Nick and Malcolm Statman vs Stuart Brown Verdict Transcript (23/04/2014)- Pages 31 to 35 (of 75)

APPROVED JUDGMENT (contd… Pages 31 to 35 of 75)

131. Allegation (24) is dated October/November 2012.  This allegation is taken from the defendant’s witness statement at paragraph 8 in which the defendant stated:

“Following the striking out of my counterclaim, I decided on several courses of action:

(a) to publish a little of my research and e-book extracts on my blog as a precursor to the e-book launch just to gain some credibility within the industry sector.
(b) [This is the particular part about which complaint is made] to contact various authorities to try to get help from them as to what else I could do, particularly with regards to a new direct claim as opposed to a counterclaim.  These included:
(i) Trading Standards
(ii) The police
(iii) The fraud squad
(iv)  HMRC
(v)  Citizens Advice.
(vi)  The Advertising Standards Authority.”

132. The complaint is that the purpose of referring this matter to these bodies was to expose the claimants by providing confidential information, in breach of the confidentiality clause, as to how the claimants operate.  There is a problem for the claimants if this is truly the purpose or the basis for the complaint in relation to this particular allegation.  Mr Nick Statman accepted, correctly, in evidence that the defendant has a perfect right, as anybody else has, to make complaints or refer matters to any properly appointed regulatory body, such as the bodies referred to at paragraph 8(b). It is true Mr Statman added, again correctly, provided there was a factual basis to support those allegations rather than being, as he believed would be the case, unfounded and based on malice.

133. The claimants complain that in conceding, as he did, at paragraph 8(b) of his witness statement that the defendant intended to approach these bodies, it would follow that the defendant would embark upon a process of disclosure of confidential information or knowledge concerning the system as to how offers are formulated.  There is a difficulty here for the claimants if that is the real basis of their complaint within this allegation. That is, a company which has a business operation which accords with proper practices would be of no interest to any such regulatory body. Conversely, if allegations were made about the company which revealed apparent practices which offended proper practices the complainant would, as Mr Statman rightly conceded, be entitled to report his concerns to such a regulatory body. In short, it is difficult to justify this allegation within the context of the claim for a permanent non-disclosure injunction. The same consideration would not necessarily apply to the harassment claim, of course.

134. Be that as it may, so far as the defendant’s position is concerned, it was merely this: that he did, in evidence, confirm that he thought he had made online complaints to one or more of those bodies. He had no direct recollection as to what exactly was complained about, save that with HMRC he believed it may have been in relation to a VAT query. As for the complaint to the Trading Standards and the Advertising Standards Authority or the police the complaint concerned those matters which were already reported in the press and were in the public domain.  That is there was no suggestion from him, in any cross-examination or elsewhere, that he had reported details of his own particular franchise agreement or indeed anything which was not within the press reports.

135. The final allegation is allegation (25), which is taken from the witness statement at paragraph 8(c).  The defendant stated that, as at that date, 8th November 2012, he intended to contact imminently his local MP, the Law Society, the Office of Fair Trading and the RICS.  The claimants’ concern was that the defendant would disclose confidential information relating to their system beyond anything which was already in the public domain. The defendant again responded to the effect that he had a right to report matters upon which he had a reasonable and sincere belief, that his complaints were no more than those which have been referred to in the OFT report and that, in those circumstances, he has not been in breach of any of the clauses relied on. In fact, the defendant was unclear as to whether he did in fact carry out his intended further reports, for example, to his MP. It was noticeable that the bodies referred to in paragraph 8 (c) were the mainly those public bodies who were interviewed by the BBC for the purposes of their programme.

136. Miss Omar submitted whereas it does appear, according to clause, that the public domain exception which is applicable to confidential information does not apply to ‘knowledge concerning the system’, there is no evidential basis for the claimants to assert that the defendant had revealed or indeed had demonstrated any intention of revealing any such ‘knowledge’.  Rather his complaints, it would appear on the evidence, are founded on the known facts which have been reported upon by the media.

137. Thus, those are the allegations upon which the permanent injunction is sought.

138. So far as the evidence in support is concerned, I can deal with this much more shortly.  Mr Nick Statman gave evidence in accordance with his witness statement of 29th February 2012, used to obtain the ex parte injunction, and 7th March 2014 in relation to confidential information or the non-disclosure injunction. He also gave evidence in accordance with his statement of the 6th March 2014, to which I shall refer later, in relation to his application for a permanent injunction under the Act of 1997.  He confirmed that he was a sole director of the first claimant; that the second claimant in the harassment action, his father, was a former director; that both have a 50-50 shareholding; as I understood the evidence in relation to the second claimant, the first claimant recruited franchisees for the second claimant.

