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England and Wales High Court (Queen's Bench Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Halcyon House Ltd v Baines & Ors [2014] EWHC 2216 (QB) (11 July 2014) URL: http://www.bailii.org/ew/cases/EWHC/QB/2014/2216.html Cite as: [2014] EWHC 2216 (QB) |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
(sitting as a Judge of the High Court)
____________________
HALCYON HOUSE LIMITED |
Claimant |
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- and - |
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CAROLINE BAINES SUSAN MOGRIDGE MINT LETTINGS AND MANAGEMENT LIMITED |
Defendants |
____________________
James Purnell (instructed by SA Law LLP) for Mrs. Baines, Mrs. Mogridge and Mint Lettings and Management Ltd.
Hearing dates: 10, 11, 12, 13, 16, 17, 18, 19, 20, 23 and 24 June 2014
____________________
Crown Copyright ©
His Honour Judge Richard Seymour Q.C. :
Introduction
"Caroline was appointed the Managing Director (and was also, in this capacity an employee with a salary). I was the Chairman, and Jeremy was a director. The arrangement was that Caroline would run the business on a day-to-day basis but would provide regular information and reports to me and Jeremy. There would be monthly meetings between the three of us (as the Board of Directors)."
"To confirm our conversation of this morning, I am pleased to offer you the position of full time administrator here at Halcyon House Ltd.
The working hours will be from 9am to 5pm, Monday to Friday, and your starting salary will be GBP 17000.00 per annum.
Holiday entitlement is 20 days per annum plus bank holidays and I can confirm that there will not be a problem with you taking time off in May for your friends [sic] wedding.
I very much look forward to confirming a starting date with you, and to working together in the near future.
Should you have any questions, please do not hesitate to contact me."
"Ms. Nicky [sic] Payne was employed by Halcyon as a part-time Client Liaison Officer. Her main duties involved inspecting properties before and after they were let and undertaking inventories in relation to the properties. This was necessary in order to determine whether any damage to properties had been caused by a tenant during the currency of a lease, and to determine the appropriate implications for the tenants deposit (which was securely held by Halcyon during the currency of the lease);"
"Mrs. Mogridge was the next most senior employee [after Mrs. Baines]. She had been employed since around March 2008 on a full-time basis. She was effectively the Administration Manager and acted as Caroline's unofficial deputy. For example, when Caroline was absent from Halcyon's offices, Ms. Mogridge would take over the day-to-day running of the business and offices. Her duties were wide ranging and included: (i) financial duties such as the preparation of accounting documentation for the business and arranging payment to contractors who had undertaken work at landlords' premises and chasing tenants for rents when they had not been paid; and (ii) client landlord duties such as liaising with client landlords in relation to a range of matters such as the payment of rent to client landlords on a monthly basis (once it had been collected by Halcyon), proposed rent increases, making arrangements for repairs to properties as well as day-to-day dealings with client landlords where necessary. Mrs. Mogridge had wide exposure to Halcyon's clients and would have been on first name terms with quite a few of them; (iii) office management duties such as the maintenance of a diary to record appointments and reminders in relation to other tasks which need to be undertaken and the giving of instructions to members of staff. Apart from Caroline, Mrs. Mogridge was the only employee who had access to Halcyon's bank accounts and passwords, and who could effect bank transfers. She would sometimes take substantial cash deposits (over £1,000) from tenants and bank them. All of this required a very high degree of trust from her employer. She may not have been recruited initially as Halcyon's Administration Manager but that was clearly her actual position in the company."
The evidence and findings of basic fact
"Dear Caroline
It is I believe essential that I should place on record the bones of our discussions which have recently taken place re Halcyons [sic] future.
The business was bought as a "family business" with you to be in charge of the day to day running and to be paid a salary and as has transpired a bonus and dividends. Initially this worked well and we 3 had regular planning meetings and financial information.
In the last 2-3 years these meetings have not been continued, financial information is non-existent or very late and no business plans are produced or discussed. In the interests of harmony I allowed this to continue (probably for far too long).
In order to resolve this I sought a way to keep both you and your brother happy and treated fairly and devised 2 options both of which required Halcyon to move from the Post Office so that I am free to sell
1/ We should issue the surplus cash in the form of a dividend
I would aquire [sic] Jeremys [sic] shares in return for property.
You would be given sole managerial authority to run Halcyon
I would take some fee/percentage of profits to boost my income as I would be giving away property so that you would have eventually become sole owner
2. Alternatively, bearing in mind your pregnancy and presumed wish to raise a young family, you would re-think your attitude and Halcyon would revert to the family business as originally intended. The surplus cash would not be distributed but be used if possible to help purchase a freehold office to assist in growing the company more quickly. Shareholding to remain unaltered.
Originally you decided on option 1 and then apparently changed your mind and went for option 2.
In the following period you managed to make it quite clear that you had no intention of sharing information or decision making but expected things to continue as they have been During lunch as [sic] TTewinbury [sic] I asked you if my understanding was correct and you said yes and to quote you "if it ain't broke why should I fix it" I then made it clear that option 2 was only available as I originally proposed and therefore option1 [sic] would obtain. You appeared to accept this quite readily and I believed you had simply changed your mind again.
At no time during this lunch, or in the days before or after was any mention made of you aquiring [sic] Jeremy's shares and certainly not using Halcyons [sic] surplus cash in this way. I can be absolutely certain that we had no conversation whatsoever in this regard as I would have pointed out to you, as I do now, that 45% of Halcyon which includes this money already belongs to Jeremy. Whoever you did have this discussion with is incredibly ill-informed to think it would be possible. I should of course be interested to know who.
As I am writing: there are currently 2 sets of offices available to Halcyon. I understand BBW is not available until at least the end of the year. If you cannot agree a lease with them in the next 2 weeks then re-open negotiations with the others. Please keep me informed/
This is a difficult letter to end as clearly much remains unsaid. I hope you get in touch soon
As ever
M [presumably meaning "Mum" or "Mummy", in manuscript, whereas the remainder of the letter was type-written]"
"Dear Mum,
I refer to your letter, posted through Halcyons [sic] letterbox over the weekend.
I should like to detail exactly what you have said to me over the past few weeks.
Our first discussion on the subject of Halcyon ownership was in the Chequers. This discussion was initiated by you entirely, and I had no idea that it would take place. You said to me that you could not possibly continue with things as they were as you could not cope with it. You said that you were fed up, that you were sick and tired, and that you no longer wanted any involvement with Halcyon.
You offered two options:
- You and Jeremy take a substantially larger role in the business and how it is run.
- I use the capital in Halcyons [sic] account that we have built up over the past 6 years to buy out Jeremys [sic] shares and possibly yours. You would then give Jeremy a flat to make it 'fair'. In return for this, you would expect an annual income.
I checked with you that it was possible to use the funds in Halcyons [sic] account to purchase the additional shares from Jeremy, and you told me that you had spoken to Mark at CVDFK [the auditors of Halcyon] and he had said that it would be fine.
Unsurprisingly, I was delighted at the thought of being able to buy the majority shareholding in the business, and we left it that I would think it over before making a final decision, though my obvious preference was to own the majority stake in Halcyon.
Subsequent to that conversation, the option of a freehold office came up in Knebworth. I said to you, quite clearly, that I thought from Halcyons [sic] point of view it would be better to invest in a freehold rather than use the capital to purchase your shares or Jeremys [sic], and that therefore, I was re-considering option one and would not be in a position to give a final answer until the matter of the freehold becoming available was confirmed.
…
To then receive a telephone call from you stating that you now intended to take the accumulated capital to pay a dividend was a bolt from the blue, completely unexpected and million miles away from what had previously been discussed.
…
It is quite clear to me now that you were never in a position to enter into the discussions we had, and that you never had the right to offer me the prospect of owning a business which I have worked incredibly hard for over the past six years and am incredibly proud of.
Speaking personally, I feel that your actions over the past few weeks have been at best confusing and at worst, simply cruel. I cannot understand why you would want to put me through such emotional upheaval, whether or not I am seven months pregnant.
…
The options now seem to be limited to:
1) Paying out a large dividend to you and Jeremy. At this point in time, I would not wish to take my dividend, and instead would add it to the value of my Directors [sic] loan.
2) Paying back the loans to all Directors.
3) Leaving it in the bank.
…"
"The money [suggested as available as a dividend] can either be used to buy your shares and /or Mums [sic] (and it should be borne in mind that regardless of what you think the 'market value' of the company is now, if I walk over the road and set up on my own and take the clients with me (and there is nothing stopping me at all), it will be worth nothing and your shares will be worth the same – nothing. Halcyon makes a profit because of me, it remains in business because of me, and if I was to do as above, it would go under within 8 – 10 weeks. That is a fact."
"Caroline, Jeremy and I attended a Halcyon Board Meeting on Saturday 21st November 2009, at which it was agreed that a dividend would be paid to each shareholder in the same proportions as the respective shareholdings. Accordingly Caroline and Jeremy received £18,000 each, while I received £4,000. There was also discussion about Caroline buying Jeremy's and my shares in the company but this was not agreed. It was however agreed that Caroline would arrange for me to be added as a signatory to the business bank accounts. The minutes of that meeting prepared by me are at page 26 of the bundle."
"Minutes of Directors meeting at 10 Long Ridge, Aston, Herts, 21st November 2009
Attendees: Caroline Baines, Nicola Low, Jeremy Low
After a brief initial discussion, it was agreed that a dividend of £40,000 would be paid to the Directors – the split to be £18000 each to Jeremy Low and Caroline Baines, and £4000 to Nicola low [sic].
In addition, Halcyon would re-pay the Directors loan of £22500 to Jeremy Low and £5000 to Nicola Low, and in turn Caroline Baines would purchase their shares in the Business (Halcyon House Ltd). In addition, £5000 would be paid by Halcyon House Ltd to Nicola Low to cover the refurbishment of the Offices at 1 St Martins Road, Knebworth upon the relocation of the business (to be arranged as soon as possible).
This was agreed by all, and Caroline Baines went to fetch the office cheque book to finalise the arrangements.
Upon her return, after a brief discussion over previous conversations, Nicola Low rescinded her agreement to the above and tore up the agreements typed by Jeremy Low in Caroline Baines' absence.
After another brief discussion, it came to light that Jeremy Low had shared a confidential communication between Caroline Baines and himself with Nicola Low, though he had denied previously that he had done so.
The majority shareholders (Jeremy and Nicola Low) then instructed Caroline Baines to issue cheques for dividends as outlined above and this was done.
Nicola Low then stated that going forward, the profits in the company would be split according to share ownership at the end of each year. Jeremy Low agreed, but added that should an opportunity arise that he and Nicola Low considered worth investing in, then they would do so.
Nicola Low then requested that she be added as a signatory to the business bank accounts, and Caroline Baines agreed to arrange for the relevant documents to be sent to her by post directly from the bank. There may be issues with regards to PI/CMP insurance which Caroline Baines will investigate and should there be any problems, she will report them back to the other Directors.
There being no other business, the meeting closed at 12 pm."
"By the middle of 2009 it had become clear that Caroline regarded Halcyon as hers and that she did not want any input from Jeremy or myself. I was very anxious to avoid a family rift and therefore determined that I would try to resolve the difficulties. In addition, it became obvious to me from what I was hearing from a number of sources that Halcyon's name was not as good as it should be in the marketplace. Indeed, the company lost some big clients. For example, in August 2009 Caroline used appalling language in an exchange of emails with a client, Mr. Leonard Petts, resulting in the loss of his business. Prints of those e-mails are at pages 7-11 of the Bundle. …"
"On 21 November 2009, at a Meeting of Directors at Mrs. Low's house, the Directors agreed for Mrs. Baines to purchase the shares of Mr. Low and Mrs. Low. Mr. Low committed the terms of agreement to writing, but Mrs. Low later at that meeting tore up the written document and the agreement to sell shares was thereby terminated."
"I do not recall Mrs. Low writing out the terms of an agreement and I certainly do not recall her tearing them up at the same meeting. I do recall that we agreed a solution whereby Mrs. Baines would be given the entirety of the business and I would be given a flat (with a mortgage on it) in return. Mrs. Baines reneged on the agreement and was very rude about it."
" … I refer again to the email sent to me by Mrs. Baines on 16 November 2009 at 14.46 hours, a copy of which is at page 9 of exhibit "JFGL2", in which she clearly threatened to set up on her own and take Halcyon's clients with her, and not just by implication."
"Called in because I had identified the web-site was not functioning properly. Neither Sue [Mogridge] not [sic] Elaine [Washbrook] knew how to repair it or even who to contact.
No-one wanted to phone Caroline as she was on maternity leave.
Sue mentioned the following problems
1. French Polish in the form of the son who is now a partner had been identifying work not needed. Sue did not know how to deal with it because of length of association with Tom I instructed her not to continue using them.
2. Payments with Contractors.
3. Elaine has problems with Riversmeet No block figures repaired [sic]. Andre [Harrold] was apparently upset as C[aroline] had cancelled meeting on 4th when he should have prepared all figures.
Elaine was also struggling to find appropriate paperwork.
4. Balance in Lloyds Client Account approx 47000 should have been over 100000. Sue does not know where rest is held – neither do I.
5. The office account was down to approx 1900 apparently balance may be in an HSBC account. Details unknown
6. The massage [sic] on the mobile held by Caroline says – phone office and if you leave a message may not get back to you.
7. Sue would welcome someone (me) to whom she could refer matters she was unsure of. Would consider course for ARLA did not want to become "above" oters [sic] preferred flat line. Would be interested in share-holding in the future."
"2. I cannot upload any more photos to our own website. Don't know why. I did wonder if there were too many old photos on there that we aren't using but there doesn't seem to be any way I can remove any to test this. Nicola rang me yesterday to ask about this (there are a couple of new ones on the website which don't have photos) and asked me to ring her back if I can't resolve it."
"In February 2010 (I can't remember an exact date as it didn't seem that important to me at the time) the office door buzzer went and Nicola Low came into the office. To say that Elaine, Nicki and I were surprised is an understatement. We knew that Caroline was only at the end of a telephone or email so Nicola Low's visit was totally unexpected. Nicola Low said on her first visit that she had come to 'make sure everything was alright' and to see 'if there were any cheques that needed signing'. Everything was fine and there were no cheques that needed signing. No one had asked her to come, and there were no issues we were not comfortable dealing with."
"Dear Caroline,
As Directors of Halcyon we are calling a General Meeting to be held at the Halcyon Offices at 8 p.m. on Tuesday 2nd February. A copy of the Agenda is enclosed. If you have other matters for discussion that you would like to add please let me know. My computer is currently kaput so if you wish to e-mail please contact Jeremy.
We appreciate this may be difficult for you but please consider
1. You may hire a taxi or car at Halcyon's expense if you wish to attend.
2. We could move the meeting to your house.
You may nominate a proxy and they can attend and act on your behalf.
Please contact me if you have any queries.
Yours sincerely,
N.M. Low - Chairman"
"1. Discuss signatories for Halcyon office account cheque book
2. Discuss proposed changes to day to day management for Halcyon together with transfer of information, documents, hardware etc.
3. Any other Business"
"1. To relieve Caroline of day to day responsibilities.
2. To replace Caroline's signature for Banks with Chairman's
3. Caroline will remain a Director and receive maternity pay for appropriate length of time.
4. Chair proposes to hold weekly update meetings with staffat [sic] first.
5. Situation to be reviewed after 3 months.
N.M. Low (Mrs.) - Chairman"
"Dear Jeremy,
In response to documents received this evening, i [sic] object to the proposed meeting tomorrow evening on the grounds of insufficient notice.
Aside from the obvious reasons why I cannott [sic] attend, there is insufficient time for me to locate a proxy and ensure that they can attend either.
In addition, I see no reason for a meeting to be held at all. The business is running smoothly and there are no issues. Should any issues arise, there are procedures in place to ensure that they are dealt with.
I strongly feel that any interference will serve no useful purpose and in fact have a negative effect not only on the staff but on the smooth and efficient running of the company.
Should you or your fellow director have had any concerns regarding my maternity leave, you could, and should, have raised them previously. As you are both aware, I have put in place both the staff and the necessary processes to ensure that the company functions more than adequately whilst I am away from the Office.
