QUEENS BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
B e f o r e :
|EXCELERATE TECHNOLOGY LIMITED||Claimant|
|(1) LINDSAY CUMBERBATCH|
|(2) RED FOOT TECHNOLOGIES LIMITED||Defendants|
Gary Selfe (Counsel) Direct Access for the Defendants
Crown Copyright ©
a. non-compete: not to be employed or engaged by or otherwise interested in or concerned with any concern which competes with any business of the Company in which he was involved during the last 12 months of his employment;
b. non-dealing: not in competition with any business of the company in which he was involved during the last 12 months of his employment to deal with or accept orders from any third party with whom he had personal dealings within the last 12 months of his employment and who was a customer, agent supplier, investor or distributor of the Company or who was negotiating or contemplating doing business with the Company;
c. non-solicitation: not in competition with any business of the Company in which he was involved during the last 12 months of his employment solicit business or orders or canvass or facilitate the soliciting or canvassing of business or orders from any third party with whom he had dealings with during the last 12 months of his employment and who was a customer, agent supplier, investor or distributor of the Company who was negotiating or contemplating doing business with Company.
a. they knew of, and appreciated the import of, the covenants;
b. the Second Defendant was set up in competition with the Claimant, having its domain name registered on 11th August 2011 before incorporation on 5th September 2011 with Messrs Osmond and Vincent as shareholders and directors.
c. the First Defendant was informally involved with the Second Defendant through Mr Osmond during the 12 month covenant period;
d. The Second Defendant solicited and procured business with the Claimants former coach building partner, Bence, during the restricted period in relation to two specific projects: a contract with Cleveland Field Services ['CFS'] and Mobile Breast Screening ['MBS'] – the former being taken over from the Claimant and the latter one in which the Claimant had shown some prior interest;
e. The First Defendant worked at Bence's premises during the period of restriction; and
f. The First Defendant openly joined the Second Defendant as soon as his restriction period had elapsed in August 2012.
''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."
This is amplified by Lord Goff in Armagas Ltd v. Mundogas S.A. (The Ocean Frost),  1 Lloyd's Rep. 1, 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].
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. [emphasis added].
(1) By the setting up of Red Foot and Mr. Cumberbatch's involvement in Red Foot (a) did Red Foot compete with Excelerate (b) did Mr. Cumberbatch breach his non-compete covenant and (c) did Red Foot induce that breach ?
a. Mr. Cumberbatch, alone had the technical knowledge and expertise to undertake mobile broadband to ERV's at the time, having acquired the same during his employment with the Claimant – hence the covenants.
b. Mr. Cumberbatch, had surreptitiously obtained and retained confidential customer and supplier lists of the Claimant that facilitated direct competitive activity by himself, Mr Osmond and Red Foot.
c. During the traumatic month of July 2011, Mr Cumberbatch suddenly made 14 phone calls and sent 8 (still undisclosed) texts via his Excelerate mobile phone to Mr Osmond; requested, obtained and retained the highly confidential information concerning the end dates of vital HART contracts prior to the Red Foot domain name being registered on 19th August 2011 and Red Foot being incorporated with Mr Osmond and another as shareholders and directors just 5 days after the compromise agreement.
d. The Red Foot name, website, fictitious technical director of Gill Welch, e-mail addresses, social media and company proposals and revealed documentation all configure to Mr Cumberbatch being the founder and shadow technical director of the company, as he admitted at an Emergency Services Show after his restraint period had expired:
i. It is common ground that the name Red Foot has a connection with Mr Cumberbatch who has Barbadian heritage and connection and no connection with Mr Osmond. The explanation provided by the Defendants that Mr Osmond chose it hoping to flatter Mr Cumberbatch so he would join him is nonsense; Mr Cumberbatch, who had lost his job, was always going to join Red Foot. Such nonsense is accompanied by inconsistency. First, Mr Osmond explained that he had chosen Red Foot as a company name in September 2011, whereas it was in fact chosen as the domain name in August 2011. Second, Mr Osmond's explanation that he discovered the name by googling indigenous Caribbean wildlife is demonstrably false.
