Space Airconditioning Plc v Guy & Anor

This Court decides most appeals without citing CPR Part 52.11 (3), which states when it will allow an appeal:-

“Hearing of appeals

(1)

…

(2)

…

(3)

The appeal court will allow an appeal where the decision of the lower court was –

(a)

wrong; or

(b)

unjust because of a serious procedural error or other irregularity in the proceedings in the lower court.”

In this case exceptional circumstances suggest that particular attention should be paid to the scope of Part 52.11(3) and to the consequences of its application. Allowing this appeal would involve the prospect of a re-trial. Dismissing this appeal would involve this court in affirming an order based on a judgment which contains a plainly wrong finding of fact. When the error was pointed out in the lower court after the judgment had been handed down, the judge acknowledged that the finding was wrong, but declined to correct it as a typographical slip and refused permission to appeal. The parties continue to disagree about the significance of, and the explanation for, the admitted unamended error. Is the erroneous finding and are the circumstances in which it remains uncorrected sufficient to justify the conclusion that the decision of the lower court was “wrong”, or that it was “unjust” as a result of an “irregularity in the proceedings”?

While the circumstances giving rise to the appeal are extremely unusual, the cause of action is not: it is the alleged wrongful extraction, retention and use of confidential customer information by an employee, who sent in his notice and went to work for a competitor. The confidentiality of customer information and the duty of an employee not to make or disclose unauthorised copies of documents which embody the information, and not to misuse the information, either during his employment or after its termination, were central to the claim. Every judge who has heard interim applications is familiar with urgent requests for immediate relief of a drastic nature in this kind of case: an ex parte injunction, a search and seize order, disclosure and delivery up of documents and materials to be followed by an expedited trial. This is such a case.

The trial took place within months of the initial blast of orders in the Chancery Division. The case has ended up in the Court of Appeal with leading counsel neither of whom appeared in the court below. The difficult situation confronting the court and the parties stems from the unfortunate combination of circumstances in which (a) the judge handed down a written judgment dismissing the action without the prior confidential circulation of a draft judgment to counsel for consideration of typing corrections and obvious errors in writing; (b) the order appealed was made some time later after the judge agreed to make certain corrections to the handed down judgment; and (c) the judge refused an application for permission to appeal, having also declined to make a further amendment to correct the finding that key documents relied on by the employer did not contain the confidential information in question, which finding the judge accepted was “plainly wrong.”

The appeal is from an order of Proudman J dated 10 October 2011 dismissing an action by Space Airconditioning plc (Space) against a former internal sales manager, Mr Adrian Guy, and his new employer, Smith Brothers Stores Limited (SBS).

The judge’s refusal of Space’s application for permission to appeal was on the understandable ground that her judgment was fact-based. However, the judge added that her refusal of permission was “despite a finding which was plainly wrong at the start of [39] of the judgment.” i.e the finding that relevant confidential information was not in certain documents printed out by the employee in disputed circumstances before he left his employment. The judge, who did not accept the respondent’s submission that that finding was the result of a typographical error capable of correction by her, explained that “The inferences which the claimant asked the court to draw could not be drawn from the facts found.”

Lloyd LJ granted permission to appeal on 15 December 2011. He correctly commented that an appeal on fact alone faces difficulties. The crucial question is whether this really is an “appeal on fact” and whether, in all the circumstances, it is a case in which the court should allow the appeal and order a re-trial.

There are exceptional cases in which, on a “lack of reasons appeal”, this court may, before deciding the appeal and in order to avoid a possibly unnecessary re-trial, seek from the trial judge amplification of the reasons for the appealed order: see English v. Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 at [25]. However, as explained below, that option is unavailable in this case and, in any case, neither side has asked the court to take that course. In my judgment, this court is faced with a stark choice between either allowing the appeal and ordering a re-trial or dismissing the appeal on the ground that the admittedly incorrect finding of fact does not make the judge’s decision “wrong” or constitute an “irregularity” that makes the decision “unjust.”

Any order for a re-trial is bound to give rise to further argument about the costs incurred in these proceedings. It seems unlikely that, if ordered, any re-trial would actually take place. The reality probably is that this appeal is about which party is liable to pay the very substantial costs incurred in the interlocutory proceedings, the 5 day hearing at first instance and of this appeal.

