Westbridge Foods Ltd v Radovits [2005] EWHC 3249 (Comm)

166 of 2004[2005] EWHC 3249 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
COMMERCIAL COURT
Venue The Royal Courts of JusticeDate Thursday, 3 March 2005
Strand
London WC2A 2LL
B e f o r e:
MR JUSTICE CALVERT-SMITH
Between
WESTBRIDGE FOODS LIMITEDClaimant- v -
Between
TAMAS RADOVITSDefendant
Digital Transcript of Smith Bernal Wordwave Limited190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR IAN RIDD (instructed by CVS Law) appeared for ClaimantMR TIM PENNY (instructed by Seddars) appeared for Defendant
JUDGMENT
[1]In this case the claimant seeks to commit the defendant to prison for breaches of an undertaking given by him to the Court in proceedings between the parties on 9th October 2003.

History of the case

[2]Westbridge Foods Limited (Westbridge), the claimant, is an importer and distributor of poultry products – in particular raw, both fresh and frozen, coated (e.g. breaded), and cooked chicken products. It also deals to a lesser extent with turkey meat and duck. It is based in Malvern. Its Managing Director at the material time to the present is Peter McNeil.[3]Tamas Radovits, the defendant, is of Hungarian origin. He was employed by Westbridge from March 2002 until the end of 2003. His title was Business Development Manager. His particular role was to seek opportunities to expand Westbridge’s business in Poland and Hungary. In September 2003 he accepted an offer to work for Oakfield Foods Limited (Oakfield).[4]Oakfield was the second defendant in the original proceedings. Oakfield is an importer and distributor of meat products. It is based in New Barnet. In view of the dispute between the parties as to whether it is properly described as a competitor for the purposes of these proceedings I shall not describe it further at this stage. The original proceedings and the present application arise from the alleged behaviour of the defendant between the 9th October and the 9th December when the undertaking I have referred to was replaced by a second undertaking.

Events prior to 9th October 2003

[5]Mr Radovits describes the circumstances of his resignation from Westbridge, and I quote from his third affidavit:
“I would like to summarise here how I joined Oakfield. Miles Levy first suggested I should join Oakfield on 22 July. At first I did not think that he was serious but he suggested the same thing again on 1 August. We had a further (social) meeting on 29 August but we discussed terms and conditions on 8 September. I got Oakfield’s offer on 10 September and I accept that between 10 and 24 September I knew I would leave Westbridge. Between 11 and 16 September I was away on Westbridge business in Hungary so I could not have handed in my notice. “I returned to the office on 17 September when I intended to hand in my notice. On the same day I learned that an employee of Westbridge, Thea, just handed in her notice on the same week and she would leave the company on Friday the same week. The same weekend (20 to 21 September) was a Westbridge company weekend and I decided against handing in my notice before that. I intended to hand in my notice on Monday, 22 September but Mr McNeill was out of the office until 24 September when I finally told him that I wished to resign.”
On 1st October 2003 he asserted by letter from solicitors that he had been constructively dismissed as the result of the conduct of Mr McNeil that day. The next day Westbridge replied denying the allegations and seeking undertakings from the defendant by close of business the next day, 3 October.[6]That day the defendant’s solicitors replied offering an undertaking in, inter alia, the following terms:
“Our client is willing to give the following undertakings until close of business on Friday, 10 October. (1) Not to solicit or attempt to entice any customers or suppliers of Westbridge Foods Limited (Westbridge) away from Westbridge. (2) Not to work for any competitor of Westbridge and to act in good faith towards Westbridge and observe its confidentiality. (3) To return the only Westbridge property in his possession, being a CD ROM onto which he copied the contents of his own folder as a form of backup due to the unreliable computer system.”
On 7th October the claimant served a Notice of Application for injunction.

The undertaking

[7]This was contained in a Consent Order of 9th October, and reads: “Upon the defendant undertaking until the hearing of the claimant’s application dated 7 October 2003 or further[8]On the date upon which the undertaking was given the defendant was abroad. Further reference will be made to this later.[9]By a witness statement dated 20th October the defendant abandoned the claim that he had been constructively dismissed and accepted that he was, and had been employed throughout by Westbridge. Mr Radovits had not worked for Westbridge between leaving on 1st October and that date. He returned to work on 10th November.

The allegations in general

[10]By the close of the evidence before me the claimant alleged that the defendant had breached all but the confidentiality part of the undertaking in one or more respects. In reply the defendant accepted a number of breaches but took issue with the claimant on a number of factual issues which I was asked to decide.[11]The allegations grew during the course of the months leading up to trial. This growth was the result of three separate events.• The discovery in late 2003 that the defendant had, until 14th November 2003, used a mobile telephone belonging to Oakfield to call customers and suppliers of Westbridge.• The discovery, in March 2004, of a personal computer used by the defendant in connexion with similar matters during the relevant period.• The defendant’s 3rd affidavit served in April 2004 in which for the first time he admitted some of the alleged breaches of the undertaking and, to his credit, admitted further breaches.[12]It is admitted by the defendant that until the time of the service of his 3rd affidavit he had given misleading and on occasions deliberately false evidence in his first two affidavits.[13]The general issue before me was whether the 3rd affidavit represented the full extent of the defendant’s breaches or not.

The history of proceedings

[14]The Application to Commit was first listed for hearing on 1 April 2004. Due to the non-availability of the judge it was dealt with on that date and listed for directions only on 2 April. On that day an application by the defendant to adjourn the committal application to be heard by the trial judge eventually trying the action was refused and the committal application was directed to be heard in May 2004. The Application to Commit came on for hearing before Buckley J on 5 May 2004 and on that date, after further argument, the Court stood the application over to the trial judge. Directions were given the following day and the trial of the action was subsequently listed for 15 November 2004 but, on 2 September 2004, the claimant accepted the sum of £85,000 that had been paid into court by the defendants jointly and that action came to an end.