ii. In his 'Linked In' entry, Mr Cumberbatch variously describes himself as being or having been a director of Red Foot.
iii. There are e-mail addresses for Mr Cumberbatch and Gill Welch at Red Foot but, despite numerous requests there has been no disclosure of those accounts. In one e-mail tracked down of 17th May 2012, Gill Welch states that he is copying in "our MD" and copies in Mr Osmond. This indicates that Gill Welch is not Mr Osmond.
iv. At a secretly recorded interview at the Emergency Services Show on 21/22 November shortly after the expiry of the covenants, Mr Cumberbatch explained that Red Foot was his company, that he did all the IT and that Mr Osmond was his partner.
v. A Project M proposal for an ESA grant of 410k euros. for Mobile Breast Screening describes Mr Cumberbatch as the Technical Director and as having an equity interest. This document was part of the procurement of an ESA grant of E 410,000. On Ds' case, that grant was obtained on the basis of misleading information. On C's case it represents the true position throughout, namely that LC is a shadow director of D2 and is beneficially interested as an owner of D2.
vi. There have been a number of inconsistent and evasive responses to requests by the Claimant to clarify the relationship of the Defendants to one another. In a letter from Mr Osmond to Willans (solicitors for the Claimant) of 31st August 2012, he denied Mr Cumberbatch was an employee of Red Foot but asserted he might be recruited – despite what is now an accepted fact that he was working on CFS at least from the first of that month. In a further letter of 17th September, he denied Mr Cumberbatch was a shareholder, director or employee. In a letter dated 24th September, from the Defendants' former solicitors, Davies & Partners, there is a significant failure to explain the relationship between the Defendants.
vii. Red Foot website describes a business directly competitive with that of the Claimant. The content demonstrates a detailed knowledge of satellite transmission that Mr Cumberbatch was familiar with from his time at the Claimant, unlike Mr Osmond. 'Gill Welch' therein describes a person identical to Mr Cumberbatch, not Mr Osmond or anyone else. Gill Welch is described as the 'founder' of Red Foot. The Claimant contends the founder of Red Foot is Mr Cumberbatch/ Gill Welch. Various inconsistent explanations have been given for the Gill Welch entry. In correspondence Mr Osmond stated that it was an amalgam of potential subcontractors and consultants and had been posted in error by a marketing consultant. However, there has been no disclosure of any communications between Mr Osmond and the "marketing consultant". In his oral evidence Mr Osmond stated that the website had been dictated by him to the website designer without any documentation being created. In the Defence, it was contended that it was posted to encourage business and to lend credibility, that being said to be normal marketing activity; that is inconsistent with it being posted in error. It is also inconsistent with the claim that Red Foot had neither facility to nor intention of trading. In Mr Cumberbatch's first witness statement, he said it was just content to fill the site which was then forgotten about. In answer to correspondence about an email from Gill Welch, Davies & Partners asserted Mr Osmond was contemplating having an "Ask Gill" feature on the website. None of these contradictory explanations are credible. They are based on a deceit in that it was being represented to the public that Red Foot had a technical resource available to it that they did not have. The inescapable truth is that they did not misrepresent the position because Lindsay Cumberbatch was Gill Welch and he was available to Red Foot and was its technological founder with a business partner in Mr Osmond.
viii. When the Claimant discovered through his Linked In entry that that Mr Cumberbatch was involved with Avanti, a supplier of bandwidth, they were concerned that his activity was likely to be competitive. The Defendants admit that it is the bandwidth supplier Red Foot has used for both CFS and MBS. When Gary Hopkins of the Claimant, raised with Mr Cumberbatch his involvement with Avanti, his first reaction was to deny it and claim that someone else must have put it there. Mr Cumberbatch removed it from his entry. His explanation was that he removed it because he did not want to upset Mr Savage. He certainly achieved that as it alerted the Claimant as to Mr Cumberbatch's contractual betrayal. In my judgment, he knew he was caught out and removed it in order to try to conceal his link with Red Foot and active promotion of competitive business with Excelerate.
e. Mr Cumberbatch was working at Bence premises during his restraint period at a time when Red Foot were in collaboration with Cleveland Fire Services for a new contract.
