Baldwin & Anor v Berryland Books

These are appeals from the decision on 24 July 2009 of His Honour Judge Hodge QC, sitting as a High Court Judge, by which he found all the Defendants liable for conspiracy to injure the Claimant, Berryland Books Limited (“Berryland”), by diverting its business to the First Defendant, BK Books Limited (“BK Books”), and the Second Defendant liable for breach of fiduciary duty as a director of Berryland, and the Third and Fourth Defendants liable for breach of their duty of fidelity as employees of Berryland. He ordered an enquiry as to damages.

The Fourth Defendant, Sophie Baldwin, and the Fifth Defendant, Dr Ramasan Navaratnarajah, have appealed against the Judge’s findings against them. Berryland, the Respondent on the appeal, says that the appeals are really appeals against the Judge’s findings of fact, which should not be and cannot be challenged on appeal. The Fourth and Fifth Defendants say that the Judge’s errors were mixed errors of law and fact, in that the evidence was incapable of supporting the Judge’s findings on liability.

In his judgment the Judge referred to the Second Defendant, Kuleindiren Selvandam, as Indiren, to the Third Defendant, Helen O’Kane, as Helen, to the Fourth Defendant as Sophie and to the Fifth Defendant as Ramasan. Counsel used similar descriptions in their oral submissions to us. For convenience, therefore, and without any intended discourtesy, I shall use the same descriptions in this judgment.

The following is a brief summary of the factual background and Berryland’s case so far as necessary to understand the broad context of these appeals. I gratefully take much of the summary from the Judge’s judgment.

Berryland carries on the business of publishing and selling children’s books. It was incorporated in England on 12 February 2004 following discussions between Indiren and three Indian directors (“the Standard Directors”) of an Indian printing company, Standard Press (India) Private Ltd (“Standard”). Indiren held 30% of the shares in Berryland and the Standard directors together held the remaining 70%. All four were appointed directors of Berryland. Indiren was the company secretary. Indiren was the only director based in England. He exercised all day-to-day management responsibilities, making all decisions regarding the production and sale of Berryland’s books. Indiren was effectively in full control of Berryland save that from time to time the Standard Directors would request financial information and attend board meetings.

In the course of 2006 tensions developed between Indiren and the Standard Directors. There was disagreement between them as to the salary that Indiren should be paid. The Standard Directors did not consider that Indiren should be paid anything because Berryland was a new company. Indiren considered that, as the only executive director and the managing director and chief executive officer of the company, he should be paid an appropriate remuneration for his time. He sent an email to one of the Standard Directors on 31 March 2006, indicating that there were two options to move forward: either he was bought out of the company for 30% of Standard's total investment of £280,000, equating to £84,000; or he would buy out Standard’s shareholding for a mutually agreed figure. Neither of those proposals was accepted. Nor was any agreement reached as to Indiren’s salary. At a meeting of the board of Berryland 12 October 2006, chaired by one of the Standard Directors, a proposal by Indiren that he should receive a salary of £4,500 per month from October 2006 was rejected. It was resolved instead that Indiren should repay the salary previously drawn by him without the proper approval of the board. By the time of that board meeting, Indiren was deeply unhappy about his business relationship with the Standard Directors, and with the questions that they were asking him about Berryland’s finances and his running of its business. The Judge said (at [2]) (and it has not been challenged on this appeal) that it was the tensions and deteriorating relationship between Indiren and the Standard Directors, first revealed by email exchanges in March and April 2006, and thrown into sharp focus by the 12 October 2006 board meeting, which were the root cause of the events which led to this litigation.

Helen is married to Indiren. She was employed by Berryland as its business development manager from its establishment in February 2004. She gave notice of her resignation by email on 9 November 2006.

Sophie was employed by Berryland as its UK sales manger with effect from 18 April 2006. She had no previous experience in publishing. Due to child-care responsibilities, she worked flexi-time, and only spent part of her time in Berryland’s office. She resigned by letter dated 8 November 2006. Her contract required her to give one month’s written notice. In her resignation letter she stated that she would work her four weeks notice, less any outstanding annual leave.

UK sales formed only a relatively small part of Berryland’s business. International sales were the responsibility of Sean Buckley (“Sean”). He was employed as Berryland’s Vice-President, International Sales, from 1 August 2004 under a written contract dated 8 July 2004. He ceased to work for Berryland on 20 October 2006, having given one month’s notice on 20 September 2006.

BK Books was incorporated on 8 June 2006. Initially, Ramasan was the sole director and shareholder. He is a friend of Indiren. He is employed by the NHS as a consultant obstetrician. He has never had any involvement in publishing. It is not clear precisely how many shares in BK Books were issued to him. On or about 1 March 2007, for no consideration, Ramasan transferred his entire shareholding in BK Books to Indiren, who was then appointed a director of BK Books. Ramasan remained a director of BK Books until September or October 2008. Ramasan never played any management or directing role in BK Books. He never made any financial contribution to the company, except, possibly, for the initial costs of incorporation, and he never received any financial benefit or return from it.

