QUEENS BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
B e f o r e :
Specialist Mercantile Judge
| SAFETYNET SECURITY LIMITED
|(1) LEONARD COPPAGE
(2) FREEDOM SECURITY SOLUTIONS LIMITED
Crown Copyright ©
"It is a condition of your employment, that for a period of six months immediately following termination of your employment for any reason whatsoever, you will not, whether directly or indirectly as principal, agent, employee, director, partner or otherwise howsoever approach any individual or organisation who has during your period of employment been a customer of ours, if the purpose of such an approach is to solicit business which could have been undertaken by us"
a. Is the restrictive covenant enforceable?
b. Did Mr Coppage owe the Claimant a fiduciary duty of "no conflict"?
c. Did solicitation and/or breach of the fiduciary duty occur?
d. Was Mr Coppage the "controlling mind" of the Second Defendant?
e. Did, and if so, to what extent, the Claimant suffered loss by reason of breach of the restrictive covenant and/or breach of fiduciary duty?
a. Was there an implied term that the Claimant was to provide Mr Coppage with work?
b. Was there a repudiatory breach –
i. in that the Claimant was conducting a sham redundancy exercise, thus breaching the implied term of trust and confidence;
ii. and/or in that Mr Coppage was placed on gardening leave without having been served with a notice of termination, in breach of the terms of the employment contract?
c. Did Mr Coppage resign from his employment in response to the alleged repudiatory breach by the Claimant?
d. Did, and to what extent, did Mr Coppage suffer loss by reason of the alleged repudiatory breach by the Claimant?
'Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.'
'Agreements in restraint of trade, like other agreements, must be construed with reference to the object sought to be attained by them.' Per Sir Nathaniel Lindley MR in Haynes v Doman  2 Ch 13, at p.25, quoted with approval by Lord Denning MR in Littlewoods Organisation Ltd v Harris  1 WLR 1472, 1481.
a. First, the Court should consider the construction of the clause for its pure meaning.
b. Second, the Court should consider the object of the restraint, here, protection of the Claimant's customer base and goodwill established therein.
c. Finally, the Court must construe the clause in context and have regard to the factual matrix at the date at which the contract was made.
a. In the Defence, it is alleged that Mr Coppage "was a key figure in its business operation being the main person who was able to and did bring and retain new business though not all clients were obtained through the first defendants"
b. In Mr Bhogal's (his erstwhile solicitor) witness statement, he states that Mr Coppage "held a high level of responsibility and responsible for the general operation of the Company as a whole" and Mr Coppage "was marketed as the face of the Company" .
c. In his witness statement Mr Coppage boasts: "I was responsible for at least one fifth of the Claimant's client base and income as a result of my pizzazz for business development and expansion"
d. In his affidavit Mr Coppage's states: "Mr Hanley wanted me to be the face of his business"
e. Mr Ali, a Defence witness states: Mr Hanley "had employed Lenny to be the face of the business and develop it as such'.
a. Mr Coppage played a large role in the Claimant and as "the face" of the Claimant he was readily identifiable with the goodwill built up within the Claimant's customer base; and
b. Mr Coppage admitted in cross examination that he had contact with all of the customers of the Claimant since taking on the role of Operational Director in May 2010.
' 'MMs Enright's counsel refers the Authority to Black's Law Dictionary definition of a non-solicitation agreement as this:-
"A promise in a contract for the sale of a business, a partnership agreement, or an employment contract, to refrain, for a specified time, from either (1) enticing employees to leave the company or (2) trying to lure customers away".
 It is also submitted that if solicit means to entice, then appropriate synonymous for 'entice' include "tempt", "lure", "persuade", and "inveigle". I accept that solicit should be interpreted similarly.
 In Sweeney v Astle Stout J noted that 'solicit' was a common English word, and in its simplified form meant 'to ask' and that its other meanings included 'to call for', 'to make request', 'to petition', 'to entreat', 'to persuade'.
 The Employment Court in Deloitte & Touche Group-ICS Ltd v Halsall referred to Sweeney and also the Shorter Oxford Dictionary definition "to seek assiduously to obtain", "to ask earnestly or persistently for" and 'request' or 'invite'. More recently,
the High Court in TAP (New Zealand) Pty Ltd v Origin Energy Resources NZ Ltd considered that solicit in its ordinary use "has connotations of impropriety or persistence" and then cited the definition from the Shorter Oxford Dictionary that had
also been referred to in Deloitte.