I would be grateful, therefore, if you could advise me of the reasons behind your apparently sudden decision to call a meeting with such obviously inadequate notice.
If either of you has reason to believe that I am not fulfilling my duties as Managing Director, I would ask that you put them in writing with examples where possible, to enable me to respond in kind.
Yours sincerely,
Caroline Baines."
"Further to your request below, we are prepared to postpone the Extraordinary General Meeting to Friday, 5th February 2010.
Location and time to remain the same; we are also happy to move the meeting to you if that helps."
"Dear Caroline,
I understand you have already been notified but just to confirm, it is of course a Board Meeting which has been called not a General.
Please accept my apologies for any confusion caused.
Yours sincerely,
Nicola Low - Chairman"
"Dear Caroline,
I am writing to you in my capacity as Chairman of Halcyon House Ltd and with the agreement of our fellow Director.
We are aware that you believe that the arrangements you put in place to run Halcyon in your absence are satisfactory. We disagree.
The Company owes you a duty of care and all Directors have responsibilities to the Company. The Company is legally obliged to provide you with Statutory Maternity leave and such leave should generally be free of concerns for the business. Naturally it is anticipated that should there be any matters on which your experience and prior knowledge would be helpful, you would be willing, and indeed it would be in your interests to co-operate.
We understand you have taken to your private address a number of items which should rightly be held at Halcyon's offices. Attached is a list which should cover most business items but please include everything when you arrange for their return. Halcyon will pay for a courier to collect from Marley Road [the residence of Mrs. Baines] and we shall arrange for the collection on Friday between 10-10.30a.m. If this time is not convenient please advise of an alternative by e-mail if you prefer.
We propose that I should become a signatory for the cheque books. We are concerned that no trading figures have been made available in the last three months and these together with the block accounts need to be discussed by me with Andre urgently. We shall also need the latest correspondence and any updates on the office move proposal. If you have information which would help in putting the Website back in working order as quickly as possible then that would be appreciated.
We hope you understand that these decisions have been made in accordance with our legal responsibilities and with your and the Company's best interests at heart.
Yours sincerely,
Nicola Low – Chairman."
"IMMEDIATE – URGENT
LIST – NOT EXHAUSTIVE – OF DOCUMENTS HARDWARE, INFORMATION ETC WHICH SH;OULD [sic] BE HELD IN HALCYON OFFICE AND WHICH DO NOT BELONG PERSONALLY TO CAROLINE TO INCLUDE:
CHEQUE BOOKS FOR ALL BANK ACCOUNTS HGOLDING [sic] ALCYON [sic] MONIES OR MONIES UNDER THEIR CONTROL
BUSINESS CREDIT/DEBIT CARDS
ALL BANK STATEMENTS FOR BANK ACCOUNTS HOLDING HALCYON MONIES OR MONIES UNDER THEIR CONTROL
KEYS INCLUDING OFFICE AND ALARUM [sic] FOB
PASSWORDS FOR ALL BANK ACCOUNTS
ALL COMPUTER PROGRAMMES
SAGE AND WAGES FILES
DOCUMENTS OR FILES RELATING TO HALCYON BUSINESS
ANY CORRESPONDENCE WITH ANY BUSINESS OR PERSON RELATING TO HALCYON BUSINESS
LAPTOP TOGETHER WITH ANY INFORMATION BOOKLETS ETC
LATEST PRINTOUT OF ACCOUNTS AND ANY INVOICES OUTSTANDING OR DUE TO BE PAID
UP-DATE AND ANY CORRESPONDENCE RE POSSIBLE OFFICE MOVE
PLEASE NOTE
HALCYON MAY CONTINUE TO USE THE MOBILE AS A CONTACT POINT FOR YOU AND YOU MAY CONTINUE TO USE IT FOR INLAND PERSONAL CALLS
HALCYON WILL FUND THE PURCHASE OF A REPLACEMENT LAPTOP COMPUTER UP TO THE VALUE OF £500 ON RECEIPT OF THE ABOVE IN GOOD ORDER"
"8.2 In or around late January/early February 2010, unnecessarily arranging for couriers to regularly deliver documents to the 2nd Claimant's address."
"From the beginning of February 2010, just over one week after I had given birth, my mother began to send couriers to my home on a regular basis to deliver letters, notices of meetings and other demands. During the week of February 1st or 5th, they called almost daily. I was not notified of the times or days when they would be arriving (with the exception of one time when they didn't actually show up), and with a brand new baby to care for, this was extremely distressing and caused me a huge amount of unnecessary upset and stress. There was no reason for my mother to use couriers to call at my home, if she had wanted to communicate with me, she could have used email, the postal service or even picked up the telephone. Her decision to use the most intrusive and disturbing method of delivering her correspondence (none of it wanted and none of it necessary) must have been made in the full knowledge that it would cause me the maximum amount of upset and anxiety at a time when I was recovering from a caesarean section. These courier visits continued for approximately three weeks."
"121. Given that the courier was due to call at this time [the time when Mrs. Baines was visiting a clinic with her son] on that day, I emailed my brother on February 4th (as requested), to say that I wouldn't be in for the courier the following morning and could they reschedule for the following Tuesday. My brother completely ignored this as the courier knocked on my door at midday on February 5th when I was in the middle of breastfeeding and quite unprepared for his arrival. Unsurprisingly, I was not able to hand over the items for collection as I had been out most of the morning, had not had time to get everything organised, and in any event was somewhat busy attending to my son. The courier, however, would not take 'no' for an answer and attempted to get past me into my house to see if he could see the laptop. Apparently he had been instructed to take that away from me at the very least, whether I agreed or not.
122. At this time, I was in a state of only partial dress and was holding my baby son, who by now was screaming. I had changed back into my nightdress when I got home as the 'normal' clothes I had worn to the baby clinic were still too uncomfortable to stay in for long. I tried to explain to him that I had told my mother it wasn't convenient and she should have cancelled his visit. I was so clearly not prepared in any way for his arrival, was increasingly visibly upset and had no intentions of letting him into my home, so eventually he gave up and went away.
123. This unannounced and unexpected attempted intrusion into my home was distressing in the extreme. I have tried to put into writing the effect that that incident had on me, but I simply cannot find the words. I was gripped with anxiety every time there was a knock on the door (and indeed I often simply didn't answer it at all) and I found it almost impossible to relax when feeding my son just in case the same thing happened again…."
"I was informed he would call at 10.30
I was out at 10.30
He arrived at midday. I was not informed of the new time.
The directors of halcyon [sic] have no right to send anybody to my home without first obtaining my approval. To continue to do so could well constitute harrassment [sic] and I have been advised to inform you that any further callers arriving without a minimum of 48 hours CLEAR notice and without written permission from myself will be turned away."
"1. Advised by courier firm J4 that CB [Mrs. Baines] was in but refused to hand over any items for collection.
2 Had phone call from CB who was upset and abusive. J[eremy] had apparently threatened her. I was not privy to the latest exchange of e-mails and said I could not comment. I pointed out that views expressed in my letter to her were unchanged and that there was evidence that HHM [Halcyon] needed someone in authority to make decisions
2. [sic] CB said she would not be sending a representative to the Board Meeting nor would she be attending.
4. CB confirmed she would hand over all office items to courier on Tuesday"
"Present Mrs N Low (Chair) and Mr. J. Low
Item 1. It was agreed that the Chairman would become an additional signatory on all cheque book accounts. Agreed not necessary to remove Mrs. Baines.
RESOLUTION That Mrs N Low should be appointed as signatory to all Bank Accounts controlled by Halcyon. PASSED
Item 2 Chair suggested that Sue, Elaine and Nicky [Payne] should continue as they are as they appear very competent and she will go in to the Office for a minimum of day per week to up-date and sort out/advise on any problems She would also make herself available on the phone. Financial records need updating and Chair will meet with Andre to ensure this happens.
RESOLUTION That HHM should be run along the lines outlined in Item 2 and Mrs Baines would be bothered as little as possible on business matters. PASSED
ANY OTHER BUSINESS
It was agreed that Chairman's letter to Mrs Baines dated and delivered on 2nd Feb be accepted by the Board as representative of their views.
It is appropriate to formally record that Mrs Baines failed to hand over Company documents etc as per list to Courier today. This should now take place on Tuesday.
Date of Next Meeting to be Notified."
"The Board formally records that Mrs Baines failed to hand over Company documents etc as per list to Courier today. This should now take place on Tuesday. The Board formally records the exchange of emails the week preceding hereof between Mrs Baines and Mr Low."
"During Caroline's maternity leave it is necessary that she be free from business concerns in so far as this is possible. If you feel it is necessary to speak to Caroline please consult as below.
The day to day running of the business currently appears to be working well and it is the intention and wish of the Board that this should continue.
The Chairman Mrs Nicola Low will be available on the telephone and will be calling in to the office regularly to discuss any problems and make any decisions required. It is essential that you keep the Chairman informed of any problems, potential or current, and feel free to approach with any concerns you may have.
The Board would wish to express their thanks to you for your cooperation and hard work in growing Halcyon' [sic] future."
"Saturday 6th Feb called in to Halcyon's pffoce wotj voew tp familiarising myself.
a. Back office virtually swamped by piles of closed files etc etc
b. 4 large (8" high) piles of papers on desk – all appeared to be largely random and found:
1. letter from Lodge accounts which appears not to have been answered.
2. Company appears to have been uspended from ARLA no record of when re-instated
3. Audit of insurance appears to indicate we not doing the job properl y – unclear whether this has been put right
4. Letter to me on open file on computer and the letter from me on the desk = this is a disgrace."
"These notes are made following an arranged visit to CB to collect the laptop and keys. This follows the cancellation last week of an agreed day (Thursday) and time to collect.
1. I and others believed the current message on CB mobile was capable of causing offence "I may not get back to you" in an unfortunate tone. I therefore asked CB to remove the message and just use the mobile for friends and the office. CB disagreed and said that would not remove it. We shall see!
2. We had discussed in the office and agreed that it would be friendly, and landlords would appreciate, being advised of the happy arrival of Henry. CB very angry – said we should have consulted her first – no right to contact "her" clients. I fail to see how she could object to this.
3. Can no longer use internet banking. Advised by Lloyds that this is because CB has not advised them correctly about her marriage and she will need to sign another form. When I mentioned this informed she had advised Steve MQeen [sic] the previous manager and he had photo-copied both her marriage licence and the translation months ago and Lloyds were incompetent – not signing again etc etc I refrained from pointing out that had she returned the envelope from Sue when it was due (with the courier) we could have sorted this out long ago.
4. She accused me of removing her as a signatory as someone! Had told her [sic]. This is simply untrue
5. I was asked if I had cancelled her phone with Orange as she was having problems with reception and receiving calls. There was no possible reason to make this assumption which was aggressive and taken with 4 above confrontational
6. CB refused to return the laptop saying she had not uploaded from the demo to the office computer the information needed for Riversmeet leases. This is unacceptable especially given the generous offer in our original letter.
7. I discovered today from Andre that the VAT Return had not been prepared – it is due for payment in 8 days – and a huge amount of entries remained outstanding from December, Andre informed me this morning that he had been unable to arrange a date with CB for him to come into the office to prepare end of month accounts despite her protestations that all had been organised! If I had not phoned him what did CB think was going to happen to the VAT return!
I was so distressed as a result of this meeting that I rang ACAS for advice.
Apparently Halcyon is in a very precarious position because of the pregnancy and maternity leave.
We should hold our counsel until CB returns to work and then hold a performance review detailing everything we have discovered and pointing out how unacceptable it is. Because we have not given previous warnings we should give a formal verbal warning followed up by a letter and giving a time-frame in which to improve. This should be carefully followed up. ACAS recommended we consult an employment solicitor before we take action."
"Visited W[elwyn]G[arden]C[ity] [a reference to the residence of Mrs. Baines] to pick up laptop and keys by arrangement.
1. CB said she had been told by Lloyds being removed as signatory – on being told I would speak to bank then said a member of the bank had spoken to a member of our staff and had told them this – refused to say who. I then spoke to Sue (Nicky or Elaine would have told her) she thinks C can only be referring to conversation they had back in January when Andrew had phoned to ask her to get change of name mandate from Low to Baines. Sue forwarded this to CB on 12th Jan who appears to have ignored it – hence the recent kerfuffle re passwords etc. C is either very confused or looking to create problems.
2. e-mail from CB to Sue saying "this should be interesting she told me yesterday she couldn't sign cheques" This e-mail was then deleted by CB using laptop. I explained to Sue the implication was incorrect as I had told CB I could not access the internet bank! I asked Sue if she felt any conflict of interest – she said no only interest was Halcyon.
3. CB said she intended her maternity pay to start from 25th December. She has not been entering this as maternity pay and we have not been reclaiming from Revenue. Will have to sort this out.
4. C said I had agreed she should receive full wageswhilst [sic] on Maternity leave as he [sic] would be working from home. This is not so :[sic] wages were never discussed. Did discuss several months age [sic] the possibility of working from home part-time after the baby was born and a few weeks old. NB we did not speak from late November/early Dec.
5. CB cannot accept I have the best interests of Halcyon at heart and responsibilities as both Chairman and Director. I cannot just give in to her demands .. The backlog and inefficiencies have to be dealt with. Apparently I am destroying any vestige of personal relationship we have left (ie I won't be allowed to see Henry) Blackmail.
Finally collected keys and computer on Wednesday but would not give password to access yougov to make Company returns"
"Dear Caroline,
MATERNITY LEAVE/PAY
I am writing to regularise the position re your maternity leave and pay.
You have said that you wish your leave to start with effect from Friday 25th December – however to keep matters clear and for calculations it means from Monday 28th December is your first full week.
Concerning your leave: Halcyon currently has no notification re your planned date of return, whether you intend to take additional maternity leave, or whether you wish to return full or part-time. Please would you give some thought to this and let me know your intentions as soon as possible. By way of calculation your initial 26 weeks of maternity leave will end on Friday 25th June to return on 28th June. You are required to give 8 weeks written notice of the date on which you would like to return to work.
Concerning your pay: the situation is that you have received full pay for 9 weeks of your maternity leave to 28th February. From 1st March statutory maternity pay will become payable.
We had anticipated that it would by now, no longer be necessary to contact you with work related queries. Regrettably your lack of co-operation in providing critical information regarding Block Accounts, in particular Riversmeet and the passwords for Gateway and the laptop have made this impossible. We are contractually obliged to provide accounts in a timely manner and they are now overdue. The residents are pushing for their Accounts and I instructed Andre to prepare these and make the overdue Government returns. Please make sure that you answer his questions as fully and helpfully as possible and provide the password for the laptop together with any other information you may have which we may need. You have been asked to do this several times.
I understand you are the only one who knows what is being stored in the garages for the landlords. It is my intention to clear the garages or at least one of them as I now no longer wish to pay the rent on them. Please can you let me know which landlords/furniture is involved and whether we should contact them to ask them to make other arrangements. Do you have a list somewhere?
Towards the end of March someone will contact you to establish approximately how many hours you have spent answering any questions and you will be paid a pro-rata rate in addition to your S[tatutory].M[aternity].P[ay]. I trust you will find this arrangement fair and satisfactory.
Yours sincerely
N.M. LOW (Mrs)- Chairman "
"Dear Mrs. Low,
In response to your letter dated 1st March:
1) you are aware of my planned date of return, we have discussed it on nume[rous occasions It] was planned that I would return at the end of June, though with the current situ[ation I may] be forced to return to work much earlier. Possibly within weeks
2) you have no right to change the terms of my leave or my pay. As an employ[ee I am entitled to] my full salary and as a Director i [sic] object in the strongest terms to the pay of an [employee being] changed without formal discussion at an EGM
3) it will always be necessary to contact me on certain issues. I have explaine[d that on] numerous occassions [sic], yet you seem not to be able to understand this. I am th[e most senior] member of staff.
There has never been a lack of co-operation on my part, quite the opp[osite].
All information regarding the accounts are on the database. There was only o[….] which needed doing and these have been done.
You have no need to access gateway.
You have the password for the laptop.
You are wrong in your assumption re; the garages.
As per our conversation of today, I am formally requesting copies of all corres[pondence sent to] me since December.