The law

[15]In the course of argument I was referred to the following cases: Johnson v Walton [1990] 1 FLR 350, Erskine Communications Ltd v Brown and Others Transcript 28 October 1991, R (on the application of Harris) v Official Solicitor to the Supreme Court Transcript 22 October 2001, Faccenda Chicken v Fowler and Others [1987] 1 Ch 118, ABK Ltd v Foxwell [2002] EWHC 9 (Ch) (Transcript), Hivac Limited v Park Royal Scientific Instruments Limited and Others [1946] 1 Ch 169, Robb v Green [1895] 2 QB 315, Wessex Dairies Limited v Smith [1935] 2 KB 80, Harmsworth v Harmsworth [1988] 1 FLR 349. I was referred to Volume 1 of Civil Procedure and in particular to RSC Order 52 and the commentary to the Order.[16]Burden and standard of proof. The burden is on the claimant and the standard is the criminal standard.[17]Particularity. For the court to entertain an application to commit a defendant for contempt of court for breach of the undertaking it must be clear what it is that the defendant has undertaken to do or not to do. The allegations of breach must relate clearly to the terms of the undertaking and the Court may not find a breach unless it is contained within the terms of the allegations made in the application. The particularity required is not that which is required in the drafting of a criminal indictment.[18]The evidence in support of the application must be given by affidavit.[19]“Good faith”. Although there was argument about the exact scope of the duty of good faith owed by the defendant to the claimant, in particular whether it was confined to a requirement “not to do anything which can create substantial harm to the employer” in practice it was conceded that in this case for the defendant to work for Oakfield and to do so behind the claimant’s back amounted to a breach of the duty and of the undertaking.[20]Because of the unusual circumstances of this case, in which the application to commit is being heard after the undertaking has lapsed and after the substantive proceedings have been concluded, there is a danger that the hearing might involve an attempt to reopen questions put to rest by the settlement of the case. I have attempted to focus upon the issues which bear on alleged breaches of the undertaking and have only considered other matters insofar as they may aggravate or mitigate such breaches.