Berryland’s case was briefly summarised by the Judge as follows (at [6]). In or before the beginning of June 2006 Indiren conceived of an unlawful enterprise to divert Berryland’s business into another corporate vehicle, which was to become BK Books. This was conceived as including, or came to include, the use of Berryland’s confidential information, corporate opportunities, staff and customers. Indiren’s unlawful enterprise developed into a conspiracy that drew in the other Defendants, and also Sean. In order to conceal his intentions, Indiren caused his friend, Ramasan, to establish BK Books; but it was Indiren who exercised management and control of BK Books from the start, and it was he was he who was the true beneficial owner of the company. From the time of BK Books’ establishment, Indiren, Helen, Sophie and Sean were actively engaged in either working for BK Books, and diverting business to it from Berryland, or in pursuing unlawful preparatory activities. As a result of these unlawful activities, immediately after their serial resignations from Berryland, between 8 and 13 November 2006, if not before, they were able to commence working for BK Books as a going (and competing) concern, and without the usual lead-in time required to start up and to establish a new publishing venture. In furtherance of this conspiracy, before Indiren, Helen and Sophie left Berryland, all Berryland's records, whether in electronic or hard copy form, were removed, destroyed or deleted. At the very least, Indiren, Helen and Sophie were very reluctant to provide necessary computer passwords and other important commercial information. This has damaged Berryland's business.

Berryland’s claim, therefore, arose from alleged breaches of the contractual duties of fidelity of Helen and Sophie as employees of Berryland, and alleged breaches of Indiren’s fiduciary duties as a director of Berryland, both in promoting BK Books as a competing company and in deliberately sabotaging Berryland's business; and Berryland claimed that BK Books and Ramsasan were complicit in those breaches of duty by facilitating or dishonestly assisting in, or benefiting from, them. Collateral to, and supporting, those claims of conspiracy and sabotage, were secondary claims that Indiren, Helen and Sophie breached their equitable obligations not to use or to divulge confidential information and trade secrets, and that they infringed Berryland's copyright in its database and in certain Sudoku books that Berryland had been in the course of publishing and marketing.

The history of the proceedings is important. Berryland issued its claim form on 5 December 2007. The alleged conspiracy was pleaded as follows in paragraphs 61 to 66 of the Particulars of Claim.

The activities of the Defendants before November 2006 pursuant to the alleged conspiracy were set out as follows in paragraphs 67 to 69 of the Particulars of Claim:

The “Confidential Information” mentioned in paragraph 69.4 was alleged in paragraph 31 of the Particulars of Claim to include, but was not limited to, Berryland’s customer base, Berryland’s customers’ requirements, including the commissions and/or discounts that it provided to distributors, renewal dates, Berryland’s pricing strategy, including market feedback on particular books, and Berryland’s suppliers and the terms of supply.

It was said in paragraph 70 of the Particulars of Claim that those allegations were evidenced by the facts set out in paragraphs 70.1 to 70.8 under the heading “Particulars of unlawful activity pre-November 2006”. I shall refer to these in more detail in due course.

Until 1 December 2008, shortly before initial disclosure was given, the Defendants were all represented by the same solicitors (Bracher Rawlins LLP) and counsel (Malcolm Chapple). Thereafter, and for the purposes of disclosure, preparation of witness statements, and the conduct of the trial, Indiren, Helen, Sophie and Ramasan all acted as litigants in person. It appears that up to, and including, the trial Indiren acted on behalf of, and co-ordinated, all the other Defendants.

A single joint Defence was settled by Mr Chapple. It was endorsed with a statement of truth signed by each Defendant on 4 February 2008. The heart of the Defence was in paragraph 7. That paragraph set out a positive case that in May and June 2006 Indiren and a group of French businessmen (“the French Businessmen”) had detailed discussions about the possibility of Berryland and the French Businessmen “joining in a cross-marketing venture whereby Berryland and the said French Businessmen each marketed (for a fee) products supplied by the other (“the French Venture”)”. It was alleged that the negotiations for the French Venture were entirely and exclusively for the benefit of Berryland; that in about June 2006 it was decided by Indiren, as the sole executive director and English based director of Berryland, that Berryland, its employees and Indiren would “all act in concert to build the business of Berryland by pursuing the French Venture”. Paragraph 7 continued as follows:

Paragraph 7 of the Defence then referred to the resignations of Indiren, Helen and Sophie in early November 2006, and continued as follows:

On the same day the Defence was served a CPR Part 18 Request for Further Information was served on behalf of all the Defendants jointly. The Request was answered on 31 March 2008. The following request was made in respect of paragraphs 64 and 67 of the Particulars of Claim:

The answer to that request was as follows.

