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

A renewal application for permission to appeal must answer each reason given for refusing permission on paper; repeating the original skeleton argument is insufficient. An undertaking limited to confidential information is not an unlawful restraint of trade merely because it restricts use of that information, and confidentiality is not lost because the information is remembered. Where an employee voluntarily supplies confidential information without being asked to obtain it, that does not establish inducement or unclean hands. Attribution of an employee’s knowledge to a company depends on the purpose of attribution; in a third-party claim, senior employee knowledge may be attributed. Costs decisions attract broad appellate deference.

Personal Management Solutions Ltd and another sought permission to appeal against a decision of Judge Curran QC, sitting as a Deputy High Court Judge, concerning the alleged misuse of confidential information in the form of a customer list. Floyd LJ refused permission on the papers. The applicants renewed the application, challenging findings concerning restraint of trade, unclean hands, attribution of knowledge to corporate defendants, and costs.

The Court of Appeal considered whether any of those grounds disclosed a realistic prospect of success or an appealable error in the exercise of the costs discretion.

Permission to appeal refused.

1. Renewal application. Practice Direction 52C paragraph 16 required the applicants’ statement to address individually the reasons given for refusing permission on paper. Repeating the original skeleton argument was insufficient, although the court considered the renewed points.
2. Confidential information and restraint of trade. An undertaking whose contents relate to confidential information does not prevent competition, provided that the information is not used. It is therefore not unenforceable as an unlawful restraint of trade. Confidential information does not lose its character merely because it can be remembered without having the material directly available.
3. Unclean hands and inducement. The judge found that the employee had offered the list to the claimants without being prompted. That finding made it impossible to establish that the claimants had induced a breach of contract. Applying the principle in RBS v Highland Financial Partners, there was no evidence that the claimants had asked the employee to obtain and remove the list in breach of his employment contract. The reference to dishonesty in the judgment under appeal was only shorthand for the fuller formulation derived from that authority. A rule preventing relief whenever confidential information was disclosed by a whistleblower would be wrong.
4. Attribution of knowledge. The attribution of an employee’s knowledge to a company depends on the purpose for which attribution is sought. The principle stated in Jetivia v Bilta [2015] UKSC 23 applied to a claim between a company and the director or employee whose misconduct damaged it. It did not prevent attribution in a claim by a third party against the company. The judge was entitled to find that the misuse occurred with the knowledge of the relevant senior employees.
5. Costs. The costs discretion was broad. The Court of Appeal would interfere only if the judge had gone plainly wrong in principle, failed to consider relevant matters, or considered irrelevant matters. No appealable error was shown.

• Court of Appeal (Civil Division): Floyd LJ refused permission to appeal on the papers. On renewal, Lewison LJ refused permission: [2015] EWCA Civ 985.
• High Court of Justice, Queen’s Bench Division: Judge Curran QC, sitting as a Deputy High Court Judge, gave the decision under appeal. No citation is stated in the judgment.