Bartholomews Agri Food Ltd v Michael Andrew Thornton
| Jurisdiction | England & Wales |
| Judge | His Honour Judge McKenna |
| Judgment Date | 23 March 2016 |
| Neutral Citation | [2016] EWHC 648 (QB) |
| Docket Number | Case No: HQ16X00656 |
| Court | Queen's Bench Division |
| Date | 23 March 2016 |
[2016] EWHC 648 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge McKenna
(Sitting as a Judge of the High Court)
Case No: HQ16X00656
Daniel Stilitz QC and Zac Sammour (instructed by T Gleeson Solicitor, Company Secretary and Group Legal Counsel) for the Applicant
Michael Duggan QC (instructed by Birketts LLP) for the Respondent
Hearing dates: 14 March 2016
Introduction
This is the application of the applicant, Bartholomews Agri Food Limited ("Bartholomews") for an interim injunction against the Respondent, Michael Andrew Thornton in which Bartholomews seeks to enforce the terms of a restrictive covenant contained in the Respondent's contract of employment.
In support of it's application, Bartholomews relies on witness statements made by Gary Scott Herman, its Managing Director (and Chief Executive of it's parent company, Bartholomews (Holdings) Ltd), and Timothy Andrew Gleeson, it's Company Secretary and Group Legal Counsel. The Respondent, for his part, has filed three statements of his own and in addition also relies on a statement from Mr John Bianchi, the Managing Director of Pro Cam UK Limited, the company for which the Respondent intends to work on the expiry of his notice period.
Initially in the first statements of Mr Herman and Mr Gleeson, whilst there is some passing reference to confidential information, the emphasis was placed on the customer connection which it was said the Respondent possessed. However in Mr Gleeson's second statement, more emphasis was placed on confidential information, which it was said that the Respondent possessed so that there are two aspects of protectable interests which it is said are protected by the restrictive covenant, namely, customer connection and confidential information.
The Respondent for his part resists the application on the basis that the restrictive covenant relied on by Bartholomews is in restraint of trade, unreasonable and unenforceable. It is too wide and moreover Bartholomews have failed to demonstrate that there is any confidential information to be protected as opposed to information which the Respondent is permitted to use by virtue of his skill and experience developed over many years.
Background
Bartholomews is an agricultural merchant supplying a full range of products and services to the agricultural sector including the provision of agronomic advice to individual farmers, landowners and their managers with an annual turnover of in excess of 111 Million pounds. It operates in West and East Sussex, Kent, Hampshire, Wiltshire and Dorset. It is part of a larger group of companies, the holding company for which is Bartholomews (Holdings) Ltd. Other group companies include Churchill Freight Services Ltd, Bartholomews Specialist Distribution Ltd, Shoreham Silo Services Ltd and Ultimate Fertilisers Ltd. Total group turnover in 2014 is said to be in excess of 117 million pounds.
The Respondent is an agronomist who began working for Bartholomews, then known as Bartholomews (Chichester) Limited in September 1997 as a trainee agronomist. As such, the Respondent provides advice to Bartholomews' customers on issues such as crop planting and rotation, seed choice, and soil condition and crop nuitrition advice in the form of fertiliser application.
The Respondent resigned on the 21 st December 2015 and on or about 22 nd March 2016, on the expiry of his Notice Period, the Respondent intends to take up employment with Pro Cam UK Ltd which is a retailer which supplies its customers with seed from multiple seed producers.
On the 6th January 2016 Bartholomews purported to place the Respondent on garden leave until the termination of his employment. There is an unresolved factual dispute between the parties as to whether the imposition of garden leave by Bartholomews on the 6 January preceded an offer from the Respondent to that effect, it being common ground that there is no provision in the Contract of Employment between the Respondent and Bartholomews for the imposition of garden leave.
The Relevant Provisions of the Contract
The Respondent signed a document entitled "Conditions of Service Principal Statement" on 28 November 1997 which purported to incorporate what where described as common Terms and Conditions for all employees of Bartholomews (Holdings) Ltd. That document included the following relevant provisions:-
" INTRODUCTION
This document is a written form of agreement between the Employee and Bartholomews (Holdings) Ltd and therefore any Company owned by Bartholomews (Holdings) Ltd. Keep this document safe. Any changes to the Contract will be made to you in writing.
6 TERMINATION OF EMPLOYMENT
Employees who wish to leave the Company must give written notice of this intention. The period of notice varies with the type of job being undertaken and is notified separately to employees in a document that is an integral part of the Contract of Employment.
10. COMPANY CONFIDENTIALITY
Employees should not, during the continuance of their employment, or at any time thereafter, divulge any of the details of the business rf trade information relating to Bartholomews (Holdings) Ltd or any subsidiary Company, acquired during their employmentbyt the Company, or any person, firm, or other organisation.
10.2 PROTECTION OF KNOWLEDGE ACQUIRED DUE TO THE COMPANY'S SPECIALISED BUSINESS
Employees shall not, for a period of six months immediately following the termination of their employment be engaged on work, supplying goods or services of a similar nature which compete with the Company to the Company's customers, with a trade competitor within the Company's trading area, (which is West and East Sussex, Kent, Hampshire, Wiltshire and Dorset) or on their won account without prior approval from the Company. In this unlikely event, the employee's full benefits will be paid during this period."
It is to be observed at the outset that these provisions have not been well drafted. There are no definitions and, on one reading, the covenant prevents the Respondent from being able to work in the six specified counties at all, albeit that Bartholemews does not interpret the clause in that way. What then is meant by the words "of a similar nature?"
The Issue
The issue for determination at this stage is whether Bartholomews can demonstrate that there is a serious question to be tried so far as the enforceability of clause 10.2 is concerned. That is to say what Patten J (as he then was) described in BSW Ltd v Balltech Ltd [2006] EWHC 822(CH) at paragraph 19 as " a minimalist approach which sets the threshold at a level which does little more than exclude claims which might be characterised as frivolous or vexatious"
In this regard, Bartholomews must demonstrate that it has legitimate business requiring protection and that clause 10.2, on its true construction, is no wider than is reasonably necessary for the protection of those interests. This involves construing the restrictive covenant in order to consider the question whether, without having to resolve disputes of fact, as was submitted by leading counsel for the Defendant was the case here, the restrictive covenant is so obviously unenforceable in it's wording that even at this interim relief stage the issue can be resolved. As Chadwick LJ put it in Arbuthnot Fund Managers Ltd v Rawlings [2003] EWCA Civ 518 at paragraph 20:-
" The first task of the Court – faced with the contention that post-termination restraints on an employee's ability to engage in future business activity are not enforceable – is to construe the contract under which those restraints are to be imposed. That, as...
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