J N Dairies Ltd v Johal Dairies Ltd & Anor [2010] EWCA Civ 348

Case No A3/2009/1702

[2010] EWCA Civ 348

IN THE HIGH COURT OF JUSTICE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue BIRMINGHAM DISTRICT REGISTRY

[2009] EWHC 1331 (Ch)

His Honour Judge David Cooke (sitting as a judge of the High Court)

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 31/03/2010

Before

LORD JUSTICE MUMMERY

LORD JUSTICE STANLEY BURNTON

LORD JUSTICE SULLIVAN

Between

J N Dairies LimitedClaimant/Respondent

(1) Johal Dairies LimitedDefendant/ Appellant

(2) Gurbir SinghDefendant

(Transcript of the Handed Down Judgment of

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Tim Lord QC and Richard Blakeley (instructed by Druces LLP) for Appellant

Vernon Flynn QC and Damien Walker (instructed by Burges Salmon LLP) for Respondent

for Gurbir Singh did not appear and was not represented.

Hearing Hearing dates : 16, 17 March 2010

Judgment

Stanley Burnton LJ :

Introduction

[1]This is an appeal by the First Defendant, Johal Dairies Limited, against the decision of His Honour Judge David Cooke giving judgment in favour of the Claimant / Respondent, J N Dairies Limited, on a preliminary issue as to whether there had been any actionable breach of confidence or misuse of the Claimant’s confidential information by either Defendant in relation to certain invoices of the Claimant. The judge held that both the Defendants had committed an actionable breach of confidence as alleged by the Claimant. The Second Defendant, Gurbir Singh, did not appear at the trial and was not represented. He is in India, and played no part in the proceedings other than by providing an affidavit for the First Defendant, to which I shall refer below.

[2]I shall refer to the First Defendant as the Appellant, to the Claimant as the Respondent, and to Gurbir Singh by name.

[3]The grounds of appeal are two-fold. The first, and the principal ground relied upon by the Appellant when Mr Lord QC opened the appeal on its behalf, is that the judge closed his mind to its case. As Sir John Chadwick said when giving permission to appeal, the Appellant makes an extremely serious criticism of the judge’s objectivity. The second ground is that the trial and judgment were unfair: the very serious findings made by the judge against the Appellant, to which I shall refer below, go beyond the pleadings and should not have been considered during the trial or in his judgment. The second ground achieved greater prominence during argument before us.

[4]The Respondent contends that the judge was objective and unbiased throughout; that the hearing was fair and that the judge was entitled, although not bound, to make the findings he did.

The basic facts in outline

[5]Both the Appellant and the Respondent are wholesale distributors of dairy products in the Midlands. Their customers are in the main small shops and independently owned supermarkets. It is clear from the allegations in this case and the manner in which this litigation has been conducted that they are bitter trade rivals.

[6]Gurbir Singh was a driver employed by the Respondent on their round number 19. He was an illegal immigrant. He was dismissed with effect from Saturday 8 November 2008. He returned to India on 10 January 2009.

[7]The Respondent does not produce dairy products itself. It buys them from milk producers. The products are brought into its warehouse in Wolverhampton where in the early hours of the morning they are loaded into lorries and vans each of which will go off on a round to deliver to customers. A customer's requirements are not fixed each day. On arrival the delivery driver will take and record the customer's order, supply his requirements and move on to the next customer. The driver's records are then processed by office staff who produce a weekly invoice to the customer. Typically, those invoices are generated on a Friday or Saturday, and sorted out into a bundle for each round, contained in a plastic wallet. On Monday morning these wallets are placed into a series of filing trays on a rack in the Respondent’s warehouse, one tray for each round, so that each driver may collect the invoices for his round and distribute them to customers during Monday morning.

[8]On Monday 10 November 2008 at about 2 a.m. a man was seen on the Respondent’s CCTV system entering the warehouse. He had no business to be there. According to the Respondent, he was recognised as Gurbir Singh, whose bicycle was later found on the premises. That it was him is accepted by the Appellant. Gurbir Singh left the warehouse without being apprehended.

[9]The Respondent’s case is that it found that the invoices that had been put on the rack for collection by its drivers later in the morning were missing. It concluded, not unnaturally, that they had been stolen by Gurbir Singh. Its case is that Gurbir Singh went to the Appellant’s premises and handed over the invoices to Mr Surbjit Singh Johal (known as “Jitty”), a director of the First Defendant. Without intending any disrespect, I shall refer to him by his nickname. From about 6 a.m. Gurbir Singh began to visit the Respondent’s customers on his old round, but now driving a white van owned by the Appellant, telling them that they would not receive a delivery from the Respondent that day and inviting them to buy from the Appellant instead.

