Rancom Security Limited v Helen Girling & Ors.

Rancom Security Limited (“C”) is in the business of home security.

Ms Helen Girling (“D1”) and Mr Jay Rose (“D2”) are former employees of C and have set up in competition to C operating through Connect 4 Security Limited (“D3”).

Business competition of and in itself is a good thing by driving improvements in products and services. However, C claims that it has lost customers to D3 as a result of the alleged wrongful actions of the defendants, who:

The defendants do not dispute that the majority of D3’s customers are former customers of C, but it is the defendants’ case that:

This is my judgment following the trial of the preliminary issue of liability.

C was incorporated in 2003. Its directors were Messrs Lee Hosking (“LH”) and Ranjit Dhillon (“RD”).

In 2006, D2 commenced working for C in sales before being promoted to area manager in 2008 and then national sales manager in 2011.

In 2011, D1 commenced working for C initially in telesales before being promoted to national marketing manager in 2013.

C was originally named Direct Response Security Systems Limited, although there was a change to its present name on 18 June 2014 following the reputational damage caused by the broadcast in 2010 of a BBC Watchdog programme that was heavily critical of the company’s sales practices.

In 2015, the National Police Chiefs’ Council issued Guidelines on Police Requirements & Response to Security Systems, which provided, inter alia,:

“………..

1.

PREFACE

…….

1.2

To enable a security system to be recognised within the Requirements for Security Systems it must comply with the Policy on Police Response to Security Systems and a recognised standard or code of practice controlling manufacture, installation, maintenance and operation. Such standards must be in the public domain and not be product based.

1.3

The installation and services provided by the installing company and an Alarm Receiving Centre (ARC) / monitoring / tracking centre (e.g. RVRC, SOC), shall be certified by a United Kingdom Accreditation Service (UKAS) accredited certification body in accordance with the provisions of the Requirements for Security Systems.

……

2.

GUIDANCE, ADVICE AND PROCEDURES

2.1

Type A - Remote Signalling Systems.

2.1.1

Systems terminating at a recognised ARC, Remote Video Response Centre (RVRC) for CCTV and System Operating Centre (SOC) for vehicle tracking. All centres must conform to BS 5979 (Cat II) or BSEN 50518.

2.1.2

Unique reference numbers (URNs) will be issued to systems at these recognised centres. In the case of stolen vehicle tracking systems the URN will be issued by police forces to the operating company or monitoring centre, not to each vehicle.

…….

2.3.

LIST OF COMPLIANT COMPANIES INSTALLING TYPE A SECURITY SYSTEMS

2.3.1

To identify companies conforming to this Policy it is necessary for each Police Force to hold a list of policy compliant companies. Inclusion on the list does not amount to confirmation that the company or its work has been inspected by the Police. Only companies so listed may install, maintain and/or monitor Type A Systems in the particular Police area. Where a company loses police recognition under this policy, its existing customers will have 90 days in which to make alternative maintenance/monitoring arrangements.

……..

3 OPERATIONAL TACTICS

3.1

POLICE ATTENDANCE - Type A Security Systems

3.1.1

For Type A security systems there are two levels of police response.

LEVEL 1 – Immediate

It should be noted that police response is ultimately determined by the nature of demand, priorities and resources which exist at the time a request for police response is received.

LEVEL 3 – Withdrawn

No Police attendance, keyholder response only.

3.1.2

The police service has adopted the use of confirmed alarm technology as part of the effort to reduce false calls.

3.1.3

All new Intruder and Hold up Alarms (HUA) applications will only qualify for a URN and police response if installed to the current required standards...

…….

3.2

INTRUDER ALARM SYSTEMS

3.2.1

Intruder alarm systems (IAS) issued with a URN will receive LEVEL 1 response until three false calls have been received in a rolling 12 month period.

3.2.2

Following two false calls in a rolling 12 month period the customer will be advised, in writing, with a copy being forwarded to the maintaining alarm company informing them of the situation and recommending urgent remedial action.

3.2.3

Following three false calls in a rolling 12 month period LEVEL 3 will apply and police response will be withdrawn, not less than 14 days from the date of the Withdrawal letter. The customer will be advised in writing with a copy to the maintaining company, who will be required to instruct the ARC/RVRC not to pass alarm messages to the police.

……..”

C was approved and accredited by the SSAIB to provide security systems with monitoring and maintenance services.

C offered its customers fixed term contracts for:

C also provided optional (i) add-on products such as fire, smoke, carbon monoxide, flood and/or perimeter detectors and (ii) warranty cover in respect of the installed equipment.

C acquired/licensed an industry wide generic software package to enable C to record on a database (“the Alarm Master Database”) customer information, which included:

As a result of the sensitive nature of the customer information stored on the Alarm Master Database, only a limited number of employees, who needed that information to perform their duties, were given their own unique log in details to access the database.

It was the evidence of LH that:

It was the evidence of D1 and D2 that:

In 2016, C’s accountants gave advice about the tax advantages of staff providing their services to C through a limited company. A number of staff then established personal services companies including, for example, Caroline Caveill (“CC”), who worked in telemarketing and who, on 23 May 2016, incorporated SecurewithCaz Limited.

On 17 May 2016, D1 and D2 incorporated D3. D1 and D2 are co-directors of D3. According to the filings at Companies House, D2 resigned as a director on 3 October 2016, but was re-appointed on 16 March 2020.

From January 2017, D3 submitted weekly invoices to C in respect of the services of D1 and D2.

On 9 May 2017, D1 applied for D3 to be approved and accredited by the SSAIB.

On 27 June 2017 and 4 July 2017, LH and RD met with D2 and sought to persuade him to agree to a cut in his basic pay, since the business was performing badly and losing money. D1 was also in attendance at those meetings and in support of D2. D2 covertly recorded those meetings.

D1 and D2 alleged that, during the course of the meeting on 4 July 2017, RD made a threat to kill D2 by way of a cut-throat gesture, which caused D1 and D2 immediately to resign their positions.

In October 2017, D1 and D2 issued claims against C in the Employment Tribunal for compensation for alleged constructive dismissal. C initially contested the claims on the ground that D1 and D2 had not been employed by C, but rather had been engaged as self-employed contractors.

On 10 August 2018, the Employment Tribunal determined, as a preliminary issue, that D1 and D2 had indeed been employees of C.

By letter dated 30 October 2018, the SSAIB gave 21 days’ notice that C’s registration would be withdrawn.

