APPROVED JUDGMENT (contd… Pages 21 to 25 of 75)
89. Allegation (4) is the email of 16th February 2012 sent to Mr Barber. In this email, the complaint is that the defendant used the following words:
“As I said, what becomes public, if anything, will be up to Mr Statman.”
90. The claimants make and made the same complaint to the effect that those words constituted a breach or threatened breach of the clause. The response of the defendant, articulated by Miss Omar, was the same as the response to the previous allegation, namely, the email was not capable of constituting an actual or threatened breach of the clause and has no substance capable of justifying an injunction, whether it be interim or permanent.
91. Allegation (5) is based on the next sentence in the same email of 16th February 2012; the defendant wrote:
“I am sure it will cost him [that is Mr Statman] more than the £140,000 my territories cost to close down.”
The claimants complain that that sentence constituted a wrongful disclosure as it went to ‘the success’ of the defendant’s operation.
92. The defendant denied that this sentence constituted a breach or threatened breach of the confidentiality clause. Miss Omar submitted that this statement could hardly constitute a breach of the clause and clearly did not reveal material information about the quality of standards and services provided by the claimants or, indeed, by the defendant and she submitted that, in any event, for this allegation could not constitute a basis for a permanent injunction.
93. Allegation (6) is the final paragraph of that email (that is, the claimants carved out of this email three separate allegations). The offending words complained of are as follows:
“They have taken [it states 16 but the defendant in fact wrote 14] months to resell two areas of mine that have had zero interest and how can they sell them anyway based on a negative trading history in a two year period? Certainly not what I paid.”
Again, the complaint is that those words offend the confidentiality clause as they concern information revealed to a third party, that is Mr Barber, a fellow franchisee, as to the operation of or the success and terms of his, the defendant’s, own business.
94. The defendant, in his response within the schedule, takes issue with the claimants as to what was meant by “the system” which is undefined in the contract and he referred to the operations manual which he asserts was never issued, despite promises to do so. Miss Omar submitted that these words were innocently expressed to a franchisee only. There was no threat to publish outwith the organisation and that, in any event, assuming that the clause was intended to bar one franchisee from revealing this kind of information about his contract to another franchisee, this is not a breach, Miss Omar submitted, which would justify a permanent injunction, not least having regard to the fact that the defendant has now for two years ceased to be a franchisee and there has been no further communication between him and, for example, Mr Barber or otherwise.
95. Allegation (7) is taken from another email from the defendant to Mr Barber, dated 19th February 2012. The complaint is that the defendant wrote:
“If he (Mr Statman) does decide to terminate, then I will assess what is released and how to other franchisees and to the public at large. I shall stand up to them for as long as I can and cost them as much as I can. I have nothing left for them to take.”
The claimants’ complaint is that this was a threat to disclose confidential information to the general public about their system.
96. The defendant’s response was that there was nothing within this email to justify the assertion that any threat to disclose confidential information. Miss Omar invited the court to look at this statement in context and to note that no specific information was identified, that it was conditional upon the reaction of Mr Statman in any event and that it was mere speculation to suggest that confidential information might be revealed. This too was an allegation which was relied upon to establish the need for an ex parte urgent injunction, on the basis of threatened disclosure.
97. Allegation (8) is taken from the same email, which is the final paragraph which reads as follows:
“As far as recent completion ratio, one completion in 15 weeks despite having between 15 and 20 signed contract in progress during this time. Five failed in that period too. Not pre-sold so died. Have had some very angry vendors on the phone as well. All have had moves booked and paid for as last minute GW drop-off by 10 to 15K. Usual practice when they have to buy themselves. Total average time for a completion is still between 12 and 14 weeks.”
The complaint here is that this was, again, information relating to the defendant’s own operation and the (lack of) success of his franchise revealed to a third party, that is, a fellow franchisee. The response from the defendant and the submission of Miss Omar was the same as that in respect of the previous allegations.