[10]It is common ground that the Respondent contacted two community elders who had vouched for Gurbir Singh when it had taken him on. They and the Respondent’s general manager caught up with Gurbir Singh. There was an altercation. The police were called and Gurbir Singh was arrested. The precise cause of the altercation is disputed.

[11]According to the Respondent, in the course of a verbal confrontation, Gurbir Singh admitted that he had taken the invoices and that he had given them to Jitty. According to the Appellant, the cause of the altercation was simply that Gurbir Singh was working on his old round, soliciting custom for the Appellant.

[12]The Respondent alleged that employees of the Appellant subsequently visited a number of its, the Respondent’s, customers, on round 19 and other rounds, seeking to persuade them to transfer their business to the Appellant, and either producing or referring to the Respondent’s invoices in order to show that they knew what prices the customers were paying and could offer a better deal. This was the actionable misuse of the Respondent’s confidential information alleged by it that formed the basis of the preliminary issue.

[13]The Appellant’s case is that it never received the invoices, and therefore could not and did not use the prices in them to pitch its own prices to the Respondent’s customers. It did seek to obtain the business of the Respondent’s customers, but by fair means by offering lower prices and a better service.

The course of the proceedings

[14]These proceedings were commenced on 26 November 2008. The Respondent applied for an interlocutory injunction to restrain the Appellant from using the confidential information in the invoices. On 3 December 2008, His Honour Judge Simon Brown QC refused injunctive relief, but ordered the trial of the preliminary issue referred to above, to begin on 10 March 2009 with a time estimate of 4 days. That estimate appeared reasonable since at that date the only issues appeared to be:(a) Did Gurbir Singh take the invoices?

(b) Did he give them to the Appellant?

(d) If the answers to all those questions were affirmative, did the Appellant use any of that information in order to seek the business of the customers to whom they were addressed by undercutting the Respondent’s prices? Directions were given that were appropriate to the trial of these issues. I would observe, parenthetically, that the formulation of the issue was unfortunate. In fact, this was not to be the trial of a preliminary issue. It was rather the trial on the issue of liability. The Respondent would have succeeded on the preliminary issue as drafted if the Appellant had received and misused only one invoice containing confidential information. That would hardly have been a useful result.

[15]The Respondent served its Particulars of Claim on 11 December 2008. They raised the issues summarised in the preceding paragraph. (There was also an allegation of conversion of the invoices, but that is immaterial.) The Respondent alleged that the Appellant had used the invoices in concert with Gurbir Singh, but significantly did not allege that they had been taken by him in concert or pursuant to a conspiracy with the Appellant. Curiously, and again significantly, the Respondent sought an order that the Defendants pay for an advertisement of the findings of the judgment.

[16]The Appellant served its Defence on 30 December 2008. It raised no issues beyond those summarised in paragraph 14 above. The Respondent’s Reply, served on 8 January 2009, added nothing of substance.

[17]Witness statements were exchanged on 13 February 2009. The Respondent served witness statements of 16 witnesses and an affidavit of one. The Appellant served witness statements of 9 witnesses and an affidavit of one. Even without consideration of their contents, at that point it should have been obvious that even if they were not all called to testify orally, this would not be a 4-day trial, particularly since some of the witnesses would require an interpreter.

[18]However, the stakes were raised by the Appellant’s service on 13 February 2009 of the affidavit of Gurbir Singh made on 12 February 2009 after his return to India. He said that he had received a message that Jaspal Singh Nijjar, the founder and managing director of the Respondent, required him to sign a letter to the effect that he had stolen the invoices and provided them to the Appellant, and that if he were to do so he would be rewarded financially. He then received a telephone call from Bahadur Singh Sangha to the effect that Jaspal Singh Nijjar would be coming to India with documentation confirming that the Respondent would sponsor his return to England so that he could testify in court against the Appellant, and would be paid £20,000 if he did so. Gurbir Singh reported that conversation to Jitty. He stated that on 28 January 2009, Balkar Singh Varaich and Bahadur Singh Sangha had come to his village and offered him £20,000 to give evidence for the Respondent. He denied that he had stolen any invoices or handed any to the Appellant.

[19]It can be seen that the affidavit of Gurbir Singh raised the issue whether the Respondent had sought to bribe him to commit perjury. The Respondent responded to this allegation by serving witness statements of Balkar Singh Varaich and Bahadur Singh Sangha dated 3 March 2009. In his witness statement, Bahadur Singh Sangha said that Gurbir Singh had confessed to him before his return to India that he had been paid £40,000 by Jitty to steal the invoices, and he had again confessed to the same effect when he had seen him in India. He denied offering Gurbir Singh money to perjure himself. In his witness statement, Balkar Singh Varaich agreed with Bahadur Singh Sangha’s account of what had been said by Gurbir Singh in India. He too denied that there had been any attempt to bribe Gurbir Singh to perjure himself.

