling Gee 7 (untruthfully) that he was going to work in the building industry. The following week Mr Wilson commenced employment with Personal Group.
  96. Part 3
    The agreed issues

  97. In advance of the trial the parties agreed a schedule of issues. Some of these related to matters which are no longer pursued. Of the issues which remain the following are of primary importance:
  98. In respect of the claim against the second and third defendants:

    (1) Whether the information contained in the List sent by Mrs Reader of Brakes to Mr Eaton on 29 May 2013 was,

    (a) the claimants' confidential information within the meaning of clause 3 of the contract between the claimants and Brakes; and,
    (b) whether it was information of a confidential character.

    (2) Whether the second and third defendants were and are under a duty of confidence to the claimants in respect of the information contained in the List.

    (3) Whether the second and third defendants used the List unlawfully to target employees with the claimants' insurance policies, in order to persuade them to change provider.

    (4) Whether the second and third defendants should be restrained from further use of the List.

    (5) Whether the claimants have suffered any loss as a result of any wrongful use of the List by the second defendants as set out at 3 above.

    (6) What damages should be awarded to the claimants.

    (7) Should the claimants be denied an equitable remedy on the basis that they have not come to the court with clean hands.

    As against the fourth defendant

    (8) Whether the fourth defendant was bound by the terms of clause 2.2 of the legal undertaking dated 7th October 2011 and whether the first claimant company is entitled to enforce those terms.

    (9) What is the proper construction of clause 3 of the legal undertaking and, on that construction, is it enforceable?

    (10) Did the fourth defendant act in breach of clause 2.2 of the legal undertaking by his solicitors' letter dated 12th of October 2011 and by failing to provide a List in accordance with that clause?

    (11) Did the fourth defendant act in breach of clause 3 of the undertaking by procuring a copy of the List from Brakes, or by passing on to the second and third defendants a copy of the List?

    (12) Is the first claimant entitled to seek an order for specific performance of the undertaking given by the fourth defendant?

    (13) Did the fourth defendant use the List either to target employees with the claimants' insurance policies, in order to persuade them to change provider or to arrange a group policy with another underwriter?

    (14) Has the first claimant company suffered loss as a result of any breaches of clause 2.2 or 3 of the undertaking given by the fourth defendant?

    (15) What damages should be awarded to the first Claimant?

    Part 4
    The witnesses

    (1) Guidance as to the appraisal of the evidence of the witnesses

  99. In assessing the reliability, accuracy, and veracity of the witnesses on all sides I have been considerably assisted by the chronology of events and such contemporaneous documentation as exists. E-mailed responses to requests for information, for example, provide evidence from which inferences may be drawn as to the motives of the parties involved, and the nature of the transaction between them. The general background and sequence of events is also of assistance in determining the overall probabilities. In Onassis v Vergottis [1968] 2 Lloyd's Rep 403, Lord Pearce said at 431:
  100. "It is a truism … that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance."
  101. In the case of The Ocean Frost [1985] 1 Lloyd's Rep 1 at 57 Robert Goff L.J. (as he then was) made the following well-known observation when dealing with the approach he adopted in cases of fraud when considering the credibility of witnesses:
  102. "Speaking from my own experience, I have found it essential … when considering the credibility of witnesses, always to test their veracity by reference to the independent facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth."
  103. In Grace Shipping v Sharp & Co [1987] 1 Lloyd's Rep 207, now as Lord Goff of Chieveley, he said at 215:
  104. "It must not be forgotten that, in the present case, the judge was faced with the task of assessing the evidence of witnesses about telephone conversations which had taken place over five years before. In such a case, memories may very well be unreliable; and it is of crucial importance for the judge to have regard to the contemporary documents and to the overall probabilities."
  105. Arnold J in the case of BRUTT Trade Marks [2007] RPC 19 at [24], having made reference to Goff LJ's observations in The Ocean Frost, said,
  106. "Thus before addressing the conflicts of evidence the fact-finding tribunal should first consider what is common ground, what is asserted by one party and not contested by the other, and vice-versa, and what is shown by the documentary evidence. Once these matters have been ascertained and put into chronological order, it is frequently much easier to resolve the remaining conflicts. In resolving such conflicts it is of assistance to consider which version of events is the more likely."

    (2) The rival contentions as to the witnesses

  107. Leading counsel for the claimant companies, Mr Stafford QC, characterised Mr Eaton, the fourth defendant, as a disloyal, unethical opportunist who saw a way of benefiting himself by assisting Gee 7 to compete unfairly with Personal Group. Although the events of 2011, the year in which Mr Eaton left the employment of Personal Group, were not central to the claimant companies' case, they tended to show how Mr Eaton went about business, what his commercial ethics were, and how he was "prepared to be a chancer." Mr Eaton had, said Mr Stafford, "calculated his chances, calculated that he was not going to be caught, took a chance, and when he was caught, made a series of specious excuses." The remarkable timing of the sequence of events between June and October 2011, and the nature of some of those events, I understood Mr Stafford to submit, amounted to circumstantial evidence which cast light upon Mr Eaton's true intentions and upon the issue of whether he knew the relevant information was confidential. At the very least, Mr Stafford submitted, it showed that he had been reckless in his use and abuse of that confidential information.
  108. It is necessary to consider whether the evidence does indeed show that Mr Eaton's behaviour was as unethical as Mr Stafford claimed, or whether in fact, Mr Eaton was simply a hardworking business executive who wished to leave a company where he was unhappy, and whose entirely innocent actions have been misinterpreted in the harsh glare of hindsight. His case, in effect, is that he is a victim of circumstances and has become the quarry of ruthless and spiteful former employers because he joined Gee 7, an upstart competitor who dares to tread upon turf they regard as theirs alone.
  109. Turning to Mr Pardoe's role, Mr Stafford said that in his witness statement Mr Pardoe had sought to present himself as an honest broker, who was "essentially detached from this unfortunate sequence of events." Personal Group's case, however, was that Mr Pardoe was determined to compete with Personal Group on any terms, was involved in some of the relevant events from at least July 2011 onwards, and was aware that the information in the List was confidential, taking a leading role in the use and abuse of such confidential information. In order to test that categorization by Mr Stafford it will be necessary to take a critical look at the timing of events and at such documents as can be shown to have been seen and considered by Mr Pardoe.
  110. Mr Lee, for the defendants, in closing, dealt with the relevance of the background as follows. It was of fundamental importance, he said, to remember that in respect of the allegations in the disciplinary proceedings in October 2011 of breach of the duty of confidentiality by disclosing information to others outside Personal Group, that the first claimant company had been satisfied that Mark Eaton had not acted with any malicious intent in relation to the matters alleged. That, Mr Lee submitted, set the scene for what followed, and what followed should be regarded in that context.
  111. So far as that basic premise is concerned, it is entirely understandable that Mr Lee should have put the matter in that way. In taking account of that, however, I must bear in mind that a great deal of background detail available to all parties at the time of the hearing in the summer of 2014 was not available to Mr Rooney in the autumn of 2011 when he made his finding. Moreover, Mr Rooney had not actually said that he was satisfied (in a positive sense) that Mark Eaton had not acted with malicious intent: he was careful to say, at that stage, that upon the evidence available to him he could not make a positive finding against Mr Eaton: i.e. he could not say that he was satisfied that Mr Eaton had acted maliciously. He gave a 'level 2' warning to Mr Eaton, on the basis that he had acted in breach of his contract and his duties of confidentiality.
  112. As to the documents e-mailed by Mr Eaton to his personal e-mail address, Mr Lee again made the point that the conclusion drawn by Mr Rooney was that Mark Eaton had acted negligently, not maliciously. I take that into account, but must also bear in mind that that was a finding made solely upon the basis of such evidence as was then available. Mr Rooney made it clear in the witness box that his conclusions on the evidence available now would probably have been different.
  113. So far as the meeting between Mark Eaton and Jon Pardoe in July 2011 was concerned, Mr Lee made the point that "if this was as suspicious or as secretive as is now suggested," Mark Eaton would not have entered the meeting in his 'Outlook' diary at Personal Group (as he said he had, and as a print of it amongst the papers appeared to confirm: although there was some suggestion that in another record Mr Eaton had entered a dental appointment as his reason for absence from work that day) and in any event he would not have volunteered information about the meeting during the investigation meeting, as Mr Rooney accepted that he had, however belatedly that had been.
  114. Mr Lee made a further point that it was striking that there was no evidence that Mr Eaton or Gee 7 have put any of the information e-mailed to the private e-mail address to any use. That, too, is a perfectly fair point so far as it goes. It is true that there is no such evidence. One difficulty, as will be seen, is that as Mr Eaton did not comply with his undertaking to identify all the confidential information which he had had in his possession, it would have been a challenge to find any evidence in any event. An inference may only be drawn from such documents as the claimant companies can prove Mr Eaton sent to his own e-mail address. Despite the suggestion that this absence of evidence was "striking," Mr Lee did not provide examples of the kind of evidence of actual use of the e-mail documents which, on the defendants' case, one might have expected to see.
  115. With regard to the nature of the 'contacts' which Mr Eaton e-mailed to himself, Mr Lee made the point that 90 per cent of them were not business contacts. That Mrs Reader (then Miss Beale) was well known to Mr Eaton as his contact at Brakes was something which Mr Rooney accepted. In all the circumstances Mr Lee submitted that the explanations which Mr Eaton had given should be accepted.
  116. The conclusions I have reached as to the overall reliability of each of the witnesses who gave oral testimony are as follows.
  117. (3) The witnesses for Personal Group

    Mr Rooney

  118. I found Mr Rooney to be a credible and straightforward witness. He answered questions directly and simply. On occasions in cross-examination it was clear that he knew that the answer to a question might well be to the disadvantage of Personal Group, but he nevertheless unhesitatingly gave a straightforward answer. I noted at the time when he was being asked about the use that could be made of the List that he repeatedly agreed with suggestions made by cross-examining counsel as to its limitations in touting for business. Unsurprisingly, in closing, Mr Lee relied significantly upon the answers he received to those questions. As a further example of his candour, as I judged it, Mr Rooney readily accepted that Brakes had given reasons other than pricing for their decision to switch from Personal Group. He was never evasive, defensive or argumentative.
  119. Mr Scanlon

  120. Although the evidence which was given by Mr Scanlon, the chief executive of Personal Group, as to matters in issue other than damages was very limited, I formed much the same impression of him as I did of Mr Rooney. He was a good, clear, and direct witness. Again it was hardly surprising that Mr Lee in closing invited me to prefer the evidence of Mr Scanlon and Mr Rooney to that of Mr Wilson in respect of the potential use of the List in soliciting business.
  121. I should make it clear, however, that neither Mr Rooney nor Mr Scanlon was the subject of challenge as to veracity. In the main, they gave evidence on matters which were common ground. However, when cross-examined upon such controversial matters as arose, I found each of them frank, reliable and clear.
  122. Mr Wilson

  123. Overall, I formed the view that Mr Wilson was a reliable witness. From some of the material in the case I had the impression at an early stage that a suggestion was being made that Mr Wilson had been sent as a spy into the Gee 7 camp. However, Mr Lee made it clear that that was not the defendants' case.
  124. I accepted Mr Wilson's evidence as to his reasons for leaving Personal Group before joining Gee 7. I also accepted his account as to why he rapidly became unhappy with his pay and conditions at Gee 7, and of how and why he came to return to Personal Group. I have already made reference to this briefly above, and to the fact that Mr Wilson and Wayne Jones (by 2013 a senior regional manager at Personal Group,) had become friends when they had both worked for Personal Group, and maintained their friendship after Mr Wilson had left. When they met to play squash in January 2014 Mr Wilson told Mr Jones that he was then working for Gee 7, and of his dissatisfaction.
  125. It was quite clear to me from the terms of the e-mail at CB 501, referred to at paragraph 52 above, that the situation presented an opportunity to Personal Group for some intelligence-gathering. Personal Group in general did not want anyone who had resigned from the company to think that they could readily come back. It was very rare for them to take anyone back. Mr Wilson was very anxious to return, and I have no doubt that he was co-operative when asked about Gee 7's activities in respect of Personal Group's former customers, which, in all the circumstances, were obviously matters of acute and understandable suspicion. However, I accept Mr Wilson's evidence as to how he came to offer the List, unprompted, to Mr Jones and to Mr Andrew Lothian, the managing director of the second claimant company whom he met in February 2014.
  126. When he was being cross-examined I noted that Mr Wilson gave straightforward answers which were clear and to the point. He was neither defensive nor argumentative. Whilst initially slightly nervous in his appearance he relaxed completely during the course of cross-examination and in my view had the demeanour of a witness who was simply doing his best to assist by explaining exactly what happened, as he had witnessed it. He readily admitted that he had given an untruthful reason to Gee 7 when he resigned from their employment. He explained why he had not given the true reason, and did so convincingly. Whilst Mr Lee properly and professionally tested Mr Wilson's evidence in cross-examination, in my view it passed that test. I set out some examples below to explain why I take that view.
  127. There was a conflict of evidence between the accounts of Nina Atkins, the other Gee 7 employee employed to canvass Brakes employees who had been Personal Group customers, and of Mr Wilson, over a conversation which they had about the List, and related matters. In my view, this may be explained upon the basis that Ms Atkins considered that Mr Wilson was making improper use of the List, and that in doing so she formed the view that he was intending to use the List "[t]o see people before I did." Both spoke of a serious argument between them at this time, and each gave different reasons for it. Ms Atkins mentioned receiving regular e-mails on compliance issues from the compliance officer at Gee 7. It was quite clear to me that Ms Atkins took compliance matters very seriously indeed. Mr Wilson did not give me the same impression.
  128. Mr Wilson had been a highly successful salesman when he worked for Personal Group, and did his best to achieve sales for Gee 7. His evidence was that,
  129. whilst I was employed by Gee 7 I was assigned to the Brake Bros contract. I recall that at this time I thought it would help me greatly in my targeting of Brake Bros employees if I knew what the employees paid so that when I spoke to them I could confirm to them what they currently paid and then undercut this price, typically by around 10%. As a result I asked Mark Eaton if such information was available. This resulted in a hard copy of the List which is the subject of these proceedings being sent to my home address."

  130. Mr Wilson said that he would use the List when he saw employees of Brakes with Personal Group policies. From the List he could confirm the premium they were paying. He said that he would talk to them about the new Gee 7 plan, and, if they decided to take it up he would complete their details on his computer and arrange for Personal Group deductions to be cancelled and Gee 7 deductions put in their place. He did this, he said, although he was
  131. "… not comfortable with this approach."