98. Allegation (9) arises out of the lengthy email of 24th February 2013. This includes several allegations, that is, from (9) to (16) inclusive. It is an email sent by the defendant to the franchisees and copied to the claimants. It is marked “without prejudice”. The defendant in his response takes issue with reliance upon this email because he has marked it “without prejudice”. That was a mistake made by the defendant, a litigant in person, who ought to have known that, as Miss Omar conceded, simply putting the words “without prejudice” did not render the document privileged from production. It may be that it was marked “without prejudice” because the defendant feared that, in relation to this particular email, he might have been overstepping the mark. This email, or parts of it, appear to differ from the earlier emails in that at least it appears to contain a threat to publish information which might be within the confidentiality clause.
99. Allegation (9) concerns this sentence:
“I can only presume trying to sell at least six loss-making franchise areas that have just sent someone bankrupt.”
The complaint is that this again is a reference to the lack of success of his own franchise and constitutes (material) confidential information about the business. The defendant’s response and the submission of Miss Omar followed the earlier responses.
100. Allegation (10) is taken from the second page of this email which, in summary, refers to the fact that an offer had been made by the claimants to the defendant to settle their dispute. In it, the defendant referred to an offer of £15,000 cash in relation to outstanding sums claimed based on an average or risks basis, more particularly explained by Mr Nick Statman at the meeting on 10th October 2011. An agreed transcript of that meeting has been put in evidence. The defendant has also put in evidence the audio recording of that meeting to support his contentions as to the content and, in particular, the (disputed) conduct of the second named claimant, Mr Malcolm Statman.
101. So far as this particular allegation is concerned, the complaint in the schedule is that the defendant is in breach by disclosing information to third parties about the operation and success of his own franchise in referring to the discussions concerning offers to settle made in a meeting said to be confidential. However, in closing submissions, Mr Richardson made the realistic concession that whereas the defendant had been asked by the claimants to treat the meeting of 10th October 2012 as confidential and to keep the fact of any offer to himself, the fact that the defendant then went against that understanding could not constitute grounds for a claim for an injunction or a breach of the confidentiality clause. However, Mr Richardson relied upon that conduct of the defendant as being conduct consistent with a person who does not have respect for confidentiality clauses.
102. Allegation (11) arises out of the same email, in which the defendant wrote:
“For example, in September, I had a double completion from a couple selling two properties and was only paid out on one as there was not enough money in the joint deal. On another occasion I was told to accept £500 or the deal wouldn’t complete.”
The claimants’ complaint is that this is yet again a breach of the clause, in that the defendant revealed to a third party information concerning his own franchise. Mr Richardson clarified the claimants’ position by placing specific reliance on clause 22.214.171.124 and the prohibition on making any reference to information relating to the standards of service provided. Miss Omar repeated her earlier submissions in answer to this allegation.
103. Allegation (12) is the following sentence [after allegation (11)]:
“It is difficult to walk away from an investment of over £200,000 and many, many hours of work for zero pay in that time but enough is enough. 22 months later, I am still losing money every month, even discounting the franchise fees i.e. an operating loss from six areas.”
“I have had two completions since 1st December 2011. That is in three months despite having between 15 and 20 plus signatures on contracts at any one time during that period and, of course, with several failures.”
Again, the same complaint is made, namely, this is information relating to the defendant’s franchise to a third party and which may impact on the quality of services provided not only by him but also the claimants.
104. The defendant’s response was that this was not in breach of any part of the confidentiality clause. Miss Omar submitted that this was not information which constituted a breach of the clause, particularly as it passes internally between franchisees. Miss Omar again referred to the fact that when these emails were passing between franchisees – to the knowledge of Mr Nick Statman – it had not occurred to anyone, including Mr Statman, that comments of this kind within internal emails were in breach of their confidentiality clauses.
105. Allegation (13), a little further on in the email:
“I am an even bigger fool for purchasing two additional regions on the back of, on paper anyway, a good start. That is signing twelve contracts in six weeks only for ten of those to have failed three months later.”
The claimants again complain that this is another part of the defendant revealing information about the success or not of the operation or of the terms of his own franchise. Miss Omar repeated her earlier submissions. The information revealed in this internal email, viewed in context, could not justify the granting of an injunction.
106. Allegation (14) appears and arises in mid-sentence on the next page of the same email:
“I have had one completion out of 33 done in under four weeks.”
