Claim No. 1LS40811

Neutral Citation Number: [2013] EWHC 2825 (QB)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
LEEDS DISTRICT REGISTRY
MERCANTILE LIST

18 September 2013

His Honour Judge Saffman 
sitting as a Judge of the High Court

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BETWEEN:

MANUFACTURING EXCELLENCE LIMITED
Claimant

-and-

STEVE HEMMING trading as HEMMING-MANN LIMITED
GRAHAM HILL trading as GRAHAM HILL TRAINING
ALASTAIR BIRKHEAD
PARALLAX PARTNERS LIMITED
Defendants

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Mr S Fletcher for the Claimant
Mr G Willetts for the First Defendant
Second Defendant and Third Defendant in person
Fourth Defendant represented by Third Defendant pursuant to CPR 39.6

Hearing date: 24 to 28 June 2013 
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JUDGMENT
Introduction

1.	In this case the claimant, Manufacturing Excellence Ltd, is represented by Mr Stephen Fletcher of counsel and the first defendant, Mr Steve Hemming by Mr Glenn Willetts of Counsel.  The second defendant, Mr Graham Hill and the third defendant, Mr Alastair Birkhead both act in person.  Mr Birkhead also represents the fourth defendant, Parallax Partners Ltd (PPL) having been given authority to do so on the first day of the hearing pursuant to CPR 39.6 and having filed a written statement complying with CPR39 APD 5.2.

2.	The claimant's business is to provide training and consultancy advice to other companies who seek such help in order to improve their business operations.  Its main area of business is in the field of Lean consultancy and training and Business Improvement Techniques (BIT) which the claimant’s managing director, Mr Paul Bell describes as a means of delivering Lean consultancy.  Such training is aimed at assisting businesses to eliminate waste and make better use of their resources.  The process often, but by no means always, involves the claimant delivering training, assessment and verification for National Vocational Qualifications (NVQs) for selected members of its customer’s workforce.  In the claimant's case this was usually BIT (Business Improvement Techniques) NVQs level 2 and 3.  The claimant also offers leadership and management training to businesses independent of NVQs.  Its position therefore is that its business is not confined only to the delivery, assessment and verification of BIT NVQs level 2 or 3.  It can, and does, offer bespoke training and consultancy.  At the relevant time the claimants work split was about 60% to 70% in favour of BIT NVQs and the balance was bespoke.

3.	One of the attractions of these BIT NVQs so far as the claimant's customers are concerned is that Central Government often provides funding for the attainment of this qualification.  That obviously benefits the individual who gains the qualification and the company for whom he/she works.

4.	As I understand it, the funding is provided through initiatives that change from time to time.  The ones which were referred to in this case are "Train to Gain" and its successor "Modern Apprenticeship".  The funding from Government is provided to a funding agency which in turn contracts with accredited business trainers/consultants such as the claimant.  The claimant in the relevant period for the purposes of this claim dealt predominantly with 2 such funding agencies, A4e and Bradford College.  No funding is available for bespoke training/consultancy.

5.	The 2nd and 3rd defendants worked for the claimant as what the parties describe as an “associate” but which is perhaps more generally recognised as a self employed consultant.  Mr Hill had never been employed by the claimant but the 3rd defendant, Mr Birkhead had.  He had been made redundant from his position as a member of a management team directly employed by the claimant in March 2010.  Thereafter he became an associate in the same way as Mr Hill.

6.	Both were taken on as associates pursuant to written agreements entered into by Mr Hill in or about April 2007 and by Mr Birkhead in about June 2010.  In the court bundles these agreements are at C2:221 and C1: 69 respectively.

7.	The claimant said that in about May 2007 Mr Hemming entered into a contract similar to those of Mr Hill and Mr Birkhead.  This contract is at C1: 21.  I shall refer to it and Mr Hill and Mr Birkhead’s contracts as the "Relevant Contracts".

8.	Mr Hemming denied that he personally was a party to the contract of May 2007.  He contended that that contract was made between the claimant and Hemming Mann (Interim Management) Ltd (HMIM), a company incorporated in 1999 and in respect of which Mr Hemming was a director and employee.  His evidence was that it was a vehicle for the continuation of the provision of management consultancy and interim management services which, prior to HMIM’s incorporation, had been conducted first by him as a sole trader and subsequently in partnership. The contract does not actually refer to HMIM, it refers to Hemming-Mann Ltd. Mr Hemming argued that this is simply a misnomer for HMIM.

9.	It should be said that this contract of May 2007 was preceded by an earlier contract of 2005 between the same parties (either the claimant and Mr Hemming, as the claimant contended or the claimant and HMIM, as Mr Hemming contended).  This contract took effect from the 1 October 2005 and was expressed to terminate on 31 March 2006.  It is at C1: 1 of the bundle.

10.	I shall of course refer to the Relevant Contracts in more detail below.  For current purposes it is sufficient to record that they contain provisions imposing restrictions on the activities by the consultants which are designed to protect the claimant's business both during, and for 6 months after the expiry of, the respective agreements.  They are set out in detail in the amended particulars of claim which starts at A: 3 but for this purpose the relevant pages are A: 6 to 9.

11.	The claimant contended that the defendants are in breach of the provisions of the Relevant Contracts by reason of their approach to, and dealings with, customers of the claimant both pre and post the termination of the Relevant Contracts.  These contracts were terminated on 24 November 2010 by letter to that effect to each defendant sent by the claimant's solicitors.  These letters are at D1:178.

12.	In addition the claimant contended that the actions of the three defendants constituted a breach of their duties of fidelity and confidence to the claimant both impliedly, under the terms of their engagement, and arising out their position as agents of the claimant.

13.	In addition to its claims for breach of contract and breach of confidence and fidelity, the claimant also asserts that all defendants including the 4th defendant, PPL are tortfeasors.

14.	PPL was incorporated on 8 September 2010.  Messrs Hemming, Hill and Birkhead were its directors and shareholders.

15.	The claimant alleged that all the defendants conspired to use unlawful means to injure or damage the claimant’s economic interests and that the claimant was caused loss as a result.

16.	Further, the claimant alleged that all the defendants are guilty of inducing each of the first three defendants to breach their respective agreements.

17.	Further, the claimant alleged that the defendants are constructive trustees of the business opportunities which they allege the defendants have converted to themselves.

18.	The claimants argued that the defendants conduct has caused it to suffer loss which, for the purposes of this litigation, they are prepared to confine to the loss of work from 7 specific clients.  The claim totals £195,222 and is calculated by Mr Graham Garbett, an expert forensic accountant instructed by the claimant, whose report is at B1: 1.

19.	Leaving aside the issue of whether Mr Hemming was ever a contracting party which is a defence unique to him, the defendants contended that no liability arises to the claimant in any event and if it does the damages cannot exceed £70,490.  This is the figure calculated by the defendants’ expert forensic accountant, Mr Simon Paley by adopting the same approach as Mr Garbett but adjusted to take account of what Mr Paley considers to be errors or inappropriate assumptions on the part of Mr Garbett.  Mr Paley's report commences at B1: 37.

20.	I shall of course deal with each claim and the defence to it as necessary in more detail below but for current purposes it is sufficient to note that the defences broadly (over and above the defence unique to Mr Hemming) are as follows:

21.	First, so far as the 1st and 2nd defendants are concerned, their contracts expired well before any of the acts complained of occurred.  Mr Hemming points out that the contract wherein his services are offered expired on 31 March 2008 and post termination restrictions therefore terminated on 31 September 2008.  Mr Hill says his contract and post termination restrictions also expire on those dates.  They contend that none of the matters complained of by the claimant occurred in the period when the 1st and 2nd defendants’ contracts applied.

22.	Their respective contracts do provide some machinery for extension.  That machinery is contained in clause 4 .1 which provides that the contract will be renewed by an exchange of letters if it is to be renewed on the same terms except those involving fees payable for services supplied.  If other terms of the contract were to be changed then an exchange of letters would not suffice, instead there would have to be a new contract.

23.	Mr Hemming and Mr Hill argued that the appropriate machinery was not actioned.  In neither case was a letter renewing their contracts exchanged and thus their contracts expired on 31 March 2008 and post termination restrictions ceased to apply 6 months later.

24.	This argument is not open to Mr Birkhead.  His contract, having been entered much later than that of the other two, was not due to expire until 31 March 2011.  The actions about which the claimant complains are covered by the period during which that contract was extant and the 6 months thereafter.

25.	Furthermore, for reasons which I shall also deal with later, Mr Hemming and Mr Hill denied, as contended by the claimant, that these contracts can be regarded as being extended by implication, waiver or estoppel.  They said that work done on behalf of the claimant's after the expiration of their respective agreements was done mainly on an ad hoc basis.

26.	Furthermore, and these following arguments are ones to which Mr Birkhead also avails himself:

27.	That on a proper construction of the restraint of trade clauses which the claimant prays in aid of its claim, they do not prevent any of the individual defendants from taking the action about which the claimant complains.

28.	Next, that the clauses which the claimant seeks to enforce are not enforceable because they go further than is reasonably necessary to protect the claimant's legitimate interests, in accordance with ordinary principles relating to restraint of trade.

29.	The individual defendants disputed that their status as consultants gives rise to implied duties of confidentiality and in any event, they deny that they have utilised any information that is protected information in the sense envisaged in the seminal case of Faccenda Chicken v Fowler. Further, as far as the complaint by the claimant is wrongful use of the claimant's training materials and manuals, they deny they have done so either in breach of the claimant’s copyright or indeed otherwise.

30.	As regards the suggestion of implied duties of fidelity, the defendants contend that in the circumstances of this case and bearing in mind the actual nature of the defendants’ relationship with the claimant, any fiduciary obligations do not extend so far as to render their conduct unlawful.

31.	The defendants do not accept that the facts of the case establish the commission of any economic tort as alleged by the claimant.

32.	Finally, there is significant dispute on the question of quantum should any breach of contract, express or implied or any economic tort be established.

33.	I have already mentioned that each party has the benefit of a report of a forensic accountant to address the issue of damages.  Counsel for the claimant and the 1st defendant and Mr Hill and Mr Birkhead agreed (Mr Birkett for himself and PPL) that the expert joint statement at B1: 75 suggests that the experts will be able to agree losses once the underlying basis for their calculation is determined.  It was therefore agreed by all advocates at the outset of the case that accordingly the experts need not be called at this stage.  If necessary, and a breach of contract or the commission of a tort is established, this draft judgment will be sent to them having delineated within it, the parameters that hopefully will enable them to reach an agreed position on quantum.

34.	I heard evidence from a number of witnesses during the 5 days that this case was heard.  It strikes me that it is helpful, rather than to recount the salient details of the evidence of each witness en bloc, to consider the evidence as far as it is relevant to each issue upon which I have to decide.

Is Mr Hemming a party to the contract?

35.	I shall deal first therefore with whether Mr Hemming was a party to the contract of May 2007 and the position in terms of his status after it expired.

36.	This issue is in itself in two parts.  The first part is whether, even if Hemming-Mann Ltd and HMIM are the same, the 2007 contract is actually a contract between the claimant and HMIM wrongly described as Hemming-Mann Ltd or whether it is a contract with the claimant and Mr Hemming as an individual.

37.	The second part arises out of the fact that if the contracting consultant in that agreement is Hemming-Mann Ltd then that is a company which does not actually exist.  The company of which Mr Hemming is a director and employee is HMIM.  That is the company which has, as its registered office, the address referred on page 2 of the 2007 contract (C1:22) and the company number and address which appears on the 2005 contract (C1:2).

38.	Mr Fletcher argued that since the company does not exist the contracting party must have been Mr Hemming as an individual. Mr Willetts argued that the contracting company was HMIM which existed throughout the relevant time wrongly described as Hemming-Mann Ltd 

39.	I should emphasise that even if I find that HMIM in the shape of Hemming-Mann Ltd rather than Mr Hemming as an individual was the contracting party then this does not mean that Mr Hemming is out of the woods.  The claimant alleged that if the 2nd and 3rd defendants are in breach of contract then that has come about by the acts of Mr Hemming in concert with other defendants.  The Claimant contended that Mr Hemming unlawfully procured/induced that breach by the 2nd and 3rd defendants and he would have done so in combination with the 2nd to 4th defendants.  As a result the claimant contended he is liable for the consequences of that as a conspirator to interfere with the claimant's economic interests and/or inducement to the 2nd and 3rd defendants to breach their contracts.

Is the contract between the claimant and HMIM or the claimant and Mr Hemming

40.	I shall deal first with the first part of this issue namely whether the 2007 contract was between the claimant and HMIM wrongly called Hemming – Mann Ltd or between the claimant and Mr Hemming personally.

41.	The evidence of Mr Hemming and Mr Roger Lees was germane to this issue.  At the material time Mr Lees was a director of the claimant and was responsible for operations including the preparation of contracts for associates.

42.	The first page of the contract describes it as a consultancy agreement between the claimant and Hemming-Mann Ltd.  The 2nd page (C 1:22) defines the contracting parties as "Manufacturing Excellence Ltd" and "Steve Hemming of Hemming-Mann Ltd" and an address for the consultant which is both Mr Hemming’s home address and the registered office of HMIM.

43.	The execution clause at C1:32 indicates that it is executed as a deed by "Steve Hemming on behalf of Hemming-Mann Ltd"

44.	This contract was not the first written contract governing the supply of services by Mr Hemming.  It was in 2005 that Mr Hemming first came across the claimant in the shape of its managing director Mr Paul Bell.

45.	An agreement was reached which resulted in Mr Hemming carrying out LEAN/AGILE consultancy work for the claimant.  Mr Hemming contended that he did so as an employee of HMIM pursuant to the first written agreement to which I have already referred at C1: 1.  This work ultimately morphed into the provision of NVQ training and assessment.

46.	As with the subsequent May 2007 agreement, this 2005 contract described itself as a consultancy agreement between Manufacturing Excellence Ltd and Hemming-Mann Ltd.  On the 2nd page of the agreement the consultant is described as "Stephen Hemming" and, in a separate box "Hemming-Mann Ltd" and it records the company number of HMIM.  It was executed by Mr Hemming as follows "Stephen Hemming Managing Director for and on behalf of Hemming-Mann Ltd".

47.	Notwithstanding that Mr Bell, as an experienced businessman, understands that a company is a separate entity to its directors, his position was that the contract was with Mr Hemming the individual.  That was his intention and the introduction of the company was at the behest of Mr Hemming to assist him in his accounting.  Mr Hemming said his intention was that HMIM should be the contracting party.

48.	Mr Bell was taken to the 2005 contract by Mr Willetts, not only the clause dealing with the parties and the execution clause but also clause 1.1 which states as follows;

"Manufacturing Excellence engages you to offer the services of Stephen Hemming as a consultant to provide services as set out in clause 1.2 below ……."

49.	It was suggested to Mr Bell that this drew an obvious distinction between Mr Hemming and the company.  Equally clause 9.3 which provides that the name and address to which notices should be sent is Hemming-Mann Ltd and provides an e-mail address and Mr Hemming as "steveHemming@Hemming-mann.freeserve.co.uk"

50.	Mr Bell did not dispute that invoices raised pursuant to that contract and indeed invoices raised following its expiry on 31 March 2006 had consistently been raised by a company describing itself as Hemming-Mann Ltd.  He acknowledged that VAT had been charged on those invoices and that the claimant had paid the invoices and sought to recover the VAT where that was possible.  He said in his evidence that the invoices were not checked closely, they were just paid.

51.	I mention at this point that this 2005 contract contains no post termination restrictions.  They are referred to in the contract at clause 6 but on the basis that they would be covered by a separate agreement.

