England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(MR JUSTICE GRAY)

		Royal Courts of Justice Strand London WC2 Thursday, 29th November 2001

Thursday, 29th at the November 2001

1. LORD JUSTICE CLARKE: This is an application by Mr James for permission to appeal against an order, dated 8th August 2001, made by Gray J. By that order the judge refused Mr James' application to discharge an interim injunction granted against him by Hunt J on 13th December 2000. The injunction provided that the defendant should be restrained from using or disclosing any database of customer and potential customer names belonging to the claimant or any copies thereof or any data forming the whole or part thereof and any tapes belonging to the claimants or any copies thereof. The order also required the defendant to deliver up any of such material in his possession, and to make an affidavit saying what had become of any material which was no longer in his possession. The injunction was granted following a hearing at which Mr James represented himself. He did not take any steps to appeal against the order of Hunt J after it was made in December 2000.
2. I should say a brief word about the facts. Mr James is an IT consultant. McKenna Breen, the respondent, is a company which organises seminars on hypnosis and communication skills. McKenna Breen employed Mr James between November 1998 and August 1999. He worked on its IT systems, including its customer database. After he left he retained certain tapes and disks, in particular a CD Rom containing the customer database. In July 2000 Mr James wrote a letter to his then business colleague, Kate Pearce, concerning a seminar.
3. He mentioned in the letter that before he left McKenna Breen he had made an unofficial copy of their customer database and that "some people had expressed an interest while I was there." She passed the letter to McKenna Breen in November 2000. Based on that letter they applied for the injunction on 13th December which, as I indicated a moment ago, was granted. Mr James complied with the order by returning a number of tapes. In his second affidavit of 17th January 2001 he stated that in September 2000 he had destroyed the CD Rom containing the database. He said in that affidavit:

"5. However, for clarification, I now state that the 'CD Rom' referred to in the final paragraph of Schedule 1 attached to the First Affidavit contained the only copy of the database in my possession.

5.1. The 'CD Rom' was destroyed on or about September 2000 in accordance with data security protocols employed by several Blue Chip financial institutions. That is to say, it was physically mutilated before being broken into four separate pieces and distributed into different refuse bins."

4. Since then it appears that McKenna Breen have made no great efforts to progress the action, although Mr James has told me that there is to be a case management conference next week.
5. This application arises out of an application made by Mr James on 8th August 2001 to Gray J for an order discharging the injunction. He argued that he had fully complied with the injunction and no longer possessed the database or tapes which the injunction restrained him from using. The only evidence to the contrary was given by Kate Pearce. She swore an affidavit on 15th May 2001 in which she exhibited her previous witness statements which had been made in support of the initial application for the injunction and in which she essentially reiterated the contents of those earlier statements.
6. Mr James' case is that Miss Pearce's evidence was and is unreliable, and that she had an ulterior motive for assisting McKenna Breen in that the litigation had allowed her to oust Mr James from the new seminars business which Mr James had started after leaving McKenna Breen. His submission to the judge was that the injunction was causing him significant harm in that it was damaging his reputation in the small IT community. McKenna Breen argued that the evidence showed that Mr James had not destroyed the database in September 2000, and relied upon Kate Pearce's evidence that on 1st December he had told her over the telephone that three people had offered him money for the database and that he had copied it into his disk drive.
7. Gray J held that the question was not whether the injunction had been rightly granted since it had not been appealed. The question was whether the circumstance had changed since then so as to make it unnecessary for the protection of McKenna Breen's business that it should be continued. He held that it should be continued, and refused the application.
8. Mr James' grounds for a proposed appeal are in short: (a) that the hearing did not amount to a fair trial and therefore it contravened Article 6 of the European Convention on Human Rights; (b) at the hearing the judge precluded arguments on the correct interpretation of the letter of July 2000; and (c) that the judge accepted evidence from McKenna Breen only, even though he, Mr James, had shown that the evidence of their key witness, Kate Pearce, was untrue and unsafe.
9. I take those grounds in turn. (a) The suggestion that the hearing before the judge was not fair. I have read the transcript of the hearing before Gray J and it is true that the following exchanges occurred on page 25:

"MR JUSTICE GRAY: You are not, at least I do not think you are and I do not think you should be, saying that the injunction was wrongly granted in the first place.