Berryland’s Reply to the joint Defence was also served on 31 March 2008. Paragraph 4 of the Reply denied and responded to the allegation in the Defence that BK Books was established and incorporated solely for the purposes of the French Venture. It alleged that the “purported French Venture is a fabrication”, and gave various particulars on which Berryland relied in that regard.

There is in the appeal bundle an unsigned witness statement of Sophie. It is indorsed with the date 8 April 2009. It is unclear whether or not it was prepared by solicitors. It comprises, so far as material to this appeal, bare denials of the conspiracy allegations and the other allegations against her of breaches of duty and unlawful conduct.

There is also in the appeal bundle an unsigned witness statement of Ramasan, also indorsed with the date 8 April 2009. It is unclear whether or not it was prepared by solicitors. He explained his involvement with BK Books in paragraphs 6 and 11 to 14 of his witness statement. Paragraph 6 was as follows:

The marketing venture mentioned in that paragraph was a reference to the French Venture. Further details were given of this and of BK Books in paragraphs 11 to 15 of the witness statement, which were as follows:

For the most part, the rest of Ramasan’s witness statement comprised bare denials of the pleaded allegations against him.

The trial took place over 10 days between 2 and 21 July 2009. As I have said, the Defendants, co-ordinated and led by Indiren, were all acting as litigants in person long before then. On the first day of the trial, the Judge permitted Indiren, as its director, to represent BK Books pursuant to CPR 39.6. Indiren also took the lead part in representing Helen, Sophie and Ramasan. The Judge recorded in his judgment that Sophie and Ramasan were absent from court for substantial parts of the trial. Berryman was represented by Mr Ben Quiney, counsel, to whom the Judge in his judgment paid tribute for the consideration and courtesy he had shown to the individual Defendants.

Indiren, Helen and Sophie all gave oral evidence and were cross-examined.

Towards the beginning of his careful and detailed judgment, the Judge recorded in unimpeachable terms ([11]) the principles by which he sought to evaluate the evidence, both written and oral. He gave his assessment of the witnesses. It is sufficient to refer to his assessment of the evidence of Indiren, Sophie and Ramasan.

The Judge said ([14]) that he could not treat the evidence of Indiren as reliable and did not consider him to be a witness of truth. He said that he was satisfied that Indiren was lying, “not in a stupid attempt to bolster a good case, but because his case is a lie”.

The Judge said the following of Sophie:

The Judge said the following of Ramasan:

The Judge said ([26]) that he rejected the Defendants’ explanation for the original establishment of BK Books: that it was intended to be a cross-marketing venture with the French Businessmen, and an imprint of Berryland enabling it to pitch for book sales at a higher (and more lucrative) end of the market. The Judge made the following findings of fact (at [27]) about the establishment of BK Books:

The Judge continued:

The Judge said that he was satisfied that Helen was “in on” Indiren’s plans from their inception. He was satisfied, and found, that from early June 2006 until they resigned in the following November, both Indiren and Helen knowingly participated in a joint enterprise to establish BK Books as a potential competitor to Berryland. He said that by the time of the board meeting on 12 October 2006 Indiren was aware that the Standard directors were not interested either in buying him out or in selling their own shares in Berryland to him; and, from that time (if not before) Indiren effectively looked to BK Books as the vehicle for his (and Helen’s) future involvement in the field of publishing children’s books.

The Judge then turned (at [28]) to the involvement of Sean, Sophie and Ramasan. He said:

The Judge said ([29]) that he was satisfied (and found as a fact) that between June and November 2006 Indiren and Helen, and to a much lesser extent Sophie, knowingly, and acting in concert, undertook activities preparatory to the establishment of BK Books as a competitor to Berryland. He then specified 8 such activities.

The Judge said ([32]) that in addition he was satisfied (and found as a fact) that Indiren, with the knowledge of Helen and Sophie, appropriated BK Books’ maturing business opportunities which were properly the property of Berryland, namely CD Rom books such as “The Three Little Pigs” (and other related titles), and the Sudoku books which formed part of Berryland’s library of products.

The Judge said ([33]) that he was satisfied (and found as a fact) that each of Indiren, Helen and Sophie (and also Sean) knew and appreciated that those activities would, or might, cause harm to Berryland. The Judge found that Helen and Sophie, as employees of Berryland, were each in breach of their duties of fidelity in failing to disclose the wrongdoing of the other, and of Indiren.

The Judge also found ([34]) that Sophie resigned from Berryland in order to go to work for BK Books; that she worked for BK Books during her one month notice period (until 8 December 2006); and that she was thereby in breach of her duty of fidelity as an employee of Berryland.

Although the Judge found that Indiren, Helen and Sophie deleted and removed electronic and hard copy emails, files and other documents “with a view to covering their tracks”, he rejected Berrlyand’s case that they deliberately engaged in any more comprehensive destruction, deletion or removal of electronic and hard copy documents and records from Berryland’s computers and premises with a view to sabotaging its ongoing business. He also rejected any separate case by Berryland that Indiren, Helen or Sophie unlawfully used any confidential information belonging to Berryland.