52.	The May 2007 contract was signed about 14 months or so after the expiry of the first contract.   This contract came about because the work being undertaken by Mr Hemming had expanded from LEAN/AGILE consultancy to the provision of NVQ assessments and implementation of projects.  This new contract was more extensive than the 2005 contract in that it contained post termination restrictions. Subject to that, Mr Bell believed that all services then supplied were supplied on the same basis as was reflected in the first contract.  So far as he was concerned this was on the basis that the contract was with Mr Hemming personally.

53.	I have already referred to the parties as described in 2007 contract and the execution clause in paragraph 43 above.

54.	These are not the only part of the agreement however to which Mr Willetts referred to point up the distinction drawn in the contract between the company and the individual.  He referred me to:

(1)	clause 1.2 which deals with the service the consultant is to provide and in particular the following;

"……….. The consultant declares that Steve Hemming has expertise in Lean manufacturing………."

(2)	Clause 9 which, in common with the 2005 agreement, specifies that notices to be served on the consultant shall be sent to Hemming-Mann Ltd albeit the e-mail has changed to 

"steveHemming@manufacturingexcellence.co.uk"

55.	Once again invoices raised pursuant to this agreement were raised by Hemming-Mann Ltd and paid by the claimant.

56.	Mr Willetts also drew attention to an e-mail at D1: 40 dated 11 December 2009 from Mr Lees suggesting that Mr Hemming should undertake a fully funded BIT NVQ level 2 as an employee of Hemming-Mann.  He suggested that this is evidence that the claimant was aware of the distinction between Mr Hemming and his company.

57.	Mr Fletcher however pointed Mr Hemming to other terms in the 2007 contract which he suggested could only be consistent with the contract being made between the claimant and an individual.  It should be said that Mr Hemming's response to these points was that he never actually checked the 2007 contract which had been prepared and was sent to him by the claimant so he never noticed the inconsistencies.

58.	Mr Fletcher pointed out; 

(1)	The party in the contract is not described in terms as Hemming-Mann Ltd but as "Steve Hemming of Hemming-Mann Ltd"

(2)	 Clause 1.1 is phrased as follows;

"Manufacturing Excellence engages you as a consultant to provide the services ….."

He suggested that the reference to "you" must be to an individual.

(3)	Clause 1.6 which provides as follows;

"You will be free to accept other engagements during the term of this agreement provided that you have obtained prior written consent for each engagement from Roger Lees, Operations Manager.  Consent will be withheld if the engagement conflicts with the interests of Manufacturing Excellence and/or may result in you not devoting the necessary time and attention to perform properly the services under this agreement"

Mr Hemming conceded that this was inconsistent with a contract with a company.  What company would commit itself to seeking permission to enable another person working for that company to undertake an engagement which may have nothing to do with the claimant or its customers?

(4)	Clause 1.7, which enables the consultant to arrange for another person to provide services, would not be necessary if the contract really was with a company because clearly a company per se could not provide the services since it has no corporeal form.

Mr Hemming was not prepared to concede that.  He fairly makes the point that such a clause could equally benefit a company because it provides it with the right to subcontract work.

(5)	Clause 1.9 which contains the sentence;

"……Neither should you correspond with customers and other organisations with whom Manufacturing Excellence have formal relationships using any other branding, either of your own company or yourself as an individual.  Voice mail greetings on your mobile phone should only include your name, not the name of your own company or other trading vehicle"

He suggested to Mr Hemming that this was inconsistent with a contract with a company and clearly defined the word "you" as a reference to an individual.  Once again Mr Hemming's response was that he had not checked this contract and accordingly had not appreciated the inconsistency.'

(6)	The provisions of clauses 4.2.2, 4.2.3 and 4.2.4 (which provided for termination of the contract if the consultant became bankrupt, committed an arrestable offence or became a patient under the Mental Health Act 1983), clause 8.1 (which provided that the contract is not a contract of service but rather a contract for services), clause 8.2.1 (which required the consultant to indemnify the claimant in respect of income tax) and clause 9.7 (which provided for the holding of personal information).  

Mr Hemming agreed that these were inconsistent with a contract with a company.  Once again Mr Hemming indicated that he had not checked this contract and had not appreciated the inconsistencies but nonetheless so far as he was concerned this contract did not mark a change in the manner in which he provided services to the claimant which was, and always had been, since 2005 as an employee of a limited company. 

59.	In his final submissions, Mr Fletcher argued that clauses 1.2 (which provides for the services to the supplied by a consultant), 1.4 (which provides that "you" will be responsible for providing and using your own mobile phone etc)  and 1.8 (which with deals with annual reviews of the contract between "you" and Mr Lees) are equally only consistent with a contract with an individual because there are areas of what Mr Fletcher calls "personal development".

60.	Finally he contended that the restrictive covenants in the contract would be nonsense if the contract applied to a company rather than an individual.  The contact with the claimant's customer was made by the individual, in this case Mr Hemming.  He was the one able to develop a relationship with the customer and it would be nonsensical if clauses to protect the claimant from the damage that may ensue if the consultant abused his position could be sidestepped on the basis that the person committing such abuse was not the contracting party but merely its alter ego.

61.	I should say that the 2005 contract contains all the clauses that Mr Fletcher argues militate in favour of this being a contract with an individual except clauses 1.8  and  1.9 and the post termination provisions.

62.	The issue of who the parties to the agreement were is one of construction.  Mr Fletcher and Mr Willetts were at variance as to the relevant legal principles to be applied as an aid to construction.  Mr Fletcher argued that only the 2007 contract can be considered and if that is unambiguous on the face of it then the parol evidence rule precludes a consideration of extrinsic evidence including the 2005 contract or the relationship between the claimant and Mr Hemming both before that contract and after its expiry.  He referred me to Chitty 31st edition paragraph 12 -- 096 in support of that contention.

63.	Mr Willetts disputed that the parol evidence rule applies in the context of this case or, if it does, the circumstances of this case present an exception to it.  The rule essentially precludes extrinsic evidence which seeks to add to, subtract from, vary or qualify a written contract but in this case Mr Willetts argued that is not the reason why reference can and should be made to the circumstances preceding the 2007 contract including the 2005 contract.  He referred me to Chitty paragraph 12 -- 117 which makes clear that extrinsic evidence is permissible (subject to restrictions which he argued are not applicable here) in circumstances where the intention is not to add to or detract from the wording of the contract but merely to assist in interpreting or explaining a written agreement.  

64.	I refer further to Chitty;

"The modern view is that the words do not have to be vague, ambiguous or otherwise uncertain before extrinsic evidence will be admitted.  Since the purpose of the enquiry is to ascertain the meaning which the words convey to a reasonable person against the available background of the transaction in question.  The court is free (subject to certain exceptions) to look to all the relevant circumstances surrounding the transaction, not merely in order to choose between the possible meanings of words which are ambiguous but even to conclude that the parties must, for whatever reason, have used the wrong words or syntax".  

65.	In addition Chitty specifically states that the identity of parties may be established by extrinsic evidence where it is not clear from the written instrument to whom it refers.

66.	I am satisfied that it is not clear from the written instrument to whom it refers.  It seems to me it is not tenable for the claimant to argue otherwise in the light of the understandable lengths that Mr Fletcher has gone to point out the ways in which the 2007 agreement is inconsistent with the idea that the consultant is anything other than an individual.  

67.	I am, in all circumstances, satisfied that I can take account of extrinsic evidence to establish who the parties actually were to this contract.

68.	So what extrinsic evidence is there to assist in resolving the issue?  Of course there is the 2005 contract with its reference to Hemming-Mann Ltd as well as the inclusion of a company number.  There is also the wording of clause 1.1 of  that contract which provides that the claimant "engages you to offer the services of Stephen Hemming as a consultant".  In addition there is clause 9.1 which provides for notices to be sent to Hemming-Mann Ltd.  Finally of course there is the execution clause wherein Mr Hemming signs as  " Stephen Hemming Managing Director for and on behalf of Hemming-Mann Ltd " 

69.	In addition, there is the fact that it is not disputed by the claimant that it was aware that Mr Hemming had a company.  Mr Lees did not say otherwise and indeed his e-mail of 11 December 2009 which I have referred to, albeit written well after the signing of the 2007 agreement, did not suggest that the existence of Hemming-Mann Ltd was anything other than a given.

70.	In addition of course as part of the factual matrix is the fact that invoices were consistently sent by Hemming-Mann Ltd in respect of the work done by Mr Hemming and were paid by the claimant who recovered such VAT charged on the invoices as was capable of being reclaimed.

71.	Of course I accept that there are clauses in the 2007 agreement and in the 2005 agreement which are not consistent with a corporate consultant or at the least fit uneasily with that concept but in my judgement not as many as Mr Fletcher contends.  I see no inconsistency with the principle of the contracting parties both being companies in the wording of clause 1.1, 1.7, or indeed 1.9 of the 2007 agreement.  There are however other clauses to which he referred which are, I agree, difficult to reconcile with a corporate consultant.  That factor must go into the mix in a consideration of the factual matrix.

72.	Considering the factual matrix I have come to the conclusion that it is quite clear that the parties to the 2007 agreement were the claimant and a company.  I am satisfied that the contracting parties in 2005 were those parties and when that contract came to an end the arrangement, whether it was contractually or merely ad hoc continued on the same basis.

73.	The fact is that the 2007 agreement, as indeed is true of the 2005 agreement, was prepared by the claimant.  It put in the reference to Hemming-Mann Ltd.  Clearly I have no doubt that it was asked to but it was open to the claimant to decline to contract with a company.  There can be no doubt that the effectiveness of the restrictive clauses is considerably diluted in the circumstances, possibly to the point of ineffectiveness but that however was in the hands of the claimant.  The contract does not lack efficacy by virtue of the dilution of the effect of these clauses.  It is simply a contract which in the circumstances disadvantages the claimant, the directors of which were both experienced businessmen.

74.	In these circumstances, in my judgment, if Hemming-Mann Ltd had existed Mr Hemming personally would not bound by 2007 contract and there would be no basis for inferring  that the relationship changed after this contract expired in March 2008.

The effect of the reference to Hemming-Mann Ltd

75.	I now turn to the question of how the fact that Hemming-Mann Ltd does not exist affects that conclusion.  

76.	It is common ground that HMIM has existed since 1999.  It was the evidence of Mr Hemming that in his dealings with the claimant he omitted reference to "Interim Management" from the title because the company had expanded into areas other than interim management.  He dealt with this in his 3rd witness statement at A1:153 paragraphs 4 and 8.  Essentially, informally he shortened the name by the omission of the words "Interim Management".  In the 2005 contract and on all invoices raised in respect of services supplied he used the company number for HMIM.

77.	S.51 Companies Act 2006 which came into effect on 1 October 2009 and s36 (C) Companies Act 2005 which applied before that date both stipulate;

(1)	a contract that purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made by the person purporting to act for the company or as agent for it and he is personally liable on the contract accordingly.

78.	Mr Fletcher argued that this fixes Mr Hemming with personal liability.  Mr Willetts argued it has no application because the relevant time is not a time when the company has not been formed.  The company referred to was HMIM formed in 1999.  The arrangement with the claimant was never intended to be an arrangement with a new company but was always intended to be with HMIM

79.	I am satisfied, for the reasons expressed by Mr Willetts, that s51 has no application here.

80.	Mr Fletcher then contended that there has been a breach of s1202 Companies Act 1986 and the Companies (Trading Disclosures) Regulations 2008 which have been in effect since 1 October 2008.

81.	S1202 states

(1)	a company to whom this chapter applies must state the information required by this chapter in legible characters on all

(a)	its business letters

(b)	written orders for goods or services to the supplied to the business

(c)) invoices and receipts issued in the course of a business

(d)) written demands for payment of debts arising in the course of business

82.	It is not clear to me the 2005 or 2007 agreement fall within (a) to (d) above.  In any event both predate the coming into effect of the Act.

83.	As regards the Companies (Trading Disclosures) Regulations, these were introduced pursuant to s82 Companies Act 1986.

84.	Regulation 6  provides;

Registered name to appear in communications
(1)	Every company shall disclose its registered name on—
(a)	its business letters, notices and other official publications;
(b)	its bills of exchange, promissory notes, endorsements and order forms;
(c)	cheques purporting to be signed by or on behalf of the company;
(d)	orders for money, goods or services purporting to be signed by or on behalf of the company;
(e)	its bills of parcels, invoices and other demands for payment, receipts and letters of credit;
(f)	its applications for licences to carry on a trade or activity; and
(g)	all other forms of its business correspondence and documentation.
(2)	Every company shall disclose its registered name on its websites.

Regulation 7 provides;

Further particulars to appear in business letters, order forms and websites
(1)	Every company shall disclose the particulars set out in paragraph (2) on—
(a)	its business letters;
(b)	its order forms; and
(c)	its websites.
(3)	The particulars are—
(a)	the part of the United Kingdom in which the company is registered;
(b)	the company's registered number;
(c)	the address of the company's registered office;
(d)	in the case of a limited company exempt from the obligation to use the word “limited” as part of its registered name under [section 60 of the Act], the fact that it is a limited company;
(e)	in the case of a community interest company which is not a public company, the fact that it is a limited company; and
(f)	in the case of an investment company within the meaning of section 833 of the Act, the fact that it is such a company.
(4)	If, in the case of a company having a share capital, there is a disclosure as to the amount of share capital on—
(a)	its business letters;
(b)	its order forms; or
(c)	its websites,
that disclosure must be to paid up share capital.
85.	Mr Willetts argued that Regulation 7 is not applicable because the contract does not fall into any of the categories a to c.
86.	Mr Fletcher agreed but contended that Regulation 6 most certainly is applicable.  It should be noted that these Regulations post date the 2007 contract in any event because they took effect on 1 October 2008.  Accordingly they will be applicable to the invoices raised after that date but not to the 2005 or 2007 contract.  Those Mr Fletcher suggests will be covered by s349 Companies Act 1985 now repealed.  

87.	s349 Companies Act 1985 stated as follows;

349.   Company's name to appear in its correspondence, etc.

(1)	Every company shall have its name mentioned in legible characters—

(a)	in all business letters of the company,

(b)	in all its notices and other official publications,

(c)	in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and

(d)	in all its bills of parcels, invoices, receipts and letters of credit.

(2)	If a company fails to comply with subsection (1) it is liable to a fine.

(3)	If an officer of a company or a person on its behalf—

(a)	issues or authorises the issue of any business letter of the company, or any notice or other official publication of the company, in which the company's name is not mentioned as required by subsection (1), or

(b)	issues or authorises the issue of any bill of parcels, invoice, receipt or letter of credit of the company in which its name is not so mentioned,

he is liable to a fine.

(5)	If an officer of a company or a person on its behalf signs or authorises to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque or order for money or goods in which the company's name is not mentioned as required by subsection (1), he is liable to a fine; and he is further personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount of it (unless it is duly paid by the company).