C’s solicitors sent a letter before action dated 1 November 2018 seeking to challenge the SSAIB’s decision. The SSAIB’s solicitors responded by letter dated 13 November 2018 (a) confirming that C’s registration would still be terminated and (b) detailing the alleged activities of C that formed the basis of that termination decision. In summary, the activities complained of were:

By letter dated 19 November 2018, C “resigned from the SSAIB accreditation”. It was the evidence of LH that the decision to resign was taken because:

C wrote to its customers advising them of the switch, which was described as an “enhancement to your existing service”, and inviting the customer to sign and return an attached consent form to “activate your security guarded response.” The local police forces also wrote to C’s customers advising them of the loss of police response and the need to contract with another approved /regulated company, if they wished to continue to receive a police response.

On 7 June 2019, the Employment Tribunal dismissed the claims of D1 and D2. In dismissing those claims, Employment Judge Lloyd held that:

“…..

The claimants conduct has been marred by duplicity, at the time of their employment and to a degree it has to be said in the way they have given their evidence at this hearing…..

….. I hesitate to do so, but I conclude that at times the claimants have not been completely honest in the way that they’ve engaged with this tribunal…. there has not been complete honesty and integrity in the way that they have presented their cases at the tribunal hearing.

…..

The claimants claims of constructive dismissal I conclude, regretfully but I do, are contrived from a series of events largely, if not manufactured, certainly manipulated by the claimants [f]or their own commercial or financial advantage. They are indeed, and again no criticism [is made of] them, they are indeed unsentimental entrepreneurs…. But unsentimentally in business is no concession to contrive a dismissal for their own commercial and entrepreneurial advantage, and that, I regret, is what has occurred.

Again, to repeat, I am not so naïve as to think either side in this highly competitive, highly emotional toil, are free of criticism on any level…. But also, and more particularly, whatever the conduct of the respondent, the claimants did not respond with their resignations in that context. They responded now I’ll find, a little late, as part of an overall plan to part ways with the respondent, for whom they had worked for some time. The claimants, I conclude resigned their long standing posts with the respondent as a critical step in them developing their own business, [D3], in competition with the respondent. I conclude therefore that the claimants willing severed their relationship with the respondent in circumstances which if not wholly contrived were opportunistic to pursue their fledgling business model and at the same time create an opportunity of the claim we now find before us.

The claimants’ response is not credible, measured against the real circumstances of their employment environment. That is to say the history of their relationship with the respondent amongst it that juxtaposition of basic requirements of their employment, and more particularly the claimants’ manipulation of their own company, [D3], to maximise their financial and business future opportunities. Those I find, were the very personalised bones and for the claimants’ own benefit rather than any accommodation of the respondent’s business.

Whatever the genesis of [D3] as to whether they were asked to set it up or whether it was a mutual decision, I think the claimants knew full well that there were huge advantages for them, sometimes not entirely legal or straightforward. In setting up the company and funnelling their funds and income and resources through it, and also as a platform for development of their own future business goals, namely as an accredited installer of [home] security…..

……..

……. That overall was their strategy, they basically looked for and ultimately gained an opportunity to offer their resignation in circumstances where dare I call it “The Grand Plan” had already been laid. The grand plan which had already been made, and I think had been made some time before either 27^th or the 4^th July, was a plan to leave more or less imminently and to compete directly with the respondent with the advantage of not simply their experience with the respondent’s company, but the knowledge of the respondent’s operations in exactly the same field and also their knowledge of the customer base which of course they had.

That plan I think had been formulated and set in motion well in advance of the final meeting to which I’ve referred, and by the time of Lee Hoskin’s and Ranjit Dhillon‘s pressure on the second claimant, I think there was an element of pressure in the context of negotiation, Mr Ranjit Dhillon unashamedly described himself as a hard negotiator, well he’s a businessman, and that would be part of his stock in trade.

……

…….. The actions and their actions on the 4^th July although I accept not wholly scripted, of course there’s an element of preplanning. It was nevertheless in essence of role-play on their part which I think was well rehearsed in their minds at least, and it wasn’t a genuine response to a fundamental breach of their contract of employment.

……….

I concluded that any perception of threats to life or limb or to general safety from Ranjit Dhillon was imagined rather than real, and think at times deliberately hyped and imagined….

………

……….[RD] was certainly not making death threats or threats of harm to either claimants and there was no basis for the claimants to reasonably perceive that there was any threat to their personal safety or indeed that certain words or actions had been used to convey such a threat. I think they have used that phrase and overall perhaps quite hard-nosed demeanour of Mr Dhillon to conjure up a threat that never really existed at all.

……….

The claimants I think had certainly made a decision well before the final meeting of the 4^th July, to depart the company and to pursue their own business interests….. their resignations were already well calculated I think as part of the joint venture that they now proposed to embark upon, and there was evidence which I have no reason to doubt that the claimants had cleared their desks, there was certain evidence that boxes had been removed by them from the premises……

The present claim was issued on 18 March 2020.

The case management order dated 1 July 2021, inter alia, disapplied the provisions of Practice Direction 51U and directed that the parties provide Standard Disclosure of documents, rather than Extended Disclosure.

In Painter v Hutchinson [2007] EWHC 758 (Ch) at [3], Lewison J (as he then was) identified a non-exhaustive list of indicators of unsatisfactory witness evidence including:

In Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm), Leggatt J, as he then was, made the following observations about the interference with human memory introduced by the court process itself:

“[19.] The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party's lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.

[20.] Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often (as in the present case) when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness's memory has been "refreshed" by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness's memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events.”

The primary witnesses of fact were LH, for C, and D1 and D2. They were cross examined at length. I found them all to be respectful, polite and indeed charming, which are no doubt valuable attributes for the particular service industry in which they operate.

I did not find that LH’s evidence was tainted to any meaningful extent by indicators of unreliable witness evidence. Indeed, I was struck by the fact that LH readily made concessions in cross examination that did not necessarily support C’s case. For examples, he readily conceded that:

That all said, LH has a financial interest in the outcome of the proceedings such that he cannot be regarded as a truly detached or objective witness free of motivating forces or biases. In the circumstances, whilst I have no reason to doubt that LH was an honest witness, I have nevertheless treated his evidence with a degree of caution.