Turning to Ramasan’s alleged involvement in the conspiracy, the Judge said (at [37]):

The Judge said ([38]) that, were it necessary to do so, he would hold that each of the Defendants knowingly assisted in the breaches of duty of Indiren, Helen and Sophie, but he did not think that a knowing assistance claim added anything to the other causes of action on which Berryland had succeeded.

The Judge declined ([40] and [41]) to make any finding of infringement of Berryland’s copyright.

Berryland alleges that the Defendants committed the tort of conspiracy to injure. Of the two types of tortious conspiracy to injure, Berrlyand relies on the tort of unlawful means conspiracy. It is common ground that the principal constituents of that tort were authoritatively stated in Kuwait Oil Tanker Co SAK v Al Bader [2000] 2 All ER (Comm) 271, in which Nourse LJ gave the judgment of the Court. He described the tort as follows, at [108]:

It is not necessary that every overt act is done by every conspirator, but the act must be done pursuant to the conspiracy or combination: Kuwait at [110]. Further, it is not necessary to show that there is anything in the nature of an express agreement, whether formal or informal. It is sufficient if two or more persons combine with a common intention, that is to say, that they deliberately combine, albeit tacitly, to achieve a common end: Kuwait at [111]. Nourse LJ quoted (at [111]) the following passage from the judgment of the Court of Appeal Criminal Division delivered by O'Connor LJ in R v Siracusa (1990) 90 Cr App R 340 at 349 as being of assistance in this context:

It is not necessary, therefore, for the conspirators all to join the conspiracy at the same time. The parties must, however, be sufficiently aware of the surrounding circumstances and share the same object for it properly to be said that they were acting in concert at the time of the acts complained of: Kuwait at [111]. In most cases it will be necessary to scrutinise the acts relied upon to see what inferences can be drawn as to the existence or otherwise of the alleged conspiracy or combination, for it will be a rare case in which there will be evidence of the agreement itself: Kuwait at [112].

Mr Quiney, for Berryland, rightly observed in his oral submissions that, in this area of the law, knowledge and intention are intimately connected. Intention to injure, and indeed acting in concert, cannot be inferred in the absence of the requisite knowledge. The leading authority on intention and knowledge in this context is OBG Ltd v Allan [2007] UKHL 21, [2008] 1 AC 1. It is not necessary to set out the facts of OBG, including the cases heard with it in the House of Lords, Douglas v Hello! Ltd (No 3) and Mainstream Properties Ltd v Young. The House of Lords was not concerned specifically with tortious liability for conspiracy, but the views which were expressed by the House of Lords on the mental requirements of the tort of causing loss by unlawful means are applicable to the tort of conspiracy: Meretz Investments NV v ACP [2007] EWCA Civ 1303, [2008] Ch 244 at [146] (Arden LJ). OGB is authority that, in this context, what is required is actual intention or reckless indifference. Mere foreseeability of a consequence does not satisfy the requirement of intention: [43] (Lord Hoffmann). A defendant’s foresight that his or her unlawful conduct may or will probably damage the claimant is not enough: [164] (Lord Hoffmann). The same applies to knowledge. Relevant knowledge is actual knowledge or reckless indifference. Mr Quiney submitted that the latter is equivalent to “turning a blind eye” or what is sometimes called Nelsonian knowledge. That is a rather vague expression. Reckless indifference in this context means: “a conscious decision not to inquire into the existence of a fact”: [41] (Lord Hoffmann).

The need to show an intention to harm and the insufficiency of any lesser state of mind was also emphasised by Lord Nichols in OBG. He said (at [166]):

The starting point of Mr Adam Chichester-Clark, counsel for Sophie, was that Sophie could only be liable for conspiracy if she knew that she was doing something wrong; and that required that she had to know that (1) Indiren and Helen, her immediate bosses, did not own Berryland, and (2) BK Books was not merely a brand name by which Berryland sold its books, but was a separate competing entity.

Her evidence was that she thought that BK Books was merely an imprint for selling Berryland products, intended to dispel the impression, which many wholesalers then believed, that Berryland only sold cheap books. She thought it was intended to enable Berryland to increase its business by selling under a better brand. The essence of her case appears from the following extracts from her cross-examination:

Mr Chichester-Clark submitted that the Judge never properly considered Sophie’s explanation of her understanding of BK Books, or fairly analysed the evidence as to whether she was involved in the conspiracy of Indiren and Helen. The joint Defence put forward a positive case based on the alleged French Venture, which the Judge rightly rejected at [26] of his judgment. No criticism is made of the Judge’s findings against Indiren and Helen. Mr Chichester-Clark submitted that the Judge fell into error, however, in failing to see that Sophie was advancing in her evidence an alternative case to that of Indiren and Sophie, whose defence was based on the use of BK Books, a separate corporate entity, as part of the French Venture. Having rightly rejected the French Venture and found a conspiracy by Indiren and Helen to injure Berryland, the Judge concluded as a matter of fact that Sophie knew and was a party to that conspiracy, essentially merely because he had rejected the joint defence of the French Venture in paragraph 7 of the joint Defence, and without testing the evidence against her own case in cross-examination that she thought BK Books was an imprint of Berryland.

