Carlos Bertram Clarke v Michael Arthur Newland
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NEILL,LORD JUSTICE BALCOMBE |
| Judgment Date | 21 December 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J1221-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 1988 |
| Docket Number | 88/1126 |
[1988] EWCA Civ J1221-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. S. BATES Q.C.)
Royal Courts of Justice
Lord Justice Neill
Lord Justice Balcombe
88/1126
MR. S. P. MEHIGAN (instructed by Messrs. Mishcon de Reya) appeared for the Appellant (Plaintiff).
MR. M. T. F. BRIGGS (instructed by Messrs. Gersten & Nixon) appeared for the Respondent (Defendant).
This is an appeal by the plaintiff, Dr. Carlos Bertram Clarke, from the order dated 15th December 1988 of Mr. Stewart Bates Q.C., sitting as a deputy judge of the High Court, whereby he dismissed an application by the plaintiff for an interlocutory injunction to restrain the defendant, Dr. Michael Arthur Newland, from practising as a general medical practitioner in a defined area of central London for a period of three years from 1st January 1989.
The agreed note of the judge's judgment records that, had there been no authority on the matter, the judge would have granted the injunction, but that he concluded that he was prevented from doing so by a decision of the Court of Appeal which he decided was binding upon him.
The case has come to this court as a matter of urgency because, if he is free to do so, the defendant intends to start practice within the relevant area on 1st January 1989. It is, therefore, important that an early conclusion should be reached. The parties are content that a final decision should be made in the case without regard to the principles which might otherwise have applied if merely interlocutory relief were being sought.
The plaintiff is a general medical practitioner in practice at 76 Gloucester Street, S.W.1. He has been in general practice since 1946. He has been in practice at 76 Gloucester Street since about January 1978. The defendant joined him as an assistant in his practice in May 1982. After a time, during which the defendant acted as an assistant, the plaintiff invited him to become a partner. There was some initial difficulty about this because permission had to be sought from the local Family Practitioners Committee in the area. In the end, however, permission was obtained and in October 1985 a partnership agreement was signed between the two partners.
The plaintiff was concerned that the agreement should contain a clause to prohibit the defendant from working in the area if at any time the partnership came to an end; and the agreement contained a clause designed to achieve this result. The defendant had a chance to read it before it was signed and to take advice.
I come now to the partnership agreement which is dated 3rd October 1985 and which is exhibited to the plaintiff's affidavit. I shall read parts of it. The agreement begins:
"This agreement is made the 3rd day of October, 1985 between Carlos Bertram Clarke of 76 Gloucester Street London SW1 ('the Senior Partner') of the one part and Michael Arthur Newland of 14 Breakspeare Court College Road West Dulwich London SE21 ('the Salaried Partner') of the other part".
Clause 1 provides:
"The parties have carried on the practice of general medical practitioners at 76 Gloucester Street SW1 aforesaid and are both practitioners on a list of practitioners providing general and medical service under the National Health Service Act 1946 such partnership having commenced on the 3rd day of May 1983 and shall during the continuance of this agreement carry on such practice for their mutual benefit as hereinafter provided".
Clause 2 provides:
"The duration of this partnership shall be for the joint lives of the partners from the date hereof unless determined as hereinafter provided."
In the following clauses provisions were included to regulate the relations between the partners during the currency of the agreement. There were numerous references in the agreement to "the practice". I can give examples: the phrase in clause 4 is "the expenses of the practice"; in clause 5 it speaks of "activities outside the practice"; in clause 8 the phrase is used, again, "expenses of the practice" and "accounts of the practice"; and, finally, in clause 10 "income deriving from the practice". So in that context it is plain that the word "practice" is there used in connection with the partnership practice which had been established between the plaintiff and the defendant.
Clause 14 provided for the determination of the partnership by means of notice. It was in these terms:
"The partnership may be determined by either party giving to the other not less than three months' notice in writing and on the expiration of such notice the partnership shall determine accordingly".
