Paul Clements v Adam Frisby

A claim based on misuse of an alleged business plan fails where the claimant cannot prove, on the balance of probabilities, that he conceived the plan, imparted confidential information, or engaged the defendant to implement it. The ordinary civil standard applies to serious allegations, although more cogent evidence may be required to overcome their inherent improbability. In assessing disputed events from many years earlier, the court should test witness recollection against contemporaneous documents, known or probable facts, inherent probabilities and the consistency of the evidence. The absence of a witness or document may support an inference, but its significance depends on the circumstances.

The claimant alleged that he conceived the business model behind In The Style, disclosed it confidentially to the defendant, provided approximately £10,000 in start-up capital and engaged the defendant to develop the business. He advanced claims for breach of confidence and breach of fiduciary and contractual duties.

The defendant denied the allegations, maintaining that he and an initial business partner had independently developed the business and that the claimant had merely been approached as a potential investor. The central issues were whether the claimant’s factual narrative was established and, if so, whether the alleged disclosure and engagement gave rise to liability.

1. Claim dismissed. The claimant failed to establish that he conceived the business plan, provided the alleged start-up capital, or engaged the defendant to implement it. The evidence showed that the defendant and Mrs Devine had taken the material steps establishing the business, including obtaining the domain name, creating the website, sourcing stock, applying to register the trade mark and approaching celebrity collaborators.
2. The burden remained on the claimant to prove his case on the balance of probabilities. The seriousness of allegations such as conspiracy, fraud and attempts to procure false evidence did not change the civil standard, but stronger evidence was required to overcome the improbability of such allegations: H (Minors) [1996] AC 563.
3. In assessing credibility, demeanour was of limited value and had to be tested against contemporaneous documents and other evidence: Re Mumtaz Properties Ltd [2012] 2 BCLC 109. Recollections of events nearly ten years earlier required particular caution. Findings should principally be based on reliable documents, known or probable facts and compatible witness evidence: Gestmin SGPS S.A. v Credit Suisse Limited [2013] EWHC 3560 (Comm); Kogan v Martin [2019] EWCA Civ 1645; Kimathi v The FCO [2018] EWHC 2066 (QB); and Re Parsonage (deceased) [2019] EWHC 2362 (Ch).
4. The court was entitled to draw, or decline to draw, inferences from a failure to call a witness or produce documents. The significance of the omission depended on availability, the evidence the person could reasonably have given, other evidence on the issue and the importance of the issue in the case overall: Efobi v Royal Mail Group Ltd [2021] 1 WLR 3863.
5. The legal principles governing breach of confidence and fiduciary duties were considered, including the requirements of confidential information, circumstances importing confidence and unauthorised use, as well as the fact-sensitive nature of fiduciary obligations. It was unnecessary to determine the alternative legal issues because the factual foundation of the claim had not been proved. The court declined to make hypothetical findings on the alternative case.