139. Mr Statman referred to the fact of previous proceedings issued by Mr Barlow which involved the Mirror article.  He pointed out that the article did not reveal the claimant’s trading methods, rather it revealed a synopsis of the franchisee’s complaints.  He asserted that the defendant had been given, contrary to his denials, the training manual and the operation manual, all of which had been disclosed in these proceedings.  He agreed that there had been a face-to-face meeting on 10th October 2011. He said he had offered, in effect, 100 percent of that which the defendant was seeking.  He was concerned that the email of 24th February 2012 did indeed contain a threat to publish private information and that the reason why a letter before claim was not written was that the defendant seemed intent on looking for trouble, the previous meeting having resulted in impasse.  He referred to the fact that knowledge which the defendant acquired would have been taken from their business manual.  He explained that the key to the success of their business model or operation was not the blanket offer, typically of 80 percent of the open market value. Rather, the key was the proper identification of the true, local open market value and it was in that respect that the claimants had developed their own know-how and research and a set of principles or criteria or factors which they would take into account in order to identify the appropriate open market value from which they could then, through their franchising scheme and their own business operation, make appropriate below the market value offers. That is, correctly assessing the open market value to which the reduction was  applied was the key to the success of their operation and also that of their franchisees.  Mr Statman’s concern was the defendant had made a threat in the email(s) to disclose the knowledge or information which he had acquired from the franchise.  He acknowledged that no such information had in fact been released (certainly not beyond that which I have recited from the schedule) but he said that was simply because of the fact that there has been in place the initial ex parte injunction followed by the defendant’s undertakings.

140. Mr Statman noted that the Mirror article did not reveal the claimant’s business model and that there was a distinction to be drawn between the nature of that information, including that in the Express article concerning Mr Malcolm Haywood’s complaint already in the public domain and their concerns about the defendant’s threats to disclose confidential information in light of the defendant’s hostile attitude and the breakdown of their business relationship.

141. He agreed that undertakings had been given to the OFT but explained the basis for that consistent with the public press release to which I have referred.  He denied that there had been any attempt in these proceedings to strangle the defendant’s ability to work at the outset or subsequently or to cause him intimidation or distress.

142. Mr Statman was taken by Miss Omar through the schedule. He was invited to explain what confidential information capable of being protected by the agreement itself was in fact being sought to be protected.  Mr Statman explained only in general terms  that they, the company, needed protection from disclosure of that which he regarded as confidential information because of the highly competitive nature of the sector or business within which his companies operated.  The claimants work to tight margins and it is necessary to protect the secret details of their own model or system.  Thus the essential point of concern to Mr Statman was that whilst the defendant had a right to report or raise concerns or complain to whoever he wished about matters, he could do so only if there was a foundation in fact and was not based on malice. What the defendant could not do, Mr Statman said under cross examination, was to betray confidences, that is their know-how and the workings of their business model. By the end of his evidence, however, it was not clear what sensitive information or knowledge was in issue since the only information revealed in the defendant’s publications or emails were either already within the public domain or appeared not to be material requiring the protection of an injunction.

143. Mr Malcolm Statman did not give evidence in relation to this matter, although he was, for a substantial period, a co-director with an intimate knowledge of the business model and, indeed, of the defendant.

144. Mr Statman (Snr) did give evidence, however, in relation to harassment and he gave direct evidence, as indeed did Mr Nick Statman, on the meeting of 10th October 2011 to which I have referred.  The defendant’s case on that meeting was put to both claimants (in the harassment claim) the gist of it being that, in the course of that meeting, Mr Malcolm Statman reacted in an aggressive, offensive and intimidatory manner by shouting at him and swearing in the course of that shouting, telling him to sit down, when he, the defendant, had got up to leave.  Mr Nick Statman denied that there had been any such aggressive behaviour by his father, Mr Malcolm Statman. In particular, he denied that there had been anything which might justify a subsequent allegation of intimidation or assault, verbal or otherwise.  Mr Malcolm Statman also expressly denied acting in that manner, although, as I understood his evidence, he did not deny that he may have used some swear words.

145. The meeting was recorded secretly by the defendant on his mobile phone. An agreed transcript of that meeting was adduced in evidence and used by all parties in cross examination. An authentic audio replay of that meeting was also adduced in evidence though not put to a witness in cross examination. I have listened to it. The transcript is accurate. It is fair to say that Mr Malcolm Statman, possibly out of character but nonetheless on that occasion clearly acted in an aggressive, offensive and intimidatory manner.  He did use the words complained of by the defendant. He did shout at the defendant evidently when he was getting up to leave and told him to sit down. He did shout swear words to make his point.  It is not possible to say whether the defendant’s manner was such as to give rise to some frustration on the part of Mr Malcolm Statman which in turn might explain why he blew his top. However, the defendant at all times appeared to conduct himself courteously and did not appear, from the recording to be at all responsible for Mr Statman (Snr)’s outburst. In short, the defendant’s description of that meeting is accurate. It is certainly possible that he was intimidated by Mr Statman (Snr) and that thereafter he ‘sat through’ the meeting to avoid further unpleasantness.