 It matters not who initiates the contact. The question of whether solicitation occurs depends upon the substance of what passes between parties once they are in contact with each other. There is solicitation of a client by a former employee if the former employee in substance conveys the message that the former employee is willing to deal with the client and, by whatever means, encourages the client to do so.
 In my view, "canvass" is synonymous with soliciting. Both words involve an approach to customers with a view to appropriating the customer's business or custom. I consider a degree of "influence" is required. There must be an active component and a positive intention'.
Findings of fact and evaluation of the evidence
". . . Faced with a conflict of evidence on an issue substantially effecting the outcome of an action, often knowing that a decision this way or that will have momentous consequences on the parties' lives or fortunes, how can and should the judge set about his task of resolving it ? How is he to resolve which witness is honest and which dishonest, which reliable and which unreliable? . . .
The normal first step in resolving issues of primary fact is, I feel sure, to add to what is common ground between the parties (which the pleadings in the action should have identified, but often do not) such facts as are shown to be incontrovertible. In many cases, letters or minutes written well before there was any breath of dispute between the parties may throw a very clear light on their knowledge and intentions at a particular time. In other cases, evidence of tyre marks, debris or where vehicles ended up may be crucial. To attach importance to matters such as these, which are independent of human recollection, is so obvious and standard a practice, and in some cases so inevitable, that no prolonged discussion is called for. It is nonetheless worth bearing in mind, when vexatious conflicts of oral testimony arise, that these fall to be judged against the background not only of what the parties agree to have happened but also of what plainly did happen, even though the parties do not agree.
The most compendious statement known to me of the judicial process involved in assessing the credibility of an oral witness is to be found in the dissenting speech of Lord Pearce in the House of Lords in Onassis v Vergottis  2 Lloyds Rep 403 at p 431. In this he touches on so many of the matters which I wish to mention that I may perhaps be forgiven for citing the relevant passage in full:
''Credibility' involves wider problems than mere 'demeanour' which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person telling something less than the truth on this issue, or though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by over much discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part."
Every judge is familiar with cases in which the conflict between the accounts of different witnesses is so gross as to be inexplicable save on the basis that one or some of the witnesses are deliberately giving evidence which they know to be untrue . . . . more often dishonest evidence is likely to be prompted by the hope of gain, the desire to avert blame or criticism, or misplaced loyalty to one or other of the parties. The main tests needed to determine whether a witness is lying or not are, I think, the following, although their relative importance will vary widely form case to case:
(1) the consistency of the witness's evidence with what is agreed, or clearly shown by other evidence, to have occurred;
(2) the internal consistency of the witness's evidence;
(3) consistency with what the witness has said or deposed on other occasions;
(4) the credit of the witness in relation to matters not germane to the litigation;
(5) the demeanour of the witness.
The first three of these tests may in general be regarded as giving a useful pointer to where the truth lies. If a witness's evidence conflicts with what is clearly shown to have occurred, or is internally self-contradictory, or conflicts with what the witness has previously said, it may usually be regarded as suspect. It may only be unreliable, and not dishonest, but the nature of the case may effectively rule out that possibility.
The fourth test is perhaps more arguable. . . ."
"And it is not to be forgotten that, in the present case, the Judge was faced with the task of assessing the evidence of witnesses about telephone conversations which had taken place over five years before. In such a case, memories may very well be unreliable; and it is of crucial importance for the Judge to have regard to the contemporary documents and to the overall probabilities. In this connection, their Lordships wish to endorse a passage from a judgment of one of their number in Armagas Ltd v. Mundogas S.A. (The Ocean Frost),  1 Lloyd's Rep. 1, when he said at p. 57:-
"Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth." [emphases added].
That observation is, in their Lordships' opinion, equally apposite in a case where the evidence of the witnesses is likely to be unreliable; and it is to be remembered that in commercial cases, such as the present, there is usually a substantial body of contemporary documentary evidence."
In that context he was impressed by a witness described in the following terms.
"Although like the other main witnesses his evidence was a mixture of reconstruction and original recollection, he took considerable trouble to distinguish precisely between the two, to an extent which I found convincing and reliable."
