Nick and Malcolm Statman vs Stuart Brown Verdict Transcript (23/04/2014)- Pages 11 to 15 (of 75)

APPROVED JUDGMENT (contd… Pages 11 to 15 of 75)

42. On 16th August 2012, the Deputy Master gave directions in this matter.  He observed that the defence and counterclaim filed by the defendant, still a litigant in person, was not compliant with CPR 3.4(2).  It was of inordinate length and muddled in detail to such a degree as to conceal any basis for a defence or counterclaim and the defendant was required to file an amended pleading.


43. On 10th October 2012, the learned deputy master considered the amended pleading and struck that out, save for certain paragraphs.  The defendant was required to file a further amended defence which properly particularised the information which it was alleged was already in the public domain.  The upshot was that the counterclaim was struck out.

44. The defendant explained in evidence that, on counsel’s advice, he had determined not to attempt to resurrect within these proceedings a counterclaim since it would be convenient in any event for any counterclaim to be hived off so as to avoid cluttering the injunction proceedings.  The defendant has indicated in his evidence that he intends in due course properly to formulate a claim in respect of the misrepresentation or breach of contract by the claimants.  Whether he does so is entirely a matter for him.  Nothing in this judgment is intended, expressly or impliedly, to express any favourable observations in relation to any such proposed claim.  The strike out of the original counterclaim has significance in these proceedings, the claimants argued, in that it was following that striking out of the counterclaim on 10th October 2012 that the defendant resumed that which Mr Richardson described as a campaign of hatred after a lull since 5th April 2012.

45. On 13th February 2012, Master Cook gave further directions, including an order that unless the defendant complied with the previous order as to the filing of an amended defence, his defence would also be struck out.  The master also directed that the case should be case managed and heard sequentially by the same judge in due course.

46. On 29th October 2012, the claimants issued an application seeking the committal of the defendant, on the grounds that he had failed to comply with the terms of his own undertaking of 19th March 2012.  That was supported by an affidavit by Miss Slater, sworn on 30th October 2012. Miss Slater asserted that breaches had occurred as follows:
“(a) The defendant’s email to other franchisees dated 27th March 2012 revealed [she asserted] terms of the franchise agreement and remuneration entitled or received and thus was contrary to paragraph 2 of the undertaking to which I have referred.  [This now constitutes allegation (20)].
(b) That the defendant’s blog entitled, “An introduction to the below market sector property world, part 1” dated 11th October 2012, [which constitutes allegation number (21)] disclosed [it was alleged] the type of vendor the claimants seek to attract, the policy relating to the calculation of offers, the claimants’ profit margins and the terms of the franchise agreement contrary to the specific undertakings in paragraphs 1 and 2 of the undertakings.
(c)  [this merely constituted a repeat of (b)].
(d)  The defendant’s blog entitled “Sorry to all house sellers in Wolverhampton that have been messed around by Gateway Homes” dated 26th March 2012.  [This is allegation (19)]. It is alleged in this affidavit that the blog discussed the nature of the transactions with vendors and the terms of the franchise agreement.
(e)  The defendant’s blog entitled, “Sorry to all house sellers in Lincolnshire that have been messed around by Gateway Homes”, again dated 26th March 2012, [which constitutes allegation (18)].  Again it is alleged that blog discussed the nature of transactions with vendors and terms of the franchise agreement.
(f)  The defendant’s blog entitled, “Trusting the wrong people in the Gateway Homes network”, dated 23rd October 2012, in which it is alleged that the nature of the transactions with vendors, terms of franchise agreement and remuneration received were discussed.
(g)  The defendant’s comment on the Sunday Express website entitled, “Public apology Mr Haywood” dated 23rd October 2012, which it is alleged discusses the nature of transactions with vendors and the terms of the franchise agreement.  [This constitutes allegation (22)].
(h)  The defendant’s comment on the Daily Mirror website, dated 23rd October 2012, which it is alleged discusses the terms of the franchise agreement and remuneration received.”