  132. Mr Wilson was also subjected to a rigorous, though entirely fair, cross-examination about this topic by Mr Lee. At one point he was shown a memorandum from the compliance officer at Gee 7, which contained the following sentence:
  133. 'It is very important that you do not offer any comparison of our policy with what an employee may already have, nor suggest in any way, expressly or by implication, that, first, they have to change and, secondly, that our policy is better.'
    "Q. That is very a clear instruction is it not? A. Yes. Q. The author of that memo, Kate Brookstein also gave you clear instructions not to compare policies, did she not? A. She did. I say that, but obviously when I was given a List with their prices, if they were unsure of how much they were paying we could get it cheaper for them. …. We are not supposed to compare policies, but I was given a List with all the policies on. Q. What follows from that? A. Then I went to the field and if anybody was unsure how much they were paying for Personal Group I was able to tell them and then say, 'I can do it lower for you' …. Reduce it or make it cheaper. …. Q: Mr. Eaton made it clear to you as well, did he not, that you were not to compare products? A. Yes."

  134. There then followed cross-examination in which Mr Lee asked Mr Wilson about the use which could be made of the List. Mr Rooney and Mr Scanlon had both agreed that they could not see how any particular benefit, or insurance cover, could be deduced from the premium payroll deduction. To the evident surprise of some, the answers in cross-examination were as follows.
  135. "Q. That is very a clear instruction is it not? A. Yes. Q. The author of that memo, Kate Brookstein also gave you clear instructions not to compare policies, did she not? A. She did. I say that, but obviously when I was given a List with their prices, if they were unsure of how much they were paying we could get it cheaper for them. …. We are not supposed to compare policies, but I was given a List with all the policies on. Q. What follows from that? A. Then I went to the field and if anybody was unsure how much they were paying for Personal Group I was able to tell them and then say, 'I can do it lower for you' …. Reduce it or make it cheaper. …. Q: Mr. Eaton made it clear to you as well, did he not, that you were not to compare products? A. Yes."

    "Q. … the List did not tell you what benefit anyone was receiving, either, did it? A. I had the amounts on and I knew -- if it said £10.75 for example, I knew that was the £50 a night level. If it said £10.74 I know it would be them and a partner, or them and a spouse. If it said £17.25 I knew they had the £50 a night level with the £7,500 death benefit, so I did kind of know quite a lot of the time what they were paying for and what they had.

    Q. You have given two examples but you could not possibly ---- A. I can give you more. £16.12 would cover them. If it covered them, a partner and a child it would be £16.11 because it is £5.37 per person, so I knew kind of what they had and what they did not have. Q. But on the List there are over 200 combinations of price are there not? A. Yes. I was able to work out the majority of them with the combinations. Q. If that is right, Mr. Wilson, you never told anyone at all that you intended to do that did you? A. Intended to do what, sorry? Q. Try and work out what the cover was? A. I could just look at it and see."

  136. Mr Lee then asked some questions as to the circumstances in which the alphabetically-rearranged List had been provided to Mr Wilson on 28th of January 2014.
  137. "Q. Before you had the List you go to Mr. Eaton and you say, 'Some employees have asked me what the deductions are and I do not know', correct? A. Correct. …. I think I spoke to Mark and then the next thing I know, maybe a week down the line, me and Nina [Atkins] had something sent through the post. I cannot remember exactly who I spoke to …."

    [Mr Wilson was then referred to his witness statement]

    "Q… You do not there suggest that your aim in asking for this List was to try and undercut Personal Group by 10% do you? A. We got paid on how much business we did, so it was very easy for us to switch it with that because these are blue collar workers. They are not on £50-£60,000 a year, they are on practically minimum wage, so if I could say to them they can save £5 or £6 a month -- they are currently paying £20, we can do it for £18 -- it was the right thing for them to do really."

    Later he said,

    "I knew it was Personal Group's information, but my employer gave it to me so I did not know whether it was legal or illegal. I just had that as a tool to switch more policies."

  138. Mr Lee submitted that I should reject Mr Wilson's evidence. In particular he pointed to the conflict of evidence as between Mr Rooney and Mr Scanlon on the one hand, and Mr Wilson on the other, as to the potential use of the List. They had agreed that it was not possible from the bald information in the List as to premium to deduce the corresponding insurance cover. That evidence, Mr Lee submitted, should be preferred to that of Mr Wilson in cross-examination (above) in which he gave examples which had not been referred to in his witness statement.
  139. I have considered Mr Lee's submission with care.  It is correct that there is a significant difference between the accounts of Mr Wilson on the one hand, and the deputy chairman of Personal Group, Mr Rooney, and the Chief Executive Officer, Mr Scanlon, on the other hand. However, I was impressed by the fluency with which Mr Wilson was able to provide examples of how the premiums shown in the List enabled him to know the corresponding benefits. When challenged by Mr Lee that he had provided only two examples (although he had in fact provided at that point three examples) he readily and fluently began to give further examples, until, it seemed to me, Mr Lee wisely changed course.
  140. One obvious explanation for such encyclopaedic knowledge of rates of premium and the cover they represent is that Mr Wilson is a highly competent insurance salesman who knows his subject backwards. His evidence that he had been one of Personal Group's top-performing salesman, winning various awards, was not challenged. He worked day-in, day-out, selling policies with variously priced premiums. I am entirely satisfied that the examples he gave in evidence were perfectly genuine and accurate examples of knowledge which he carried in his head. Such knowledge could not be expected of the most senior directors of the company.
  141. (4) The witnesses for Gee 7

    Mr Eaton

  142. Mr Eaton at times appeared to be uncomfortable and defensive in the witness box. Where a witness is personally a defendant in the case (and Mr Eaton alone fell into that category) it would be remarkable if there were not occasional signs of discomfort and guardedness. Cross-examination, even though perfectly politely phrased and delivered, may be perceived as being hostile by a truthful witness, who might well appear defensive and guarded. I make full allowance for that in the case of Mr Eaton. Evasiveness, however, is not a characteristic of a truthful witness. On a number of occasions Mr Eaton appeared to me not merely to be defensive, but to lack candour: when asked about matters which could have been dealt with by very simple answers, he did not attempt to answer those questions straightforwardly.
  143. An example is to be found at the very beginning of his cross-examination, on an otherwise relatively insignificant point, when he was invited to consider a passage in his witness statement concerning the 'winning' of the Brakes contract, which, unknown to Personal Group, had been in April 2013: see Part 2 of this judgment at paragraph 44. The problem had been that, contrary to Brakes' wishes, Personal Group would not agree to early termination and, in about September 2013, Mr Pardoe had changed the commencement date of the April contract to coincide with expiry of Personal Group's contract.
  144. Cross-examination on this was as follows:
  145. "Q. …. I will just read to you the second sentence: 'When we did win the Brakes contract in January 2014 there was no intention to resurrect the Proposal because of the regulatory concerns.' Do you see that? A. Yes.
    Q. Do you stand by that sentence? A. Yes.
    Q. Really? What you say in the first part of that sentence is that you won the Brakes' contract in January 2014, do you not? That is what you are saying? A. That is correct.
    Q. You won it in April 2013, did you not? A. No.
    Q. That is when the contract was signed, was it not? A. The deal did not go ahead."

    Q. That is not what I asked you. You won the contract in April 2013? A. No, that is not true."

    Counsel then had to take Mr Eaton to a copy of the contract itself, dated 5th April 2013, CB 203, which he agreed appeared to bear Mr Pardoe's signature. Nevertheless, with the document in front of him, Mr Eaton parried a further question inviting him to agree that Gee 7 had a contractual commitment from Brakes in April 2013, by saying that it did not go ahead.

    "Q. But to say that you 'won' the contract in January 2014, would you agree with me, that that is a misleading statement? A. Sorry, can you repeat that?
    Q. To say that you 'won' the contract in January 2014, would you agree with me that that is a misleading statement? A. No, I think we believed we were going to work with Brakes, but we did not work with them at that point in time.
    Q. You did not say, 'we started work with them in January 2014,' you said, 'We won the contract in January 2014.' A. I am not sure what your point is.
    Q. My point is, do you agree with me that the statement that you have just endorsed in the witness box… is misleading? A. Possibly, in that context, yes."
  146. Having seen and heard him, and having regard to the fact that he has achieved directorial positions in substantial companies for some years, I have no doubt that Mr Eaton is an intelligent man who readily understood what he was being asked, and knew what the straightforward answer was. The point counsel was asking him about itself was of no real significance in the overall scheme of things. Had it been answered by simple agreement that the expression used in the witness statement was the wrong choice of word, it would have been unremarkable. It was not answered in that way. Whether it was the result of anxiety over admitting on oath the soliciting of Brakes' business in early 2013 when they were still contractually bound to Personal Group, or because he perceived counsel's questions to be concealing some sort of trap, is unimportant. The significance of the exchange is that it is an example of Mr Eaton's evasiveness: he would not concede a point which for some reason he regarded as being to his disadvantage until he had no option but to do so.
  147. I make no positive finding against Mr Eaton that he was untruthful in the evidence he gave that he had absolutely no idea that Ms Hulusi or Mrs Reader at Brakes had been indulging in a pretence (as I find either or both of them probably had) that a tendering process between Personal Group and Brakes was being undertaken in the months before January 2014. This was what Mr Scanlon described as the "charade." I have summarised the evidence about this at paragraphs 49-51 above.
  148. Mrs Reader and Ms Hulusi, of course, have not had the opportunity to explain their conduct in evidence. The circumstances, however, and the lack of any possible explanation for such aberrant conduct by HR officers and administrators at so large a company as Brakes, might be thought to tell its own tale. The fact was that Personal Group, although tenaciously clinging to the contract for its full term, were effectively being "stalled" while the company which Mrs Reader quite evidently favoured as a replacement for Personal Group, namely Gee 7, were actively doing all they could to displace them.
  149. Mr Eaton said he had not heard of all this until the day before he gave evidence. He also said that he could see no reason why any such pretence should have been practised by those at Brakes. Given the admittedly close working relationship he had had with Mrs Reader for some years, and all the circumstances of the case, it is surprising that Mr Eaton was wholly unaware of something which can only have been done for his benefit as agent for Gee 7.
  150. Despite the reservations I have as to Mr Eaton's general credibility, I cannot say that there is evidence which satisfies me on the balance of probabilities that he was untruthful in saying that he did not know about 'the charade' at the time it happened. Mr Lee made the point that Brakes may have had their own motives for indulging in a pretence about re-tendering. Whilst Mr Lee made it clear that he could only speculate as to their reasons, I agree with him that it is a reasonable possibility.
  151. In the end I think that the matter of 'the charade' is best regarded in the light in which Mr Stafford described it in closing:
  152. "… a somewhat discreditable commercial episode … of a piece with the unhealthy aspects represented by the supply of the confidential contract and the supply of the List of names."

  153. I should make it clear that I do not draw any inference beyond the limit of Mr Stafford's invitation, but that his submission as to the marginal relevance of the point is in my view a sound one, for the reasons he gave.
  154. Mr Pardoe

  155. Mr Pardoe was a witness whose self-confident manner was obvious from the outset. Occasionally he showed signs of impatience, and an assertiveness which bordered on truculence. He is, as he made clear, an enterprising and determined businessman with little time for what he regards as unreasonable restrictions on competition. However, he too was evasive when asked simple questions. This was exemplified in a passage in cross-examination which began when he was asked a simple question as to why the List could not have been obtained openly and directly from Personal Group. A lengthy extract is necessary, as it demonstrates counsel's pertinacity in insisting on a straight answer to his questions and the witness's reluctance to give such an answer.
  156. "Mr Stafford: When you took over the contract from Personal Group, why did you not ask Personal Group for a List of its customers and how much they were paying? A. That is exactly what I suggested Brakes did because that would be normal in the industry.
    Q. I am asking why didn't you ask Personal Group? A. Because Brakes are the Group administrator of the scheme. It would not be down to me to ask Personal Group. It would be down to Brakes to ask that. I suggested to Brakes, as the Group administrator of the scheme, like any group scheme, that they should go to the insurer and ask for the details.
    Q. These are not group schemes. These are individual policies. A. No, they are group schemes.
    Q. I am going to ask you again, but I will put it a different way. If you had asked Personal Group to provide you with a copy of the List, can you think of any reason why they would have refused? A. I could not see any reason why they would refuse Brakes that information.

    Q. That is an evasive answer, as well you know. If you had asked Personal Group for this List, can you think of any reason why they would not have provided this List to you? A. I think any normal insurer would say, 'Please give us a letter of authority from the company.'

    Q. I am asking you for the third time. If you had asked Personal Group for this List, do you think they would have given it to you or not? A. I think they would if I had had a letter of authority.
    Q. Is that because you think it is information that is not confidential? A. No, it is just that in my experience that is what happens in the industry. You get a letter of authority from the company, the employer, the group administrator, and the existing incumbent insurer provides the information.

    Q. I am going to suggest to you that the reason that you are not grappling and answering directly my questions is that the answer is no, you would not have expected if you had gone to Personal Group that Personal Group would have given you this information. A. Knowing them as I know them, because they are absolutely vindictive, of course I know that they would not have given me the information, but my experience in the industry tells me that 99.9% of companies would provide that information. ….

    Q. Let me ask you this question. You have put in your witness statement a whole host of reasons why this information is not confidential. You have not told us in your witness statement that what you would normally do is go to the displaced contractor with a letter of authority and get the information, have you? A. I suggested to Brakes ----

    Q. I am going to cut you off there. I am asking you about what is in your witness statement and what is not in your witness statement. You have not put in your witness statement anywhere that the normal thing to do is to get a letter of authority from the employer and that way get the List directly from the displaced provider. A. I did not see any benefit in ----

    Q. No, is it in your statement or is it not? A. But I said -- say it again, sorry?
    Q. What you have described to the court is that it is entirely normal to get hold of a List like this by approaching the employer, getting a letter of authority and going to the displaced provider (Personal Group in this instance) and you would expect to get this List. That is what you have told this court. A. Yes.
    Q. I am saying to you that that explanation is not in your witness statement. I am asking you do you accept it is not in your witness statement? A. I would have to refer to it, but I think there is reference to examples such as group personal pensions where it would be perfectly normal.

    [Judge] So you agree that is not in your witness statement?
    A. I do not think I can agree to that without ----
    Q. Look at your witness statement, please. A. Thank you. (Pause) Yes, so I have referred to it. ….