The Judge rejected ([16]), for example, Sophie’s evidence that she did not discuss with Indiren, prior to her resignation from Berryland, her planned resignation or any opportunity that he might have for her at BK Books. In that regard, the Judge placed weight on the small size of Berryland’s operation in the UK and the relationship between Sophie, Helen and Indiren. Mr Chichester-Clark submitted that the Judge failed, however, to take account of the fact that Sophie was a junior employee, who was only in the office for part of the working day; she had arrived only in April 2006; her immediate boss was Helen, who was married to Indiren, who controlled the day to day management of Berryland’s UK office; and the principal sales person was Sean Buckley, the Vice-President of International Sales, responsible for the US.

The point is related to the Judge’s apparent finding ([20]) that Sophie’s motive for participating in the conspiracy of Indiren and Helen was to ensure her continued employment by Indiren, and Judge’s implicit rejection of her evidence that her reason for resigning was the deterioration in the working atmosphere and the letter left on Helen’s desk by one of the Standard Directors, in which he had referred to “Retrenchment of existing employees”. Mr Chichester-Clark pointed out that the motive found by the Judge was never pleaded in Berryland’s statements of case, and it was not part of Sophie’s cross-examination.

In assessing Sophie’s credibility, the Judge was influenced by what he perceived ([16]) to be a clear contradiction between her evidence in cross-examination that she had no memory of having discussed the French Venture, and what was said in a response dated 5 September 2008 to a request by Berryland for further information. That response, which was settled by counsel, was verified by a statement of truth by Sophie and the other Defendants. Mr Chichester-Clark again submitted that the Judge failed fairly to assess the position. The request was dated 31 March 2008. Berryman asked the following question in relation to paragraph 7(h) of the Defence:

Whether before 8 June 2006 the Defendants (including Mr Navaratnarajah) discussed either the establishment of BK Books or the French Venture.”

The answer to that question was:

There was the following further question:

The answer to that question was:

Accordingly, Mr Chichester-Clark pointed out, the Defendants’ case always was that there was no discussion with Sophie about the beneficial or legal ownership of BK Books.

The Judge was also unimpressed ([16)] with her evidence that she could not remember receiving a “chatty” email on 11 September 2006 from Helen attaching the proposed new BK logos and that it was certainly not part of an ongoing discussion, and Sophie’s failure to explain why Helen should have sent it. The Judge said that the email “clearly indicates that Helen regarded Sophie as being in on whatever was being planned with regard to BK Books”. Mr Chichester-Clark submitted that those observations of the Judge underscore his failure to see that Sophie’s evidence of her understanding that BK Books was not a separate corporate entity controlled by Indiren, but rather a Berryland imprint, was not inconsistent with the email of 11 September 2006 or indeed the sell-sheets sent to her in September 2006 showing new products for BK Books for sale to wholesalers in 2007 or discussions about the French Venture.

Mr Chichester-Clark further pointed out that the email of 11 September 2006 and other messages to Sophie in September 2006 on which Berryland relies were all before the board meeting of 12 October 2006, which was the catalyst for Indiren’s decision to trigger his insurance policy in the form of BK Books (as the Judge described it in [27] of his judgment).

The Judge found as a fact ([28]), on the basis of those matters and also “the speed with which [after her resignation] she began working for BK Books”, that Sophie consciously assisted Indiren in promoting BK books on his behalf. Mr Chichester-Clark submitted, however, that there was no basis for the Judge’s finding that Sophie worked for BK Books during her period of notice or for drawing an adverse inference against Sophie as to the “speed” with which she started to work for BK Books. Her evidence in cross-examination was that she was employed by BK Books from 9 December 2006. Her evidence was that between 8 November 2006, when she gave her notice to Berryland and the beginning of December she was trying to find another part time job. Mr Chichester-Clark submitted that there was no evidence to support a finding that Sophie did anything else during her one month notice period, and it was not put to her in cross-examination.

The Judge said ([28)] that it must have seemed most unlikely to Sophie, in view of the events after the board meeting of 12 October 2006, that Indiren would succeed in securing ownership and control of Berryland. Mr Chichester-Clark pointed out, however, that there was no evidence she was at that board meeting.

