Nick and Malcolm Statman vs Stuart Brown Verdict Transcript (23/04/2014)- Pages 41 to 45 (of 75)

APPROVED JUDGMENT (contd… Pages 41 to 45 of 75)

174. To go further and restrict any discussion or the revealing of any detail or prohibiting any kind of exchange of experiences in the field (or plain moaning) between franchisees would neither be realistic nor reasonable and, in my judgment, a duty of confidentiality extending that far would be impracticable and itself likely to be a source of disharmony amongst franchisees.  It was for that reason, I have no doubt, that the claimants never suggested during the passing of the internal emails between franchisees (copied in some instances to Mr Nick Statman) that the information now complained of was or might be in breach of the clause and why, in any event, they took a pragmatic approach when they were willing to accept the terms of the undertaking offered by the defendant, it appears with some input from Keith J on 19th March 2012.

175. This explains why, when considering the alleged breach or ambit of clause 7.1.14 as advocated by Mr Richardson in his closing submissions, there were so many emails, some of which were adduced in evidence, passing between the franchisees and with the knowledge and, as I have said, on some occasions with participation of Mr Nick Statman.  That evidence assists in identifying the boundary imposed by clause 7.1.14 certainly as between franchisees. The kind of information revealed within the internal emails now complained of was not considered to be within the reach of the clause. Material information from the franchisee agreements was not mentioned.  There was, as I have indicated, a legitimate purpose to seek to retain confidential, as between the individual franchisee and the franchisor, the material details of his own remuneration package.  It is to be noted in this case that at no stage has the defendant ever hinted at, nor has it been suggested that he would, a wish to disclose to other franchisees, for example, his own personal remuneration package, that is either the sums which he agreed to pay or, indeed, the sums which he was receiving, although it is quite true that he did, in the terms referred to within those blogs and emails refer to the losses which he had made.

176. As for the ambit of the express terms within the franchise agreement at clause 7.1.14, I am satisfied that clause is not so widely drafted as to be meaningless.  It is not to be restricted to circumstances in which the franchisee seeks to set up on his own business.“For your own benefit” is taken to mean what it says and could arguably include another ‘benefit’ of the kind Mr Richardson submitted, namely to bolster or further a dispute which the franchisee may have with the franchisor.  It is clear that the clause is restricted to the conducting of “the business” which is defined as the franchisee’s business and that, in cross-examination, the defendant did not deny that he was bound by these clauses.

177. Mr Richardson placed particular emphasis, however, on the effect of clause  The issue is whether the defendant has disclosed or, unless restrained, threatens to reveal information which constitutes knowledge concerning the system.  In particular, the claimants argue that the information contained within the emails and/or blogs, including those written by the defendant to other franchisees directly related to the standards of quality and services offered by Gateway Homes.

178. So far as clause is concerned, the franchisee is obliged to keep ‘the agreement’ confidential.  Mr Richardson submitted that that includes keeping secret the fact of the existence or termination of the agreement. In my judgment that construction is to be rejected. ‘The agreement’ means the (material) terms or content of the agreement. It was not within the contemplation of the parties to prohibit any public reference to the mere fact of existence of a franchise agreement. The date of termination itself, or the duration of such an agreement is not within the reach of the clause. Even if it were, on the facts of the present case it would not be necessary, just or appropriate to grant a permanent injunction to prevent any further risk of disclosure of innocuous facts such as those complained on in these proceedings.

179. In my judgment, the starting point is to consider each of the alleged breaches of confidence and to consider whether any of the information complained of is information which is capable of being regarded as ‘confidential’ in light of the judicial guidance referred to earlier. If so, it is necessary to consider whether that information  was already in the public domain, otherwise than by breach of agreement by the defendant. It is also necessary to consider whether any of that information constitutes ‘knowledge’ concerning the system or comprises information relating to the material contents of the agreement.  Miss Omar submitted in answer to Mr Richardson’s submissions that no such confidential information of any kind, certainly none which is material, has yet been disclosed by the defendant and none had been threatened.  No details in relation to the claimants’ system have in fact been disclosed other than the complaints made by the defendant wholly in keeping with the information contained within the public domain and, in those circumstances, there has been no breach.  In particular, she referred to the press articles, the BBC programme and the OFT report.

180. I have considered each of the 25 allegations complained of individually and cumulatively and I have paid particular regard to Mr Richardson’s submission that I should treat the defendant’s evidence with caution for the reasons I have indicated earlier in this judgment.

181. In my judgment, the claimant has failed to establish that any one of these allegations is sufficient whether in themselves or cumulatively to justify the granting of the permanent injunction sought.