I did not find D1 and D2 to be reliable or at times credible witnesses. The evidence of D1 and D2 was characterised and tainted by repeated and significant indicators of unreliable evidence. By way of examples,:

The written evidence of D1 and D2 was expressed in very similar terms. The agreed list of issues for trial includes “Did D3 approach customers of C using data from C’s Alarm Master database… or by other legitimate marketing activity..” No doubt recognising the importance of this issue, D1 and D2 each addressed it in some detail in their witness statements as follows under the sub-heading “How the Third Defendant has Obtained its Customers” :

I do not consider that these striking similarities in the written evidence of D1 and D2 are in themselves an indicator of unreliable witness evidence, since, if true, it would potentially reflect a shared work experience. In addition, it would be wholly unrealistic to expect D1 and D2 not at least at some time to have discussed their recollection of events before committing them to writing. However, having apparently so carefully considered their written evidence, and on such a critical issue, it is in my judgment then even more remarkable that D1 and D2 sought to depart significantly from that written evidence when being cross examined. By way of examples,:

My distinct impression was that D1 and D2 were making up this evidence as they went along in an attempt to answer the questions put to them in cross examination in a manner consistent with their overall case.

According to the oral evidence of D1 and D2, the lead sheets were a vitally important component of the defendants’ case, highly relevant and clearly disclosable. However, they were not disclosed into these proceedings because D1 explained that they were deliberately destroyed as and when the leads were converted into sales. There are a number of serious problems arising from that explanation:

No documents relevant to D3’s alleged advertising campaign have been disclosed by the defendants. In her oral evidence, D1 said for the first time that such documents existed, since she had passed copies of the advertisements/invoices to her solicitor. However, she did not know what had happened to those documents and had not made any enquiries as to their current whereabouts.

D1 stated in her written evidence that the data purchases had been highly focused by reference to parameters including that the consumer “Has an existing alarm.” During D1’s oral evidence, she was taken to the small number of invoices that had been disclosed in relation to the data purchases. None of them referred to consumers having an existing alarm. D1 then claimed that there were “lots more invoices” available, but the defendants had only been asked by the solicitor “to produce so many” and “give me a few”.

In her witness statement, CC stated that:

Sadly, since making that witness statement, CC has died. Therefore, C served notice to rely on CC’s witness statement as hearsay evidence pursuant to s.2 of the Civil Evidence Act 1995.

In order to challenge the credibility of CC’s otherwise damning evidence, the defendants rely upon the evidence of Hayley Kemp (“HK”), who claims that Michael Vry (“MV”) suborned false evidence from CC.

C was given permission to rely upon evidence from MV responding to the allegations made against him by HK. It was MV’s evidence that he:

I did not find HK to be a reliable witness for the following primary reasons:

Of course, in light of CC’s death, the defendants were unable to challenge CC’s evidence directly by way of cross examination. CC had given an earlier witness statement, whilst still employed by D3, in support of D1 and D2 in the Employment Tribunal. In that earlier witness statement, CC stated (with my emphasis added) that “I could not have stayed with [C]…. as I could not have worked for Ariar Millwood, and I was concerned about some of the practices of [C] in the poaching of other firms’ data.” I have no doubt that CC’s decision effectively to change sides would have been at the forefront of any cross examination of CC at this trial. In all the circumstances, I do not attach conclusive weight to the evidence of CC. Rather, I evaluate and assess that evidence against and in the context of all the other evidence.

Lisa Smith (“LS”) began working for C in October 2019 initially as a customer care operative, although now employed by C as Head of Customer Services. It was LS’s evidence that:

I found LS to be an honest witness doing her best to assist the Court. However, the accuracy of her evidence was in large part dependent upon the accuracy of the information recorded upon the Tracker. As already noted, it was Karen Armstrong, rather than LS, who was primarily responsible for carrying out the initial investigation and entering the relevant information onto the Tracker. By LH’s own admission, Karen Armstrong’s method of investigation was seriously flawed such that the information contained on the Tracker was tainted. In those circumstances, I am unable to attach significant weight to the evidence of LS.

I read and heard evidence from Brenda Morphet (“BM”), Ian Kirkwood (“IK”), TG and John Wolfindale (“JW”). They all confirmed that they received unsolicited marketing calls on behalf of D3 and notwithstanding that they had been TPS registered for many years.

It was the evidence of BM, IK and JW that it was clear from those initial or subsequent conversations that D3’s representatives knew individual terms of their contracts with C such as the date of renewal or the amount paid.

It was the evidence of IK, TG and JW that during those conversations D3’s representatives told them that C was in severe financial trouble.

I have no reason to doubt that BM, IK, TG and JW were honest and largely reliable witnesses.

Derek Whitehouse (“DW”) was contracted on a self-employed basis by C from February 2016 to monitor regulatory compliance and investigate customer complaints. In May 2019, he joined D3 performing the same role. It was DW’s evidence that:

I did not find DW to be a reliable witness. He was not a detached or objective observer. His evidence was heavily influenced by his strong ties of loyalty towards D1 and D2 as shown by:

I have already addressed HK’s evidence above.

The defendants intended to call to give oral evidence Jane Betts, Kenneth Trueman, Melville Wilby, John Winterbottom and Celia Lester. There was not enough time available for these witnesses to be cross-examined by C, and so their written statements were admitted unchallenged.

They all broadly stated that:

The defendants also served Civil Evidence Act notices to rely as hearsay evidence upon witness statements from Beryl Beavis, Sybil Chapman, Werner Eisele, Jennifer Hodder, Anthony Lingham, Ruth Mellor, Mary Sainsbury, Edna Silburn, Charles Whitby and Brian Williams. Broadly that evidence was (i) critical of the business practices of C and (ii) confirmed that the switch to D3 was motivated by a desire to regain a police response.

I have no reason to doubt that all these witnesses were honest and largely reliable in the written evidence that they provided.

I remind myself that witnesses, who lie, do so for different reasons. Lies in themselves do not necessarily mean that the entirety of the evidence of a witness should be rejected. A witness may lie in a stupid attempt to bolster a case, but the actual case nevertheless remains good irrespective of the lie. A witness may lie because the case is a lie.

C’s primary pleaded claim is that “[7] The Defendants embarked on a plan to take and misuse confidential information belonging to [C] and/or to infringe its database in order to contact its customers ….. in order to persuade them [to] contract with [D3] instead either before or from the date that the customer’s contract with [C] came up for renewal.” That is a serious allegation, which is tantamount to an allegation of civil fraud/dishonesty.