The facts - general

[21]In considering the facts and reaching my conclusions there are some findings which are common to some or all of the individual allegations.[22]Was Oakfield a “competitor” within the terms of the undertaking? I have no doubt that it was. First, although the principal business of Oakfield was meat and the principal business of Westbridge was chicken there was undoubtedly an overlap between their businesses. Second, until the undertaking was given, for the period during which the undertaking was in force and beyond, Mr Radovits was going to work for Oakfield and to expand its business to include poultry from Poland and Hungary. Third, the whole point of the proceedings at the stage the undertaking was given was to prevent the defendant working for Oakfield until he had worked his notice. The propositions either, that Mr Radovits and/or his legal advisers deliberately constructed the original undertaking so that he could later claim that he could continue to work for Oakfield, or, that the “good faith” undertaking was the only part of the undertaking which might operate to prevent him doing so, are untenable.[23]Mr Radovits’ conduct of the proceedings, in which lies told were only exposed by the discovery of telephone records and the chance discovery of his computer, means that, even following his change of attitude his evidence needs to be viewed with great caution. His discovery – see below – that Westbridge knew the number of his Oakfield mobile phone, which prompted him to change telephones, is the clearest indication both that he was indeed working for Oakfield and that he was acting in breach of his duty of good faith to Westbridge.[24]Mr Radovits has sometimes tried to run two inconsistent defences together. On the hand one he maintained (para 132-133 of his third affidavit) that it was not until late October that he realised he owed any duty at all to Westbridge and not until mid-November that he realised the full extent of those duties, and on the other that he had deliberately selected the work he did on Oakfield’s behalf during the period of the undertaking so as not to be in breach, as he saw it, of his undertaking. Neither defence sat very comfortably with his final position, that he had breached the undertaking in a number of respects, and that he apologised sincerely to the court for so doing.[25]It became plain that Mr McNeil, for Westbridge, still bears a personal grudge against Mr Radovits for the way he considers he has behaved towards him and Westbridge. He said in evidence that he regretted the fact that the substantive case had been settled and therefore, although understanding that the present proceedings concerned only the defendant alleged breach of duty to the Court, I find that he was anxious to use them as a way of demonstrating that had the case not settled Westbridge would have won it. Breaches.[26]The allegations. I shall deal with the “live” allegations individually.[27]The first two involving Smithfield Murray were abandoned by the claimant. Likewise the last involving Hen Breast meat. An allegation – which was not denied - separately pleaded concerning the use of the mobile telephone to call Oakfield and customers, suppliers and hauliers of Westbridge was dealt with as part of the evidence in support of the specific allegations. This effectively left 16 allegations which were numbered 1-16 for the purposes of the trial. They were in short form: i. Roldrob ii. Agroliget. iii. THP. iv. S & A Foods. v. Adros/Avis vi. Adros/other customers vii. Konspol. viii. Claiming expenses from Oakfield. ix. Bomadek. x. Carnex. xi. Drobex/Avis and Burger King. xii. Drobex/Oakfield. xiii. Perkins. xiv. BFI. xv. Hindelang. xvi. Trip to Poland and Hungary.[1]Roldrob[28]The claimant’s allegation. The allegation was that between about 7 and 14 November 2003 the defendant on behalf of Oakfield, placed with Daniel Przygoda of Roldrob, a supplier of turkey meat, an order for the supply by Roldrobb of 10 tons of turkey meat, the placing of this order for Oakfield constituted trading on behalf of Oakfield and so both working for a competitor of Westbridge and a breach of the defendant’s undertaking to act in good faith towards Westbridge. Or, if the order was not placed on behalf of Oakfield, it constituted trading by the defendant on behalf of himself, for his and not for Westbridge’s benefit, and so constituted a breach of the defendant’s undertaking to act in good faith towards Westbridge. The evidence in support of this came from an employee of Westbridge, Agnes Nagy, who on 12th November, two days after Mr Radovits had returned to work for Westbridge, took a call on a mobile telephone which had previously been used by the defendant from Mr Przygoda of Roldrob. He wanted to speak to Mr Radovits about the delivery of some turkey fillet. She offered to pass his message on. She recorded the gist of this conversation in an Email to Mr McNeil the same day. (It is worth noting that on this day, the 12th November Mr Radovits called Westbridge to report that he was sick and would not come to work. In fact – see S & A Foods below – he was meeting Mr Barnett of S & A Foods in Derby. On 14th November Mr Przygoda rang again. Ms Nagy’s recollection is that he wanted to talk to Mr Radovits about the delivery of 10 tonnes of turkey. He could not manage this on Friday 21st but could probably do it thereafter in two deliveries. The call was interrupted, so Mr Przygoda told her, by Mr Radovits calling him on a bad line. Ms Nagy called Mr Przygoda later and asked for the price and was told between 4.05 and 4.10 euros. Once again Ms Nagy informed Mr McNeil and solicitors acting for the company of the gist of the conversation in an Email of the same day. In evidence Ms Nagy stood by her account save to the extent that she could not say whether a formal order had been placed. As to the price she said that it was clear that Mr Przygoda was in his car at the time he called and could not remember exactly the price he had agreed. Mr McNeil says that he telephoned Mr Radovits the same day on the mobile phone he had been given by Oakfield. This was, as he admits, the first time that Mr Radovits knew that Westbridge knew his new number. Thereafter he switched to a different telephone. There was a further conversation in which Mr McNeil angrily accused the defendant of trading behind his back. In evidence Mr McNeil said that Westbridge was looking to build up a market in turkey meat and had since done so. He believed that had the defendant passed on such an offer Mr Mann of Westbridge who has experience in the turkey market could have found a buyer for it.[29]The defendant’s response. In his first affidavit Mr Radovits said that he had received the Oakfield mobile but did not think that by using it to inform contacts that he had left Westbridge and joined Oakfield he was doing anything wrong. He denied trading on Oakfield’s behalf. In his second affidavit he admitted that he had spoken to Mr Przygoda and that Mr Przygoda had offered him 20 tonnes of turkey on 5th November. On 7th November he declined the offer. On 11th November Mr Radovits had returned to work at Westbridge and been told to report any offers he received to Mr McNeil. He then got back to Mr Przygoda who offered him 10 tonnes of turkey meat. He made no commitment to buy. He believes that either Mr Przygoda or Ms Nagy or both must have misunderstood the position. He never placed a firm order and no turkey was delivered to Oakfield or anywhere else as a result. There is no documentation at Oakfield, who made disclosure for the purposes of the substantive proceedings, to evidence either. He claims that he telephoned and informed Mr McNeil that he was in negotiations with Roldrob on 14th November following a message being left on his mobile phone. In his third affidavit he claims that he did so following Mr Przygoda informing him that he had spoken to Agnes (Nagy). Here there is an irreconcilable conflict of evidence. However even on Mr Radovits’ account he only informed Mr McNeil after he knew that Westbridge was aware of his dealing with Mr Przygoda. The defendant alleges further that Westbridge, apart from some earlier unsuccessful dealing in fresh turkey, was not in truth a turkey trader and would have been most unlikely to want to take 10 tonnes of turkey from Roldrob who was not a supplier of theirs.