I shall expect these by the end of the week.
In addition, I shall be collecting my full monthly wage from Halcyon, as legally [entitled].
Yours sincerely,
Caroline Baines"
"I am proposing hat [sic] the hours expended on Halcyon business by you this month are not in excess of 12. .These will be paid at a rate of £16 in addition to your SMP. Should you wish to discuss this please let me know."
"1. SUE LOOKING FOR ANOTHER JOB – SUGGESTS WE SORT
2. WAS SHE BEING FORCED OUT
3. SHOULD SHE RESIGN
4. WOULD GET ANOTHER JOB – NEEDS TO PAY HALF MORTGAGE
5. WOULD SUE US
6. AS DIRECTOR CAN RETURN IMMEDIATELY
7. DID NOT WANT MEETING WITH SOLICITOR PRESENT – SHE WANTS TO WORK FROM HOMEAND [sic] LOOK AFTER H[enry] AND RECEIVE FULL PAY.
8. BANK REC[ord]S FOR CLIENT AC[count] IN BACK OF JEEP WHICH HAS BEEN TOWED TO EDMONTON AS SHE LEFT IT IN PUBLIC ROAD HAVING DECLARED SORN WILL TRY TO RECOVER
9. MEET ON TUESDAY AT 2PM
THOUGHTS
NOT SURE SENSIBLE TO HAVE MEETING
CB TRANSFERRED MONEY TO HER OWN ACCOUNT WITHOUT ASKING OR ADVISING
CANCELLED PAYMEN [sic] TO VAT OFFICE VIA BACS WITHOUT ADVISING US. WE HAD INITIATED PAYMENT BY CHEQUE BECAUSE OF SEEING BACS TRANSFER."
"C WANTED TO KNOW WHAT MY PLANS WERE AND WAS I TRYING TO FORCE HER OUT. I SAID NO AND THAT IN DUE TIME AND TO SORT [sic] HER WE COULD/WOULD HAVE AMEETING [sic] TO SOR [sic] OUT WAY FORWARD BUT I WANTED A SOLICITOR PRESENT AS SHE HAD PREVIOULSY [sic] MIREPRESENTED [sic] ON A NUMB ER [sic] OF OCASIONS [sic] WHAT I HAD SAID. CB SAID SHE HAD ALREDY [sic] APPOINTED A SOLICITOR AND WANTED MEETING THIS WEEK. I AID [sic] THIS WAS NOT POSSIBLEBUT [sic] WOULD ARRANGE AS SOON AS POSSIBLE.
CB SAID WOULD SUE FOR CONSTRUCTIVE DISMISSAL AND AS SHE HAD BEEN CONTACTED DURING HER MATERNITY LEAVE RE HER JOB WE WERE AUTOMATICALLY IN THE WRONG. I SAID IN SO FAR AS I WAS AWARE SHE HAD NOT BEEN CONTACTED IN HER CPACITY [sic] AS AN EMPLOYEEONLY [sic] IN HER CPACITY [sic] AS A DIRECTOR TO DISCUSS THE RUNNING OF HALCYON AND EERY [sic] EFFORT HAD BEEN MADE TO ACCOMMODATE HER VERY PERSISTENT [sic] TO KNOW WHAT SHE HAD DONE WRONG. I SAID NOT THE PLACE TO DISCUSS BUT SHE HAD AGREED WITJH [sic] ANDRE TO PAY THE VAT ON LINE: SHE HAD SET THE DATE A MONTH LATE AND THEN CANCELLED HER PAYMENT VIA BACS WITHOUT TELLING ANYONE – MEANWHILE WE HAD CANCELLED THE CHEQUE – CAUSED HAVOC. FURTHERMORE TO ACCECC [sic] THE COMPANYS [sic] BANK ACCOUNTS AN D [sic] HELP HERSELF TO OVER 1000 POUND OF EXTRA PAY COULD POSSIBLE [sic] CONSTITUTE GROSS MISCONDUCT.
CB SAID ENTITLED TO DO THIS AS (A) SHE WAS A DIRECTOR (B) SHE AND JEREMY HAD DISCUSSED AND AGREED HER RECEIVING FULL PAY DURING MATERNITY LEAVE
I COULD NOT COMMENT ON THIS.
CB SAID SOLICITOR HAD TOLD HER SHE COULD RETURN TO WORK WHEN SHE LIKED ALL WAS WELL WHEN SHE WASTHERE [sic] AND I HAD NOT [sic] RIGHT OR REASON TO INERFERE[sic]. 3 MEMBERS OF STAFF WERE GOING TO HAND IN THEIR NOTICE AND LEAVE IF I STAYED.
CB SAID SHE WAS ONLY ONE CPABLE [sic] OF DOING BANK RECS FOR END NOV AS ORIGINAL INPUT HAD BEEN INCORRECT AND SHE HAD TO MAKE VRIOUS [sic] ADJUSTMENTSEACH [sic] TIME – SAID SHE WOULD DO IT IF I PROVIDED TH [sic] ALPTOP [sic] FOR A DAY.
AFTER PERSISTENCE I SAID THAT NOTHING WAS WRIT IN TABLETS OF STONE BUT POSSIBLE SHE COULD BECOME PART-TIME SALES/MARKETING DIRECOER [sic] BUT NOT CONTINUEING [sic] TO BE RESONSIBLE [sic] FOR THE ADMIN AND PLANNING SIDE (2-3 DAYS)
*********DISCOVERED j KEPT ALL COPIES OF THEIR EXCHANGE OF E-MAILS/TEXTS NOT MENTION OF FULL MATERNITY PAY OR RECOLLECTION "
"Dear Caroline,
I have as yet not responded in writing to your letter dated 23/3/10 and the response below was not drafted until after our lunch on 30th March as I judged it preferable to wait for the result of that meeting. It is now obvious that a response is required in order to keep the record straight. To respond to your points:
1. We had not discussed either the date or the terms on which you wished to return to work.
2. You have been misinformed. Your terms of employment were and are no different from other employees which were detailed in Contracts issued when Halcyon was purchased. I wrote to you on 1st March to clarify this.
3. The Board does not accept that anyone is or should be indispensable.
The rest of the comments demonstrate once again your lack of co-operation and helpfulness and I trust your threat to help yourself to money is simply that. You cannot under any circumstances help yourself to Company money to which you have been formally advised you are not entitled."
85. Without having received that letter at the time she wrote, Mrs. Baines did write to her mother an e-mail sent at 11.25 hours on 7 April 2010, which included:-
"Dear Nicola,
Further to our discussion last Tuesday, I thought it would be a good idea to put some things in writing.
…
With regards to my employment, I understand that you are reluctant to discuss anything without a third party present, and to this end you said that you would instruct a solicitor so that we could set up a meeting.
You have made it clear that you wish for my role in Halcyon to change upon my return, and I am anxious to understand the specifics and the impact that your plans may have not only on me and my new family but on the Business itself.
In order for us to keep to point at the above meeting and hopefully resolve this situation as soon as possible, I would like a document from you which specifically sets out how you want my role to change, the commercial reasons for those decisions, and in order for them to have validity, I will also need a signed document from Jeremy to say that he has seen your proposals, supports them, and votes for their implementation.
Needless to say that without this, should I disagree with your suggestions, they can not proceed further due to my larger shareholding.
…"
"Thanks for the details of those two Offices any chance I could have a look at them this week? (Moorlands and High St Stevenage)
Any day but Thursday is fine, afternoons are best."
"Dear Caroline,
I write with reference to your communication dated 7th April in which you refer to our meeting on 30th March. I made contemporaneous notes after this meeting and they differ somewhat in tone and content.
I refer to your paragraph 3 which reads to me as an attempt not only to manipulate but also to misrepresent the facts. There is of course already a Halcyon Employment Contract which was put in place when the Company was purchased.
It has been noted that you have not supplied the two latest employees with Contracts of Employment as Companies are legally required to do and I shall of course be rectifying this.
You have as yet still not replied to my telephone request for information as to whether you signed a formal Contract of Engagement with Riversmeet and if so where it might be found. As a Director you still have a duty to the Halcyon [sic] and I would urge you to respond promptly.
Yours sincerely,
N.M> [sic] Low - Chairman"
"Present: Jeremy Low Director Nicola Low Chairman
Mrs. Low formally proposed that
1. Mrs. Caroline Baines be removed as a Director of Halcyon House Ltd and Halcyon House Management Ltd.
2. Mrs. Caroline Baines be removed as signatory on all bank accounts and cheques and removed from access to all internet banking.
Both proposals were passed nem con."
"In conformation of our telephone conversations Mrs. Caroline Baines nee Low has been removed both as a Director and as signatory to all Bank Accounts connected with the Company.
Please find enclosed a copy of the Minutes of Board Meeting from which you will note that Caroline Low married and became Caroline Baines. She is no longer employed by Halcyon.
Please also find enclosed a new signature mandate completed from the forms you kindly faxed through. I look forward to receiving your acknowledgement and confirmation of change."
"Dear Caroline,
I refer to your letter dated 23rd March to which I drafted a response at the time but which I did not send as I had hoped to avoid the necessity to reply. It now seems to me that was the wrong decision and I therefore enclose a copy.
I write now with reference to your communication dated 7th April in which you refer to our meeting on 30th March. I made contemporaneous notes after this meeting and they differ in both tone and content.
I refer to your paragraph 3 which reads to me as an attempt not only to manipulate but also to misrepresent the facts. There is of course already a Halcyon Employment Contract which was put in place when the Company was purchased. I have been made aware that you have not supplied the two latest employees with Contracts of Employment as Companies are legally required to do and I shall of course be rectifying this.
It was always our intention that your role would remain unchanged after your maternity leave. You were clearly advised that my role was purely to be as an interim manager to allow Halcyon to meet not only its business obligations but also its duties to its employees. Your caesarean merely emphasised the necessity for this and as Directors we take our obligations seriously.
You were only contacted in your capacity as a Director and to obtain essential business information which we could not obtain in any other way.
Had you been helpful and co-operative we would not have needed to contact you more than once about the same thing. I do not accept you were contacted unnecessarily or that this was in any view harassment.
In the meantime despite your lack of co-operation I believe we have reached the stage where your input will no longer be judged to be essential and we shall no longer need to contact you. The fact that you have failed to respond to my phone call and e-mail regarding the Riversmeet Contract would appear to indicate there would be little point in any case.
Your comment regarding my wish for your role to change is unfounded. This sort of comment is why I would have preferred a 3rd party to be present so there is no opportunity to misrepresent what is said.
There is no "situation" which must be resolved at this time except the matter of your Maternity pay which Jeremy and I believe should be SMP plus a payment for any time you spend assisting There is no record that I can trace – including the e-mails and texts between yourself and Jeremy – which would indicate otherwise.
It is with regret however that I have to advise you that our wages clerk noted that you had been credited with full salary last month and thought this had been authorised which of course it had not. The total overpayment you have now rec eived [sic] is considerable and we reserve e [sic] the right to recover in future
In order to avoid any problems the Directors have voted to remove you as a signatory to the Bank Accounts and changed passwords. You will of course be re-instated when the issue is resolved and re-imbursed should our decision prove faulty.
What has become apparent during the past two and a half months is that further discussion will prove essential. However – Without Prejudice: I believe there is a case to be made to delay any further action on our part until end June
To re-iterate: the Directors have tried to act with both your and Halcyons [sic] best interests in mind and in accordance with our duties and responsibilities.
Yours sincerely,
N.M. Low - Chairman"
"…
Firstly, in response to your letter which you say was drafted after our lunch on March 30th:
1) You are aware of the date of my return to work. The terms upon which I returned was what I had wanted to discuss with you, but you refused as you wanted to engage a Solicitor on your behalf before the discussion was held. To date, despite requesting an urgent meeting, I have heard nothing from you. My return date, as you are aware, was to be during the week commencing 28th June, but I am abroad during this week, so will return week commencing 5th July.
2) I have stated my desire to return to work prior to the 'official' date, but you have advised me that I would not be welcome, and that if necessary, you would have me removed from the Offices to prevent this taking place. Should this no longer be the case, I shall be happy to return for a few days a week as soon as is practical, even next week. In any event, I intend to spend at least one full day per week (with the exception of the weeks commencing 21st and 28th June) working for Halcyon from the week commencing May 10th. To this end, I will need an alarm fob, a set of keys, and probable access to my laptop, which you removed from me.
3) I have not been 'misinformed' by anybody – I am under no contract, I have never been issued with one, and I have never signed any document with regards to my employment terms.
4) I do not understand the reason for this statement, nor can I find one unless it is a direct threat to me and my position upon my return to work. I should appreciate immediate clarification of this and the reasons why you have included it in your letter. I have asked repeatedly what your intentions are with regards to me and my employment upon return, and you have so far refused to answer. This statement, unfortunately, seems to make your intentions all too clear.
…
Now to your letter dated 25th April:
…
2) I note with interest the use of the past tense in your next paragraph. Clearly things have changed, as indicated by your statement of nobody being indispensable in your previous letter. It has been brought to my attention that you have already employed somebody to carry out part of my role without my knowledge or approval. Do you intend to keep this person on after my return? If so, this would constitute a significant change to my role, and is certainly something which should have been discussed with me prior to the appointment.
…
6) I was never advised that you had been appointed as an interim manager. You wrote to me before my son was two weeks old demanding that I attend a meeting (firstly it was to be an EGM, but subsequently changed to a Directors [sic] meeting when you realised that the legalities in calling an EGM did not suit your purposes) to discuss these matters. You then informed me by telephone that there was no point in me attending as there was to be no meaningful discussion, and that I was to be presented with a fait accompli. I wrote and expressed my objections to the plans of you and Mr. Low to remove me from my duties in the strongest possible terms, but never received a reply despite requesting one on at least two separate occasions. I was also never sent minutes of this meeting, and was never formally advised of what had taken place, what had been discussed, or whether my written objections had even been raised.
…
8) You state that the Directors have voted to remove me as a signatory to the bank accounts. This is manifestly untrue, unless you no longer consider me to be a Director. Once again, these decisions can only be made at an EGM or meeting of the board with all of the notices and other documents which would need to be provided. I have received no such notices, and therefore your decision has no legal basis and should be reversed immediately. In addition, given my imminent return to work and the fact that I shall be working again for Halcyon as outlined above, this course of action is not only going to hamper my ability to do my job, but will merely increase the administrative load upon my return. The actions you have taken seem to be calculated to remove and destroy any mutual trust and confidence.
…"
"I'd very much like to go ahead with renting the offices in Stevenage Old Town, preferably with a lease starting at the beginning of July.
Could you let me know what you need so we can get things started?"
"… I have spoken to Caroline Baines regarding a lease on 162b High Street and the outcome of our conversation is as follows:-
1. Tenant – Caroline is setting up a new company probably to be called Mint, but has confirmed that she would be prepared to take the lease in her own personal name.
2. She is prepared to pay the asking rental of £4,000 per annum, and indeed would pay this upfront in one go.
3. As it is a new business, she does not want to commit herself for more than a year and has therefore offered a one year lease.
…
5. Timing – Caroline has indicated that she would like to start the lease around July this year.",
those comments did not seem to me to be inconsistent with what Mrs. Baines told me.
"I have been instructed by Mrs. Nicola Low and Mr. Jeremy Low, your fellow directors and shareholders in Halcyon House Limited. I have seen various letters and emails which have passed between the directors since November 2009. Mr. and Mrs. Low have identified concerns which they have about certain acts or omissions on your part which they consider not to have been in the best interests of the business and which could amount to acts of misconduct or gross misconduct. These include:"
"Having discussed the matter at length with Mrs. Low I wonder whether it more useful to have a round table discussion between the shareholders and directors with a view to resolving the current breakdown in working relationships and seeking an amicable settlement to the situation. Obviously if that cannot be achieved then it may be necessary for a more formal meeting to be held in due course to consider the allegations set out above and for you to have the right to comment on them. I would however very much hope that such an eventuality could be avoided."
"2. The Employee's employment with the Company will [sic] terminate by mutual agreement on 8th June 2010 ("the Termination Date").