The burden of proving the allegation rests upon C. The standard of proof is the balance of probabilities. In other words, C must establish that more likely than not the allegation is true. There is no legal requirement that the more serious the allegation, the more cogent the evidence needed to prove it. The civil standard of proof (balance of probabilities) does not vary with the gravity of the alleged misconduct. As Lord Justice Males said Bank St Petersburg PJSC & Anor v Arkhangelsky [2020] EWCA Civ 408

“[117] In general it is legitimate and conventional, and a fair starting point, that fraud and dishonesty are inherently improbable, such that cogent evidence is required for their proof. But that is because, other things being equal, people do not usually act dishonestly, and it can be no more than a starting point. Ultimately, the only question is whether it has been proved that the occurrence of the fact in issue, in this case dishonesty…, was more probable than not.”

In the very well-known passage from his judgment in The Ocean Frost [1985] 1 Lloyd’s Rep 1 (which was described as “salutary” by Lord Mance in Central bank of Ecuador v Conticorp SA [215] UKPC 11 at [164]), Robert Goff LJ observed:

Direct evidence of fraud is relatively rare and is often a matter of inference from circumstantial evidence, although the court should generally take great care when assessing whether or not inferences can properly be drawn in any particular circumstances. The essence of a successful case of circumstantial evidence is that the whole is stronger than the individual parts. The court should necessarily avoid a piecemeal consideration of circumstantial evidence – per Rix LJ in JSC BTA Bank v Mukhtar Ablyazov & Others [2012] EWCA Civ 1411 at [52], albeit there dealing with a committal application to which the criminal standard of proof applied.

In British Railways Board v Herrington [1972] A.C. 877, at 930, Lord Diplock observed that:

“The [defendant] ………….. elected to call no witnesses, thus depriving the court of any positive evidence ……. This is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if the court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold.

It would have been a “legitimate tactical move” for the defendants to decline to put in witness evidence and simply require C to prove its case, whilst running the risk that the court might draw adverse inferences. However, the defendants have elected to assert a positive case as to the legitimate marketing activities used to target C’s customers. Therefore, the burden is upon the defendants to prove that positive case to the Civil standard of proof.

In preparation of this judgment, I read and heard submissions from counsel for both sides. The trial bundle extended to 14 lever arch files. I am unable in the course of this judgment to refer to all the evidence/argument relied upon by the parties, but I have taken it all into account in reaching my decisions.

The court may draw adverse inferences from the failure of a party (i) to produce contemporaneous documents that would have otherwise existed, if that party’s oral evidence is correct, and/or (ii) to call as a witness at trial a person who might be expected to give important evidence.

In Re: Mumtaz Properties Ltd [2011] EWCA Civ 610, Arden LJ said:

“[14] In my judgment, contemporaneous written documentation is of the very greatest importance in assessing credibility. Moreover, it can be significant not only where it is present and the oral evidence can then be checked against it. It can also be significant if written documentation is absent. For instance, if the judge is satisfied that certain contemporaneous documentation is likely to have existed were the oral evidence correct, and that the party adducing oral evidence is responsible for its non-production, then the documentation may be conspicuous by its absence and the judge may be able to draw inferences from its absence.”

In Wisniewski v Central Manchester Health Authority [1998] PIQR P323 at P340, Brooke LJ said:

“From this line of authority I derive the following principles……

(1)

In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2)

If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(3)

There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4)

If the reason for the witness's absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified."

However, in Royal Mail Group Ltd (Respondent) v Efobi (Appellant) [2021] UKSC 33, Lord Leggatt said:

“[41.] The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority….is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.”

A significant amount of time was spent by the defendants’ counsel cross examining LH about C’s alleged unscrupulous business practices including:

LH denied the allegations made against him and C. There was some independent corroborating evidence available in relation to LH’s version of events:

Further it was argued by C that it was D3, which was guilty of “churning” by persuading C’s customers to sign up with D3 and despite there being unexpired terms on their existing contracts with C.

Ultimately, I do not consider that I need make findings in relation to these specific allegations against C, since:

D1 and D2 admitted in their written evidence and from an analysis of D3’s customers that:

Those figures are not accepted as accurate by C, but on the defendants’ own case over 2/3rds of their customers had previously been C’s customers.

D1 and D2 further admitted in their oral evidence that D3 had deliberately and successfully targeted C’s customers nationwide from late 2018 after they learnt that C had lost its police response, which explains the significant increase in the numbers of C’s customers switching to D3 from 2019 onwards.

Therefore, I repeat that the central factual issue to be determined in the present case is how was D3 able to make contact with so many of C’s customers, a proportion of whom were TPS?

It is not disputed that C’s marketing and sales staff generally did not have access to the Alarm Master Database. However, it was the evidence of LH that both D1 and D2 were given access to the Alarm Master Database to enable them to perform fully their specific roles. D1 needed access so that her team could market to existing customers additional products/upgrades. D2 needed access so that he could see what equipment was ultimately installed in order to calculate the sales’ commissions.

It was the oral evidence of D1 that she did not insist, as LH claimed, that she be given access to C’s Alarm Master Database when appointed National Marketing Manager. She stated that she was only ever dealing with prospective customers, and so she did not need access to the Alarm Master Database to perform even her new role. However, in her written evidence, D1 had stated that, when appointed National Marketing Manager, her role expanded considerably in that her duties were not simply confined to generating new leads but:

“included but weren’t limited to, the reporting of the daily figures to the National Manager and Directors including late night sales results, daily staff meetings, training, appraisals, customer telephone confirmations, customer complaints, data management, staff recruitment, department payroll, resolving declined customer card payments, record keeping, marketing strategy, liaising with other departmental managers, reporting to the National Sales Manager, referencing for ex-employees, disciplinary action, liaising with courts when required and many other duties as and when they arose.”

When asked by counsel for C how D1 could have, for example, dealt with customer complaints, if she did not have access to customer information via the Alarm Master Database, D1 sought to row back on her written evidence by saying for the first time that she only ever dealt with complaints from prospective customers, who had been contacted despite being TPS registered. She also claimed that it was in fact D2, who dealt ultimately with customer complaints/cancellations.

So far as her dealing with (i) declined customer card payments or (ii) selling additional products to new customers prior to the installation of equipment, D1 described an overly cumbersome process of paperwork either being left in a tray for collection or being brought up to her.

Having initially said in evidence that he had no reason to access the Alarm Master Database because in his role with C he was only ever dealing with new customers, he then admitted that he would, at least from time to time, need to deal with complaints from existing customers in which case the administration teams would pass the call to him such that he still did not require access to the Alarm Master Database to deal with any such complaint.

