Kieran Corrigan & Co Ltd v OneE Group Limited & Ors

The claim concerned alleged misuse of confidential information relating to the design and marketing of corporate research & development (R&D) tax relief structures under the Corporation Tax Act 2009. The court applied the established three-stage test for breach of confidence (information with the necessary quality of confidence; imparted in circumstances importing an obligation of confidence; unauthorised use to the claimant's detriment) and considered related claims in unlawful means conspiracy and procuring breach of contract. The judge found that the claimant's material (the Structure and related project papers) was the product of specialist skill and effort and therefore confidential; it had been disclosed to OneE Tax under an NDA and then used by OneE personnel to develop and market the Nemaura structure. As a result the First, Third and Fourth Defendants were held liable for breach of confidence and for unlawful means conspiracy in respect of acts from 5 October 2014 onwards; the Second Defendant was not liable. The claim for procuring breach of contract was not made out. The court also addressed issues of limitation, the Trade Secrets Regulations, correct court fee, and serious procedural failings in the defendants' witness statements.

Background and nature of the proceedings. The claim was brought by an Irish tax adviser who alleged that OneE and certain of its directors and employees misused confidential information (including draft instructions to counsel and project-specific materials) about an R&D tax-efficient investment structure (the "Structure") which he had developed with senior counsel. The pleaded causes of action were breach of confidence, procuring breach of the NDA between the claimant and a OneE group company, and unlawful means conspiracy. Remedies originally sought included injunction and delivery up but at trial the claimant pursued an inquiry as to equitable compensation or damages, or at his election an account of profits, with an order for payment following the inquiry/account.

Issues for decision. The court framed and decided (a) whether the claimant's material had the quality of confidence and had been imparted in circumstances importing an obligation of confidence, (b) whether the defendants had misused that information, (c) whether the defendants procured a breach of contract, (d) whether there was unlawful means conspiracy, (e) limitation and the application of the Trade Secrets Regulations 2018, and (f) related procedural issues including the correctness of the court fee and defective witness statements.

Reasoning and principal findings. The judge reviewed the relevant R&D tax provisions in the Corporation Tax Act 2009 (notably the Chapter 2 SME relief and the subcontractor rules in ss.1051–1053 and ss.1133–1136) to explain the technical work behind the Structure. He found that the claimant's materials (the draft instructions, project notes and related documents) were the product of specialist legal and tax skill and therefore not readily accessible to the relevant professional circle; they were imparted to OneE Tax under an NDA and to identified OneE personnel at meetings and by e-mail; and they were then used by OneE staff to develop and market the Nemaura structure. On that basis the judge held that the information had the necessary quality of confidence and that the First, Third and Fourth Defendants had used it in breach of confidence. The Second Defendant (Mr Timol) was held not to have known or to have appreciated the confidential provenance of the material and so was not liable for breach of confidence or conspiracy. The judge found that OneE Tax had passed confidential material into the wider OneE group in May–August 2014 and that that transfer and the subsequent marketing and fundraising activity amounted to misuse. The court also concluded that the Trade Secrets Regulations give rise to a separate statutory remedy for unlawful acquisition/use/disclosure of trade secrets but that those Regulations (and their six-year limitation scheme) apply only to claims for the statutory remedies and not to common-law equitable claims for confidential information prior to 9 June 2018. The unlawful means conspiracy claim succeeded only in respect of acts on or after 5 October 2014 (within limitation). The procuring-breach-of-contract claim was time-barred. The judge made adverse costs findings against the defendants for serious breaches of Practice Direction 57AC in the preparation of witness statements.

At first instance, the court allowed the claimant's case in part. The First Defendant (OneE Group), the Third Defendant (Dominic Slattery) and the Fourth Defendant (Timothy Johnson) were held liable for breach of confidence; the Second Defendant (Bashir Timol) was not. The First, Third and Fourth Defendants were also held liable for unlawful means conspiracy in respect of acts on or after 5 October 2014; Mr Timol was not liable for conspiracy. The defendants were not liable for procuring breach of contract. The court concluded the claimant's information was confidential (including analysis of s.1053(6) CTA 2009 and the proposed LLP/R&D structures), that it had been imparted under an NDA and in confidential circumstances, and that substantial parts of the Nemaura structure embodied and deployed that information. Limitation and the scope of the Trade Secrets Regulations limited some aspects of the remedies available.