Beals Mortgage and Financial Planning LLP & Ors v First Global Financial Services Ltd & Ors

A genuine mistake in a party’s name may be corrected where the intended party is identifiable and the mistake creates no reasonable doubt about identity. A later agreement may discharge an earlier agreement by necessary implication, with the discharge providing consideration for the new agreement. Relevant evidence is not automatically excluded because it was obtained unlawfully; admissibility requires a balance between the competing rights and interests in the circumstances of the case. Database contents systematically selected, arranged and made accessible for future use may attract statutory protection, and contractual restraints may apply to clients first contacted while the adviser was still acting for the business.

The claimants, two closely related financial-services and estate-agency partnerships, sued former advisers, an administrator, companies and associated individuals. They alleged breaches of contract, misuse of confidential database information, copyright infringement, interference with property, inducing breaches of contract and conspiracy. The central factual case was that the defendants diverted clients, files and database material to a rival financial-services business.

The trial also raised a pleading mistake in the claimant’s name, contractual enforceability and consideration, the admissibility of recorded telephone calls, restraint of trade, issue estoppel and the statutory status of the database.

1. Disposition. The claims succeeded in their entirety against the six remaining defendants. The court awarded total damages of £80,000, apportioned between the defendants according to culpability, dismissed the counterclaims, directed amendment of the claimant’s name and granted permanent injunctions against further misuse of protected data.
2. Name of party. Under CPR 17.4(3), the court could correct the genuine omission of “Planning” from the claimant’s name. The intended claimant was identifiable, and no defendant had been misled, confused or prejudiced. The amendment was therefore ordered. The Sardinia Sulcis [1991] 1 Lloyd’s Rep. 201 was applied.
3. Contracts. The purported letter relied on by Sean Healy was a forgery and, in any event, had not been accepted, was superseded by the later services agreement and could not create enforceable rights. A new agreement replacing an existing agreement is supported by consideration supplied by the discharge of the old agreement. The new agreement also imposed materially different obligations. Bob Rice was not misled or subjected to undue influence, and his agreement was not rescindable.
4. Evidence. The recorded telephone transcripts were admissible. Even if unlawfully obtained, admissibility depended on balancing the claimants’ interest in placing relevant evidence before the court against the defendants’ privacy rights, including the seriousness of any Article 8 interference. The balance favoured admission. Jones v University of Warwick [2003] 1 WLR 954; [2003] EWCA Civ. 151 was applied.
5. Database and restraints. The client lists, diary records and relevant Trigold material formed part of a protected database. The defendants’ copying, retention and use of confidential material infringed the claimants’ rights. A client who first contacted an adviser while the adviser was working for the claimants was a client dealt with during the relevant period and fell within the contractual restraint. The restraints were narrow in scope and duration and were not shown to be an unlawful restraint of trade.
6. Liability. The evidence established a concerted scheme to divert clients, confidential data and files to the rival business. The defendants were liable under the contractual, statutory and tortious causes of action pleaded, including inducing breaches of contract and conspiracy.