Colville v Seventy Thirty Ltd

In a contractual damages claim, a breach must be an effective or dominant cause of the loss. It need not be the sole cause and may be one of several cooperating causes. The trial judge must make clear factual findings identifying the breach, what was done, when it occurred, and how it caused the loss. General findings of assistance, encouragement or malice cannot replace findings about the disclosure said to constitute the breach or its timing. Where those findings are absent, the causation conclusion cannot stand and the appellate court should set aside the decision and consider remitting the matter for retrial.

Seventy Thirty Ltd claimed that its former employee, Emmet Colville, had breached contractual obligations of confidence by assisting a former customer, Ms Burki, in proceedings against the company. It claimed its legal costs in those proceedings as loss caused by the breach. The County Court judge found liability and ordered disclosure and destruction of confidential information, while staying the money claim.

Mr Colville appealed, arguing that the judge had failed to make necessary findings about what information he disclosed, when he disclosed it, whether the disclosure breached contract, and whether it caused Ms Burki to commence or amend her claim. The central issue was whether the findings were sufficient to support the conclusion on causation.

1. Appeal allowed. The order of DJ Hugman dated 22 January 2018 was set aside. Ground 5 did not need to be determined.
2. The applicable causation test was not materially in dispute. A contractual breach must be an effective or dominant cause of the claimant’s loss. It need not be the sole cause and may be one of two causes cooperating to produce the loss, applying Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360 and Heskell v Continental Express Ltd [1950] 1 All ER 1033. The discussion in County Ltd v Girozentrale Securities [1996] 3 All ER 834 concerned a different issue, namely whether subsequent events had displaced an earlier effective cause.
3. The trial judge’s essential task was to find the material facts, identify the legal issues and give reasons showing how the decision followed from those facts, as explained in Fage UK Ltd v Chobani UK Ltd [2014] FSR 29. The judge had not found clearly what Mr Colville disclosed to Ms Burki, when the disclosure occurred, or whether the disclosure was confidential information provided in breach of contract.
4. Those omissions were decisive. Seventy Thirty had to prove both a contractual breach and that the breach was an effective cause of Ms Burki’s proceedings. Assistance, encouragement, pressure or malice could not establish breach or causation without findings identifying the relevant disclosure and its timing. The chronology was particularly important because the principal identified disclosure appeared to post-date commencement of Ms Burki’s claim. The alternative case that later disclosures caused an amendment or continuation of the claim also required findings that had not been made.
5. The appellate court was not in a position to make the missing factual findings itself. The provisional view was that the claim should be remitted for retrial, subject to submissions on the consequential order.

• High Court (Queen’s Bench Division): appeal from the order of DJ Hugman, sitting at Wandsworth County Court, dated 22 January 2018. The order was set aside. The claim was provisionally to be remitted for retrial.