Case No. IP-2018-000134

118.For the reasons discussed above, equity imposed a duty of confidence on TCL if it received information it knew or ought to have known was fairly and reasonably regarded as confidential. See also art.4(4) of Directive 2016/943. If the duty was imposed, TCL was in breach of it because the information in question consisted of the client details received from Mr La Gette and Mr Bishop and TCL used those for the benefit of its business. So the short question is what TCL knew or ought to have known about the client details it received. 119.At the time when TCL was first in contact with Mr La Gette and Mr Bishop, TCL knew that they were employed by Trailfinders as sales consultants. The brochure provided by TCL to potential franchisees included this, under the heading ‘Do you [TCL] supply business leads [to franchisees]?’: “No – because we don’t need to. It’s amazing how quickly word gets around when a Travel Counsellor arrives on the scene! Everyone wants a VIP service – and when it comes to travel, they’ll get it from you. You’ll love the challenge of cultivating your customer base. Keeping existing customers warm and introducing yourself to new ones. If you’re coming from a travel background already, feel free to bring your old customer contact list along with you. We’ll add them to your Contact Centre ready for your first day – a great start to a rewarding career running your own travel business.” 120.As appears from the brochure, TCL did not supply new franchisees with potential customers. They were expected to bring their own and in the case of those in the travel business, bring their customer contact list. Mr La Gette and Mr Bishop did exactly that. 121.It is highly improbable that TCL believed that Trailfinders did not regard their customers lists, including the names and details of those customers who dealt with any one sales consultant, as being confidential. TCL plainly maintained that its own equivalent information was confidential. The franchise agreement with TCL signed by Mr La Gette and Mr Bishop required that their customer lists formed part of the confidential information and intellectual property owned by TCL. Mr Byrne, CEO of TCL, stated that TCL would not wish someone outside TCL to have access to a franchisee’s customer database. 122.Mr Byrne was asked in cross-examination about the recruitment process. He said that the recruiter would know whether a candidate franchisee worked in a travel business such as Trailfinders. When it was put to Mr Byrne that if the recruit was working for a travel business there was an obvious risk that they might bring with them the current employer’s contact information, he said that TCL expected such individuals to respect agreements with their employer. But he could not point to any document in which TCL stated to candidate franchisees that this was TCL’s expectation. 123.Mr Byrne thought that any risk of the current employer’s customer information being passed to TCL would emerge during the oral interview. He also said that recruiters had been told to make sure that potential franchisees were aware of data protection issues. However, in the transcript of the phone conversation on 16 August 2016 between Mr La Gette and Cathy Oldfield of TCL, referred to above, to which Mr Byrne was taken, Mr La Gette is recorded to have said that he will be bringing contacts from his Trailfinders’ employment. Ms Collins said nothing about data protection or confidentiality. Nor did she at any stage ask Mr La Gette to ensure that he was not taking data from Trailfinders’ systems. On the balance of probabilities I find that potential franchisees were encouraged to bring with them details of existing clients and were not warned about any risk of breach of confidence. 124.Mr Mill made three particular points in closing. The first was a proposition of law, namely that in order to be fixed with an obligation of confidence, a third party must know that the information was confidential. I was taken to Toulson & Phipps on Confidentiality, 3rd ed., (2012), where that assertion is made, drawing a parallel with the law on knowledge as it applies to accessories to a breach of trust and referring to the Court of Appeal judgment on breach of confidence in Thomas v Pierce [2000] FSR 718. I do not accept the proposition of law as advanced. Campbell v MGN and Vestergaard both post-date Thomas v Pierce and the edition of Toulson & Phipps relied on. Thomas v Pierce was considered by Arnold J in Primary Group (UK) Ltd v The Royal Bank of Scotland plc [2014] EWHC 1082 (Ch); [2014] RPC 26, at [229] to [234]. Arnold J concluded that it is no longer good law on the question of the test to be applied with regard to the imposition of an equitable obligation of confidence, for reasons with which I respectfully agree. Finally, Mr Mill’s proposition of law cannot be good, having regard to art.4(4) of Directive 2016/943. 125.Mr Mill’s second point was that sales consultants started to leave Trailfinders for TCL in 2015 and by the time Mr La Gette left at least 20 had left. No complaint was made to TCL about misuse of Trailfinders’ confidential information in the year or so before Mr La Gette and Mr Bishop each passed client details to TCL, so there was no reason for TCL to believe that Trailfinders had any concern about it. 126.I do not accept that this follows. There may have been many reasons why Trailfinders did not raise a complaint with TCL before it did, not least the unattractive prospect of paying for legal advice and being drawn into litigation. This argument was raised for the first time in closing. For it to carry any weight the point ought to have been put to Mr Simpson in cross-examination. 127.Mr Mill’s third point was that if anyone at TCL knew or ought to have known that TCL was receiving confidential information from Trailfinders it could not have been anyone more senior than a recruiter such as Cathy Oldfield. She was too junior for her knowledge to be imputed to TCL. 128.I do not accept this argument either. All franchisees joining TCL were encouraged to disclose the names and details of their contacts to TCL. Mr Byrne must have known this because he claimed (although I have not accepted his evidence on this point) that at the time Mr La Gette and Mr Bishop joined TCL, recruiters were given oral advice to ensure that the recruiter was entitled to give these details to TCL. Mr La Gette’s and Mr Bishop’s franchise agreements were signed on behalf of TCL by Abigail Hamer. It was not made clear where she stood in the seniority of TCL’s operations. But even if neither Mr Byrne nor anyone else with sufficient seniority knew that either Mr La Gette or Mr Bishop was being recruited, which I find unlikely, they knew that TCL was receiving Trailfinders’ client information via new franchisees, whoever the franchisees were. 129.This was also an argument left until closing; one which, were to have any prospect of succeeding, should have been raised earlier so that the witnesses could have dealt with it and in particular so that questions could have been put to Mr Byrne about what he knew. 130.It goes further: in this court parties are required to plead, concisely, the arguments on which they intend to rely (CPR 63.20(1)) so that opposing parties can file any evidence required and deal with the matter properly at trial. 131.In my view a reasonable person in the position of Mr Byrne or other person of sufficient significance in TCL’s operations would have been aware that at least part of the contact information brought to TCL by Mr La Gette and Mr Bishop was likely to have been copied from Trailfinders’ customer data. There was too much of it to have been carried in their heads. Such persons at TCL knew or ought to have known that Trailfinders would regard the information as confidential. A belief that TCL was thereby receiving confidential information could only have been reversed if Mr La Gette and Mr Bishop had given TCL convincing reasons why this was not the case. They did not and I have the impression that TCL did not wish to inquire. 132.In those circumstances TCL ought to have known that they were in receipt of information which Trailfinders reasonably regarded as confidential. Equity imposed on TCL an obligation of confidence and it was in breach of that obligation.