Cheshire Estate & Legal Limited v Thomas Oliver Blanchfield & Ors
[2024] EWCA Civ 1317
Kew Green Group Limited & Anor. v Jameson Lamb & Ors.
30 May 2023
[2023] EWHC 1289 (KB)
High Court
Two former managers left their company, Kew Green, and started their own. Kew Green sued them for stealing clients, employees, and secrets. A judge said some of Kew Green's complaints were valid and will go to trial, while others were thrown out because they weren't strong enough.
Key Facts
- •Kew Green Group Ltd (Claimants) sued Jameson Lamb, Alex Pritchard, Axiom Hospitality Ltd, and JLAP Investments Ltd (Defendants) for various breaches of contract, fiduciary duties, and economic torts.
- •Lamb and Pritchard were former senior managers and directors of Kew Green, using Axiom and JLAP after leaving.
- •The dispute centers around the defendants' actions after resigning, including investments in a Starwood project, soliciting clients and employees, and alleged misuse of confidential information.
- •Settlement agreements existed between Kew Green and Lamb & Pritchard, outlining post-termination obligations and restrictive covenants.
- •The defendants' actions allegedly led to the termination of several hotel management agreements (HMAs) with Kew Green's clients.
Legal Principles
Summary judgment/strike-out approach under CPR rules 3.4 and 24.2.
Easyair Ltd v. Opal Telecom [2009] EWHC 339 (Ch)
Fiduciary duties of directors, continuation after resignation (Companies Act 2006, section 170).
CMS Dolphin Ltd v Simonet [2002] BCC 600; Companies Act 2006, section 170
Requirements for fiduciary duty (cases cited: Bristol and West Building Society v. Mothew [1998] Ch 1; Sheikh Al Nehayan v Kent [2018] 1 CLC 216; Fujitsu Services Ltd v. IBM United Kingdom Ltd [2014] 1 CLC 353; A Company v. Secretariat Consulting Pte Ltd [2021] 4 WLR 20).
Various cases
Exploitation of maturing business opportunity after resignation as a breach of fiduciary duty (Industrial Development Consultants Limited v. Cooley [1972] 1 WLR 443; Recovery Partners GP Ltd v Rukhadze [2019] Bus LR 1166).
Various cases
Particularity required in pleading misuse of confidential information (Ocular Sciences Ltd v. Aspect Vision Care Ltd [1997] RPC 289).
Ocular Sciences Ltd v. Aspect Vision Care Ltd [1997] RPC 289
Intention to compete not unlawful unless it involves breach of contract or fiduciary duty.
Laughton & Hawley v. Bapp Industrial Supplies Ltd [1986] ICR 634; British Midland Tool Ltd v Midland International Tooling Ltd [2003] 2 BCLC 523
Outcomes
Struck out parts of the claim related to post-employment fiduciary duty (paragraph 23.2A), breach of contract based on actions post-termination of employment, mere intention to compete (paragraph 42), and some allegations of preparatory acts post-employment.
The court found no basis for a free-standing fiduciary duty post-employment beyond the statutory provisions. The actions were not deemed breaches of contract based on the facts and contractual clauses.
Allowed claims related to breach of service agreements, misuse of confidential information, breach of settlement agreements (clauses 12.3 and 12.4), and breach of fiduciary duty while still directors to proceed to trial.
Sufficient evidence and arguable breaches were found for these claims. The court acknowledged the difficulty in proving misuse of confidential information due to the defendants' actions, but allowed the claim to proceed.
Claims for economic torts, knowing assistance, and receipt of trust property to proceed, subject to the timeline for Axiom's involvement.
These claims were considered sustainable insofar as they related to actions that were permitted to proceed to trial.
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