88.	Mr Fletcher contended that the written contract comes within the description of business letters under (a) but, if not it is covered within the description endorsements ….purporting to be signed by or on behalf of the company under (c)  He draws my attention to the fact that non-compliance with s349(1) was an offence under s 349 (2).
89.	Regulation 10 of the Companies (Trading Disclosures) Regulations states that a company and every officer in the company who is in default commits an offence if there is a failure to comply with, inter alia, Regulation 6.
90.	The point made by Mr Fletcher was that it would be improper to construe a contract in such a way that acknowledges the commission of an offence.
91.	I have not been provided with any authority for that proposition but in any event it is Mr Hemming who sought to persuade the court that the contract should be construed in the manner which Mr Fletcher suggested may result in an offence.  In my judgment this is a wholly different situation to one where a construction resulting in the suggestion of an offence is one not asserted by the potential offender.
92.	In all the circumstances, I am not persuaded that the statutory or regulatory provisions assist Mr. Fletcher.  Further I am fortified in that view by the decisions of the Court of Appeal in Oshkosh B’Gosh Inc v. Dan Marbel Inc Limited and Badgerhill Properties Limited v. Cottrell. I recognise that these 2 cases were not actually referred to by Mr Willetts in his final submissions and in my draft judgment sent to the parties on 7 August 2013 I invited Mr Fletcher to make any representations he thought appropriate if he felt that the purport of the cases had been misdescribed to any extent that had a material effect on their relevance.  I have not received any such submissions. 
93.	I trust that Mr Willetts will forgive me for adopting his summary of those cases.  In both of those cases a director of a company had signed contracts or other written documents on behalf of a company but without correctly stating the companies’ registered names.  In the first case the director had signed stating the company’s new trading name (which had not yet been registered at Companies House).  In the second case the company’s headed paper had contained a typographical error such that the company’s full registered name had not been included.  In both cases the plaintiffs claimed that since the company name had not been fully stated that meant that the directors had signed on behalf of a company that had not yet been formed and so were personally liable on the contracts.  The Court of Appeal disagreed in both cases and found that the directors had both plainly intended to contract on behalf of the properly formed and registered companies and had simply misstated the company name and that as such there was no personal liability pursuant to section 36C of the 1985 Act.   
94.	In the Oshkosh case in particular the Court of Appeal took the view that although the company was at the material time acting and trading under an incorrect name it had already been duly formed by its incorporation.   As Balcombe LJ indicated at page 512 of the judgment:
“It seems to me that where the question is whether a contract purports to be made by a company, or a person as agent for a company, it must be a matter of fact which is the company in question.  
Here it is admitted that there was no company actually bearing properly the name Dan Marbel Inc Limited, but nevertheless there was evidence, including the use of Egormight’s number on some of the stationery, from which it is perfectly clear that the company making the contract with which this case is concerned was, or certainly there was evidence which entitled the court to find was, Egormight.”
95.	Finally, I go back to Chitty;

"……….. Extrinsic evidence will also be admitted to show in what capacity the parties contracted: e.g. to show which party was the buyer and the seller, or to correct a misnomer"

96.	I have already been through the extrinsic evidence in connection with the first part of this issue and it seems to me that it is equally relevant to enable me to form the view that the reference to Hemming-Mann Ltd is a misnomer and the correct reference is HMIM.

97.	I am satisfied therefore that this contract was between the claimant and HMIM wrongly described as Hemming-Mann Ltd.

Is HMIM an agent for Mr Hemming as a disclosed principal?

98.	I have considered Mr Fletcher's point that even if the contract was made with Mr Hemming’s company then the company only acted as agent for him and so, as principal, he would still be liable on the contract.

99.	I cannot accept that that is the position.  It completely blurs the distinction between a company and those behind it and the fact that it is trite law that they are wholly different entities.  This contract was, I have found, entered into by a company.  From the claimant's point of view perhaps it ought not to have been or, alternatively perhaps, it ought to have been modified to make Mr Hemming a party to it so he personally could enter into covenants to protect the claimant.  The fact is though that it was entered only by the company as consultant.

100.	A finding that the company had done so as an agent on behalf of Mr Hemming just because, as Mr Fletcher states, HMIM is a corporate vehicle through which Mr Hemming carries out what are otherwise his personal actions would, in my view, be driving a whole wagon train of coaches and horses through the principles developed in Salomon v Salomon and which have been a basic tenet of company law ever since.

Do the contract terms remain in place after 31 March 2008

101.	I now turn to the second issue which is whether the written terms of the contract remain applicable after 31 March 2008 which was the date when the written consultancy contracts expired except for the consultancy of Mr Birkhead which expired on 31 March 2011. 

102.	In light of my finding that Mr Hemming was not personally a party to the 2007 contract this issue no longer affects him directly.  It only directly affects Mr Hill.  It may affect Mr Hemming indirectly in the sense that whatever is the position with regard to Mr Hill, that also, in view of my determination on the first issue determines the terms of the relationship between the claimant and HMIM.

103.	Clause 4.1 of Mr Hill's contract at C2: 226 (which is identical to clause 4.1 in the HMIM contract) stated:

"Subject to the provisions for earlier termination contained in this agreement, this agreement shall continue for a limited period until 31 March 2008.  If agreed by both parties, this agreement may be renewed for additional periods, normally after 12 months duration, by the exchange of letters, which may specify agreed alterations to clause 2.  Renewals requiring changes to additional clauses shall be by means of a new agreement"   

104.	It is not disputed that no such letters were exchanged.  Mr Hill and for that matter Mr Hemming argue that the terms contained in that agreement therefore ceased to have any bearing on the party's contractual relationship from 31 March 2008 which thereafter became an ad hoc arrangement.

105.	The evidence of Mr Lees, Mr Hill and Mr Hemming is relevant to this issue.  I shall deal first with Mr Lees.

106.	His position was that the claimant is a fairly informal company and as a result it was agreed informally that the contract would roll over.  He was under the impression that in any event the end date of 31 March 2008 was only ever included for the benefit of the consultants for tax purposes.

107.	He stated that nothing changed after the expiry date.  Mr Hemming and Mr Hill continued to carry the claimant's business cards and invoices were processed and paid within 5 days as had been the position before 31 March.  They both continued to have access to the claimant’s intranet which contains confidential information and they attended team meetings.  They received training, they used the claimant’s stationery and carried out sales visits on behalf of the claimant.  All this was as it was before 31 March 2008 and none of this was available to ad hoc contractors.

108.	In addition both Mr Hemming and Mr Hill subscribed to "SharePoint" which was a calendar system whereby a consultant would enter onto the computer the days that he was unavailable to work for the claimant and it also enabled the consultants to record time spent on the claimant's business and the outcome.  Mr Lees says that this also accorded with the pre March 2008 position.  In addition, as I understand it SharePoint was not used by ad hoc contractors.

109.	In short, all parties continued to work as if the relationship that pertained before 31 March 2008 was still in place.

110.	Mr Lees did point out that he actually sent a draft contract to Mr Hill on 3 December 2008 under cover of an e-mail to be found at D1:36.  The draft contract itself is at C1: 57.  In the e-mail Mr Lees asks Mr Hill to read the draft contract and comment on it on the basis that it contained changes to the existing written contract and so Mr Hill's input would assist in "debugging" the draft to enable it to be used as a standard template in the future.  Mr Lees acknowledged that Mr Hill did not respond to that e-mail and he did not chase him.

111.	Importantly, Mr Hill agreed that he continued to work to the terms of his 2007 contract even after it formally expired although he contended that invoices started to get paid later than before.  He said in terms, in answer to a question from Mr Willetts, that he believed he and the claimant were working on the same terms, certainly until the new draft was sent to him on 3 December 2008.  

112.	He did not explain why he felt that the fact that he had received a draft contract to look at altered the position save to say that he felt that post March 2008 and in particular in 2009 things were changing.  He was concerned about the obligation to input his commitments into the SharePoint system.  Indeed at D3: 241 there is an e-mail from Mr Lees dated 1 December 2009 essentially reprimanding Mr Hill for not keeping SharePoint up to date.  Mr Hill says that he decided to keep an eye on whether the claimant was changing the contractual position.

113.	Mr Fletcher took him to D1:205.  This is an e-mail dated 21 December 2010 to Mrs Sandra Brown who is an employee of Alere Ltd one of the claimant's customers in respect of which a loss is claimed.  She had e-mailed Mr Hill requesting that he e-mail her managing director about Mr Hill’s capacity to do further work for Alere.  For this purpose the relevant part of Mr Hill's response was;

"There is a contract with ManEx that says we will not work with customers we have worked with in the last 12 months (with ManEx, in a field in which they work) for 6 months after our contracts have been cancelled.  We have through our solicitors stated that none of the training we are doing is funded and as that is the only way ManEx supply, as such is not the same field.
By May ManEx have no control over who we work with at all, past customers or not.  We have been advised that as we are only offering private training ManEx would not have a strong case if they chose to pursue it."

114.	It would seem to me that this e-mail reveals that Mr Hill believed that he was covered by restraint clauses contained in his 2007 contract.  That of course accords with his evidence which I recount in paragraph 111 above.

115.	However Mr Hill denied in answer to Mr Fletcher that this e-mail was consistent with an understanding that the 2007 contract terms continued to apply.  He said that the e-mail does not give the full picture but concentrates only on his belief that any work to be undertaken for Alere would not be covered by any contractual restrictions because it was work that the claimant did not do.  In that respect therefore Mr Hill says it tells only half the story -- it should have said that he did not believe that he was bound by any restrictions in any event.  

116.	At D1: 162 there is an e-mail written by Mr Hill dated 1 November 2012 which invited Mr Brian Hall of Parker Hanifin (another customer of the claimant) to a meeting of the Parallax Partners Forum.  I shall come back to Parallax Partners Forum, it is not to be confused with PPL but it is essentially its precursor.  For present purposes the point of the e-mail is that Mr Hall was given a parallax partners e-mail address to which to reply because "it keeps ManEx out of the loop"

117.	It was suggested to Mr Hill that this too was evidence that he understood that in writing to Mr Hall he had overstepped the boundaries imposed by his contract.  He denied that, he said he wanted the claimant kept out of the loop because he feared that Mr Bell, the managing director of the claimant might get aggressive with Mr Hill as he had done on a previous occasion -- not because Mr Hill had breached his contract but because he simply did not approve of something Mr Hill had done.

118.	Mr Hemming’s evidence touched on this issue.  He too felt that post 31 March 2008 HMIM were supplying services on an ad hoc basis.  Having said that he conceded that he did work after the contract expiry date for a company called Melloy as well as Alere and he did not negotiate ad hoc terms for this work in terms of fees or otherwise.  He took it for granted that the fee would be as per the 2007 contract.  In fact the same was true of work undertaken for a company called Stratford Precision. Melloy and Alere are companies in respect of which the claimant claims damages but Stratford Precision is not.

119.	He agreed that post March 2008 he attended team meetings for which HMIM was paid as it had been prior to that date and that he had and continued to use the claimant's business cards and e-mail address.  He also acknowledged that he was expected to continue to use SharePoint and continued to have access to the intranet.  He also agreed that the claimant continued to keep a record of his professional development and paid for CRB checks and that he had some training at the claimant's expense.

120.	All these are consistent with a relationship with the claimant that was not ad hoc.  It is difficult to draw any distinction between the arrangements relating to Mr Hemming’s services and the arrangement relating to Mr Hill.

121.	Mr Fletcher made the point in his final submissions that neither Mr Hill nor for that matter Mr Hemming (although I have found not in a personal capacity) acted as if an exchange of letters was necessary before the contractual arrangements to continue.  Nor did anybody notify the other that they considered the contract terms to be varied or that they would only continue on the basis that the terms would be varied.  He made the point that there was no difference in the way in which the parties conducted themselves pre-and post March 2008.

122.	Mr Willetts of course only speaks for Mr Hemming but in this respect what he said is relevant to Mr Hill's case.  In his opening statement he said that the lack of an exchange of letters was deliberate because the claimant wanted to change the agreement as evidenced by the e-mail of 3 December 2008 referred to in paragraph 110 above.  However that was 8 months after the contract had expired and it cannot be said that Mr Lees was at all assiduous in following it up.  In any event, as far as I can recall, that suggestion was not actually put to Mr Lees.

123.	In his final submissions, Mr Willetts argued that it was Mr Lees’ job to set up and maintain contracts.  If he did not maintain them then that must be because it was not the claimant's wish to maintain them.  He argued that that is the objective analysis and it is the objective rather than a subjective analysis with which I must be concerned.

124.	In any event he pointed out that the 2007 contract did not actually contain a provision for payment within 5 days so it makes no sense for the claimant to contend that in paying within 5 days it was acting as if the contract persisted after its expiry date.  Indeed the only reference to the time by which invoices are to be paid is not 5 days but 30 days and that is in the draft contract sent to Mr Hill in December 2008.

125.	Similarly he pointed out that access to the intranet does not figure in the 2007 contract nor does the requirement to engage with SharePoint, nor the need to maintain CPD records nor indeed CRB checks.  None of these emanated from the 2007 contract so how can the fact that they occurred both before and after the expiry date be evidence that the contracts continued?

126.	In addition, he argued that the parties themselves chose not to follow the procedures which were set out in the contract and he gives the following examples;

(1)	There was no written consent as required by clause 1.6 for Mr Hemming to work with Mr Brian Donkin, only a verbal consent and in any event clause 1.6 talks about consent being in the gift of Mr Lees when in fact it was in the gift of Mr Bell.

(2)	There was no annual review as envisaged by clause 1.8

(3)	The work undertaken after the expiry date was not consistent with the services defined in the written agreement.

(4)	Rates of pay were not as per the 2007 contract

127.	In summary, Mr Willetts contended that the course of dealings after expiry of the contract was not consistent with its continuation and that what actually happened was therefore simply indicative of no more than a basis upon which ad hoc services were supplied.

128.	I do not accept that.  In the light of the evidence of both Mr Hill and Mr Hemming that I have recounted I am satisfied that they saw the 2007 contract as continuing, as did the claimant.

129.	I have no difficulty in concluding that this was not an ad hoc affair but was a continuation of the arrangement pre 30 March 2008.  It is true to say that if the claimant went to the trouble of putting into a contract the need to exchange letters as a prerequisite to the continuation after the expiry date then one would expect it to initiate this process if it wanted the contract to continue, especially where, in Mr Lees, they have a director whose job included setting up and maintaining of contracts.  Nevertheless, as Mr Willetts observed, what matters here is an objective analysis.  The evidence above leads me to conclude that the requirements to formally extend the contracts by an exchange of letters was impliedly waived and all parties continued post 31 March 2008 as if the written contract existed. Thus, in so far as they were valid and enforceable, HMIM was bound by the restraint clauses as was Mr Hill. 

130.	In those circumstances I need not go on to consider whether the restraint of trade clauses which form the basis of this claim need to be implied into the relationship either on agency principles or otherwise because, on my analysis, the express restrictions continue to apply (subject to their enforceability).  Accordingly I need not address issue 3 raised in Mr Fletcher’s written submissions from paragraph 37 nor Mr Willetts’s oral submissions in this regard supplemented as they are by his further written submissions from paragraph 27 (to which Mr Fletcher takes objection in any event as being an attempt at a further bite of the cherry). They apply if they are enforceable against Mr Hill for the reasons outlined above and Mr Birkhead because his contract was still extant at the relevant time.

Restraint Provisions

131.	Accordingly the next issue which must be decided is whether the provisions in restraint of trade are, as a matter of law, enforceable or are an unreasonable restraint.  This issue affects Mr Birkhead as well as Mr Hill.

132.	I set out below the relevant clauses by reference to Mr Hill’s contract (in fact HMIM’s and Mr Birkhead’s contract are virtually identical in all relevant respects);

Clause 1 Consultancy Services 

1.1	Manufacturing Excellence engages you as a consultant to provide the services as set out in clause 1.2 below (the Services) with effect from 1 April 2007 on the terms and conditions set out in this agreement.

1.2	provide services as a Lean and Agile consultant and NVQ assessor implementing projects directly within customer's premises acting either as the sole deliverer or as a member of a wider Manufacturing Excellence team………….