    Q. So you are referring there, first of all, to a group process, a group policy; yes?
    A. Can I clear up this definition because you are using terminology which I think lacks understanding, no disrespect. ….
    [A lengthy description by the witness of the differences between group, company and individual policies followed.]
    Q. Now, the group personal pension is ----

    [Judge] I am sorry, we are straying a little from the question you asked which has not yet been answered.
    'You do not refer in your witness statement to the normal thing being to get a letter of authority from the employer and going to the provider and getting a list that way?'
    What is the answer?
    A. Well, I obviously do not refer to that."
  157. Having reconsidered Mr Pardoe's evidence on this and many other topics, I have no reason to alter the impressions I noted at various points whilst he was in the witness box: that he was unduly defensive and evasive, occasionally attempting to deflect difficult questions with rambling and barely relevant answers.
  158. At a stage close to the end of his cross-examination, he was asked some questions as to the purpose behind the use of the List at Gee 7. An extract is set out in the next Part of this judgment. At a significant point Mr Pardoe gave an answer which appeared to be very candid. When counsel pointed this out, however, as being to the advantage of Personal Group, Mr Pardoe went back on his answer: see paragraph 150 below. I did not find him a reliable witness.
  159. Miss Atkins

  160. Miss Atkins was an entirely straightforward witness. As the following passage in cross-examination shows, she did not seem entirely clear in her own mind as to whether Mr Wilson was using the List improperly in an unfair targeting of Personal Group customers, or in a way which was unfair to her, by using it in an attempt to see people before she could, but I found that she was doing her best to be helpful.
  161. Q. Was this conversation when you discussed the List before or after you next saw Mr. Wilson using it because he clearly did use it? A. Yes, he obviously did use it. That was previous to that. So when we first arrived at site, the next working week. Q. Yes. So at the start of the next working week you both turned up with the List? A. Yes. Q. That is the point when you had the conversation? A. That we both had received a copy of this List which obviously I later realised that he had requested.
    …. Q. … did you discuss [with Mr Wilson] how the List was to be used? A. Well, we both looked and obviously you have lots of names on there so it is very difficult firstly to be able to pinpoint someone that was directly in that site at the time, but obviously we knew that it was to be used if someone did not know their payroll deductions which, to be honest, was quite rare.
    Q. When you spoke to Mr. Eaton … at the end of that week where you had in your possession the List, that was another conversation in which the List came up? A. Yes. Q. What was said on that occasion? A. That I believed that Mark Wilson was using the List to specifically target, you know, staff members there. …. But obviously the only purpose of that would be to – I did not really see any point of the List so the only purpose would be for him to see people before I did. Q. So, in a way, you were worried -- and I do not say this is a wrong thing -- that he was jockeying for what might be a better position as he saw it in terms of commission-earning opportunities? A. No, I do not agree with that. I believe that it is because it was being misused and obviously it was very clear on how the List should be used. Q. Yes. Because Mr. Eaton had set the rules? A. Yes, and obviously we get regular e-mails from Compliance and so on …."

    Part 5

    Issues of fact and findings of fact

    The importance of background

  162. Counsel on both sides emphasized the importance of the background to the issues in the case. For the claimants it was said to illuminate and explain conduct and motives which might otherwise be difficult to understand or follow. For the defendants it was submitted that it provided the all-important context within which the primary issues needed to be placed and to be considered within that context. I agree with both counsel on these points. Moreover, it seems to me that the findings which I make as to the evidence which I accept in respect of the background are of some importance overall when considering the essential issues in the case as agreed by the parties. I therefore propose, before dealing with my findings in respect of the main issues to give my findings of fact in respect of the evidence in relation to the background.
  163. When, how, and why Mr Pardoe and Mr Eaton came to meet in 2011

  164. Going back to the very beginning of the sequence of material events, there may appear to be some chronological and other anomalies in the respective accounts of Mr Pardoe and Mr Eaton. First, by the 22nd July 2011 most of Gee 7 had been set up, and Mr Pardoe had, on his own evidence, played a significant role in that. Moreover, he had already recruited the three financial advisers from Personal Group.
  165. If, therefore, Mr Eaton is correct in his account of what was said, i.e. that when he met Mr Pardoe on that occasion, Mr Pardoe was "not working within the financial services industry at all" and that Mr Pardoe mentioned only that he was considering getting back into the industry via a financial services company, either Mr Eaton would seem to have the date wrong, or he misunderstood what Mr Pardoe was saying, or Mr Pardoe's account to Mr Eaton was not an accurate one.
  166. Secondly, in Mr Eaton's 'Linked In' profile (a form of curriculum vitae posted on the business equivalent of a social internet site) Mr Eaton described himself as being a 'founder' of Gee 7. That assertion still remained on the Linked In profile at the time of the trial. On Mr Eaton's account in evidence, and on that of Mr Pardoe, he was not a founder of Gee 7.
  167. In cross-examination Mr Eaton was asked,
  168. "Q In 2011, you had an appointment to meet with Mr Pardoe? A I did. Q That was on 22nd July? A I believe that is correct. …. Q Is it right that this was the result of Mr Pardoe inviting you to meet him? A Yes. Q At the time… three financial advisers had [already] left Personal Group to go to Gee 7? A That is what I heard, yes. Q And at that meeting he explained you his plans for moving into EBP's? A No."

    The witness was then invited to look at a letter from his solicitors, Wragge & Co, which contained an assertion that Mr Pardoe had first met Mr Eaton to discuss his proposed new business venture "in or around July to September 2011", and that "Mr Eaton decided to leave your clients' business and join Gee 7 and tendered his resignation in September 2011." He was asked whether he agreed that that sentence could be read as meaning that (contrary to what he had told Mr Rooney at the time he resigned) his reason for tendering his resignation was his decision to join Gee 7. To that suggestion he responded by saying that he totally disagreed, but understood how it could be "misconstrued."

  169. Mr Pardoe, when cross-examined, said that he did not agree with the Linked In profile published by Mark Eaton. In particular Mr Eaton had not been a founder of Gee 7. When pressed by counsel, the witness said that while he would not describe Mr Eaton as a founder of Gee 7,
  170. "… you can always encourage employees to have a pride in the company and … to regard themselves as founders. He was not technically a founder."

  171. As to the July meeting in 2011 Mr Pardoe agreed that he had contacted Mark Eaton to sound him out. At this stage he said,
  172. "I was thinking of going back into business myself."

    He accepted however that he had recruited the three other members of Personal Group staff by July 2011.

    "Q So you must have had some well developed plans? A No - they were only coming into a wealth management business."

    When asked, in the light of the letter from Wragge & Co, who are also the solicitors for Gee 7, if he knew what had happened between 22nd July and early September which persuaded Mark Eaton to tender his resignation, Mr Pardoe said,

    "I've no idea. There were no further discussions between us that I can recall."

    Conclusions on the Eaton-Pardoe meeting in July 2011

  173. The conclusion I have reached is that, on the balance of probabilities, Mr Rooney's suspicions as to the conduct of Mark Eaton and Mr Pardoe are well-founded, for the following reasons.
  174. The timing of Mr Pardoe's activities in establishing Gee 7 as a competitor to Personal Group, and his recruitment of other staff from Personal Group, followed very shortly by his invitation to Mr Eaton to meet on 22nd July 2011 are circumstances which form part of an overall pattern. The evidence of both Mr Pardoe and Mr Eaton was that the invitation was for what each of them described as no more than a casual social meeting at which business was not discussed in any meaningful way. That is inconsistent with it being (a) during working hours and (b) with Mr Eaton having made an entry in his 'Outlook' diary.
  175. The explanation given in the solicitors' letter was plainly written on instructions given by Mr Eaton at the time, and made a clear link between the meeting and his resignation. His evidence to the contrary was simply unconvincing.
  176. There are then the subsequent circumstances involved in the e-mails to Mr Eaton's private e-mail account. In my view Mr Eaton never satisfactorily explained the sending of the "test" e-mail. He gave no explanation in his witness statement at all, and his evidence when briefly cross-examined about it was as follows:
  177. "Q. If you are sending emails home on a regular basis, what need would there have been for a 'test' email? A. It was probably because the internet was down. I was probably doing that with our IT department. I do not know for sure because obviously it is a long time ago. …. Q. This is the first time that explanation has been tendered, is it not? A. I cannot recall."

  178. The sending of the 'test' e-mail was very shortly followed by Mr Eaton's sudden resignation, as to which his evidence was also unsatisfactory in my view, for the reasons given in the next section of this judgment.
  179. In the light of all the circumstances of what had gone on before it and what followed after it I am satisfied on the balance of probabilities that the claimant companies have shown, as counsel put it in opening, that the meeting on the 22nd July was arranged by Mr Pardoe to recruit Mr Eaton and that Mr Eaton saw a chance to be taken to compete unfairly with his employer, and took it, and, when he was caught out, gave untruthful explanations. Whatever may be the consequent position in law, I have come to the conclusion that, as a matter of fact, Mr Eaton was disloyal and unfair in his dealings with Personal Group.
  180. The stated reason for Mr Eaton's resignation from Personal Group

  181. When on the 11th September 2011 Mr Eaton handed in his resignation, he said in his witness statement that his reason was a complete breakdown in his relationship with Mr Rooney. Mr Rooney was cross-examined on the reason for Mr Eaton's resignation as follows.
  182. "Q. In relation to Mr Eaton and his leaving of Personal Group, he felt that his role had been diminished within Personal Group, did he not? A. That is what he said, but two months before he left, he had been promoted to head up the Key Account team. ….
    [Judge to counsel] In what way are you suggesting that his role had been diminished?.... [Mr Lee]… perhaps "diminished" is not the right word … I am not suggesting, for example, that he was demoted.… He felt that he was less important and he said that, did he not? You were aware of that? A. That is what he said, yes. My comment is that two months before that, he was promoted to head of the Key Account team so I'm not too sure what he was referring to. [Judge] … what did he say then? A. He did not say anything at that time about feeling that his role had been diminished. He was given more authority to lead up a team."
  183. In his witness statement Mr Rooney had said:
  184. "At the end of the interview Mr Eaton confirmed that he did not have any future career plans. Given the events that occurred after this … Mr Eaton was not honest about his motivations for leaving. Mr Eaton was in fact planning to work with Mr Pardoe in a new company providing, amongst other things, employee benefits."

  185. The evidence of all the circumstances leading up to Mr Eaton's resignation may be summarised as follows.
  186. (1) Since joining Personal Group, Mr Eaton had been promoted to higher levels and greater responsibilities within the company. The latest such promotion was two months before his resignation.

    (2) Mr Pardoe had started up Gee 7, and had invited three other significant Personal Group employees to join him there, before inviting Mr Eaton to the meeting on 22nd July.

    (3) Mr Eaton at that time was the Key Contacts Director at Personal Group.

    (4) The solicitors' letter, which was obviously based on Mr Eaton's instructions at the time it was written, plainly stated that he and Mr Pardoe had discussed Mr Pardoe's proposed new business at that meeting, and that Mr Eaton had decided to leave Personal Group to join Gee 7 and so had tendered his resignation in September 2011.

    (5) The test e-mail from the Personal Group e-mail address, followed by the other e-mails, then followed.

    (6) The "diminished role" reason given at the meeting where Mr Eaton tendered his resignation was vague, insubstantial, and at odds with the facts, as Mr Rooney pointed out. No particulars of that, or of the rather different reason in Mr Eaton's witness statement (the irretrievable breakdown in his relationship with Mr Rooney), were put to Mr Rooney in cross-examination.

  187. For the reasons I have already given, I am satisfied that Mr Eaton was recruited by Mr Pardoe at the July 2011 meeting, so that his knowledge, experience and expertise could be employed to compete with Personal Group. The fact that Mr Eaton and Mr Pardoe each denied that, however, raises other questions. Why did they deny it? Is the answer that each perceived the truth about the matter as damaging to his case in this litigation? Whether it was, or is, actually damaging is not really the issue: active recruitment for perfectly fair, above-board, competition with Personal Group would have been quite unexceptionable. I have to consider, first, whether this may be an indication, that on this point (and possibly therefore on others) neither Mr Pardoe nor Mr Eaton is a reliable witness; and, secondly, whether an inference may be drawn that each knows that they did not have fair, above-board, competition with Personal Group in mind. Before reaching a conclusion on either of those points I shall consider some other matters of fact which, to a greater or lesser extent are also in issue.
  188. How and why Brakes provided Gee 7 with a copy of the Personal Group-Brakes contract

  189. On 10th November 2008 Personal Group had entered into an exclusive contract with Brake Bros. Ltd to provide Brakes' employees with EBPs. That contract was extended in December 2011 for a further two years. Mr Eaton was the key contact at Personal Group with Brakes, and he had a close working relationship with Mrs Reader at Brakes. The contract was filed in Personal Group's computers in one of Mr. Eaton's computer files. The Personal Group-Brakes contract contained an express confidentiality clause. The Claimants' case is that in the light of his close involvement with the making of the contract, the storage of the contract on his computer, and his close involvement in the running of the contract, the court should infer that Mr. Eaton knew that the contract contained the express confidentiality clause in question.
  190. Mr. Eaton conceded in cross-examination that he believed such commercial contracts would normally contain a confidentiality clause. Mr. Pardoe made a similar concession. Mr. Eaton did not expect that a company would provide a copy of its commercial contracts to a trade rival.
  191. On 27th February 2013 Mrs Reader sent to Mr Eaton a copy of Personal Group's contract with Brakes [CB187], under cover of an e-mail which said,
  192. "As discussed the Personal Group Contract, thanks. If you think something is missing, let me know, I can probably dig it out."

  193. In his witness statement Mr Eaton said,
  194. "It was Ms Reader's understanding that they could change EBP providers when they wanted and they thought their contract with Personal Group had ended. I had had no involvement in drafting the contract between Brakes and Personal Group … and was unsure when the contract was due to terminate. I remember suggesting to Sue that she run it past her legal department to be sure. Sue sent me a copy of Brakes contract with Personal Group on 27 February 2013…. I cannot recall the exact conversation that led to Sue sending the contract but I do remember she was somewhat confused about when their Personal Group contract finished but I sent it onto Gillian Cheal, Head of Compliance at Gee 7 as I wanted to get her view on whether Brakes could terminate the contract. I copied in Jon Pardoe to the e-mail too. …. I wanted to keep him in the loop …. I did not read the contract …. I believe Gillian only looked at the termination clause and her view was that it was a matter for Brakes to decide on and Gee 7 should not get involved. I relayed this message to Sue."

