Proactive Group Holdings Inc & Anor v HJ 2024 Limited & Ors
[2024] EWHC 2821 (KB)
William Allan Jones & Anor v Andrew Simon Mallett & Anor
5 August 2024
[2024] EWHC 2035 (Ch)
High Court
A former employee shared secret documents from his old job. A court said he had to delete all of them and tell who he shared them with. While the employee tried to claim some documents weren’t his, the judge disagreed, stating he had control of them. The employer wanted all the documents back but the court said that wasn't necessary given the age of the documents.
Key Facts
- •Mr Mallett, former employee of companies owned by Mr Jones, breached a Settlement Agreement by retaining and disseminating confidential information.
- •The Settlement Agreement, dated 21 December 2018, required deletion of confidential information.
- •Mr Mallett argued that some documents belonged to his company, Ceirios Limited (CL), and were not covered by the agreement.
- •The court considered whether the Settlement Agreement applied to documents held by Mr Mallett in his capacity as director of CL.
- •The claimants sought various relief, including delivery up of documents and an account of dissemination.
- •The court considered whether the breaches were isolated incidents or part of a wider pattern.
- •The court assessed the adequacy of the defendants' disclosure in the proceedings.
Legal Principles
Construction of contracts: The court interprets contracts to give effect to the parties' intentions as ascertained from the words used, in their context.
This is a general principle of contract law.
Possession or control of documents: A document can be in someone's possession or control without being owned by them.
B v B [1978] Fam 181
Implied terms: An implied term will only be added to a contract if it is necessary to give business efficacy.
Ali v Petroleum Co of Trinidad and Tobago [2017] UKPC 2; Yoo Design Services Limited v Iliv Realty PTE Limited [2021] EWCA Civ 560
Equitable remedies: Courts have discretion in granting equitable relief, considering factors such as the nature of the breach and the conduct of the parties.
City Site Solutions Ltd v Baker [2023] EWHC 2064 (KB)
Outcomes
The court found that the Settlement Agreement applied to documents held by Mr Mallett, even those he claimed belonged to CL.
The agreement used the language of 'possession or control,' not ownership. Mr Mallett, as sole director and shareholder of CL, had possession and control of CL's documents. The court rejected the argument for an implied term limiting the agreement to documents owned by Mr and Mrs Mallett.
The court found that the breaches were not isolated incidents, inferring further breaches based on the defendants' conduct.
The court considered Mr Mallett's conduct in assisting others in disputes with Mr Jones, the inadequate nature of the initial compliance with the agreement, and the defendants' disclosure during the proceedings.
The court granted partial relief: the defendants must delete all confidential information in electronic form and Mr Mallett must provide a witness statement detailing dissemination.
The court balanced the claimants' entitlement to a clean break and the need to prevent further dissemination against the defendants' conduct and the age of the information. The court declined to grant full relief, including delivery up of documents, as it was considered disproportionate given the circumstances.