The Judge found as a fact ([29]) that between June and November 2006 Sophie knowingly, acting in concert with Indiren and Helen, undertook activities preparatory to the establishment of BK Books as a competitor to Berryland. He mentioned the following, so far as concerns Sophie: her knowledge that Indiren and Helen were developing CD Rom books as potential products for BK Books with a view to promoting them to customers as such, rather than on behalf of Berryland; her “probable” knowledge of the booking of a ticket for Indiren, on or before 31 October 2006, to fly to the United States on 14 November 2006 with the express object of pitching BK Books’ products to customers of Berryland; “possibly” Sophie taking steps, together with Indiren and Helen, to ensure that BK Books would be in a position to pitch to supply Sudoku books to customers in competition with Berryland’s own Sudoku titles during Indiren’s visit to the US; and discussing and co-ordinating with Indiren and Helen their respective resignations from Berryland with a view to their immediately starting to work for, or undertake activities on behalf of, BK Books.

As to those matters, Mr Chichester-Clark submitted that: Sophie “possibly” acting in a particular way could not satisfy the requirements for conspiracy; there was no evidence that Sophie played any part in, or knew of, the booking of a plane ticket for Indiren to fly to the US on 14 November 2006; Mr Chichester-Clark’s attack on the Judge’s conclusion that there was a co-ordination of resignations is addressed above, and was never pleaded by Berryland to be part of the alleged conspiracy; and the Judge’s conclusions resulted from his failure to assess the evidence against Sophie’s alternative defence, rather than the joint defence of the French Venture.

Nor, Mr Chichester Clark submitted, was there any evidence to support the Judge’s finding ([35]) that Sophie had deleted emails. That was never put to her. Her evidence in cross-examination was that, after she had been paid her salary, she gave Mr David Asir (one of the Standard Directors) all of the documents that she had, including all her emails. She said that every single email she had on her computer regarding Berryland was printed out, and sent recorded delivery to Mr Asir, as requested, and as stipulated by herself in an email.

In the light of all those matters, Mr Chichester-Clark submitted that it is open to this Court to set aside the Judge’s finding as to Sophie’s liability. He referred to Grupo Torras SA v Al-Sabah [2000] CLC 221 in which the Court of Appeal said (at [48]) that “the evaluation of inherent probability ... is a task which this court can and should perform without much inhibition”. Mr Chichester-Clark submitted that the Judge’s findings as to Sophie’s intentions were all based on inherent probability: the Judge’s analysis was fundamentally flawed in his general approach to her defence, and that undermined his findings of particular facts.

Mr Quiney, in powerful submissions, argued that Sophie’s appeal is no more than a bare attack on legitimate findings of fact by the trial judge, who was able to form a view about, and did assess, the credibility of the witnesses, including Sophie, on the basis of what he saw and heard.

Mr Quiney supported the Judge’s findings, emphasising both the nature of the defence advanced on behalf of all the Defendants and the evidence, particularly Sophie’s evidence. He stressed that a single defence to the conspiracy claim was advanced on behalf of all the Defendants, in the joint Defence which was settled by counsel and was endorsed by statements of truth signed by each Defendant, including Sophie. The single defence was the positive assertion of the French Venture. That defence was rightly rejected by the Judge, whose conclusion on that point has not been challenged.

Mr Quiney pointed out that there is no dispute as to the elements of the conspiracy of Indiren and Helen. From August 2006 Indiren and his wife were designing and producing products for BK Books, and in September 2006 those products were being pitched to Berryland’s customers for sale in the following February. In addition, in August and September 2006 books already developed by Berryland featured in sell-sheets for sale by BK Books. Mr Quiney said that, on the evidence, Sophie was a key part of that enterprise. Emails in relation to those proposed sales by BK Books were sent to Sophie in September 2006. This was all done by Berryland’s employees, in Berryland’s time, by Berryland’s employees.

Mr Quiney emphasised that, when those emails were put to Sophie in cross-examination, she simply denied seeing them. It was a bare denial. Nor did she explain in her witness statement, the “economy” and “opacity” of which were commented upon by the Judge ([19)], that the sell-sheet attachments were Berryman imprints. The Judge, Mr Quiney said, was fully entitled to reject her evidence that she had not received the relevant emails. That was against all the probabilities, since it would have been part of her job to pitch for and sell the products to which the emails related. The Judge, he said, was therefore fully entitled to conclude that Sophie knew, by October 2006 at the latest, of the business opportunities being snatched from Berryland.

Mr Quiney said that the Judge was entitled, in forming his view of the probabilities, to take account of the intimate nature of the company. He pointed out that, in September 2006, Sophie was the only UK sales representative of Berryland; and, after Sean resigned on 20 October 2006, she was the only sales representative. She knew the business and she knew the customers. The admitted conspirators, Indiren and Helen, therefore needed her participation. He said that her whole case lacked credibility.

Mr Quiney rejected Mr Chichester-Clark’s argument that the Judge failed to consider Sophie’s personal position. He pointed to the various places in the judgment where the Judge singles out Sophie and the evidence in relation to her, and makes his findings in relation to her.

