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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> English, Welsh & Scottish Railway Ltd v Goodman [2007] EWHC 3463 (QB) (09 May 2007) URL: http://www.bailii.org/ew/cases/EWHC/QB/2007/3463.html Cite as: [2007] EWHC 3463 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		No. HQ07X00391 Royal Courts of Justice
		9th May 2007

MR. JUSTICE RODERICK EVANS:

1. This is an application by the defendant to strike out the claimant's claim. The claimant is a substantial rail freight company which was formed when British Rail was privatised. The defendant has worked in the rail industry for over 25 years, firstly with British Rail and then with the claimant. He started as a train driver and was promoted to the post of area manager.
2. In the summer of 2006, the claimant company announced it was going to reorganise its business affairs and the result of that was that the defendant, together with more than 20 other employees of the claimant, were made redundant in the early part of January 2007.
3. When he ceased working for the claimant, the defendant began employment with GB Railfreight, which is a competitor of the claimant. The defendant's contract with the claimant contained a number of restrictive covenants, but there was no covenant which precluded the defendant from working for GB Railfreight. In addition to restrictive covenants, the claimant also operated an email policy which precluded the defendant from sending emails from his work email address to his home address.
4. On 31^st January 2007, the claimant wrote to the defendant asking him to return all information emailed to his home email address. The following day (1^st February) the defendant's solicitors met with the claimant's solicitors and indicated a willingness to give undertakings to abide by the terms of the defendant's contract. Between the 1^st and 6^th February emails sent to the defendant's home were delivered up to the claimant in a number of tranches, although no admission was made that those emails contained confidential information. During that period, on 2^nd February 2007, the claimant issued an application and a claim form seeking an injunction preventing the defendant from working for GB Railfreight or for any competitor of the claimant. Those matters came before the court on 8^th February. The defendant had not, of course, had an opportunity of collating evidence and the application was adjourned by consent, on terms that the defendant repeated his undertakings to abide by the terms of his contract and that he confirmed that he had delivered all relevant emails.
5. The matter came back before the court on 22^nd February, and again it was dealt with by consent. On that occasion the claimant abandoned its application for the injunction that it was seeking against the defendant. The defendant gave appropriate undertakings to the court and there was an order that the claim should be set down for a hearing on liability only with a five-day estimate. The case was certified as appropriate for an expedited hearing and the claimant was to make an appointment to attend on the Clerk of the Lists to seek a trial date at the first available date after 14^th May. The order also contained directions for the trial and for the onward progress of the case. Those directions included an extension of time within which the particulars of claim should be served. Time was extended to 26^th February.
6. On that date, the particulars of claim were served. It included an application for injunctive relief and a claim for damages. The claim for damages is set out in paragraph 24 of the particulars of claim. It brings together, or reflects, in part at least, allegations made earlier in the pleading. There are three parts to paragraph 24 which are relevant,

"1. The claimant has had to replace at considerable cost those employees whom the defendant wrongfully encouraged to join GB Railfreight.

"2. The use of confidential information by GB Railfreight to secure contracts which the claimant would otherwise have secured.

"3. The loss of customers which the claimant would have secured but for the defendant's wrongful conduct".

7. The defendant sought further particulars of those three claims on 15^th March and after two extensions of time, further information was served on 3^rd April:

"Under paragraph 24 of the Particulars of Claim

"Of paragraph 24.1: 'The Claimant has had to replace at considerable cost those employees who the Defendant wrongfully encouraged to join GB Railfreight'.

"Request

"19. Identify by name and job title each of the employees who have allegedly been replaced by the Claimant and state whether their replacements were recruited internally or externally and give the date of any relevant advertisements (whether internal or external), the dates of any interviews and the dates when it is alleged that the appointments were made.

"REPLY

"The Claimant has replaced Mr. Paul Baxter-Smith with Neil Ethell who as[sic] an internal applicant. Marc Moffatt, Ken Quarmby and a vacant position based at Tyne have been replaced by 3 people on a temporary basis and who are Mark Younger who has stepped up from being a driver, Peter Cotes who has stepped up from being a driver and Kevin Jones who has transferred as trains master based at Thornaby. The other managers would have been part of a displaced pool to be considered for the new role of Production Manager which replaces their role of Operations Manager. The five left would have been considered for four positions. The recruitment for these positions is currently on going and no body has as yet been appointed.

"Of paragraph 24.2: 'The use of confidential information by GB Railfreight to secure contracts which the Claimant would otherwise have secured.'