Clause 1.6

You will be free to accept engagements during the term of this agreement, provided that you have obtained prior written consent of each engagement from Roger Lees, Operations Manager.  Consent will be withheld if the engagement conflicts with the interests of Manufacturing Excellence and/or may result in you not in devoting the necessary time and attention to perform properly the Services under this agreement.

Clause 1.9 Consultancy Services

In delivery of this contract, you will only use the branding of Manufacturing Excellence.  This will include the sole use of a business card, and e-mail address, visual aids and slides provided by Manufacturing Excellence, and any written correspondence to customers must be on Manufacturing Excellence letterhead.  When using letterhead, prior agreement should be sought from Roger Lees.  Contracts will not be subcontracted to you but will remain the responsibility of Manufacturing Excellence, and delivery will be covered by Manufacturing Excellence quality processes and PI cover.  At no time should you represent yourself as an employee of Manufacturing Excellence, nor are you able to commit Manufacturing Excellence to any expenditure or contractual obligation.  Neither should you correspond with customers and other organisations with whom Manufacturing Excellence have formal relationships using any other branding, either of your own company or yourself as an individual.  Voice mail greetings on your mobile phone should only include your name, not the name of your own company or yourself as an individual.

Clause 4.4 Termination of the Agreement

Upon termination of this agreement you shall deliver up to Manufacturing Excellence all notes memoranda and other correspondence, documents papers and property belonging to Manufacturing Excellence which may have been prepared by you or have come into your possession.  You shall not retain any copies or permit them to be used by any other person.

(a)	Clause 5 Confidentiality

5.1 confidential information means all proprietary information relating to Manufacturing Excellence trade secrets, operations, processes, plans, intentions, product information, know-how, design, software code (including source and executable code) developer concepts, designers and plans and models, market opportunities, transactions, affairs/all customer information and customer information proprietary to customers.

5.2 you shall not use or disclose confidential information without the written consent of Manufacturing Excellence unless and in each case only to the extent that:

5.2.1 the confidential information is lawfully known to you independently

5.2.2 the confidential information is in, or comes into, the public domain other than as a result of wrongful use or disclosure by you

5.2.3 disclosure is required by law or regulatory authority.

5.3 the obligations in this confidentiality clause continue whether or not this agreement is terminated and without limit of time.

Clause 6 Post Termination Restrictions

6.1 you agree that, you will not, either on your own account or with any other person directly or indirectly, for 6 months from the date on which your consultancy terminates for whatever reason:

6.1.1 in relation to a business the same as or in competition with the business of Manufacturing Excellence in which you were actively involved during the 12 months immediately prior to the termination of your consultancy,

Perform any services for or supply any goods to another person who was at any time during the 12 months immediately prior to the date of termination of your consultancy a client or customer of or in the habit of dealing with Manufacturing Excellence, and with whom at any time during the same period you have contacts or dealings or were concerned in the course of your consultancy:

Solicit or interfere with or endeavour to entice away from Manufacturing Excellence any person who was at any time during the 12 months immediately prior to the date of the termination of your consultancy a customer or client of or in the habit of dealing withManufacturing Excellence, and with whom at any time during the same period you had contact or dealings or were concerned in the course of your consultancy:

Offer employment to, employ or offer or conclude any contract for services with (or procure or facilitate the making of such an offer by any person) to any senior employee, director or other person engaged or employed by Manufacturing Excellence in a senior capacity at any time during the 12 months immediately prior to the termination of your consultancy with whom at any time during the same period you had dealings in the course of your consultancy:

6.1.2 carry on or be concerned or be employed or engaged within Yorkshire and Humberside, East Midlands and North East England and, at any time during the 12 months immediately prior to the termination of your consultancy (the "Restricted Area") in any business which is the same as or in competition with the business of Manufacturing Excellence in which you were actively involved during the 12 months immediately prior to the termination of your consultancy, whether or not the competing business is physically located in the Restricted Area.

6	6.1.3 ……….

7	6.2 ………….

6.3 if any of these restrictions are found to be void and would be valid if some parts were deleted or the period of the restriction or the size of the Restricted Area were reduced, the restriction shall apply with the minimum modification necessary to give it effect

Construction of the above provisions

133.	A fundamental principle in the construction of contracts is the need to ascertain the parties’ intentions. In undertaking this exercise the clauses must be given their ordinary meaning taking account of the background and factual matrix i.e. the employer's business and its trade connections and the duties undertaken by the person who is the subject of the restraint.  

134.	Of course the words mean what a reasonable person who has all the background knowledge would understand them to mean and that the words mean what they say, consistent with business common sense.  In construing the clauses Mr Willetts submitted that regard should be had to the contra preferentem principle and that any doubt should be resolved in a way which favours the defendants.  

135.	With these broad principles in mind I must determine the meaning of the clauses before going on to consider whether they are enforceable and then, in so far as they are enforceable, whether any of the defendants’ conduct constitutes a breach of the clauses correctly construed.

136.	I think there is no real difficulty in construction of the restrictions on the consultants until one gets to clause 6.  In those circumstances I turn to clause 6.1.1.noting that in so far as the restrictions apply, they are limited to 6 months post termination by clause 6.1.  

137.	Mr Willetts drew my attention to the use of the phrase “the business of Manufacturing Excellence in which you were actively involved” and he questioned the meaning of this phrase in paragraph 54 of his skeleton argument and in his oral final submissions.

138.	Clearly one must proceed on the basis that the phrase is there for a purpose because clause 6.1.1 could equally make sense without its inclusion albeit that it would have had to be rejigged a little.  The clause could have been drafted to provide that the consultant should not, in relation to any business the same as or in competition with the claimant's, perform services etc for any business which was a customer of the claimant in the 12 months prior to termination and with whom the consultant had had any contact or dealings.  Such a clause may have led to questions as to its enforceability (on the basis of its scope) but its meaning would have been clear.  

139.	So what does the reference to the business of Manufacturing Excellence in which you were actively involved and its juxtaposition actually add?  The reference is to the business of the Manufacturing Excellence in which the consultant was actively involved.  That is therefore not the claimant's business per se but that part of the claimant's business in which the consultant was actively involved.  Mr Willetts contended that the first three defendants were only actively involved in BIT NVQ training and so the clause as drafted does not preclude the consultant from providing services in relation to any business, whether such business is the same as or competes with the claimant, provided that the services provided are not NVQ training.

140.	Mr Fletcher argued that they were involved in Lean/Agile training and that BIT NVQ training is part of that. He argued therefore that they are precluded from undertaking Lean/Agile training because that was the work in which they were actively involved.

141.	I am satisfied that the phrase must be construed narrowly.  This accords with ordinary contra preferentem principles but, as a matter of principle, it seems to me that a restraint clause, because it deprives the person subject to it from pursuing a course of action that may contribute towards his living, should be construed restrictively.  

142.	I bear in mind that Lean/Agile training appears to be a business improvement technique whose boundaries are not clear although its objective (to enable a firm to make better and more efficient use of its resources) is.  I have noted in paragraph 2 above that there is some disagreement between Mr Bell, on the one hand, and Mr Morris and the defendants on the other as to the relationship between BIT NVQ and Lean.  However even if BIT NVQ training is a part of the Lean process, it is clearly only a part. It would in my view be wrong to equate them so as to conclude that if one is involved in BIT NVQ training one is precluded from training in the wide spectrum of other activities designed to assist firms to improve their efficiency through Lean/Agile programmes.  An analogy, may be helpful, if a lawyer who works exclusively in personal injury for a firm of solicitors were only precluded from working for another firm in the area in which he was actively involved for the first firm, in my view he would not be precluded from working for the second firm as a conveyancer even though both come within the umbrella of “law”. 

143.	I am satisfied that a reasonable person with the relevant background knowledge would consider the restriction as applicable only to BIT NVQ if those are the only areas in which the defendants supplied services.  Thus, if I am satisfied that the defendants delivered only BIT NVQ training in the relevant period, then they are not precluded from supplying other services  in relation to any business, whether the business is the same as or competes with the claimant, provided the services provided are not NVQ training.

144.	This conclusion is by no means absurd or inconsistent with business efficacy.  It does after all restrict the limitations upon the consultant which, from the claimant's point of view, reduces the risk of the clause being struck out as too wide.  Nor is it absurd that the restraint should in reality not extend beyond the performance of only those services for relevant customers of the claimant which the consultant actually supplied to those customers. 

145.	Clause 6.1.2, required reading and re-reading in an effort to understand precisely what it purports to mean.  It seems clear to me that the phrase “restricted area” appears in the wrong place and should in fact have been inserted immediately after the words “North East England”.  At least then the clause would make grammatical sense but even then it is difficult to understand the relevance of the phrase “restricted area” when the clause specifically says that the embargo is upon employment in any business which is the same as, or in competition with, the claimant and in which the defendant was actively involved during the 12 months preceding termination whether or not physically located in the restricted area.

146.	To give the phrase “restricted area” any meaning at all therefore it must mean that there is a general 6 month embargo on carrying on or being concerned or employed or engaged in any business within that restricted area whether or not the business is in competition with the claimant.  That clearly cannot be justified as necessary to protect the claimant's legitimate interests.

147.	Even if the phrase “restricted area” is moved to what appears to be its natural home after the words “North East England” and this particular restriction is hived off under the authority of clause 6.3 then still the restraint is qualified by the use of the phrase “the business of Manufacturing Excellence in which you were actively involved”.

148.	In addition to the construction issue I refer to in paragraphs 139 to 143, it could be argued that the clause properly construed means that a firm becomes a competing firm if it delivers the same work that the consultant was actively involved in delivering for the claimant. Thus such a firm becomes a competing firm if its business includes the delivery of NVQs.  Having become a competing firm the clause then precludes the consultant from working with it for the delivery of anything.

149.	In my view such an interpretation of the clause stretches it beyond what a reasonable person with the relevant background knowledge would consider the words to mean especially in the light of the meaning of clause 6.1.1.  Such a person would consider that the words are intended to restrain a consultant from being concerned in any business in which the consultant was actively involved for the claimant at the relevant time.  Thus, if the claimant delivered only NVQ's to relevant customers in that time then the restraint only precludes the consultant from being concerned post termination in the delivery of NVQs to any relevant customers of the claimant.

150.	In my judgment therefore the clauses are less restrictive in their effect than the claimant contends.  Of course the more restrictive the effect of the restraint clauses, the less likely they are to be upheld but, if they are valid, the more likely it is that the conduct of the consultant constitutes a breach.

Enforceability

151.	I now turn to the issue of the enforceability of the post termination restraint clauses as construed above.

152.	Mr Fletcher and Mr Willetts were agreed as to legal principles applicable in regard to the assessment of the validity of restraint of trade clauses.  A restraint of trade clause will be unenforceable as being contrary to the public interest unless the person imposing it can show (the burden being upon him) that he has a legitimate interest meriting protection and the restraints are reasonable as between the parties in that they extend no further than is reasonably necessary to protect that legitimate interest.  A person is not permitted to protect itself against competition in itself but only as against the unfair exploitation of its trade secrets or trade connections.

153.	All three of the individual defendants addressed this issue in their evidence to a greater or lesser extent.  It was also considered by Mr Sam Morris, the Managing Director of Develop U Ltd who is briefly referred to in footnote 1 above.  Develop U is another training company which is in the same sector and therefore, one supposes, a competitor of the claimant.  

154.	Mr Fletcher pointed out that even Mr Hemming did not dispute that restraint clauses in this type of contracts are standard.  He, or perhaps more accurately his company, has from time to time subcontracted services and restraint clauses are inserted in the contracts with these subcontractors.  He conceded that without such provisions a company like the claimant would not engage consultants.

155.	It has to be said that Mr Hemming was more understanding of the claimant's position than Mr Morris. He saw clause 1.6 and 6 .1 .2 as unique.   His evidence was that he actively encourages his consultants to "spread their workload amongst different suppliers" and that his company's contracts do not contain restrictions on working for other suppliers.  It was not clear however whether this extended to a carte blanche enabling consultants to work for DevelopU’s customers without going through DevelopU.

156.	It is relevant to note in consideration of the assessment of the reasonableness of the post termination restrictions, that no consultant was guaranteed any work and it is not disputed that work offered by the claimant did in fact drop-off considerably.  Mr Willetts made the point on behalf of his client but it is equally applicable to Mr Hill and Mr Birkhead.

157.	In relation to clause 6.1.1, the claimant contended that it is clear that this subclause is not too widely drawn.  It does seek to restrain the performance of services and solicitation but the restraint is layered in that it is only for 6 months post termination, the restrictions are by reference to the claimant’s business (and, on the proper construction as I have found it, limited to the consultants’ role within it) and is confined to customers with whom the claimant has had dealings only in the 12 months preceding termination. 

158.	The claimant argued that such restrictions are no more than are necessary to protect the claimant’s legitimate interest.  The defendants were engaged to have direct contact with the claimant's customers and this contact was by no means transitory.  The contact included attending at the client premises over extended periods often over an extended period of time and close liaison with people in the capacity to make decisions about training programmes.  In short the claimant’s engagement of the defendants results in the defendants having not only access but influential access to the claimant's customers and that these clauses are designed to prevent the unfair exploitation of the close contact and influence with the aim of freezing out the claimant from the customers that it has nurtured.

159.	The defendants suggested that what is relevant to an assessment of reasonableness here was the nature of their role in the claimant's business.  None of them had a guarantee of work and they had very limited, if any, sales responsibilities.  None of the defendants were directors or senior managers and indeed their roles were quite junior, they were essentially just NVQ assessors and trainers -- what is more, their work had dropped off considerably in the months leading to the termination of their employment.  Mr Hemming’s evidence was that he, as an employee of HMIM, was working no more than 2 1/2 days per month for the claimant and Mr Hill and Mr Birkhead were faring little better.  In addition, if the clauses are effective they prevent further post termination contact with the customer however fleeting the defendants contact or dealings were with it.  The effect of the clauses is therefore to stifle competition rather than to protect a genuine trade connection.

160.	As for the length of the post termination restrictions, Mr Willetts pointed out that a useful comparator is Mr Birkhead’s employment contract which provides restrictions post termination of 5 months only;1 month less than the restrictions sought to be imposed on mere consultants.

161.	Mr Willetts had some observations on the geographical restrictions which are contained in clause 6.1.2.  I need not dwell on these however because I have already indicated that as clause 6.1.2 is actually drafted the restrictions applicable to a restricted area are too wide to be enforced because they prevent the defendants from being employed in any capacity in that area and that is not on any view a reasonable restraint to protect a legitimate interest.

162.	Nonetheless, in the light of a restricted construction of the meaning of the clauses as set out in paragraphs 143 and 149 above, I am satisfied that the claimant has discharged the burden on it of establishing that 6.1.1 and some of 6.1.2 are enforceable.  I would be far less convinced if these clauses had the wider meaning lent by the interpretation I refer to in paragraph 140 or 148 above i.e. that a competing business that delivers NVQs becomes a competing business for all training/consultancy purposes.  This is because in those circumstances the defendants would be precluded from supplying services to relevant customers even though they had not supplied those services on behalf of the claimant to those customers.  This would be against the background of not being employed by the claimants, not having guaranteed work and the other factors referred to in paragraph 159 above.

163.	I come to the conclusion that the clauses with a restricted meaning as I find them are enforceable because I accept the arguments put by the claimant in paragraph 158 above that the claimant has, in its customers, a valuable commodity and that its relationship with them is one which it is reasonable for the claimant to seek to protect from abuse by consultants who are introduced to them by the claimant for the mutual benefit of both the claimant and the consultant.  I remind myself that this was actually the view of Mr. Hemming.  It is not apparently the view of Mr Morris but in this regard I prefer the evidence of Mr Hemming.  Mr Morris is after all a competitor of the claimant whether he has known about them in the past or not and it was not clear that he would regard with equanimity one of his consultants exploiting his customers and cutting out Develop U.