Furthermore, irrespective of the case of conspiracy against Sophie, Mr Quiney submitted that there is no basis for disturbing the Judge’s separate findings against Sophie for breach of her duty of fidelity as an employee, including the preparatory acts mentioned in ([29]) of the judgment, the diversion of maturing business opportunities ([32]), the failure to disclose the wrongdoing of Indiren and Helen ([33]), working for BK Books during her notice period ([34]), and the deletion, destruction and retention of material ([35]). Mr Quiney submitted that, even if the intention on the part of Sophie necessary for a finding of liability for conspiracy was not made out, the Judge was entitled to hold that she had the requisite knowledge for the Judge’s findings as to the breaches of her duty of fidelity as an employee.

Mr Quiney rejected the application to the present appeal of the statement in Grupo Torras about the ability and willingness of the Court of Appeal to re-evaluate inherent probability. He pointed out that the Court of Appeal in that case pointedly observed (in [60]) that that the finding of fact under appeal did not depend upon the Judge’s rejection of the credibility of the critical witness or his performance in the witness box. In the present case, by contrast, the Judge did form an adverse view of Sophie’s credibility.

Notwithstanding those points so attractively advanced by Mr Quiney, and the obvious difficulty of overturning findings of fact by a trial judge, who formed an adverse view of her credibility, I consider that, in the unusual circumstances of the present case, Sophie’s appeal should be allowed.

Critical to my conclusion is the fact that Sophie was never separately represented before or at the trial. That concealed that she had a quite separate defence to the positive case of the French Venture asserted in the joint Defence. It is entirely understandable that the Judge considered that all the Defendants were standing by that joint positive case as to the setting up of BK Books for the legitimate purpose of taking advantage of the French Venture. The impression that they were all standing or falling together on that explanation was heightened by the fact that, at the time of the formal Defence, they were all represented by the same counsel and solicitors; and at the trial all the Defendants were represented by Indiren. Sophie’s witness statement, comprising for the most part bare denials of Berryland’s allegations, gave no indication of any different defence.

Sophie’s oral evidence in cross-examination, however, made quite clear that she was advancing a quite different defence to that of Indiren and Helen, and which was not dependant on the positive case on the French Venture in the joint Defence. Her defence was that, so far as she was concerned, BK Books was merely an imprint within Berryland and for the purpose of Berryland’s business, which was intended to open up new markets for a more sophisticated publication. The Judge, for the understandable reasons I have mentioned, never identified that as a separate, personal defence, for there was no one independently to press it on her behalf.

I agree with Mr. Chichester-Clark that the Judge, having rejected the single joint defence, found that Sophie was simply not to be believed. This coloured his whole approach to her evidence. He never assessed the evidence, such as the significance of the September emails sent to her and the sell-sheets which were attached to them, in the light of her alternative, personal defence. On the face of it, they were consistent with that defence. So too was her explanation of the circumstances in which she resigned and the reasons for her resignation, and generally her absence of any knowledge of wrongdoing on the part of Indiren and Helen or their intentions as to the use of BK Books. The Judge’s failure to evaluate her explanation in the light of the evidence calls into question all the Judge’s findings of fact against her, including, in particular, those where his finding was, for the reasons given by Mr. Chichester-Clark, unsupported by any evidence or inconsistent with the weight of the evidence. That is also underscored by the Judge’s own view that Sophie’s role in the conspiracy of Indiren was “less clear” ([28]) and involved her “to a much lesser extent” ([29]), the absence of any cogent evidence as to her motive for joining the conspiracy between April (when she joined Berryland) and the 12 October 2006 board meeting (which the Judge found was the catalyst for Indiren’s decision to trigger his insurance policy in the form of BK Books), and the fact that the emails to Sophie on which Berryland and the Judge placed so much weight occurred before that board meeting, which she did not, in any event, attend.

The same criticisms apply equally to the findings of the Judge on breaches of Sophie’s duty of fidelity.

I would therefore allow Sophie’s appeal.

The substance of Ramasan’s appeal is quite simply that the Judge’s findings of fact are insufficient in law to make Ramsan liable in tort for conspiracy to injure Berryland.

I have already quoted earlier in this judgment the passages in paragraphs 6 and 11 to 15 of Ramsan’s witness statement in which he explains his involvement with BK Books. That account was repeated and amplified in his oral evidence in cross-examination, the material parts of which were as follows:

Ramasan also gave evidence in cross-examination that Berryland’s own accountant handled the arrangements for setting up BK Books. He also gave evidence that he never knew that BK Books had traded prior to Indiren leaving Berryland.

