CSS Ltd; Christopher Ernest Inns v Nautech Services Ltd

JurisdictionJersey
CourtCourt of Appeal
JudgePerry JA,Martin JA
Judgment Date30 January 2015
Neutral Citation[2015] JCA 21
Date30 January 2015

[2015] JCA 21

COURT OF APPEAL

(Unknown)

Before:

James McNeill, Q.C., President John Martin, Q.C., and David Perry, Q.C.

Between
CSS Limited
Christopher Ernest Inns
Appellants
and
Nautech Services Limited
Respondent

Advocate O. A. Blakeley for the Appellants.

Advocate E. Moran for the Respondent.

Authorities

Nautech Services Limited -v- CSS Limited and Others [2014] JRC 159.

Pell Frischmann v Bow Valley Iran Limited [2008] JCA 146.

Pell Frischmann -v- Bow Valley Iran Limited [2008] JLR 311.

AG v Evans [1965] JJ 527.

AG v Edmond-O'Brien [2006] JLR 133.

Thomas Marshall Limited v Guinie [1979] 1 Ch 227.

Application for leave to appeal against the judgment of the Royal Court dated 26th August, 2014.

THE PRESIDENT:
Introduction
1

The appellants appeal from a judgment given on 26 August, 2014, by the Samedi Division of the Royal Court (Clyde-Smith, Commissioner, with Jurats Kerley and Blampied). In the proceedings which gave rise to that judgment the appellants were, respectively, the first and fourth respondents to a representation made by the present respondent (“Nautech”). By the judgment the second appellant was held to be in contempt of an order for interim relief restraining infringement of copyright in confidential information pending trial and the first appellant was held vicariously liable for that contempt.

Background
2

Nautech, a company incorporated in Jersey in 1992, provides services by way of placing specialist personnel in the maritime and seismic field. Over the years it has built up an extensive database of personnel in respect of whom it has independently verified their internationally recognised qualifications and safety certification. The second appellant was for a number of years employed as the operations manager of Nautech, being responsible for the Jersey office, the provision of personnel to clients, the IT systems and staff.

3

The first appellant was incorporated in February 2013 and in the next month two key personnel resigned from Nautech to join the first appellant. Following that event, Nautech issued various proceedings in April 2013. Shortly before those proceedings were raised, the employment of the second appellant by Nautech was suspended and on 28 May, 2013, he was dismissed as an employee. He subsequently worked for the first appellant, but as an agent rather than as an employee.

The Interim Injunction
4

An interim injunction was obtained at an early stage and subsequently varied. In its original terms it sought to prevent infringement of Nautech's copyright in a specified database or the making of further use of Nautech's confidential information and/or trade secrets. After amendment by the court on 7 May, 2013, the order prohibited the respondents “from infringing [Nautech's] copyright in any of [Nautech's] confidential information and/or trade secrets or any part thereof for any purpose …”

5

A question of construction of the order arose in the proceedings below us before the Royal Court which determined, at paragraphs 24 to 26, that in the contempt proceedings before it, Nautech had to show firstly that its confidential information contained within specified databases had been used and secondly that such information was subject to Nautech's copyright. That construction is not in issue in the appeal before this court. As is shown in those paragraphs, the specified databases were restricted to the works identified in Schedule F of the amended Order of Justice.

The Alleged Breach
6

As matters eventually stood before the Royal Court, the instances of alleged breach comprised five emails sent by the second appellant to individuals on separate dates between June 2013 and January 2014; the second appellant using email addresses sourced from his own Gmail account.

The Findings Below
7

Insofar as relevant to this appeal, the Royal Court found as follows.

8

The Royal Court found that it was not in dispute that in or around June 2012 contacts held in a BlackBerry device used by the second appellant were exported to a Jersey Telecoms laptop and from there exported to the personal Gmail account of the second appellant. From that Gmail account the contacts were exported to a new iPhone and, quite separately, to a CSV file (an electronic file storing, among other matters, email contact details and often used transfer data from one software utility to another) and placed in a folder in his Outlook mail box. A few minutes later a second export of default contacts was made to a personal storage electronic file used by the second appellant's Microsoft Outlook e-mail system Mailbox which was maintained as part of his work with Nautech and could be accessed from his Workstation at Nautech (paragraph 46).