Mr Neil Afram is the Managing Director of Space, which was appointed the UK distributor of air conditioning products manufactured by Daikin Europe NV (DENV). The other UK distributor is a DENV subsidiary, Daikin Air Conditioning UK Limited (Daikin UK).

Mr Guy began his employment with Space on 8 September 2003. His position as internal sales manager gave him access to Space’s confidential customer information. He resigned on 11 November 2010 with effect from 31 December 2010. During the notice period he was placed on “garden leave” at home.

Mr Guy admits that (1) on 24 June 2010 he printed 23 Space documents, including customer summaries; and (2) on 26 July 2010 he printed 81 Space documents, including customer contact reports. The printings were not repeated between then and when Mr Guy gave notice in November 2010.

The documents printed on 24 June contained information about discounts given to customers. Space’s case was that the information would be enormously beneficial to a competitor, as it shows the value of the customer, the value of unfulfilled quotes and the quote and discount information, which would enable a competitor of Space to pitch its first quote at a figure that would be lower than that quoted by Space, thereby undercutting Space and seeking to win an order.

Mr Guy’s explanation for the printing was that an issue had arisen about the credit limit of one customer (Callisia) and whether that limit had been exceeded. Mr Guy’s evidence was that he printed the sheets to show to Mr Afram that other customers were over the limit and that, as against them, Mr Afram had not taken the robust approach that he took towards Callisia. However, Mr Guy did not show the documents to Mr Afram, as he considered it unlikely that Mr Afram would resile from his firm stance about Callisia. Mr Guy said that he had thrown the printed-out documents away. Space disputed Mr Guy’s evidence about the printings. It alleged that he had acted in breach of contract by printing out its customer documents for purposes other than his employment with Space.

The judge accepted Mr Guy’s evidence about the 24 June print outs as plausible and as consistent with the contemporaneous documents showing that there was a dispute with Callisia about credit limits. There were many calls between Mr Guy and Callisia at that time; there were emails between Mr Afram and Mr Guy; and there were entries in Space’s log book about their dealings. Further, however, the print outs showed customers all over the country, not just the three customers allocated to Mr Guy.

The judge also accepted Mr Guy’s evidence about the 26 July print outs. His evidence at trial was that he started on the process of re-allocating accounts after an increase in workload. He was moving some of his accounts on. A Mr Hale was appointed for customers in the M3 corridor. That was not, however, the same explanation as was provided by Mr Guy’s solicitors Herrington & Carmichael in their letter of 4 February 2011, which referred to his making out a case for a salary increase.

On the next day, 27 July 2010, Mr Guy visited and met Mr Simon Goswell and Mr Darren Thomas in Thurrock. They are employees of SBS, which is a competitor of Space, though it did not, at that time, supply the higher value air conditioning products of the kind manufactured by DENV, in particular chillers and Variable Refrigerated Volume (VRV). It was a supplier of tube valves and fittings for mechanical services. From 2009 it also supplied small air conditioning units (splits). At that meeting Mr Guy put out feelers about the possibility of a job with SBS.

Space’s case is that there was a direct link between the printing out of Space’s documents by Mr Guy and the meeting with Mr Goswell and Mr Thomas. The judge accepted Mr Guy’s evidence that his real reason for the meeting was as a cover for a visit that he was making to an old friend, Mr Maurice Newsum in Benfleet. The meeting with SBS, which only lasted for about 15 minutes and was following up a quotation, was a pretext and did not involve the disclosure of any confidential information by him.

On 17 August 2010 Mr Guy had a conversation with Mr Lee Nicholls of Daikin UK. On 14 October 2010 Daikin UK appointed SBS a “partner dealer” of Daikin UK along with four other companies. The appointment enabled SBS to sell VRV air conditioning units of the kind commonly used in commercial buildings. Before then Space was, along with Daikin UK, the only distributor of Daikin products in the UK. The judge held that there was a valid explanation for the appointment of new partners and rejected the allegation that that was all part of a conspiracy between Mr Guy, SBS and Daikin UK.

