GK triumphs against Paymaster
The Privy Council has overturned a decision by Jamaica’s appeal court that GraceKennedy two decades ago stole Paymaster’s business plan and used it as the model on which it establish its own bill-payment firm, BillExpress.
“The board is persuaded that the Court of Appeal erred in overturning (Justice Roy) Jones’ conclusions on the case against GKRS(GraceKennedy Remittance Service) for breach of confidence, both because it has not been demonstrated that the judge disregarded relevant evidence or otherwise was plainly wrong in his assessment of the evidence and because the evidence on which the Court of Appeal relied does not support its conclusion,” the Privy Council, Jamaica’s court of last resort, said in a ruling handed down on Monday.
In the judgment written by Lord Hodge, the Privy Council ruled there was evidence before Justice Jones, “which entitled him to reach the conclusion which he did and there was not sufficient contrary evidence to allow the Court of Appeal to make the inferences which it did.”
BillExpress is operated by GKRS, which is a subsidiary of food and financial conglomerate GraceKennedy Limited.
Group CEO of GraceKennedy, Don Wehby, welcomed the Privy Council decision, which, had it stood, would not only see it paying out millions of dollars to Paymaster, but done serious reputational damage to one of Jamaica’s oldest and most iconic conglomerates.
“GraceKennedy Limited is happy that the Privy Council decided in our favour on this matter, affirming that GraceKennedy Remittance Services acted honestly and with integrity with respect to its dealings with Paymaster and the engagement of the developer of the software, Mr Paul Lowe,” Wehby said.
Paymaster officials were not immediately available for comment on the implications of the ruling to business, including on the matter of costs, which are yet to be assessed.
Paymaster is now a subsidiary of the Irish-owned telecoms giant, Digicel, but the dispute with GraceKennedy had its genesis in the mid-1990s when the business was a concept in the head of businesswoman and founder Audrey Marks, who is now Jamaica’s ambassador to the United States.
Marks had seen multi-payment billing operations in the United States and wanted to bring the idea to Jamaica. In 1994, she employed computer consultant Dr Maurice McNaughton and his company Jamaica Online Information Services Limited (JOL) to help in the development of the agency. McNaughton in turn brought on Lowe, a software developer, who had already developed cashiering software, CSSREMIT, which he was modifying to meet the requirements of clients, up to that point, on a non-exclusive basis. Essentially, Lowe retained copyright to the program.
While Marks apparently provided specifications to Lowe to customise the operations she had in mind, Paymaster had no written contract with Lowe specifically indicating any relinquishing of his copyright. The courts, at all three tiers of the case, argued that there was nothing in the pleadings that implied that they had done so.
As Lowe was developing the program for Paymaster, in 1996, Marks approached GKRS, which had the support of a deep-pocketed parent, to invest in her company. As part of those talks, she provided GKRS’s then managing director, Brian Goldson, with a copy of her business plan on a confidential basis.
However, in 1998, GKRS formally told Marks that it would not invest in Paymaster, which was already beginning to roll out its operation, on the basis of the software it had paid Lowe to improve and rectify.
In the meantime, GKRS was developing its own bill-payment operation, which would be in direct competition with Paymaster.
In 1999, Lowe approached GKRS with a proposal for the non-exclusive use of CSSREMIT software, which would be customised for use by the GraceKennedy subsidiary. The demonstration version of the software Lowe presented to GKRS had information about the location of some Paymaster stores and companies with which it had contracts.
So, when GKRS launched in payments operation, Paymaster went to court claiming that Lowe had breached its copyright and improperly handed its proprietary business information to its competitor. Paymaster, essentially, also accused GKRS of stealing its business plan.
In the Supreme Court trial, Justice Jones rejected Paymaster’s claims and accepted GKRS’ evidence that it had been developing its own business plan independent of any discussions with Marks, including, to the point of sending one of its managers to the United States for a year to study such operations and the platforms and systems to make such an operation viable.
Moreover, GraceKennedy’s money-transfer partner Western Union was also in that line of business and, through them, GKRS had facilitated bill payments to overseas entities from Jamaica.
While the Court of Appeal agreed with Jones’ ruling that Paymaster did not own the copyright to the software, it overturned his finding that there was no breach of confidence on GKRS’s part with regard to the Paymaster business plan relying for its findings on perceived gaps in the evidence by Goldson and his successor, particularly with regard to the timing of the business plans they presented to the court.
However, while it accepted that concerns raised by the Court of Appeal about Goldson’s evidence could weaken its reliability, the Privy Council said it was “not persuaded that those matters were sufficient to undermine his credibility, where there was other evidence which corroborated important parts of his evidence”.
Added Lord Hodge: “In relation to the second proposition, the judge might have acknowledged in his judgment GKRS’s failure to produce internal documentation from 1998 and 1999 in order to vouch its assertion that it prepared for the launch of its bill payment product over two years. He might have explained why he (Justice Jones) accepted GKRS’s evidence about its preparations, notwithstanding the absence of such documentation. But, as there was otherwise sufficient evidence to establish GKRS’s case, the judge’s failure to acknowledge the absence of certain documentary evidence cannot be equated with a failure to consider relevant evidence.”