"Request

"20. Identify with precision:

"a. The confidential information it is alleged was used by GB Railfreight;

"This is a matter of evidence to be dealt with in the witness statements in due course.

"b. The contracts which it is alleged that GB Railfreight secured stating when it is alleged that the contracts were so secured and how it is alleged that the confidential information was used to secure the contracts.

"This is a matter of evidence to be dealt with in the witness statements in due course.

"Of paragraph 24.3: 'The loss of customers which the Claimant would have secured but for the Defendant's wrongful conduct.'

"Port of Tyne - Drax contract - new region for GBRF 1 10 28 76 87 JL11. Three year contract awarded in April 2006 worth £11 m. before April 2006 EWS held this contract.

"Email Evidence

"30 October 2005 (time: 1631) [email protected] /Ward Simpson & Kevin Walker - MOW for Tyne Dock

"30 October 2005 (time: 1632) [email protected] /Ward Simpson - Class 66 Instructors Notes

"01 November 2006 (time: 1949) [email protected] /Ward Simpson - Port of Tyne to Drax route knowledge requirements

"Request

"21. Identify each and every customer it is alleged that the Claimant would otherwise have secured and give full particulars of how the Defendant's conduct allegedly prevented them from being secured.

"This is a matter of evidence to be dealt with in the witness statements in due course."

8. I should add that the Drax contract referred to in that response, said to be worth £11 million, had in fact been awarded to GB Railfreight in April 2006, but because they did not have the skills or the skilled manpower to run the contract, it was still being operated by the claimant. EWS say no doubt that that is why GB Railfreight were keen to engage the assistance of the defendant to solicit or poach employees from EWS to the workforce of GB Railfreight. It should also be noted that the two emails referred to by the claimant in its response as being dated the 30^th October 2005 should in fact be dated the 30^th October 2006.
9. Other parts of the particulars of claim were also the subject of a request for further particulars. I do not intend to refer to those individually, but a number of those requests were also met with the response that all would be revealed in witness statements.
10. The complaint made by the defendant is that it is not acceptable to plead a case in the general and non-specific way the claim has been pleaded in this case, and it is also unacceptable, it is said, for the claimant to say in respect of these requests, and, indeed, others, that the answer is a matter of evidence to be dealt with in the witness statements. How can a defendant prepare witness statements when it does not know what case it is to meet? How can a defendant prepare its case and consider, for example, the relevance of part 36 without knowing the case it has to meet? Until the claimant can properly particularise its case, the defendant cannot prepare its witness statements and itself for trial.
11. The defendant relies on observations by Laddie J. in the case of Ocular Science Limited & anr. v Aspect Vision Care Limited & ors. [1997] RPC 289. The observations which are relied upon appear on pages 359 and 360 of the judgment under the headings "pleadings and a breach of confidence action". In addition, the defendant relies upon observations of Eady J. in the case of Delos Limited v CAE Electronics Limited, unreported, but judgment was given on 21^st February 2001, in particular the defendant relies upon the observations set out in the third paragraph on page 6. Again, I do not intend to read into this judgment those passages which have been much referred to during the course of this case.
12. Yesterday, when the matter came to court, the claimant abandoned its claim for injunctive relief and the case is now reduced to a claim for damages, and Mr. Oudkerk submits that the vagueness and lack of particularity of this claim is not only an embarrassment to them in the preparation of their case but it is an abuse of process of the court and the whole claim should be struck out.
13. Mr. Kibling's initial submission was that the defendant's application should be rejected in its entirety and the whole case should proceed to trial. He took me in his submissions to two witness statements, the first of Gerry Skelton, dated the 19^th February. He is an officer of EWS. It is important to note that that witness statement was dated long before the service of the further information which the defendant sought. The second witness statement is that of Robert Powell, solicitor for the claimant. That was served yesterday, on the day of the hearing, at 11 o'clock. I was taken through a number of emails exhibited to those statements which Mr. Kibling submitted show that during the latter part of his employment with EWS, the defendant was in improper communication and contact with officers of GB Road Freight, about the Drax contract and about the training and abilities and skills of employees of EWS who later, in January 2007, left EWS to work for GB Railfreight.
14. Mr. Kibling frankly and readily conceded that those parts of the particulars of claim and the response to the application for information, to which those emails were relevant, could, and should, have been more fully pleaded, and he agreed that in order to make good his case on what has been referred to during this hearing as the "poaching limb of the claim", the claimant would have to go further than the contents of the emails and prove that the defendant was party to improper poaching of the employees referred to. His submissions went some way to explaining the basis of the claim set out in paragraph 24.1 of the particulars of claim to which I have referred already. I shall return to that part of the claim in due course.
15. As far as the claim set out in paragraphs 24.2 and 24.3 are concerned, Mr. Kibling had to concede that he had no material available to him to justify or support those claims. There are no reasonable grounds for bringing those claims, and while it might be putting it too high to say that he formally abandoned those parts of his pleaded case, that is in effect what he did yesterday.
16. In view of the concession that he made, his secondary position was to say that the claim encapsulated in paragraph 24.1 should, in any event, go for trial as a discrete issue which could be tried alongside the defendant's counterclaim. The precise wording of paragraph 24.1 is relevant. It reads:

