Back Office Ltd v Percival & Ors

Contempt of court must be proved to the criminal standard, and the applicant is confined to the breaches pleaded in the application notice and supporting evidence. Solicitation requires a specific and direct appeal to a potential customer with a view to obtaining its business. A company may be liable for contempt where its servant or agent deliberately breaches an undertaking while acting in the course of employment, even if the conduct was unauthorised or contrary to instructions. The additional requirement that an individual proprietor authorised the conduct, or failed to take reasonable preventive steps, applies to individual respondents but not corporate defendants. Directors may nevertheless be liable personally where that requirement is proved.

Back Office Limited sought committal orders or fines against four defendants for alleged breaches of undertakings given on 11 July 2012. The undertakings prohibited solicitation or dealings with 279 listed clients until 5 March 2013. The underlying dispute concerned employees who had left Back Office for Liquidity Group Solutions Limited, a competing payroll-services company.

The alleged breaches concerned approaches to Jobsworth Recruitment Solutions Limited and Gemdrive Logistics Limited. Liability was alleged against the individual sales agents, the company, and two directors. The central issues were whether the approaches constituted solicitation, whether the breaches were proved to the criminal standard, and what was required to establish corporate and personal liability for contempt.

1. Result. Mr Percival and Liquidity Group Solutions Limited were guilty of contempt of court. The applications against Mr Foulsham and Mr Tipper were dismissed.
2. The alleged breaches had to be proved to the criminal standard. The court had to be sure that the breaches identified in the application notice and supporting affidavits had occurred. The evidence established that Mr Richardson attempted to solicit the business of Jobsworth and Gemdrive on 12 February 2013. Mr Percival’s email of 21 February 2013 was also a specific and direct appeal intended to obtain Jobsworth’s business, applying the test in Trego v Hunt [1896] AC 7.
3. The evidence did not establish to the requisite standard that Mr Richardson contacted other prohibited clients, that a director authorised his approaches, or that either director could reasonably have foreseen the breaches and failed to take reasonable preventive steps.
4. For Liquidity, the relevant question was whether its agents acted in the course of their agency. The deliberate acts of Mr Richardson and Mr Percival, undertaken as commissioned salesmen acting within the scope of their authority, made Liquidity liable even if they acted in dereliction of duty or contrary to instructions. The court followed the principle in Stancombe v Trowbridge Urban District Council [1910] 2 Ch 190, as approved by the House of Lords in In Re Supply of Ready Mixed Concrete (No. 2) [1995] 1 AC 456.
5. The Court of Appeal’s approach in In Re Supply of Ready Mixed Concrete [1992] QB 213 and [1992] ICR 229, which treated the third Hone v Page ingredient as necessary for corporate liability, had been overruled by the House of Lords. That ingredient remained applicable to individual respondents, including directors, but was not required for corporate liability.