164.	Mr Willetts did not argue that 6.3 is not authority for severing the unenforceable part of that clause from the part which reasonably protects a legitimate interest.  I am satisfied that a restriction from being concerned or employed or engaged in the provision of services on behalf of somebody else to relevant customers where those services have been supplied by the consultant to the relevant customers of the claimant on the introduction of the claimant for 6 months post termination is not unreasonable.

Has there been a breach of the restraint clauses?

165.	I now turn to the issue of whether Mr Hill and/or Mr Birkhead are in breach of the restrictive clauses in their contracts.  This will inevitably include consideration of their conduct prior to termination as well as the consideration of whether their conduct post termination breached the post termination provisions.  

166.	I have found that there is no contract between the claimant and Mr Hemming.  I have also already formed the view that Mr Hemming is not a principal for his agent, HMIM and so I am not satisfied that Mr Hemming personally is fixed with any fiduciary obligations vis a vis restraint provisions.   

167.	I do not overlook that Mr Fletcher in his skeleton argument submitted that even if Mr Hemming is not bound by contractual terms, the terms may survive as against Mr Hemming as a matter of commercial necessity/expediency. His argument appears to be that Mr Hemming is an agent of necessity.  In paragraph 50 of his skeleton he argued that this must arise because of the very nature of the relationship “which has already been acknowledged by the previous express agreement”.  Although he pursued that agency point in his final submissions, he did not refer to it arising to meet some commercial necessity. 

168.	For the avoidance of doubt I make it clear that I do not accept that Mr Hemming personally was bound by obligations akin to the contractual obligations that affect say Mr. Hill. It seems to me therefore that it is not necessary to deal with Mr. Hemming’s conduct either as an agent of necessity or otherwise both for the reasons I have already given and because even Mr Fletcher only asserted necessity based upon “the previous express agreement” and I have held that was not an agreement between the claimant and Mr Hemming.  

169.	Accordingly I need not deal specifically with Mr Hemming’s conduct either pre or post termination although what he did and what he knew about the conduct of Mr Hill and Mr. Birkhead will be relevant to the issue of the economic torts that the claimant alleges.

Pre termination conduct.  

170.	All 3 of the consultancy contracts were terminated by the claimant on 24 November 2010.  What conduct in breach of contract is alleged by the claimant to have occurred up to that date?

Clause 1.9

171.	First, regard has to be had to clause 1.9 which is set out in full in paragraph 132 above.

172.	Perhaps the major issue centres around Parallax Partners Forum and thereafter PPL which, as I have said, was incorporated on 8 September 2010.

173.	It is clear that on 25 May 2010 Mr Hill sent an e-mail to a number of people including Mr Steve Dewar of Dales Pharmaceuticals, Mrs Sandra Brown of Alere Ltd (formerly Inverness Medical UK Ltd) and Mr Martin Booth of Witt & Son Ltd inviting them to what the invitation (at D1:86) describes as "The first Parallax event looking at how best to enable your business in becoming an agile partner" at D1: 85 is a list of people to whom that invitation was sent.  Mr Hill acknowledged that it was prepared by him and was a list of companies to be targeted.  Mr Hill was candid enough to concede that in so far as the list included the claimant's customers, information about them came to Mr Hill by virtue of their relationship to the claimant.  His evidence is that the list was discussed with Mr Birkhead and Mr Hemming.

174.	The meeting was held at the Kyte Hotel, Darrington West Yorkshire on 1 July 2010.  The invitation was sent by Mr Hill, not through the claimant’s e-mail address, but from Mr Hill at “Snickelways Solutions”.  The e-mail is at D1:75.  It was copied to Mr Hemmings and Mr Birkhead and their telephone numbers are also given as people to whom attendance can be confirmed.  It is not disputed that Dales, Alere and Witt were customers of the claimant to whom one or more of the defendants had delivered services on behalf of the claimant.

175.	Mr Hill in his e-mail specifically asked the recipients not to feed the initiative back to Paul Bell.  The meeting was duly held, Mr Dewar, Mr Booth and Mrs Brown attended amongst others.

176.	Mr Birkhead sent a similar invitation to Mr Martin Doxey at Claro Engineering.  Evidence that he did so is in the form of e-mails at D1: 92 and 93 reminding Mr Doxey of the event.  That e-mail originated from Mr Birkhead from an address other than the claimant e-mail address.  There is no dispute, as I understand it, that Claro was a customer of the claimant to whom one or more of the defendants had provided services on behalf of the claimant.

177.	Feedback from that first meeting is at D1: 87.  It talks of what the attendees want from Parallax and it includes help, guidance and training workshops.  Furthermore, as I understand it, the document at D1: 88 entitled "proposals for taking Parallax Partners forward" is a minute of that meeting and describes the purpose of the meeting as 

"to enable positive and sustainable change by working in close partnership with our clients to ensure their expectations are relevant, achievable and above all successful".

178.	It provided for a membership charge of £500 and that Parallax Partners will work together to the benefit of the group and that meetings will focus on "Organisational Agility: Leading Change: Adversity Quotient etc".  It also provided that a Parallax website was being formed which would include ideas for further developments of Parallax Partners.  I will come to Adversity Quotient (AQ) shortly.

179.	There was a second meeting on 9 September 2010 (the day after the incorporation of PPL) at the Copper Dragon Brewery, Skipton which involved the attendees visiting Dales premises.  Minutes of that meeting are at D1:116 and are headed “PPL”.  Representatives of Alere and of course Dales attended.  This meeting also preceded the termination of the defendants’ contracts and it was organised, as was the 1st meeting, as a result of correspondence by or on behalf of the defendants without reference to the claimants branding or letterhead.

180.	I should make two points, figuratively in parenthesis.  

(1)	On 4 January 2010 Mr Hill had e-mailed Mr Dewar attaching a proposal.  The e-mail is at D1: 55 and a proposal at D1: 61.  This actually originated from Mr Hill as Snickelway Solutions.  The proposal is to provide some leadership and management training.  It is not disputed that at this time Dales was a customer of the claimant.  That much is clear from diaries at C1:122.  Accordingly it should not have been contacted by Mr Hill other than as a representative of the claimant.  

(2)	Mr Hemming seems to have carried out work for Melloy, a customer of the claimant between April and August 2010 although he said that was 

“mainly software based and outside the scope of the work that would have been provided by Manex”.  

The claimants said that it could have delivered this work but that in any event the invoices rendered by HMIM in respect of it at B2:24 – 28 relate to “Business Improvement Consultancy”.

181.	In any event, to return to the forum, the defendants said that it did not compete with the business of the claimant.  That is not accepted by the claimant but, even if it did not, that in itself in my judgment would not prevent the conduct of Mr Hill and Mr Birkhead in inviting representatives of Claro, Alere and Witt from being a breach of clause 1.9 because that precluded the consultant from corresponding with the claimant's customers using any branding other than a claimants branding or indeed corresponding at all with customers other than by the use of the claimant letterhead.

182.	In any event the claimant complained that this forum was a tool for the defendants to sell the activities of the defendants and that essentially it was not dissimilar to an initiative known as the Lean Consortium run by the claimant since 2003.

183.	Mr Bell dealt with the Lean Consortium in his witness statement at A: 84 paragraph 6.  It is a vehicle by which the claimant had for some time provided the opportunity for customers to meet and share examples of best practice by an arrangement whereby customers from different sectors visit the premises of one of the customers to see how that customer operates to maximise efficiency.  As Mr Bell put it "it allowed companies to work together, sharing best practice and reducing costs".  In his 2nd statement at A:111 paragraph 28 he expanded upon what the Lean Consortium does and its cost to members.  At £20,000 it is considerably more expensive than the Parallax Partners Forum which is only £500 but Mr Bell argues that it offers what the Parallax Partners Forum offers plus a great deal more.

184.	The defendants argued that the concept of the Parallax Forum was one which the claimant did not want to adopt.  The defendants’ position was that the claimant was offered it but, having originally agreed to facilitate it, Mr Bell then pulled the plug on it.

185.	The defendants’ evidence was that a forum was initiated at the request of Mr Dewar and Mr Booth both of whom had expressed an interest in getting together with other like minded people wedded to the idea of Lean training essentially to set up a benchmarking Forum, as Mr Hill described it in paragraph 15 of his statement at A: 165.  Broadly it was to enable members of the forum to learn from the experiences of other members.

186.	Mr Hill said that initially the idea was taken to the claimant in the shape of Roger Lees and the go-ahead was given to invite customers who might feel the same way as Mr Booth and Mr Dewar to a meeting at the Copper Dragon Brewery on 18 June 2009.  At D3: 17 is a copy of an e-mail to employees and other consultants of the claimant to advise them that the event is to take place.  It was not disputed that ultimately this meeting was vetoed by Mr Bell who it seems only found out about it somewhat late in the day.  It was his evidence that he saw no point in a forum in view of the Lean Consortium and felt that customers should be pointed in the direction of existing initiatives rather than new ones.  At D3: 18 is an e-mail from Mr Booth to Mr Bell bemoaning the fact that the meeting had been cancelled and at D3: 19 is Mr Bell's reply in which he partially explained why the meeting was cancelled.  I say "partially" because the e-mail suggested that the forum may only have been postponed rather than cancelled whereas Mr Bell’s evidence was that he had no intention of proceeding with it at all in the form envisaged by Mr Hill and Mr Birkhead.

187.	The evidence on the nature of the Parallax Forum was quite extensive and did not come just from the defendants.  They all gave unequivocal evidence that the forum was set up because customers wanted it and no direct benefit was received or anticipated by the defendants personally.

188.	Essentially the view of the defendants was that the forum was no more than a medium through which its members could get together.  Mr Hill spoke of the ownership of it being given to its members and the defendants merely as facilitators of the forum.  Any membership fees were simply to meet out-of-pocket expenses such as venue costs and subsistence.  All 3 defendants were cross-examined about this at length and all 3 persisted in that view that this was merely a service offered to customers because they wanted it with no corresponding benefit to the defendants.  There is however an e-mail from Mr Hill dated 6 September 2010 at D1: 113 attaching (at page D1:115) an agenda for the meeting on 9 September.  It points out that Parallax Partnership gave you access to "professional Lean coaches and trainers".  The claimant argued that this is evidence that Mr Hill saw it as a marketing tool.

189.	Mr Birkhead said that he saw the forum as simply an extension of the carrying out of voluntary mentoring work which he undertakes in the community.  It was work for the greater good and not for personal gain.  Furthermore he actually felt that the forum was not intended to focus on customers per se.  Invitations were sent to people in their capacity as individuals rather than as representatives of companies.  

190.	It has to be said that there are e-mails from Mr Birkhead which do not sit happily with the idea that the Parallax Partners Forum was just a facilitator with no vested interest.  There is an e-mail at D1: 99 dated 13 July 2010 in which Mr Birkhead appears to claim credit for Parallax Partners in the securing by Witt of a £300,000 contract.  He says in the e-mail 

"great news about the contract, I hope everything goes well with it, you see what happens when parallax is on your side!!!!!"  

Mr Birkhead said that that was mere flippancy but, if nothing else, it does appear to seek to make a connection between Parallax Partners as an entity and Witt as a company rather than Mr Booth personally.  It is also difficult to credit Mr Birkhead's assertion, in answer to a question from Mr Fletcher, that that response is not intended to promote Parallax Partners as an entity.

191.	In addition at D1: 101 there is an e-mail on 9 July 2010 from Mr Birkhead which talks of proposals for Witt.  The e-mail originated from a Parallax Partners e-mail address.

192.	Mr Hemming conceded that he was involved in the discussions with both Mr Birkhead and Mr Hill leading to the setting up of the forum although he says that he came into the forum discussions somewhat later than the others who invited him because of his business experience.  He acknowledged that he and the other 2 individual defendants were the professional Lean coaches and trainers referred to in the document at D1: 115

193.	When he became involved discussions usually took the form of conference calls.  His evidence was that Parallax Partners also came into existence as a vehicle to explore the possibility of gaining a franchise or licence in a new form of training known as Adversity Quotient (AQ).  This had been developed in the United States and there was a desire to introduce it into the UK.  His evidence was that the defendants wanted to sound people out as to whether they wanted AQ training and to that extent the forum would be a focus group.

194.	He was unsure whether he was aware that the e-mails inviting companies to the inaugural forum meeting at the Kyte Hotel were being sent out but acknowledged that it was sent out to people representing companies who were customers of the claimant. 

195.	His position was that he saw nothing wrong in these invitations being sent out or indeed the activities of the forum in endeavouring to bring like minded companies together.  He did not see himself as bound by the terms of any contract which precluded him from doing so, primarily on the basis that he himself was not a party to a contract and secondly on the basis that any contract relating to his services had expired in March 2008.

196.	His evidence was that he was aware that Mr Hill's contract had not been formally renewed after its expiry by effluxion of time in March 2008 and he was not told by Mr Birkhead that his contract was still extant and accordingly was not aware that he may be acting in breach of contract.  

197.	Mr Hill also stated that Mr Birkhead did not tell him that he had signed a contract with the claimant on 1 June 2010 which did not expire until 31 March 2011.  Indeed he said that there was no discussion about contractual arrangements or obligations between the individual defendants until they received the claimant's letter before action in November 2010 which terminated the contracts.  

198.	Mr Birkhead confirmed that so far as he is concerned Mr Hemming and Mr Hill did not know that he (Mr Birkhead) had signed a contract on 1 June 2010 which persisted until March 2011.  There was never any discussion about the contractual position prior to receipt of the 24 November 2010 termination letter.

199.	Mrs Brown in her evidence had something to say about the forum.  She covered it briefly in her witness statement at A: 165.  In her oral evidence she confirmed she was not approached by any of the defendants on behalf of Parallax Partners to carry out work and indeed did not feel that the defendants were using the forum as an opportunity to promote Parallax Partners as a training provider.

200.	Mr Booth also gave evidence relating to Parallax Partners.  His written evidence is at A: 181 upon which he expanded in his oral evidence.  He said he was passionate about BIT and Lean training and could see the enormous benefits in a forum for like minded people.  His evidence was that he raised it with Mr Bell but nothing significant happened.  He discovered that Mr Dewar shared his passion for this form of training and together they approached Mr Hill with a view to him pressing the claimant to set up a forum.

201.	After the cancellation by Mr. Bell of the meeting organised by Mr Hill at the Copper Dragon Brewery which was due to take place in June 2009, Mr Booth and Mr Dewar formed the view that the claimant was not interested in a forum and an approach was then made to Mr Hill to get the idea going independent of the claimant.  His evidence therefore is that the defendants were merely following up on an initiative suggested by himself and Mr Dewar.  He did not believe the defendants promoted the work of the claimant as their own or that they used the forum to canvass for further work independent of the claimant.  He did however acknowledge in his evidence that he was appreciative of the defendants for setting up the forum.  It earned them, as he put it "brownie points" but he did not place any work with them arising out of their role as facilitators of the forum.

202.	As I have mentioned, PPL was incorporated on 8 September 2010.  It was the successor to the forum and it is clear that after the incorporation of the company the organisation of the forum was undertaken by the company.