[20]It is evident that the seriousness of the allegations on both sides and of the litigation had potentially been drastically increased by this exchange of affidavit and witness statements. If a 4-day trial had been optimistic, if the new allegations were to be investigated it was clearly simply wrong. No application was made by either side for further directions; neither side sought to amend its pleadings. I shall comment on this below.

[21]On 18 February 2009, the Respondent applied for an extension of the time estimate to not less than 10 days. There was a hearing on 24 February to consider the application. The judge managed to free himself for a hearing of 8 days, and both parties agreed that they should be able to complete the hearing in that time. So the trial proceeded.

[22]During the course of the hearing, the allegations of the Appellant came to be even more serious. It contended that the whole of the Respondent’s case was the product of a conspiracy to pervert the course of justice: the Respondent was knowingly putting forward concerted perjured evidence to establish a false case. As the judge put it, the contention was that “there was [an] orchestrated campaign [by the Respondent] to procure false evidence”. On the other side, a question arose on Day 6 as to whether the judge should make findings on the unpleaded allegations of bribery and conspiracy made in the witness statements of Balkar Singh Varaich and Bahadur Singh Sangha, both of whom gave evidence. The position of the Respondent was that it was unnecessary for the judge to make findings on those allegations, but that it was open to him to do so.

The judgment

[23]As already stated, the judge found for the Respondent. He rejected the Appellant’s case. In his judgment, he commented on the credibility of the witnesses generally and individually and gave reasons for his findings on their credibility. His findings of fact were as follows:

“i) The figure who entered the claimant's premises at about 2 am on 10 November 2008 was the second defendant, Gurbir Singh. ii) While there, the second defendant stole all the invoices that the claimant had put out for its drivers to deliver that morning, that is to say invoices to all of its customers on all of its rounds. iii) The second defendant then went to the first defendant's premises and gave these invoices to Mr Surbjit Johal on behalf of the first defendant. He then went off with one of the first defendant's drivers, Mr Sukhvinder Sandhu, well before 4 am, in an attempt to win over his old customers to the first defendant. He did not use the invoices himself on that occasion. When confronted by Mr Arshad Khan, Mr Maur and Mr Kulbir Sangha the second defendant told them, as was the fact, that he had given the invoices to Mr Surbjit Johal. iv) The second defendant and Mr Surbjit Johal had prearranged both the theft of the invoices and that the second defendant would go out on his round on behalf of the first defendant. This arrangement had been made in the course of the previous week during the telephone calls that were shown to have been made from the telephones of Mr Surbjit Johal and Mr Gurnek Johal to the second defendant and, probably, other phone calls by the second defendant and/or meetings of which there is no record. The second defendant told various customers in advance that he would shortly be moving to the first defendant. Mr Surbjit Johal told Mr Sandhu in advance that he would be going out on the round with the second defendant so that on that morning he did not do his normal work but waited for the second defendant to arrive, when they set off in a preloaded van. v) I reject the first defendant's evidence that no start date been agreed until a telephone call at about 3 am on 10 November. Having found on the basis of direct evidence that there was a prearrangement for the second defendant to start work at the first defendant on 10 November, and that he stole the claimant's invoices on the way to doing so, the inference is irresistible that the theft was also part of the prearranged plan. vi) The second defendant continued to work for the first defendant, going out on various rounds for it, until at least 28 November 2008. I reject the suggestion that he was doing so as an unpaid volunteer. vii) The second defendant was rewarded by the first defendant for his part in this scheme in the manner that he admitted to Mr Bahadur Sangha and Mr Varaich, in particular by payment of £40,000 and his cost of travel to India. He may well have received or been promised additional benefits. viii) The first defendant has made use of the invoices and/or the information in them for the purpose of approaching and negotiating with various customers of the claimant, specifically those who gave evidence on the claimant's behalf but, in all probability, including others who have not done so.”

[24]The Respondent has fully exploited these findings in the press.

The grounds of appeal: (1) The judge’s lack of objectivity

[25]This ground of appeal, which was the only one specifically addressed by the Court of Appeal when giving permission to appeal, was summarised by Sir John Chadwick when giving permission as follows:

“… amongst the allegations made in the skeleton argument, over the name of leading counsel for the first defendant (the proposed appellant), is the allegation that the judge closed his mind to the first defendant's case and that's the judge's reasons for refusing permission to appeal demonstrated an inability to grapple objectivity with issues of fact presented to him. Those are extremely serious allegations to make against a judge: in that they come close to an allegation of actual bias in the conduct of the trial. What is asserted on behalf of these applicants is that they did not get a fair trial.”