47. Finally, at (i) in the affidavit it is stated as follows:
“Finally and most seriously, the BBC report about the claimants and Tom Craven Property as confirmed at exhibits to this affidavit.  The BBC have advised that they have spoken with franchisees, vendors in Teesside, Staffordshire, Lincolnshire and Merseyside, West Yorkshire and North Yorkshire and have also evidence of instructions provided to the claimants’ instructing agent about the calculation of offers to vendors.  The BBC has specifically confirmed to us on the telephone that they have been provided with a copy of the first claimant’s confidential franchisee’s operations manual.  For the avoidance of doubt, the initial ex parte injunction obtained against the defendant was a result of his threats to approach journalists about the claimants and expose confidential information, including the franchisee operations manual.  Given the defendant is simultaneously making reference to Tom Craven Property and the BBC report features vendors from the defendant’s franchise areas, it is our belief [that is the claimants’] that the defendant has provided information directly to the BBC, has encouraged to disclose information and/or vendors to approach the BBC.  Such actions are clearly undoubtedly in contravention of the undertakings at paragraphs 1 and 2 of the order of 19th March 2012.”

48. The claimants’ application was in two parts.  It was an application for disclosure pursuant to CPR 31.17 against the BBC in respect of information received by the BBC for the purposes of the BBC programme which was televised on 5th November 2012.  That application was not successful.

49. However, so far as the affidavit is concerned, it also set out  the details of the application for the committal of the defendant.  It is unnecessary to recite further from that affidavit for present purposes.

50. In support of the claim for the permanent injunction for breach of contract and/or confidentiality, Mr Nick Statman filed a second witness statement dated 7th March 2014.  His father Mr Malcolm Statman did not file evidence in this particular matter and his evidence was confined to the harassment claim to which I shall refer in due course.  In his witness statement, Mr Nick Statman repeated his complaint and reliance on the defendant’s emails dated 15th February, 16th February, 19th February and 24th February 2012.  Mr Statman asserted that the defendant had been ‘in cahoots with Mr Barlow’.  Mr Statman revealed that litigation was brought against Mr Barlow and, indeed, Mirror Newspapers, which had been compromised on terms not disclosed.  He asserted that prior to his departure and following the claimant’s termination of the agreements on 20th March 2012, the defendant had downloaded the claimant’s entire internal computer system in his capacity then as a franchisee.  Mr Statman referred to the defendant’s blog posted on 25th February 2014 entitled, “Class action.  Civil claims against gateway Homes aka property buyer franchise programme.  All franchisees and ex-franchisees invited to contact me.”  Mr Statman asserted that any discussions by the defendant with any such franchisee would constitute a breach of the undertakings and, in any event, a breach of the confidentiality clause.

51. In his witness statement, at paragraph 17, Mr Statman put his position as follows:
“In July 2013 a Scott schedule was produced setting out all of our allegations of breach of confidence.  In addition to the general implied duty of confidence, the specific breaches of the agreement prohibits Mr Brown from discussing all information in any form or medium obtained or received by him, including that relating to the business affairs of the franchisor, any franchisee of the franchisor or the intellectual property.  Mr Brown is also required to keep the terms of the agreement confidential.”

52. Mr Statman (at paragraph 18 onwards) described the conduct of the defendant which it is alleged individually and cumulatively constituted a breach of the confidentiality clause.  All of those complaints are contained within the schedule before me.

53. The defendant filed a witness statement on 6th March 2014 extending to 41 pages, notwithstanding a direction from the court previously that witness statements should not extend beyond 10 pages.  So far as material, this witness statement upon which the defendant relied refers to the fact that, first, internal emails between franchisees, each subject to the same agreement, could not, he argued, be confidential and, in any event, there was no publication of these matters to the public.

54. He argued that it appeared that  if the defendant mentioned the mere fact of an agreement or the fact that offers had been to him by Mr Statman  such would, on the claimants’ interpretation of the clause, give rise to a breach of the confidentiality obligation within clause 7.1.14.2. The defendant argued that the agreement clearly could not have contemplated such an outcome.