On 6 November 2010 Mr Guy entered into a contract of employment with SBS. On his resignation from Space on 11 November 2010 Mr Guy went on garden leave until the termination of his employment at the end of December. Space alleged that during that period Mr Guy solicited, by use of customer contact details on his mobile phone and in breach of his continuing duty of fidelity to Space, its customers and passed details of Space’s customers to SBS, which then sent account opening information to those customers.

On 4 January 2011 Mr Guy began work with SBS. From 4 January 2011 to 16 February 2011 SBS accepted orders from 10 Space customers to the value of £92,300. Space alleged that Mr Guy made use of its confidential customer details by providing quotations that used Space’s discount information and thus enabled SBS to undercut Space’s quotations. The judge found that Space’s confidential information had not been used to secure orders. With regard to two particular transactions between SBS and customers -Callisia Breast Clinic and Gray’s Mechanical- the judge concluded that Space would not have secured the orders anyway. The Callisia order would have been lost to Daikin UK.

Space issued these proceedings on 15 February 2011. Mann J made an interim order on the same day. On 24 February Newey J continued the interim injunction in a limited form.

On 21 February 2011 Mr Guy delivered up to his solicitors his mobile phone, which contained contact details of Space’s customers, which Space alleged he used to solicit business for the benefit of SBS.

There was no dispute in the lower court or in this court about the law of confidential information and the duties of an employee arising from the employment relationship. It would be a breach of duty for Mr Guy to copy Space’s documents during his employment with Space with a view to their disclosure to and use by SBS either while he was still employed by Space or after the end of that employment. Mr Guy’s contract contained a post–termination confidentiality provision in extremely wide terms.

Mr Guy’s contract of employment did not contain any restrictive covenant preventing him from working for a competitor after cessation of his employment with Space, nor did it contain any covenant against soliciting or dealing with Space’s customers after he left Space. The judge held that the existence of a conspiracy between Mr Guy, SBS and Daikin UK to obtain and use Space’s confidential information illicitly was not established by the evidence.

The important point is that it was common ground before the judge that Mr Guy was not permitted to copy Space’s documents or to memorise confidential information in them to use for SBS’s benefit, either during his employment or after it had terminated. He was bound by the implied duty of good faith not to use or disclose for the duration of his employment Space’s trade secrets and by an implied term of his employment contract not to use or disclose Space’s trade secrets, either during his employment or thereafter. Those duties were laid down by this court in Faccenda Chicken v. Fowler [1987] Ch 117.

The expedited trial lasted for 5 days from 13 to 19 May 2011. On 13 June 2011 the judge orally announced her decision to dismiss the action. By an order dated 30 June 2011 the judge discharged with immediate effect the interim injunction dated 24 February 2011 granted by Newey J and adjourned other matters to a date after a full judgment had been provided.

On 29 July 2011 the judge handed down her written judgment without having previously made it available to counsel in draft on the usual confidential basis. With the benefit of hindsight the positive advantages of circulating the judgment in draft confidentially to counsel can be appreciated: obvious errors in the writing of the judgment and typographical mistakes can be picked up, pointed out and corrected close to and preferably before the formal hand down and the entry of the order of the court.

The judgment set out the reasons for the decision announced on 13 June. The judge summarised the claim as relating to the use of Space’s confidential information by Mr Guy, allegedly induced by SBS. The judge also summarised the events leading to Mr Guy leaving Space’s employment and joining SBS and described the businesses carried on by SBS and Daikin UK. She stated that Space’s case against the defendants was one of a conspiracy with Daikin UK (which was not made a party). It was alleged by Mr Afram that there was a conspiracy for “a wholesale raid on our customers using our confidential information.” Space said that it brought the proceedings to protect that information; the defendants said that the proceedings were brought to gain a competitive advantage over them. The issue was whether Mr Afram’s mistrust was well-founded and made good on the evidence.

After summarising the relevant law on the duties of an employee relating to confidential documents and information, the judge summarised the evidence given by the witnesses and made preliminary observations on some of them.