[26]It is to be noted that there was and is no allegation of any prior (or any) relationship between the judge and the Respondent capable of giving rise to a perception of bias. There was and is no allegation of a manifestation of bias or of any misconduct on the part of the judge during the trial. Indeed, it was a real achievement on his part to complete the trial in the 8 days he allocated to it. This ground of appeal arises from, and is confined to, the content of his judgment. The principal contentions are that he failed to consider the improbabilities of the Respondent’s case; that he failed to apply the requirement of cogent evidence for allegations of serious misconduct such as those upheld by him to be proved; that he applied different and less stringent criteria to his assessment of the credibility of the Respondent’s witnesses as against the Appellant’s; and that he failed to consider the majority of the specific points made in respect of the credibility of the Respondent’s witnesses.

[27]I have no doubt that the judge was well aware of the need to be satisfied by particularly cogent evidence of the allegations of misconduct made by the Respondent. He did not need to refer to this in his judgment. He gave full reasons for his findings. He was not bound to address in his judgment every point made by the parties. We do not think that the adequacy of his reasons is open to challenge.

[28]Once the undisputed facts are taken into account, I do not find the essence of the Respondent’s case at all improbable. Someone trespassed in their warehouse in the early hours of 10 November. As stated above, it is no longer in dispute that it was Gurbir Singh. He had no business to be there. It is not disputed that later that morning he drove round his former delivery round on behalf of the Appellant. The Appellant says that he did so without payment. I find that most improbable. The Respondent got in touch with the elders who had vouched for Gurbir Singh, and they set off in pursuit, eventually finding him on the round. The police were called and he was arrested.

[29]The Appellant makes the good point that it was they who called the police, something they would be unlikely to do if they had been party to a conspiracy to steal the Respondent’s invoices. However, Arshad Mehmood Khan, the Respondent’s general manager, made a statement to the police on 10 November. In it he said that at about 4 am that morning the Appellant’s drivers had come in asking where their delivery notes were. As a result, the CCTV recordings were checked. It was found that Gurbir Singh had entered the building and left with something unidentified. Mr Khan had gone to Manchester with two community elders and come across Gurbir Singh at one of the shops to which the Appellant sold milk. His statement continued:

“Both uncles (i.e. the community elders) entered the shop and started talking with [Gurbir Singh] in Punjabi asking for the paperwork back and after a few discussions it became apparent that the notes had been given to a male called ‘Jitty’ from Johal Dairies.”

If, therefore, there was a conspiracy on the part of the Respondent to "frame" the Appellant, it came into existence very soon after Gurbir Singh's trespass. I find that most improbable. Furthermore, it is difficult to see why Gurbir Singh should have been interested in the Respondent's invoices unless he was going to give them to a competitor. If he did not take them, there was an unanswered question: what became of them? And if he did take them, and give them to “Jitty”, it is difficult to see why he should have done so unless there had been some pre-arrangement between them, and he was going to be rewarded financially or in some other way for delivering them. The Appellant’s case became all the more improbable once it was established, after disclosure of Jitty’s mobile telephone records, that, contrary to what Jitty had said in his witness statements, he had been in contact with Gurbir Singh during the previous week. The Appellant’s to my mind unlikely story of Gurbir Singh going on their delivery van on the morning of 10 November without payment did not help their case.

[30]At the beginning of the hearing of this appeal, Mr Lord QC was asked to put before the Court the most striking of the instances where the judge had failed to take into account important evidence indicating that the testimony of a witness called by the Respondent should not be accepted. The first example put forward by Mr Lord was Sukhvinder Singh Sandhu, to whom I shall refer, without disrespect, as “Sandhu”. He was a former employee of the Appellant who was called by the Respondent. He said he had been ordered by Jitty to go out with Gurbir Singh on the morning of 10 November 2008. In his witness statement he said:

“It was obvious that Jitty was waiting for [Gurbir Singh] to arrive as he kept on calling him on his mobile phone asking (in Punjabi) where he is, how much longer he would be, ... etc.”

Mr Lord’s point was that Jitty’s mobile telephone records showed that he had made no calls to Gurbir Singh until 4.02 a.m.. This, submitted Mr Lord, showed that Sandhu was lying when describing Jitty’s telephone calls to Gurbir Singh much earlier that morning. Yet the judge failed to refer to this substantial point in his judgment, and accepted Sandhu’s evidence without taking it into account.

[31]On examination, however, the point fell away. In oral evidence, Sandhu said that he had assumed that Jitty was on the telephone to Gurbir Singh because they were waiting for him and he was saying things like, “Hurry up, where are you?” In relation to the phone, he said that “… it was a mobile, a cordless phone.” If it was a cordless land-line telephone, there was nothing in Mr Lord’s point, since the land-line telephone records had not been disclosed, and it could have been the telephone being used by Jitty. Moreover, Jitty in cross-examination admitted that he used a cordless telephone in the mornings before the girls arrived in the office at about 8.30 a.m.. In my judgment, therefore, the Appellant had no point based on Jitty’s mobile telephone records that the judge should have referred to or taken into account. The Appellant had certainly not demonstrated that Sandhu’s evidence was false.

