JN Dairies Ltd. v Johal Dairies Ltd & Anor

Commercial information contained in customer invoices may possess the necessary quality of confidence even where elements could be discovered from customers or by legitimate investigation. The relative ease of legitimate discovery does not, by itself, deprive information of confidentiality.

Information unlawfully obtained cannot be used as a defence to a breach-of-confidence claim merely because it would not satisfy the stricter principles applicable to an employee’s remembered skill, knowledge and experience. Where stolen confidential information is passed to a recipient who knows its nature and provenance, the recipient may owe the same equitable duty of confidence. Unauthorised use causing some detriment is sufficient for liability.

The claimant, JN Dairies Ltd, brought a breach-of-confidence claim against its competing wholesaler, Johal Dairies Ltd, and a former driver. The preliminary issue was whether either defendant had committed an actionable breach of confidence or misuse of confidential information in relation to the claimant’s invoices.

The claimant alleged that the former driver removed invoices containing customer identities, purchase quantities and prices, handed them to Johal, and that Johal used the information to target the claimant’s customers. The defendants denied the removal, transfer, use and confidentiality of the information. The central issues were factual responsibility and whether the invoice information was sufficiently confidential to attract equitable protection.

1. Preliminary issue decided for the claimant. The court found that the former driver entered the claimant’s premises, stole the invoices, passed them to Johal, and that Johal used the information when approaching the claimant’s customers. The theft and subsequent use formed part of a prearranged plan.
2. The invoice information had substantial commercial value. Prices varied materially between customers, and knowledge of the actual prices enabled a competitor to make targeted offers and negotiate from an informed position. The information was not public merely because customers might disclose prices or competitors might estimate them.
3. The court applied the equitable principles stated in Coco v AN Clark (Engineers) Ltd [1969] RPC 41: the information must have the necessary quality of confidence, be imparted in circumstances importing an obligation of confidence, and be subjected to unauthorised use to the claimant’s detriment. The requirements were satisfied.
4. Customer purchasing information and prices were confidential because they were held in the claimant’s records and were not in the public domain. A customer list could also be confidential even if it could be assembled through legitimate effort. That relative accessibility might affect injunctive relief or proof of loss, but did not prevent the information being confidential in the first place.
5. The principles concerning information retained in an employee’s memory, discussed in Faccenda Chicken v Fowler [1987] 1 Ch 117, Printers & Finishers Ltd v Holloway and Herbert Morris Ltd v Saxelby [1916] AC 688, did not govern stolen documents. Those authorities protected an employee’s ability to use legitimate skill and knowledge after employment; they did not establish that unlawfully obtained documents were actionable only if they met an equally stringent trade-secret test.
6. The former driver knew that the invoices were the claimant’s commercially valuable information and had no right to obtain or pass them on. Johal, through its director, knew the material’s confidential nature and unlawful provenance. This imposed a duty of confidence on both defendants.
7. Johal’s unauthorised use caused detriment, including lost business and the need to offer improved terms to retain or recover customers. Some detriment was sufficient for the preliminary issue; the extent of loss remained for later determination if required.

First-instance judgment. The judgment itself does not state any prior appellate decision.