England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM TRURO COUNTY COURT
(His Honour Judge McKintosh)

		Royal Courts of Justice Strand London WC2 Wednesday 9th May, 2001

1. LORD JUSTICE ALDOUS: This is an application for permission to appeal the decision of His Honour Judge McKintosh of 24th January 2001. In that the decision the judge held that Mr Kidd and Mr Burton had, in breach of their contract of employment with their previous employers, solicited their former clients. The judge proceeded to give relief against them.
2. The action was brought by the firm of solicitors, Thurstan Hoskins & Partners, against another firm of solicitors, Anthony Allbright and Richard Morgan, formerly known as Jewill Hill & Bennett, and also against Mr Burton and Mr Kidd. Mr Burton and Mr Kidd had worked for the claimants. The case had been settled against Mr Allbright. Essentially the allegation that came before the judge was that there had been solicitation by Mr Burton and Mr Kidd of the claimants' previous clients.
3. As only I have before me an application for permission to appeal by Mr Kidd, I will concentrate upon his evidence and his obligations.
4. Mr Kidd had been employed, as I have said, by the claimants. He was under a restrictive covenant (which was set out by the judge in his judgment) not to solicit or endeavour to take away from his employer the business of any clients who had been clients within one year before the termination of his employment; nor to hold himself out as having any connection with the employer.
5. The judge held that the covenant was a valid covenant, and therefore the issue before him that remained was whether upon the evidence there had been solicitation. It is against a finding of fact, namely that there was solicitation, that Mr Kidd seeks permission to appeal.
6. Mr Spens, who has appeared before me today, submitted that for there to have to be a finding of solicitation there had to be some evidence of solicitation, namely that there had to be evidence either from Mr Kidd that what he had done amounted to solicitation, or evidence from a previous client that they had been solicited. As there was no such evidence, the finding of the judge could not be upheld.
7. It is quite correct that Mr Kidd denied that he solicited. His evidence is set out in considerable detail starting at page 42 of the bundle. He was sworn and was cross-examined. He explained how Mr Burton had taken over the practice and how he went to join him. He denied that when he went to Jewill Hill & Bennett to make sure that he had a client base to go to. It was put to him that he had spoken to all the clients of the claimants between mid-July and 1st September. He said that he did not speak to a Mr Bentley and one or two other clients whose names had been crossed out of the list which he had. His evidence was that he went to see Mr Burton on the Friday of the weekend of 1st September. He asked Mr Burton to prepare, with considerable haste, authorities to be signed by his previous clients to enable their litigation to be transferred to his new firm. They were handed over to him by Mr Burton, and over the weekend Mr Kidd went round to his clients and obtained their signature on those authorities. His evidence was that he put before them the option, and in no way did he seek to encourage them to sign.
8. The judgment of the judge was therefore based upon circumstantial evidence because nobody was called on behalf of the claimant who said that he had been solicited, and there was no evidence from Mr Hoskins, the senior partner of the claimants, that he had any knowledge of any solicitation.
9. The judge put his judgment in this way:

"Mr Burton moved into Jewill Hill & Bennett to work there and at the end of July Mr Kidd gave notice. He, under his contract of employment, should have given three months' notice, but he gave one month's notice to the claimant that he was going. He went on holiday from 14th to 20th August. So it seems that he was there at the claimant's for 14 days, then he was away and when he came back he was there for another nine days before he actually left.

Immediately before he left he asked for an extra list of his client matters from the cashier and he obtained that. He said it was sent to a Mr Shryane. It is not clear on the evidence whether Mr Shryane actually got that or whether he got a photocopy of it or whether he got other things instead. There are letters from Mr Shryane on the file. But what is significant is that that very evening, Friday 29th August, was to see Mr Kidd knocking at the door of Mr Burton. Now, although some of the evidence, particularly Mr Burton's, is crystal clear about various things and what was said precisely about the matters in issue, he becomes rather vague about what happened.

But it seems that it is accepted by both defendants that by the time that happened there had already been some discussion with them about client transfer for the simple reason that they both agree that Mr Kidd had asked Mr Burton before that evening to have prepared certain authorities for signature by clients as to the transfer of their business to Jewill Hill & Bennett where Mr Burton and Mr Kidd were in fact to establish themselves very, very shortly indeed. And Mr Kidd, according to Mr Burton, arrived at his door and he remembered that it was a very nice clear summer evening and they were later to go out for a drink in the garden, and Mr Kidd in the kitchen out of the blue asked for a sheet of paper and something to write with. Mr Burton did not ask him what for, and Mr Kidd wrote the list down, which we see on the bundle and has been referred to, of about 22 clients. Mr Burton in return handed over the authorities for the clients to sign, and Mr Kidd, accordingly to his evidence, almost exhausted himself over the weekend working hard to go round to get all the clients to sign the authorities, and turned up on the afternoon of Monday 1st September to deliver these to Mr Burton, who then quickly got on with applying for as many as possible to fill in to transfer the legal aid certificate to the firm which he was in the process of buying from Mr Allbright (and known to Mr Kidd) and the purchase of which subsequently was completed on 5th September. There are various slightly different versions of what was actually was said but it seems that it was something to the effect: `These are clients whom I am bringing with me', or `who wish to come' or `to continue'."