[30]Finding. I find that the claimants have not proved to the appropriate standard that a formal order had been placed. I find however that the only explanation for the series of calls from 5th November onwards is that the defendant was attempting to negotiate such an order on Oakfield’s behalf and that he was thereby working for a competitor (Oakfield), and in breach of his undertaking to act in good faith towards Westbridge. Further I find that this behaviour does fall within the terms of the allegation although the full allegation has not been made out.[2]Agroliget[31]The claimant’s allegation. At or about the beginning of November 2003 the defendant canvassed with Sandor Mihok of Agroliget the supply by Agroliget of chicken breast meat to his order. Such orders were not orders to be placed by the defendant on behalf of Westbridge but were orders to be placed by the defendant for the supply to or to the order of Oakfield or of himself, and so in either event constituted a breach of defendant’s undertaking not to work for a competitor of Westbridge and/or a breach of the defendant’s undertaking to act in good faith towards Westbridge. Agroliget is and was a supplier of Westbridge at the date when the defendant sought the supply of chicken breast meat from it and so his seeking the supply from Agroliget other than on behalf of Westbridge constituted a breach of the defendant’s undertaking not to solicit or entice away from Westbridge any of its suppliers or to attempt to do so. It is agreed that at the material time Agroliget was a supplier to Westbridge. The claimant alleges that while on a visit to Agroliget on Westbridge’s behalf on 17th November 2003 Mr Mann met its managing director, Mr Mihok. He informed him that two or three weeks before Mr Radovits had telephoned him to discuss the supply of chicken breast to him. He told Mr Mann Mr Radovits’ contact telephone number. This was admittedly the number of the telephone given to Mr Radovits by Oakfield and used by him on 14th November in connexion with the Roldrob matter. Originally the claimant alleged that this behaviour, if proved, constituted an attempt to solicit or entice a supplier of Westbridge as well as a breach of the undertakings not to work for a competitor and to act in good faith towards Westbridge. In evidence Mr Mann said he could not contradict the account given by the defendant in his first affidavit. (See later). In closing his case Mr Ridd for the claimant confined his submission to the latter two allegations.[32]The defendant’s response. In his first affidavit he claimed that he had spoken to Mr Mihok in late October 2003 and that, in the margins of what was a social call, he had discussed the possibility of Agroliget supplying fresh chicken to him from January 2004 onwards. Although Mr Mihok offered to supply him fresh chicken in November he had declined the offer. In his 2nd 3rd and 4th affidavits he repeats these claims. He further states that there is no likelihood that Westbridge would have lost business as the result of these overtures even following the 1st January 2004 since Westbridge never took everything it was offered by Agroliget. On his behalf it was submitted that Mr Radovits’ admissions fall short of proof of any of the breaches alleged.[33]Finding. I find that in contacting Mr Mihok in what was his employer’s time Mr Radovits was in breach of the undertakings not to work for Oakfield and to act in good faith towards Westbridge. The claimant, as Mr Ridd accepts, has failed to prove the more serious allegation of soliciting or enticing made in the application.[3]THP[34]The claimant’s allegation. In or about early November 2003 the defendant sought on behalf of Oakfield to procure business for Oakfield with THP, a supplier of chicken meat in Slovakia and/or in November 2003 sought from THP details of the prices at which it would sell meat and upon receipt of that information advised THP of the likely market response to those prices. The defendant failed to inform the claimant of these discussions and of the fact that he had been providing advice and information to THP. This constituted a breach of the defendant’s undertaking not to work for a competitor of Westbridge and/or a breach of the defendant’s undertaking to act in good faith towards Westbridge. Mr McNeil alleges,a. That THP was a potential customer of Westbridge from the summer of 2003 when they sent in their pro forma purchase contract. In the event no business was done between them before Mr Radovits resigned.b. That in December 2003 he telephoned Mr Lacika of THP because he wanted to check whether his suspicions, that no business had been done since July was due to Mr Radovits’ wishing to bring THP to Oakfield as a new supplier, were justified. Accordingly, without informing Mr Lacika he taped the conversation. During the course of the conversation Mr Lacika said:
“Q. Has Mr Radovits explained his situation to you? A. Yes, he told me he is now working for somewhere. Q. What’s the name of the company? A. Something Foods, I forget the name. Q. Is it Oakfield Foods? A. Oakfields, yeah, yeah. Q. Okay, because, has he visited you recently? A. No, I think maybe three weeks ago we spoke together about future co-operation but we don't do together business at this time, we just try to make the price, but it is difficult because I know you buy from Holland and that is a very difficult situation at this time. Q. Right. A. Right. For one week is good price and another week is not good and I think it is more work than influenza time.”
Q. What’s the name of the company? And then a little later on Mr Lacika said:
“A. It was fresh products, fillets, single fillets. And then I spoke with Mr Tom Radovits about co-operation between Westbridge and THP and after he tried to do business between Oakfield Foods and THP, but I've been sending the offer, the price list, which is valid until the end of this year and I don't have any answer from him, or I don't know what is going on with his new position. Q. Where did you send these offers? Did you send it here? Q. Where did you send these offers? Did you send it here? A. No, to the Oakfields Foods, his new company.”
In addition a number of documents evidencing contact during the period of the undertaking were discovered. In December 2003 solicitors acting for the defendant disclosed two price lists sent to him by THP. One fell within the period of the undertaking and one outside it. It was then claimed on the defendant’s behalf that they were unsolicited by him. Much later the defendant produced, as exhibits to his third affidavit, further documents evidencing contact with THP. The first is an email of 27 October 2003 and reads in part:
“Dear Frantisek, [which is Mr Latsika] thank you very much for your call earlier this afternoon. Your offer of €330 per kilo Topelkani(?) for fresh vacuum packed chicken breast meat is too high for the British market at the moment.”
A little later on he says:
“Yes, it is a spot price but you offer your product only for four weeks in November and as I see it at the moment the fresh chicken market will not improve in this time.”
He goes on to ask him to reconsider his offer to supply fresh chicken breast meat and asks him to quote for other chicken commodities. A second email from Mr Radovits to Mr Latsika and another lady at THP:
“Thank you very much for your November offer. I discussed your offer with potential customers in great details but I'm afraid I got the following responses.”
And then he gives what he says in the email are negative responses:
“I haven’t yet managed to check out the calibrated wings. I'll come back to you as soon as I have some info. Because of the current market situation I suggest the following action. Leave the drumsticks, thighs and legs. The difference between your price idea and the current market price is just too big. I could also sell boneless thigh meat but I suspect we’d have the same problem there. Please review the whole bird and the breast meat price. If you can come down to a realistic level I'm sure we will be able to do some business. Looking forward to hearing from you soon.”
The claimant suggests that these documents suggest that in late October and the beginning of November 2003 Mr Radovits was attempting to set up business with THP on his own account – business which it is accepted he was not doing on behalf of Westbridge, his employers.

