Personal Management Solutions Ltd & Anor v Brakes Bros Ltd & Ors

Confidential information may include a customer list which is not publicly available and which collates commercially valuable information, even where individual elements could be obtained from other sources. The court must consider the information’s nature, context, accessibility, value, confidentiality safeguards and potential for harm.

A third party’s conscience is affected where it knows, or objectively ought to appreciate, that information is confidential and nevertheless retains, disseminates or uses it. The usual elements of breach of confidence remain quality of confidence, an obligation of confidence and unauthorised use causing detriment or potential detriment.

An undertaking given with independent legal advice was enforceable where it restrained unfair competition rather than trade generally. Mere silence did not establish waiver or equitable estoppel.

The claimants, associated employee-benefits companies, alleged that the defendants had misused a list of Brakes employees holding the claimants’ insurance policies and the premiums paid by them. The list had been supplied by Brakes to Gee 7, a competitor, and was later disseminated to employees conducting sales activity.

The claimants sought damages, injunctions and specific performance of an undertaking given by the fourth defendant, a former director and employee. The issues included whether the list was confidential information, whether Gee 7’s conscience was affected, whether the information had been used to compete unfairly, whether equitable relief should be refused for lack of clean hands, and whether the undertaking was enforceable.

1. Confidential information. The list was the claimants’ information and had the necessary quality of confidence. It identified a defined group of customers, the premiums they paid and their willingness to purchase insurance. Its compilation saved a competitor the expense and delay of independent investigation. The court rejected the contention that it was merely Brakes’ payroll data.
2. Applicable principles. The court applied the three elements identified in Coco v A N Clark: information of the necessary quality of confidence, circumstances importing an obligation of confidence, and unauthorised use causing detriment or potential detriment. The court also applied the contextual factors in Faccenda Chicken v Fowler and the potential-harm approach in Lansing Linde v Kerr.
3. Conscience and use. Objectively, the circumstances showed that the defendants knew, or deliberately closed their eyes to the fact, that the list was commercially sensitive. Gee 7 received, retained, disseminated and rearranged it. Mr Wilson used it to identify premiums and solicit policyholders. No countervailing public interest justified disclosure.
4. Relief. The claimants were entitled to an injunction restraining Gee 7 from using the confidential information. The fourth defendant breached his undertaking by failing to provide the promised list and by procuring and passing on the confidential list. The undertaking was not an unlawful restraint of trade because it restrained unfair competition only. Specific performance and further relief were available.
5. Waiver, estoppel and clean hands. The claimants’ silence did not amount to an unequivocal representation that clause 2.2 would not be enforced. The alleged misconduct by the claimants in receiving information from Mr Wilson lacked the close connection and dishonesty required to deny equitable relief.
6. Damages. Assessment was postponed because late disclosure, including recordings of sales conversations, required further consideration.

First-instance decision. The judgment does not state that an appeal had been brought.