10. The judge continued:

"Well, I have to say that in things like this one has to look primarily at the evidence that one has been able to examine in rather more detail than purely written evidence. One has to look at the question of credibility and reliability. I have to say that, despite the quite proper pressures and attacks upon them, I found that Miss Williams and Mr Field were transparently honest witnesses, and they were in no doubt, it is quite clear. As I say, I have already given credit for the fact that I do not think Mr Hoskin is an easy temperament, but there is no doubt that neither were the defendants, and Mr Kidd, I am afraid, came across through the evidence as having great gifts with clients, being very sensitive to clients - I have already given him credit for that - and he has perhaps negative sides in administration: well, many people do, one would not condemn somebody for that. But I do think he is a man who bears a grudge, who is a man who is vindictive and revengeful and, I have to say, so does Mr Burton. ...

Looking at the time scale, one now moves on also to look -- and at the things I have said, one looks also to the situation to which, in their unhappy situation (and clearly it was not happy for them, nobody says that) the second and third defendants found Jewill Hill & Bennett. They were purely and simply litigation practitioners. Mr Kidd - in fact Mr Burton I think once said in evidence really he was so good at getting in clients. They had to get in clients and they had to get in clients quickly and they had to try and get that department up and running. ...

A man who has just bought a new firm and wants to get the litigation up and running, and he has not really got any client base, particularly on the litigation side, which is one of his fortes, and he is going to take on a new assistant, albeit that the new assistance says: `Well, I am so keen to come and work with you', although at one time he said he was just going to take a rest and there were one or two other firms -- he did not think he was perhaps going to be paid for the last month at Thurstan Hoskin. He has got to live. Is he really saying that he could not care really whether any clients came or not? I do not think that is really very realistic. I think, if he is honest, of course he cares, just as any solicitor would care buying a new firm and trying to get a litigation practice that really was not very big and had no legal aid up and running. Of course one of the prime things to do is, as soon as possible, try and get yourself a legal aid franchise of your own which helps to maximise cash flow."

11. The judge went on to deal with the cash flow position of the new firm and pointed out that Mr Burton wanted Mr Kidd, if he could:

"... to start and hit the ground running with a cabinet of clients, rather than an empty cabinet and starting from scratch, hoping perhaps that an odd few nights on duty solicitor might rake in something."

12. The judge concluded:

"It seems to me that when one puts everything together, as one must, the picture respectfully, on the balance of probabilities, is clear. These two defendants knew perfectly well of their restrictive covenants. Any experienced solicitor, whether assistant or partner, knows about such things and knows that they will tend to apply to the other. ...

As I say, I think the time scale is significant. The interesting thing also is, I think, this letter. I think the letter of 1st September in some ways is extraordinary in that it is saying: `Here is all this list', and substantially it is exactly the same list as the one handed over to Mr Burton at his home written out in the kitchen on the previous Friday only three days before. And yet it seems that some at least on the list had not consented to things being handed over. There is some evidence that some clients at least did not really know it had all taken place, this parting of the ways and the going over to Jewill Hill & Bennett."

13. The judge found it extremely suspicious the dating of the authorities. He concluded that they were corroborative of the urgency with which they were regarded. The final part of his judgment on this matter stated:

"As I say, I think all these things knitted together point to one picture, together with the evidence to which I have referred and in particular the evidence of Mr Field and to a lesser extent Miss Williams. These two men bore a grudge and, observing them in their evidence in this case, still do bear a deep grudge against Mr Hoskin. They are very revengeful against him. They also had that desperate need to get on board, as I have said, a client base. In my view, this all probably started somewhere around May time of 1997. I do not accept the evidence of Mr Kidd when he says: `Well, these people, it was only in the course of my professional dealing with him that I came across all these people'. That would be very difficult to do in the sort of time span he had to do it. 20-odd clients do not suddenly meet you in the street all at once, even in a small place, over a period of about a couple of months. I think that is very unlikely.

It is quite clear that they were as thick as thieves, these two. As I say, they had worked and eaten together, day in day out. There was the arrangement - some of which is crystal clear and some vague - which led to the making of the authorities so quickly; the calling on 29th August; the letter on 1st September. In the view of this court, albeit that it is difficult and, as Mr Spens rightly says, there is not really a lot of direct evidence, it is the nature of these proceedings that is the problem. I look at all 45 statements. They are not quite all duplicated off copies of the same but they do have a very, very same ring, each of the other. One simply does not know exactly how they were taken. One knows that they were not taken by an independent solicitor or statement-taker, but taken by the person whose cause it is.

In the circumstances, albeit on the balance of probability, this court finds that there was solicitation by both the second and third defendants. Mr Spens (and Mr Burton has joined himself to the request) asks this court to specify in particular which client. The court says on the balance of probabilities all of the clients on the list, all 22 of them. They are as similar as chalk and chalk."

14. It is clear from the judgment that the judge did not hold that there had been evidence from anybody that had actually been solicited. He also did not hold that Mr Kidd had admitted an act of solicitation. His judgment is based upon having seen the witnesses in the witness box, the view that he took of Mr Burton and Mr Kidd, and the circumstantial evidence.
15. Mr Spens submits that that is not enough to come to the conclusion that there had been solicitation as pleaded. In my view Mr Spens puts his case too high. This is a question of civil onus. The question before the judge was whether, on the balance of probabilities, solicitation had taken place. The judge was entitled to consider all the evidence and the demeanour of the witnesses in the witness box. The fact that there was no evidence from anybody who had been solicited and the fact that Mr Kidd denied soliciting was only a part of the evidence that he had to consider.
16. In my view the judge's finding of fact is one with which this court would not interfere. This court has not, and will not, have the opportunity to see the witnesses in the witness box. Findings of fact of this type, when there is circumstantial evidence to support them, are findings which this court does not interfere with.
17. In my view there is no real prospect of an appeal succeeding and I refuse permission.
ORDER: Application for permission to appeal refused. (Order not part of approved judgment)