It was submitted on behalf of the defendants that I ought to draw an adverse inference from that the fact that C has failed to disclose any documentary evidence relating to which of C’s employees were licensed to use the Alarm Master Database. However, D1 stated in evidence that D3 only has 2 licenses for its own Alarm Master Database, which are in the names of D1 and David Shutkever, the Technical Manager. Nevertheless, D3’s administration staff are still able to access the Alarm Master Database and print off information, although an alternative system has now been designed internally to enable staff to process the data more efficiently. In those circumstances, I do not consider it appropriate to draw any adverse inference from C’s failure to disclose documents relating to which of C’s employees were licensed to use the Alarm Master Database.

D3 acquired its own Alarm Master Database systems package from pcdata, who also provided as part of that package one day of free training. The defendants have disclosed copies of an exchange of emails between D2 and pcdata arranging a training meeting at D3’s offices on 24 August 2017 with D1, D2 and David Shutkever in attendance. As part of those email exchanges, D2 asked “Do drop me a reply as to how long you think it will take for complete novices to learn, so I can plan the day around your training programme.” It was further submitted on behalf of the defendants that D2 would not have been asking for training for him and D1 as complete novices, if they were already familiar with the system as a result of having routinely accessed it whilst employed by C.

On balance, I find that that D1 and D2 whilst employed by C did have access to the Alarm Master Database for the following primary reasons:

The Employment Tribunal determined that D1 and D2 resigned from C as part of an established plan to set up in competition with C and in doing so to secure a competitive advantage by seeking to exploit their knowledge of C’s operations/customer base. It was submitted on behalf of the defendants that, whilst they do not seek to go behind the findings of dishonesty made by the Employment Judge against D1 and D2, it is not an abuse of process for the defendants now to seek to relitigate the particular issue of whether or not there was any “Grand Plan” as previously determined by the Employment Judge and having regard in particular to the facts that:

In my judgment, it would bring the administration of justice into disrepute, if I were now asked to make a contrary finding to that arrived at by Employment Judge Lloyd, who heard the contested evidence of D1, D2 and LH on this particular issue at length and after it had already been determined, as a preliminary issue, that D1 and D2 were employed by C. In my view it is irrelevant in determining this issue whether or not the claim before the Employment Tribunal included discrimination.

Further, I am not persuaded that any new evidence was placed before me, that if it had been placed before the Employment Tribunal, would have potentially caused Employment Judge Lloyd to have made a different finding.

Firstly, whilst LH now accepts that C’s employees, including D1 and D2, received accountancy advice upon establishing personal service companies, Employment Judge Lloyd acknowledged and accepted D3’s dual purpose by finding that;

“Whatever was the genesis of [D3] as to whether they were asked to set it up or whether it was a mutual decision, I think [D1 and D2] knew full well that were huge advantages for them, sometimes not entirely legal or straightforward. In setting up the company and funnelling their funds and income and resources through it, and also as a platform for the development of their own future business goals, namely as an accredited installer of [home] security….”

Secondly, in her evidence to me, D1 admitted that:

D1 and D2 must have been confident that they would be able to grow the business relatively quickly, since:

D1 and D2 are highly intelligent and hugely experienced in the home security sector. It is reasonable to expect that, in light of the financial risks involved and after months of pre-planning (whether as part of a “Grand Plan” or “Plan B”), the defendants would have designed and implemented a robust marketing/sales strategy targeted at generating over the short term sufficient cash flow at least to meet the payroll.

I found the oral evidence of D1 and D2 regarding D3’s marketing strategy to be variously confused, confusing, inconsistent, contradictory and lacking in credibility.

“advertising opportunities in consumer directories and magazines”

D1 said in evidence that:

The defendants provided no evidence of any or any substantial sales, whether to C’s customers or more generally, having been generated by either such method.

“legitimate data purchases from third parties such as telemarketing information”

In her oral evidence, D1 said that, due to the high turnover of staff, the only remaining member of D3’s original telesales team was Jackie Owen, who had only recently returned to work after a long period of absence due to ill-health. Nevertheless, Jackie Owen had been able to make 155 calls the day before D1 gave her evidence. Multiplying that number of calls by the number of telesales staff employed at the outset means that D3 needed initially at least 7,750 contact telephone numbers a week to keep the team busy. Indeed, in an email dated 9 January 2018 to D1 and D2 from a prospective data supplier, it is recorded that “My notes from our meeting….you have a team of 10 agents, each manually dialling and achieving approx.. 350 calls per day….. Estimated volume requirement per month equates to around 15 – 20k records….” As to how D3 initially sourced the required volume of data, it was D1’s oral evidence that:

As the narrative evolved during the course of the oral evidence of D1 and D2, it became apparent that this was the main method by which the defendants claimed that they were able to make contact with C’s customers and as a result of the leads allegedly generated by the 2017 leaflet campaign.

It was D1’s evidence that:

It was the evidence of D2 that:

Although not mentioned in her witness statement, D1 said in her oral evidence that she had created excel spreadsheets for the years 2017 to 2021 (“the Fit Books”), in which she inputted on an ongoing basis the details of new customers of D3, who had formerly been customers of C. The Fit Books include a column recording how those customers say they were contacted by D3. The vast majority of such entries (some 75%) record that the customer was contacted as a result of “Leaflet 2017. CB. Opt in”, where “CB” is shorthand for “call back”. However, there are a number of problems arising with the evidential value of the Fit Books:

There was a complete absence of any contemporaneous documents relating to the 2017 leaflet campaign:

Accepting for a moment the inherently unlikely explanation that such important company property, which would have included the consumers’ personal data, was somehow ever entrusted to the care of James Carr and having regard to his apparent very significant personal problems, the absence of any other contemporaneous documents thereby increased the importance to the defendants’ positive case of the lead sheets. In particular, the defendants ultimately claimed that it was the lead sheets that evidenced that D3 was entitled from 2018 to call TPS registered consumers, including C’s customers, who had opted-in as part of the 2017 leaflet campaign to receive such marketing calls from D3. It is, therefore, incomprehensible that the defendants not only failed to disclose the leads sheets, but also during the course of these proceedings continued with a policy of destroying them for no discernible good reason.

However, this is not merely a case about inferences to be drawn from the absence/destruction of disclosable documents. That conduct also has to be viewed in the context of missing witnesses. It was the defendants’ evidence that:

However, neither D1 nor D2 had any answer as to why Martyn Wright and/or Charlie Flint, who have been employed by D3 as sales representatives/security advisers since the outset and continue to be so employed, were not called as witnesses. This omission was even more surprising in light of D2’s oral evidence that Messrs Wright and Flint had been in attendance at the strategy meeting when the all-important 2017 leaflet campaign was allegedly brain stormed.