182. I accept that, at the outset, the claimants were uncertain as to the intention of the defendant and that the concluding paragraph of the email of 24th February 2012 was sufficiently vague and sufficiently ominous so as to cause them to consider that some action was required (for example, see paragraphs 28 and 107 above). A letter before claim would have been the appropriate way to proceed in those circumstances if the claimants’ sole concern was the uncertainty as to how the defendant might proceed following the email or, on balance, having regard to the fact that the parties had had their roundtable meeting which ended unhappily, by seeking an interim injunction, again, if the sole concern was the uncertainty as to the defendant’s intentions. The latter approach would not have been appropriate if the claimants were predominantly concerned in simply  ‘gagging’ the defendant in a blanket manner because of his hostility towards them.

183. The claimants elected the latter approach. The terms of the injunction sought was granted without restriction at that stage.  It was granted, it seems to me, on the basis that the final email contained a threat of some kind and was written in circumstances in which the relationship had broken down and that there was a risk that he might engage in wholesale disclosure of information not already in the public domain. The other allegations initially relied on are and were insufficient to justify the continuation of an injunction in any event.

184. I am not satisfied that communications between individual franchisees in the form adopted by the defendant when emailing to Mr Barber or the other franchisees was of itself a breach of the confidentiality clause.  It was not a breach of the implied duty at common law.  Had the defendant gone further and had he sought to reveal his personal package with others in those emails, the position might have been different but at no stage did he do so. There is no evidence to justify the conclusion that unless now restrained by injunction the defendant would hereafter embark upon such conduct.

185. As to the breaches complained of concerning the defendant’s blogs and other publications, the gravamen of the complaint is that the defendant has referred to the duration and termination of the agreement and that he has, on occasions, referred to his poor performance. I am not satisfied that those matters constitute disclosures which put the defendant in breach of the confidentiality clause. Nor do they constitute a breach of the  duty of confidentiality at common law.  In my judgment, the mere fact that the defendant, in passing, referred to the number of months when his agreement lasted or referred to the date when his agreement was terminated is insufficient to trigger the restrictions imposed by clause 17.1.14 and did not, in those circumstances, constitute a breach. Mr Richardson did not explain why the claimants might have a legitimate purpose in keeping confidential the existence of an agreement, its duration or its date of termination. In any event, in those circumstances the question whether damages would be an appropriate remedy would need to be addressed.

186. The same is true in relation to the allegations based upon the public apology to Mr Haywood or, indeed, the comments made by the defendant in his witness statement which deal with allegations (22) to (25).  In my judgment, there is no question of the defendant in those circumstances breaching the confidentiality clause.  He was entitled, for example, to post his comments on third parties’ websites which relate to information already revealed in the public domain in any event.  His comments did not stray into matters of confidence and the assertion in Mr Richardson’s closing submissions that these comments constituted an attack on the standards of service offered by the claimants is rejected.  In my judgment, those comments were not within the reach of those particular clauses or, indeed, at common law.

187. Furthermore and in any event, standing back, looking at each of these allegations cumulatively and individually, I am not satisfied that there exists any proper basis for the court to grant a permanent injunction. Leaving aside the email of 24 February 2012 in which the defendant did warn or threaten to go public, in unspecified terms about the claimants staff and their operations, the remainder of the allegations relied on are insufficient, individually or cumulatively to justify such an injunction, or indeed, an interim injunction. The information or ‘knowledge’ complained of does not appear to be within the ambit or reach of the clauses in question. In any event, the nature or substance of the allegations do not render it necessary or just, for the proper or proportionate protection of the claimants’ rights of confidentiality, to grant a permanent injunction. That is not to say that the defendant now has a free rein to publish what he likes, at least not without risk of being sued again (but next time on a proper basis for breach of confidence) as the confidentiality clause continues after termination. The lack of substance to the overwhelming majority of the allegations complained of betray an absence of objectivity on the part of the claimants in the pursuit of these proceedings. The fact that the claimants may, understandably, be particularly sensitive over the press reports, the OFT report and the BBC report and feared that the defendant would rekindle public interest in them is not a sufficient basis to justify these proceedings nor a permanent injunction.  In any event, the ultimate decision, in exercising the discretion to grant the equitable remedy sought would be made in light of the totality of the evidence, in particular, the claimants’ conduct.

188. I ought to add that the claimants’ complaint, of reference by the defendant in an email to their ‘franchise 360 forum’, is another example of the unrealistic approach adopted by the claimants.  It may be that the claimants were, at the outset, concerned that they did not know what might be revealed if the perceived threat was followed through but the franchise 360 system was clearly well known to all franchisees and used by them and, in my judgment, there was no justification for complaining, under guise of breach of confidence, about that particular reference by the defendant in his internal email in these proceedings.

189. It follows that I refuse to grant a permanent injunction in this action.  Had the claimants established a sound evidential basis which might permit the granting of such an injunction I should have declined to exercise my discretion in their favour given their conduct in any event.