3. The Company will, within 14 days of the date of this Agreement pay to the Employee:
3.1 The balance of Statutory Maternity Pay due to the Employee subject to the usual deductions in respect of tax and national insurance; such payment being strictly conditional upon the Employee providing to the Company Form MATB1
3.2 £25,400 as compensation for the loss of her employment.
3.3 £22,500 in repayment of the Employee's Director's Loan Account
3.4 The Company shall be entitled to deduct the sum of £4,623.92 from the monies payable to the Employee under clause 3 being monies which the Employee owes to the Company.
…
6. The Employee undertakes to return to the Company no later than the date of this Agreement all property, equipment, records, correspondence, documents, computer disks, files and other information (whether originals, copies, electronic files or extracts) belonging to the Company or any of its Associated Companies save as provided in clause 6.1 below, and confirms that she has not retained and will not retain any copies in any form whether original, copy, electronic or extracts.
6.1 The Employee shall be entitled to retain the mobile telephone handset currently in her possession and to continue using the telephone number currently issued to her, provided that the Employee shall assume responsibility for all costs connected with the mobile telephone from the Termination Date.
7. The Employee shall, at the same time as signing this Agreement, execute the Stock Transfer Forms attached to this Agreement in respect of her shareholding of 45 Ordinary Shares in the Company and in Halcyon House Management Limited to transfer the shares to Nicola Low at par value ("the Purchase Price") without warranty or representation except as to title. …
9. The Employee represents and warrants that:
…
9.7 She is not aware of any matters relating to her employment which, if disclosed to the Company, would or might affect the decision of the Company to enter into this Agreement.
10. The Employee acknowledges that the Company is entering into this Agreement in specific reliance on the representations, warranties and undertakings in this Agreement and that, without prejudice to any other remedy the Company may have, the Company shall be entitled to require the immediate repayment of the sum paid to the Employee under Clause 3.2 above should any of those representations, warranties or undertakings be breached.
…
12. The Employee acknowledges that she is bound by an existing duty of confidentiality towards the Company and its Associated Companies and will not at any time in the future divulge to any individual, organisation, firm or company any confidential or sensitive information which was acquired by her in the course of or for the purpose of her employment, without the prior written consent of the Company.
13. Both the Employee and the Company agree that they will not make, publish or otherwise communicate any disparaging or derogatory statement whether in writing or otherwise concerning the other party and in the case of the Employee concerning any Associated Company or any of the officers or employees of the Company or any of its Associated Companies.
14. At the same time as entering into this Agreement the Employee will resign as a Director of the Company and of Halcyon House Management Limited by signing the letter of resignation attached hereto. The Employee agrees to execute any such other documents as may reasonably be required of her in order to give effect to such resignations."
"Mother announcedto [sic] staff I wouldn't be back yesterday …"
"After a long deliberation, I have come to the unfortunate decision to terminate my employment with Halcyon House Limited due to personal health issues.
I have very much enjoyed working at Halcyon for the past two and a half years but feel that having a break in my career at the moment would be beneficial to me.
I would expect to leave Halcyon's employment on 15th July 2010 thereby giving one month's notice, but if you wish me to leave earlier on 30th June 2010, which coincides with a normal end of month pay transaction, then I would be in agreement with that. I am due 11 days holiday which I would like to have taken into consideration of my notice period so I actually leave on 30th June 2010 and my salary for the month, plus the 11 days holiday taking it to 15th July, can be transferred to my account at the end of June 2010 in the usual manner.
My sincere apologies if this is not the news you were expecting to receive but my health is important."
"I have been working for Halcyon for the past 22 years, the last 6 yrs for you and your family, and after careful consideration I have decided to give my notice of employment.
I would like to spend some time with my family and to reconsider my future.
I am giving one months notice, but would like to take my holiday entitlement to be considered, I have not taken any holiday days this year to help cover a working colleague's maternity leave.
My last day will be end of June, unless you would like me to leave earlier.
I would like to take this opportunity to thank you and your directors for employing me for the past 6 years, and wish you good health and prosperity in the future."
"I have to inform you that the Directors of Dunsters Mead Management Limited are preparing to change our Managing Agent from the end of this month. I would like therefore to give you provisional notice to have our accounts and archives together with all relevant documentation ready to be collected before the end July.
I anticipate confirming this decision within a few days."
"This is just a quick email to let you know that I have now left Halcyon and set up a new Agency called Mint (fresh start!) based in Stevenage Old Town.
Sue and Nicki will be joining me at the end of July so it'll very much be the 'old' Halcyon but just under a different name.
We'll be charging the same fees as Halcyon, but as we're a new company, we haven't yet registered for VAT and don't anticipate having to do so until July next year, which could save you quite a bit over the next 12 months.
Would you consider switching the management of your properties to the new company?
Everything would effectively remain the same for you, but just with different contact numbers and we'll take care of everything with regards to paperwork etc from here.
If you want to give me a ring, my mobile number is …, and feel free to call/email Sue also, though please bear in mind that the current manager at Halcyon is not aware that she is leaving to join the new venture so she may not be able to speak as freely as she would like to."
"Termination letter for Halcyon attached as discussed – I'd recommend emailing it to Sue as she can set things in motion before she leaves on Friday."
"I have received from Caroline a letter to send to Halcyon (addressed to you) in order to transfer my rentals to the new company.
I am happy to do this subject to confirmation from you that I will not incur any additional charges and that payments to my account once the transfer has completed will not result in delays in my receiving payment. I would also like to confirm that the payments for Tamar Close in respect of the County Court Judgements against the previous tenants will also get transferred seamlessly.
If you are able to confirm this I will send the termination letter immediately on receipt of your confirmation so that you can action it prior to leaving Halcyon."
"The key ingredients of this e-mail are that Susan Mogridge had told Mr. Chapman that she was leaving Halcyon, that Caroline had drafted and sent to him a letter to send to Halcyon to transfer his rentals to "the new company", that Susan Mogridge was colluding in this arrangement while she was still an employee of Halcyon, and that indeed she was being encouraged to complete the transfer before she left Halcyon. It is interesting that Mr. Chapman does not state the name of "the new company" in this email. The only reason for this could be that Mr. Chapman and Mrs. Mogridge already knew of the detail of Caroline' [sic] new company."
"We write further to completion of the Compromise Agreement dated 25th June 2010 between our respective clients. It has come to our client's attention that your client has been in contact with clients of Halcyon House Limited with a view to soliciting their custom for her new business.
You will be aware that in clause 6 of the Compromise Agreement Mrs. Baines undertook to return all company property to our client no later than 25th June 2010 and not to keep copies in any format of any information belonging to Halcyon House Limited. By virtue of the fact that your client has been in email communication with Halcyon House Limited's clients it would appear self evident that, in breach of that undertaking, Mrs. Baines has wrongfully retained confidential client details belonging to our client.
It may also be that Mrs. Baines has acted in breach of the obligations imposed on her by clauses 12 and 13 of the Compromise Agreement, namely to keep confidential all confidential or sensitive information acquired by her in the course of or for the purpose of her employment and not to make disparaging or derogatory comments about our client or any offices [sic] or employees of Halcyon House Limited.
We would draw your attention to the power in clause 10 for our client to require repayment of £25,400 by Mrs. Baines in the event of her breach of any of the representations, warranties or undertakings contained within the Compromise Agreement, such a claim being entirely without prejudice to any other remedy which our client may have.
In the light of the above our client requires full disclosure from your client of:
1. Each and every client of Halcyon House Limited or Halcyon House Management Limited with whom she has been in contact since 8th June 2010.
2. The method of that communication eg telephone, email, text message, letter.
3. The contents of that communication together with copies thereof.
4. All property belonging to Halcyon House Limited which remains in her possession which appears likely to include client lists and contact details.
Unless such disclosure and delivery up of all items identified under point 4 above is made by close of business on Wednesday 21st July 2010 our client will consider that Mrs. Baines has acted in breach of representations, warranties and undertakings contained within the Compromise Agreement as set out above and seek immediate repayment of £25,400. Further we anticipate being instructed to make an immediate application for an injunction to prevent further use of our client's confidential information together with an appropriate award of damages in respect of the advantage obtained by your client's new business as a result of misuse of our client's property."
"Your client remained an employee and director of our client company until 8th June 2010. It appears self evident that, in breach of her fiduciary duties she prepared to compete and did in fact compete with our client whilst remaining an employee and director."
"I refer to your fax sent to Ewart Price this morning and its contents. Ewart Price are no longer instructed by me, so please address future correspondence directly to myself.
I am in no way in breach of the compromise agreement as described. I turned over to your Clients all relevant documents, data and related information, as required, during my visit to the Offices to collect my personal items. Indeed, your Client witnessed the return of these items.
I did not retain any information such as Client lists in any form. Neither have I said anything disparaging or derogatory about your Clients. As per the terms of the agreement, I have not discussed the contents with anybody, and nor do I intend to do so.
However, should Clients learn through their own discovery or by any other means that I have entered into Business for myself and then choose to approach me and make enquiries, this is not in breach of the agreement."
"I refer to your second fax of todays [sic] date to Ewart Price (who are not instructed in this matter).
Mint Lettings and Management Ltd. was established in April of this year and until very recently was a dormant enterprise. The name was registered purely as a backup should the situation at Halcyon become irretrievable.
Prior to my resignation as director of Halcyon, it did not, nor was it ever intended to trade and it certainly posed no competition."
"There is implied into every contract of employment a duty on an employee to serve their employer with fidelity and good faith. This obligation continues throughout the period of employment. Included within that obligation are specific duties including: honesty, not to compete with their employer, not to take preparatory steps during employment to complete [sic] with their employer including soliciting the employer's clients, discussing or accepting offers from clients of the employer or memorising or copying confidential information belonging to the employer.
Our client has seen email correspondence sent to your Halcyon House email address at 13.34 on 16th July 2010, whilst you remained in our client's employment [this, of course, was incorrect], which demonstrates quite clearly that you have, whilst in employment, taken preparatory steps to compete with Halcyon House, have solicited clients of Halcyon House and, it would appear, have memorised or copied confidential information belonging to Halcyon House in order to obtain an unfair advantage on behalf of Mint Lettings and Management Limited, a business in which you appear to have an interest.
Further, it would appear that prior to your departure from Halcyon House you deleted a number of incoming and outgoing emails. Our client is currently seeking to recover the information deleted which may result in further wrongdoing being uncovered.
[The letter continued by demanding information along the same lines as in the longer letter to Mrs. Baines of 19 July 2010 and to threaten court proceedings and an application for an injunction]"
"I write in response to your letter dated 19th July 2010.
Firstly, some points for correction: My employment with Halcyon House began on 10th March 2008 and terminated on 15th July 2010, not from July 2008 to 16th July 2008 as you assert. Furthermore, I was not appointed as a 'Manager' but an Administrator.
Given that my employment terminated on 15th July of this year, as evidenced not only by my letter of resignation but also by the fact that I did not attend the office on 16th July 2010, I have no knowledge of any email received by your Client into my old inbox on that date. Indeed, there may have been several as, pursuant to your Clients [sic] demands, I did not, and have not, told any client (Landlord OR [sic] Tenant) that I was leaving or have left Halcyon House.
Given the above, I did not, and cannot possibly have, 'taken preparatory steps to compete with Halcyon House Limited, solicited Clients of Halcyon House Ltd' or have 'discussed or accepted offers by any clients'.
I have worked to the best of my ability and with honesty, loyalty and integrity throughout my employment at Halcyon House and it was with regret that I terminated my employment due to stress as per my resignation letter.
Indeed, during my last month's employment, I trained two new members of staff to assist with a smooth transition subsequent to my departure.
In addition, I do not have any property of Halcyon House Limited in my possession or in my control."
"Whilst delighted to announce the good news we have regretfully become aware that pursuant to the termination of their respective contracts in June and July, Caroline Baines and Susan Mogridge have removed certain personal information with respect to some of our clients and may approach you. [Some versions of the letter then continued, "This is of course in breach of the Data Protection Act and as a result, we shall be pursuing the matter vigorously through all legal means available to us"; others substituted for the words, "clients and may approach you", the words, "landlords in breach of the Data Protection Act and they may approach you"]
Finally we should like to thank you for your continued loyalty and support and in recognition of this we are initiating a 2% rebate on our fees for 6 months from 1st September 2010.
Halcyon has over 30 years experience as a Managing Agent for lettings in Hertfordshire and we look forward to continuing to build on this experience as we develop our plans in the coming months.
Should you wish to discuss any matters relating to your properties, please do not hesitate to telephone and speak to Sharon, Elaine or myself."
"We note that you have removed the keys for properties belonging to Mr. Chapman & Mr. Makulski.
You did this without permission or authority.
Please acknowledge receipt of this email and return the keys by Monday, 9th August 2010, by 9.30 am. If you have others, please return at the same time."
"I have not removed any keys at all.
If you have keys missing, let me know which properties they relate to and if I can be of help in locating them, I shall let you know.
With regards to Mr. Chapmans [sic] keys, for example, I believe his son may be holding a spare set?"
"Your colleague Susan Mogridge has removed keys and they must be returned by 2.00 pm."
"I have checked our key cabinet and there is nothing in there which shouldn't be.
I shall have a word with Sue when she returns to the Office, but this will not be before 3 pm."
"We must confirm our previous verbal advice to you that your tenants [sic] deposit is held by us under the Tenancy Deposit Scheme and we can only release it on proof of membership of this or an approved alternative scheme to which we may safely pass it."
"ARLA membership
Client Money Protection Insurance
Over 30 years experience in the industry
In depth knowledge of YOUR Property
Strong Agent relationship with YOUR tenant
Qualified Staff
VAT free fees until July 2010! [sic]"
"We were most surprised to hear from the police who visited you yesterday that you have no possession of the original documents and keys relating to 73 Augustus Gate, but had managed to retain copies of the documents for your own use.
Can you please explain what you have done with our original documents.
Can you please explain what you have done with our keys to the property."
"I am a director and majority shareholder in HALCYON House Lt [sic] a Residential Letting Agents.
On 16th June a Mrs. Susan Mogridge, at that time an employee of Halcyon handed in her notice citing ill-health as the reason. She confirmed undertakings that she had no intention of working for an alternative agent which would have been required by her Contract of Empoyment [sic]. On 23rd July I discovered a copy of an e-mail from one of our landlords proving beyond doubt that she had been colluding with another ex-employee Mrs. Caroline Baines to persuade landlords to leave. I then discovered that a great deal of information had been deleted from our computers (as per statement from Knebworth Computers) and downloads had been taken from her computer listing approximately 300 persons (landlords and tenants) personal details. These include their name and addresses, home telephone numbers, mobile telephone numbers and also the private Bank Account Details. She also removed a number of keys including 1 from Mrs. Hammond (73 Augustus Gate). Initially theft was denied (see-mail [sic]) but two were subsequently returned through our door (confimed [sic] by Sharon Lister) The keys for 2 Saxon House and 20 Tippett Court have also been removed without permission but the landloreds [sic] is I believe aware of this. I was not overly concerned that Hammonds [sic] key remained with Mogrridge [sic] as I had spoken to Hammon [sic] and she confirmed she intended to transfer her property. Hammond is not now happy to confirm this and I must therefore report it as theft. This key for 73 Augus [sic] Gate will also be in Mogridge office.
We have received a number of telephone calls from the Landlords and Tenants concerned about the misuse by Baines and Mogridgeof [sic] their confidential information.
The proof of these thefts can be obtained by getting lists of Landlords whom they have approached which will be on their computers and records and comparing them with those held by Halcyon… Not only is there clear proof of theft but the removal of information is a breach of section 55 of the Data Protection Act.
You should be aware that Mrs. Caroline Baines is my daughter and there are civil actions pending against her. She and Mogridge were clearly acting together and she may therefore be implicated in the thefts."
"20. On 13 September I returned to the Stevenage Police Station and was told I had to be re-interviewed. The interview could go ahead immediately but if I wanted a solicitor present, I was told I would have to be locked in a cell again and await a solicitor's arrival. I knew I could not face that claustrophobic cell, so I reluctantly agreed to be interviewed without a solicitor present.