That is so important, and so infrequently done."
11. By the end of the judgment, it is clear that what has impressed the judge most in his task of fact-finding was the absence, rather than the presence, of contemporary documentation or other independent oral evidence to confirm the oral evidence of the respondents to the proceedings.
12. There are many situations in which the court is asked to assess the credibility of witnesses from their oral evidence, that is to say, to weigh up their evidence to see whether it is reliable. Witness choice is an essential part of the function of a trial judge and he or she has to decide whose evidence, and how much evidence, to accept. This task is not to be carried out merely by reference to the impression that a witness made giving evidence in the witness box. It is not solely a matter of body language or the tone of voice or other factors that might generally be called the 'demeanour' of a witness. The judge should consider what other independent evidence would be available to support the witness. Such evidence would generally be documentary but it could be other oral evidence, for example, if the issue was whether a defendant was an employee, the judge would naturally consider whether there were any PAYE records or evidence, such as evidence in texts or e-mails, in which the defendant seeks or is given instructions as to how he should carry out work. This may be particularly important in cases where the witness is from a culture or way of life with which the judge may not be familiar. These situations can present particular dangers and difficulties to a judge.
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.
a. He preferred to repeat the unpleaded, irrelevant and unsubstantiated allegations against Mr Hanley to try to damage Mr Hanley's credibility in preference to answering the straightforward questions that he was asked.
b. His evidence is not borne out with the contemporaneous evidence before the Court. For example, no evidence has been produced in relation to alleged police involvement or Mr Coppage's alleged early attempts to seek legal advice from the Citizens Advice Bureau. The contemporaneous note of the second redundancy meeting on 16 April said to have been made by Mr Coppage a day or two after the meeting, and only produced in disclosure rather than at the time of the injunction application, does not bear out Mr Coppage's pleaded case that on "16 April, Mr Hanley offered to reemploy in the same role at a reduced salary".
c. Though never raised previously, Mr Coppage questioned the authenticity of his signature on the Claimant's internal Form EE confirming receipt of a written statement of terms and the employee handbook and his own standard disclosure document. He spent a period of time in cross examination considering whether his signature at the bottom of each page of the 12 and 16 April meeting notes was indeed his. This gave the impression that Mr Coppage was unwilling to agree to having signed documents that he perceived as being unhelpful to his case.
d. Mr Coppage had no explanation as to why the statement of his former solicitor Mr Bhogal asserted that "neither Defendant approached any customers of the Claimant" or why his statement dated 17 July 2012, whilst not specifically asserted, very much gives the impression that there was no contact at all between himself and the customers when in reality there was a large level of both telephone and text traffic. In the circumstances, where disclosure of Mr Coppage's telephone records was only forthcoming following a formal application at a contested hearing on 27 July 2012, Mr Coppage has sought to deliberately mislead the Court. Mr Coppage's subsequent affidavit, dated 3 August 2012, seeking to suggest that whilst there was contact, such contact was strictly personal in nature, has to be considered in the light of the earlier blanket denial of any contact.
e. Mr Coppage had no explanation as to why his solicitors wrote to the Claimant's legal representatives on 29 June 2012 asserting that "the communication between Mr Coppage and the customers is personal in nature and does not have any relevance to these proceedings" whereas his own evidence was that he checked for messages in the week beginning 28 May 2012, one month earlier, and at that time discovered that the messages no longer existed. The adverse inference to be drawn is that Mr Coppage purposefully deleted his text messages at some time after 29 June 2012.
f. Mr Coppage even lied on his Facebook page: he claimed to be an ex SAS Officer and did not reveal he was an ex police office when asserting his credentials in security.
a. The notices of termination of services from each of the customers from 18th April 2012 to 30 April 2012 are similarly worded. There is a repetitive use of the phrases "company restructure" and "after careful consideration".
b. In the face of a specific direction of the Court that the customer evidence be given consecutively with witnesses only being allowed into Court once they had given their evidence, so as to diminish any collusion, the Defendants, their Counsel and all of the customers who attended court to give evidence defied that court order and attended a pre-hearing conference together.