[32]The second example put forward by Mr Lord was the evidence of Kulbir Sangha. He was one of the community elders (or “uncles”) who had vouched for Gurbir Singh. His evidence was summarised by

the judge as follows:

“… he had been telephoned in the early hours by Mr Maur, not by anyone at the claimant. They had gone together to the dairy, been told what had happened and seen the CCTV pictures. He had gone in one car with Mr Khan and Mr Maur to Manchester, where he confirmed that he had confronted Gurbir Singh about the invoices and Gurbir had told him that he had taken the invoices and given them to "Jitty". There was some slight discrepancy from his statement in that he could not recall any episode concerning the keys to Gurbir Singh's van, but this was a peripheral matter that did not affect my overall impression that Mr Sangha gave honest and reliable evidence. He denied the suggestion that the argument was nothing to do with stolen invoices and all about Mr Arshad Khan's furious reaction to one of his drivers going to work for the competition.”

Mr Sangha insisted that Gurbir Singh had been alone in the Appellant’s white van. That was inconsistent with the evidence of Sandhu, who said he had accompanied Gurbir Singh on the round that morning. The judge did not refer to this discrepancy. However, it seems to me that whether Gurbir Singh was accompanied or not was largely irrelevant to the issues in the case. At most, it went to the reliability of Mr Sangha’s recollection. I do not understand it to be suggested that Mr Sangha was not present at the altercation that took place that morning. I am not able to infer from the judge’s omission of this point in his long and careful judgment any lack of objectivity on his part.

[33]The other point the judge did not refer to specifically in regard to Mr Sangha was that his witness statement was in perfect English, with no indorsement concerning translation, yet his English is very imperfect. The judge addressed the manner in which such witness statements had been prepared in paragraphs 17 and 18 of his judgment entirely adequately.

[34]The third witness to whose testimony Mr Lord referred was Sukhpal Singh. He was a witness called by the Respondent who claimed to have witnessed Jitty passing a carrier bag of cash to Gurbir Singh. The judge rejected his evidence, and gave substantial reasons for doing so. One would have thought that this evidenced a lack of bias on the part of the judge; indeed, I do think so. What is said is that having decided that this witness was lying, the judge should have considered the possibility that, as contended by the Appellant, there had been an orchestrated campaign by the Respondent to present false evidence; yet there is no indication in the judgment that he did so.

[35]I do not think that this complaint has substance. In his judgment the judge assessed the testimony of each witness in terms of which in my judgment no complaint can justifiably be made.

[36]Mr Lord was on somewhat stronger ground in relation to Mindaugas Brazauskas, the driver with whom Mr Sandhu has worked between 6 and 8 November 2008, and who had worked at the Appellant’s depot on 10 November. He was called by the Appellant, and his evidence of events in the early morning of that day supported the evidence of Jitty, and was inconsistent with that of Sandhu. The judge rejected his evidence. One of the reasons given by him was that he appeared to be very nervous when testifying. So too, says Mr Lord, were witnesses for the Respondent. However, nervousness was not the only reason given by the judge for rejecting Mr Brazauskas’ evidence. In paragraph 41 of the judgment, the judge gave adequate, if not overwhelming, reasons for his finding on credibility.

[37]The Appellant also contends that the judge should not have interpreted the tachograph sheet produced by the Appellant in support of Mr Brazauskas’ evidence without expert evidence. I agree with this criticism. But the judge had already given his reasons, in paragraph 41, for rejecting Mr Brazauskas’ account. Moreover, in paragraph 44 he sensibly said that he would consider the other evidence in relation to the events on and leading up to 10 November and Gurbir Singh’s involvement with the Appellant. This was an entirely sensible and fair approach. The judge’s consideration of the tachograph evidence played a very small part in his decision, and could not lead to this Court interfering with any of his findings of fact.

[38]There were other matters going to the general probabilities in the case that the judge did not address in his judgment, the omission of which the Appellant relies upon as demonstrating the closed mind of the judge. In addition to the fact that it was the Appellant who called the police as a result of the altercation involving Gurbir Singh on the morning of 10 November, it is said that it was improbable that the Appellant would have paraded Gurbir Singh on the delivery round that morning if Jitty had been party to his theft of the invoices the taking of which was bound to have been discovered by the Respondent. There is the fact that most of the customers who said they had seen the Respondent’s invoices in the possession of the Appellant said they had done so after this litigation had begun. These are good points. However, a judge is not required to address every argument and every item of evidence in his judgment, particularly in a case such as the present in which very many points were being made on both sides. These points, and others referred to in the Appellant’s skeleton arguments, are not so significant or cogent that the judge was bound to refer to them, and their omission from what was, in general, a well-structured and full judgment is no indication of bias or lack of fairness.