In addition, D1 said that in hindsight her friend, Steve, could and should have been called as a witness to confirm that he had gifted the data initially used by D3’s telesales team.

The missing lead sheets and the missing witness evidence clearly would have been highly material going as they do to the very heart of the factual dispute in this case. For no good reasons, the defendants have chosen not to put in potentially very significant documents and witness evidence to (i) support their positive case and (ii) rebut the evidence of CC. In all the circumstances, I consider it appropriate to draw the following adverse inferences:

I am reinforced in that view by the following.

Firstly, C’s consumer witnesses all confirmed that they received unsolicited marketing calls on behalf of D3 and notwithstanding that they had been TPS registered for many years.

Secondly, other than Ruth Mellor, none of the defendants’ consumer witnesses make any reference in their written evidence to having received a leaflet from C in 2017. In his witness statement, Kenneth Trueman does state that he contacted D3 in response to a promotional leaflet, which he received in April 2019. It was the defendants’ evidence that D3 ceased using the 2017 leaflet in November 2017, although, in 2019, D3 produced a key facts documents, which the security advisers/engineer were told to post to the properties either side of any property that they were attending. It is likely that this is the document that Mr Trueman is referring to in his witness statement.

Thirdly, as part of her complaint, Ms de Domingo wrote to D3 on 12 August 2019 stating that:

“……There are also some things that are important for me to know:

As in the present proceedings, Ms de Domingo was asking the relatively simple question where was the evidence that showed that her mother, who was TPS registered, had opted-in to receive marketing calls from D3? DW responded on behalf of D3 by way of a 7 ½ page letter dated 14 August 2019 in which he dismissed the complaint as being “without foundation.” The letter also stated as follows:

“1.

Your Mother was originally spoken to in 2017 by our company, following a campaign promoting the services of [D3] to homeowners in various areas across the country. As part of our campaign, was a leaflet describing the benefits of our Monitored Alarms services for Home Security purposes. When the leaflets are delivered there was often an opportunity to speak to the occupier and explain the content of the leaflet. If there was any interest shown by the occupier, as your Mother did at the time, they were encouraged to provide their name and telephone number in order for a pre-arranged Home Security consultation to take place. Your Mother said she was already in a contract with her existing alarm company with a couple of years remaining. Therefore, your Mother asked for us to make contact nearer the end of her contract. This is how we first obtained your Mother’s telephone number. We subsequently first made contact with your Mother in 2019.

……..

2.

You state your Mother is TPS registered, however her permission to contact her was given during the original discussion which took place in 2017.

a)

We are unable to provide the requested “evidence” you seek as that promotion campaign commenced over 2 years ago and we no longer hold those details, due to a Head Office relocation.

b)

We are unable to provide you with a recording of the call from our company to your Mother, as no such technology is used at [D3]. Therefore, no “transcript” of the call can be provided to you, because such a transcript must be an accurate account of an original conversation/dialogue that had been recorded.

c)

Please refer to the earlier paragraph.

d)

We have not stated at any time, in our telephone calls to you and/or our written correspondence, that your Mother had “called” our company. Again, we refer you to the earlier paragraph in this letter,

……..”

The response letter refers to evidence no longer being available because of an office relocation. It makes no reference to the theft of personal data by James Carr. In his written evidence DW stated that “I have not discovered anything within [D3’s] operating procedures that gives me cause for concern.” His stated role included ensuring ICO compliance. Whilst DW was not employed by D3 at the time of the alleged theft, DW said in his oral evidence that he had liaised with D2 as part of his investigation of the complaint.

However, even more striking, is the fact that this very long and detailed letter makes absolutely no mention of the relevant lead sheet, which if it had ever existed ought still to have been then available for disclosure to Ms de Domingo, who had cancelled the contract 2 days after it was signed by her mother and within the 14 day statutory cancellation period. DW said in his oral evidence that again as part of his investigation he would have gone to the filing cabinet and taken out the relevant customer documentation.

In Bank St Petersburg PJSC & Anor v Arkhangelsky, the then Chancellor of the High Court warned that a trial judge when determining disputed facts must be careful to avoid adopting a piecemeal and compartmentalised approach, but rather to stand back and consider the effects and implications of the facts he has found taken in the round.

The primary facts are as follows:

There are only two possible explanations for the defendants having been able to contact C’s customers in this way:

For the following primary reasons, I have rejected the defendants’ positive case that D3 was able to target and make contact with C’s customers as a result of the leads generated by the alleged 2017 leaflet campaign:

In the absence of any other credible explanation, the only inference and the inescapable conclusion to be drawn from the primary facts is that the defendants executed a plan to take and use the customer information belonging to C in order successfully to target C’s customers for the benefit of D3.

C elected at trial not to proceed with the claims for (i) breach of fiduciary duties and (ii) dishonest assistance in breach of trust.

Such claims were considered by Bacon J in the recent case of Weiss Technik UK Ltd and other companies v Davies and others [2022] EWHC 2773. The background to the claim was summarised by Bacon J as follows:

“[1.] ……….. It is brought by three companies within the Weiss Technik group ……… against four former employees (the individual defendants) and the company SJJ System Services Limited (SJJ), which was set up by one of those employees, Mr Jones, when he left Weiss.

[2.] The claim is, essentially, that Mr Jones established SJJ by taking large swathes of confidential Weiss information and software, which he used to compete with Weiss. The claimants say that the other defendants, i.e. Mr Davies, Mrs Whitfield and Mr Oram, then continued to provide Mr Jones and SJJ with confidential information from Weiss either at Mr Jones' request or voluntarily, before they left Weiss at various different times to work for SJJ. They then (the claimants say) continued to use Weiss's confidential information after they had joined SJJ.”

Having reviewed the authorities, Bacon J helpfully summarised the relevant legal principles as follows:

“Breach of confidence

Legal principles

[113.] It is well-established that an obligation of confidentiality may arise either under the express or implied terms of a contract, or as an equitable obligation.

……….

[115.] The seminal case of Faccenda Chicken v Fowler [1987] Ch 117 confirms that confidentiality obligations will also typically be implied in an employment relationship where necessary, in circumstances summarised at pp. 135–138:

“(2)

In the absence of any express term, the obligations of the employee in respect of the use and disclosure of information are the subject of implied terms.