55. As for the sentences or parts of the sentences taken from the emails complained of, he argued, rightly, that they must be read in context and that the whole of the emails and series of emails and subject matter should be considered, particularly those passing between franchisees, not least those which had been copied to and contributed to on occasions, as shown in the evidence, by Mr Nick Statman himself.

56. The defendant argued in his statement that any obligations as to confidentiality and information acquired in the course of the business ceased if and when such information became generally known or easily accessible.  In this respect, the defendant referred to the information already in the public domain which appears, for example, in the Office of Fair Trading report and press release, the BBC programme to which I have referred and also the Mirror and Express articles.  In short, it was the defendant’s contention that that published information is a shield since he had not revealed or said anything of substance or which went beyond the information already published or known to the public at large following the publication and wide dissemination of the articles referred to.

57. He also argued that the party to the agreement, in any event, was  the first claimant and not the second claimant.  That argument was developed in closing submissions by Miss Omar and was not, so far as I could detect, quarrelled with by Mr Richardson in his closing submissions. It was not suggested that the second claimant was, in fact, a party to the agreements relied on.

58. The defendant argued that since the claimants had not required him to sign a non-disclosure agreement and had not clearly identified that which was ‘confidential’ they could not now establish that the contents of his emails or blogs were in breach of the confidentiality clause.  Miss Omar developed this argument and submitted that the agreements relied upon by the claimants were so wide as to be meaningless and of no effect.

59. The defendant argued that he had not released any confidential information in any event.  He recited the fact that Keith J recognised that the defendant was permitted to reveal to third parties details of his business information and that he had not revealed any matters which contravened his obligations.  So far as the BBC was concerned and their letter dated 22nd October 2012, which was exhibited by Miss Slater in her affidavit, the defendant relied upon the fact that the BBC had replied to the effect that they had not used any information received from him.

60. The claimants’ position, developed in closing submissions by Mr Richardson in relation to the defendant’s statement(s) generally is that it shows, or is consistent with the general contention on the part of the claimants, that the defendant is fixated with the claimants and means them harm.  Thus, paragraph 18 was cited in which the defendant said:

“From around February 2011 to October 2011, I gathered as much evidence as I could about the business methods of the claimants.  I was shocked with what I found.  I had not agreed to invest £130,000 plus to be party to unethical business practice, flagrantly ripping people off, heaping misery on already, in many cases, desperate and vulnerable people.  By October, I had attained all the physical proof needed of potentially fraudulent criminal practice to seek professional advice.”

61. At paragraph 3, sub-paragraph 4, in dealing with the allegations of harassment, the defendant said:

“Although the alleged harassment blog posts were removed (a) by the claimants’ solicitor threatening hosting company and taking down of entire blog by them before the claim; (b) by me not contesting the hearing on 9th November from threatening advice from Mr Matthew Richardson and removing all in my control by 10th November, it has not been determined if any of them either (a) harassment actually took place; (b) any confidentiality breaches actually occurred.  The pertinent evidence got lost in the melee of my unlawful arrest and HHJ Anthony Thornton [QC] dismissing the claimants’ applications for committal etc.”

62. The defendant asserted at sub-paragraph 5(d):
“The method of writing, linking, tagging, keywording, headlining, categorising of internet pages is also not a crime but an art form, a skill honed and refined over many years’ experience, something I get paid to do on a daily basis, so good practice and procedures are second nature.”

63. The defendant went on to assert that following the meeting of 10th October 2011, the claimant had completed only one of the transactions introduced by him.  He repeated the assertion that he had not disclosed any of the franchisee emails.  He confided in Mr Barber, a franchisee, and it was Mr Barber who in fact betrayed the confidence reposed in him to Mr Statman.  He observed that Keith J had also been concerned that the injunction in its ex parte form was so wide as to prevent him from following his own business and ought not to have been granted, he said, subject to that strict restriction.