203.	Further meetings of the forum took place on 24 November and 10 December 2010 and 14 April 2011 and involved visits to Witt and Alere’s places of business respectively.  The meeting on 10 December was notified to Mr Brian Hall of Parker Hannifin on 1 November 2010 by Mr Hill. (I have already referred to it at paragraph 116 above in a different connection).  By this time Mr Hill’s email address was parallaxpartners.co.uk and he wrote as a director of PPL.  Parker Hannifin was a customer of the claimant and Mr Hill sent his email from this email address so that the claimant was “kept out of the loop”.(D1;162)

204.	Mrs Brown was invited to the meeting on 10 December by an e-mail of 27 October 2010 at D1: 171.  Once again this e-mail originated from Mr Hill's parallax partners e-mail address and he is described as a director.  On the following day he mentioned to Mrs Brown that he had heard a rumour that Roger Lees was “sniffing around”.

205.	The defendants’ evidence was that PPL was set up to assist in pursuing the plan to bring AQ to the UK.  It was not envisaged that PPL would trespass upon the interests of the claimant at all.

206.	Once again all the defendants were as one on this but Mr Hill's evidence was perhaps the most full.  He had read of this concept of AQ developed by a Mr Paul Stoltz in the US.  He e-mailed Mr Stoltz to see if arrangements could be made to enable Mr Hill to deliver AQ as a franchisee/licensee in this country.  His reply was that his company, Peak was interested but did not wish to come to any arrangements with a sole trader.  As a result Mr Hill got Mr Birkhead and subsequently Mr Hemming involved first through the forum and then subsequently through PPL.  The idea was that a company in which there were 3 directors may meet Mr Stoltz concerns about the capacity of this particular potential franchisee/licensee  to deliver AQ.

207.	Eventually the franchise did not materialise because Peak wanted too much money.  An approach to Mr Booth and Mr Dewar to help fund the idea got nowhere.  In summary PPL was intended to be a vehicle through which AQ was to be delivered.  Having said that, since the forum was already running, it became its successor in maintaining it.

208.	There is however much e-mail correspondence originating from PPL which predates the date of termination of the defendants’ contracts and which is concerned with proposals for delivery of training by PPL to customers of the claimant.  The defendants’ position was that the training that they were offering was bespoke training and consultancy for which there was no funding.  It did not compete with the claimant's business which at that time was the delivery of funded structured and non-bespoke BIT NVQ training.  Having said that, in his evidence Mr Hill acknowledged that the claimant could have supplied this work if they chose to do so by employing consultants to provide this training.  His point was that albeit that the claimant could have put forward proposals and delivered the training, the customers with whom PPL were dealing had already decided not to use the claimant any more.  His argument is that the customers in respect of whom the claimant seeks to recover a loss approached the defendants rather than the other way around.

209.	Even if that were so however the issue here is the defendants conduct in the context of clause 1.9 which precludes corresponding with customers using any branding or letterhead other than that of the claimant.

210.	The chain of e-mails at D1: 172 reveals that on 29 October Mrs Brown chased Mr Hill for a proposal regarding 

"what we discussed regarding training new members of staff and ongoing training for the rest of the staff to include NVQ 3 training."  

211.	At D1:170 is Mr Hill's reply of the same date enclosing a proposal on behalf of PPL.  At page D1: 210 is a copy of an e-mail attaching an invoice apparently in connection with the said proposal.  That too originated from PPL.

212.	At D1: 122 is an e-mail dated 26 September 2010 to Mr Booth from Mr Birkhead of PPL attaching a proposal and the proposal itself is on the following 2 pages.  At D1: 126 is an invoice dated 30 September 2010 from PPL address to Witt for consultancy work done by Mr Birkhead on behalf of PPL.  Mr Hemming agrees that he raised this invoice.

213.	At D1: 140 is an e-mail to Witt dated 18 October 2010 from Mr Birkhead as a director of PPL attaching an invoice for SWOT analysis and feedback and with a further proposal to be found at page D1: 141.

214.	At D1: 159 is a proposal from PPL to Alere which it is clear, by reference to the e-mail at D1: 155, was sent before 28th of October 2010.

215.	At D1: 177 is an e-mail of 24 November 2010 to Dales written by Mr Hill as a director of PPL about delivering funded BIT NVQ work in January 2011.  This appears to be precisely the area in which the claimant was involved.  Training appears to have taken place in March 2011.  There was correspondence with a funding provider, Training and Coaching Associates in January 2011 (see the correspondence at D1: 225 et seq).  There is an invoice from PPL to Dales dated 31 March 2011 at D2: 20 but the defendants say that it was not for BIT NVQ work.

216.	At D1: 121 is an e-mail of 22 September 2010 from Mr Birkhead trading as “AJB Consulting” to WT Johnson, another of the claimant's customers offering Productivity and Competitive Analysis (PAC).  Mr Birkhead admitted that the claimant arranged for him to be PAC trained.  He  argued that this was an approach to Mr Johnson is a personal capacity, as chairman of the Textile Centre of Excellence but it is sent to Mr Johnson at WT Johnson, the firm.

217.	At D1: 146 is Mr Birkhead's proposal to WT Johnson and at D1: 145 is a proposal from Mr Birkhead to Witt dated October 2010.  Mr Birkhead says it is more consulting work than training and does not therefore compete with the claimant and in any event Witt approached him.

218.	Interestingly on Page D1: 169 is a further e-mail of 10 November 2010 in which Mr Hill expresses his appreciation for the support "we have been given with Parallax Partners".  

219.	In addition on 25 November 2010, the day following the sending of the letter of termination, Mr Hemming on behalf of Parallax saw Mr Johnson of WT Johnsons and Son.  Mr Johnson’s evidence to this effect is his witness statement at A:188.

220.	Let me deal first with the defendants’ proposition that the forum was an altruistic venture solely for the benefit of its members.  In considering that it is important in my view to appreciate that PPL was its seamless successor taking over the organisation of the forum meetings following its incorporation.

221.	I reject the defendants’ evidence that the forum did not advantage them and later PPL and I am satisfied that it was a marketing tool for all four defendants.  To some extent the fact that it did so comes from the evidence of Mr Dewar who in his witness statement at A: 185 states that it became clear to him during discussions in the forum group that PPL could offer much more to Dales in the form of training.  I acknowledge that there is some understandable conflating by him of the forum and the limited company but in my view it is clear that the views he formed as a result of the forum were beneficial to the defendants.  In addition there is for example Mr Hill's e-mail at D1: 169 expressing his appreciation for the support "we have been given with Parallax Partners" why would he say that if the benefits were all for the customers?

222.	Furthermore, the forum minutes themselves suggest that it is a marketing tool.  I refer to the minutes of the first meeting which I quote in paragraph 178 above to the effect that the forum will “focus on organisational ability, leading change” as well as AQ.  The first 2 were certainly within the remit of the claimant.

223.	I am satisfied that the defendants knew that the forum and thereafter PPL would be commercially advantageous to them and disadvantageous to the claimant.  Why else go to pains to ensure that the claimant was “kept out of the loop” or express concern that Mr Lees may be "sniffing around"?

224.	In addition it is clear that PPL did in fact secure work from the claimant's customers and the defendants acknowledge that this was work the claimant could have delivered.  It is almost inconceivable that they were not aided considerably in this by the continued visibility that the forum both pre-and post PPL incorporation bestowed on them.  That much was explicitly accepted indeed by some of the witnesses called on their behalf.  Mrs Sandra Brown supposed that the Forum was good for their business because it kept them in touch with potential customers.  I have already mentioned that Mr Booth spoke of the defendants earning “brownie points” from the forum.

225.	I accept that the advantages that the parallax venture gave to the defendants secured for them an unfair business advantage at the claimant's expense.  It was a springboard which enabled the defendants to promote their business venture.  In my view it does not matter that the claimant did not wish to pursue a forum along the lines of the Parallax forum.  That is a decision that it is entitled to take.  The fact is that the defendants’ decision to run one in the manner that they did adversely affected the claimant.

226.	In my judgment there is ample evidence of a breach by Mr Hill and Mr Birkhead (and HMIM) of their express obligations pursuant to clause 1.9 both in relation to the forum per se and in the correspondence with customers thereafter before the termination of the defendants’ contracts.  It matters not whether the claimants could have undertaken the work contained in the defendants’ proposals although in fact the evidence is clear that the claimant could have done so.  That was the evidence of Mr Hill and it was not disputed by either of the 2 other individual defendants.  

227.	The wording of clause 1.9 is clear; any correspondence with the claimant's customers must use the claimant's branding and letterheads.  Nor is it a defence that the claimants would not have got this work in any event.  Even if that were true (and of course it is not accepted by the claimant who contends that they had a good relationship with all these customers prior to it being sabotaged by the defendants) the conduct of the defendants was in my view aimed at directing customers away from the claimant.

Clauses 4.4 and 5

228.	I now turn to clauses 4.4 and 5 which deal with delivery up of notes, memoranda and training materials etc belonging to the claimant and the defendants’ obligations as regards confidentiality.

229.	I have not heard any evidence that leads me to conclude that post termination the defendants retained documentation belonging to the claimant.  I will no doubt be corrected if I am wrong but Mr Bell's statements did not suggest it and Mr Fletcher's final submissions did not address that possibility.  He concentrates on the alleged breach of confidentiality.  The defendants’ evidence was that they delivered up all the claimant's documents on 24 February 2011.

230.	I am therefore not in a position, bearing in mind the burden of proof, to form the view that the defendants have retained any of the claimant's documents.  

231.	Accordingly I turn to the allegation of breach of confidentiality.  It is common ground that after a contract is terminated the only category of information that an employee is restrained from using is trade secrets.  An employee is entitled to use the body of knowledge that he carries about with him as a result of his experience so long as it does not amount to a trade secret.

232.	Mr Fletcher argued that Faccenda does not apply in so far as the information was used pre termination.  He argued that the defendants were able, through their contacts with the claimant's customers, to access information which was confidential to the claimant's business.  He argues that the use of this information by the defendants acted as a springboard to promote the defendants own competing business activities.

233.	I have already dealt with the defendants’ conduct in approaching the claimant's customers and its springboard effect in my consideration of clause 1.9. 

234.	In my view, in the context of clause 5, what has to be considered is what confidential information they used.  The claimant accepted that there was no direct evidence that their training or other materials were used by the defendants either pre-or post termination.  Mr Fletcher simply asked me to draw inferences that they were.

235.	The defendants’ evidence was that training materials etc were based upon models in the public domain.  They did not use the claimant’s materials including but not limited to its "Factory of the Future".  The reference in an invoice at D1:11 from HMIM to Develop U dated 24 November 2008 is explained by Mr Morris as simply relating to converting existing materials to a PowerPoint presentation.

236.	The defendants argued that they have not disclosed their training materials, not because that would indicate that they have been plagiarised from the claimant but because they are commercially sensitive documents, the sight of which would unfairly benefit the claimant.

237.	I do not feel in all the circumstances that I can draw the conclusion that the defendants used either pre-or post termination the claimant's confidential training materials.  With regard to the position pre termination I apprehend that such a finding makes little difference in view of the fact that I have found that the defendants conduct in communicating with the claimant's customers using Parallax branding/letterheads is a breach of the contractual terms.

Clause 6

238.	I now turn to clause 6, the post termination restrictions.  I have already determined that the clauses prevented the defendants for 6 months post termination from delivering to the claimant's customers work of the same nature that they themselves delivered in the 12 months preceding the termination of their contracts.  It is therefore necessary to establish what that work was and whether the work that was delivered or arranged to be delivered in the 6 months post termination was the same and if delivered after the 6 month period, whether it was delivered pursuant to proposals made prior to 25 May 2011.

239.	As for the work undertaken by the individual defendants pre termination, Mr Bell conceded that in the 12 months prior to the termination of his contract Mr Hemming was involved only in BIT NVQ level 2 and 3 notwithstanding that his contract describes him as a Lean/Agile consultant.

240.	Mr Hill's evidence was that albeit also contracted to the claimant as a Lean/Agile consultant, to all intents and purposes all the work he did for the claimant was BIT NVQ level 2 and 3.  This was not challenged by the claimant.

241.	Mr Bell recognised that the claimant's core business in the 12 months to the termination of the defendants’ contracts on 24 November 2010 was indeed BIT NVQ levels 2 and 3 and he had never paid Mr Hill to deliver leadership and management training.  I have already mentioned that he estimated that 60% to 70% of the claimant's work was NVQ related.  As to how that reconciles with his evidence that such work is the claimant's core business, I note that in answer to Mr Birkhead he confirmed that about 90% of the claimant's income was from NVQ work.

242.	Mr Birkhead too was clear that the work he carried out for the claimants, both as an employee before he was made redundant in February 2010 and thereafter as a consultant, was NVQ related only.  Indeed in his capacity as a consultant he never actually carried out any consultancy work.  Once again as I understand it, this was not challenged by the claimant.

243.	As to the work undertaken by the defendants in the 6 months post termination or delivered after that period as result of proposals made within the period, I have gained some assistance from the experts reports who identified invoices raised in the relevant period.  With the aid of these reports as well as the evidence and final submissions I believe I have been able to identify the nature of the work undertaken in this relevant period between November 2010 and May 2011.  However, I recognise that in their final submissions the parties have not specifically addressed as fully as they may have wished the issue as to whether any work undertaken was the same as the work undertaken by any of the defendants in the 12 months prior to termination.

244.	In those circumstances when this judgment was sent to the parties in draft on 7 August I invited any party who believed that my understanding as set out hereunder was in error, to make further submissions in relation to that prior to the handing down of this judgment.  I did so on the basis that it may be that if there is a dispute the matter may have to go off for further consideration possibly in the form of the taking of an account.  I have not had any such submissions except from Mr Birkhead and Mr Hill.  Both have filed submissions on their own behalf and Mr Birkhead also on behalf of PPL. On their own behalf they deal with the effect on themselves and their family of this litigation.  On behalf of PPL, Mr Birkhead’s submissions relate to the issue of work carried out by PPL for Claro post 24 May 2011. The submissions also contend that PPL had no dealings with Melloy either prior to, or post, termination.

245.	Having said that, my assessment of the situation is as follows;

Melloy

246.	It seems that in the post termination 6 months none of the work undertaken by the defendants relates to the provision of BIT NVQs other than work in January 2011 relating to the provision of BIT NVQ level 2 for 7 employees.  This work was undertaken by Mr Hemming who, by virtue of my earlier findings, is not personally bound by the post termination restraints.  Mr Willetts in any event argues that this was rolled up with Lean work and leadership management work and some was performed in any event after 23 May 2011.  But, whenever performed it was performed as part of a larger role.  He asks whether it is likely that the claimant would have secured the contract for the provision of the BIT NVQs without undertaking the other leadership management work and he draws my attention to Mr Barrell’s evidence that he wanted Mr Hemming to carry out the work.  The work was funded by the Welsh Assembly and the nature of the work is set out in a letter from them at D1: 228.  It is clear that the BIT NVQ element is worth £16,000.

Dales

247.	There appear to have been 2 pieces of work undertaken by Mr Hill on behalf of Parallax in the relevant period post termination.  This appears to be clear from B2:152.  It seems clear that some at least was originally envisaged to include the provision of BIT NVQ provided through the funding agency, Training and Coaching Associates.  As I understand it, ultimately the work done was bespoke work and thus in the end was not BIT NVQ work like that Mr Hill had delivered to the Dales during the last 12 months of his contract.

Alere

248.	Whilst one or more of the defendants did deliver work to Alere, there is no evidence it was BIT NVQ work, rather it was bespoke training.  I do not overlook that the e-mail of 29 October 2010 (at D1: 172) wherein Mrs Brown appears to chase proposals for BIT NVQ but in the end she says that was not provided.  Instead Alere received bespoke and, as I understand it, unfunded training which was different to the funded BIT NVQ training that had been provided by any of the defendants in the 12 months prior to termination.