(3)

While the employee remains in the employment of the employer the obligations are included in the implied term which imposes a duty of good faith or fidelity on the employee. For the purposes of the present appeal it is not necessary to consider the precise limits of this implied term, but it may be noted: (a) that the extent of the duty of good faith will vary according to the nature of the contract (see Vokes Ltd v Heather, 62 R.P.C. 135); (b) that the duty of good faith will be broken if an employee makes or copies a list of the customers of the employer for use after his employment ends or deliberately memorises such a list, even though, except in special circumstances, there is no general restriction on an ex-employee canvassing or doing business with customers of his former employer …

(4)

The implied term which imposes an obligation on the employee as to his conduct after the determination of the employment is more restricted in its scope than that which imposes a general duty of good faith. It is clear that the obligation not to use or disclose information may cover secret processes of manufacture such as chemical formulae …, or designs or special methods of construction … and other information which is of a sufficiently high degree of confidentiality as to amount to a trade secret. The obligation does not extend, however, to cover all information which is given to or acquired by the employee while in his employment, and in particular may not cover information which is only “confidential” in the sense that an unauthorised disclosure of such information to a third party while the employment subsisted would be a clear breach of the duty of good faith …

(5)

In order to determine whether any particular item of information falls within the implied term so as to prevent its use or disclosure by an employee after his employment has ceased, it is necessary to consider all the circumstances of the case. We are satisfied that the following matters are among those to which attention must be paid:

(a)

The nature of the employment. Thus employment in a capacity where 'confidential' material is habitually handled may impose a high obligation of confidentiality because the employee can be expected to realise its sensitive nature to a greater extent than if he were employed in a capacity where such material reaches him only occasionally or incidentally.

(b)

The nature of the information itself. In our judgment the information will only be protected if it can properly be classed as a trade secret or as material which, while not properly to be described as a trade secret, is in all the circumstances of such a highly confidential nature as to require the same protection as a trade secret eo nomine …

(c)

Whether the employer impressed on the employee the confidentiality of the information. Thus, though an employer cannot prevent the use or disclosure merely by telling the employee that certain information is confidential, the attitude of the employer towards the information provides evidence which may assist in determining whether or not the information can properly be regarded as a trade secret …

(d)

Whether the relevant information can be easily isolated from other information which the employee is free to use or disclose. In Printers & Finishers Ltd v Holloway [1965] R.P.C. 239, Cross J. considered the protection which might be afforded to information which had been memorised by an ex-employee. He put on one side the memorising of a formula or a list of customers or what had been said (obviously in confidence) at a particular meeting, and continued, at p. 256:

'The employee might well not realise that the feature or expedient in question was in fact peculiar to his late employer's process and factory; but even if he did, such knowledge is not readily separable from his general knowledge of the flock printing process and his acquired skill in manipulating a flock printing plant, and I do not think that any man of average intelligence and honesty would think that there was anything improper in his putting his memory of particular features of his late employer's plant at the disposal of his new employer.'

For our part we would not regard the separability of the information in question as being conclusive, but the fact that the alleged “confidential” information is part of a package and that the remainder of the package is not confidential is likely to throw light on whether the information in question is really a trade secret.”

[116.] As for equitable confidentiality obligations, the classic statement is that of Megarry J in Coco v AN Clark (Engineers) [1968] FSR 415, p. 419:

“In my judgment, three elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself … 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.”

[117.] The first of those conditions was pithily described by HHJ Waksman QC in McGill v The Sports and Entertainment Media Group [2014] EWHC 3000 (QB) at §148 as encompassing “information which is not generally available to others and which the possessor does not wish to be generally available”.

[118.] The second of the Coco v AN Clark conditions will apply where the receiver of the confidential information knows or should know that the information is confidential. That may be the case not only where confidential information has been disclosed in breach of an obligation of confidence, but also where confidential information innocently comes into the hands of the receiver, who should nevertheless know that it is confidential: Lord Goff in AG Observer (the Spycatcher case) [1990] 1 AC 109, p. 281D–F.

[119.] The principle was expressed by the Supreme Court in Vestergaard v Bestnet [2013] UKSC 31, [2013] RPC 33 as follows:

“The classic case of breach of confidence involves the claimant's confidential information, such as a trade secret, being used inconsistently with its confidential nature by a defendant, who received it in circumstances where she had agreed, or ought to have appreciated, that it was confidential”.

[120.] As to the third requirement for a detriment arising from the use of the confidential information, use can be established in a wide variety of ways, including not only examining the material and making copies of it, but also deliberately setting out to obtain material known to be confidential. In Tchenguiz v Imerman [2010] EWCA Civ 908, [2011] 2 WLR 592, Lord Neuberger MR said that:

“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. …

The ingredients of the common law tort were identified in Ratcliffe v Evans [1892] 2 QB 524 by Bowen LJ as follows:

“written or oral falsehoods, not actionable per se nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage.”

Section 3(1) of the Defamation Act 1952 provides:

“Slander of title, etc.

(1)

In an action for slander of title, slander of goods or other malicious falsehood, it shall not be necessary to allege or prove special damage —

(a)

if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form; or

(b)

if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication.”

In George v Cannell and another [2022] EWCA Civ 1067, Warby LJ held

“[65.] I have already given most of my reasons for concluding that the Judge was wrong to adopt the historic approach. In summary his decision, that a claimant relying on section 3 must plead and prove a specific mechanism by which the offending statement did on the balance of probabilities cause actual financial loss, flowed from a fallacy that fails to give the statutory language its natural meaning and effect. The authorities, properly understood, do not support this. I add that I think it is also a fallacy to reason from the proposition that malicious falsehood is an economic tort to the conclusion that only proof of actual financial loss will do. “Economic tort” is a label to indicate the nature of the interest protected by the cause of action. On its natural interpretation section 3 is aimed at the protection of financial or economic interests. Parliament provided for a claimant to establish liability on proof that the acts complained of had a natural tendency to cause loss of the type protected by the tort. I can see nothing heterodox in that. Nor do I see force in the supposed paradox that the claimant might establish liability on the basis of an inherent probability of financial loss, even though the defendant has proved as a fact that there was none in the event. This is not an “absurdity” as the defendants have submitted. In my view it is consistent with Parliament's intention and simply an extreme illustration of the occasional side-effect I have described at para 47 above.”