64. In his witness statement the defendant asserted that on 19th March 2012 he had invoiced the claimant for a debt of £1,000 and on 20th March 2012 the claimants terminated his franchise agreements. He then posted his blogs about which complaint is now made.  He complained that on 17th October 2012 the claimants procured the host site providers ‘123.reg’ to take down his site without any good reason. On 18th October 2012, he reported to the police the fact that he had been verbally assaulted and prevented from leaving a room, he complained, at the meeting on 10th October 2011, and also potential fraudulent practices on the part of the claimants.

65. Finally, he made reference to the fact that on 31st October 2012, the claimants instituted separate proceedings seeking relief under the Act of 1997.  They successfully sought an ex parte injunction on short notice.  That step was followed by the BBC ‘Inside Out’ programme.  His complaint was and is that the claimants’ use of the legal process constituted intimidation and harassment. That is, he was not the person causing harassment, it was the claimants who harassed him.

66. Before turning to the schedule of allegations, both parties have made reference to the Office of Fair Trading report of August 2013 followed or accompanied by a press release and the subsequent press release of December 2013.  The defendant seeks to rely upon the report but in particular the press releases in support of the proposition that because the claimant companies were willing to provide certain undertakings as to good practice to the OFT, that, he argued, is evidence of the fact that the claimants had good reason to do so because the offer of undertakings constitutes an admission.  I should add at this stage that that argument hardly lies in the mouth of the defendant bearing in mind that he himself has offered undertakings to the court.  The reality of the matter is that the press release made it plain that no admissions were sought by the OFT and none given by the claimants in relation to any allegations of poor practice.

Find pages 1 to 5 here
Find pages 6 to 10 here
Find pages 11 to 15 here
Find pages 16 to 20 here
Find pages 21 to 25 here
Find pages 26 to 30 here
Find pages 31 to 35 here
Find pages 36 to 40 here
Find pages 41 to 45 here
Find pages 46 to 50 here
Find pages 51 to 55 here
Find pages 56 to 60 here
Find pages 61 to 65 here
Find pages 66 to 70 here
Find pages 71 to 75 here

Claimants –

Mr Nicholas Charles Statman aka Nick teflon-coat Statman
Mr Malcolm Robert Statman aka Malcolm bully-boy Statman
Gateway Homes Nationwide Franchise Ltd / Whitehall Franchise Ltd (in liquidation from August 2014)
Gateway Homes UK Ltd
(Other trading companies / names in operation –
OPANET LIMITED
CXI 92 LIMITED
KINGSBRIDGE AND CARTER LTD
STATPROPS LIMITED
SPEEDY PROPERTIES LTD
TOM CRAVEN LIMITED
ROBERT CHARLES PROPERTY LIMITED
GATEWAY HOMES RENTALS UK LIMITED
GATEWAY HOLDINGS (UK) LIMITED
GATEWAY HOMES RENTALS UK LIMITED
PROP BUY LTD
ROOST UK LIMITED)

Claimants Legal Team (upto end July 2014) –

Miss Kaye Longhorn – Cohen Cramer Solicitors
(apparently now departed employment)
Miss Emily Slater – Cohen Cramer Solicitors
(apparently now been fired) aka Miss Emily I-am-the-law Slater
Miss Gemma Bowkett – Cohen Cramer Solicitors
(apparently now departed employment)
Mr Michael McDonnell – Cohen Cramer Solicitors

Mr Matthew Richardson – Barrister @ Henderson Chambers aka Mr Matthew tweedledum Richardson (Ex-UKIP General Secretary … that didn’t last long!)
Mr Adam Richardson – Barrister @ Warwick House Chambers
aka Mr Adam tweedledee Richardson

Claimants Legal Team (post July 2014) –

Miss Clare Painter – Group Manager, Gateway Homes UK Ltd aka Jane Wood (trying to act as a McKenzie Friend)
Mr Nick Statman – acting as a Litigant In Person

Defendant –

Mr Stuart Brown – acting as Litigant In Person, represented at Trial by Miss Omar

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