190. As appears from the affidavit of the claimant’s solicitor, Miss Emily Slater, dated 30th October 2012, in which, pursuant to an application issued on 29th October 2012, the claimants sought to have the defendant committed to prison for an alleged breach of the undertakings.  That application was eventually withdrawn as appears in the order of the court of 17th January 2013. The committal application lacked merit and could not have succeeded. It should never have been brought.

191. That committal application was issued two days prior to the commencement of the second action against the defendant, this time in the names of Mr Nick Statman and Mr Malcolm Statman, by claim form issued on 31st October 2012, in which a claim for injunction and damages for harassment under the Protection from Harassment Act 1997 was instituted.

192. The claimants applied on ‘short notice’ for an injunction to require the defendant immediately to remove all internet postings of which he was the author relating to the applicants ‘or their companies’ and the employees and officers of those companies and:

“(b) Shall not harass or otherwise contact the applicants either directly or indirectly by any means other than through the applicants’ solicitors.”

193. The matter came before Lindblom J on 2nd November 2012 when an ex parte injunction was made in reliance upon the witness statements filed by Mr Nick Statman of 30th October 2012 and Mr Malcolm Statman of 26th October 2012 which identified each of the publications on the part of the defendant about which complaint was made under the Act and which included emails and blogs, a number of which have already been referred to.

194. The upshot of the complaint according to the first claimant’s  witness statement was that he had been rendered utterly frightened and terrified by the complaints that the defendant had made to the police, the OFT and the ASA and, potentially, to other similar organisations. It was stated that the effect upon him by reason of reading the defendant’s written material was such as to affect dramatically his life resulting in insomnia due to anxiety and an exacerbation of his underlying Crohn’s disease.  No medical evidence of any kind was filed in support of those assertions.

195.  Mr Malcolm Statman provided a witness statement to the court dated 26th October 2010 in which he confirmed that he had observed the adverse effects of the defendant’s publications upon his son which resulted in a deeply upsetting reaction by him, Mr Statman (Snr).  He did not make any direct assertion of being affected himself by the publications complained of in that action.

196. The ex parte injunction having been granted, the matter came back before the court on 9th November 2012 before HHJ Thornton QC who continued the order in the same terms.  It is to be observed that nowhere in the order (or statements) are the applicants’ companies identified. Mr Malcolm Statman said in evidence that he is or was a director of about 13 companies. He was unable to recall which ones in the witness box.

197. The defendant filed a defence denying that he had published any matter capable of being regarded as an act of harassment. He denied that his conduct was such that he knew or ought to have known that it would have had the effect of harassing either or both claimants within the meaning of the Act and that if claimants had in fact suffered any such distress or anxiety such matters would have been due to the adverse publicity arising from, for example, the BBC ‘Inside Out’ programme to which I have referred, rather than his, the defendant’s, conduct.

198. Furthermore, by his defence, the defendant complained that the pursuit of the claim was aggressive and that the claimants, by their instructing solicitor, Miss Emily Slater, had procured his wrongful arrest by the Lincolnshire police at 1.30am at his home on 19th November 2012.  That particular complaint, at paragraph 10 of the defence, was reiterated by the defendant in his evidence and is referred to in his lengthy witness statement to the effect that it was he who had been intimidated and distressed by reason of the aggressive conduct of the claimants in both actions.

199. That is, he complained, these proceedings were orchestrated by or on behalf of the claimants as a means of oppression, namely, by bringing the non-disclosure action, followed by an application to commit without any proper basis, followed within days by the claim under the Protection from Harassment Act 1997, also followed up by a committal application, none of which was justified. Furthermore, as the defence pleaded, he argued, the claimants’ conduct was such as to result in the procurement of his unlawful arrest. Notwithstanding the order of 17th January 2013 the claimants commenced the second committal application, again without merit, and which was pursued aggressively on their behalf by letters being written to the court to insist that the matter be dealt on inadequate notice.

200. That (second) application to commit was supported by the third affidavit of Miss Slater, dated 20th February 2014, in which it was alleged that there were breaches of the order of  9th November 2012 as set out at paragraph 5 of her affidavit.

201. On 21st February 2014, HHJ Oliver-Jones QC upon hearing the case management conference summarily dismissed that second application to commit for non-compliance with CPR 81, PD, paragraph 16.1(3) (for wholesale non compliance).  There was a dispute between counsel before me as to what in fact took place before the learned judge on that occasion. Miss Omar indicated that the learned judge, whilst not formally ruling on the allegations alleged to have constituted a breach was nonetheless dismissive of them. Mr Richardson indicated that the learned judge had simply struck the matter out for the non-compliance with technical or procedural requirements.  I am not hindered in any way by that apparent disagreement and there is no need to consider it further.

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 –

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

Tagged with: , , , , , , , , , , , ,

Leave a Reply