Kew Green Group Limited & Anor. v Jameson Lamb & Ors.

The claimants (two Kew Green hotel management companies) alleged wide-ranging wrongs by former senior managers and related corporate vehicles including breaches of employment and settlement agreements, breaches of fiduciary duty, misuse of confidential information, inducing breaches of contract, economic torts, knowing assistance and knowing receipt. The defendants applied to strike out or for summary judgment in respect of substantial parts of the pleaded case.

The court applied the familiar summary judgment/strike-out approach (CPR rules 3.4 and 24.2): assume the claimant's pleaded facts at their highest, avoid a mini-trial, and decide short points of law suitable for summary disposal while leaving fact-sensitive issues for trial.

Key legal conclusions were:

• The pleaded free-standing, forward‑looking common law fiduciary duty said to subsist after resignation (paragraph 23.2A) was unsustainable and struck out: post‑resignation protection is governed by the backwards‑looking duties in section 170 Companies Act 2006 and by the parties' contractual arrangements.
• Certain pleaded matters did not properly plead breaches of the service agreements (notably a part of paragraph 38 referring to “contracts of employment”) and specific factual allegations (paragraphs 42, 50, 53 and 54) were bound to fail and were struck out.
• Claims of misuse of confidential information, alleged breaches of the settlement agreements (notably obligations in clauses 12.3 and 12.4 to use best endeavours to prevent termination and to seek renewal of HMAs), allegations about the Dragonglass/Starwood investment and various economic tort and accessory claims were held to be arguable and fit for trial.

Background and parties: The claimants are two Kew Green hotel management companies. The first and second defendants (Mr Lamb and Mr Pritchard) were long‑standing senior employees and directors of Kew Green companies; the third and seventh defendants are corporate vehicles used by them after leaving employment. The claim, issued April 2021, pleads breaches of employment and settlement agreements, misuse of confidential information, breaches of fiduciary duties (including alleged appropriation of a 'maturing business opportunity' relating to the Dragonglass/Starwood project), inducing/procuring breaches of contract, conspiracy, knowing assistance and knowing receipt, equitable remedies and an account of profits.

Nature of the application: Four defendants applied (20 March 2023) for strike out or summary judgment in respect of large parts of the claim.

Issues framed by the court:

• What obligations were owed at each relevant time (service agreements, settlement agreements, consultancy agreement, and statutory fiduciary duties under section 170 Companies Act 2006)?
• Whether particular pleaded causes of action were properly pleaded and legally sustainable (including whether a forward‑looking common law fiduciary duty could be imposed after resignation).
• Whether claims were an abuse of process for want of particularity (notably the misuse of confidential information allegations).
• Which disputes were suitably decided at summary stage and which required trial (disclosure and witness evidence)?

Court’s reasoning and outcome on the principal issues:

• The court accepted that while employed the defendants owed ordinary contractual duties and directors’ fiduciary duties. After resignation those director duties continued only insofar as captured by section 170(2) Companies Act 2006 and by the contractual terms the parties had agreed (notably the settlement agreements).
• The settlement agreements (25 October 2019) replaced the earlier post‑termination restraints and contained time‑limited restrictive covenants (running to 31 July 2020) and detailed confidentiality obligations and obligations in clause 12 to use best endeavours to prevent termination and to renew certain HMAs. Those contractual obligations survived and were potentially breached.
• The court rejected the claimant’s contention that a free‑standing forward‑looking common law fiduciary duty in relation to retention/renewal of HMAs survived their resignation; that allegation (paragraph 23.2A) was struck out because the contractual matrix and statutory regime (s170) were the proper basis for any such duties.
• Allegations that failed as a matter of law or pleaded inaptly were struck out (paragraphs 23.2A; part of paragraph 38 referring to "contracts of employment" as pleaded there; paragraphs 42, 50, 53 and 54). Other allegations — including misuse/retention of confidential information, breach of clauses 12.3/12.4 of the settlement agreements relating to Dragonglass/Starwood and certain solicitation/economic tort claims (where factually grounded) — were held to be arguable and to proceed to trial.
• The court distinguished cases relied on by the parties and explained that fact‑sensitive inquiries (e.g. whether an opportunity was a maturing opportunity of the company, the details and timing of communications and deletions of emails, and whether confidentiality was misused) required disclosure and trial rather than summary disposal.

Procedural outcome: The judge proposed striking out the specifically identified unsustainable paragraphs and gave leave for the remainder of the claims to proceed to a trial listed (subject to directions) in March 2024; consequential submissions and limited further directions were to follow.

First instance: the defendants' application was allowed in part. The judge struck out pleaded content that was unsustainable as a matter of law (notably the pleaded free‑standing post‑resignation fiduciary duty at paragraph 23.2A, a mischaracterisation in paragraph 38 and paragraphs 42, 50, 53 and 54) but refused to strike out or grant summary judgment for the remainder of the claim. The court held that (i) post‑resignation protection is governed by the backward‑looking duties in section 170 Companies Act 2006 and by the parties' contractual terms, (ii) the claimant’s misuse of confidential information and certain alleged breaches of the settlement agreement (including clause 12 obligations to use best endeavours to prevent termination and to seek renewal of HMAs) were arguable, and (iii) fact‑sensitive issues (including the Dragonglass/Starwood investment and deletions/retention of emails) require disclosure and trial.