[39]I do not propose to refer to the very many other points put forward in the Appellant’s skeleton arguments. There is a heavy onus on a party seeking to show that a judgment was unfair in circumstances in which there was no prior (or later) relationship between the judge and the other party, no misconduct by the judge during the trial (in terms of undue interference with the examination of witnesses, or one-sided comments indicating a prematurely concluded decision, or otherwise), adequate reasons have been given for the judge’s factual findings, and his decisions on the legal issues are unchallenged. In my judgment, the Appellant has not come close to satisfying this onus.

Other unfairness

[40]In my judgment, the other basis of this appeal put forward by the Appellant is of greater weight. Mr Lord points out that the Particulars of Claim were, as mentioned above, confined to an allegation of misuse of confidential information. However, the trial extended into an investigation of an allegation that the Appellant, through Jitty, had bribed Gurbir Singh to steal the Respondent’s invoices. As Mr Lord put it, what had started out as a breach of confidence case became a criminal trial of the Appellant, and in particular of Jitty. The Appellant contends that that case, of bribery and conspiracy involving at least Jitty and Gurbir Singh, was not fairly put or investigated. If that case had been properly pleaded, the preparation for trial, and the evidence adduced by the Appellant, would have been different and greater. As it was, the Respondent had its cake and was able to eat it: it did not amend its pleadings to include allegations of bribery and conspiracy, but submitted to the judge that it was open to him to make findings of bribery and conspiracy, and the judge in his judgment did so. On his side, Mr Lord found that he had to allege a conspiracy between the many witnesses called by the Respondent to present a false case against the Appellant. Thus on both sides there were unpleaded allegations of very serious dishonesty.

[41]For the Respondent Mr Flynn QC submitted that it had been unnecessary for the Respondent to plead the bribery or the conspiracy. If established, the bribery and conspiracy were no more than evidence on which the judge could find that what was the Respondent’s case throughout was established, i.e. that the Appellant had misused the Respondent’s confidential information. Mr Flynn submitted that it would have been unfair to require him to plead the bribery and conspiracy allegations while leaving the Appellant free to make an unpleaded allegation of conspiracy to pervert the course of justice. Thirdly, he submitted that the factual findings made by the judge had been fairly addressed during the trial. The Appellant had not sought an adjournment or sought to adduce any of the evidence that it now suggested, at this very late stage, would have been adduced if the Respondent’s allegations had been pleaded.

[42]I have no doubt that the Respondent’s allegations of bribery and conspiracy should have been pleaded. The Respondent should not, as Mr Lord submits, have been able to have its cake and to eat it. CPR Part 16.4 (1)(a) requires a claimant to include in its particulars of claim “a concise statement of the facts on which the claimant relies”. The Respondent did rely on the fact of bribery, by adducing evidence that Jitty had been seen paying a large bribe to Gurbir Singh, and the fact that there had been a conspiracy between the Defendants for Gurbir Singh to steal the Respondent’s invoices. Moreover, paragraph 8.2 of the Practice Direction to CPR Part 16 requires the claimant specifically to set out any allegation of fraud and illegality where he wishes to rely on it in support of his claim. The Respondent should not have adduced evidence of the alleged conspiracy and bribery without amending its Particulars of Claim, and Mr Flynn should not have examined or cross-examined witnesses with a view to establishing those facts. It is no answer that the Respondent could have succeeded in establishing liability without establishing those facts: those facts were part of its case at trial. A party’s pleadings set out for the other party and for the Court the facts to be investigated during the trial. The Particulars of Claim in this case did not do so. Nor is it any answer, if it be the case (which I address below), that the Appellant’s allegation of conspiracy was also unpleaded. By alleging the unpleaded matters the Respondent assumed the burden of pleading them. Moreover, once the Respondent’s allegations of bribery and conspiracy had emerged, the preliminary issue as formulated became wholly inappropriate.

[43]On the other side, however, in my judgment the Appellant’s case that the Respondent had orchestrated the presentation of false evidence should also have been pleaded. RSC Part 16.5 provides:

“(1) In his defence, the defendant must state – (a) which of the allegations in the particulars of claim he denies; (b) which allegations he is unable to admit or deny, but which he requires the claimant to prove; and (c) which allegations he admits. (2) Where the defendant denies an allegation – (a) he must state his reasons for doing so; and (b) if he intends to put forward a different version of events from that given by the claimant, he must state his own version.”

Of course, a simple allegation that a witness is mistaken, or even lying, does not have to be pleaded. But it seems to me that if a party wishes to contend that the witnesses on the other side have conspired to present a false case, his allegation falls within paragraph (2). (a) which of the allegations in the particulars of claim he denies; (b) which allegations he is unable to admit or deny, but which he requires the claimant to prove; and (c) which allegations he admits. (a) he must state his reasons for doing so; and (b) if he intends to put forward a different version of events from that given by the claimant, he must state his own version.”