  195. Cross-examined as to this, there was the following exchange:
  196. "Q. There came a point in the negotiations when there was sent to you, by Mrs. Reader, the contract? A. Correct. Q. Let us have a look at [the e-mail dated] 27th February, from Sue to you, 'Hi Mark. As discussed the Personal Group Contract, thanks. If you think something is missing, let me know, I can probably dig it out.' A. Yes. Q. So this follows a meeting that you had with Sue Reader? A. I cannot recall whether it was a meeting or phone call. Q… 'As discussed the Personal Group Contract ....' Can you tell me why she was sending this to you? A. I believe I can, yes. I believe there was some confusion over when her contract with Personal Group ended and that is, I believe, the reason she sent it. Q. What were you supposed to do with it? A. I do not know: make a comment or give it to someone who actually was more qualified than me. Q. So what did you do with it? A. I forwarded it on to Gillian Cheal…. Q. So what do you make of the sentence that she adds at the end of her e-mail: 'If you think something is missing, let me know, I can probably dig it out'? A. I have no idea. With respect, probably Sue would be the best person to answer that. Q. Indeed. It reads as though maybe you were looking for some piece of information. A. I was not so ---- Q. No, I am asking you, do you think that is how it reads? A. Yes, I can see how that would read like that, yes. Q. And it reads as though she may be responding to your request for something and you are going to look at it and see if there is a piece of the jigsaw missing? A. You are surmising. I do not know. Q. I am asking you so that you have a chance to say. A. No, I have not. I cannot answer because I do not know what she was thinking at that point. Q. You had had a discussion which probably meant that you knew what was in her mind. A. As I said, I had lots of discussions with her. There was a lot going on at that period of time."
  197. Mr Pardoe was also asked about this in cross-examination:
  198. "Q, You received a copy of the Brakes contract with Personal Group did you not? A. Correct. Q. At the time you received it you would have regarded it as confidential, would you not? A. I would have certainly viewed it as confidential between Brakes and Personal Group, correct. Q. You took no steps to return it to Brakes did you? A. I did not look at it. Q. You did not need to look at it to know that it was a confidential document in the light of your previous answer? A. No, but there is surely no difference between returning it and not looking at it. Q. Retaining it means you control whether you look at it and when you look at it, does it not? A. I am not sure whether I even retained it. I delete most of my e-mails so I could not answer you whether I retained it or not, but I certainly did not look at it. … if I had retained it obviously I have control on whether I could look at it …. Q. Are you really saying to the court, for the first time, that it is possible that you deleted it? A. I do not know. I have no idea. I do delete a lot of my e-mails."

    Conclusions as to the reason for the provision of the Personal Group-Brakes contract to Mark Eaton

  199. The words used by Mrs Reader in her e-mail of the 27th February, could not have been clearer.
  200. 'Hi Mark. As discussed the Personal Group Contract, thanks. If you think something is missing, let me know, I can probably dig it out.'

    In my view the following matters may be inferred from those words. (1) Mrs Reader and Mr Eaton had had a discussion about the Personal Group-Brakes contract. Each of them had reason to know that that was a confidential document as between Personal Group and Brakes. (2) The reason for its being sent was a request from Mr Eaton. The words "If you think something is missing" imply that Mrs Reader was assisting him in trying to find some information which may or may not have been discoverable from the wording of the contract itself. The reference to her probably being able to "dig it out" is consistent with her readiness to research other documents in her files which might be relevant to the Personal Group contract. (3) There is no sign of confusion in Mrs Reader's mind, as suggested by Mr Eaton, in any of the words she used. Nor is there any reference by her to any enquiry about or uncertainty over the term of the contract.

  201. Mr Eaton's answers in cross-examination, as set out above, were in my view unconvincing. That is consistent with his knowing the true purpose of the provision to him of the Personal Group contract, but being unwilling, not unable, to reveal it. In the context of this case that is consistent with a pattern of unethical conduct towards Personal Group.
  202. I reject Mr Eaton's evidence that he had "no idea" what Mrs Reader had meant by the phrase, "if you think something is missing, let me know, I can probably dig it out." This e-mail, it seems to me, is contemporaneous documentary evidence of a conversation or some form of electronic communication in which Mr Eaton had made a request for information from Mrs Reader. As counsel suggested when cross-examining Mr Eaton, since it is plainly the result of some kind of discussion with her, it is probable that Mr Eaton knew exactly what was in her mind. He chooses now to deny that, and suggests that the true reason for it was that Mrs Reader was in fact asking for information about the term of the contract. The phrase "if you think something is missing, let me know, I can probably dig it out" is quite inconsistent with that explanation, and I reject it. Plainly, this casts further doubt upon Mr Eaton's credibility as a witness. The inference which I draw is that he was asking for information which he thought might be of assistance to him in attempting to compete with Personal Group's business.
  203. How and why the List was provided

  204. On 29 May 2013, at 1605, Mrs Reader sent an e-mail to Mr Eaton which reads as follows:
  205. "Hi Mark,
    Please find attached two spreadsheet [sic]. Needless to say, they both hold very sensitive information to be used only for the purposes listed below and no other exercises. Thanks Mark.
    (1) A current complete list of all Brakes employees with their date of birth for you to trial the activation code method.
    (2) A list of all employees currently in the Hospital Plan [i.e. with Personal Group] we currently offer and then premium, for you to calculate an alternative premium for them. ['The List.']
    ….
    Please pass these reports on to the relevant people with your instructions, reiterating the sensitivity of the info. Thanks again.
    …."
  206. Nine minutes later, at 1614 the same day, Mr Eaton forwarded Mrs Reader's e-mail and attachments to Mr Pardoe and to Mr David Cartlidge, the Head of IT at Gee 7. He added the words "Here's the data list from Brakes one is for Dave the other is for the policy transfer."
  207. In his witness statement Mr Eaton said,
  208. "On 29 May 2013 I was sent by Sue Reader a list, which I shall refer to as the List, containing the names of Brakes' employees, their employee roll number, their wage type and the aggregate amount to be deducted from their wages for insurance policies held with Personal Group. Attached to this was a second separate list of all Brakes' employees with their roll number and dates of birth.

    …. In order to set up My Staff Shop certain information is required in advance including employees' names, dates of birth and roll number. …. The information in the second list was provided to enable us to do this.

    In terms of the List, my recollection of why we were sent this was … so that we could provide alternative cover for Brakes staff during the transition period in relation to the launch of the new benefits scheme. We had been exploring with Brakes the possibility of giving Personal Group policyholders the option to switch to NHS Xtra ("the Proposal"). Perhaps we would have needed these details if we were to make the Proposal but at the time I was aware of compliance issues concerning the Proposal. …. I do know that it was decided that the Proposal was not possible. I think Sue must have misunderstood the request when she says that it would be used to make comparisons with Personal Group plans.
    …. When we did win the Brakes contract in January 2014 there was no intention to resurrect the Proposal because of the regulatory concerns. …. I should emphasise that I did not read either list and simply forwarded them on to Dave Cartlidge in his capacity as Head of IT and Jon Pardoe.

  209. In cross-examination he was asked,
  210. "Q. … Core bundle p. 201, please. This is an e-mail from [Mrs Reader] to you at just about the time of the contract. A. Yes. Q. Just read the second and third sentences: 'We don't receive any information from them [Personal Group] advising us of the level of cover the employee has chosen, just the instruction the cost of the reduction. Is this going to make it difficult to determine a like-for-like cover?' That was a very pertinent question, was it not? A. Yes. Q. In certain circumstances, the best way to get like-for-like cover is to know the identity of the policyholder, the amount they are paying and what they are paying for -- correct? A. It could be correct, yes. Q. Of course, knowing who it is and what they are paying is a very good start in that direction? A. Possibly. Q. I am right in saying that Mrs. Reader was quite concerned to ensure that there was good value being given, was she not? A. Of course.
    "Q. If we move forward in time to 2014, in Core bundle 2, page 499, you will see an e-mail from Sue Reader to you. A. Yes. Q. Could I ask you to look at the final bullet point …? A. Yes. Q. Do you see that it reads: 'Please can you assure me that your offering is still 10% lower than our current one, and how you demonstrate this? By this I mean, how is this determined? Does it not depend on anyone's particulars?' Do you see that? A. Yes. Q. So it is clear from the first sentence, 'Please can you assure me that your offering is still 10% lower than our current one?' that she was interested in the actual price, was she not? A. On this particular e-mail, yes. Q. And because she uses the words, 'Please can you assure me that your offering is still 10% lower', it means that she has been concerned about price for some time? A. All customers are concerned about price. Q. It is clear from that sentence that you have, in the past, given some sort of assurance to her that the price would be about 10% less than Personal Group? A. Are you talking about particularly on policies? Q. I am talking about what this says. I am asking you what you said to that. A. Yes, that probably was a conversation that we had.
    "…. Q. It is a good question, is it not? A. It is a good question, yes. Q. 'Does it not depend on anyone's particulars?' That is a good question. A. If you did not understand the type of policy, yes. Q. But fortunately, by 7th January, you did at least have some information in your possession, did you not, which relates to the particulars? A. What do I need to look at? Q. ….You did have information in your possession by , did you not? A. What do I need to go to? Q. … Core bundle 1 … page 223.You will see there … that it is from Sue Reader to you? A. Yes. Q. You will see that this is the e-mail under cover of which she attached the list of Personal Group's customers and what each was paying? A. Yes. Q. Do you see under numbered item (2) that the purpose of providing 'a list of all employees currently in the Hospital Plan and their premium,[was] for you', that is to say you, Mark, 'to calculate an alternative premium for them.' A. Yes, she did say that, yes. Q. That is what it was for, do you agree? A. That list was not actually, but I think that was a misconception with Sue Reader…..
    "Q. Did you write back and say, 'We do not need this'? A. It will be the bundle if I did. Q. Take it from me, it is not. A. Okay. Q. Did you get on the phone to her and say, 'We do not need this'? A. No, I do not believe we did. Q. Did you destroy this information? A. No. Q. You passed it on, did you not? A. Yes. Q. At the time a time you passed it on you had well in mind that there was a purpose to keeping this material? A. Not at that time, no. Q. Are you sure? A. I am sure. Q. Have a look at the e-mail at the top: 'Here is the data list from Brakes. One is for Dave and the other ...', which I say is the List of people – '... is for the policy transfer'? A. Yes. Q. So you had mind that it was useful for the policy transfer? A. No, because that particular policy transfer is probably the wrong terminology. …."

  211. Mr Pardoe was also asked about this in cross-examination:
  212. "Q … core bundle….page 223. …. We see in Mrs. Reader's e-mail, in her second numbered paragraph: 'A list of all employees currently in the hospital plan we currently offer and their premium.' That is the List? A. Yes.

    …..
    Q. It comprised information about the business affairs of Personal Group with its customers, did it not? A. It contained a list of payroll deductions, yes. Q. It contained a list of the premiums being paid by the policy holders and a list of who those policy holders were? A. Yes. I saw it as a list of payroll deductions that Brakes were making. That is how I saw it. …. I appreciated it was private and confidential to the employee and to Brakes. …. Q… If you look at paragraph 2 you will see Ms. Reader's understanding was that Mr. Eaton wanted to calculate an alternative premium. .… She is saying use this to calculate an alternative premium. A. Do you want me to explain that? Q. I am just asking you whether you agree with what that means? A. I have explained that in my witness statement. It is to do with her wish for us to prepare alternative quotations for their employees. That is disclosed as a form that is an early draft that we had thought up. It was dispensed with for compliance reasons. …….. Q. We have seen the considerable efforts that you were making to address the constituency of insured employees of Personal Group. My suggestion to you is that this was designed to address the same constituency: How to provide a lower premium for those who have already got Personal Group insurance? A. No, that is incorrect. ….. Q. I suggest to you that this e-mail to Mr. Eaton was flagging up Mrs. Reader's anxiety about providing informationto Gee 7. A. She had sent two spreadsheets. One is a spreadsheet of all her employees, 7,500, with massive amounts of data. Clearly, the information is sensitive. Q. Do you see that sentence continues: 'They both hold very sensitive information to be used only for the purposes listed below and for no other exercise'? A. Correct, yes."

    Conclusions on the reason for the sending of the List by Brakes

  213. In respect of the e-mail at CB 201 ending "is this going to make it difficult to determine a like for like cover?" The very fact that that question was asked is contemporaneous evidence that Mrs Reader and Mr Eaton had discussed such information as Brakes might be able to provide him with to offer like-for-like-cover in competition with Personal Group. Mr Eaton found it impossible to deny that the best way to get like-for-like cover was to discover the identity of the policyholder, the amount being paid and the cover for which the premium was being paid, Although he would only say, "It could be correct, yes."
  214. The e-mail of 7th January 2014, at CB 499, is consistent with Mr Eaton having given Mrs Reader some assurance in the past that replacement cover would be offered at 10% below the Personal Group premium level. Again, however Mr Eaton would not give a straightforward answer to perfectly clear questions which he could easily have answered by saying "yes". Instead he said, "All customers are concerned about price." "Are you talking about particularly on policies?" Until he was constrained to reply "Yes, that probably was a conversation that we had." I found this unsatisfactory, but consistent with Mr Eaton's evasive attitude on earlier points of difficulty.
  215. When Mr Eaton was cross-examined on the e-mail which enclosed the List itself, his evidence was that Mrs Reader had either misunderstood or misconceived in some way the reason for its provision. I do not accept this. Again the contemporaneous document shows quite clearly what her purpose was in sending the list: "to calculate an alternative premium." That Mr Eaton knew this at the time, and clearly understood it, is shown by the words he used in the e-mail by which he forwarded it: "the other is for the policy transfer." He dealt with this unsatisfactorily in cross-examination by saying that that was "probably the wrong terminology." He was driven to admit by meticulous cross-examination that he would not have expected Personal Group to send him a list of that kind.
  216. When Mr Pardoe was cross-examined about the confidential nature of the information which was contained in the List his responses were in my view given stolidly and disingenuously: he would only concede that it was "[a] list of payroll deductions" and he would only accept that the information was "sensitive" because it contained personal information about employees of Brakes. Whilst the second list was indeed a list of payroll deductions, and amounted to Brakes' complete "payroll data" Mr Pardoe determinedly avoided dealing with the refined nature of the information in the List and the fact that it consisted of all those employees of Brakes, and only those employees of Brakes, who were also clients of Personal Group.
  217. I am satisfied that the chronology and overall circumstances show, on the balance of probabilities, that the e-mail of 4th April 2013 from Mrs Reader to Mark Eaton was part of a dialogue between them generated by the agreement for Gee 7 to take over the Personal Group hospital plan business. This is demonstrated by Mrs Reader's important qualification that Personal Group did not give any information advising Brakes of the level of cover each employee had chosen, but just the cost, and her consequent enquiry "is this going to make it difficult to determine a like for like cover?"
  218. It is also clear from the wording of the e-mail of 29th May 2013 that Mrs Reader was sending the attached spreadsheets as part of the continuing dialogue. I am satisfied that the probability is that this dialogue had been with Mr Eaton, whether at times face-to-face, or by telephone or by e-mail. From such impression as it is possible to gain from the papers alone, Mrs Reader seems astute and determined, and entirely capable of dealing with commercial matters such as these. It is clear that in doing her job for Brakes she had been promised by Mr Eaton, and was determined to retain, at least a ten per cent reduction, which, coincidentally, is exactly the level of deduction which Mr Wilson said he offered when interviewing Brakes employees on the Personal Group plan.
  219. The terms of the e-mail show that each spreadsheet was being sent for a different purpose. The second (complete) list was "to trial the activation code method" whereas the List was being sent "For you to calculate an alternative premium" for the employees who were Personal Group's policyholders. The plain meaning of those words is that the List was being sent to enable Gee 7 to compete with Personal Group by offering an alternative premium. If the account given by Mr Eaton in evidence were correct, only the second list would have been necessary. By her phrase "the relevant people" Mrs Reader implied that she understood that different people at Gee 7 would be handling the two separate tasks. The rapidity with which Mr Eaton passed the information on to two separate people and the wording of his e-mail are themselves entirely consistent with that. Mr Eaton forwarded the e-mail itself, but added no words of his own "reiterating" the sensitivity or limiting the purposes for which it might be used.
  220. The very fact that there were two separate lists sent by Mrs Reader is in itself a reason for rejecting Mr Pardoe's evidence that the List consisted only of Brakes' payroll data, as I have already mentioned. Mrs Reader in two separate places in a very short e-mail laid stress upon the sensitivity of the information and the strict limits for which the information might be used. That cannot be explained away by the fact that both spreadsheets contained names and dates of birth. On the balance of probabilities I am satisfied that she was well aware of the commercial sensitivity of the List and was emphasising that to Mr Eaton.
  221. For her part, the interest which Mrs Reader had to serve was in obtaining a better EBP deal for Brakes' employees than that currently provided by Personal Group in terms of premium or cover, or of both. The intention of both Mrs Reader and Mr Eaton at the time of each of the e-mails was for Gee 7 to displace Personal Group, and I am satisfied that both were well aware of the ethical risk involved in using the List in doing so.
  222. I reject Mr Eaton's explanation that Mrs Reader was yet again labouring under a misunderstanding, or that she had somehow misconceived the reason for his request.
  223. Actual use of the List