As for Mr Afram, the judge described him as a man who “clings to an idea once he has formed it.” He believed, for example, that there was no good business reason for Daikin UK to appoint SBS as a business partner. The judge found that there was a perfectly valid explanation for the appointment, which was to develop the business of Daikin into new markets. Mr Afram also believed that Mr Guy had detailed knowledge of prices and discounts, either in his head or in a file of a price list, for VRVs that would enable him to impart relevant confidential information to SBS. The judge concluded on this and other aspects of Mr Afram’s evidence that he “saw conspiracies everywhere and expected the Court to infer that they existed without adducing cogent evidence of the underlying facts.”

As for the defendants’ witnesses, the judge stated that she was not asked to make findings on Space’s allegations about Mr Guy’s use of its clients’ numbers on his mobile phone or about his activities when he was on garden leave. It was denied that they were breaches of duties owed to Space. They would in any case add nothing, if Space succeeded on the main issues. They were not causative of loss to Space. In connection with the question of the credibility of Mr Guy, the judge stated that Mr Guy admitted retaining the mobile phone with client’s numbers on it and did not hand it over till February 2011. He admitted that, while on garden leave, he passed details to Mr Goswell of four customers, as a result of which SBS sent account opening applications to them. He also admitted speaking on the phone to Space’s customers, who had phoned him or whom he had called back. The judge found that it was likely that he had spoken to some of his contacts among Space’s clients during his period of garden leave with a view to transferring them to SBS after he had left.

The judge then turned to the issues, the first being whether Mr Guy had taken database documents and, if so, whether it was with the concurrence of SBS. On that issue the judge considered two relevant matters: the circumstances surrounding the meeting on 27 July 2010 and the nature of the documents themselves.

The judge dealt first with the meeting on 27 July 2010 between Mr Guy, Mr Goswell and Mr Thomas. SBS alleged that at that meeting Mr Guy showed them print outs made on 24 June 2010 and 26 July 2010 in order to demonstrate his potential worth to SBS. The judge concluded that:-

“34.

As a matter of common sense, it seems to me likely that Mr Guy did put out feelers as to the possibility of a job at SBS, by whom he was subsequently employed. He may even have boasted that he could bring in a lot of work. By that stage he was certainly looking round for other employment. I found Mr Goswell’s manner of denial a little evasive. The prospect of Mr Guy joining SBS may also have formed the foundation for the eventual decision to enter the air conditioning market on a more serious basis. However, that is very far from finding that Mr Guy provided confidential documents to SBS at that meeting.”

The judge then dealt with the nature of the documents themselves. She was asked by Space to draw the inference that there was a “sinister purpose to the meeting” and that Mr Guy did print out documents for use at that meeting. The judge turned back to deal separately with the printing out of the documents on 24 June and 26 July “to see whether the printing gives rise to the inferences I am asked to draw.”

In a key passage relating to the printing of customer sheets on 24 June 2010, admitted by Mr Guy but asserted to be for a legitimate reason, the judge said:-

“39.

The main documents relied upon were customer summaries. It is notable that such summaries do not show important discount information. Mr Guy’s explanation for the printing is as follows….”

The judge went on to summarise and accept as more plausible Mr Guy’s evidence about the credit limit issue with Callisia and his denial that he showed them to SBS. She referred to the “printed customer summaries” as having “the most information regarding credit limits.” The judge did not accept Space’s criticisms of Mr Guy’s story as implausible for a number of reasons or its contention that the information in the documents provided Mr Guy with a useful snapshot of the value of Space’s customers nationwide.

The judge dealt next with the 67 customer contact sheets containing contact details which Mr Guy admitting printing on 26 July 2010. She said that they were “not documents containing discount information.” Nor did they contain budgets, levels of business or outstanding quotations, which was the sort of information one would expect a person to print, if, as alleged, there was a wholesale raid on Space’s database. The judge accepted Mr Guy’s account of the printing as initiative on his part in re-allocating accounts in response to an increase in his workload.

The judge concluded that Space had not made out its case as to the purpose and use of the printings made by Mr Guy on 24 June and 26 July 2010.

