Arletech Ltd v Millard & Ors

Permission to appeal should be refused where the proposed grounds invite reconsideration of factual findings which the trial judge was entitled to make after evaluating the evidence in detail, and where causation provides an independent answer. A judge need not address every matter raised by the parties if the judgment shows that the relevant issues and evidence were considered. Where liability fails, brief contingent findings on damages do not make the judgment defective if factual causation has been rejected. On the facts, there was no real prospect of an award of exemplary damages or a different costs order.

The claimant company sued two former senior employees for conspiracy, conversion and breach of contract arising from covertly recorded workplace conversations and their subsequent departures to a competing business. Claims in deceit and exemplary damages were also raised, and a third defendant had previously compromised the claim. After a five-day trial, Mr Recorder Dixon dismissed the claims against the first and second defendants. The claimant sought renewed permission to appeal, challenging findings on breach of contract, causation, adverse inferences, damages and costs. The central issue was whether the proposed appeal had a real prospect of success.

Lord Justice May, sitting alone on the renewed application, refused permission to appeal.

1. The proposed appeal did not challenge the conspiracy or conversion findings, but principally concerned alleged breaches of contract by the former employees. The recorder had found that the second defendant’s conduct was plainly disloyal, but ineffective, and that no loss was caused by it. The first defendant’s departure was attributable to the claimant’s response to its suspicions, rather than to any contractual breach.
2. Whether the discussions and conduct amounted to an actionable breach was a matter of fact and degree. The recorder had heard the evidence, considered the recordings in detail and was entitled to reach the factual conclusions he did. The existence of an arguable alternative interpretation did not give the proposed appeal a real prospect of success.
3. The complaint that the recorder failed to draw adverse inferences from missing emails did not undermine the judgment. Judges are not required to address every matter relied on by the parties where a detailed judgment demonstrates that the relevant material was considered.
4. Because liability had failed, the recorder was entitled to express his contingent conclusions on damages briefly. His findings that the claimed losses were not caused by the defendants’ conduct were factual findings supported by the reasoning in the judgment and did not disclose a defective assessment of damages.
5. There was no real prospect of an award of exemplary damages in the absence of special damages in what was essentially an economic contest. The costs order was also within the recorder’s discretion, particularly given the claimant’s persistence in the conspiracy case. The cumulative hurdles meant that the proposed appeal had no real prospect of success.

Order: Application refused.

• Court of Appeal (Civil Division): Lord Justice May refused the renewed application for permission to appeal.
• Winchester County Court: Mr Recorder Dixon dismissed the claimant’s claims against the first and second defendants after a five-day trial. The order was made on 19 July 2001.