  224. I have made extensive reference to Mr Wilson's evidence as to the use he made of the List, at paragraphs 80 to 89 above.
  225. Mr Eaton was asked to confirm that he knew perfectly well that the information in the list would not have been provided to him by Personal Group, and he was asked about actual use of the List. The cross-examination was as follows.
  226. "Q. You knew perfectly well that this was a customer list, in effect, of people and prices being paid
    A. I knew it was a policy holder list, yes.
    Q. …. You knew perfectly well that this sort of information is not provided to a trade rival like you?
    A. No, a list of policy holders could be provided.
    Q. Provided by a trade rival to you?
    A. Sorry, I think you have missed ----
    Q. Provided by a company like, for example, Personal Group to you a trade rival?
    A. Would Personal Group send me a list like that?
    Q. Yes.
    A. Of course not, no.
    Q. You knew that the contents were very sensitive?
    A. I did. ….
    Q. … Then there came a time in early 2014 when this list became … potentially useful again. Do you agree?
    A. Yes.
    Q. The circumstances in which it became useful again were that your salespeople, Mark Wilson in particular, were now conducting one-to-one interviews at Brakes. That is correct?
    A. That is correct, yes….. .
    Q. … Having spoken to Mr. Wilson you then spoke to Jon [Pardoe]?
    A. Yes.
    Q. You said there is a list which contains this information?
    A. I probably did not say it look like that. I probably said, "Is there a list or I think we had something from before". ….
    Q. … am I right in saying you had a conversation with Ms. Atkins about the list?
    A. I cannot recall it, but I possibly ---….
    Q. What she said was that you explained the purposes for which the list should be used?
    A. Yes.
    Q. That is correct?
    A. Yes, that is correct.
    Q. She says, essentially, you gave permission but it was a defined permission. "You could use it for this reason but not for that reason"?
    A. Yes.
    Q. Is that something that you can recall?
    A. I can, yes. ….
    Q. Had you explained to Mr. Wilson what uses you were prepared the list could be put to?
    A. Yes.
    Q. When you explained that to him you were setting the rules?
    A. Yes.
    Q. If you wanted to you could have changed the rules. You could have said, "I am now going to say you can use for wider purposes"?
    A. Possibly, but I would not have done.

  227. Mr Pardoe, at one point in his cross-examination, was also asked questions about this, which he answered as follows:
  228. "Q. [After reference to Mrs Reader's e-mail of the 29 May] Do you see that sentence continues: 'They both hold very sensitive information to be used only for the purposes listed below and for no other exercise'?
    A. Correct, yes.
    ….
    [Judge] You see it now. Did you see it at the time?
    A. No, but I went back to that when I decided that we would allow the list to be sent to Mark Wilson.
    Mr. Stafford: That actually is precisely the point. How does providing the list to Mr. Wilson fit in either to the exercise in paragraph numbered 1 or to the exercise in numbered paragraph 2?
    A. It ties in exactly because what she had provided that list for initially was for us to try and provide comparable quotations. That is exactly what my understanding that Mark Wilson wanted to do. He wanted to tell people what the premium was when they did not know and then say to them, 'Actually, for that kind of level of payroll deduction you can have this.'
    Q. That is a very important answer you have just given because that is our case, that you were providing this to Mr. Wilson so that he could provide exactly that information and that is the truth, is it not?
    A. No, it is not the truth.
    Q. Okay. We will have a look at the transcript in due course."

  229. It is submitted that the evidence given in the penultimate answer above is virtually conclusive on the issue of use. Beyond his attempt to retract it, no attempt was made by Mr Pardoe to explain what else he had meant in giving that answer, nor was the matter clarified in re-examination. On the other hand, the point was made by Mr Lee that by the time that discussions were taking place between Gee 7 and underwriters for alternative policies to those of Personal Group, the information in the List was considerably out of date.
  230. Be that as it may, I accept Mr Wilson's evidence that he used the List as he said he did. He spontaneously and convincingly demonstrated when under challenge in the witness box how a skilled salesman with a thorough knowledge of the various policies could tell the cover being provided from the amount of premium being deducted from the payroll. I think that it is unlikely that Ms Atkins used the List in the same way, not merely because she said she did not, and I regarded her a truthful witness, but because she did not have Mr Wilson's great experience with Personal Group and hence did not have the same in-depth knowledge.
  231. There was evidence that use of the list to compare different providers' policies was prohibited by Gee 7. Those prohibitions came most clearly from the compliance officer at Gee 7, who certainly seems to have taken her duties seriously and responsibly, but Mr Wilson also accepted that Mr Eaton had expressly given similar instructions. What was never satisfactorily explained, in my view, was why, in the face of those prohibitions, when Mr Wilson asked Mr Eaton for the information, the List was retrieved, rearranged alphabetically, and provided to Mr Wilson at the express instructions of Mr Pardoe.
  232. There is then the unchallengeable fact that the alphabetically-rearranged List was sent, at Mr Pardoe's express request, in hard copy form only, by post, to Mr Wilson's home address. It was deliberately not sent as an e-mail attachment. The claimant companies' case is that there can be only one explanation for that, which was that Mr Pardoe had decided not to leave an electronic or digital soft-copy audit trail. That assertion was made clear by counsel for the claimants in opening. No explanation was given to dispel the suspicion it created, nor was any evidence given which can be regarded as a refutation of it. Those matters cannot be overlooked, it seems to me, when comparing what was being said as to the theory, or policy, of those in charge at Gee 7 in respect of the use to be made of the List, and the reality, in terms of actual practice.
  233. Summary of the evidence of use of the list

  234. In summary, therefore, the use of the List by Gee 7 on the evidence is as follows.
  235. (1) It was received at Gee 7 by Mr Eaton and not returned as having been received in error.
    (2) It was disseminated, first to Mr Pardoe and Mr Cartlidge, and not returned.
    (3) It was kept on computer file at Gee 7.
    (4) At the instructions of Mr Pardoe, it was re-arranged into alphabetical order.

    (5) In that re-arranged form it was printed and sent in hard copy form only to Mr Wilson and to Ms Atkins, following Mr Wilson's request for assistance in dealing with problems he was encountering with Personal Group policy holders' queries.

    (6) Mr Pardoe said in cross-examination that the List had been provided to Mr Wilson because,
    "[h]e wanted to tell people what the premium was when they did not know and then say to them, 'Actually, for that kind of level of payroll deduction you can have this.'
    The claimant companies say that that is precisely their case: Gee 7 was using the List by providing it to Mr. Wilson so that he could provide that information.
    (7) In consequence, a number of Personal Group policy-holders were probably induced to transfer to Gee 7 policies by Mr Wilson as a result of his use of the List.
  236. Given all those matters, considerable doubt is cast, in my view, upon the sincerity of such prohibitions as were issued by Gee 7, in the mouths of Mr Eaton and Pardoe at least. I find on the balance of probabilities, whatever was said publicly, Mr Eaton and Mr Pardoe were privately content for Mr Wilson (at least) to make what use he wished of the List in interviewing Personal Group policy holders. It should be added that (as I understand it) the claimants contend that the assumption of authority by Messrs Pardoe and Eaton to tell their own employees what use could or could not be made of the List is evidence of their appropriation of it, amounting in itself to "use."
  237. The reason for the provision on the list only to Mr Wilson and Ms Atkins

  238. Mr Lee made the point that only two members of the whole Gee 7 Sales team had been provided with the List. That, he submitted, told against any tactic of using it to solicit business. That is plainly a point which merits consideration. As was repeatedly emphasised by the defendants themselves, however, the members of the Gee 7 sales team were also tasked with soliciting business from the thousands of Brakes employees who were not Personal Group policy holders. Provision of the list would have been of no help to them, and indeed would have been a distraction.
  239. The reason the List was provided only to Mr Wilson and Ms Atkins, I have concluded, was probably because it was Mr Wilson who had actually asked for precisely the kind of help which the List provided. He and Nina Atkins worked in Brakes' premises where there were Personal Group policy holders. If it could be useful to him, it was probably thought at Gee 7, then it could be useful to her. If I am wrong about that, I nevertheless accept Mr Stafford's submission that use of the List was not confined to the activities of Mr Wilson. Given that it was Personal Group's confidential information, "use" of it included the wrongful retention of it by Gee 7; their failure to return it or to destroy it (as, for example, any reasonable and ethical person would do if in receipt of an e-mail intended for someone else); their transposition of it into alphabetical order; their dissemination of it within the company; and, in general, their appropriation of it in the sense of treating it as though it was Gee 7's to deal with, regardless of Personal Group's rights.
  240. Mr Stafford in my view rightly illustrated the reality of such use by his citation from the judgment of Lewison LJ in Force India Formula One Team Ltd v Aerolab SRL [2013] EWCA Civ 780:
  241. "… it seems to me that compensation should have been assessed on the basis of the value to Aerolab of the whole corpus of information. After all, if A wrongfully retains B's dictionary, it does not matter that he only looked up a few words."
  242. My overall conclusion is that some use was indeed made of the List by Gee 7 to the disadvantage of Personal Group. Evidence of the extent of active sales-competition abuse is limited. It is possible that that limitation arises because of late disclosure of audio recordings of Mr Wilson's conversations with Personal Group policyholders. However, it also seems that its use was considerably less than Personal Group feared when they began this litigation, and fewer policyholders were induced to change provider than they at one stage believed. Be that as it may, I am satisfied that, as a matter of fact, use of the List to the actual financial disadvantage of Personal Group was significantly more than de minimis, and that use of the List in the other respects contended for by the claimants has been established.
  243. Part 6
    The law

    Robb v Green

  244. An explanation of the commercial sensitivity and confidentiality of a customer list is given in the nineteenth-century case of Robb v Green [1895] 2 QB 1, at p.18-19, where Hawkins J said,
  245. "There is one other contention of the defendant's counsel … that the order-book of the plaintiff contained no more information than might be acquired by reference to directories …; and … that the defendant's master, in seeking to advance his own business, before the defendant made the copy of the order-book, had published circulars or pamphlets containing the names of many of the customers who had sent him favourable testimonials; so that the defendant had when he made the list complained of materials at his command without making use of his master's book. This … may be true, but it is not so altogether. The order-book contains collected together the names and addresses of purchasers … spread over the length and breadth of England, Wales, and Scotland. No directory would give this information in this collocation; ….

    "The names of all the customers are collected together in the order-book in a manner not to be found in any other book or paper to which the defendant had access. To him, therefore, the possession of a copy of the order-book would be peculiarly valuable. He would be saved the expense and delay of searches, such as would be necessary to enable him to compile such a list for himself. …. By making a copy of the order-book the defendant was able to canvass at once each of his master's customers without trouble or expense; …. It is the compilation which made the book and the list so valuable to the defendant, and facilitated his endeavours ….

    "The effect of this judgment will not be to check fair and honourable competition, …. But I hope it will have the effect of deterring every clerk or servant while in service from betraying his master's confidence and knowingly taking dishonourable advantage of information which, as a servant, he obtains to advance his own interests at the expense of his employer."

    Saltman Engineering: 'the necessary quality of confidence'

  246. It was in the case of Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 that the phrase 'the necessary quality of confidence' was coined by Lord Greene MR, at 215. This meant, he said, that the information in question,
  247. " … must not be something which is public property and public knowledge."

    Coco v. Clark

  248. Megarry J (as he then was) identified the three essential matters which a party needed to establish to found a claim for breach of an equitable duty of confidence in Coco v. A. N. Clark (Engineers) Ltd. [1969] R.P.C. 41, 47. Both counsel in the present case have made reference to these observations, which have regularly been approved in subsequent cases up to the highest levels: see Lord Griffiths in Attorney-General v Guardian Newspapers Ltd (No 2) ("Spycatcher") [1990] 1 AC 109 at 268; Lord Nicholls of Birkenhead in Campbell v MGN Ltd [2004] UKHL 22, [2004] 2 AC 457 at [13]; and Lord Hoffmann in Douglas v Hello! Ltd (No 3) [2007] UKHL 21, [2008] 1 AC 1 at [111]. It is common ground that the observations of Megarry J represent the basic principles in equity which must be applied. They are as follows.
  249. "Three elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself, in the words of Lord Greene, M.R., in the Saltman case (1948) 65 R.P.C. 203 … must 'have the necessary quality of confidence about it.' Secondly, that information must have been imparted in circumstances importing an obligation of confidence. Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it."