21. This time I was interviewed by two different officers because I was told that Mrs. Low had made yet another statement saying I had now stolen keys to two other properties, 2 Saxon House and 20 Tippett Court, and had then returned the keys to Halcyon. I was once again in shock and could say nothing except to deny the allegations during the interview, since I had not taken the keys and I had never heard of these allegations before as they had not been mentioned in the first interview. PS Treadwell, one of the police officers indicated that he had spoken to the tenant of Augustus Gate and that the tenant had confirmed the fact that he had all the keys. Both officers agreed that they had done the questions of keys to death and moved the interview on.
22. The police officer then said that Mrs. Low had alleged that I had stolen two copies of my employment contract. In fact, I never had an employment contract. This was not an allegation that had been made in the correspondence from Mrs. Low's solicitors; in fact Mrs. Low knew that I never had a written employment contract.
23. PS Treadwell said he had also spoken with the owner of the keys for the property at Augustus Gate, Mrs. Hammond. She had informed the police that I was being used by Mrs. Low as a "scapegoat". The police officer said that after interviewing me he felt the same."
"Thank you for taking the time to speak to me on Wednesday. As discussed my concerns relate to non-compliance by an ARLA member with the law regarding tenants [sic] deposits and acceptable standards of behaviour towards fellow letting agents.
The background to my complaints is as follows: Halcyon was purchased as a family business with Caroline Baines MARLA being in charge of day to day running. Two or three years ago Directors stopped getting the regular financial reports and information they had been used to and requests for information were ignored. When Caroline became pregnant and was due to take maternity leave I became concerned re the running of the Company and offered to attend the office on a regular basis until she returned. This suggestion was unwelcome, but on attending the office I became alarmed at the administrative mess the paperwork was in (see correspondence with ARLA re Bank Reconciliations). Following repeated attempts to resolve issues and put in place plans for the future a solicitor was consulted and Caroline was offered a Compromise Agreement which paid her a considerable sum of money if she resigned and it was understood she would stay at home and care for the baby.
Caroline breached this Agreement which she signed in bad faith and colluded with a then Halcyon employee Susan Mogridge in removing complete lists of landlords and tenants and a number of keys. This is the subject of civil litigation.
When Halcyon were asked to hand over deposits to Mint (Caroline's new company) for a tenant whose landlord had decided to move it was drawn to my attention that various adjustments and withdrawals had been made to the deposit which meant we could not hand over the full amount. At this time Halcyon is still holding this tenants [sic] remaining deposit until we have advice on what to do.
Enclosed please find copies of print-outs which show tenants whose deposits have not been ring-fenced. The "Sue" is Susan Mogridge who removed computer files from our offices (we have and [sic] IT report which proves this) and CJL and CB is Caroline Low now Baines.
With regard to unprofessional and improper behaviour by a MARLA member I am enclosing sample copies of letters sent by Mint to our landlords and tenants. I also enclose a copy e-mail from an overseas landlord the dates of which prove collusion by these 2 persons when still employed by Halcyon.
Although a number of landlords have been tempted at the prospect of not paying 20% VAT and have been misled by the untrue comparisons in the Mint letter we have also received letters, e-mails and telephone calls of support from landlords and tenants who are appalled at Mints [sic] behaviour.
You may wish to know that Halcyon's new M.D. is a student member of ARLA and we hope to be re-instated by the end of the year.
I trust as a professional body you will investigate my complaints and concerns re a MARLA member ad [sic] advise me of your conclusions. Please do telephone me should you require further information."
"We regret having to contact you to advise that Mint Lettings have instructed your tenant to pay rent to them one month early. Your property was in our care until 12th October and we are due a commission payment of £31.45. Mint are aware of this and should pay it direct to us so that we may transfer your tenants [sic] deposit.
Please can you arrange for £31.45 to be forwarded to us at your earliest convenience so that matter can be closed."
"1. Improper removal of funds from protected clients [sic] deposits.
2. Using information obtained illegally from Halcyon to solicit landlords to transfer to Mint using false comparisons and language derogatory to another agent. These letters are grossly unprofessional and bring the industry into disrepute. (A number of landlords have written/e-mailed and phoned us to say how disgusted they were)"
"Mr. Baker has forwarded a letter to you us [sic] which you have written to him.
You are correct in your assertion that we took over management of Mr. Bakers [sic] properties from 12th October, and we have not received rent prior to this period.
As you will know, Ms Durkins [sic] rent is due on the 12th of each month (and therefore correctly paid to us for the month of October), and Bird and Daines [sic] rent is due on the 30th of each month, the first rent we shall receive from them will be the 30th of October.
Should either tenant be in arrears with their rent, please advise us which tenant, which payment was missed, and what steps you have taken to rectify the situation so that we can follow up on behalf of Mr. Baker.
In any event, no monies are owed to you."
"I refer to the letter Mr. Kitching has sent to the tribunal concerning the management of the above and would comment as follows.
Mrs. Baines was removed from Halcyon under a compromise agreement necessitated by her administrative incompetence. A writ is in course of preparation which will be served on Mrs. Baines requiring the return of monies paid to her and damages.
It may assist the tribunal to know that I have owned and been a Director of several small businesses over the years all of which have been profitable and I have [been] for the past 25 years, and remain, the postmistress of Knebworth with 5 staff and 12 postmen attached (day-to-day management by Chief Clerk).
Halcyon House Ltd. employs 2 managers with over 20years [sic] direct experience in property management mainly in the residential sector (some commercial). One of these is an ARLA member, and whilst not holding specific qualifications with ARMA [sic] at this time, are sufficiently aware of the requirements to enable Halcyon to provide the sort of service leaseholders in small blocks are looking for.
The "mess and late accounts" were under Mrs. Baines [sic] tenure. The running of Willowdene and the accounts are now under control and operating smoothly with the exception of Mr. Kitching. I am enclosing copies of letters sent to Mr. Kitching asking him to settle his account. Given that the accounts are now accurate and properly annotated I daresay Mr. Kitching is unhappy at being approached for outstanding monies which should have been processed by my predecessor.
…"
The allegations made in the Halcyon Action
"In circumstances where Ms. Baines (on behalf of Mint) received the names and addresses of the Claimant's landlord clients from sources other than as pleaded at paragraphs 32 and 33 above (including by memorising the information), in obtaining and/or making use of the said information to solicit the landlord clients of the Claimant, Ms. Baines was in breach of duty in like form as those breaches of duty pleaded at paragraph 39 above."
"Great stress was laid by the learned counsel for the defendant upon the fact that a servant having left his master may, unless restrained by contract, lawfully set up in the same line of business as his late master, and in the same locality; and that he may, without fear of legal consequences, canvass for the custom of his late master's customers, whose names and addresses he had learned, bona fide accidentally, during the period of his service. I do not suppose that anybody, with any knowledge of the law, would seriously contend the contrary."
"6. During the currency of their employment with the Claimant, Ms. Baines and Ms. Mogridge owed to the Claimant the following duties which were implied into their Employment Contract, implied as a matter of law or alternatively by reason of business efficacy or alternatively, because the reasonable bystander would have so implied them:
(a) that Ms. Baines and/or Ms. Mogridge would not compete with the Claimant during the currency of the Employment Contracts;
(b) that Ms. Baines and/or Ms. Mogridge would not, during the currency of the Employment Contracts, make unlawful preparations to compete with the Claimant after termination of their respective Employment Contracts;
(c) that Ms. Baines and/or Ms. Mogridge would not, during the currency of the Employment Contracts, copy or memorise the Claimant's information (including but not limited to the Claimant's trade secrets and confidential information) in order to use that information other than on behalf of the Claimant;
(d) that Ms. Baines and/or Ms. Mogridge would not, during the currency of the Employment Contracts, recruit or solicit or entice or encourage the Claimant's employees to leave the Claimant's employment (whether with a view to join a competitor or otherwise);
(e) that Ms. Baines and/or Ms. Mogridge would not, during the currency of the Employment Contracts, divert business opportunities to any entity other than the Claimant (other than with the permission of the Claimant);
(f) that Ms. Baines and/or Ms. Mogridge would not disclose or use (other than on behalf of the Claimant) the Claimant's confidential information during the currency of the Employment Contracts and thereafter;
(g) that Ms. Baines and/or Ms. Mogridge would disclose to the Claimant, during the currency of their Employment Contracts, any wrongdoing whether on their own part and/or on the part of others;
(h) that Ms. Baines and/or Ms. Mogridge would not, without reasonable and proper cause, act in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence enjoyed by the Claimant and each of Ms. Baines and /or Ms. Mogridge.
7. Further or in the alternative, the duty referred to at paragraph 6(f) above, was owed by Ms. Baines and Ms. Mogridge to the Claimant in equity.
8. Further, Ms. Baines and Ms. Mogridge owed fiduciary duties to the Claimant:
(a) in the case of Ms. Baines, by reason of her statutory directorship until its termination on or around 15th June, 2010
(b) in the case of both Ms. Baines and Ms. Mogridge during the currency of the Employment Contract because of the seniority of their respective positions within the Claimant and/or the trust and confidence reposed in them by the Claimant by permitting them wide access to the Claimant's confidential information, including but not limited to lists of the names of the Claimant's client landlords and the names of tenants residing in the properties owned by those client landlords.
9. The fiduciary duties owed by Ms. Baines and Ms. Mogridge were duties owed by reason of the common law and/or equity and /or by reason of sections 170 to 177 of the Companies Act 2006, the content of which was:
(a) a duty to act in the best interests and/or to promote the success of the Claimant;
(b) a duty to avoid conflicts of interest as between the Claimant's best interests and the personal interests of Ms. Baines and Ms. Mogridge and in any event, to disclose such conflicts of interest to the Claimant's directors where they arose;
(c) a duty not to make any unauthorised profit from their position as fiduciaries;
(d) a duty to disclose any wrongdoing to the Claimant whether on their own part and/or on the part of others. "
"Implied duty not to compete
11.1 As to paragraph 6(a), it is admitted that the contractual duty of good faith included a requirement for both Mrs. Mogridge and Mrs. Baines not to compete with the Claimant during the currency of their respective Employment Contracts.
Implied duty not to make unlawful preparations to compete
11.2 As to paragraph 6(b), it is denied that any such term was implied into the contracts. The alleged implied term is too vague. It is unclear what is meant by the term "unlawful preparations".
Implied duty not to copy or memorise the Claimant's information
11.3 As to paragraph 6(c), it is denied that any such term was implied into the contracts. The alleged implied term is too vague. It is unclear what is meant by the terms "Claimant's information", "trade secrets" or "confidential information".
Implied duty not to recruit or solicit or entice or encourage employees to leave
11.4 As to paragraph 6(d), it is admitted that the contractual duty of good faith included a requirement for both Mrs. Mogridge and Mrs. Baines not to recruit or solicit or entice or encourage the Claimant's employees to leave the Claimant's employment during the currency of their respective contracts.
Implied duty not to divert business opportunities
11.5 As to paragraph 6(e), it is admitted that the contractual duty of good faith included a requirement for both Mrs. Mogridge and Mrs. Baines not to divert business opportunities to any entity other than the Claimant other than with the permission of the Claimant during the currency of their respective contracts.
Implied duty not to disclose or use Claimant's confidential information and trade secrets
11.6 As to paragraph 6(f), it is admitted that, in abstract, the contractual duty of good faith included a requirement for both Mrs. Mogridge and Mrs. Baines:
11.6.1 Not to disclose or use the Claimant's confidential information during the currency of their respective contracts other than on behalf of the Claimant.
11.6.2 Not to disclose or use the Claimant's trade secrets during the currency of their respective contracts and thereafter other than on behalf of the Claimant.
Implied duty to disclose wrongdoing
11.7 As to paragraph 6(g):
11.7.1 It is denied that the contractual duty of good faith included a requirement for Mrs. Mogridge to disclose to the Claimant during the currency of her contract any wrongdoing whether on her own part or on the part of others;
11.7.2 It is admitted that the implied duty of good faith in Mrs. Baines' [sic] contract would have included such a requirement during the time that she was employed as Managing Director. Thereafter (namely from February 2010), there was no such requirement.
Implied duty of mutual trust and confidence
11.8 As to paragraph 6(h), it is admitted that there was a term implied in their respective contracts that Mrs. Mogridge and Mrs. Baines would not, without reasonable and proper cause, act in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence enjoyed by the Claimant and each of Mrs. Mogridge and Mrs. Baines.
12. As to paragraph 7, it is admitted that, in the abstract, the duty referred to in paragraph 6(f) was capable of being owed by Mrs. Baines and/or Mrs. Mogridge to the Claimant in equity. It is denied that there was any such duty in this case for reasons set out further below.
Fiduciary duties
13. As to paragraph 8(a):
13.1 It is averred and admitted that Mrs. Baines owed a fiduciary duty in her capacity as the Managing Director until she was stripped of that role in February 2010 without being given any reason, save that Mrs. Baines notes that it coincided with the birth of her son.
13.2 It is denied that Mrs. Baines owed a fiduciary duty thereafter by reason of her statutory directorship. From February 2010 Mrs. Baines was excluded from the business and never allowed to return. She had her laptop, keys and Office alarm entry fob removed. The other employees and clients were told not to contact her. In the circumstances, any fiduciary duty ceased at that point.
14. Paragraph 8(b) is denied:
14.1 For the reasons set out in the paragraph above, it is denied that Mrs. Baines was in a senior position after February 2010. It is further denied that after February 2010 the Claimant reposed any trust and confidence in Mrs. Baines and/or permitted her any access to the Claimant's confidential information.
14.2 It is denied that Mrs. Mogridge was ever in a senior position. She was an administrator. It is denied that Mrs. Mogridge was permitted wide access to the Claimant's confidential information such as to impose upon her a fiduciary duty. The information as to the Claimant's landlords and their tenants was contained on a software programme which was accessible to every member of staff, including temporary staff and external contractors such as the accountant and bookkeeper. There was no restriction or limit on the access to that software programme at any time.
15. Paragraph 9 is denied:
15.1 Mrs. Mogridge was never a director or in a senior position and owed no fiduciary duties by reason of common law and/or equity and/or by reason of sections 170 to 177 of the Companies Act 2006.
15.2 Mrs. Baines ceased to be a director in all but name from February 2010 for the reasons set out above. For those reasons, the general duties imposed upon a director by reason of common law and/or equity and/or by reasons of sections 170 to 177 of the Companies Act 2006 ceased at that point (subject to s.170(2))."
"Setting up of Mint
19. On or around 21st April, 2010, Ms. Baines incorporated Mint. Mint was always intended by Ms. Baines to be a competitor to the business of the Claimant as is evidenced by its name.
20. Thereafter, Ms. Baines telephoned a firm of commercial estate agents (and whom, therefore the Claimant would not have contact with in its ordinary course of business) Brown & Lee on at least 23rd April, 2010, 14th May, 2010, 17th May, 2010, and 18th May 2010. Brown & Lee operate in the Stevenage area of Hertfordshire and Mint has, since it commenced trading, operated from premises at 162B High Street, Stevenage, Hertfordshire SG1 3LL ("the Mint Premises"). Such contact was not on behalf of the Claimant. In the premises, the Court will ask the Court [sic] to draw the inference that Ms. Baines telephoned Brown & Lee on the above dates in order to secure the Mint Premises.
Solicitation of the Claimant's Staff
21. As set out above, the Claimant [sic] received legal advice in relation to the Compromise Agreement on 15th June, 2010.
22. Thereafter:
(a) on 16th June, 2010 Ms. Mogridge provided a letter of resignation in relation to her employment with the Claimant to Ms. Low. Ms. Mogridge stated therein: "After a very long deliberation, I have come to the unfortunate decision to terminate my employment with Halcyon House Limited due to personal health issues".
(b) on 17th June, 2010 one of the Claimant's other employees, Ms. Nicki Payne (the Claimant's Client Liaison Officer), resigned from the Claimant's employment after 22 years of service by letter of the same date. Ms. Payne stated in that letter that: "I would like to spend some time with my family and to reconsider my future".
23. The reasons given for the resignations of Ms. Mogridge and Ms. Payne in their resignation letters were not true. Both employees resigned to commence work for Mint and did commence work for Mint immediately and in any event in or around July 2010.