As for the allegation that Mr Guy had misused his knowledge of Space’s discount structure offered to customers on listed prices, the judge rejected that both on the alleged basis of stealing documents containing such information and on the basis of trade secrets acquired as part of his knowledge and expertise in the course of his employment. There was no credible evidence that Mr Guy took away a price list for VRVs. The judge accepted his evidence that he only had a rough idea of what discount might be applied to a particular quotation and that would be of limited assistance given his imperfect knowledge of the full list prices. She found that there was no hard evidence of, or suggesting, misuse of trade secrets. There was nothing to show that SBS’s quotation was devised other than in the usual way. She concluded that Space had not made out its case that Mr Guy used discount information unlawfully in providing quotations on behalf of SBS, just as it had also failed to make out its case that Mr Guy acted in breach of duty by extracting confidential information by the printings on 24 June and 26 July.

The judge therefore dismissed the action. On 10 October she made some corrections to the judgment that she had handed down at the end of July 2011, though not to the finding in [39]. She gave a further judgment, made the order from which this appeal is brought and refused permission to appeal.

Mr Paul Goulding QC, who now appears for Space, says that there will have to be a re-trial. The admitted erroneous finding in [39] of the judgment against Space means that Space has not had a fair trial of its case. The wrong finding gave rise to a real doubt as to whether the judge appreciated the importance of the confidentiality factor central to Space’s claim. It was not a claim to enforce a restrictive covenant against a former employee. The claim was based on the confidentiality of documents and information which an employee was under a duty not to use, save for the purposes of the employer who had allowed him access to it.

It is clear, he submits, that the judge misunderstood much of the crucial evidence going to the heart of Space’s case, as is demonstrated by her admitted error in [39] of the judgment. That error also had a knock on effect, as it coloured the judge’s assessment of the evidence on other issues concerning the actions of Mr Guy and SBS.

In the first place, and most crucially, the judge wrongly found in [39] of her judgment that the customer summaries copied on 24 June 2010 did not show important discount information, even though that fact was plain from the face of the documents. That error was fundamental to the whole judgment. It vitiated her findings that Mr Guy had not breached his contractual duties by making the printings and had not used discount information unlawfully in providing quotations on behalf of SBS. The discount information was important in relation to current and future orders and as a record of credit limits. That was a key point, given that the judge rejected Space’s case that Mr Guy had knowledge in his head of the discounts from experience acquired during his employment.

Secondly, the judge wrongly failed to make findings in [40] of the judgment as to whether the customer summaries printed on 24 June (a) included customers who were not over the credit limit and (b) contained information that provided Mr Guy with a useful snapshot of the value of Space’s customers nationwide. Mr Goulding submits that the judge should have made those findings, which would have seriously undermined Mr Guy’s explanation for the printing on 24 June accepted by the judge.

Thirdly, as to the printing on 26 July 2010, the judge failed to take into account her finding that not all the documents printed by Mr Guy on that date were M3 customers or were customer contact sheets. That finding seriously undermined Mr Guy’s explanation for the printing on that date which the judge had accepted. The judge also erred on that aspect of the case in failing to find that Mr Guy previously gave a different explanation for the printing from the one advanced by him in evidence at trial. That appeared in a letter from his solicitors dated 4 February 2011.

Fourthly, with regard to the meeting with SBS on 27 July 2010, which the judge found was for Mr Guy to put out feelers for the possibility of a job with it, the judge failed to take those findings into account in making her findings as to the reason for the printings on 24 June and 26 July. Space’s case is that there was a direct connection between the printings and the 27 July meeting

Mr Spearman QC says that this appeal against primary findings of fact should be dismissed, as the judge had rightly held that Space failed to prove its case and discharged the interim injunction. He added that, even if the appeal succeeded, there was no prospect of new injunctive relief and the amount recoverable as damages or profits was small. That suggested that the appeal was all about costs.

The essential background to the case was that the market in the products in question is very competitive; that Space had taken no post-termination covenant from Mr Guy against solicitation of customers or dealing with them nor was there any covenant against going to work for a competitor. Space had been shocked by the changes in Daikin’s distribution network in the UK from Space alone to SBS and four other outlets.