    Attorney General v Guardian Newspapers Ltd (No 2) – the "Spycatcher" case

  250. In the "Spycatcher" case, Attorney General v Guardian Newspapers Ltd (No 2) [1988] UKHL 6, the history of the law which protects confidential information was reviewed by Lord Griffiths, who said at pp. 14ff., that it was judge-made law, reflecting the willingness of the judges "to give a remedy to protect people from being taken advantage of by those they have trusted with confidential information." Although the terms of a contract may impose a duty of confidence the right to seek a remedy was not dependent on contract: it existed as an equitable remedy.
  251. Lord Griffiths said that the duty of confidence is, as a general rule, also imposed on a third party who is in possession of information which he knows is subject to an obligation of confidence: see Prince Albert v. Strange (1849) 1 Mac. & G. 25, and Duchess of Argyll v. Duke of Argyll [1967] Ch. 302.
  252. "If this was not the law the right would be of little practical value…." (ibid.)

  253. Moreover,
  254. "When trade secrets are betrayed by a confidant to a third party it is usually the third party who is to exploit the information and it is the activity of the third party that must be stopped in order to protect the owner of the trade secret." (ibid.)

  255. Lord Griffiths said that the task of the judge is to balance,
  256. "… the public interest in upholding the right to confidence, which is based on the moral principles of loyalty and fair dealing, against some other public interest that will be served by the publication of the confidential material."
    ….
    "I have no doubt, however, that in the case of a private claim to confidence, if the three elements of quality of confidence, obligation of confidence and detriment or potential detriment are established, the burden will lie upon the defendant to establish that some other overriding public interest should displace the plaintiff's right to have his confidential information protected." (ibid.)
  257. In the same case, Lord Goff, at p. 28, said that he had resisted the temptation to "embark upon an exegesis of the law relating to breach of confidence" but he went on to make the following observations.
  258. "A duty of confidence arises when confidential information comes to the knowledge of a person (the confidant) in circumstances where he has notice, or is held to have agreed, that the information is confidential, with the effect that it would be just in all the circumstances that he should be precluded from disclosing the information to others. … I of course understand knowledge to include circumstances where the confidant has deliberately closed his eyes to the obvious. The existence of this broad general principle reflects the fact that there is such a public interest in the maintenance of confidences, that the law will provide remedies for their protection. I realise that, in the vast majority of cases, in particular those concerned with trade secrets, the duty of confidence will arise from a transaction or relationship between the parties - often a contract, in which event the duty may arise by reason of either an express or an implied term of that contract. It is in such cases as these that the expressions 'confider' and 'confidant' are perhaps most aptly employed. But it is well settled that a duty of confidence may arise in equity independently of such cases…."
  259. Lord Goff then said that there were three qualifications to the general principle:
  260. (1) The principle of confidentiality only applies to information to the extent that it is confidential. In particular, once it had entered the public domain, as a general rule, the principle of confidentiality could have no application to it.
    (2) The duty of confidence applies neither to useless information, nor to trivia.
    (3) Although the basis of the law's protection of confidence is that there is a public interest that confidences should be preserved and protected by the law, nevertheless that public interest may be outweighed by some other countervailing public interest which favours disclosure. It was this third 'limiting principle'which may require a court to carry out a balancing operation, weighing the public interest in maintaining confidence against a countervailing public interest favouring disclosure.

    Faccenda v Fowler

  261. In Faccenda Chicken v Fowler [1987] Ch 117 the Court of Appeal approved one of Goulding J's definitions of a type of information which might be acquired by an employee, which he described as,
  262. "Specific trade secrets so confidential that, even though they may necessarily have been learned by heart and even though the employee may have left the service, they cannot lawfully be used for anyone's benefit but the employer's."

  263. The defendants rely, in particular upon the emphasis placed on context by the Court in Faccenda at p. 137. In deciding whether information is confidential, all of the circumstances must be considered, including:
  264. (a) The nature of the contract (in that case the contract of employment) and in particular whether confidential information is handled habitually;

    (b) The nature of the information;

    (c) Whether one party impressed on the other the confidential nature of the information; and

    (d) Whether the relevant information can be easily isolated.

    Lansing Linde and the "harm test"

  265. Further guidance was provided by the Court of Appeal in Lansing Linde v Kerr [1991] 1 WLR 251. Staughton LJ said (at p. 260):
  266. "It appears to me that the problem is one of definition: what are trade secrets, and how do they differ (if at all) from confidential information? [Counsel] suggested that a trade secret is information which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret. I would add first, that it must be information used in a trade or business, and secondly that the owner must limit the dissemination of it or at least not encourage or permit widespread publication.
    That is my preferred view of the meaning of trade secret in this context."

    Butler-Sloss LJ expressly concurred. It is to be noted that Staughton LJ, although adding his own qualifications to it, adopted the test suggested by counsel in the case: i.e. of liability to cause harm, which does not necessarily involve proof of actual harm or of special damage. Whether consciously or not, counsel in formulating the test echoed the well-known observation of John Stuart Mill that:

    " … the only purpose for which power can be rightfully exercised over any member of a civilised community, against his will, is to prevent harm to others …." (Essay On Liberty, 1859, Robson ed. 1977, at p. 223.)

    Prevention of harm before it may happen is an obvious reason for litigation.

    'Conscience'

  267. In Imerman v Tchenguiz [2010] EWCA Civ 908, [2011] Fam 116, Lord Neuberger MR, delivering the judgment of the Court of Appeal, said:
  268. "64. It was only some 20 years ago that the law of confidence was authoritatively extended to apply to cases where the defendant had come by the information without the consent of the claimant. That extension, which had been discussed in academic articles, was established in the speech of Lord Goff of Chieveley in Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109. He said, at p 281, that confidence could be invoked 'where an obviously confidential document is wafted by an electric fan out of a window … or … is dropped in a public place, and is then picked up by a passer-by.'

    ….

    "68. If confidence applies to a defendant who adventitiously, but without authorisation, obtains information in respect of which he must have appreciated that the claimant had an expectation of privacy, it must, a fortiori, extend to a defendant who intentionally, and without authorisation, takes steps to obtain such information. It would seem to us to follow that intentionally obtaining such information, secretly and knowing that the claimant reasonably expects it to be private, is itself a breach of confidence. …

    "69. In our view, it would be a breach of confidence for a defendant, without the authority of the claimant, to examine, or to make, retain, or supply copies to a third party of, a document whose contents are, and were (or ought to have been) appreciated by the defendant to be, confidential to the claimant. …"

  269. In the accessory liability case of Royal Brunei Airlines v Tan [1985] 2 AC 378, at p.389, Lord Nicholls examined the related concepts of dishonesty and 'unconscionable conduct,' 'lack of probity' and 'conscious impropriety' in a case where the issue was whether actively dishonest assistance had been provided by the defendant.
  270. "… in the context of the accessory liability principle acting dishonestly, or with a lack of probity, which is synonymous, means simply not acting as an honest person would in the circumstances. This is an objective standard. At first sight this may seem surprising. Honesty has a connotation of subjectivity, as distinct from the objectivity of negligence. Honesty, indeed, does have a strong subjective element in that it is a description of a type of conduct assessed in the light of what a person actually knew at the time, as distinct from what a reasonable person would have known or appreciated. … honesty and its counterpart dishonesty are mostly concerned with advertent conduct, not inadvertent conduct. Carelessness is not dishonesty. Thus for the most part dishonesty is to be equated with conscious impropriety. However … subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in particular circumstances. The standard of what constitutes honest conduct is not subjective. Honesty is not an optional scale, with higher or lower values according to the moral standards of each individual. If a person knowingly appropriates another's property, he will not escape a finding of dishonesty simply because he sees nothing wrong in such behaviour.

    "In most situations there is little difficulty in identifying how an honest person would behave. Honest people do not intentionally deceive others to their detriment….. Nor does an honest person in such a case deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless."

    Later, observations were made on 'unconscionable conduct':

    "Mention, finally, must be made of the suggestion that the test for liability is that of unconscionable conduct. Unconscionable is a word of immediate appeal to an equity lawyer. Equity is rooted historically in the concept of the Lord Chancellor, as the keeper of the Royal Conscience, concerning himself with conduct which was contrary to good conscience. It must be recognised, however, that unconscionable is not a word in everyday use by non-lawyers. If it is to be used in this context, and if it is to be the touchstone for liability as an accessory, it is essential to be clear on what, in this context, unconscionable means. If unconscionable means no more than dishonesty, then dishonesty is the preferable label. If unconscionable means something different, it must be said that it is not clear what that something different is. Either way, therefore, the term is better avoided in this context."

    Vestergaard

  271. The Supreme Court has recently emphasised the need for the conscience of the recipient of the allegedly confidential information to have been affected in order for a duty of confidence to arise: see Vestergaard Frandsen A/S & Ors v Bestnet Europe Ltd & Ors [2013] 1 WLR 1556 per Lord Neuberger of Abbotsbury PSC, with whom the other members of the Supreme Court agreed at [23] and [25]:
  272. "Liability for breach of confidence is not, of course, limited to … classic cases. Thus, depending on the other facts of the case, a defendant who learns of a trade secret in circumstances where she reasonably does not appreciate that it is confidential, may none the less be liable to respect its confidentiality from the moment she is told, or otherwise appreciates, that it is in fact confidential. From that moment, it can be said that her conscience is affected in a way which should be recognised by equity."

    Primary Group

  273. In the recent confidential information case of Primary Group (UK) Ltd & Ors v The Royal Bank of Scotland Plc & Anor [2014] EWHC 1082 (Ch) Arnold J considered the question of whether the appropriate test for 'conscience' was an objective or a subjective one. He concluded, following a thorough review of the authorities which I gratefully adopt, that the appropriate test was an objective one. I do not regard that conclusion as being obiter, as Mr Lee submitted it was, simply because the judge said, in effect "If I am wrong about that …" and went on to consider the position on a subjective-test basis.
  274. As I said when the point was raised in argument, I regard myself as effectively bound by the decision of Arnold J. In the case of Huddersfield Police Authority v Watson [1947] KB 842, D.C., Lord Goddard CJ said:
  275. "… I can only say for myself that I think the modern practice, and the modern view of the subject, is that a judge of first instance, though he would always follow the decision of another judge of first instance, unless he is convinced the judgment is wrong, would follow it as a matter of judicial comity."

    The Divisional Court in the Huddersfield Police case regarded themselves generally as bound by their previous decisions, in accordance with the principle in Young v. Bristol Aeroplane Co. [1944] K B 718. In a strict interpretation of the doctrine of stare decisis it is possible in a rare case not to follow the decision of a judge of first instance, if exceptional circumstances of the kind mentioned by Lord Goddard apply. There are no such circumstances in this case, and, moreover, I respectfully agree with analysis of the case law by Arnold J, which laid the foundation for his decision, for the reasons which he gave.

    Authorities on unenforceability for restraint of trade

  276. Mr Lee, as counsel for Mr Eaton, submitted that employers relying upon confidentiality clauses which constitute a restraint of trade must justify them as being reasonably necessary to protect their interests: see Balston Ltd v Headline Filters Ltd [1987] FSR 330 per Scott J at 351-2 and Intelsec Systems Ltd & Ors v Grech-Cini & Ors [2000] 1 WLR 1190 at 1205-6 per Mr Nicholas Warren QC (sitting as a deputy judge of the High Court).
  277. Counsel made extensive reference to the authorities dealing with the principles to be applied in determining whether covenants in restraint of trade are enforceable, including Office Angels Ltd v Rainer-Thomas [1991] IRLR 214; Herbert Morris Ltd v Saxelby [1916] AC 688; Kores Manufacturing Co Ltd v Kolok Manufacturing Ltd [1959] Ch 109; Stenhouse Ltd v Phillips [1974] AC 391 Mason v Provident Clothing & Supply Co Ltd. [1913] AC 724; Capgemini India Private Ltd & Ors v Krishnan [2014] EWHC 1092 (QB).
  278. Mr Lee also submitted that the undertaking constituted an unlawful restraint of trade, despite the fact that Mr Eaton had given the undertaking after receipt of independent legal advice.
  279. For the claimant companies, Mr Stafford pointed out that in Gerrard Limited v Read [2001] All ER (D) 355, Blackburne J. considered an application to reduce the period of a springboard injunction made by consent. He regarded the fact that the defendant (who had been legally advised throughout) had agreed to the restraint as being the determinative factor:
  280. "As to this I remain of the view, as I have been throughout the hearing, that having agreed to a nine-month springboard restraint, which the court on 27th July was willing to sanction when it made the consent order, there is a considerable onus on Mr Read to say why the Court should now revisit that accord. That is not to suggest that … it is other than for Mr Gerrard … to justify the restraint but simply to require Mr Read as the person restrained to come forward, in the particular circumstances of this case, with good reasons for saying why the court should now re-open the matter."
  281. Similarly, in Capgemini v Krishnan [2014] EWHC 1092 (QB), His Hon Judge Robert Owen QC, sitting as a judge of the High Court, held:
  282. "… notwithstanding all of the matters submitted by [counsel] as to why the clause itself could be attacked, the fact of the matter is that with the benefit of independent legal advice and no longer being in an employer/employee relationship each of the defendants willingly entered into the undertaking in question. That election engaged a powerful public policy, namely, that such agreements to compromise either actual or threatened litigation is to be encouraged by the court and thus, unless for good reason, supported also."

  283. It is therefore submitted that there is a heavy burden upon Mr Eaton to demonstrate why the undertaking he gave freely and with the benefit of legal advice, should now be struck down as unenforceable.
  284. In the case of Herbert Morris v Saxelby [1916] A.C. 688, Lord Atkinson said at p.702,
  285. "In all cases such as this, one has to ask oneself what are the interests of the employer that are to be protected and against what is he entitled to have them protected. He is undoubtedly entitled to have his interest in his trade secrets protected, such as secret processes of manufacture which may be of vast value. And that protection may be secured by restraining the employee from divulging those secrets or putting them to his own use…"
  286. Mr Lee submits that the restraint will only be enforceable if Personal Group can justify it as reasonably necessary to protect its interests. The reasonableness of the restraint is to be determined as at the date the contract is made.
  287. The Kanchenjunga, and estoppel or waiver

  288. Lord Goff explained the concept of equitable estoppel in The Kanchenjunga [1990] 1 Lloyd's Rep 391 at 399 as follows:
  289. "Equitable estoppel occurs where a person, having legal rights against another, unequivocally represents (by words or conduct) that he does not intend to enforce those legal rights; if in such circumstances the other party acts, or desists from acting, in reliance upon that representation, with the effect that it would be inequitable for the representor thereafter to enforce his legal rights inconsistently with his representation, he will to that extent be precluded from doing so." (Emphasis added.)