249.	As to the suggestion that Mrs Brown was persuaded not to undertake BIT NVQ training in favour of this bespoke work, I am not satisfied that that was so.  She was clear in her evidence that actually BIT NVQ was not suitable for Alere.  I readily accept that that appears to fly in the face of her e-mail of October but I am not prepared to find that she was lying in respect of this.  Furthermore if indeed the work that the defendants supplied was unfunded whereas BIT NVQ may have been funded it is unlikely that Alere would have committed itself to pay for work when they could have had the same benefit for nothing. It suggests that they saw the unfunded work as offering extra value because it was different.

250.	There is an additional issue with regard to Alere in that some work was done for a different but associated company namely Alere International Ltd.  That gave rise to an argument as to whether any work for the associated company was actually work for a "customer" and thus caught by the restraint provisions.  On the basis that any work done for the associated company post termination was not in fact the provision of BIT NVQ, I need not address that question.  Even if an associated company was a "customer", on the construction of the relevant post termination clause as I have found it, the defendants are not restrained from delivering work which is not BIT NVQ level 2 or 3 in any event.

Witt

251.	It appears that no BIT NVQ level 2 or 3 work was delivered or arranged in the relevant post termination period.  Some work appears to have been carried out in June 2011 but it was "Mapping".  This is, as I understand it, different to BIT NVQ.  I was referred to an e-mail to Mr Bell of 24 August 2010 at E1: 174 which suggested that Witt were in the market for BIT NVQ level 3 but his evidence was that if it was that that was not pursued.  Instead PPL was instructed to carry out some consultancy work to clear a bottleneck in production.  This was different to the work that any of the defendants had provided in the 12 months prior to termination.

WT Johnson

252.	Once again there appears to be no evidence that the defendants undertook BIT NVQ work in the relevant period post termination.  It appears, as evidenced by the invoice from PPL at E2: 81, that they delivered customer service training 

Claro

253.	Once again it appears that no BIT NVQ training was provided in the relevant period post termination.  Some work appears to have been done in November 2011 which Mr Willetts appears to suggest was invoiced in March 2012 although he did not give me the reference for that.  A perusal of e-mails at B2: 83 suggests it was leadership management work, not BIT NVQ levels 2 or 3 work.

Lombard

254.	There is evidence that BIT NVQ work was a possibility.  This is referred to in Mr Garbett's report at B1: 25.  In fact the work ultimately carried out was carried out after mid August 2011 as evidenced by a purchase order at D2: 123 and was for work other than BIT NVQ.  That was invoiced in August and September and October 2011.  The claimant says that this work appears to have been envisaged in January 2011 and refers to an e-mail at D1: 226 dated 17 January 2011 from Mr Hill to Training and Coaching Associates.  This seems to refer to a company in Oxford looking to run NVQs for 40 staff.  The claimant argues that Lombard fits this description.  The defendants say it is another company called Penlon who have never been a customer of the claimant.  It seems to me the matter is academic.  Even if the company was Lombard it was for the supply of work other than BIT NVQs.

Summary on the issue of breach

255.	In summary therefore on the issue of breach of contract, I find that Mr Hill and Mr Birkhead are in breach of their obligations in respect of clause 1.9 in respect of any work carried out on behalf of customers of the claimant prior to termination of their contracts or after termination as a result of proposals made before determination and are in breach of clause 6 of their contracts in relation to any BIT NVQ level 2 or 3 work carried out for relevant customers in the 6 months post termination or carried out after 25 May 2011 as a result of proposals made before that date .

Economic Torts

256.	I now turn to the economic torts.  I think it is probably academic whether Mr Hill and Mr Birkhead are guilty of any economic tort save possibly as far as the measure of damages for a tort is different to the measure of damages for their breach of contract.  In my view the main importance of the consideration of whether the conduct of the defendants constitute an economic tort is whether Mr Hemming and/or PPL are guilty of an economic tort and thus liable to the claimant bearing in mind they cannot be fixed with liability on the basis of breach of contract.

The defendants’ knowledge

257.	In my judgment, as a prerequisite it is important to make a finding as to what, on balance, each defendant knew of the contractual commitments of other defendants.  In particular perhaps whether each individual defendant knew that the involvement of the others in the forum and the use of PPL as a vehicle to deliver training was likely to be in breach of contractual obligations.

258.	I should repeat that I do not accept that neither Mr Hill nor Mr Hemming on behalf of HMIM did not appreciate that the obligations imposed by the consultancy agreements continued to remain in place after March 2008.  I have dealt with this earlier.

259.	The next question is whether it is more likely than not that each of the individual defendants would have regarded the others to be fixed with the same obligations.  I have already mentioned that it was Mr Hemming’s evidence that he was aware that Mr Hill originally had a contract but was under the impression that his had lapsed because it had not been renewed.  However, even if he did not specifically hear from Mr Hill’s own lips that Mr Hill had a contract but it had expired, it does not help him in my judgment.  Neither in my view does it help him with regard to Mr Birkhead's position.  

260.	All 3 knew that the other 2 were consultants retained by the claimant to deliver similar training contracts.  If one was subject to contractual terms including restraints on conduct then it is much more likely than not, in the absence of being told that the contrary is true, that each will believe that these other consultants will be retained by the claimant on the same or at least similar terms.

261.	Mr Willetts pointed out that Mr Birkhead only signed his consultancy contract in June 2010 and the forum was set up in May.  He suggested that Mr Hemming and Mr Hill could not in these circumstances be aware that Mr Birkhead may be bound by the same clauses that appeared in their contracts because he did not have a contract when the forum was set up.   

262.	The fact is though that they were aware he was a consultant in the same way that they were.  In any event, even if they did not know they ought to have been aware that, independent of a written contract, Mr Birkhead, as an agent owed an obligation of loyalty to the claimant that would preclude him from communicating with the claimant’s customers except for purposes that benefitted the claimant and would not result in a secret profit.  

263.	In any event, I am satisfied as a fact that there will have been discussion between the 3 individual defendants about their contractual commitments.  These defendants are businessmen, knowing what restraints affect their own conduct vis a vis the claimant it is unlikely that they would not each discuss with the others the contractual situation as it applied to them.  In fact there is documentary evidence that the position was discussed between them.  At D1:205 is the e-mail of 21 December 2010 to Sandra Brown at Alere.  I have referred to and quoted from it in paragraph 113.  It makes it clear that the defendants together have taken advice on the contractual position.  That much is clear because this e-mail is a response to one asking what the situation was with regard to the Parallax Partners who are of course the 3 individual defendants.  Mr Hill's response was that "we (my emphasis) have been advised that as we are only offering private training ManEx would not have a strong case".

264.	Mr Willetts argued that this was after the letter of termination from the claimant’s solicitors of 24 November and does not mean that the defendants appreciated the position before that. Even if the email can be explained away on that basis I am satisfied from hearing their evidence that these defendants are sufficiently sophisticated to have considered and discussed their contractual positions when the forum was set up.  The fact that they did not want the claimant to be “in the loop” about their activities adds credence to that view.

265.	I am satisfied in all the circumstances that Mr. Hemming knew of the contractual commitments of the other 2 and that PPL (whose guiding mind were the individual defendants) was aware of the contractual commitments of Mr Hill and Mr Birkhead and that their combined conduct was disadvantageous to the claimant.  Further, if I am wrong and they did not know, then they turned a blind eye to it.

Unlawful means conspiracy

266.	Against this background I deal first with unlawful means conspiracy.  This arises where 2 or more people combine to take action which is unlawful in itself with the intention of causing damage to a 3rd party who does indeed incur the intended damage.  The 3rd party need not establish that the intention to cause damage was the predominant intention but that purpose must be part of the conspirators’ intention.  It is sufficient that the defendants embarked deliberately on a course of conduct appreciating the possible consequences for the claimant.

267.	Mr Willetts argued that the claimant cannot discharge the burden of establishing either unlawful means or an intention to cause damage.  The claimant argued that unlawful means embraces all acts which a defendant is not permitted to do whether by civil or criminal law.  In this case I have found that the conduct of Mr Hill and Mr Birkhead constituted a breach of their respective contracts and their acts were therefore acts that they were not permitted to undertake. It embraces the situation, as here, where each of the defendants was combining to divert business to themselves/PPL whilst engaged to work for the claimant.  

268.	As to intention to cause damage, I have already indicated what is meant by "intention" and I have rejected the defendants’ contention that the forum was set up for purely altruistic purposes just to benefit its members and that PPL was set up only for the purpose of improving the chances of obtaining a license or franchise to deliver AQ.  It is clear to me that all the defendants, in setting up the forum and in running PPL, appreciated that it would cause damage to the claimant.  That is why they wanted the claimant kept out of the loop.  Furthermore that PPL, whose guiding minds were those of the defendants, equally appreciated that the consequences of its actions in canvassing for work from the claimant's customers prior to termination and indeed after the termination in respect of work covered by clause 6, would cause damage to the claimant.

269.	Accordingly I am satisfied on balance that the claimant has established an unlawful means conspiracy against all the defendants including Mr Hemming and PPL.

Inducement to breach

270.	In the event that I am wrong I turn to the issue of inducement to breach a contract which is the second economic tort alleged.  The principles of inducement are as follows

(1)	There must be a contract

I have already dealt with this at length.  There were contracts which covered the conduct of Mr Hill and Mr Birkhead and HMIM.

(2)	There must be a breach of that contract

I have already found that there have been breaches including breaches by HMIM which, on the question of breach, logically cannot be in any different position to that of Mr Hill or Mr Birkhead.

(3)	The conduct of the defendants must have been such as to procure or induce that breach.

I am satisfied that the individual defendants and PPL were actively engaged in the forum and the conduct of PPL.  I have already explained why I am satisfied that is the case. I remind myself for instance that Mr Hemming sent out PPL’s invoice to Witt for work actually done by Mr Birkhead. (see paragraph 212).

(4)	The defendants must have known of the existence of the relevant term in the contract or turned a blind eye to the existence of such a term.

I have already dealt with this.  I am satisfied that the individual defendants and PPL were aware of the relevant contractual terms that bound Mr Hill and Mr Birkhead or, if they did not, then they turned a blind eye.

(5)	The defendants must have actually realised that the conduct which was being induced or procured would result in a breach of the term.

It seems to me that in the circumstances of this case that is axiomatic and I need not dwell on it. Even if Mr Hemming and Mr Hill believed they had no contract and/or he and Mr Hill thought that they had expired, the fact is that Mr Birkhead’s contract was extant on any view and I have found that Mr Hemming (as did Mr Hill) knew that or alternatively turned a blind eye to it.  On the facts as I have found them, he also knew that the conduct put HMIM in breach.

271.	For completeness I mentioned that I had considered Mr Willetts observations in respect of inducement in his oral final submissions and in particular his reference to DC Thomson v Deakin although I note that he has not supplied me with a copy of that case.  He told me that this case deals with 3 types of procurement namely direct persuasion, other direct intervention and indirect persuasion.  He questioned where the evidence of persuasion is here?  In my judgment it is almost inevitable that each of the defendants would have believed that the conduct which I found to be a breach would benefit them.  That envisaged benefit would be in itself persuasive in their discussions.  In any event, it seems to me that the requirements necessary to establish procurement are actually those set out in the more recent case of Aerostar which I have set out above.

272.	I have also considered Mr Willetts’ argument that Mr Hemming cannot be seen to be procuring a breach by HMIM because procuring requires the inducement by one person of another.  He argued that this cannot work in this case where the company and individual are one and the same.  Of course this is directly contrary to the arguments he deployed on the question of who was actually a party to the consultancy agreement.  The reasons that caused me to take the view that the contract was with HMIM also lead me to conclude that Mr Hemming and HMIM are different entities for this purpose.  In any event Mr Hemming has not only procured a breach of contract by HMIM but also by Mr Hill and Mr Birkhead.

Unlawful interference

273.	Finally there is the tort of unlawful interference which consists of one person using unlawful means with the object of causing damage to another.  Mr Willetts argues that there are 3 elements to this

(1)	Deliberate interference

(2)	Intention to injure

(3)	Damage

274.	It seems to me that where, as here, the allegation is that all 4 defendants have been guilty of unlawful interference this covers very much the same ground as is covered by the conspiracy issue.  However for completeness in my view the interference with Mr Hill’s and Mr Birkhead's contractual obligations by Mr Hemming and PPL and indeed Mr Hills and Mr Birkhead as regards each other is clearly deliberate because it was the intended effect of the forum and the proposals put by PPL to the claimant's customers before termination and indeed the conduct of all 4 defendants in the 6 months post termination in regard to work involving the supply of BIT NVQs.

275.	Mr Willetts argued that where the defendants operated in a different field to the claimant there cannot be an intention to injure.  However, there is no dispute that services the defendants offered could have been performed by the claimant and indeed some of the post termination services offered were BIT NVQs.

Damage

276.	It is true to say that these torts rely on damage and I now turn to that question.

277.	The defendants called a number of witnesses to suggest that none had been caused to the claimant and that by mid 2010 when the forum was formed the customers in respect of whom the claimant claims a loss and who had been approached by the defendants prior to the termination of their contracts would not have availed themselves in any event of the services of the claimant.

278.	Mr Neil Barrell, a former director of Melloy spoke of the industry being awash with trainers/consultants.  He spoke of the overlap between training and consultancy.  It will be remembered that it is the defendants’ case that the 2 are different and the claimant did not essentially provide the latter.  Perhaps the most important aspect of his evidence, both written and oral, was the strength of the connection a company builds with its trainer.  That is the theme that runs through his witness statement at A: 175 and is also evident from his oral evidence in that even though for example the Welsh Assembly which funded training for Melloy would have preferred the use of a Welsh training firm, Melloy made representations for the use of Mr Hemming.

279.	Mr Paul Johnson of WT Johnson and Son made it clear in both his witness statements (at A: 188) and his oral evidence that Parallax had met his training needs.  When Paul Bell came to see him in February 2011 he was told he was too late.  To quote from Mr Johnston's statement 

"at that time HR were already well advanced with a customer service programme with Parallax.  The need had been identified in December 2010"

280.	Mrs Sandra Brown whose witness statement is at A: 194 gave evidence to the effect that she had no further use for the claimant because she had no further need for NVQs which she found to be too rigid and manufacturing centric and which thus did not meet the needs of Alere which was not a manufacturing company.  In addition, Alere has no further capacity for NVQ training because it lacked eligible employees.  She pointed that out to the claimant in October 2010 but by that time she had been in direct discussions with Mr Hill, independent of the claimant as a result of the invitation to the first forum meeting in July 2010.  Since that time PPL had done some bespoke training for Alere.  I remind myself that it is not disputed that the claimant could have delivered such training.

281.	Mr Fletcher in his cross-examination of Mrs Brown drew attention to the e-mail at D1: 170 to which I have already referred in paragraph 210 wherein she is chasing Mr Hill for proposals for NVQ level 3 training.  I appreciate that this is at variance somewhat with her evidence that such training was neither wanted in principle nor did they have sufficient personnel to undertake it but the email shows that the defendants were happy to supply it.

282.	She too recognised that a good professional relationship plays an important part in the choice of trainer.  She spoke of having a very good professional relationship with Mr Hill and that Alere used the claimant originally because he delivered their training.  She spoke of him providing “really good training and understanding Alere's needs”.  In this respect her evidence accords with that of Mr Barrell.

283.	Mr Sam Morris, whose witness statement is at A:178, is the managing director of Develop U which is a training firm in the same market as the claimant and thus a competitor.  He agreed that there were many training firms in the market and took issue with Mr Bell whose view was that once you have a customer it is yours for life.  He had a different view to Mr Barrell on the overlap between training and consultancy.  I do not think I need to dwell on this because it is not suggested that the claimant was not capable of delivering both or subcontracting to personnel who could do so.