Mr Spearman’s principal point is that the trial turned on the credibility of witnesses, who gave evidence about serious issues of employee misconduct, conspiracy and document theft. The judge, having watched and listened to the witnesses give their evidence, rejected Space’s case of a three way conspiracy of Mr Guy, SBS and Daikin UK to raid Space’s database on 24 June and 26 July 2010 for use in a new competing venture. The conspiracy theory promoted by Mr Afram was not borne out by the evidence. The judge accepted the explanations given by Mr Guy for the printing out of customer documents in June and July 2010 and found that there was no evidence that confidential information had been misused. He submitted that the claim in relation to the printing out on 24 June was exaggerated, as it related to only 24 customer summaries out of over 5,300 sets of details.

Further, the judge rejected Space’s alternative case that Mr Guy carried away in his head its trade secrets about discounts, projects, historic quotations and credit terms. Mr Guy’s state of knowledge was limited and there was no evidence of use of Space’s trade secrets by him.

At the end of the argument one thing is clear: the appeal turns on what importance (if any) is to be attached to the admittedly wrong finding in [39] that the June print outs did not show customers’ rates of discount.

I start from the elementary proposition that, if a judgment contains what the judge acknowledges is an error when it is pointed out, the judgment should be corrected, unless there is some very good reason for not doing so. A judgment should be an accurate record of the judge’s findings and of the reasons for the decision. It should not normally be necessary for a party to bring an appeal to correct an error, if it turns out that the parties and the judge agree that there is an error and that a correction should be made. This applies to a handed down judgment before the order is entered, though the occasion for correction will be rarer if the parties’ representatives have been given a prior opportunity to suggest corrections of typing mistakes and obvious errors in the writing of the judgment. Before the correction is made the judge should obviously give both sides an opportunity to make submissions on whether there is a valid objection to a proposed amendment of the judgment.

It is impossible to accept Mr Spearman’s suggestion that the likely explanation for the error in [39] is typographical only, resulting from the mistaken inclusion of the word “not” in the crucial sentence. I agree with him that this kind of mistake can easily happen and that it does sometimes happen in quite formally drafted legal documents, such as judgments. When it does, the mistake is usually obvious and the simple omission (or insertion, as the case may be) of a “not” will make complete sense of the relevant passage. That is not the case here, given (a) the wording and immediate context of the key sentence; (b) that the judge, while acknowledging the error when it was pointed out to her by Space’s counsel, without prior notice, at the hearing on 10 October 2011, decided not to amend the judgment. I fail to see how this court can possibly say with any confidence that the error was only a typographical one, when the judge herself would not say that it was.

Mr Spearman naturally plays down the materiality of the erroneous finding, saying that it does not vitiate the judge’s assessment of Mr Guy’s evidence about his reasons for the printings out and the judge’s reasons for refusing to draw the inference that the reason for the printing was that alleged by Space. Mr Guy and SBS never disputed that the documents printed out on 24 June 2010 contained important information relating to Space’s customers, to discounts, to credit limits and to current and future orders. All that could be seen from the documents themselves and was not in issue.

The crucial issue was Mr Guy’s reason for printing the documents in the first place. The judge rejected Space’s allegation that the printing was deliberate wrongful conduct involving a conspiracy to remove and misuse the documents and accepted Mr Guy’s explanation. Mr Spearman says that the key findings of the judge for rejecting the alleged conspiracy were not undermined by any possible misunderstanding of the judge about the nature and contents of the customer summaries printed out by Mr Guy. If the judge had thought that those findings were possibly undermined, she would have granted permission to appeal. Instead she refused permission.

As for the judge’s error in [39], Mr Spearman emphasises that, in the light of the many other findings, that error alone would not have affected the outcome of the case. He points to findings that the appointment of SBS as a “partner dealer” of Daikin UK were supported by reasons other than the knowledge of the database raid alleged by Space. There was no evidence of the involvement of Daikin UK in the raid, having appointed SBS for other reasons enabling it to access the market of mechanical services contractors. That possibility only came up in September 2010. There was no real prospect of Mr Guy leaving Space for SBS while the latter did not have the ability to sell VRVs and that was several months after the print outs were made. The print outs were made well before he decided to leave Space and handed in his notice. In the interval Mr Guy had contact with another company (Mitsubishi) and there was no mention of a raid on Space’s database in that connection.

Finally, use of the confidential information was an essential part of Space’s cause of action. There was the crucial finding of the judge that there was in any case no evidence derived from the analysis of the quotations of SBS to customers of Mr Guy having used Space’s confidential information.

