Proactive Group Holdings Inc & Anor v HJ 2024 Limited & Ors
[2024] EWHC 2821 (KB)
Waste Managed Limited v Stephen Wilce & Ors.
15 June 2023
[2023] EWHC 1456 (KB)
High Court
A company sued its former employees for stealing secrets to start a competing business. The judge refused to immediately stop the new business because the suing company waited too long to complain and didn't fully prove the secrets were stolen. However, the judge said that another person involved, who initially hid the former employees' actions, will have to face the lawsuit.
Key Facts
- •Waste Managed Limited (WML) purchased the assets of CheaperWaste Limited (CWL).
- •Former CWL employees (Wilce, Drake, Fee) allegedly misused confidential information to establish Better Waste Solutions Limited (BWSL), competing with WML.
- •WML alleged breach of contract, fiduciary duty, misuse of confidential information, conspiracy, and misrepresentation.
- •WML sought an interim injunction to prevent the defendants from using confidential information and the confidential business model.
- •Mr. Green (initial shareholder of BWSL) also faced a strike-out application.
- •Defendants offered undertakings regarding some confidential information but not all.
- •Significant delay by WML in applying for the injunction was a key issue.
Legal Principles
Principles governing interim prohibitory injunctions (serious issue to be tried, balance of convenience, adequacy of damages)
American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL)
Principles governing interim mandatory injunctions (least risk of injustice, high degree of assurance of success at trial)
Nottingham Building Society v Eurodynamics Systems plc [1993] FSR 468 (ChD); Zockoll Group Ltd v Mercury Communications Ltd [1998] FSR 354 (CA)
Considerations regarding delay in injunction applications (impact of delay on fairness)
Legg v Inner London Education Authority [1972] 1 WLR 1245 (ChD)
Outcomes
Interim injunction application refused.
While a serious issue to be tried existed regarding the confidentiality of the business model as a whole, WML failed to show a serious issue to be tried on misuse. The court considered the delay in applying for the injunction significant and inadequately justified, weighing heavily against granting the relief.
Strike-out application against Mr. Green refused.
Triable issues of fact remained regarding Mr. Green's role in the alleged unlawful means conspiracy, particularly his role in concealing Mr. Wilce's involvement in BWSL.