24. In the premises:
(a) the Claimant will ask the Court to draw the inference that Ms. Baines solicited, enticed or encouraged Ms. Mogridge to commence work for Mint at the expense of the Claimant during the currency of Ms. Baines' [sic] Employment Contract. The same was in breach of the term of Ms. Baines [sic] Employment Contract pleaded at paragraph 6(d) and/or (h) above;
(b) the Claimant will ask the Court to draw the inference that Ms.Baines and/or Ms. Mogridge (with the knowledge of each other) solicited, enticed or encouraged Ms. Payne to commence work for Mint at the expense of the Claimant during the currency of the Employment Contracts. The same was in breach of the term of the Employment Contracts pleaded at paragraph 6(d) and/or (h) above;
(c) the Claimant will ask the Court to draw the inference that Ms. Baines and/or Ms. Mogridge (with the knowledge of the other) were placing the interests of Mint before the interests of the Claimant in breach of the fiduciary duties pleaded at paragraph 9 above;
(d) at no time during the currency of the Employment Contracts or while Ms. Baines was a statutory director of the Claimant were the matters at paragraph 24(a) to (c) disclosed to the Claimant by either Ms. Baines or Ms. Mogridge in breach of the clauses in the Employment Contracts pleaded at paragraph 6(g) and/or (h) and the fiduciary duties pleaded at paragraph 9(d) above ("the Disclosure Duties").
Solicitation of the Claimant's Clients on behalf of Mint
Mr. Dick Chapman
25. Mr. Dick Chapman was a client of the Claimant.
26. On 15th July, 2010 Ms. Mogridge received the following email from Mr. Chapman:
"Hi Sue
I have received from Caroline a letter to send to Halcyon (addressed to you) in order to transfer my rentals to the new company.
I am happy to do this subject to confirmation from you that I will not incur any additional charges and that payments to my account once the transfer has completed will not result in delays in my receiving payment. I would also like to confirm that the payments for Tamar Close in respect of the County Court Judgements against the previous tenants will also get transferred seamlessly.
If you are able to confirm this I will send the termination letter immediately of your confirmation so that you can action it prior to leaving Halcyon.
Thanks
Dick
27. Thereafter Mr. Chapman notified the Claimant of an intention to transfer his business from the Claimant to Mint on 16th July, 2010.
28. In the premises, during the currency of Ms. Mogridge's Employment Contract, Ms. Mogridge solicited the business of Mr. Chapman for Mint at the expense of the Claimant and with the knowledge of Ms. Baines. To the best of the Claimant's current knowledge the same was done by the following acts (prior to 15th July, 2010):
(a) Ms. Baines sending a letter to Mr. Chapman soliciting his business on behalf of Mint. The said letter stated that Ms. Baines and Ms. Mogridge were setting up Mint and invited Mr. Chapman to transfer his business to them; and
(b) a follow up telephone call from Ms. Mogridge during the course of which Ms. Mogridge solicited the business of Mr. Chapman for Mint at the expense of the Claimant.
Dunsters Mead
29. At all material times until June 2010 the Claimant managed a block of flats known as Dunsters Mead. In June 2010 Ms. Mogridge informed Ms. Low that the management of the Dunsters Mead property was to be transferred from the Claimant to "another agent". In fact, that other agent was Mint although Ms. Mogridge did not inform Ms. Low of that fact at the time, or at all.
30. Consequently, in June 2010 Ms. Low asked Ms. Mogridge why the Dunsters Mead property had been transferred away from the Claimant to another agent. Ms. Mogridge replied that Ms. Low should not contact anybody at Dunsters Mead because the decision to transfer the property had already been made.
31. In the premises, during the currency of the Employment Contracts and during the currency of Ms. Baines statutory directorship, Ms. Baines and/or Ms. Mogridge (with the knowledge of the other) solicited the business in relation to the Dunsters Mead property for the benefit of Mint and at the expense of the Claimant and concealed the same from Ms. Low and/or the Claimant.
Breaches of Duty
32. By reason of the matters set out at paragraphs 19 to 31 above:
(a) Ms. Baines and/or Ms. Mogridge were in breach of the clauses of the Employment Contract pleaded at paragraphs 6(a) and/or (e) and/or (g) and/or (h) and/or some one or more of the fiduciary duties pleaded at paragraph 9(a) to (c) above;
(b) Neither Ms. Baines nor Ms. Mogridge disclosed their wrongdoing or the wrongdoing of the other to the Claimant during the currency of the Employment Contract (and/or while Ms. Baines was a statutory director) and therefore each of them was in breach of the Disclosure Duties."
"44. Further insofar as the matters pleaded at paragraphs 19 to 43 above [paragraphs 33 to 40 inclusive, and paragraph 43, related to alleged misuse of confidential information, whilst paragraphs 41 and 42 summarised the allegations of breaches the respective contracts of employment of Mrs. Baines and Mrs. Mogridge] occurred before Ms. Baines signed the Compromise Agreement, they were matters which (i) were known to Ms. Baines; and (ii) related to Ms. Baines' [sic] employment, because Ms. Baines [sic] actions placed her in breach of duty as pleaded above; and (iii) if disclosed to the Claimant would or might have affected the decision of the Claimant to enter into the Compromise Agreement, because they related to Ms. Baines' [sic] setting up of a business in competition with the Claimant's. Consequently, by her failure to disclose the said matters to the Claimant:
(a) the representation made by Ms. Baines and recorded at clause 9.7 of the Compromise Agreement was false in circumstances where Ms. Baines (i) knew that it was false (and therefore it was made fraudulently), or (ii) was reckless in that she did not care whether or not it was true or false (and therefore it was made fraudulently); or (iii) ought to have known that it was false;
(b) Ms. Baines was in breach of the warranty set out at clause 9.7 of the Compromise Agreement.
45. Pursuant to clause 10 of the Compromise Agreement, the Claimant has sought, by a letter dated 21st January, 2011, repayment of the sum of £25,400 (alternatively the Claimant does so by service of this pleading). Ms. Baines has declined to repay the sum to the Claimant."
"that warranty was breached when it was given (on 15th June, 2010 when Ms. Baines signed the Compromise Agreement) because Ms. Baines was in breach of contract and knew about the imminent competitive threat of Mint, but had failed to disclose the same to Halcyon."
"46. Ms. Mogridge's breaches of contract and/or fiduciary duty set out above were induced and/or procured and/or facilitated by Ms. Baines acting on behalf of Mint and/or in the case of breaches of fiduciary duty Ms. Baines and/or Mint dishonestly assisted Ms. Mogridge in her breaches of the same.
47. Such inducement and/or procurement and/or facilitation of breach and/or such dishonest assistance was carried out by Ms. Baines, acting as a servant or agent of Mint (such that Mint is vicariously liable for the same), with knowledge of the existence of the contractual or fiduciary duty concerned and intending that the same [sic] or being reckless as to the existence of such duty and intending that the same be breached. Ms. Baines' [sic] knowledge is to be imputed to Mint because she was the directing mind and will of Mint.
48. The intention pleaded above is to be inferred from the fact that such breaches of duty aforesaid were a necessary means to achieve the objective of securing the Claimant's staff and/or clients and/or confidential information for the benefit of Mint.
49. In all the premises the behaviour of Ms. Baines and/or Mint as set out in the foregoing fell below the ordinary standards of honest people and Ms. Baines and/or Mint appreciated that their behaviour fell below the ordinary standards of honest people.
50. In addition to the matters pleaded at paragraphs 46 to 49 above, Mint is liable to the Claimant because:
(a) as pleaded at paragraphs 33 to 40, Ms. Baines on behalf of Mint received the Claimant's confidential information and/or trade secrets, namely, the names and addresses of some or all of the Claimant's client landlords, in the period of around May 2010 to around August 2010;
(b) Mint was aware that the information was the Claimant's confidential information and/or trade secrets because Ms. Baines'[sic] knowledge is to be imputed to Mint as its directing mind and will;
(c) in the premises, Mint fell under an equitable duty of confidence not to disclose or make use of the said information;
(d) by reason of the matters pleaded at paragraphs 33 to 40, Mint has made use of the Claimant's confidential information and/or trade secrets in breach of the said equitable duty of confidence by using it to solicit the business of some or all of the Claimant's client landlords. "
"(a) the sum of £25,400 paid to Ms. Baines pursuant to clause 3.2 of the Compromise Agreement and which would not have been paid to Ms. Baines but for the breaches of the Disclosure Duties by Ms. Baines and/or Ms. Mogridge and/or would not have been paid had the false representation referred to at paragraph 17 not have been made [the latter reference was obscure, as what was pleaded at paragraph 17 of the Particulars of Claim were terms of the Compromise Agreement]
(b) alternatively, the sum of £25,400 paid to Ms. Baines pursuant to clause 3.2 of the Compromise Agreement which Ms. Baines is obliged to repay to the Claimant by virtue of clause 10 of the Compromise Agreement but has declined to do so;
(c) loss of business arising out of the Claimant's loss of client landlords to Mint. The Claimant's current estimate as to its loss of business is approximately £25,000 per annum."
"a. On or around 20 July 2010, the Claimant's Mrs. Low wrote to landlords stating that Mrs. Baines had "removed certain personal information with respect to some of our landlords in breach of the Data Protection Act".
b. In or around August 2010, Mrs. Low on behalf of the Claimant stated orally to a landlord, Mrs. Hammond that Mrs. Baines had not ensured that Mint was a member of an approved tenancy deposit scheme.
c. On 12 August 2010, Mrs. Low confirming this oral statement ("previous verbal advice") in a letter to Mrs. Hammond.
d. On 1st October 2010, Mrs. Low wrote a letter to Mr. Oliver in the Compliance department of the National Federation of Property Professionals and made the following allegations about Mrs. Baines:
i. That she had failed to provide regular financial reports and information to Directors.
ii. That she had ignored requests for information from Directors.
iii. That she was responsible for leaving the Claimant's paperwork in an "administrative mess".
iv. That she signed the Compromise Agreement in bad faith and that this was the subject of civil litigation.
v. That she was in some way responsible for improper adjustments and withdrawals from the tenants' deposits.
vi. That she had committed "unprofessional and improper behaviour".
e. On 12 October 2010, in a letter to Mr. Baker, the Claimant wrongly alleged that Mint had instructed his tenant to pay rent to them one month early.
f. On 15 October 2010, the Claimant's Mrs. Low made a complaint to the National Federation of Property Professionals describing a complaint about Mrs. Baines as follows:
i. "Improper removal of funds from protected clients deposits"
ii. "Using information obtained illegally from Halcyon to solicit landlords to transfer to Mint using false comparisons and language derogatory to another agent. These letters are grossly unprofessional and bring the industry into disrepute."
iii. Requesting that the NFOPP should effect the "removal of Caroline Baines as a member of ARLA and Mint removed as a member of TDS. Any other professional bodies informed."
g. On 14 April 2011, the Claimant's Mrs. Low wrote to the Leasehold Valuation Tribunal stating:
i. "Mrs. Baines was removed from Halcyon under a compromise agreement necessitated by her administrative incompetence".
ii. "The "mess and late accounts" were under Mrs. Baines [sic] tenure".
iii. "I daresay Mr. Kitching is unhappy at being approached for outstanding monies which should have been processed by my predecessor".
h. Orally stating to an employee Tracy Querns that Mrs. Baines was sacked because she was not capable of running the company."
"62. Mrs. Baines asks the Court to infer from the above matters that the Claimant has made these and like allegations to all of the Claimant's landlords and tenants.
63. Insofar as any of the above matters were directed against Mint, Mrs. Baines was at all material times the directing mind and will of Mint and accordingly any statements disparaging and derogatory of Mint are also disparaging and derogatory of Mrs. Baines.
64. …
65 By reason of the above matters, Mrs. Baines has suffered loss and damage.
PARTICULARS
(a) The behaviour of the Claimant's Mrs. Low caused Mrs. Baines considerable anxiety at a time when she had only just given birth to a child. The Claimant's conduct was designed to and did cause Mrs. Baines to suffer considerable anxiety and upset.
(b) Allegations of the utmost seriousness have been made against her personal and professional integrity. The Claimant has made allegations without basis which would have been designed to and have caused Mrs. Baines to suffer considerable anxiety and upset.
(c) The allegations that the Claimant has made have besmirched Mrs. Baines' [sic] personal and professional character. The Claimant has wrongly alleged that Mrs. Baines is guilty of theft and dishonesty. As a result, the Claimant has destroyed relationships that Mrs. Baines had with clients over the preceding ten years.
66. Mrs. Baines seeks damages in an amount to be assessed for mental distress, loss of reputation and financial loss caused by breach of the Compromise Agreement."
Particular a:- denied, but in any event not disparaging or derogatory, true, and made by Mrs. Low, not Halcyon.
Particular b:- admitted, but not disparaging or derogatory, true, made by Mrs. Low, not Halcyon, and about Mint, not Mrs. Baines
Particular c:- denied. The letter in question was not disparaging or derogatory, and was written by Mrs. Low, not Halcyon.
Particular d:- admitted, true and written by Mrs. Low, not Halcyon.
Particular e:- admitted, save for the word "wrongly", but not disparaging or derogatory, true and made by Mrs. Low, not Halcyon, about Mint, not Mrs. Baines.
Particular f:- admitted, but not disparaging or derogatory, true, and made by Mrs. Low, not Halcyon.
Particular g:- admitted, but not disparaging or derogatory, true, and written by Mrs. Low, not Halcyon.
Particular h:- denied.
The allegations made in the Harassment Action
"8.1 On or around 31 January 2010, a mere 11 days after the 2nd Claimant [Mrs. Baines] had given birth to a son, calling an Extraordinary General Meeting and/or a Board Meeting to take place on 2 February 2010 and/or 5 February 2010 for the purpose of removing the 2nd Claimant as Managing Director.
8.2 In or around late January/early February 2010, unnecessarily arranging for couriers to regularly deliver documents to the 2nd Claimant's address.
8.3 On or around 5 February 2010, removing the 2nd Claimant as Managing Director.
8.4 On or around 5 February 2010, telling Halcyon House's employees not to contact the 2nd Claimant.
8.5 In or around February 2010, forcing the 2nd Claimant to return her laptop, keys and office alarm fob.
8.6 In or around February 2010, changing the locks at the premise [sic] of Halcyon House to prevent the 2nd Claimant from accessing them.
8.7 In or around April 2010, removing the 2nd Claimant as a signatory to Halcyon House bank accounts and changing account passwords.
8.8 On 13 May 2010, through solicitors HRJ Law, making unfounded allegations of misconduct.
8.9 [The commencement of the repetition of allegations already made in the Set Off, which continued to paragraph 8.16, with the only new allegation being:-]
8.14 In November 2010, writing to landlords that worked with the 2nd Claimant requesting records of their business dealings with Mint including telephone records and emails, and implying that if these were not supplied they might be pursued further."
"(a) On or around 12th August 2010, stating via letter to a landlord, Mrs. Hammond, that the 1st Claimant had stolen keys to her property.
(b) Making an allegation to the police on or around 27 August 2010 that the 1st Claimant had stolen keys for a property at Augustus Gate leading to the 1st Claimant's arrest.
(c) Making a further allegation to the police in or around 13th September 2010 that the 1st Claimant had stolen keys to 2 Saxon House and 20 Tippett Court and two copies of her employment contract.
(d) On or around 20 July 2010, writing to landlords stating that the 1st Claimant had "removed certain personal information with respect to some of our landlords in breach of the Data Protection Act".
(e) Making an allegation to the National Federation of Property Professionals on 1st October 2010 that the 1st Claimant had colluded with the 2nd Claimant in removing complete lists of landlords and tenants and a number of keys, and that the 1st Claimant removed computer files from Halcyon offices.
(f) Informing a landlord Cy Biggs in or around November 2010 that the 1st Claimant had been arrested for theft."
"10.1.1 The 1st Claimant was in total shock, stunned and petrified at being arrested on 27 August 2010. She suffered from claustrophobia in the prison cell.
10.1.2 After she was bailed, the 1st Claimant suffered panic attacks and agoraphobic tendencies. She felt that she was not safe and could not be left on her own. These thoughts led to feeling anxious and avoidance behaviour.
10.1.3 The 1st Claimant attended her GP and in October 2010 was referred to the Stevenage Enhanced Primary Mental Health Team.