  290. The representation may be made by words or by conduct or may be implied. However, it must be unequivocal, with the result that silence alone is not normally sufficient: see Seechurn v Ace Insurance SA NV [2002] 2 Lloyd's Rep 390 per Ward LJ.
  291. The effect of the representation is usually suspensory. However, that will not be the case where it is inequitable for the representor to resile from his promise: see Kim v Chasewood Park Residents Ltd [2013] HLR 24 per Patten LJ.
  292. Specific performance

  293. Specific performance is a discretionary remedy. It is not available if damages are an adequate remedy. The court is entitled to consider all the circumstances before exercising its discretion to make such an order. However, the court will not attempt to compel a person to do something which is not possible: see Forrer v Nash (1865) 35 Beavan 167 per Sir John Romilly MR.
  294. Application to this case

  295. The first stage is to consider what principles may be derived from the authorities which should give guidance on the first two questions: whether the information was (a) Personal Group's confidential information; and (b) whether Gee 7 had a duty of confidence in equity in respect of it. As I understand the authorities, the following questions are among the tests to be applied in law.
  296. (1) Is the information public property, public knowledge or publicly available?

    (2) Was the information trivial or useless?

    (3) Is any public interest served by the publication of the information to Gee 7, which should be balanced against Personal Group's right of confidence?

    (4) Are the names of all Personal Group's policyholders collected together in a way not to be found in any other document to which the defendants had access?

    (5) Did access to the information save the expense and delay of searches to compile such a list for themselves? Is the list therefore valuable?

    (6) Was the information imparted by Personal Group and their customers in circumstances which imported an obligation of confidence?

    (7) Was there unauthorised use of the information to the detriment, or potential detriment, of Personal Group?

    (8) As to 'detriment or potential detriment' were Brakes acting in such a way as to be potentially harmful to Personal Group in divulging the information to Gee 7?

    (9) Was the information such that, if disclosed to a competitor such as Gee 7, it would be liable to cause real (or significant) harm?

    (10) In equitable terms, were Gee 7 acting unconscionably in receiving, keeping, disseminating or otherwise using the List?

    (11) Did any such unconscionable conduct expose Personal Group to the risk of harm?

    (12) Is there evidence that Brakes provided the information for it to be exploited by Gee 7?

    In my judgment the answers to questions (1), (2), and (3) are in each case in the negative. The answers to questions (4) to (12) are in each case in the affirmative. Insofar as it is necessary to do so, having regard to the findings of fact already made, I shall try to explain those answers in greater detail in the next Part.

    Part 7
    Conclusions on the main issues in the case

    (1) (a) Confidentiality of the List as between Brakes and Personal Group;

  297. In contending that the information was not Personal Group's information at all, but was simply Brakes' payroll data, the defendants' case is put as follows. Whether or not information is confidential requires a consideration of all the circumstances: see Faccenda Chicken Ltd. In Lansinge Linde Staughton LJ said that the names of customers and the goods they buy "in an appropriate case" might meet the 'harm test.' This, submits counsel, emphasises the importance of context. It is not enough to assert that a document contains a list of customers and the prices that they pay, and to conclude "without a closer examination of the factual picture" that the information was confidential. That factual picture revealed, it was submitted, that the List was not Personal Group's confidential information. It was Brakes' payroll data, showing salary deductions its employees had authorised to pay for whatever type of insurance policy they had taken out. The fact that Personal Group had collated these authorities and had passed them on to Brakes made no difference: it remained simply a list of instructions from employees to their employer authorising the deductions. To say that the information came from Personal Group was "artificial." The true nature of the information was that it was a deduction which an employee authorised the employer to transmit to a third party, and which the employer kept up to date.
  298. In many circumstances, Mr Lee said, the information would be freely available from the employees themselves. Counsel made it clear that he was not thereby suggesting that the information was "readily available to the public in the general sense," but submitted that it was a significant factor to take into account when assessing whether or not the information was confidential. In particular it is contended that the circumstances showed that the information could be obtained by a competitor through other means.
  299. The case for the claimants on the issue of whether the list amounted to Personal Group's confidential information, in summary, is that it was essentially a 'customer list.' It was information which related to their trade or business. The List comprised information generated solely as a result of commercial transactions between Personal Group and each individual policyholder. Thus the information was confidential to Personal Group's business, and Personal Group were entitled to expect Brakes to respect that confidence, as provided for in the contract between them. The List was not in the public domain and its dissemination was limited by Personal Group.
  300. Conclusions on the first issue

  301. My conclusions on this aspect are as follows. On the evidence the following matters are established on the balance of probabilities:
  302. (1) The List came into existence as a direct result of the activities of Personal Group in performing their contract with Brakes by arranging insurance policies for the employees of Brakes named on the list.
    (2) It was not widely available, and was certainly not in the public domain. Whilst a single employee would be free to reveal his or her individual details to a competitor, he or she would not be able to reveal the others'.

    (3) Whilst the premiums charged generally for the various policies were publicly available, the list consisted of refined information which showed, as Personal Group put it, exactly who was willing to take out insurance and what price each such person was willing to pay.

    (4) Unlike the accompanying spreadsheet for all 7500 Brakes employees, the List gave particulars only of Brakes employee with a Personal Group policy. Whilst in one respect it was derived from Brakes' payroll data, it was very clearly Personal Group's customer list, showing the prices which each of those customers was paying. The complete Brakes' payroll data listed every employee whether or not he or she held a Personal Group policy.

    (5) The amount of premium being paid generally under the Personal Group programme by Brakes' employees was shown in the list, and the particular premium being paid by each employee in the Personal Group programme was also shown.

    (6) The information was therefore related to the programme generally, to the parties' employees, and related to the respective businesses of Personal Group and Brakes and their customers. It amounted to commercial intelligence which, on the face of it, was likely to be of use to a competitor for Personal Group's business.

    (7) Almost every one of the matters set out at (1) to (6) is a point which is referred to in clause 3.1 of the contract between Personal Group and Brakes. I reject the contention that, because (if construed as suggested by the defendants) it could apply to all kinds of information which would not actually be confidential, the confidentiality clause was unduly wide and uncertain. It refers to information which has been received or obtained '… as a result of the parties entering into or performing the agreement.' Whether those words were intended or understood to govern the remainder of the confidentiality clause is neither here nor there. As a matter of fact, those words describe exactly the content of the List. Moreover, the terms in which Mrs Reader's e-mails were couched seem to reflect her consciousness of the fact, and her evident concern over it, that the List fell squarely within that confidentiality clause.

    (8) No suggestion was made of any countervailing public interest which could have been served by the publication of the information to Gee 7, and which should be balanced against it by the court

  303. In the light of those matters I am firmly of the view that the information was Personal Group's information and was properly the subject of the provisions of the clause 3.1.
  304. 1 (b) Whether the information was of a confidential character

  305. My findings on this point are as follows:
  306. (1) As it was a customer list, collecting together the names of a particular group of Personal Group's policy-holders, those names were collected together in it in a way which was not to be found elsewhere. It provided Gee 7 with something which was of value to them in any competition for the same business. It was not something which they could readily have obtained through their own efforts. The information was confidential to Personal Group's business, and Personal Group were entitled to expect Brakes to respect that confidence, contractually or otherwise.
    (2) The List was not in the public domain and its dissemination was limited by Personal Group.
    (3) Disclosure of the List to a competitor was detrimental to the claimant companies' interests because it had the potential to cause harm. On this point, I accept the submission that the test propounded by Staughton LJ as the 'harm test' in the case of Lansing Linde v Kerr was not based on actual use of the information, but upon an assessment of the potential usefulness of information in the hands of a competitor and the consequential potential to harm the business whose customers were named on the List. Counsel outlined various possible ways in which harm could potentially be caused. For example, it would have been possible for a competitor to use the List to target the named policyholders as people with a known willingness to pay for insurance. It would also be possible for the List to be used expressly for price competition.

    (4) It was no answer to say that it was impossible, or very difficult, to use the list to identify the cover for which any individual premium was paid. In fact Mr Wilson said he was able to do just that, and I accepted his evidence. But, whether or not that was possible, the fact that information might or might not be useful in one specific way does not mean that it could not be used in other ways. Moreover, commercial intelligence giving details of a competitor's customers and the prices they were prepared to pay is self- evidently of value: as Gloster J said in Brake Bros Limited v Ungless [2004] EWHC 2799 (QB), a case involving buyers, in rejecting an argument that there was nothing of value which could be drawn from the terms of the trading agreement in that case:
    "Whatever a supplier has been prepared to agree is valuable in itself to a trade rival. The individual agreements of a trading agreement are valuable to a trade rival, seeking to secure the best deal from a supplier in common."

    (2) Whether the second and third defendants were and are under a duty of confidence to the claimants in respect of the information contained in the List

  307. This point essentially turns upon considerations of Gee 7's 'Conscience'. In my view all the circumstances show a willingness by both Mr Eaton and Mr Pardoe to engage in unfair competition with Personal Group by receiving its commercially-sensitive data from Brakes and keeping it. In my view, taking an objective test, any reasonable businessman in the position of Mr Eaton or Mr Pardoe would have appreciated that such conduct is improper and unethical.
  308. If such conduct does not, objectively judged, cross the threshold of 'dishonesty' in a commercial transaction, it comes very close to it. To obtain and make use of such sensitive information of another company not openly, but by irregular means, is, on the face of it, underhand and devious. In terms of other epithets used in the authorities on the subject it would show every sign of a 'lack of probity' and 'conscious impropriety.' On an objective basis, it seems to me that it plainly crosses the threshold between ethical and unethical conduct in business, and in that sense is 'unconscionable' conduct.
  309. If, contrary to my understanding of the law as explained in Primary Group, the test is a subjective one, in my view the circumstances established by the evidence are such, in any event, that Mr Eaton and Mr Pardoe knew that the List amounted to confidential information. I reject their evidence to the contrary for the reasons I have already given, but, those apart, the simple contrast between the List on the one hand, and the second list, on the other, in my view must have demonstrated to them that whilst the latter was purely Brakes' payroll data, the former was a confidential Personal Group customer list. The terms of Mrs Reader's emails were sufficient in themselves for them to appreciate (if they had not already done so) that the sensitivity of the information was not confined to the fact that names and dates of birth of Brakes' employees were involved.
  310. I have therefore reached the conclusion that both Mr Eaton and Mr Pardoe were actually conscious of the impropriety of their receipt and appropriation of the List. If I am wrong about that, and they merely "closed their eyes" to it, I am satisfied, having seen and heard them, that they did so deliberately and cynically. Thus it must follow that Gee 7's conscience was affected by its directors' consciences, whether upon a subjective basis or an objective basis.
  311. (3) Whether the second and third defendants used the List unlawfully to target Brakes' employees

  312. The evidence establishes, in my view, that the List was used in a number of ways. I set these out in greater detail below, but in summary: it was used by Mr Eaton and by Mr Pardoe by receiving it, disseminating it, keeping it and by making directions as to its permissible uses by employees. They treated it as their own to use as they wished. As their employee, Mr Wilson used it to solicit business. Mr Pardoe admitted in cross-examination that he knew that Mrs Reader had provided the List to enable Gee 7 to provide comparable quotations. He admitted that he understood that was exactly the use Mr Wilson intended to make of it. He admitted that he knew that Mr Wilson wanted to be able to inform Brakes' employees who were already Personal Group customers of the premium they were playing, and to be able to compare an alternative level of cover for the same price: see the passage in cross-examination set out at paragraph 150 above. Moreover, as I have already made clear I accept Mr Wilson's evidence as to the actual use he made of the List.
  313. Personal Group's right of confidence having been found to have been infringed, is there a countervailing public interest which is served by the publication of the information to Gee 7, and which should be balanced against it by the court? None was suggested, and it is not possible to conceive of any free-trade reason in the light of the findings I have made as to the intention of Gee 7 to use the information to compete with Personal Group unfairly. That is determinative of that issue.
  314. (4) Whether Personal Group are entitled to an injunction against Gee 7

  315. The injunction sought against Gee 7 is in the following terms
  316. "An injunction to restrain the second and … third defendants [or both] from using the claimants' confidential information, that is the deductions in respect of the claimants' EBP made by the first defendant on behalf of its employees through its payroll. Provided that nothing in this shall prevent an employee from providing to the second and … third defendants [or both] information as to the premiums paid by him…[or] her."

  317. In the light of the findings which I have made as to the unlawful use of the confidential information by the defendant companies, there is no reason for refusing such relief, subject to the issue of 'clean hands' which is dealt with separately below.
  318. (5) Damages

  319. 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. 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.
  320. 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.
  321. (6) Should an equitable remedy be denied on the basis the claimants have not come with clean hands?

  322. This is a point taken by the defendants on the basis that Mr Wilson allegedly acted in an underhand way at the behest of the claimant companies. Those who come to equity must come with clean hands. Mr Lee put it as follows. Gee 7 allege misconduct on the part of Mr Wilson and Personal Group in Mr Wilson's conduct whilst in the employment of Gee 7, in that Mr. Wayne Jones of Personal Group encouraged Mr Wilson to obtain and divulge information about Gee 7's business, when Mr Wilson was an employee of Gee 7: see the email on 10th of January 2014 (CB 501: see paragraph 54 above.) Mr Wilson took away the List and a Gee 7 brochure, and, "having obtained and divulged the necessary information, he promptly got his job back." If he had only done this, counsel submitted, because he considered it was inappropriate for confidential information of Personal Group to be in Gee 7's possession, why would he take the brochure? Why send that to Personal Group? That had nothing to do with Personal Group's confidential information being used in any way by Gee 7. It was entirely consistent with an employee taking information about his employer to the competitor and it was striking that he had not mentioned the brochure in his witness statement. He had said in his witness statement that the only information he took was the List. That, in Mr Lee's submission, was highly suspicious.
  323. The important point was that "when one looked at the equity sued for, the primary use of the List, to gain any form of advantage over Personal Group, was in Mr. Wilson's hands." It was Mr. Wilson's use of the List which was the foundation for Personal Group's claim for equitable relief. It was not just that Mr. Wilson had the List. It was the fact that their case needed and relied upon his use in order to justify the relief which they are seeking.
  324. The Claimants made the point that this was first raised in a very late amendment to Gee 7's defence. It appeared to be based upon the suspicion (if such it had been) that Personal Group had used Mark Wilson as a spy in order to obtain information about Gee 7's business. The case of RBS v Highland Financial Partners [2013] 1 CLC 596 demonstrated that there had to be a close connection between the misconduct alleged and the equity sued for. Applied to this case, that principle requires Gee 7 to prove that Mr Wilson was asked by Personal Group to obtain and remove the List, and that he did so in breach of the terms of his contract of employment. There was simply no evidence of that. Mr Wilson denied the allegation under cross-examination, and Gee 7 had produced no witnesses to support its case on the point. In any event, counsel submitted, it was far from clear that, in removing information which was unlawfully in the possession of Gee 7, and by returning that information to its rightful owner, Mr Wilson was acting in breach of any term of his contract of employment with Gee 7, or indeed in any unlawful manner.
  325. In a passage in the standard text-book on the subject, Spry on Equitable Remedies, cited in the judgment of Aikens LJ in RBS v Highland Financial Partners at paragraph 159 to which my attention was invited at the hearing, there was the following observation:
  326. "… it must be shown that the claimant is seeking '… to derive advantage from his dishonest conduct in so direct a manner that it is considered to be unjust to grant him relief.'