MR JAMES: No, my Lord, I am not saying that.

MR JUSTICE GRAY: Because you didn't appeal it. If you felt it was wrongly granted, that was the course that was open to you and you did not take it.

MR JAMES: Yes.

MR JUSTICE GRAY: For no doubt perfectly understandable reasons."

10. There were a number of further exchanges between Mr James and Gray J, and there came a moment when Mr James said:

"If I can just go through my skeleton argument, I apologise, I don't have much...

MR JUSTICE GRAY: No. I have read your skeleton argument."

11. Mr James was perhaps naturally concerned that he was being deprived of an opportunity to put his case fully before the judge because he was not allowed to go through his skeleton argument. When the judge said, "No, I have read your skeleton argument", he was simply indicating to the applicant (as I read it) that he already had the points in the skeleton argument in mind. It appears to me reading this transcript that there is really no substance in the submission that Mr James did not have a fair hearing before Gray J. Some of Mr James' points on the papers that I have seen complain about what happened before Hunt J in December 2000 which was not directly relevant before Gray J. In short, I am unable to accept the submission that the hearing before Gray J was not a fair one or that there was any breach of the applicant's Convention rights.
12. (b) Letter of July 2000. So far as the submission that the judge precluded argument on Mr James' letter to Kate Pearce in July 2000 is concerned that essentially went to the reason why the injunction was granted in the first place, as opposed to the reasons why it should be or should not be discharged in August 2001.
13. (c) Evidence. It appears to me that the essential problem is that Mr James may have thought that the judge was prejudging the question who was telling the truth; namely Mr James on the one hand or Miss Pearce on the other. He was not doing that. His judgment makes that quite clear. In his judgment he clearly explains the point that Mr James was making. He refers to the evidence given on both sides, and then says:

"The question which I have to decide is whether circumstances since then [that is since the junction] have changed in a way that makes it unnecessary for the protection of the claimant's business that the injunction should continue between now and trial. In arriving at an answer to that question I make it very plain that I am not making any findings of fact as to whether the claimant's witnesses, in particular Miss Pearce, are telling the truth. That is something that will be decided at any trial.

I am satisfied however, on the basis of the evidence which is before me, that the claimant has established the existence of a legitimate continuing need for protection against any future misuse which the defendant may make of information on the database. I acknowledge that it is the defendant's case that he no longer has access to any of that information. At the trial it will no doubt be decided whether he is right in that contention. I do not and cannot make any finding about that. I am satisfied on the material that I have been taken through that the ground for discharging the injunction is not made out and I therefore decline to do so."

14. In my judgment it was open to the judge to say that the respondent, McKenna Breen, had put sufficient material before the court to justify maintaining the injunction until the trial of the action. The judge was not, however, prejudging the question who was telling the truth. That is a matter which will have to be decided by the trial judge. If Mr James is found to be telling the truth it may be that he will be able to persuade the court that the injunction should not have been granted in the first place. It will then be open to him to advance his claim for damages under the cross-undertaking in damages which was given by the claimant, McKenna Breen, and he will be able to say, if he can prove it, that he has suffered loss as a result of the injunction which has now been in force for nearly a year.
15. I do not think that there is any realistic prospects of the Court of Appeal allowing the appeal against the decision of Gray J in August 2001. To my mind the crucial thing now is that the action be brought on for trial so that the question of who is telling the truth can be resolved once and for all. If Mr James is telling the truth, so be it. I am very pleased to hear that there is now to be a case management conference next week, and I very much hope that Master Trench, if it is to be he, fixes a trial date in the near future.
16. For reasons I have given the application for permission to appeal is refused:
(Application refused; no order for costs).