Kieran Corrigan & Co Ltd v Timol

Factual and Procedural Background

This appeal concerns whether a company director can be held personally liable for breach of confidence for approving the marketing of a tax planning structure developed by others within his company using confidential information originally obtained from a third party. The appellant company, owner of the confidential information, claimed that the director should be strictly liable once he authorises acts involving misuse of that information, regardless of his knowledge of such misuse.

The appellant company, an Irish tax advisory firm, developed a tax saving structure involving a UK limited liability partnership (LLP) to secure enhanced corporation tax allowances relating to research and development (R&D) payments. The appellant engaged in preliminary discussions with a group of companies referred to as OneE Group and its directors, including the respondent director.

Confidential information was shared under a Non-Disclosure Agreement (NDA) during meetings in early 2014. Subsequently, OneE Group developed a similar tax structure (the "Nemaura structure") which the appellant alleged was derived from its confidential information. The appellant issued claims for breach of confidence and related torts against OneE Group, its directors, and others, including the respondent director.

The trial before the Deputy High Court Judge was limited to liability, with damages to be assessed later. The Judge found that some defendants misused the appellant's confidential information, but the respondent director was not liable as he was not personally involved in the development and did not use the confidential information when approving the marketing of the structure.

The appellant appeals the finding of no liability against the respondent director and seeks a retrial based on newly discovered documents allegedly showing greater knowledge and involvement by the director.

Legal Issues Presented

1. Whether a director who authorises the marketing of a product developed by others using confidential information can be held personally liable for breach of confidence without actual knowledge of the misuse.
2. Whether the trial judge’s factual findings regarding the director’s knowledge and involvement should be set aside based on newly discovered evidence.
3. Whether the newly discovered documents justify admitting fresh evidence on appeal and ordering a retrial.

Arguments of the Parties

Appellant's Arguments

• The director should be strictly liable for breach of confidence once he receives confidential information and subsequently authorises acts involving its misuse, regardless of his awareness of such misuse.
• The trial judge erred in factual findings by concluding the director was unaware of the technical details and misuse of confidential information when approving the marketing.
• Newly discovered documents show the director had knowledge of complaints about misuse and was more involved in the technical aspects, warranting a retrial.

Respondent Director's Arguments

• The director did not personally use the confidential information and thus cannot be held liable for breach of confidence.
• The director’s focus was on commercial viability, not on technical details, and he relied on tax experts within the company.
• The newly discovered documents were not deliberately withheld and lack sufficient probative value to alter the trial outcome.
• The director denies knowledge of complaints and asserts that even if aware, he reasonably relied on assurances from colleagues.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed whether the respondent director could be held liable for breach of confidence without having personally used the confidential information. It reaffirmed the fundamental principle that liability requires actual use of confidential information by the defendant, even if unconscious, as established in Seager and Vestergaard. The director’s role was found to be commercial rather than technical, and his approval of marketing was based on broad commercial considerations, relying on tax experts for technical robustness.

The court acknowledged that the director received confidential information initially but did not use it personally in developing or approving the structure. Hence, primary liability did not arise. The court rejected the appellant’s argument that strict liability applies once confidential information is received and misuse authorised by others.

Regarding the newly discovered documents, the court applied established tests for admitting fresh evidence on appeal, including the Ladd v Marshall criteria. It found the documents were authentic, previously unavailable despite reasonable diligence, and likely to have had an important influence on the trial outcome. The documents suggested the director had greater knowledge of the technical details and complaints about misuse than the judge found, potentially affecting his state of knowledge and liability.

The court considered the balance between finality and justice, noting the documents were withheld due to non-disclosure by defendants, strengthening the case for admitting evidence and ordering retrial. It found no significant prejudice to the director in admitting the documents despite the delay in application.

Consequently, the court exercised its discretion to admit the fresh evidence and ordered a retrial limited to the director’s liability, focusing on his involvement and knowledge of misuse, while other issues remain undisturbed.

Holding and Implications

The court DISMISSED the appeal on Ground 1, upholding the finding that the respondent director was not primarily liable for breach of confidence based on the evidence that he did not personally use the confidential information.

The court ALLOWED the appeal on Ground 3, admitting the newly discovered documents as fresh evidence and ordering a retrial limited to the respondent director’s liability. The retrial will focus on whether the director knew or ought to have known about the misuse of confidential information when approving the marketing and implementation of the tax structure.

The direct effect is to reopen the liability issue against the director only, without disturbing other findings or the quantum phase already concluded. No new legal precedent was established; the decision primarily applies established principles on breach of confidence, liability, and admission of fresh evidence.