"The claimant has had to replace at considerable cost those employees whom the defendant wrongfully encouraged to join GB Railfreight."

17. Whether or not the claimant can prove "wrongfully encouraged" is, of course, a matter in issue, but there is no adequate evidence put before me of wrongful encouragement, and when that particular was drafted, no cost had been incurred, let alone a considerable cost. The particulars of claim were, of course, accompanied by a statement of truth. The pleading has never been amended. I am told that the prospective cost of training a train driver is in excess of £30,000, but the fact remains that no cost has been incurred.
18. There is one other matter which I feel obliged to mention, and that is the way disclosure has been conducted. Large amounts of irrelevant material, some of it emails of an inappropriate nature, have been disclosed. While they may have been improperly sent or received, it is difficult to see how they could form the basis of a monetary claim. Sorting out what was or was not relevant, I am told, on behalf of the defendant, was a considerable task which took far more time than it should have. That is not the way to conduct this kind of litigation. Disclosure should be focused, and I also question whether it is appropriate to mention emails, which again are of an inappropriate nature, in response to a request for information which goes to a specific but unconnected allegation of misconduct. I have not heard submissions from Mr. Kibling on those matters and I do not dwell upon them. They are not determinative of my decision but it is not difficult to understand the complaints of the defendant about those matters.
19. I have come to the conclusion that I should look at the three heads of claim individually, as Mr. Kibling has asked, but that I also must look at them as part of a whole against the background of this litigation. The claims encapsulated in 24.2 and 24.3 are without foundation and should be struck out, but matters go further than that. The manner in which this case has been pleaded is inconsistent with the efficient, prompt and focused manner in which cases generally, but cases of this nature in particular, should be conducted. It is impossible for the defence to know what case it has to meet. The exchange of witness statements, which was to take place on 30^th April, was an impossible task.
20. This is heavy-handed litigation, far too broad in its claims and allegations and unfocused and unparticularised, and I am driven to the conclusion that its purpose was not to seek remedies for provable loss but rather to intimidate. It is oppressive and its lack of particularity and precision amounts, in my judgment, to an abuse of the process of the court and the whole claim will be struck out. It would be unjust, in my view, to allow it to proceed. Therefore, there will be judgment for the defendant on the claim.

[LATER]

21. I am not going to assess costs of any part of the claim. I am going to send the whole matter for detailed assessment in default of agreement, but I shall make a number of orders dealing with costs. First of all, the assessment of costs will be on an indemnity basis throughout the whole case. The claimant will pay the defendant's costs of the case, including the reserved costs relating to the hearings before Judge Seymour. There will be an interim payment of £75,000 to the defendant, to be paid -- how quickly can you pay it?

MR. KIBLING: My Lord, could we ask for 21 days for the interim payment?

MR. JUSTICE EVANS: Why do you need so long to write a cheque?

MR. KIBLING: I will just take instructions. (After a pause) If we ask for 14 days, simply on the basis that it is not straightforward in terms of writing out the cheque. That one individual has to go through a process and we would ask for 14 days.

MR. JUSTICE EVANS: I was going to say "forthwith". Mr. Oudkerk?

MR. OUDKERK: My Lord, I am not going to quibble over 14 days.

MR. JUSTICE EVANS: I would be grateful if you would draw up a note of the costs orders, but in the round, it seems to me to be necessary to include the following matters, that the claimant will pay the defendant's costs of the case, including the reserved costs of the hearings of Judge Seymour, costs to be paid on the indemnity basis. There should be an interim payment of £75,000 within 14 days and subject to those matters, there shall be a detailed assessment of costs in the event of no agreement.

MR. OUDKERK: I am very much obliged, my Lord, and I will ensure that a minute of order is drawn up.

MR. JUSTICE EVANS: Thank you both very much.

_________