Q. Where did you send these offers? Did you send it here?

[35]The defendant’s response. In his second affidavit of February 2004 he denied doing business with THP although he admitted contact with Mr Lacika on 3rd, 21st and 27th October following the discovery of his telephone records. The result of these calls was that Mr Lacika sent him the price lists. He says in his affidavit:
“I invite the court to note that these documents were provided to me by my solicitors and by my solicitors to Ralph Davis in December 2003. In other words I volunteered disclosure of these documents following the request for disclosure. At the time this disclosure took place THP’s 15 December 2003 offer could have been pursued by Westbridge as the prices were valid until the end of January.”
He did not pass the offers on to Westbridge since they were already over-supplied with fresh chicken meat. In his third affidavit, in which he produced the further correspondence, he admits that he was considering in the medium term – April 2004 – trying to set up a chain THP – Oakfield – Perkins, a business which I shall deal with later. In evidence he enlarged on this. Although he was giving Mr Lacika the impression that he wished to do business with him immediately this was done to “string him along” or “keep him warm” against the day that he would be able to set up the chain. He did not pass the Emails on to Oakfield but kept them to himself and there were no actual supplies by THP to Oakfield as the result of the correspondence. There is no reference to trades with THP on the “commission sheet” which will be referred to later. He had had meetings with Perkins in late October 2003. Perkins is a supplier to Sainsbury’s. He admits that he should have told Mr McNeil of the approach by Mr Lacika in October and November – in particular since one of the tasks he did perform for Westbridge at that time was the compiling of a report of the July meetings with THP. In his submission Mr Penny for the defendant submitted that I should accept the account that he was stringing Mr Lacika along. Why would he tell lies about this in view of his frankness in other respects in the 3rd affidavit?[36]Finding. In my judgement the effect of the documents, the drip feed process by which they came to notice, and the admissions in the third affidavit prove beyond doubt that in this instance the defendant committed serious breaches of the undertakings not to work for Oakfield and to act in good faith towards Westbridge. However, in spite of entertaining grave suspicions to the contrary, I do not find proved to the criminal standard the aggravating feature that the defendant intended to do business with THP on behalf of Oakfield while still employed by Westbridge.[4]S & A Foods[37]The claimant’s allegation is that from about mid-October until the end of December 2003 the first defendant assisted and enticed S & A Foods, a customer of Westbridge, to buy fresh chicken meat from Ter Maten and Transoceanic Meats rather than from Westbridge. The defendant achieved this by advising S & A Foods as to where supplies of such meat could best be sourced and at what price, by arranging the supply of such meat from Adros in Poland to S & A Foods via Ter Maten or Transoceanic Meats. The defendant received a profit from the trades as is shown on his own schedule of trades and profits for the period. This constitutes a breach of the defendant’s undertaking not to solicit or entice away from Westbridge any of its customers and/or a breach of the defendant’s undertaking to act in good faith towards Westbridge. S & A Foods were at the time Westbridge’s largest customer for fresh chicken meat. The claimant alleges that the defendant, from October until the end of his employment with them, organised a chain of supply from Adros, a Polish supplier, through Transoceanic Meats and Ter Maten to S & A Foods. Adros was an existing Westbridge supplier. In his 2nd affidavit Mr McNeil sets out suspicions which were based at that time principally upon the examination of Mr Radovits’ telephone bills. On the date 7th November 2003 he discovered 8 calls in an hour to persons connected to the chain above. There had been similar clusters of calls between 22nd and 30th October. The admissions of the defendant in his third affidavit – in particular that the correspondence showing that he helped to set up a chain of supply between a Westbridge supplier and a Westbridge customer was conducted without informing Westbridge and at a time when he was still employed by them – constitute, they claim, breaches of the undertakings. It is further alleged that the claimant profited from the enterprise – witness a commission sheet which he admittedly compiled on his computer in which his “chicken commission” from Transoceanic Meats is said to be nearly £6000 in total between the weeks commencing 27th October and 1st December. In addition at a late stage it was discovered that Oakfield was involved in the chain. Transoceanic Meats (Sidcup) dealt with the importation of the meat. Transoceanic Meats (Nottingham) dealt with the transferring of the meat from packets into plastic containers called dovlars. The invoices for the work done by Transoceanic Meats (Nottingham) were sent to Oakfield for payment. Finally Mr Radovits’ involvement in correspondence produced by way of disclosure to his third affidavit shows a close involvement with the chain and a clear intention to take S & A Foods business with him to Oakfield.[38]The defendant’s response. As already mentioned the defendant admits a breach of the undertaking of good faith. He admits that in a witness statement prepared for the substantive proceedings his claim that “I believe that S & A did place some business to Ter Maten through Transoceanic” was misleading. He admits that he contacted Adros with a view to setting up this chain. However he asserts that,a. Throughout his time at Westbridge he was responsible for the S & A Foods business of Westbridge. He had developed a good working relationship with Mr Barnett of S & A Foods during that time. His last business for Westbridge was to negotiate the supply to S & A Foods of 40 tonnes of meat per week for the month of October.b. At a meeting with Mr Barnett on 12th October Mr Barnett told him that he did not want to do business with Westbridge any more and asked him if he could supply meat from November onwards. He only wished to do business with him (Mr Radovits). Mr Radovits declined in view of the proceedings then under way.c. On 17th October he met Mr Barnett and Mr Whitlock a representative of Ter Maten. Following the meeting Mr Barnett asked him if he could supply Ter Maten with meat from Poland. He agreed and later introduced Transoceanic into the picture as the result of a conversation with Mr Levy his future boss at Oakfield.d. Throughout he believed that he was not harming the interests of Westbridge since, although he discovered that S & A Foods had decided to continue to take meat from Westbridge albeit on a smaller scale, on the one hand S & A Foods reduced its requirements from November 2003 since it lost its business with Safeway, and on the other Adros had much surplus stock which it tried and failed to sell through Westbridge as well as others. (In cross-examination Mr McNeil denied that relations with S & A Foods were as bad as the defendant claimed and pointed to the fact that they have subsequently been voted “best supplier” by S & A Foods).e. As to the correspondence: i. A letter of 14th November – the day of the angry telephone conversation in Roldrob above – to Mr Barnett was simply a personal letter of the sort he regularly wrote to him concerning current trends in the market and would have been in the same terms whether written on behalf of Westbridge or Oakfield. However the recommended actions in the letter are only referable to the time after the defendant would have left Westbridge to work for Oakfield. ii. A memo to three members of staff at Oakfield about the transfer of meat from boxes to dovlars was the indirect result of Transoceanic Meats’ poor paperwork. Likewise the fact that the orders to Adros were printed by Oakfield. iii. A letter to Adros complaining about the packaging of supplies for the deliveries of 19th October and 4th December and claiming costs as a result was composed by Mr Radovits because “S & A, Ter Maten and Transoceanic could not figure out what the problem was”. iv. A document headed S & A statement was prepared by Mr Radovits at Adros’ request.f. The figures on the commission sheet were fictional and were never intended to form the basis of a claim from Oakfield.g. He had specifically asked Mr Barnett not to take all his business away from Westbridge in order to prevent accusations by Mr McNeil of poaching.h. Although he intended to use Oakfield as the broker for S & A Foods when he got there the way in which the transactions had been set up was not designed to conceal Oakfield’s involvement.