Again, the same complaint is made as in the previous allegations under this email and the same response is made by the defendant and Miss Omar.
107. Allegation (15) is the allegation which, I assume, persuaded Butterfield J to grant the initial interim injunction. The defendant concluded his lengthy email thus:
“The details surrounding Gateway Homes, Gateway Homes franchise and Gateway Homes people and operation and my bankruptcy will not go unreported in the press. I think it best to warn you in advance.”
The claimants complained that this was a clear threat to reveal to the press confidential information about the system and, in particular, their business operation. The defendant appeared unable to accept in the witness box (see earlier) that this part of the email carried with it a threat to ‘go public’ about individuals within the company and its business operations and implied he had in mind breaching the confidentiality clause.
108. The defendant’s response in the schedule was to refer to the OFT report and to assert that that report contained pretty much ‘the details surrounding’ the claimants’ system. Miss Omar submitted that this particular allegation could not constitute a threat. It was not specific enough. I am unable to accept that submission. It seems to me that, this particular allegation stood out and differed from the previous allegations which were, frankly, lacking in substance individually or cumulatively. The email was written when the defendant was plainly disgruntled with the claimants, in particular the Statmans. He was aware of the public complaints about the BMV sector and in particular, the claimants and the concluding remarks in the email plainly referred to the details of their operation. The claimants were not to know at that stage how far the defendant’s threatened intended disclosure would go. Whilst the defendant asserts that he had in mind no more than the assertions already in the public domain [that is the complaints set out in the two press reports and the OFT report and, later the BBC programme] the claimants were not to know. It was in those circumstances that, on balance, that there was a factual basis to at least seek clarification and/or an ex parte injunction. The question, however, is whether there is evidence before me now which supports the granting of a permanent injunction.
109. The final allegation arising out of this email is allegation (16) which it is alleged, in the schedule of allegations, that there was attached to the email a letter which was sent to the other franchisees, entitled “Franchisee bankruptcy notification”. The complaint is that the defendant indicated in that letter the amount of outstanding arrears and payments made in accordance with his agreement(s), (that is, confidential financial information relating to his account with the claimants).
110. The document in fact presented to the court was the letter dated 19th February 2012 which is addressed, in fact, to Mr Statman personally and which does give the kind of information in general terms referred to within the schedule. It refers to a grand total of loss accrued under the agreements, according to the defendant, of just over £93,000. The defendant, supported by Miss Omar’s submissions, denies that he has disclosed any confidential information or that details of his alleged loss is within the clause in any event.
111. Allegation (17) is dated 22nd March 2012 and is a blog posted on “Stuartsblog.org” entitled, “Gateway Homes left me a wreck too.” This blog, it is alleged, disclosed terms of the defendant’s franchise agreement by referring to the fact of its duration and termination. The blog states:
“Tony Barlow gave up his franchise with Gateway Homes only a few months after he started back in 2010. Wind forward the clock and I find myself in exactly the same state only probably ten times worse health wise and financially. For me the Gateway Homes franchise was a total career change following my son’s serious illness. Property was an industry that always appealed interested me and after three months of what I thought was an adequate research into the company and due diligence through a solicitor because of the level of investment that I needed to borrow, I took the plunge and invested. Oh, how I rue the day I signed on that dotted line and even more so when I committed to purchase two additional areas four weeks later as the initial signs were more than promising and the franchise was to live up to its marketing.”
The blog continued and referred to the fact of termination and the length of duration of his agreement(s) thus:
“Suffice to say at the moment, 22 months on, I am no longer a franchisee of Gateway Homes having had my contract terminated by Gateway Homes National Franchise Limited earlier this week, Tuesday 20th March 2012.”
The defendant continued:
“I shall be extending my blog over the coming weeks to part with some lessons learned, some pitfalls to watch out for and maybe some pearls of wisdom in franchise operation and law. After all, I now have time on my hands as I’m now officially unemployed. Gateway franchise has made me physically ill over 15 months with a severe stomach complaint directly through stress, worry and frustration.”
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
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 –
CXI 92 LIMITED
KINGSBRIDGE AND CARTER LTD
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
Mr Stuart Brown – acting as Litigant In Person, represented at Trial by Miss Omar