(2) Did Mr Cumberbatch provide Red Foot with confidential information, namely the renewal dates for HART contracts and did Red Foot induce that breach of confidentiality?
(3) Did Mr Cumberbatch through Red Foot solicit renewal business from Dave Berry at NWAT and thereby compete with the Claimant and did Red Foot induce that breach? Was the Claimant's confidential information used in that process ?
(4) Did Mr Cumberbatch provide confidential information to Bence regarding contract specification and change notices and did Red Foot induce that breach of confidentiality?
(5) Did Mr Cumberbatch through Red Foot attempt to take over the existing HART contracts in breach of confidence and in breach of non compete / non solicitation covenants and did Red Foot induce that breach?
(6) Did Mr Cumberbatch through Red Foot work from / deal with Bence / compete with Excelerate regarding CFS ?
(7) By their involvement in MBS and their involvement with Bence on that project was Mr Cumberbatch in breach of fiduciary duty by exploiting a business opportunity, did Mr Cumberbatch exploit Excelerate's confidential information and was Mr Cumberbatch in breach of his covenants not to canvass or solicit orders or compete ? Did Red Foot induce any breaches of covenant and was it knowingly involved in any breaches of fiduciary duty or breaches of confidence?
a. The Defence dated March 2013 states that Project M is Red Foot's project with which Bence is assisting and it had had spent the last 18 months developing it viz: September 2011.
b. In the Further and Better Particulars of the Defence, it is stated that Mr Cumberbatch's discussions with Bence were initially in the latter part of 2011 but that the Defendants and Bence did not become involved in Project M until March 2012.
c. The Defence also states that Mr. Brown had suggested MBS to Mr. Savage but he was not interested. However, this is not supported by any witness evidence and is contrary to the unimpeachable evidence of Mr Savage and the contemporaneous documentation such as the Bence/Excelerate meeting minutes of 20th October 2011.
d. The Defence also states that Mr Brown suggested the Project to Mr Cumberbatch following the termination of his employment i.e. consistent with a date in September 2011.
e. In Mr Cumberbatch's first witness statement, he says he was asked by Red Foot (not Mr Brown) in September 2011 to assist with Project M. In his current statement he says that MBS was first discussed at a meeting at Bence attended by himself and Mr Osmond in January 2012. Mrs Brown supports this latter version.
f. As for Mr Osmond, he contends in his witness statements that he (not Mr Cumberbatch) was approached by Mr Brown about MBS in late 2011.
g. MBS was part of the planned Red Foot business from the outset as shown by reference to it on its website which was posted at the latest in December 2011.
(8) What remedies are available to C consequent upon any findings of breach of duty, whether contractual, tortious or fiduciary?
His Honour Judge Simon Brown QC
Specialist Mercantile Judge
Birmingham Civil Justice Centre
Clerk: Helen Foster
Tel: (0121) 681 3033
IN THE HIGH COURT OF JUSTICE CLAIM NO. 3BM40042
QUEENS BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
BEFORE HIS HONOUR JUDGE SIMON BROWN QC
16 January 2015
The following costs (excluding VAT) are considered to be prima-facie reasonable:
(A) Costs for hearings 19.11.14 and 12.01.15 £ 6,985.00
(B) Costs for Claimant's application 09.12.14 £ 1,782.50
(C) Costs re First Defendant's IVA £ 3,562.50
His Honour Judge Simon Brown QC
Specialist Mercantile Judge
Birmingham Civil Justice Centre
Clerk: Helen Foster
Tel: (0121) 681 3033