[39]Finding. Having heard Mr Radovits give evidence I reject that last claim. I am certain that Oakfield did get involved, that Mr Radovits hoped to benefit from the trade that had started while he was still at Westbridge and that he would not have created the commission schedule unless he at least hoped for some reward from Oakfield. I find too that the negotiations with Mr Barnett carried out behind the back of Westbridge during October and November did amount to an attempt to entice S & A Foods business away from Westbridge. In my judgment Mr Radovits’ admission that he had urged Mr Barnett not to drop Westbridge altogether supports that finding. Even were I wrong about this I find that the correspondence, the secrecy, the lies told in documents prepared for the proceedings and the subsequent admissions constitute serious breaches of his undertaking to act in good faith towards Westbridge.[5]Adros/Avis[40]The claimant’s allegation. In October 2003 the defendant arranged the supply by Adros, the supplier to Westbridge in Poland, to Avis Foods, a customer of Westbridge, of fresh and frozen chicken and turkey meat on the following occasions: 6 October 2003, 17 October 1003, 20 October 2003, and 24 October 2003. This trading was carried out by the defendant either on his own behalf or on behalf of Oakfield but not on behalf of Westbridge. Particulars of this trading are contained in the documents contained at pages 15 to 27 of exhibit PM7, third affidavit of Mr McNeill sworn on 19 March 2004, and are further contained in documents entitled “Purchase Confirmations” disclosed by the defendant on 31 March 2004. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. The claimant alleges that, while still an employee of Westbridge, Mr Radovits arranged the supply by Adros to Avis, a customer (inaudible) specifically; that the defendant arranged a meeting or meetings which he also attended between Mr Oboda of Avis and representatives of Adros, meetings taking place in Poland between 5 and 13 October 2003. He prepared the written contract made between Avis Foods and Adros under which this meat was supplied and he prepared and sent to Adros each week written details of the order for that week specifying products purchased and the required specifications for packaging, required prices, time for payment, date of loading, registration of the lorries transporting the meat and the health and veterinary documents and certificates required.[41]The defendant’s response. In his third affidavit he conceded that a phrase in his 2nd affidavit which claimed that he had dealt fully in that affidavit with his dealings with Avis was misleading. In general he asserted and repeated in evidence that this dealing had been a private matter unconnected with either Westbridge or Oakfield. He had made nothing from it (and nor had Avis who made a loss) besides perhaps some future goodwill and had certainly not harmed the claimant by his actions. Indeed the business could only have started in earnest after the two countries acceded to the European Union in May 2004 because of the import duty regime in place before that time. Further it is pointed out that the application is defective in that it describes Avis as a customer when in fact vis-à-vis Westbridge it was a supplier. At the close of the defendant’s case it was conceded that the first date within the application of 6th October not within the relevant period.[42]Finding. As an employee of Westbridge the defendant should have kept his employer informed of any non-Westbridge relationship with existing suppliers and of his intention to use his employers’ time to set up the three remaining deals within the relevant period between such persons. As such I find that he was in breach of the undertaking to act in good faith towards Westbridge. However had this allegation stood alone it would not have been sufficiently grave to warrant a finding of contempt.[6]Adros/other customers[43]The claimant’s allegation is that the defendant between mid-October and the end of December 2003 was engaged on behalf of Oakfield in procuring the sale of fresh and frozen chicken and turkey meat supplied by Adros to customers of Oakfield onward supply to, namely, AF Blakemore, DP Meats, AC Skelton and Brown Brothers on terms that the profits, alternatively commissions, earned from those trades were divided between himself and personnel at Oakfield Foods Limited. Particulars of the trading are contained in the documents at page 28, Exhibit PM 7 to the third affidavit of Peter McNeill sworn on 19 March 2004. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. This allegation is based in the application on a single document produced by Mr McNeil to his 3rd affidavit. This document, downloaded from Mr Radovits’ computer, is identical to the first part of a longer document from his computer and produced by Mr Radovits to his 3rd affidavit. In fact it was conceded at the close of the claimant’s case that there were no supplies recorded in that document as originating from Adros, to three of the customers named in the application, AF Blakemore, AC Skelton and DP Meats, which were provably made within the period covered by the undertaking. The commission document referred to already contains details of 2 supplies from Adros via Oakfield to Brown Brothers during the period from which “my share” totals £2805.[44]The defendant’s response. The product concerned was frozen chicken which is not a principal product for Westbridge (with the exception of their customer KFC). There is no question here of enticement. His dealing was confined to dealing with Adros. Mr Glass whose name figures on the commission sheet dealt with the customers. Although the commission sheet was not fictional (as was claimed in respect of the “chicken commission” entries), and Mr Radovits hoped to receive commission in the summer of 2004, in fact no commission was paid and if it had been it would have only been a tenth of the amount in the “my share” column. In summary he admits being in breach of the undertaking not to work for Oakfield (not pleaded) and to act in good faith towards Westbridge.[45]Finding. I find that in this instance Mr Radovits has been frank with the court. He is in breach to the extent conceded in his 3rd affidavit.[7]Konspol[46]The claimant’s allegation. The defendant, acting on behalf of Oakfield Foods Limited on 10 October 2003 procured the delivery of 20 metric tonnes of frozen chicken breast from Konspol, a supplier of Westbridge to Oakfield. Particulars of their trading are contained in the documents at page 31 to 32 of exhibit PM7 to the affidavit of Mr McNeill sworn on 19 March 2004. This constituted a breach of the defendant’s undertaking to act in good faith towards Westbridge. Konspol is a supplier of chicken meat to Westbridge. Konspol was a supplier of chicken meat to Westbridge. A document produced on Oakfield headed paper from Mr Radovits’ computer and created on or about 16th October 2003 records a purchase of 20 tonnes of frozen chicken meat by Oakfield from Konspol with delivery on 10th October to a cold store in Cheshire.[47]The defendant’s response. In evidence Mr McNeil conceded that the document may have been created prior to the 9th October. There is no record of this transaction on the commission schedule. The defendant is sure that the supply never actually took place. In view of the date of the alleged delivery (10th) and his absence abroad on that date he could have done little to stop the delivery on the assumption that it did take place.[48]Finding. I find that this allegation is not made out, although the evidence supports the other admitted evidence of working for Oakfield at this period.