146. It is also true to say that Mr Nick Statman at all times conducted himself courteously in an attempt to engage with the defendant. However, I am unable to accept their denials as to the atmosphere at that meeting as complained of by the defendant. I accept the evidence from the defendant in relation to that meeting and its effect upon him. I accept that he may well have felt intimidated and obliged to sit and listen.  However, having listened to the whole of the meeting, on more than one occasion, it is fair to say that after Mr Malcolm Statman’s outburst the defendant did appear to engage a little more than he was inclined to accept in the witness box, as stated by Mr Nick Statman. I am satisfied that there was aggressive and unprofessional behaviour by Malcolm Statman which could well have  left the defendant with a lingering sense of grievance about the way he had been treated in that meeting by Mr Statmant (Snr).

147. The defendant’s evidence in chief was in accordance with his witness statements of 6th March 2014, 8th November 2012 and 16th March 2012.  The defendant was cross-examination at length and in detail by Mr Richardson.  The defendant accepted that he was fairly to be regarded as an expert in search engine optimisation and that he had, in fact, been shown the operations manual.  He had access to the information within that manual, although he insisted he had not been given a full copy, and that he had signed the agreement, he said without the copy in his possession but he did so on trust.  He said that the fact or identity of his territories was within the public domain by virtue of the nature of the work undertaken openly in public. Thus, Mr Haywood knew where the defendant operated and his transaction was subject to media reports. At no time did he regard this subject as being confidential.

148. He confirmed that the matters about which he was complaining in relation to his customers, or some of them, were matters which were in the public domain and which were, as reported, consistent with his own experience.  He was concerned that he did not make the money which he expected under the agreement.  He denied that he had written any email which could be described as being threatening or a threat to disclose confidential information.  As I have indicated, he stubbornly at one stage refused to accept that the final paragraph of the 24th February 2012 email could at the very least be read as being an intention to reveal or at least a threat to reveal.

149. Be that as it may, so far as the defendant was concerned, he denied that he took the action complained of as a result of being provoked by the conduct of Mr Nick Statman or the claimants.  He was taken to his witness statement at paragraphs 47 and 48 of 16th March 2012 in which he sought to explain his behaviour by reference to provocative behaviour by the claimants and, in particular, Mr Nick Statman.  The defendant denied that he was motivated by a desire to cause harm to the claimants or that he was engaged in any course of conduct which was vindictive or based on a vendetta. He specifically denied the fact that he restarted his blogs in October 2012 in vengeance against the claimants (who had secured the striking out of his counterclaim).  He was invited to explain why he covertly taped the meeting.  It was suggested to him that he was seeking to entrap the Statmans and that he knew full well that the meeting was to be treated in confidence yet he had no intention of respecting that confidence. It put to him that he had no intention of respecting the confidentiality clause in relation to the business operations of the claimant’s or the private knowledge which he acquired as a franchisee.  The defendant denied all of those matters.  It is true to say that at no time during that meeting did the defendant pose questions or steer the conversation in any particular manner or in any way to entrap the Statmans. Had the objective been to secure an admission or to trap them it would have been apparent from the audio/transcript. It was not.

150. The defendant was taken to a number of the allegations, though not all in number and I do not criticise Mr Richardson for that.  The purpose of Mr Richardson’s cross-examination by reference to specific allegations, such as, by way of example, (17), (18) and (19), was to highlight the fact that the defendant was adept in tagging in order to achieve a high ranking when searches were undertaken.  He accepted that that was his purpose but he saw nothing wrong in it.

151. It was put to him that he had used his tagging skills in a malicious way, at least in relation to the tagging of Malcolm Statman’s name to a BBC news report about the sale of the Jimmy Savile’s former penthouse in Leeds, which was, in fact, sold to Mr and Mrs Malcolm Statman.  In his evidence, Mr Malcolm Statman went further than his witness statement by asserting that this particular method of tagging caused him acute distress because a search of his name would immediately result in the searcher being taken by link to “Jimmy Savile paedophile.” Mr Statman indicated that he found it distressing that the defendant had created a link between his name and ‘Jimmy Savile paedophile’. He explained that it was a matter of concern not only to himself but to his son and also to their wider family. At first, this appeared to be a serious matter arising out of calculated conduct of the defendant using his IT skills.

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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 –

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

Blogger, Writer, SEO Consultant, Litigant In Person, SMM Consultant, Web Researcher

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