Mr Michael Jefferis, counsel for Ramasan, said that the Judge did not make any finding that Ramasan knew the intention of Indiren and Helen to steal Berryland’s business, and indeed did not find any intention on the part of Ramasan to injure Berryland. The Judge found ([28)] that Indiren did not want his fellow directors to know about, or become involved in, BK Books. Mr Jefferis stressed, however, that Ramasan was never asked in cross-examination why he thought Indiren did not want his fellow directors to know. Further, it was never put to Ramasan in cross-examination that the French Venture was a complete lie, and he knew that. It was never put to Ramasan that what he had said in paragraph 11 of his witness statement was a lie and that he knew that BK Books was going to be a vehicle for taking Berryland’s business. On the contrary, he said in paragraph 12 of his witness statement that he believed that Berryland would be involved in the venture. Mr Jefferis further pointed out that, when BK Books was set up in June 2006, according to the evidence and the findings of the Judge, Indiren himself had no firmer idea about its use than that it would be a hedge or insurance policy if matters did not work out between himself and Standard. The Judge himself considered ([15]) that Ramasan had little idea or understanding of the original commercial purpose of the establishment of BK Books.

Mr Jefferis submitted that the sole basis on which the Judge found that Ramsan was liable for conspiracy was that ([28]), as a result of his appreciation that Indiren had asked him to assist in the creation of BK Books because Indiren did not want the other directors and members of Berryland to know about, or become involved in, BK Books, Ramasan “assumed the risk that he was involving himself in some malpractice on the part of Indiren against Berryland”. Mr Jefferis submitted that the assumption of such a vague and open-ended risk is insufficient in law to give rise to a liability for conspiracy to injure.

I agree with Mr Jefferis that the findings of fact of the Judge were insufficient to give rise in law to a liability on the part of Ramasan for conspiracy to injure Berryland. As OBG makes clear nothing less will do than an actual intention to injure Berryland, or reckless indifference, in the sense of a conscious decision not to inquire. The Judge made no findings to that effect in Ramasan’s case. Nor was there evidence, or any finding of the Judge, that Ramasan had the knowledge necessary to form the requisite intention to injure.

The Judge said [37)] that he had “anxiously” considered whether Ramasan’s limited involvement was sufficient to render him liable as a party to the conspiracy, and that he had concluded that it was sufficient “[n]ot without some hesitation.” It does not appear that OBG was cited to the Judge. Had it been, and particularly if Ramasan had been separately represented, I have no doubt, in the light of the points so cogently made by Mr Jefferis, that the Judge would have reached a different conclusion about Ramasan’s liability for conspiracy. As in Sophie’s case, the fact that Ramasan had never been separately represented, and had left it to Indiren both before and at the trial to represent his interests, leaving Ramasan a party to the joint Defence and the positive joint case based on the alleged French Venture, obscured his quite different position in fact and law from Indiren and Helen.

I would therefore allow Ramasan’s appeal.

For the reasons I have given, I would set aside the Judge’s findings of liability on the part of Sophie and Ramasan and his order against them for an enquiry as to damages.

I agree that the judge’s order will have to be set aside in relation to Sophie and Ramasan.

Since legal aid has become unavailable to the majority of people in ordinary civil cases more and more litigants have had to represent themselves in our courts. It is particularly hard for a defendant who has no option other than appearing in court if he or she is sued and wants to contest the claim. The present claim was brought by Berryland against two of their former directors (a husband and wife) for conspiring to cause them loss by unlawful means namely by being in fiduciary breach of their duty as directors. Berryland claimed further that one of their female employees and a friend of one of the directors (a consultant obstetrician) were in on the conspiracy. Neither the female employee nor the friendly doctor could have conceivably afforded to have professional representation for an 11 day trial. They, no doubt gratefully, accepted the offer of the second defendant (who was found to be the chief conspirator and who likewise could not afford professional representation) to represent their interests at the trial.

This placed the judge in an almost impossible position because he had somehow to be alert to the possibility that the employee and the doctor had not only potentially separate interests but also possibly separate defences from the main conspirators who were purportedly representing them. The position was particularly acute in relation to Ramasan who could hardly be expected to absent himself from his hospital for the duration of the trial and was, moreover, clearly exhausted (as noted by the judge) by having been on duty and delivered a number of babies on the night before he gave evidence.

Now that both the employee and the doctor have had legal representation in the Court of Appeal (where the case has only lasted two days) this court can see the matter from their individual perspectives in a far clearer way than it was possible for the judge to do and I agree with Etherton LJ that the judgment against the fourth and fifth defendants will have to be set aside, that being scarcely any fault of the judge who tried the case with conspicuous patience.

I agree with both judgments. Like my Lords I have considerable sympathy for the judge whose attention was not drawn by the undoubted real villain of the piece who was representing the appellants to their quite separate credible defences. As I once heard Mr John Roberts Q.C. submit passionately to His Honour, the late Judge Norman Brodrick, “The explanation for my client’s alleged participation in this conspiracy in summed up in the old Creole saying, ‘He who lies down wid de dogs, gets up wid de fleas’.”

But the case also highlights another danger, namely that as Legal Aid is withdrawn, more and more cases will suffer from the lack of proper representation, judges will struggle and justice may be denied.