9

The Royal Court found that the second appellant had no memory of why the separate export of contacts to the two files had taken place and considered it unlikely that those transactions would have taken place without his involvement (paragraph 47).

10

The Royal Court found it clear that the contacts held on the second appellant's Workstation at Nautech were amongst those exported to his Gmail account and had come from his Workstation via his BlackBerry. The Royal Court, whilst considering that the BlackBerry contacts could, in theory, have been sourced from somewhere outside Nautech, was satisfied beyond all reasonable doubt that the contacts contained on the CSV file were work contacts originating ultimately from his Workstation (paragraph 49).

11

The Royal Court noted that in evidence the second appellant was unable to give any other explanation as to how the contact details had got onto his Gmail account (paragraph 59).

12

The Royal Court accordingly was satisfied to the criminal standard that in relation to the specified emails the second appellant had used information that had derived from his Workstation at Nautech.

13

In determining whether or not Nautech had copyright in confidential information the Royal Court determined that, in the light of the business which Nautech and its competitors operated, all such businesses would regard their database of contractors as being central to their business, of real value, and confidential (paragraph 66).

14

Turning to the copyright issue, the Royal Court noted the evidence of the second appellant as to the judgment required on his part in arranging the database from the incoming emails and their content (paragraph 79). It reached the view that the exercise of skill and experience brought to bear by the second appellant in the process was substantial (paragraph 80). It concluded that the work of selection and arrangement was an intellectual creation and that the database qualified as original literary work in which copyright subsisted (paragraph 81).

Grounds of Appeal
15

The grounds of appeal, as finally presented in oral argument are, in the main, challenges to the findings in fact by the Royal Court. Put succinctly they were as follows:–

  • (i) The Royal Court erred in its understanding of the evidence and the case for the Representor.

  • (ii) The evidence did not support a finding that the second appellant's Gmail contact list was sourced from his Nautech Workstation.

  • (iii) The court erred in considering whether use of the email addresses constituted a misuse of confidential information as it did not consider whether the names and email addresses themselves were confidential.

  • (iv) The Royal Court had not found that the second appellant had used a confidential directory.

  • (v) To the extent that the court did implicitly find that there had been misuse of a confidential directory, the Royal Court had failed to take into account (a) uncontested social media evidence, (b) existing connections which the second appellant had with certain of the contractors and (c) whether the June 2012 transfer was authorised by Nautech.

  • (vi) The Royal Court erred in law in failing to ask whether the relevant information was in fact already in the public domain or within the second appellant's own knowledge and experience.

16

Turning to copyright issues the appellant's grounds were:–

  • (i) That the Royal Court had erred in failing to make factual findings as to which of the databases listed in Schedule F it was considering.

  • (ii) The Royal Court had been in error in proceeding on the basis that the database in question was the second appellant's own Outlook in box.

  • (iii) The Royal Court was wrong in determining that the content of the Outlook in box constituted individual intellectual creation. The evidence did not justify a finding that the finding of emails went beyond the use of significant labour and skill.

  • (iv) The court erred in finding that copyright in the database had been breached as it had not found that the email addresses themselves were protected by copyright and that the email addresses comprised the whole or a substantial part of the database.

  • (v) The Royal Court had failed to consider whether at the time that the names and addresses were initially copied to the second appellant's Gmail account, such copying was done with the consent of Nautech such that subsequent use of the names and addresses by the second appellant would not be a breach of copyright.

Appellate Interference with Findings in Fact
17

This court, on numerous occasions, has indicated the limitations which face an appellate court which is asked to interfere with findings in fact reached by the court of first instance; particularly when that court has had the opportunity to consider oral testimony, the terms in which that testimony is couched and the demeanour of witnesses. In Pell Frischmann v Bow Valley Iran Limited [2008] JCA 146, [2008] JLR 311 the judgment of the court, given by Beloff JA, states:–

“107. It is well established that in a case where findings are made dependant on the view that the Royal Court has formed of the various witnesses, the circumstances in...

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