Bailey & Anor v Graham & Ors

Where a claimant alleges an oral agreement, the court may test the alleged agreement against subsequent conduct, but should focus on conduct that unambiguously supports or negates the competing cases and assess it with all other evidence. A breach of confidence claim requires proof that information was imparted in circumstances importing an obligation of confidence. The information must also be sufficiently precise and capable of being realised as an identifiable actuality. A recipe expressed through variable quantities, unspecified methods and adjustments made by taste may lack the necessary quality of confidence.

The claimants alleged that they had entered into an oral joint venture agreement with the first defendant to exploit a jerk-sauce recipe and share profits equally. Alternatively, the first claimant alleged that the recipe had been disclosed in circumstances importing a duty of confidence. The defendants denied the agreement and contended that the first defendant had independently developed the commercial sauce during 2005. Following a trial on liability, the court determined whether the alleged agreement existed and whether the recipe qualified for protection by confidence.

1. The claim was dismissed. The claimants bore the burden of proving the alleged oral agreement on the balance of probabilities. The court found that they had failed to do so.
2. Subsequent conduct may assist in deciding whether an alleged contract existed. The court should exercise care, concentrate on events that unambiguously support or contradict the alleged agreement, and evaluate them in the round with the other evidence, including accepted witness evidence and contemporaneous documents.
3. The evidence established that the first defendant had been experimenting with and preparing different sauces during 2005, before the alleged agreement and demonstration. The alleged demonstration of the first claimant’s secret recipe was rejected. The parties’ subsequent conduct was inconsistent with the existence of the alleged joint venture, including the absence of meaningful participation, accounting, profit claims or enquiries by the claimants.
4. The alternative confidence claim could only be pursued by the first claimant. To succeed, he had to show that the recipe had been imparted to the first defendant in circumstances importing an obligation of confidence, applying Coco v A.N.Clark (Engineers) Limited [1969] RPC 41. That alleged disclosure was not proved.
5. In any event, the recipe lacked sufficient precision to constitute confidential information. Its variable quantities, unspecified ingredients and preparation methods, discretionary dilution and tasting adjustments meant that it could not reliably produce a consistent product. The ordinary nature of the ingredients and the absence of effective secrecy measures also undermined the claim. The approach in De Maudsley v Palumbo [1996] EMLR 460 was applied.

First-instance judgment. No appellate history was stated in the judgment.