Breach - Oral contract - First defendant selling popular sauce

Bailey and another v Graham and others: Chancery Division (Judge Pelling QC (Sitting as a Judge of the High Court)): 25 November 2011

The first defendant purported to be the inventor of 'Reggae Reggae Sauce', a popular Jamaican-style jerk sauce (the sauce). He had achieved backing for the large-scale sale of the sauce after an appearance on the television programme 'Dragons' Den' in February 2007. The second defendant company exploited the 'Reggae Reggae' mark in relation to products and activities other than the manufacture and distribution of the sauce. The third defendant company controlled the rights to the sauce and marketed its manufacture and distribution.

The first claimant was the proprietor of a cafe in Brixton, London. The second claimant was a friend of the first claimant. From 1993, the first claimant and first defendant jointly operated a stall at the Notting Hill Carnival, from which they sold food including jerk chicken cooked in the sauce. The claimants alleged that the first defendant had stolen the recipe for the sauce (the recipe) from the first claimant, in breach of contract and/or in breach of a duty of confidence.

The claimants submitted that the recipe had originally been a secret known only to the first claimant, which he had created in Jamaica before coming to the United Kingdom in 1986. They submitted that in January or February 2006, an agreement had been made between the claimants and the first defendant (the agreement) whereby they would together exploit the recipe and share the profits of doing so equally as follows: the first claimant would supply the recipe, the second claimant would supply funds for marketing the sauce and the first defendant, who they submitted was not a skilled chef, would carry out the marketing.

They further submitted that the first claimant had demonstrated the making of the sauce following the making of the agreement in the presence of, inter alia, H, a chef from a rival cafe, and the first defendant (the demonstration). The first defendant submitted that he had been working on a recipe of his own for a jerk sauce from 2004, and that he had not been interested in the demonstration and had left it after only a few minutes. In considering the issues, regard was had to, inter alia, documents purporting to give quantities and ingredients for the recipe.

The claim would be dismissed. (1) Neither the claimants nor the first defendant were to be regarded as entirely reliable in their evidence. However, it was clear that the claimants had provided contradictory information. Not only had they failed to prove the demonstration that they had alleged as part of their pleaded case but, had any demonstration occurred, it had, on the balance of probabilities, taken place as the first defendant had stated.

The fact that, on the evidence, there had been no proper agreement between the parties as to how the sauce would be manufactured further supported the conclusion that there had been no agreement between them at all. The claimants had not behaved in a manner that suggested that they had been business partners of the first defendant, in that they had failed to appear with the first defendant or assist him in the preparation for his appearance on the Dragons' Den programme.

Between the demonstration and the Notting Hill Carnival in August 2006, the first claimant had made no inquiries of the first defendant as to testing or production of the sauce, and had made no attempt to discover how much had been sold or to instigate any meeting of the supposed partners in the venture. At no point had the second claimant asked for a share of the profits of the business on which, on his case, he was a partner. His conduct had been inconsistent with him having genuinely believed the agreement to have existed. Further, if the key attraction of the sauce was its flavour, there was no logic in the claimants having given the secret of its manufacture to someone who, as they claimed, was not a skilled chef (see [88]-[98] of the judgment).

The claimants had failed to establish the agreement for which they contended. The claim would fail to the extent that it was based on an alleged existence of an oral agreement (see [99] of the judgment).

(2) In order for the claim for breach of confidence to succeed, the first claimant had to demonstrate that the recipe was imparted to the first defendant in circumstances importing an obligation of confidence (see [102] of the judgment). In the circumstances, the first claimant had no prospect of satisfying the requirement that he show that the recipe was imparted to the first defendant in circumstances importing an obligation of confidence in the light of the findings already made by the court.

No other basis by which it could be alleged that the recipe had been supplied to the first defendant in circumstances importing an obligation of confidence had been pleased. On that basis the claim would fail (see [103] of the judgment). The claim for breach of duty of confidence would fail (see [110] of the judgment).

Coco v AN Clark (Engineers) Ltd [1969] RPC 41 applied.

Ian Glen QC and George Hamer (instructed by Simons Muirhead & Burton) for the claimants; Mark Vanhegan QC and Chris Aikens (instructed by EMW LLP) for the defendants.