[44]In my judgment, both sides in this case were at fault in proceeding to trial on the unamended pleadings. The Respondent should have applied for permission to amend its Particulars of Claim. The Appellant should have objected to the service of the witness statements referring to the alleged bribery and pre-arrangement between Jitty and Gurbir Singh, and should have applied for the objectionable parts of those statements to be struck out unless the Respondent’s case was properly pleaded. Clearly, too, both parties were at fault in failing to bring the case back before the Court before the beginning of the trial for a review, not only of the duration of the trial, but generally of the directions previously given. The review should have included not only the question of pleadings, but also disclosure of documents, given the allegations of dishonesty; and consideration should have been given as to whether an order should be made under CPR Part 32.5(2) that the witness statements should not stand as evidence in chief. Such an order may well be appropriate if it is alleged that witnesses are not merely mistaken, but deliberately lying, as was alleged here on both sides. Doubtless such an order would have increased the length of the trial; but with the benefit of hindsight I have no doubt that it was indeed appropriate.

[45]However, none of these things happened. Ours is primarily an adversarial system. If a party considers that it is the subject of unfairness, it must promptly make an appropriate application to the Court. The Appellant did not seek to strike out the witness statements to which it now objects. Nor did it seek any adjournment to obtain and to adduce further evidence. To the contrary, in its opening skeleton argument for the trial, it addressed the witness statements of Bahadur Singh Sangha and Balkar Singh Varaich, who said that Gurbir Singh had confessed to having been bribed by Jitty, as follows:

“D1 can deal with the evidence of Bahadur Singh Sangha and Balkar Singh Varaich through cross-examination: these are the two persons deputed by C to visit D2 in India and try to get D2 to sign a supportive statement. The very fact that these witnesses admit that they travelled to India and personally visited D2 in order to get him to sign a statement goes a long way towards corroborating D1's evidence that these persons sought to use improper methods to procure evidence from D2 ...”

Having decided to address this evidence by cross-examination at the trial, it seems to me that the Appellant cannot now complain that it should have been offered an adjournment or other interlocutory relief that it did not seek at the time.

[46]The Appellant’s opening skeleton also stated:

“2 D1 denies the entirety of C’s allegations: (1) At its heart, this is a case about competition. The parties are fierce competitors in a transparent industry in which already thin margins are becoming increasingly slender. At present, D1 is out-competing C on price and service. C does not like this. The Court should be mindful of the fact that ‘it is well recognised that breach of confidence actions can be used to oppress and harass competitors and ex-employees.’ (2) D1 has not and has never had the invoices. D1 denies that the documents were taken and disputes that C's witnesses' accounts are truthful and accurate.”

It was clear from this that the Appellant was contending that the allegations against it were untruthful: to use the vernacular, it was being framed. Mr Lord complains that he was forced into alleging a conspiracy involving all the Respondent’s witnesses. It seems to me that, in relation to the central allegations made by the Respondent, the Appellant assumed the burden of its allegation in its skeleton argument before the trial had begun. It pursued that allegation throughout the trial. In its closing written submissions, it contended that “… JND has overreached itself and committed serious abuses of the process of this court. JND has told numerous lies and has fabricated evidence”.

[47]Moreover, once the evidence of pre-arrangement and bribery had gone before the Court, it inevitably became part of the case. Indeed, it is impossible to see how the judge could have avoided finding whether Gurbir Singh’s affidavit account of the attempt to bribe him in India, or the rival account of Bahadur Singh Sangha and Balkar Singh Varaich of his confession to having been bribed in England, was true.

[48]During the course of the trial, Mr Lord raised the question of the Respondent’s pleading. On day 6, he rose to interrupt the cross-examination of Jitty, whose credibility had been damaged by the disclosure of his mobile telephone records which showed, contrary to what he had said in his witness statements, that he had been in contact with Gurbir Singh in the week preceding 10 November 2008. Mr Flynn cross-examined Jitty on the basis that those contacts demonstrated that he had arranged with Gurbir Singh the theft of the Respondent’s invoices. Mr Lord submitted, rightly, that the allegations of conspiracy and bribery put to Jitty went beyond the Respondent’s pleaded case. The judge said that it would be a matter for submission whether the Respondent’s pleading was sufficient to support its cause of action “or whether it has been departed from in the allegations that have been made”. Next morning, Mr Flynn said that he was not intending to depart from his pleading. The only explanation of that statement is that he believed, wrongly, that the evidence of conspiracy and bribery was no more than evidence in support of the Respondent’s pleaded cause of action. As a result, Jitty was not further cross-examined on those allegations and, more importantly, Mr Lord did not re-examine Jitty on them.