10.1.4 The Defendant's harassment has caused or materially contributed to the 1st Claimant suffering a moderate depressive episode which led her to seek therapy and a continued requirement to take medication for stress and depression."
The duties owed by Mrs. Baines and Mrs. Mogridge to Halcyon and whether any was infringed
"I called Caroline and told her that I had resigned. Caroline said she was thinking about setting up a new agency and asked if I would be interested coming on board. I hadn't heard anything about this before, but was very pleased at the thought I might be able to work with Caroline again. However, by this time my health was not very good, so I told her I would like to, but I wanted some time just for me to relax and unwind. Caroline said this was fine as there was nothing definite about her new venture. She didn't give me any details or tell me what her plans were. It was only later, after I had left Halcyon, she invited me to her new premises and we agreed my terms and when I would start."
"A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of the fiduciary."
"It is important to recognise that the mere fact that Dr. Fishel is an employee does not mean that he owes the range of fiduciary duties referred to above. It is true that in Attorney-General v. Blake [1998] Ch 439 Lord Woolf MR, giving judgment for the Court of Appeal, said that the employer-employee relationship is a fiduciary one. But plainly the court was not thereby intending to indicate that the whole range of fiduciary obligations was engaged in every employment relationship. This would be revolutionary indeed, transforming the contract of employment beyond all recognition and transmuting contractual duties into fiduciary ones. In my opinion the court was merely indicating that circumstances may arise in the context of an employment relationship, or arise out of it, which, when they occur, will place the employee in the position of a fiduciary. In Attorney-General v. Blake itself, as I have indicated, it was the receipt of confidential information. There are other examples. Thus every employee is subject to the principle that he should not accept a bribe and he will have to account for it (and possibly any profits derived from it) to his employer. Again, as Fletcher-Moulton LJ observed in In re Coomber; Coomber v. Coomber [1911] 1 Ch 723, 728, even an errand boy is obliged to bring back my change, and "is in fiduciary relations with me." But his fiduciary obligations are limited and arise out of the particular circumstances, namely that he is put in a position where he is obliged to account to me for the change he has received. In that case the obligation arises out of the employment relationship but it is not inherent in the nature of the relationship itself.
As these examples all illustrate, simply labelling the relationship as fiduciary tells us nothing about which particular fiduciary duties will arise. As Lord Browne-Wilkinson has recently observed in Henderson v. Merrett Syndicates Ltd. [1995] 2 AC 145, 206A: "The phrase "fiduciary duties" is a dangerous one, giving rise to a mistaken assumption that all fiduciaries owe the same duties in all circumstances. That is not the case." This is particularly true in the employment context. The employment relationship is obviously not a fiduciary relationship in the classic sense. It is to be contrasted with a number of other relationships which can readily and universally be recognised as "fiduciary relationships" because the very essence of the relationship is that one party must exercise his powers for the benefit of another. Trustees, company directors and liquidators classically fall into this category which Dr. P.D. Finn, in his seminal work on fiduciaries, Fiduciary Obligations (1977), has termed "fiduciary offices". As he has pointed out, typically there are two characteristics of these relationships, apart from the duty on the office holder to act in the interests of another. The first is that the powers are conferred by someone other than the beneficiaries in whose interests the fiduciary must act, and the second is that these fiduciaries have considerable autonomy over decision making and are not subject to the control of the beneficiaries.
By contrast, the essence of the employment relationship is not typically fiduciary at all. Its purpose is not to place the employee in a position where he is obliged to pursue his employer's interests at the expense of his own. The relationship is a contractual one and the powers imposed on the employee are conferred by the employer himself. The employee's freedom of action is regulated by the contract, the scope of his powers is determined by the terms (express or implied) of the contract, and as a consequence the employer can exercise (or at least he can place himself in a position where he has the opportunity to exercise) considerable control over the employee's decision making powers. This is not to say that fiduciary duties cannot arise out of the employment relationship itself. But they arise not as a result of the mere fact that within a particular contractual relationship there are specific contractual obligations which the employee has undertaken which have placed him in a situation where equity imposes these rigorous duties in addition to the contractual obligations. Where this occurs, the scope of the fiduciary obligations both arises out of, and is circumscribed by, the contractual terms; it is circumscribed because equity cannot alter the terms of the contract validly undertaken. The position was succinctly expressed by Mason J in the High Court of Australia in Hospital Products Ltd. v. United States Surgical Corporation (1984) 156 CLR 41, 97 as follows:
"That contractual and fiduciary relationships may co-exist between the same parties has never been doubted. Indeed, the existence of a basic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship. In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction."
The problem of identifying the scope of any fiduciary duties arising out of the relationship is particularly acute in the case of employees. This is because of the use of potentially ambiguous terminology in describing an employee's obligations, which use may prove a trap for the unwary. There are many cases which have recognised the existence of the employee's duty of good faith, or loyalty, or the mutual duty of trust and confidence – concepts which tend to shade into one another. As I have already indicated, Lord Millett has used precisely this language when describing the characteristic features which trigger fiduciary obligations. But he was not using the concepts in quite the same sense as they tend to be used in the employment field. Lord Millett was applying the concepts of loyalty and good faith to circumstances where a person undertakes to act solely in the interests of another. Unfortunately, these concepts are frequently used in the employment context to describe situations where a party merely has to take into consideration the interests of another, but does not have to act in the interests of that other. This narrower concept of good faith is graphically demonstrated by the decision of Sir Nicolas Browne-Wilkinson V-C in Imperial Group Pension Trust Ltd. v. Imperial Tobacco Ltd. [1991] ICR 524. The case concerned the nature of the employer's power in a pension scheme to give or withhold consent to proposed pension increases. The Vice-Chancellor expressly agreed with the concession that this was not a fiduciary power, observing, t p. 532:
"if this were a fiduciary power the company would have to decide whether or not to consent by reference only to the interests of the members, disregarding its own interests. This plainly was not the intention.
However, he then went on to consider the nature of the term and analysed it as follows, at p. 533:
"In every contract of employment there is an implied term: 'that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee:' Woods v. W.M. Car Services (Peterborough) Ltd. [1981] ICR 666, 670, approved by the Court of Appeal in Lewis v. Motorworld Garages Ltd. [1986] ICR 157. I will call this implied term 'the implied obligation of good faith'".
His Lordship held that, whilst it was legitimate for the company to look after its own interests in the operation of the scheme, it could not do so for a collateral purpose detrimental to the employees. It is plain that here the implied duty of good faith is being used in circumstances where no fiduciary obligation arises at all. Similarly, in Mahmud v. Bank of Credit and Commerce International SA [1997] ICR 606, the House of Lords confirmed the existence of the term relied upon by Sir Nicolas Browne-Wilkinson V-C although describing it as the duty of trust and confidence. In that particular context it was held to be a breach of the term for an employer to conduct a dishonest business. Clearly, however, the employer does not have to run his business solely by reference to the interests of the employees. Indeed, as Lord Steyn commented, the origin of the term is probably the duty of co-operation between the contracting parties. This is consistent with the recognition that the duty is one where each party must have regard to the interests of the other, but not that either must subjugate his interests to those of the other. The duty of trust and confidence limits the employer's powers, but it does not require him to act as a fiduciary. It is a contractual but not a fiduciary obligation.
Accordingly, in analysing the employment cases in this field, care must be taken not automatically to equate the duties of good faith and loyalty, or trust and confidence, with fiduciary obligations. Very often in such cases the court has simply been concerned with the question whether the employee's conduct has been such as to justify summary dismissal, and there has been no need to decide whether the duties infringed, properly analysed, are contractual or fiduciary obligations. As a consequence, the two are sometimes wrongly treated as identical: see Neary v. Dean of Westminster [1999] IRLR 288, 290 where the mutual duty of trust and confidence was described as constituting a "fiduciary relationship". Accordingly, in determining whether a fiduciary relationship arises in the context of an employment relationship, it is necessary to identify with care the particular duties undertaken by the employee, and to ask whether in all the circumstances he has placed himself in a position where he must act solely in the interests of his employer. It is only once those duties have been identified that it is possible to determine whether any fiduciary duty has been breached, as Lord Upjohn commented in Phipps v. Boardman [1967] 2 AC 46, 127:
"Having defined the scope of [the] duties one must see whether he has committed some breach thereof and by placing himself within the scope and ambit of those duties in a position where his duty and interest may possibly conflict. It is only at this stage that any question of accountability arises."
It follows that fiduciary duties may be engaged in respect of only part of the employment relationship, as was recognised by Lord Wilberforce, giving judgment for the Privy Council in New Zealand Netherlands Society "Oranje" Inc. v. Kuys [1973] 1 WLR 1126, 1130c: "A person … may be in a fiduciary position quoad a part of his activities but not quoad other parts; each transaction, or group of transactions, must be looked at.""
"At trial it was common ground between the parties that the synthesis of principles expounded by Mr. Livesey Q.C., sitting as a deputy judge of the High Court, in Hunter Kane Ltd. v. Watkins [2003] EWHC 186 (Ch), which Mr. Livesey had himself taken largely from the judgment of Lawrence Collins J in CMS Dolphin Ltd. v. Simonet [2002] BCC 600 and the authorities there cited and discussed, accurately stated the law. In this court in In Plus Group Ltd. v. Pyke [2002] EWCA Civ 370; [2003] BCC 332 Brooke LJ described the Simonet analysis as "valuable" (at [71]). Mr. Livesey said:
"1. A director, while acting as such, has a fiduciary relationship with his company. That is he has an obligation to deal towards it with loyalty, good faith and avoidance of the conflict of duty and self-interest.
2. A requirement to avoid a conflict of duty and self-interest means that a director is precluded from obtaining for himself, either secretly or without the informed approval of the company, any property or business advantage either belonging to the company or for which it has been negotiating, especially where the director or officer is a participant in the negotiations.
3. A director's power to resign from office is not a fiduciary power. He is entitled to resign even if his resignation might have a disastrous effect on the business or reputation of the company.
4. A fiduciary relationship does not continue after the determination of the relationship which gives rise to it. After the relationship is determined the director is in general not under the continuing obligations which are the feature of the fiduciary relationship.
5. Acts done by the directors while the contract of employment subsists but which are preparatory to competition after it terminates are not necessarily in themselves a breach of the implied term as to loyalty and fidelity.
6. Directors, no less than employees, acquire a general fund of skill, knowledge and expertise in the course of their work, which is plainly in the public interest that they should be free to exploit it in a new position. After ceasing the relationship by resignation or otherwise a director is in general (and subject of course to any terms of the contract of employment) not prohibited from using his general fund of skill and knowledge, the 'stock in trade' of the knowledge he has acquired while a director, even including such things as business contacts and personal connections made as a result of his directorship.
7. A director is however precluded from acting in breach of the requirement at 2 above, even after his resignation where the resignation may fairly be said to have been prompted or influenced by a wish to acquire for himself any maturing business opportunities sought by the company and where it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired.
8. In considering whether an act of a director breaches the preceding principle the factors to take into account will include the factor of position or office held, the nature of the corporate opportunity, its ripeness, its specificness and the director's relation to it, the amount of knowledge possessed, the circumstances in which it was obtained and whether it was special or indeed even private, the factor of time in the continuation of the fiduciary duty where the alleged breach occurs after termination of the relationship with the company and the circumstances under which the breach was terminated, that is whether by retirement or resignation or discharge.
9. The underlying basis of the liability of a director who exploits after his resignation a maturing business opportunity 'of the company' is that the opportunity is to be treated as if it were the property of the company in relation to which the director had fiduciary duties. By seeking the [sic – probably "to" was meant] exploit the opportunity after resignation he is appropriating to himself that property. He is just as accountable as a trustee who retires without properly accounting for trust property.
10. It follows that a director will not be in breach of the principle set out as point 7 above where either the company's hope of obtaining the contract was not a 'maturing business opportunity' and it was not pursuing further business orders nor where the director's resignation was not itself prompted or influenced by a wish to acquire the business for himself.
11. As regards breach of confidence, although while the contract of employment subsists a director or other employee may not use confidential information to the detriment of his employer, after it ceases the director/employee may compete and may use know-how acquired in the course of his employment (as distinct from trade secrets – although the distinction is sometimes difficult to apply in practice)""
"It seems to me that this restatement, as to which the parties are in agreement, will suffice at present to form the legal background to my consideration of the facts, which I will take very largely from the judgment of the judge. …"
"In my judgment an intention by a director of a company to set up business in competition with the company after his directorship has ceased is not to be regarded as a conflict of interest within the context of the principle, having regard to the rules of public policy as to restraint of trade, nor is the taking of any preliminary steps to investigate or forward that intention so long as there is no actual competitive activity, such as, for instance, competitive tendering or actual trading, while he remains a director.
It follows, in my judgment, that Mr. Head was not in breach of his fiduciary duty owed to Balston as a director of the company in not disclosing to Balston his intention to set up a business in competition, whether as a dealer in filter products or as a manufacturer of micro-fibre tubes or in taking such steps as he did to forward that intention prior to 18 April 1986."
"On this issue (which it is unnecessary to decide here where the threatened activities were not those of one director alone) I agree with the view expressed by Mr. Strauss Q.C. A director's duty to act so as to promote the best interests of his company prima facie includes a duty to inform the company of any activity, actual or threatened, which damages those interests. The fact that the activity is contemplated by himself is, on the authority of Balston's case, a circumstance which may excuse him from the latter aspect of the duty. But where the activity involves both himself and others, there is nothing in the authorities which excuses him from it. This applies, in my judgment, whether or not the activity in itself would constitute a breach by anyone of any relevant duty owed to the company. It does not, furthermore, seem to me that the public policy of favouring competitive business activity should lead to a different conclusion. A director is free to resign his directorship at any time notwithstanding the damage that the resignation may itself cause to the company: see CMS Dolphin Ltd. v. Simonet [2001] 2 BCLC 704 at [95] per Lawrence Collins J. By resigning his directorship he will put an end to his fiduciary obligations to the company so far as concerns any future activity by himself (provided that it does not involve the exploitation of confidential information or business opportunities available to him by virtue of his directorship). A director who wishes to engage in a competing business and not to disclose his intentions to the company ought, in my judgment, to resign his office as soon as his intention has been irrevocably formed and he has launched himself in the actual taking of preparatory steps. Although this might seem inconsistent with the wide statement of principle in Balston's case, it is not inconsistent with the decision in that case on its particular facts: as already noted (see [86] above) the intention to compete does not appear to have been formed prior to the resignation as a director."
"Every decision of this kind, within the principle discussed above, is fact-specific. The judge's first proposition is critical because it is factually correct and it eliminates the duality of interest or duty which the law seeks to guard against. For reasons given by my Lords, however, it is impossible to divorce the acquisition of Constructive's work by Mr. Pyke and his new company from the cessation of Constructive's relationship with the claimants. The judge's second proposition is therefore factually incorrect. I express no view as to its legal effect had it been factually correct. But when this element is severed, as it therefore has to be, from the judge's conclusion, the conclusion remains correct within the framework of duty which the law lays down. Quite exceptionally, the defendant's duty to the claimants had been reduced to vanishing point by the acts (explicable and even justifiable though they may have been) of his sole fellow director and fellow shareholder Mr. Plank. Accepting as I do that the claimants' relationship with Constructive was consistent with successful poaching on Mr. Pyke's part, the critical fact is that it was done in a situation in which the dual role which is the necessary predicate of Mr. Yell's case is absent. The defendant's role as a director of the claimants was throughout the relevant period entirely nominal, not in the sense in which a non-executive director's position might (probably wrongly) be called nominal but in the concrete sense that he was entirely excluded from all decision-making and all participation in the claimant company's affairs. For all the influence he had, he might as well have resigned."
"It follows from that decision [Swain v. West (Butchers) Ltd], which is consistent with Bell v. Lever Bros. Ltd. [1932] AC 161 and is binding upon us, that there is no general duty to report a fellow-servant's misconduct or breach of contract; whether there is such a duty depends on the contract and on the terms of employment of the particular servant. He may be so placed in the hierarchy as to have a duty to report either the misconduct of his superior, as in Swain v. West (Butchers) Ltd. [1936] 3 All ER 261, or the misconduct of his inferiors, as in this case."