I should read next clause 15, which is the clause around which most of the argument in this case has revolved. It was as follows:
"In the event of the partnership being so determined the salaried partner undertakes not to practice within the practice area bounded by the river, Page Street, Buckingham Palace Road, and Lower Sloane Street to the river within a period of three years from such determination".
Though in that clause the word "practice" is spelt with a "c", it is plainly meant to be a verb.
In 1988 difficulties arose between the plaintiff and the defendant. On 13th October 1988 the plaintiff's solicitors wrote to give notice of termination in accordance with clause 14. The third paragraph of the letter (at page 28) read as follows:
"The Partnership will therefore terminate at the latest on 13th January 1989 though Dr. Clarke may be willing to consider an earlier termination date if this can be conveniently achieved."
It seems from the fact that reference has been made to 1st January that it has been agreed that the partnership should come to an end not later than the end of the current year.
It has now come to the plaintiff's attention that the defendant is intending to start practising as from 1st January 1989 as a partner in a general medical practice at 143 Lupus Street. No. 143 Lupus Street is just round the corner from the plaintiff's surgery, about 100 yards away. On 4th November 1988 the plaintiff's solicitors wrote to the defendant to draw attention to clause 15, and a few days later, on 15th November, the defendant replied, saying that he had been advised that clause 15 of the partnership agreement was not enforceable, and it was said:
"This is because it is completely one-sided applying only to me and not to the Senior Partner."
The plaintiff then started proceedings. The writ was issued on 30th November 1988. The plaintiff claimed damages and an injunction and the matter came before Mr. Bates, sitting as a deputy judge, on 15th December. He was referred to the decision of the Court of Appeal in Lyne-Pirkis v. Jones (1969) 1 W.L.R. 1293. He held that he was bound by that decision and dismissed the summons. The plaintiff has appealed.
The case for the plaintiff can be summarised quite shortly as follows:
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(1) The verb "practise" in clause 15 has to be construed in the context of the agreement as a whole and in the proper factual matrix. In particular, our attention was drawn to clause 1, which I have already read, which refers to the practice carried on by the parties as a "practice of general medical practitioners".
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(2) The agreement has to be given a purposive construction.
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(3) If so construed, the word "practise" plainly means practise as a general medical practitioner. It is not a question of implying a term but giving the proper construction to the relevant word.
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(4) The decision in Lyne-Pirkis v. Jones and the earlier decision of the Court of Appeal in Routh v. Jones (1947) 1 All E.R. 758are clearly distinguishable. In both these cases the express words used in the relevant clause could be compared and contrasted with other express words used elsewhere.
For the defendant, on the other hand, it was argued that some limitation had to be placed on the word "practise" and the natural and proper limitation was to imply the words "as medical practitioners". There was no warrant for implying the more restrictive limitation "as general medical practitioners". Both the plaintiff and the defendant are free to practise either as doctors in a hospital or as medical consultants. Thus, to take an example: there was no obvious reason why the clause should not have been designed to prevent the defendant from working as a medical practitioner at one of the three hospitals in the prescribed area.
Such, then, put quite shortly, were the arguments addressed to us and we were referred to a number of the relevant cases, to which I will come later.
In many cases where the court has to construe a standard clause in, for example, a charterparty, there may be some earlier decisions on the same clause or on a clause which is in terms which are indistinguishable. In some of these cases the earlier decision will be a binding authority and it will have to be followed. In other cases in this category the earlier case, though not formally binding, is often followed in order to provide certainty and consistency in an area where commercial relations may depend on an accepted construction.
In the present case, however, we are not concerned with a standard clause. The approach is different. Other cases may provide some guidance but the rule of stare decisis has to be applied with care. This point was emphasised recently by Lord Justice May in Ashville Investments v. Elmer Limited (1988) 3 W.L.R. 867. The case was in a different field and concerned the ambit of an arbitration clause. But the passage, which I will...
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