[49]In his closing oral submissions, Mr Flynn again addressed the pleading issue:

“MR FLYNN … I do want to make it clear that the only thing we are asking for is a finding in positive (sic) of the preliminary issue in accordance with our pleaded case. Although there are some serious allegations in this case, it is a matter for your Lordship the extent to which you, the court, wishes to go beyond the pleaded case.”

JUDGE DAVID COOKE:

Specifically, you have not pleaded that there was any prior arrangement to take these documents. MR FLYNN: No. JUDGE DAVID COOKE: Are you suggesting that I may make a finding about that? MR FLYNN: You may make a finding about that. JUDGE DAVID COOKE: But it is not part of your case. MR FLYNN: It is certainly something that your Lordship should take into account in assessing the evidence, because, obviously, the pre-10th November telephone call was very important. It is not a necessary part of my case that there was a pre-arrangement. In fact, I will be submitting that the fact that those telephone calls were made beforehand is not a coincidence and it is important. It goes to the question of whether or not the second defendant gave the documents or copies thereof to the first defendant. That is what I am asking your Lordship to find.”

[50]I am reluctant to criticise the judge. It is clear that he managed this trial most efficiently. I have already rejected the contention that he unfairly favoured the Respondent’s case. His task was made more difficult by the failure of the parties properly to address interlocutory issues before the trial; and I have no doubt that his task was made all the more difficult by the overt hostility and emotions of the parties. But I do think that the Respondent should have been confined to its pleaded case. When, on day 6, Mr Lord raised the issue, the Respondent should have been required to amend or to abandon its unpleaded allegations: to put up or to shut up. It does not follow, however, that it would have been necessary to adjourn or abandon the trial. Given the way that the unpleaded allegations had been addressed in the Appellant’s skeleton argument, the judge could properly have exercised his discretion by requiring an amendment to the pleadings overnight but refusing any application for an adjournment. Mr Flynn’s submission that the judge could, if he thought fit, make findings that went beyond the Respondent’s pleaded case was simply wrong.

[51]However, it does not follow that there was any unfairness that should lead this Court to interfere. What occurred was the result of the Appellant’s failure to raise the question of the Respondent’s pleaded case before the trial began, and certainly before any evidence was adduced. Instead, as mentioned above, the Appellant was willing to proceed on the evidence and on the pleadings as they then were.

[52]Moreover, I do not think that the judge’s findings would have been different if the pleadings had been regularised. Mr Lord put forward examples of the evidence that the Appellant would have adduced had it realised in due time that what it faced what was more of a criminal trial on a charge of bribery and corruption than a trial of a civil claim for breach of confidence: the financial records of the Appellant, that might have shown that it did not have the cash to pay the alleged £40,000 bribe to Gurbir Singh; the land-line telephone records, which might have revealed whether Jitty repeatedly telephoned Gurbir Singh early in the morning of 10 November, as alleged by Sandhu; statements of the police as to precisely what had been said that morning when Gurbir Singh was arrested; more of the Respondent’s CCTV footage, to see whether it showed its drivers seeking and failing to find their delivery dockets and the invoices for their customers; and more. However, once what was being alleged by the Respondent became apparent (and the Appellant’s opening skeleton argument shows that this was before the trial began) the Appellant could have put all this evidence before the trial judge. Indeed, the land-line telephone records and, if relevant, their financial records should have been disclosed by the Appellant itself. The land-line records were clearly just as relevant and disclosable as the mobile telephone records, which were belatedly disclosed. The Appellant did not seek to adduce any of this evidence; indeed, the suggestion that it might have adduced this evidence was only made on the hearing of this appeal.

[53]Furthermore, I would not set aside a judgment simply because further evidence might be available. Quite apart from the constraints of the Ladd v Marshall

[1954] 1 WLR 1489

principles (see paragraph 52.11.2 of the Supreme Court Practice and Hertfordshire Investments v Bubb

[2000] 1 WLR 2318

and other cases there referred to) an appellant who complains that he was deprived of the opportunity of bringing relevant evidence before the court of trial must, in my judgment, produce that evidence to the Court of Appeal and demonstrate that there is a real prospect of its leading to a different conclusion from that of the trial judge. This present Appellant has failed to do.

[54]The only procedural prejudice to which the Appellant can justifiably point as a result of the Respondent’s pleading failure is that Mr Lord did not seek to re-examine Jitty on the conspiracy and bribery issues. I do not think that this affected or could have affected the outcome of the trial. He had been asked about, and had denied those allegations early in his evidence in chief; in re-examination he repeated the allegation that the Respondent had attempted to bribe Gurbir Singh to commit perjury. Mr Lord was able to and did ask the next witness, Gurnek Johal, about the allegations; he denied them.

[55]It follows that I would reject this ground of appeal also. It also follows that I would dismiss the appeal.

Lord Justice Sullivan :

[56]I agree.

Lord Justice Mummery :

[57]I also agree.