"I accept, as I must accept, that by a majority the House of Lords [in Bell v. Lever Bros. Ltd.] were saying that a contract of employment, though often described as creating a relationship of trust between master and servant, is not a contract uberrimae fidei so as to require disclosure by the servant of his own misconduct, either before he is taken into employment as in Fletcher v. Krell (1873) 28 LT 105 or during the course of his employment as in Healey's or Bell's case."
"I simply do not see how one can be acting as a loyal employee when one knows that three senior employees (including oneself) may transfer their allegiance to a group of companies which includes a competitor and yet not only fail to divulge that knowledge but also say things which would have the effect of positively misleading the employer about that possibility."
"I cannot accept that employees, in particular senior managers, can keep silent when they know of planned poaching raids upon the company's existing staff or client base and when these are encouraged and facilitated from within the company itself, the more so when they are themselves party to these plots and plans. It seems to me that that would be an obvious breach of their duties of loyalty and fidelity to UBS."
"It now becomes necessary to deal with the second point of the plaintiffs – namely, that the contract of March 19, 1929, could be avoided by them in consequence of the non-disclosure by Bell of his misconduct as to the cocoa dealings. Fraudulent concealment has been negatived by the jury; this claim is based upon the contention that Bell owed a duty to Levers to disclose his misconduct, and that in default of disclosure the contract was voidable. Ordinarily the failure to disclose a material fact which might influence the mind of a prudent contractor does not give the right to avoid the contract. The principle of caveat emptor applies outside contracts of sale. There are certain contracts expressed by the law to be contracts of the utmost good faith, where material facts must be disclosed; if not, the contract is voidable. Apart from special fiduciary relationships, contracts for partnership and contracts of insurance are the leading instances. In such cases the duty does not arise out of contract; the duty of a person proposing an insurance arises before the contract is made, so of an intending partner. Unless this contract can be brought within the limited category of contracts uberrimae fidei it appears to me that this ground of defence must fail. I see nothing to differentiate this agreement from the ordinary contract of service; and I am aware of no authority which places contracts of service within the limited category I have mentioned. It seems to me clear that master and man negotiating for an agreement of service are as unfettered as in any other negotiations. Nor can I find anything in the relation of master and servant, when established, that places agreements between them within the protected category. It is said that there is a contractual duty of the servant to disclose his past faults. I agree that the duty in the servant to protect his master's property may involve the duty to report a fellow servant whom he knows to be wrongfully dealing with that property. The servant owes a duty not to steal, but, having stolen, is there a superadded duty to confess that he has stolen? I am satisfied that to imply such a duty would be a departure from the well established usage of mankind and would be to create obligations entirely outside the normal contemplation of the parties concerned. If a man agrees to raise his butler's wages, must the butler disclose that two years ago he received a secret commission from the wine merchant; and if the master discovers it, can he, without dismissal or after the servant has left, avoid the agreement for the increase in salary and recover back the extra wages paid? If he gives his cook a month's wages in lieu of notice can he, on discovering that the cook has been pilfering the tea and sugar, claim the return of the month's wages? I think not. He takes the risk; if he wishes to protect himself he can question the servant, and will then be protected by the truth or otherwise of the answers."
The Set Off
"A contract-breaker is not in general liable for any distress, frustration, anxiety, displeasure, vexation, tension or aggravation which his breach of contract may cause the innocent party. This rule is not, I think, founded on the assumption that such reactions are not foreseeable, which they surely are or may be, but on considerations of policy.
But the rule is not absolute. Where the very object of a contract is to provide pleasure, relaxation, peace of mind or freedom from molestation, damages will be awarded if the fruit of the contract is not provided or if the contrary result is procured instead. If the law did not cater for this exceptional category of case it would be defective. A contract to survey the condition of a house for a prospective purchaser does not, however, fall within this exceptional category.
In cases not falling within this exceptional category, damages are in my view recoverable for physical inconvenience and discomfort caused by the breach and mental suffering directly related to that inconvenience and discomfort. If those effects are foreseeably suffered during a period when defects are repaired I am prepared to accept that they sound in damages even though the cost of the repairs is not recoverable as such. But I also agree that awards should be restrained, and that the awards in this case far exceeded a reasonable award for the injury shown to have been suffered. "
"Bingham LJ would have had this truth about judicial decision making well in mind. So interpreted the passage cited is a helpful point of departure for the examination of the issues in this case. Specifically, it is important to bear in mind that Watts v. Morrow [1991] 1 WLR 1421 was a case where a surveyor negligently failed to discover defects in a property. The claim was not for breach of a specific undertaking to investigate a matter important for the buyer's peace of mind. It was a claim for damages for inconvenience and discomfort resulting from the breach. In Watts v. Morrow therefore there was no reason to consider the case where a surveyor is in breach of a distinct and important contractual obligation which was intended to afford the buyer information confirming the presence or absence of an intrusive element before he committed himself to the purchase."
"105. It is time for me to turn to the present case and apply the principles expressed in Ruxley Electronics and Construction Ltd. v. Forsyth [1996] AC 344 and Watts v. Morrow [1991] 1 WLR 1421. In my judgment, Mr. Farley is entitled to be compensated for the "real discomfort" that the judge found that he suffered. He is so entitled on either of two alternative bases.
106. First, he was deprived of the contractual benefit to which he was entitled. He was entitled to information about the aircraft noise from Gatwick-bound aircraft that Mr. Skinner, through negligence, had failed to supply him with. If Mr. Farley had, in the event, decided not to purchase Riverside House, the value to him of the contractual benefit of which he had been deprived would have been nil. But he did buy the property. And he took his decision to do so without the advantage of being able to take into account the information to which he was contractually entitled. If he had had that information he would not have bought. So the information clearly would have had a value to him. Prima facie, in my opinion, he is entitled to be compensated accordingly.
107. In these circumstances, it seems to me, it is open to the court to adopt a Ruxley Electronics and Construction Ltd. v. Forsyth [1996] AC 344 approach and place a value on the contractual benefit of which Mr. Farley has been deprived. In deciding on the amount, the discomfort experienced by Mr. Farley can, in my view, properly be taken into account. If he had had the aircraft noise information he would not have bought Riverside House and would not have had that discomfort.
108. Alternatively, Mr. Farley can, in my opinion, claim compensation for the discomfort as consequential loss. Had it not been for the breach of contract, he would not have suffered the discomfort. It was caused by the breach of contract in a causa sine qua non sense. Was the discomfort a consequence that should reasonably have been contemplated by the parties at the time of contract as liable to result from the breach? In my opinion, it was. It was obviously within the reasonable contemplation of the parties that, deprived of the information about aircraft noise that he ought to have had, Mr. Farley would make a decision to purchase that he would not otherwise have made. Having purchased, he would, having become aware of the noise, either sell – in which case at least the expenses of the resale would have been recoverable as damages – or he would keep the property and put up with the noise. In the latter event, it was within the reasonable contemplation of the parties that he would experience discomfort from the noise of the aircraft. And the discomfort was "physical" in the sense that Bingham LJ in Watts v. Morrow [1991] 1 WLR 1421, 1445 had in mind. In my opinion, the application of Watts v. Morrow principles entitles Mr. Farley to damages for discomfort caused by the aircraft noise."
The issues in the Harassment Action
"(1) A person must not pursue a course of conduct –
(a) which amounts to harassment of another, and
(b) which he knows or ought to know amounts to harassment of the other.
…
(2) For the purposes of this section …, the person whose course of conduct is in question ought to know that it amounts to or involves harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to or involved harassment of the other.
(3) Subsection (1) or (1A) does not apply to a course of conduct if the person who pursued it shows –
(a) that it was pursued for the purposes of preventing or detecting crime,
(b) …
(c) that in the particular circumstances the pursuit of the course of conduct was reasonable. "
"References to harassing a person include alarming the person or causing the person distress."
"A "course of conduct" must involve –
(a) in the case of conduct in relation to a single person (see section 1(1)), conduct on at least two occasions in relation to that person,"
"Where … the quality of the conduct said to constitute harassment is being examined, courts will have in mind that irritations, annoyances, even a measure of upset, arise at times in everybody's day-to-day dealings with other people. Courts are well able to recognise the boundary between conduct which is unattractive, even unreasonable, and conduct which is oppressive and unacceptable. To cross the boundary from the regrettable to the unacceptable the gravity of the misconduct must be of an order which would sustain criminal liability under section 2."
"65. They [the legislators] might have considered that the principal purpose of the Act was prevention and protection rather than compensation. It begins with the prohibition of harassment in section 1. This is then made a criminal offence in section 2. Civil remedies, including damages and injunctions are provided for in section 3. The aim, it might be thought, was to deter, to punish or to encourage the perpetrator to mend his ways by the wide range of criminal disposals available on summary conviction, including the restraining orders provided for in section 5, or by the sort of specific prohibitions which may be helpfully contained in an injunction.
66. If this was the aim, it is easy to see why the definition of harassment was left deliberately wide and open-ended. It does require a course of conduct, but this can be shown by conduct on at least two occasions (or since 2005 by conduct on one occasion to each of two or more people): section 7(3). All sorts of conduct may amount to harassment. It includes alarming a person or causing her distress: section 7(2). But conduct might be harassment even if no alarm or distress were in fact caused. A great deal is left to the wisdom of the courts to draw sensible lines between the ordinary banter and badinage of life and genuinely offensive and unacceptable behaviour."
"It seems to me that what, in the words of Lord Nicholls in Majrowski, crosses the boundary between unattractive and even unreasonable conduct and conduct which is oppressive and unacceptable, may well depend on the context in which the conduct occurs. What might not be harassment on the factory floor or in the barrack room might well be harassment in the hospital ward and vice versa. In my judgment the touchstone for recognising what is not harassment for the purposes of ss. 1 and 3 will be whether the conduct is of such gravity as to justify the sanctions of the criminal law."
"17. I accept that a course of conduct must be grave before the offence or tort of harassment is proved. And that, as Mr. Porter accepted after some discussion, the only real difference between the crime of s.2 and the tort of s.3 is standard of proof. To prove the civil wrong of harassment it is necessary to prove the case on the balance of probabilities, to prove the crime, the standard is the usual criminal one of beyond a reasonable doubt.
18. In so accepting I would just add this word of caution: the fact of parallel criminal and civil liability is not generally, outside the particular context of harassment, of significance in considering civil liability. There are a number of other civil wrongs which are also crimes. Perhaps the most common would be breaches of the Trade Descriptions Act 1968 as amended. In the field of intellectual property both trade mark and copyright infringement, and the common law tort of passing off (which generally involves deception), may all amount to crimes. It has never been suggested generally that the scope of a civil wrong is restricted because it is also a crime. What makes the wrong of harassment different and special is because, as Lord Nicholls and Lady Hale recognised, in life one has to put up with a certain amount of annoyance: things have got to be fairly severe before the law, civil or criminal, will intervene."
"Making a further allegation to the police in or around 13th September 2010 that the 1st Claimant had stolen keys to 2 Saxon House and 20 Tippett Court and two copies of her employment contract."
"Mr. Hand submitted, and I agree, that there is no basis for the proposition that the absolute immunity rule only attaches to defamatory statements. As the employment tribunal well described in paragraphs 9(o) to (q) of its extended reasons, and as the Employment Appeal Tribunal also found, it attaches to anything said or done by anybody in the course of judicial proceedings whatever the nature of the claim made in respect of such behaviour or statement, except suits for malicious prosecution and prosecution for perjury and proceedings for contempt of court. That is because the rule is there, not to protect the person whose conduct in court might prompt such a claim, but to protect the integrity of the judicial process and hence the public interest. Given the rationale for the rule, there can be no logical basis for differentiating between different types of claim in its application. The width of its application in this respect has been judicially stated many times, most notably in: Munster v. Lamb (1883) 11 QBD 588 CA per Fry LJ at 607 – 608; Marrinan v. Vibart [1963] 1 QB 528, per Sellers LJ at per 535 and per Diplock LJ at 538 – 539."
"… I therefore agree with the test proposed by Drake J in Evans v. London Hospital Medical College (University of London) [1981] 1 WLR 184, 192:
"the protection exists only where the statement or conduct is such that it can fairly be said to be part of the process of investigating a crime or a possible crime with a view to a prosecution or a possible prosecution in respect of the matter being investigated."
This formulation excludes statements which are wholly extraneous to the investigation – irrelevant and gratuitous libels – but applies equally to statements made by persons assisting the inquiry to investigators and by investigators to those persons or to each other.
As the policy of the immunity is to encourage freedom of expression, it is limited to actions in which the alleged statement constitutes the cause of action. In Marrinan v. Vibart [1963] 1 QB 528 the Court of Appeal held that the immunity in respect of statements made in court or with a view to a prosecution could not be circumvented by alleging that it formed part of a conspiracy with other witnesses to give false evidence. That seems to me to be right. On the other hand, the immunity does not apply to actions for malicious prosecution where the cause of action consists in abusing legal process by maliciously and without reasonable cause setting the law in motion against the plaintiff. It does not matter that an essential step in setting the law in motion was a statement made by the defendant to a prosecuting authority or even the court: see Roy v. Prior [1971] AC 470.
Actions for defamation and for conspiracy to give false evidence plainly fall within the policy of immunity and actions for malicious prosecution fall outside it. In between, there is some disputed ground. …"
"In my judgment the answer is to be found in the Taylor case [1999] 2 AC 177. That establishes that immunity for out of court statements is not confined to persons who are subsequently called as witnesses. The policy being to enable people to speak freely, without inhibition and without fear of being sued, the person in question must know at the time he speaks whether or not the immunity will attach. Because society expects that criminal activity will be reported and when reported investigated and, when appropriate, prosecuted, all those who participate in a criminal investigation are entitled to the benefit of absolute privilege in respect of statements which they make. That applies whether they are informants, investigators, or prosecutors. The answer to the argument that immunity should not give protection to a malicious informer was tellingly given by Lord Simon of Glaisdale in D v. National Society for the Prevention of Cruelty to Children [1978] AC 171, 233:
"I cannot leave this particular class of relevant evidence withheld from the court [sc the identity of the informant who gave information of ill treatment of children to the NSPCC] without noting, in view of an argument for the respondent, that the rule can operate to the advantage of the untruthful or malicious or revengeful or self-interested or even demented police informant as much as of one who brings information from a high-minded sense of civic duty. Experience seems to have shown that though the resulting immunity from disclosure can be abused the balance of public interest lies in generally respecting it."
"1. We agree that Mrs. Mogridge had a past history of panic attacks, recurrent episodes of anxiety and depressed mood, sufficiently severe for her to seek medical help and receive treatment by both betablockers and anti-depressants. Mrs. Mogridge was, in our agreed opinion, particularly vulnerable to react to further life stressors with similar symptoms. We also note that she had some chronic health problems which pre-dated the index events and continued since then.
2. We agree that Mrs. Mogridge suffered recurrence of her panic disorder soon after she was released from police confinement that lasted until she completed a successful course of therapy in February 2011. We believe that this episode was directly related to her experience of being arrested and locked up in solitary confinement, as she claims.
3. …
4. We also agree that she had a recurrence of her previous episodes of anxiety and depressed mood, consistent with an adjustment disorder of mild to moderate severity. We believe that this episode started soon after the charges against her were dropped and her feeling that she was falsely and unfairly accused of theft.
5. We appreciate that the legal process that ensued since then was inherently stressful and agree that this episode of adjustment disorder was the outcome of interaction between pre-accident vulnerability, residual symptoms of panic disorder and the stress of pursuing this case against her ex-employer, with added contribution from pre-accident health problems.
6. When we both saw Mrs. Mogridge (Dr. Guirguis in July 2013 and Dr. McAllister in April 2012) she was intermittently experiencing some residual symptoms of adjustment disorder, triggered mainly by the stress and reminding effect of this litigation.
7. We agree that Mrs. Mogridge's psychological problems since her release from police confinement did not impair her ability to work, from the psychiatric point of view, and are not likely to do so from now until normal retirement age.
8. The short term prognosis is quite good with any residual symptoms she may still be experiencing resolving almost completely once the stress, reminding and holding back effects of this litigation are removed.
…"
Conclusion