Breach of fiduciary duty
a. Mr Hadley's primary employment was an apprentice electrician.
b. Mr Hadley, having spent approximately four years training to become an electrician, one month shy of qualification, decided to start a security company.
c. Mr Hadley's decision to start a new company coincided with Mr Coppage's resignation from the Claimant. Mr Coppage resigned and approximately one hour later Mr Hadley resigned.
d. There were 62 calls from Mr Coppage to Mr Hadley between 12 April and 30 April and 84 text messages from Mr Coppage to Mr Hadley in the month of April. Mr Hadley sought to persuade the Court that these conversations were restricted to discussions of Mr Coppage's emotions. There is a 19 year age difference between Mr Coppage, who was born on 28 October 1971 and Mr Hadley, who was born on 9 September 1990.
e. In terms of security experience, Mr Hadley has only ever worked as a door supervisor. He did not have any managerial experience. He did not have any knowledge of compliance matters within the field of security.
f. Mr Hadley seemed hesitant in recalling the start-up capital for his first and only company.
g. Beyond having been taught how to issue an invoice during the course of his primary employment as an electrician, Mr Hadley has no knowledge of accounts, payroll or HMRC matters.
h. Mr Hadley seemed unsure of the first customer of his first and only company.
i. Mr Hadley did not have a business plan and admitted that he did not know the nuts and bolts of the security industry (SIA accreditation, vetting and insurance). His hope was that Mr Coppage would assist at some time.
j. Mr Hadley was aware that his own contract contained a non-solicitation clause but did not recollect whether he was aware of the same clause in Mr Coppage's contract.
The Claimant's loss
Duty to Provide Work
a. Mr Coppage's earnings did not vary according to the work he carried out. Mr Coppage's allegations in this respect were expressly denied by Mr Hanley and are not borne out by any documentary evidence.
b. Mr Coppage was not dependant on publicity in the manner an actor or singer is; and
c. There was no risk that Mr Coppage's door security and/or business development skills would atrophy through lack of use. Indeed, the Court is reminded that in the context of the Counterclaim, the allegation of breach of contract by non-provision of work relates to a period of two days from Monday to Wednesday to allow Mr Coppage to reconsider his wish to be made redundant and give him a period of time in which to relax and think clearly.
Repudiatory Breach and Causation
a. in that the Claimant was conducting a sham redundancy exercise, thus breaching the implied term of trust and confidence; and/or
b. in that Mr Coppage was placed on gardening leave without having been served with a notice of termination, in breach of the terms of the employment contract.
a. The redundancy process was not a device to impose a unilateral salary reduction. As is set out in his evidence, in April 2012, Mr Hanley had taken the view that there was no need for the Claimant to employ a Business Development Director and he was looking to take more of this function back to himself. At the onset of the process, notification to Mr Coppage, Mr Hanley was open-minded as to whether Mr Coppage could be retained and the consultation letter provided on 12 April 2012 is consistent with this.
b. As to Mr Coppage being placed on gardening leave on 16 April 2012, the meeting notes make it clear that Mr Hanley was not dismissing Mr Coppage but rather imposing what might have been more accurately described as compassionate leave in the face of being told that Mr Hanley had not eaten or slept all weekend.
c. The email of resignation sent by Mr Coppage to Mr Hanley is friendly and up-beat in tone. There is no suggestion of a fundamental breach by the Claimant or acceptance of the same by Mr Coppage. It is also of note that despite four pre-action letters Mr Coppage first made an allegation of constructive dismissal in response to the issue of these legal proceedings. There is no evidence beyond Mr Coppage's recollection that he sought to pursue the Claimant for an alleged breach of the employment contract prior to the issue of these proceedings. No claim has been made by Mr Coppage to the Employment Tribunal.
d. Moreover, it is specifically denied that Mr Coppage chose to resign from the Claimant by virtue of anything said or done on 16 April 2012. Mr Coppage had already made his decision to leave the Claimant on 15 April 2012 and he confirmed this to Mr Pryce in a text message sent on that day when he said 'I'm happy knowing I am leaving'. .
e. In any event, Mr Coppage could have seen through the redundancy process before making a rash decision that the process was a subterfuge. Mr Coppage failed to make use of the Claimant's clearly set out grievance procedure or to express any discontent at all. In my judgment, Mr Coppage successfully used the problem of his potential redundancy to create an opportunity to "go alone".