In Libyan Investment Authority and other companies v King and others [2023] EWHC 265 (Ch), Miles J set out the principles applicable to the cause of action as follows:

“[761.] The basic elements of the cause of action in the tort conspiring to injure by unlawful means are set out in Kuwait Oil Tanker Co SAK v Al Bader (No. 3) [2002] 2 All ER (Comm) 271 (CA), per Nourse LJ at [108]:

“A conspiracy to injure by unlawful means is actionable where the claimant proves that he has suffered loss or damage as a result of unlawful action taken pursuant to a combination or agreement between the defendant and another person or persons to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do so.”

[762.] In addition, the following principles apply:

i)

A claimant must establish on the available evidence that there was an agreement or combination with the common design to cause injury to them. This is a question of fact.

ii)

Formal agreement is not required and it is sufficient if two or more persons combine with a common intention, or, in other words, that they deliberately combine, albeit tacitly, to achieve a common end: (Kuwait Oil Tanker at [111])

iii)

In most cases it will be necessary to scrutinise the facts to see what inferences can be drawn as to the existence or otherwise of the alleged conspiracy. In many contexts it will be necessary in order to prove intention to ask the court to infer the relevant intention from the primary facts: Kuwait Oil Tanker at [112] and [120].

iv)

Nevertheless, it must be shown that the alleged conspirators were sufficiently aware of the relevant circumstances, and had a sufficiently similar objective, before it can be inferred that they were acting in combination: (Kuwait Oil Tanker at [111]).

[763.] As to the requirement of intention to harm the parties agreed that the principles are set out in OBG Ltd v Allan [2008] 1 AC 1 at [164]-[167]:

i)

A defendant may intend to harm the claimant's business either as an end in itself or as a means to an end.

ii)

Intentional harm inflicted against a claimant in either of these circumstances satisfies the mental ingredient of this tort, even if the defendant does not wish to harm the claimant in the sense that he would prefer that the claimant were not standing in his way.

iii)

Lesser states of mind do not suffice: to establish liability, a high degree of blameworthiness is called for because intention serves as the factor which justifies imposing liability on the defendant for loss caused by a wrong otherwise not actionable by the claimant against the defendant, and the defendant's conduct must be deliberate.

iv)

Foresight that conduct may or will probably result in damage to the claimant cannot be equated with intention and this intent must be a cause of the defendant's conduct. The defendant must intend to injure the claimant. This intent must be a cause of the defendant's conduct.

v)

If a defendant seeks to advance his own business by pursuing a course of conduct which he knows will, in the very nature of things, necessarily be injurious to the claimant (i.e. the loss to the claimant is the obverse side of the coin from gain to the defendants and the two are, to the defendant's knowledge, inseparably linked and the defendant cannot obtain the one without bringing about the other).

[764.] As to unlawful means and knowledge:

i)

The claimant must establish that: (a) the alleged acts were “unlawful” and (b) that they were in fact the means by which injury was inflicted upon them Digicel (St Lucia) Ltd v Cable & Wireless Plc [2010] EWHC 774 (Ch) at Annex I [3]).

ii)

The defendant must have knowledge of all of the facts which make the means unlawful: The Racing Partnership Ltd v Sports Information Services Ltd [2020] EWCA Civ 1300; [2021] Ch 233 at [141].

iii)

By a majority decision it has been accepted that knowledge of the unlawfulness of the means employed is not required: see The Racing Partnership Ltd at [139] and [171].

iv)

The requirement of knowledge is satisfied where the defendant has “blind-eye” knowledge: The Racing Partnership Ltd at [159]. That requires a suspicion that certain facts may exist, and a conscious decision to refrain from taking any step to confirm their existence.

v)

As to blind eye knowledge see Group Seven & Ors v Nasir [2019] EWCA Civ 614: [2020] Ch 129, [59]-[60]:

a)

it is not enough that the defendant merely suspects something to be the case, or that he negligently refrains from making further inquiries;

b)

the suspicion must be firmly grounded and targeted on specific facts;

c)

the existence of the suspicion is to be judged subjectively by reference to the beliefs of the relevant person; and

d)

the beliefs of the relevant person, and the decision to avoid obtaining confirmation must be deliberate.

vi)

To be “unlawful”, the actions need not themselves be actionable civil wrongs: Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174.

vii)

Deceit may constitute the necessary unlawful action (ERED at [381]), as may a breach of fiduciary duty (Fiona Trust & Holding Corp v Privalov [2010] EWHC 3199 (Comm) at [69]).

viii)

It may be a defence for the defendant to prove that he believed that the means in question were lawful: obiter, in The Racing Partnership, Arnold LJ at [146].

The information contained on C’s Alarm Master Database was not simply the names, addresses and telephone numbers of customers, but also included details of individual contracts such as:

In my judgment, this information, which cannot properly be separated out and must be taken as a whole, was clearly highly commercially sensitive and confidential. CC stated in her evidence that D3’s telesales team called all the names on the printed sheets, but concentrated primarily on those customers of C, who were coming to the end of their contracts. In addition, C’s consumer witnesses (BM, IK and JW) gave evidence that it was clear to them that D3’s sales representatives knew individual terms of their contracts with C, such as price and renewal date.

Indeed, the information was treated as highly confidential by C. Only a limited number of C’s employees were given their own unique log in details to access C’s Alarm Master Database. D1 and D2 themselves knew that the information was treated by C as confidential, since the marketing and sales teams, for whom D1 and D2 were directly responsible, were generally prohibited from accessing the database.

D1 and D2 agreed and implemented a plan to take C’s confidential information and to use that confidential information successfully to target C’s customers for the financial benefit of D3 and to the financial detriment of C. In doing so, D1 and D2, as senior employees, must have known that such actions were in breach of the confidentiality terms implied into their own and each other’s employment contracts, or turned a blind eye to the existence of such terms. At the material time, D1 was the sole director of D3 and as such was its controlling mind.

As part of the agreed plan, C’s confidential information was extracted from the Alarm Master Database by either manual or electronic means. C had spent money acquiring the Alarm Master Database and the associated operating licenses. Significant time and resource was spent in storing and processing the customer data via the Alarm Master Database.

Further as part of the agreed plan, printed sheets of the data (whether printed directly from C’s Alarm Master Database or later via a USB stick) were distributed to D3’s telesales team to call C’s customers.

In conclusion, by doing all this, I find that:

I dismiss the claim for malicious falsehood for the following primary reasons:

I find that the defendants agreed and executed a plan to extract knowingly confidential information from C’s database and to use that confidential information in order successfully to target C’s customers for the financial benefit of D3 and to the financial detriment of C.

C has established the claims that:

The claims for (i) breach of fiduciary duties, (ii) dishonest assistance in breach of trust and (iii) malicious falsehood are dismissed.