[8]Expenses[49]The claimant’s allegation is that after 9 October 2003 the defendant has been working on behalf of Oakfield Foods Limited and has submitted that there were claims for business expenses incurred by him whilst working on their behalf. Such expenses have been claimed for travelling on Oakfield’s business for car parking, for travel and entertaining expenses in Hungary and Poland. Particulars of these expenses down to 23 October 2003 are contained in the documents at pages 3 to 6 of exhibit PM7 to the third affidavit of 19 October 2004 and are further contained in documents entitled “Oakfield Food Expenses” disclosed by the defendant on 31 March 2004. So, to work for Oakfield constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. This allegation is based on a number of documents created by the defendant and retrieved from his computer. The first two bear the date 29th October 2003 and are headed “Oakfield Foods expenses Tom Radovits”. It records expenses from 2nd to 22nd October, i.e. from the date when the defendant claimed to consider himself constructively dismissed to nearly three weeks after the undertaking was given to the Court. The second records expenses incurred during the Polish part of the defendant’s trip to Poland and Hungary. This trip straddled the date of the undertaking. These documents were retrieved by the claimant from a computer used by the defendant. The defendant himself produced further documents to his 3rd affidavit. These included near duplicates of the first two albeit dated one day later together with lists of business miles travelled from 26th September to 29th December 2003, a further sheet recording the Hungarian part of his trip, and lists of expenses for November and December. All were headed in the same way. The claimant suggests that his compilation of the lists provides clear evidence that he was, to all intents and purposes working for Oakfield throughout the period when he should have been working out his notice with Westbridge and was therefore in almost daily breach of his undertaking to the court.[50]The defendant’s response. The defendant admits compiling the lists, and incurring the expenditure, and that the expenditure was not incurred on behalf of his then employers, but gave evidence that he had not in fact claimed the expenses listed from Oakfield. In spite of the list of expenses he maintains that the trip to Poland and Hungary was not undertaken on behalf of Oakfield.[51]Finding. At trial Mr Ridd conceded that he could not prove to the criminal standard that the expenses listed had in fact been paid to the defendant. I find that the defendant created the lists intending at the time to submit them to Oakfield, and that he did so because the expenditure incurred was incurred on Oakfield’s behalf. In so far as the individual items of expenditure are not attributable to one of the individual breaches of the undertaking described elsewhere in this judgment I find that the business expenditure reflected in these lists constitute breaches of the undertaking to act in good faith towards Westbridge and that although the full allegation has not been proved the conduct I have described falls within the scope of the allegation.[9]Bomadek[52]This allegation and the ones which followare drawn from the claimant’s 3rd affidavit and are all, therefore, admitted. To that extent it is somewhat artificial to separate my findings into claimant’s allegation and defendant’s response.[53]The claimant’s allegation. Between October and December 2003 the defendant, acting on behalf of Oakfield, organised or attempted to organise the purchase by Oakfield of fresh and frozen turkey meat from Bomadek in Poland. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. Bomadek is a supplier of turkey meat based in Poland. In September 2003 Mr Radovits introduced Bomadek to Oakfield as a possible supplier. In October, but more frequently in November and December 2003, he assisted in the setting up of deliveries of turkey meat from Bomadek to customers of Oakfield. The commission sheet already referred to lists such supplies. “My share” amounts to some £9000.[54]The defendant’s response. In his 2nd affidavit the defendant claimed that he was not involved in communications or trade between Oakfield and Bomadek. He had made similar claims in his first witness statement dated 20th October, a time when he was in fact actively engaged in such communications and trade. In his third affidavit he admits those falsehoods and apologises to the Court. He repeats his submissions made earlier that in arranging supplies of turkey meat he did not believe that he was harming Westbridge since they were not turkey meat brokers, that the commission was never paid and that if it had been it would have been 10% of the figure on the sheet.[55]Finding. I find that the conduct now admitted constitutes a serious breach of the undertaking to act in good faith towards Westbridge.[10]Carnex[56]The claimant’s allegation. During October and November 2003 the defendant, acting on behalf of Oakfield introduced it to Carnex in Hungary and organised the purchase by Oakfield of turkey breasts from Carnex. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. Carnex is a supplier of turkey meat based in Hungary. In October and November 2003 he assisted in the setting up of deliveries of turkey meat from Carnex to customers of Oakfield. The commission sheet already referred to lists such supplies. “My share” amounts to some £3000.[57]The defendant’s response. Once again in his 2nd affidavit the defendant made statements which he now admits were misleading. In his third affidavit he admits this and apologises to the Court. He accepts that in doing so he was acting in breach of his to act in good faith towards Westbridge.[58]He repeats his submissions made earlier that in arranging supplies of turkey meat he did not believe that he was harming Westbridge since they were not turkey meat brokers.[59]Finding. I find that the conduct now admitted constitutes a serious breach of the undertaking to act in good faith towards Westbridge.[11]Drobex/Avis[60]The claimant’s allegation. Drobex is a supplier of chicken meat based in Poland. During his trip to Poland in early October 2003 the defendant visited Drobex. In October and November 2003 he tried to organise the supply of fresh and frozen chicken meat to Avis (see earlier) and Burger King via Oakfield. The allegation reads:
“During October and November 2003 the defendant attempted to organise the supply by Drobex in Poland to Avis Food and to Burger King of fresh and frozen chicken meat. This constitutes a breach by the defendant of his undertaking to act in good faith towards Westbridge.”
[61]The defendant’s response. In his third affidavit he admits: being in communication with Drobex, passing information to Oakfield’s sister company in France on its prices with a view to a possible sale to Burger King, and acting as go-between/interpreter for communications between Drobex and Avis.[62]Finding. I find that the admitted behaviour amounts to a breach of the undertaking to act in good faith towards Westbridge.[12]Drobex/Oakfield[63]The claimant’s allegation. In early December 2003 the defendant acted on behalf of Oakfield to arrange supply to Oakfield of frozen chicken breasts from Drobex in Poland. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. In early December 2003, following the attempted sales referred to he successfully organised the supply of frozen chicken meat to Oakfield.[64]The defendant’s response. In his third affidavit he admits this and apologises to the Court for his breach of the good faith undertaking.[65]Finding. I find that the admitted behaviour amounts to a breach of the undertaking to act in good faith towards Westbridge.[13]Perkins Foods[66]The claimant’s allegation. In November and December 2003 the defendant sought to supply to Perkins Foods, a customer of Oakfield, chicken and turkey meat from Adros, from Avis and from Carnex and did procure the supply of samples to Perkins. In so doing the defendant was acting on behalf of Oakfield. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. Perkins was a customer of Oakfield at the material time. In late October he visited Perkins with Mr Levy of Oakfield. Following the meeting he arranged for sample supplies of chicken and turkey to be made available to Perkins, and on 31st October sent Adros the Perkins Food questionnaire partly completed by himself.[67]The defendant’s response. He accepts the truth of the allegation but stresses that his principal purpose in meeting Perkins and communicating with Polish and Hungarian suppliers was to lay the ground for business which would only start in earnest in April 2004 and could not conceivably have harmed Westbridge.[68]Finding. I find that the admitted behaviour amounts to a breach of his undertaking to act in good faith towards Westbridge.[14]BFI[69]The claimant’s allegation. In October 2003 the defendant assisted Oakfield by introducing it to BFI, for the supply to Westbridge of cooked chicken products and by assisting in the writing of an introductory letter from Oakfield to BFI. