Claim No: IP-2021-000114 - [2023] EWHC 3153 (IPEC)

The Defendants say that the Claimant’s case in damage is insufficiently pleaded. I find it convenient to deal with their submissions relating on this point first. The Defendants submit that:

The Defendants’ submissions are ill-founded, in my judgment. In relation to points (i), (ii) and (v), the Particulars of Claim do not plead that the loss of reputation/goodwill and loss of profits claimed arises out of the Landform transaction. At paragraph 20 of the Particulars of Claim it pleads that it is a reasonable inference that the 27 June Email was sent to the entirety of the Claimant’s 500 client contacts (as I have found) and at paragraph 21 that “the Claimant’s clients have been actively misled by the content of the said email”. It refers to the Landform email as an exemplar of a client who was misled by its content and had understood that the Claimant had changed its name (as I have also found). In paragraph 23, in case there was any doubt, it pleads that “For the avoidance of doubt, it is the Claimant’s case that the extent of the Defendants’ wrongdoing is not limited to that set out above and the Claimant reserves the right to amend these Particulars of Claim following disclosure”. As Mr Goodfellow submits for the Claimant, and I accept, despite the work accruing to Greenscape almost immediately after the company started trading around the time of the 27 June Email, the Defendants have provided no documentary disclosure of how this work came to be generated, and indeed almost nothing in the way of witness evidence either, and so it is unsurprising that no application has been made to amend the Particulars of Claim as the facts are simply unknown to the Claimant. Mr Goodfellow in closing submissions described that new business as “coming out of thin air from a disclosure perspective”, which I consider to be an apposite description.

Similarly it is not correct to say in point (iii) there is no evidence of lost profit. I have summarised evidence on the point contained in Mr Hilbeck’s witness statement which was produced by his finance manager and Mr Ludley confirmed that he took no issue with those figures in oral evidence.

Mr Roughton in closing for the Defendants accepts the egregious nature of Mr Ludley’s behaviour and accepts that any Court would find that he should face up to the consequences of his actions. However, he submits that at all times Mr Ludley was very well known in the specialised world of landscape and garden recruitment, some of his clients while at the Claimant were very close friends, and they would have followed him whether he had sent the 27 June Email or not. That is what Mr Ludley says, but there is no evidence to support it save perhaps evidence that Mr Ludley has had a fairly long career in the landscaping and gardening sector generally, albeit not always in recruitment. That is also not what I have found.

I have found that the Claimant’s business underwent a significant and immediate decline after the 27 June Email was sent, that Mr Ludley sent that email not in a moment of madness but as the culmination of a plan of action to start his own business which started with transferring the Claimant’s documentation and information for himself, that it was precipitated by Mr Chapman leaving the employ of the Claimant so that he was the only recruitment consultant left, that he sent the 27 June Email hoping that it would produce marketing leads for Greenscape and that Greenscape did immediately win new business such that he was invoicing a client of the Claimant just over a month after the 27 June Email. I have found that the 27 June Email caused confusion with some of the Claimant’s clients which caused work to be diverted from the Claimant to Greenscape, and that Mr Ludley did nothing to correct that misrepresentation. That is damage amounting to both loss of profit and damage to reputation, in my judgment, sufficient to complete the tort of passing off.