    "Ultimately in each case it is a matter of assessment by the judge, who has to examine all the relevant factors in the case before him to see if the misconduct of the claimant is sufficient to warrant a refusal of the relief sought."

    (9th Edition, 2014, at page 254.)
  327. Mr Lee submitted that I must make findings on the facts about whether the misconduct alleged was made out, and then (if it was) make findings about the connection between that and the relief sought and decide whether the connection was sufficiently close.
  328. As I have said, I formed the impression at one stage that it might be being suggested that Mr. Wilson had been sent to Gee 7 as a spy. Mr Lee expressly disavowed that assertion, but submitted that the point was that Mr Wilson had met Mr. Jones, and that Mr. Jones encouraged Mr Wilson to obtain and divulge information about Gee 7's business, whilst the two companies were competitors. The inference to be drawn from that, Mr Lee submitted, was "overwhelmingly clear" and he made reference to the 10th January 2014 email, at CB 501. The next event, as he put it, was that a telephone call was made in which Mr. Wilson asked for a meeting with Mr Lothian, and Mr Wilson was re-employed. If he had only acted as he had out of concern for Personal Group's confidential information being in Gee 7's possession, Mr Lee asked rhetorically, why had he also taken the brochure? The reason was that it was entirely consistent with an employee taking information about his employer to a competitor.
  329. What was important in this regard, in respect of the equity sued for, was that the primary use of the List, to the extent that it was used to gain any form of advantage over Personal Group, had been in Mr. Wilson's hands. It was Mr. Wilson essentially upon whose use Personal Group's case for equitable relief was founded.
  330. I have already made it clear that I regarded Mr Wilson as a witness of truth. I do not accept that in obtaining the List he was acting upon any instructions at all from the claimant companies. I accept his evidence that he was troubled about the use of the List whilst in the employment of the defendant companies. Moreover, he was making use of the List at this time to the advantage of Gee 7, (although to the disapproval of their compliance officer) and to the disadvantage of the claimant companies. He had been told that it was most unlikely that he would ever be allowed to return to Personal Group. Mr Jones had actually said to him, "I don't think it will ever be possible." (see paragraph 54 above.)
  331. Insofar as staff at the claimant companies encouraged Mr Wilson to provide them with intelligence as to the conduct of the defendant companies, it does not seem to me that that conduct has been shown to have been dishonest in the sense used in the authorities concerning "clean hands." They were undoubtedly concerned about the activities of the defendant companies in terms of unfair competition with them. In such circumstances, an attempt to discover the truth about that by obtaining 'intelligence' in the way in which Mr Jones encouraged Mr Wilson to provide it, does not begin to compare with a deliberate strategy of unfair competition. There is no evidence at all that Mr Wilson was used as an agent provocateur, or even that the claimant companies suspected that the defendant companies had possession of the List until it was presented to them by Mr Wilson.
  332. Mr Eaton's undertaking: construction, scope, enforceability, and breach.

  333. An undertaking was given in the form of a deed by Mr. Eaton on 7th October 2011. He was legally advised before he agreed to give that undertaking and before signing and delivering it as his act and deed. Following its execution, Mr. Eaton did not provide the list of documents he had promised to provide. He informed Personal Group that there were no documents apart from those which had been uncovered in the course of the investigation, which contradicted his position during the investigation and disciplinary processes. His solicitors wrote the letter referred to above at paragraph 34 referring to Mr Eaton's difficulties. No attempt to amend the undertaking was made by Mr. Eaton's solicitors before its execution as a deed by their client. Mr. Eaton has never provided the required List.
  334. In his witness statement Mr Eaton said
  335. "After handing in my resignation I agreed, having instructed solicitors, to provide undertakings to Personal Group. …. My solicitors [later] … wrote to Personal Group's solicitors … [and] …explained that it was impossible for me to list all the confidential information which I had had in my possession prior to giving the undertaking. At the time of giving the undertaking I had worked for Personal Group for over 16 years …. To have retraced over 16 years of employment to detail every piece of confidential information … would have been an impossible task. …. …. It is now over two and a half years since I was placed on garden leave by Personal Group and I am in an even worse position. I simply cannot recall all of the confidential information that I had in my possession during my employment with Personal Group, and would not be able to comply with an order that I do so."

    In cross-examination he was asked,

    "Q. …. That document [the undertaking] was a document that was reviewed for you by a solicitor? A. Yes, it was, yes. …. Q. You had the opportunity, either directly or through your solicitor, to amend or object to any of its terms? A. I believe I would have done, yes. Q. Having been advised about it, you signed it? A. Yes. …. Q. … you had been sending information home? A. Yes. Q. Once somebody starts sending information home, it stops being in the control of the company, does it not? A. I would imagine so, yes. Q. You were saying, were you not, that you had done this regularly? A. I did it, yes, on occasions.

    [Counsel then referred to an e-mail sent by the witness to Beth Johnson in HR at Personal Group] Q… in the e-mail dated 12th October … you say this: "… I haven't got any information other than what was disclosed during our meeting and e-mail exchange …" So having now signed the confidentiality undertaking, you seem to be saying that there was nothing apart from those disciplinary e-mails, if I can call them that, that you had. A. Yes. Q. So what about all the others that you had previously said you had been sending home? A. Yes, I would have used them to actually give to a client. …. Q. But they would be on your computer? A. Maybe. I never looked at them again. … I did not even look at the computer again. Q. But surely, … the whole point of signing the agreement was to require you to look at your computer … to list these things out, so why did you not look at your computer? A. Well, there … probably was not anything on there at the time. …. Q. You did not really want to comply with this undertaking, did you? A. Yes, I did."

  336. At no stage did Mr Eaton explain why, in performance of his undertaking, he could not simply have forwarded to Personal Group such of the Personal Group-related digital information as remained on his home computer, or why he could not have delivered up all such printed material as may still have been at his home or in his possession elsewhere, or have said that no such information existed.
  337. On this point, I have concluded that his answers in cross-examination were lame attempts at excusing unethical conduct. He gave no reason for not checking his computer. The very least he could and should have done was to check it: he gave no explanation as to why, in a matter of minutes, he could not have selected any Personal Group files and attached them to an e-mail to Personal Group. In my view he could and should have complied with his undertaking. Any paper documents could and should have been dispatched to them by post. He did not say it was no longer possible for him to have done that.
  338. Mr Eaton was given independent legal advice before entering into his undertaking. He entered into it on a fully informed basis. By signing it, he effectively settled all proceedings which might otherwise have been in contemplation between himself and the first claimant company at that stage. Putting to one side, for the moment, the suggestions of waiver or estoppel, there is in my view no arguable basis for the suggestion that the first claimant company is not entitled to enforce the terms of that undertaking.
  339. It is submitted that, properly construed, clause 3 does not apply to information which came into Mr Eaton's possession after the end of his employment with Personal Group. In the circumstances, it is clear that the clause concerns material accessed by and entrusted to Mr Eaton during the course of his employment under his contract, not material coming into his possession from other sources thereafter. If clause 3 were held to apply to information both in Mr Eaton's possession during the course of his employment and any which came into his possession from other sources after the end of his employment, the provision would amount to a restraint of trade which went further than was reasonably necessary to protect the claimants' interests, and it would be unenforceable accordingly.
  340. I am satisfied that the clause is not improperly or unlawfully in restraint of trade. Its effect is only limited to restrict unfair competition, such as had in fact been indulged in by Mr Eaton. It in no way prevented him, nor will it prevent him in the future, from engaging fully in the business of Gee 7 or any other company, except insofar as that business involves unfair competition with Personal Group.
  341. Mr Eaton was in breach of clause 2.2 of the undertaking, by failing to provide a list of information in accordance with that clause, for reasons which I have already given.
  342. I am also satisfied that Mr Eaton was in breach of clause 3 of the undertaking by procuring, as he did, a copy of the list from Brakes and by passing the same onto the defendant companies as he did.
  343. Subject to considerations of waiver and estoppel, which I shall deal with presently, in my view the first claimant company is entitled to seek an order for specific performance of the undertaking given by Mr Eaton to it in the form of a deed executed by him. Conscientious performance of a thorough check for any information, itemisation of it, and its return to the claimants is not by any stretch of the imagination an unduly onerous or oppressive requirement. It should have been done long ago, and no good reason has ever been given for Mr Eaton's personal failure to undertake the task which he promised to perform.
  344. Waiver and estoppel

  345. Alternatively, it is submitted that the first claimant company has waived such rights as it had, or alternatively is estopped from asserting such rights as it may have had, to require performance of clause 2.2. The case is put "not as one of mere silence or inaction." Reliance is placed upon the letter Mr Eaton's solicitors e-mailed to the solicitors acting for the claimant companies on 12th October 2011.
  346. It is asserted that in this letter the solicitors then acting for Mr Eaton "specifically drew the claimants' attention to the fact that Mr Eaton was unable to comply with clause 2.2." Thereafter counsel submitted, the claimants corresponded with Mr Eaton on a range of other matters, but did not raise this issue until June 2013, when they accused Mr Eaton of wrongdoing, and belatedly made reference to the undertaking.
  347. Failure to take issue with the letter from Mr Eaton's solicitors of the 12th October 2011, "constituted a representation to the effect that PMS would not insist upon compliance with clause 2.2." Counsel submits that Mr Eaton "... relied upon that representation and did not seek any further amendments to the undertaking or to do his best to comply at a time when he would have been better placed to do so." Had he believed that he was required to reply he could have tried to do so at that time, "or to have entered into further negotiations about the terms of the undertaking."
  348. Thus, it is submitted, it would now be inequitable to allow the first claimant company to resile from its representation that it would not insist upon compliance with clause 2.2. The delay involved has only increased Mr Eaton's difficulty in complying with the undertaking in question.
  349. Mr Stafford on behalf of the claimants responds by saying that the submission on behalf of Mr Eaton appears to be that the solicitors' letter of 12th October 2011 should be seen, not as purported performance of clause 2.2, but rather as a counter-offer. The principal difficulty with that argument, he submits, is that the letter of 12th October 2011 is not, and does not read as, a counter-offer. Indeed, it does violence to the language of the relevant part of the 12th October 2011 letter to describe it as a counter offer.
  350. On this point, it seems to me that Mr Stafford is clearly correct. The words used are:
  351. "In accordance with that undertaking our client has asked us to confirm to you that:–
    (2) it is impossible for Mr Eaton to list all the confidential information which he has had in his possession prior to this point as the undertaking requested covers the entire period of his employment by Personal Group;…." [Emphasis added.]

    The suggestion that the letter of the 12th October 2011 "falls to be construed alongside the undertaking" with the effect that Mr Eaton was not contractually obliged to comply with clause 2.2, is, counsel submits, difficult to follow. "It seems to be a variation on the theme of the counter-offer. It suffers from the same defects as that argument." I agree.

  352. Counsel submitted that the letter amounts to "a statement and concession of non-compliance." It also contains an implication by the use of the word "all" in the context of the long period of his employment that his inability to comply was simply the result of the vast amount of information which he had had, but had not kept, but that whatever was still in his possession would be delivered up. In cross-examination Mr Eaton conceded that he had not even checked his computer for this purpose.
  353. Estoppel

  354. Finally, counsel for Mr Eaton argues that Personal Group are estopped from relying upon their right to enforce clause 2.2. However, there is no unequivocal representation that Personal Group would not assert its legal rights for breach of clause 2.2, by words or conduct. Mr Eaton cannot show that he acted to his detriment in reliance upon any representation; nor can he show that it would be unconscionable for Personal Group to seek to enforce its rights now. All that is pointed to is Personal Group's silence between 12th October 2011 and 5th June 2013, during a period in which (until disabused of it by events) they believed that Mr Eaton had told them the truth.
  355. Mr Stafford pointed out that mere silence falls far short of an unequivocal representation: see the case of Seechurn v Ace Insurance SA NV [2002] 2 Lloyd's Rep 390. It is said that Mr Eaton acted to his detriment by not seeking to amend or vary or part comply with clause 2.2. It is not explained why he was prevented from doing any of those things by Personal Group's conduct. It is of course relevant that Mr Eaton says he could have complied in part with the undertaking if he so wished.
  356. The remedy sought by Personal Group for breach of clause 2.2 is specific performance of that which is promised in the clause. That Mr Eaton should be required to honour the promise he made in order to obtain the valuable benefit of avoiding legal proceedings in relation to his misuse of confidential information in 2011, is, it is submitted "a modest and appropriate remedy." Neither the claimants nor the court would regard Mr Eaton as being in breach of an order for specific performance of clause 2.2 if satisfied that he has used every reasonable endeavour to comply, but that only part performance was ultimately possible. I accept this submission entirely.
  357. Further or other relief

  358. In closing, counsel for the claimants submitted that in the light of the evidence lately disclosed in the form of the audio recordings, and the evidence of Ms. Atkins that Mr. Eaton instructed her on the use of the List, Personal Group was entitled to invoke the "further relief" provision in the prayer to its Statement of Case, and sought an injunction effectively in the terms of the undertaking, namely that the Fourth defendant will not use or disclose to any third party or allow to be used by any third party any confidential information as defined in his contract of employment. Whilst any attempt at future use of the List by Mr Eaton may be unlikely, in my view, given the evidence as to past use, the first claimant company is entitled to such relief.
  359. Postponement of assessment of damages

  360. 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.


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URL: http://www.bailii.org/ew/cases/EWHC/QB/2014/3495.html