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

On an application under Civil Procedure Rules 1998, rules 3.4 and 24.2, a claim should proceed where the pleaded case is arguable and requires disclosure or evidence. The court should decide a short, decisive point of law suitable for summary determination, but should not conduct a mini-trial.

Forming an intention to compete is not, without more, actionable. Conduct undertaken while contractual or fiduciary duties remain in force may nevertheless be arguable wrongdoing. A former director remains subject to the limited backward-looking duties preserved by section 170(2) of the Companies Act 2006, but a carefully defined consultancy and settlement arrangement did not impose an additional free-standing fiduciary duty. A confidentiality claim was not abusive where the defendants’ conduct had impaired the claimants’ access to the information.

The claimants, two hotel management companies, sued former senior managers, their associated companies and others for alleged breaches of contract and fiduciary duty, misuse of confidential information, economic torts, knowing assistance, knowing receipt and conspiracy.

Four defendants applied to strike out substantial parts of the claim or obtain summary judgment. The application concerned alleged competition, investments in a hotel project, termination of hotel management agreements, employee solicitation, confidential information and the scope of post-employment duties.

The central questions were whether the challenged allegations disclosed viable causes of action and whether they were suitable for determination without disclosure and a trial.

1. Approach. The court applied the familiar approach under rules 3.4 and 24.2 of the Civil Procedure Rules 1998. The facts and law were assumed in the claimants’ favour. A claim was to be struck out or summarily determined only if it was unsustainable or bound to fail. Issues requiring disclosure or testimony were suitable for trial.
2. Service agreements and competition. The mere formation of an intention to compete did not amount to a breach of the service agreements. The allegation that the former managers had resolved to compete was struck out. Alleged communications with advisers, industry participants and clients before employment ended were arguable breaches of loyalty, fidelity and reporting obligations and were fit for trial. Alleged insertion and use of key-manager provisions also remained for trial.
3. Confidential information. The allegations concerning forwarding and deleting company emails were not an abuse of process. The claimants had identified examples of confidential material, and there was an arguable case that the defendants had deliberately put relevant information beyond the claimants’ reach. The strict particularity considerations in Ocular Sciences Ltd v Aspect Vision Care Ltd did not apply in the same way.
4. Investment and fiduciary duties. The 2018 Deed did not require consent to further investment indefinitely after employment ended. Any such construction would create an indefensible restraint of trade. The alleged appropriation of a maturing business opportunity in the Dragonglass project was fact-sensitive and remained fit for trial.
5. After 31 January 2020, the former directors remained subject to the backward-looking statutory duties preserved by section 170(2) of the Companies Act 2006. They did not, however, owe the pleaded free-standing common law fiduciary duty concerning retention and renewal of hotel management agreements. Clause 12 of the settlement agreements imposed contractual best-endeavours obligations, not fiduciary obligations requiring discretionary judgment and subordination of all personal interests. The consultancy agreement did not alter that conclusion.
6. The claims concerning breach of the settlement agreements, employee solicitation, confidential information, the Dragonglass opportunity and related economic torts were generally viable and remained for trial. Paragraph 23.2A, the reference to “contracts of employment” in paragraph 38, and paragraphs 42, 50, 53 and 54 of the particulars of claim were struck out. Directions for trial were to be considered after consequential submissions.