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. BFI was a supplier who had some contact with Westbridge in the summer of 2003. In October 2003 the defendant assisted Oakfield to draft a letter to BFI soliciting business.[70]The defendant’s response. The defendant admits the allegation but states that, following the letter, BFI supplied samples but no substantive business was done.[71]Finding. In the absence of other evidence I accept the defendant’s account. I find that the admitted behaviour amounts to a breach of the undertaking to act in good faith towards Westbridge.[15]Hindelang[72]The claimant’s allegation. Between October and December 2003 the defendant assisted the business of Oakfield by introducing to Oakfield a haulier, Hindelang, used by Westbridge and arranging on behalf of Oakfield deliveries of poultry and duck meat from Hungary. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. Hindelang was a haulier based in Hungary used by Westbridge. Mr Radovits introduced Hindelang to Oakfield in October 2003 and thereafter arranged deliveries by them on Oakfield’s behalf.[73]The defendant’s response. He admits this and apologises to the Court for his breach of good faith.[74]Finding. I find that the admitted behaviour amounts to a breach of the undertaking to act in good faith towards Westbridge.[16]Trip to Poland and Hungary[75]The claimant’s allegation is that the first defendant visited Poland and Hungary on and between 6 and 13 October 2003. On that visit the first defendant was accompanied by Tim Dougall of Forresters Limited, a customer of the claimant, and with Mr Dougall the first defendant attended meetings with various of the claimant’s suppliers. The said visit and meetings were not on behalf of or for the benefit of the claimant and neither did the first defendant tell the claimant of the fact of them. The claimant contends that the purpose of the visit and the meetings was to assist in the business of Oakfield and/or to divert the business of Forresters and of suppliers away from the claimant and the second defendant. This constituted a breach by the defendant of his undertaking to act in good faith towards Westbridge. In addition it is alleged that the defendant has changed his story about the reasons for this trip. Reference has been made when dealing with the expenses allegation (8 above) to the expense sheets which record Mr Radovits’ expenses under the Oakfield heading for this trip.[76]The defendant’s response. In addition to denying that he was acting on behalf of Oakfield, Mr Penny on his behalf submitted that since it is far from clear when the various meetings took place and that it may be that some or all of them took place before the undertaking come into force this allegation could not be made out for that reason alone.[77]Finding. I accepted this latter submission at the close of the claimant’s case although the evidence of the trip has formed part of the relevant background evidence to other findings I have made. Summary[78]Applying the principles I referred to earlier I have come to the conclusion that the breaches of the undertaking admitted by the defendant and those denied by him but found to be proved by me in whole or in part (Numbers 1-6 and 8-15) taken together amount to contempt of the Court so that the factual basis for the claimant’s application has been made out.[79]At the close of the hearing it was agreed that I should confine myself to this issue and reserve the questions of penalty and costs to a later date.[80]I now turn to the question of costs. I have been referred to Order 44(3) and considered it in the context of this case and of submissions made by Mr Ridd and Mr Penny which have dealt in principle with the attempts that were made to shorten the proceedings in the spring of last year, immediately before it was first listed for trial and later towards the end of last year and after the substantive action had been settled. It is a great shame that the parties came so close but failed to manage to cut the matter short in some way or another. I find it quite impossible to say that one side is definitely all at fault and one side definitely not at fault and I have proceeded on that basis, having looked at the way the matter proceeded. I have also heard submissions from Mr Penny on the question of an order which Mr Ridd has asked for, for a lump sum payment on account of costs within a short time of today.[81]Having considered the other matter that Mr Penny raised which is that, although Mr Ridd has broadly been successful in his application before me, he has not been one hundred per cent successful and that some of the more serious allegations which Mr Radovits faced have not in the end improved to the criminal standard, I do feel that there is scope for some reduction but not such a great reduction as is claimed for by Mr Penny who concedes that the proper basis on a hearing of this kind is for costs to be on an indemnity basis.[82]I order that there be a reduction to 75% rather than the 50% he claims; that having looked, and accepted for these purposes, at the statement put in by Mr Radovits on 9 February 2005 before me, that the proper order so far as a payment on account is that he pay £25,000 and I will listen to representations on how soon Mr Radovits thinks he can raise that sum. I should put Mr Radovits out of his misery if he still has not got the message. I am not going to send Mr Radovits to prison for these matters and, therefore, we are talking about money here rather than anything else.[83]Could you stand up, Mr Radovits. You are an able, intelligent and successful businessman and I hope that following these proceedings you will continue to be such. I hope indeed that, as Mr Penny submits on your behalf, you have learned quite a salutary lesson from these proceedings in which, as I have found, you disregarded an undertaking that you gave to the court, quite deliberately, and then took steps by changing your telephone to evade detection and that, in one instance in particular, it is by a process of some good fortune that the discovery of the extent of your contempt was made. I also bear in mind, as Mr Penny realistically accepts on your behalf, that for some considerable time you compounded the contempt by swearing affidavits which were misleading or false.[84]Against that background you, at perhaps the eleventh hour, so far as the difference between financial penalty and custodial penalty is concerned, and no doubt assisted by helpful legal advice, changed your attitude and it is right to say that you conceded a great deal of what was then alleged against you and, to your credit, then went on to admit further breaches which had hitherto not been discovered. I take into account the fact that some of the issues which we have been litigating formed part of the case which settled last year and, therefore, part of the settlement of that case and the fact that we are now many months on from December 2003 when you finally left the employment of Westbridge. But, as I said to Mr Penny, I must mark the seriousness of these contempts. Courts cannot operate properly unless people make undertakings, abide by them and then tell the truth in affidavits. I do so in this case by way of a financial penalty.[85]Having considered your means, and the fact that you are substantially liable for a significant sum in terms of Oakfield’s costs as well as a significant sum in respect of Westbridge’s costs in this application, I find that the proper order, and I have tried to grade it in part to the seriousness of the alleged offences, the total sum I order you to pay is £1,800. I have broken it up as £200 on charges, as we came to know them, 1 to 4 and 6, there being no separate penalty, as it were, for 5, which I indicated was a breach but not so much as to amount to a contempt, and £100 on allegations 8 to 15 which, if my mathematics is correct, is £1,800.[86]So far as payment of the lump sum is concerned, Mr Radovits can have one month to pay. And so far as the fine is concerned, whether it is enforced as a judgment of the High Court or as a fine, I would presume the former, bearing in mind where we are, similarly a month to pay.

order

(1) Not to solicit or attempt to entice any customers or suppliers of Westbridge Foods (Westbridge) away from Westbridge.(2) Not to work for any competitor of Westbridge and to act in good faith towards Westbridge and observe its confidentiality.” (1) Not to solicit or attempt to entice any customers or suppliers of Westbridge Foods (Westbridge) away from Westbridge. (2) Not to work for any competitor of Westbridge and to act in good faith towards Westbridge and observe its confidentiality.”