I fully understand Mr Spearman’s overall point about the difficulty in an appeal court allowing an appeal based on challenges to the correctness of the judge’s findings of primary fact. I also understand the way in which he seeks to support the judgment, notwithstanding the judge’s admitted error of fact in [39]. After some initial hesitation, I have firmly arrived at the conclusion that this appeal should be allowed.

First, the error is on a material aspect of the case, namely the nature of the information in the June print out of customer summaries. The judge herself used the adjective “notable” in relation to those documents, but in mistaken reference to what the documents did not contain rather than to the confidential discount information which it was common ground they did contain. Such information is just what one would expect someone to print out, if they were intending, as was alleged, to engage in a raid on Space’s documents.

Secondly, there is no point in remitting the matter to the judge for her to amplify her judgment, as she has already declined to do that when the error was pointed out and she decided not to make an amendment. If she thought it was a typographical slip, she would have said so and dealt with it accordingly by omitting the word “not” or re-writing that paragraph of the judgment. If she wished to amplify her judgment, she could have done that by withdrawing it at that point for reflection and for consideration of a possible amendment before the order was entered, but she decided that the judgment should remain as it was. Her reason for taking that course was indicated in the reasons refusing permission to appeal, namely that the inferences which Space asked her to make could not be made.

Thirdly, if the appeal were allowed on the ground of admitted error in the finding in [39] this court would not be setting aside or interfering with the judge’s primary finding of fact: rather it would be acting on the basis of an assessment of the likely impact on the rest of the judgment resulting from an admitted error relating to a material, possibly fundamental, fact of the case.

Fourthly, and most difficult, is the assessment of how far that error infected the other findings made by the judge, who proceeded to accept Mr Guy’s evidence as to why he printed out the documents, and that he did not make use of them in his dealings with SBS about joining it, or subsequently with its customers. Mr Goulding QC pointed to a number of troubling features of the judgment, which may have arisen from the judge’s error about the contents of the documents printed out on 24 June. For example, the judge made no finding on (a) whether the customer summaries printed out included customers who were not over the credit limit; or (b) whether a “useful snapshot” of the value of Space’s customers was obtained by the print out; or (c) the fact that Mr Guy’s explanation at trial for making the 26 July print outs differed from that given by his solicitors in correspondence in February 2011; or (d) whether her findings about the meeting with SBS on 27 July were taken into account when reaching her conclusions on the purpose and use of the print outs of 24 June and 26 July 2010; or (e) whether Mr Guy had used client numbers found on his mobile phone, which was not delivered up until 21 February 2011, to solicit business for SBS; and (f) whether Mr Guy had approached customers of SBS during the period of garden leave (11 November 2010-31 December 2010).

We do not know why the judge did not make findings on those points, whether it was connected to a misunderstanding about the documents printed out on 24 June or not. We do not know what findings she would have made. I agree with Mr Spearman that a judge is not under an obligation to make findings on every point in dispute, but where there has been an admitted uncorrected error it is unsafe to assume that the error had no material impact on the judge’s consideration of whether she should decide other factual issues in the case and, if so, whether and how to decide them.

In brief, the uncorrected sentence in [39] of the judgment indicates that the judge may have proceeded on a mistaken view of the contents of Space’s confidential customer documents. That mistake was material, because it is not possible to say, with sufficient confidence to uphold her judgment, that her findings and conclusions on other issues in the case would probably have been the same, even if she had not made that mistake. There is at least a real possibility that her mistaken view that the documents did not contain the discount information had an impact on other issues about Mr Guy’s explanations for the print outs and his alleged use of the confidential information.

I would allow the appeal on the ground that the decision appealed was either wrong or it was unjust as a result of an irregularity. The retention of this erroneous finding in the judgment can properly be described as an “irregularity in the proceedings” which makes the decision an unjust one. I would direct that the matter be remitted to the High Court to be re-tried by a different judge. The possibility of a re-trial means that it would be unwise for this court to say more than is absolutely necessary about the merits of the case.

The court invites further written submissions from the parties about what order the court should make as to the costs of the interlocutory proceedings, the trial and this appeal.

I agree.

I also agree.