284.	The evidence of the defendants’ witnesses in particular Mr Barrell and to some extent Mrs Brown suggests that the defendant's conduct with regard to the forum and PPL has caused loss.  In addition there is the fact that the defendants won work from the claimant's customers during the period between the setting up of the forum and their dismissal.

285.	I cannot see any reason to believe that this work would not have gone to the claimant in the absence of conduct by the defendants.  After all, the defendants could have delivered the training/consultancy as consultants of the claimant.  The importance of a personal relationship has been highlighted by the evidence of Mrs Brown, Mr Barrell and Mr Booth.  The defendants could clearly have made the proposals on behalf of the claimant and, because they would have been delivering it, it is likely in my view that the work would have been given to the claimant on that basis.

286.	The defendants said the claimant did not want it but do not deny that they could supply it.  The claimant says it is in the market to supply unfunded work even if its core work is funded.  The fact that the defendants did not seek consent and went to pains to keep the claimant in the dark suggests that they themselves believe that this was not work that the claimant would likely turn away particularly when areas of funded work were drying up, as seems to have been the case.

287.	Even if I am wrong in this I accept Mr Fletcher's point that damage can really be inferred by reason of the defendants conduct.  The dictum of Neville J in Goldsol v Goldman is apposite 

"damage may be inferred, that is to say, that if a breach which has been procured by the defendant has been such as must in the ordinary course of business inflict damage on the plaintiff then the plaintiff may succeed without proof of any particular damage which has been occasioned to him"

Summary of economic torts

288.	I am satisfied, in light of the above, that the ingredients for each economic tort have been met in respect of each defendant and that each is accordingly liable in damages to the claimant.

What is the principle upon which damages should be assessed?

Damages arising out of breaches of contract prior to termination

289.	Mr Willetts did not deny that in their capacity as consultants under the consultancy contracts, the consultants are agents and they have obligations of fidelity to some degree to the claimant as their principal.  He made the point that the extent of those obligations of fidelity is dependent upon the nature of the relationship between the principal and the agent.  Regard must be had to the terms of the contract, the nature of the contractual duties and relevant circumstances including factual background and the relationship as a whole.

290.	In this case the claimant had no obligation to provide work; the defendants could work for others in certain circumstances, even under the terms of their contracts.  The claimant accepted that the defendants were free agents in the sense that they were not committed exclusively to the claimant and could notify the claimant when they were unavailable by simply making that clear on the SharePoint system.  In addition Mr Willetts pointed to the lack of a canvassing or selling role.  They were in essence just trainers and indeed training at a junior level. He also pointed out that the terms of the written contract did not contain any covenants of single-minded loyalty or clauses requiring the individual defendants to disclose other business activities and to divert any business opportunities to the claimant or indeed to not act in a way that puts the agent in a position of conflict with the claimant's activities.  He argued that the only obligation the defendants had were duties to loyally carry out the jobs “they were engaged to do”.

291.	Mr Willetts conceded that AG v Blake is authority for the proposition that in cases of breach of a fiduciary duty or other exceptional cases the wronged party can recover the guilty party’s gain rather than just the wronged party's loss.

292.	Despite Mr Willetts’ submissions, I am satisfied that the fiduciary duty of Mr Hill and Mr Birkhead (and HMIM) is sufficiently extensive to enable the claimant to recover either the profit made by Mr Hill and Mr Birkhead in respect of work awarded to them by the claimant's customers both through and outwith PPL before the termination of their contracts and also after such termination provided that it was awarded following a proposal put to the customer before termination, or the loss suffered by the claimant by that conduct, whichever is the greater.  Indeed Mr Willetts appears to accept that that is an inevitable result of a finding that they owed fiduciary obligations.

293.	The relationship between the trainer and the customer is clearly very close and highly influential.  The trainer when going into his principal's customer’s business has very great capacity to influence the customer as to its training needs and who should supply them.  The nature of the relationship is clear from the evidence to which I have already referred.  It is clear that the principal, by putting an agent into a customer’s business, is exposing itself to the possibility that the agent may use its influence to the principal’s disadvantage.  The agent has a duty of fidelity not to abuse the privileged position which the principal has put him in by giving him access to the principal’s business contacts, particularly for the agent’s own advantage, as has happened here.

294.	In any event,   "the job that the agents were engaged to do", to borrow Mr Willetts’ phrase, includes specifically an obligation not to correspond with customers except by the use of the claimant’s branding and letterheads.

295.	I accept that in this case the gain has not necessarily been directly earned by an individual defendant.  Work which has been redirected from the claimant may actually have been invoiced by PPL.  The evidence is however that whichever defendants undertook the work then invoiced PPL for the same amount.  In that respect therefore the gain is clear to see.

Damages arising from breach of post termination restrictions

296.	If necessary I will hear representations as to whether damages to be assessed in respect of this period can be assessed on the same basis as the breaches prior to termination.  I recognise of course that the claimant's loss and defendants’ gain may be the same or at least so similar for the distinction not to matter in practical terms.  The issue is whether the fiduciary obligations survive the termination of the contract.  If they do not then it may be argued that damages must be limited simply to the claimant's loss.  Mr Willetts has made the point that the defendants take a causation point in respect of such losses.  He went to some lengths to illustrate that in respect of the Melloy claim relating to the 7 employees (see paragraph 246).

Damages arising out of economic torts

297.	Regrettably I find myself in some difficulty with the measure of damages in respect of these.  I have not been addressed on the question of whether the measure of damages can be equated with the measure of damages for breach of Mr Hill's and Mr Birkhead's contracts bearing in mind that that is based upon a breach of a fiduciary duty which does not appear to be owed by PPL or Mr Hemming.

298.	While it seems clear that damages are at large it does not appear from my reading of the extract from McGregor on Damages which was attached to Mr Fletcher's final submissions that damages can be anything other than the claimant's loss and expenses.  Once again, my draft judgment invited submissions from the parties on this issue if they thought it appropriate.  I have not had any such submissions.  I recognised in my draft judgment that it may not be thought necessary by the parties to consider that matter on the basis that, in the circumstances, it was disproportionate to explore the possibility that the claimant’s losses exceed the defendants’ profit.

The expert’s joint statement and their queries

299.	As I mentioned in paragraph 33, the experts’ joint statement suggested that, if questions raised in that statement on various points of principle relating to the assessment of damages can be answered then it is likely that the experts will be able to agree quantum.  

300.	I do not know how important it now is to address these points.  Mr Fletcher has not dealt with them at all in his final submissions and in the light of my decision that the consequences of breach post termination are restricted to BIT NVQ work undertaken within 6 months post termination or as a result of proposals made within that time it may be that many of the concerns of the experts are now academic or alternatively, it is disproportionate to pursue them.

301.	Nonetheless I shall briefly consider the questions but I wish to emphasise that I do so only for the purpose of giving some guidance at this stage.  I am conscious that I have not heard from the parties or indeed the experts as to why they take different views on these issues and, as I have said, the issues have not been addressed by Mr Fletcher save for a passing reference at the end of his final submissions. Once again, my draft judgment invited submissions if the parties took issue with the following guidance and I have not received any such submissions save as regards paragraphs 302 and 309 to which Mr Birkhead has referred in his submissions.  Nevertheless, at present the views that I express below can be no more than pointers to help to resolve the issue of quantum taking into account the important issue of proportionality.  The questions posed by the experts follow in bold print.

Query 1  Melloy page B1: 79

“ We would therefore ask the court to decide, only if a challenge is made by the defendants regarding contractual time constraints, whether or not £22125 deferred sales should be included within the claim or excluded…”

302.	I have already indicated that damages should be assessed on the basis of work done in the 6 months post termination and work done as a result of proposals submitted in that period even if it were performed outside that period. I have also determined that any work done by Mr Hill and Mr Birkhead after termination of their contracts following proposals submitted before the contracts were terminated should be treated in the same way as work performed prior to termination. I should say that it seems to me that in so far as HMIM are in breach by virtue of work done by Mr Hemming and invoiced by it, then if it had been a party to these proceedings it is likely it would have been subject to the same principle.

Query 2 Dales B1: 80 

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether the claimant would have been able to fully crystallise the Dales contract generating sales of £25908, or whether it would only have generated £5400 sales, the amount that the defendants have declared they were able to generate”

303.	It seems clear that Mr Dewar of Dales was somewhat disillusioned with the claimant because it had pulled the plug in 2009 on the idea of a forum.  The fact that he and Mr Booth approached Mr Hill with a view to him setting up a forum independent of the claimant is, in my view further evidence of this disillusionment.

304.	I have already referred in paragraph 215 to the fact that PPL was canvassing for work in November 2010.  It seems clear that eventually they acquired some but the claimant contended that, because they could get funding and PPL could not, they could have carried out more work and thus earned more than PPL did.  Their complaint is that the conduct of the defendants deprived them of that opportunity.  

305.	The e-mail at D1: 177 however gave a clear impression that PPL was expecting to deliver funded work through Training and Coaching Associates.  I assume that no funding work was actually delivered however but if I am wrong I will no doubt be corrected.  If it was not then Mr Willetts argues that it was because the funded work was too inflexible and he argues that the claimant has provided little evidence that Dales would have wanted it.  It would have been work under the Modern Apprenticeship Scheme rather than Train to Gain and the commitment of the staff undertaking the qualification would have been much more onerous.  

306.	Mr Willetts argued that it cannot be assumed that Dales would have been prepared to have its staff involved in this onerous training regime to the extent required because it may have been at the expense of carrying out their ordinary day-to-day activities.  On that basis I am minded at this stage to adopt the position taken by Mr Paley on this issue, not least because I have had no submissions by Mr Fletcher to the contrary.  

307.	Query 3 Alere B1: 80

(i)	£6930 sales

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants whether £6930 sales work undertaken for Alere International should be or should not be included in the claim for the lost profits of the claimant”

I have already dealt with Alere International in paragraph 250 above

(ii)	£25,908 and £37,988 sales 

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether the claimant would have been able to fully crystallise the contracts generating sales of £63896 or whether the claimant would only have generated £7800 sales, the amount which the defendants have declared they were able to generate”

In the light of what I have said in paragraph 249 and my acceptance that despite the e-mail of 29 October 2010 (D1: 172) Alere did not want any more BIT NVQ training I am inclined to the view that the claimant would not have been able to generate more work than the defendants.

(iii)	overseas travel expenses 

“We would therefore request that the court decides, whether the Alere International work should be included in the claim, based on the evidence of the claimant and the defendant whether additional cost should be included in respect of travel to France, Germany and Spain to service the Alere work”

This is no longer relevant for the reasons set out in paragraph 250

Query 4 Witt B1:82

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether the claimant would have to fully crystallise these 2 contracts generating sales of £26477 or whether it would have generated any sales, the amount which the defendants have declared they were able to generate”

308.	Like Mr Dewar at Dales, Mr Booth at Witt was clearly disillusioned with Mr Bell.  His evidence was that when he needed additional Lean training he approached a number of suppliers and finally alighted on a firm called PDM with whom he had worked before.  Mr Hill delivered the training on their behalf.  His evidence is that he prefers to deal with people on the same wavelength as him.  Taking all matters into account I am minded to take the view that it is more likely than not that he would have used training providers other than the claimant after they cancelled the meeting at the Copper Dragon in 2009.

Query 5 Claro B1: 82
“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether (i) through the defendants involvement in Active8 and Claro, sales have been diverted from the claimant and (ii) whether the claimant would have been able to undertake the Claro contract generating sales of £5698”

309.	I am inclined to the view that it does not matter that this work was invoiced by Active8 which is, as I understand it, simply another training company similar to the claimant.  The issue is whether the work was diverted away from the claimant.  I am inclined to the view that on this issue the view of Mr Garbett is likely to be preferred provided that this work arose from proposals made to Claro before 24 May 2011 when the 6 month post termination restrictions expired.

Query 6 Lombard B1: 83

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether (i) the contract referred to in Mr Garbett’s report was with Lombard, and (ii) if that was the case, whether the claimant would have been able to undertake the contract, generating sales of £51816”

310.	See my observations in paragraph 254

1.2.2 Hotel Costs B1: 83

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether the costs applied to hotels should be (i) £45 (per Mr Garbett (ii) £60 per Mr Paley or (iii) somewhere in between per night.”

311.	I received no representations at all on this.  For my part I would find it difficult to believe that one could secure appropriate hotel accommodation for £45 plus VAT even in 2009.  My inclination would be that £53 sounds the more appropriate figure although that is hardly generous.

1.2.3 Salary Costs B1: 84

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether (i) the claimant had the capacity to undertake the work or whether the cost of the labour should be (ii) £160 per day or (iii) £180 per day or (iv) some higher amount”

312.	Once again I was not addressed in this issue.  I have no firm evidence that Messrs Tolman, Hagan, Rosser and Bake would not have delivered work that had not been diverted away from the claimant.  Mr Garbett's calculation of their average cost has the merit of appearing to be based on their actual earnings.  On balance I am minded to support that figure on a pragmatic basis.

313.	  It strikes me that there is probably equal merit in Mr Garbett’s suggestion on the one hand that because these employees were a fixed cost there would in fact be no additional cost in carrying out the work and Mr Paley’s suggestion on the other hand that the claimant may have had to bring in subcontracted trainers at premium cost to carry out the work.  It seems sensible therefore to assume that Mr Garbett's and Mr Paley's points cancel each other out and that the pragmatic solution is simply to adopt the empirical figure produced by averaging the employees’ wages.

314.	Query 7 Alere B1: 88

	“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether (i) the claimant made the sale to Alere in June 2012 and (ii) what the value (estimated if required) of that sale was”

(i)  I have already given guidance on this issue
(ii)  I am unsure why this requires an answer unless it is suggested that the sale stems from work done on proposals made before May 2011.  If it does not then it is not caught by the restraint clauses in any event.

Query 8 Witt B1: 89

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether Parallax or the other defendants did complete either piece of work referred to amounting to sales of approximately £22,800”

315.	Mr Booth gave evidence.  Whether the work was done is a matter of fact.  It does not appear from my notes that he was asked but once again I will be corrected if my note is deficient in that respect.  If he was not asked then, if necessary, counsel can address me on the consequence.

2.2.2 Hotel Costs B1: 89

“We would therefore request that the court decides, based on the evidence of the claimant and the defendants, whether the cost applied to hotels on the Melloy and Lombard contracts should be based on one or two nights stay for each 2 days of work”

316.	It seems to me that this is dependent on the time that the consultant is expected to arrive at the customers and how long it is likely to take for him to get to get there.  If, for example training starts at say 9.00am and the trainer lived more than say 2 hours from the customer's premises (taking traffic into consideration) then taking a hotel room on the previous night would not be unreasonable.  If on the other hand training started at say 11.00am and he lived 2 hours away then taking a hotel room the previous night may be less reasonable.  Once again these views are simply expressed without the benefit of any representations by counsel or evidence.

2.2.3 Salary Costs B1: 90

We would therefore request that the court decides whether a notional deduction for the opportunity cost of working elsewhere should be applied to the sales undertaken by the defendants at £180 per day”

317.	Once again, I do not have the benefit of representations but I am inclined to agree with the view expressed by Mr Garbett which appears to me to be logical and reflects the reality that PPL simply paid to the relevant consultants what is invoiced to the customer for that consultant’s work.

Final Summary as to liability

318.	I refer to paragraphs 255 and 288 above.

Final Remarks

I am grateful to all the advocates for their able assistance in this matter and apologise that this judgment is unusually long.

HHJ Saffman

18 September 2013