Fellowes & Son v Fisher
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE BROWNE,Sir JOHN PENNYCUICK |
| Judgment Date | 02 May 1975 |
| Judgment citation (vLex) | [1975] EWCA Civ J0502-1 |
| Date | 02 May 1975 |
| Court | Court of Appeal (Civil Division) |
[1975] EWCA Civ J0502-1
The Master Of The Rolls (Lord Denning),
Lord Justice Browne and
Sir John Pennycuick
In The Supreme Court of Judicature
Court of Appeal
Appeal by plaintiffs from order of Mr. Justice Donaldson on 30th January, 1975.
Mr. DAVID TURNER-SAMUELS, Q.C., and Mr. D.G. FORD (Instructed by Messrs. Jas H. Fellowes & Son of Walthamstow) appeared on behalf of the Appellant Plaintiffs.
Mr. NEIL BUTTER (instructed by Messrs. Amhurst Brown of Walthamstow) appeared on behalf of the Respondent Defendant.
1 THE FACTS
Mr. Fellowes and his son are solicitors. They carry on a practice at 21 Church Hill, Walthamstow. Nine years ago they took in a young man of 20 as an assistant. He was Michael Norman Fisher. He had no legal qualifications but they put him to work in the Conveyancing department. He learned a good deal and went to classes. He got a certificate in Land Law and Conveyancing at the London Chamber of Commerce. Most of his work was for people who were selling or buying small houses for their own occupation: and only went to a solicitor for one or two transactions. When they died, he did the probate work.
In January 1972, when Mr. Fisher was 27, another firm offered him work with them. In order to persuade him to stay, Fellowes & Son offered him a higher salary but required him to enter into a written agreement. He did so. It was dated 28th February, 1972. it was for one year, and thereafter determinable by three months' notice on either side. His salary was. £34.50 a week, plus £3.00 expenses allowance. The agreement said expressly that he was to be employed as a conveyance and probate clerk in the business of the firm. It contained this restrictive clause in case he left the firm:-
"For a period of five years next after the determination (whether by effluxion of time or in any other way) of the employment of the employee hereunder, the Employee will not:-
(a)be employed interested or concerned in the legal profession within the postal districts of Walthamstow and Chingford;
(b)solicit any person corporate firm or company who, while the employee was employed by the firm, was a client of the firm."
The postal districts of Walthamstow and Chingford cover an area about six miles long and two miles wide. They have a population of 150,000.
On 2nd March, 1973, that agreement was renewed on a higher salary of £46-00 a week, plus £3,00 expenses. It was for one year from 2nd March, 1973, and thereafter from year to year determinable again by three months written notice on either side. The restrictive clause was renewed as well.
On 29th March, 1974, Mr. Fisher left the employment of the solicitors and commenced work with a firm of solicitors in Fleet Street in the City of London. But after six months he heard of a vacancy with a firm of solicitors – Amhurst Brown & Co. They had offices in Walthamstow and South Wood Ford and also in St. James Street, Westminster. Their office at Walthamstow is quite near to the office of Fellowes & Son. They are in the next street, only 150 yards away. Mr. Fisher, very properly, told Amhurst rown of the restrictive clause. They took Counsel's opinion and were advised that it was unenforceable. Amhurst Brown thereupon got into touch with Fellowes & Son and told them of the advice they had received: and that they proposed to employ Mr. Fisher at their Walthamstow office. Fellowes & Co. objected, but Amhurst Brown went ahead. Mr. Fisher started work with them at their Walthamstow office on 26th October, 1974. He was employed as a conveyancing assistant. Amhurst Brown gave Mr. Fisher strict instructions that he must not approach or attempt to solicit any client of Fellowes whatsoever.
Within a week Fellowes & Co. on 6th November, 1974, Issued a writ against Mr. Fisher. On that very same day they served an affidavit in support of a claim for an Interim injunction to restrain him from breaking clause (a). That Is, to restrain him from working anywhere in the postal districts of Walthamstow andChingford in the legal profession.
On 30th January, 1975 Mr. Justice Donaldson refused an interim injunction. He refused it because he thought that the clause was of doubtful validity. Fellowes & Son appeal to this Court.
Additional evidence was placed before us to show that, besides solicitors, there were rival concerns in this area who might employ an experienced clerk like Mr. Fisher: especially those who offer to "out Conveyancing fees by half".
2. APPLYING THE ACCUSTOMED PRINCIPLES
So far this case is one of a kind very familiar to us in these Courts. And I propose in the first place to approach it in the accustomed way. I ask myself, therefore: is this restrictive 3 clause valid, or not? At any rate, is it prima facie valid? If so, let it be enforced. But otherwise not.
Take first the covenant (b) against canvassing. it is plainly good. But Mr. Fisher has been guilty of no breach of it: and does not threaten or intend to break it. There is no ground – and indeed no claim – for an' injunction in regard to (b).
Take next covenant (a) (which prevents him being employed interested or concerned in the legal profession). I doubt very much whether it is valid. It seems to me that the restriction for five years may well be too long: and an area 12 square tulles (densely populated) may well be too large. This young man had only a term of one year certain for his employment with Fellowes. Yet he is to be restrained for five years. He worked only in the conveyancing department. Yet he cannot take work in any capacity in any solicitor's office for miles around. If he were offered a job five miles away in an entirely different area – with no possibility of coming into contact with clients of Fellowes & Son-still he could not take it. Furthermore the words whichprevent him being "interested in the legal profession" may well be too wide. Mr. Fisher was only employed as a conveyancing or probate clerk. Yet this clause would prevent him being employed in the legal department of a local authority or of a big company or as an assistant to a Justices clerk or Court clerk – all of them situations in which he could not possibly affect the practice of Fellowes & Co. This case is very different from Fitch v. Dews (1920) 2 Ch. 159; 1921 2 Ch. 158. In that case the area was a radius of seven miles from the Town Hall at Tamworth. But there were only two towns there, Tamworth with a population of 7000, and Lichfield of 6000, and several scattered villages. The defendant was a solicitor of renown, an advocate too, well known to most of the inhabitants. A restriction for life was held to be reasonable. It is altogether different with this young conveyancing clerk, known to very few, in an area of 12 square miles with 150,000 persons. I should have thought that all that was reasonably necessary for the protection of the plaintiff was a canvassing covenant such as (b) together with a covenant such as (a), restricting him from being employed for a period of one year and an area of one mile radius.
Seeing that the covenant is prima facie invalid, I would not, according to our usual practice, grant an Interlocutory injunction. I would not think it right to prevent this young man from earning his living in the way he desires to do. His freedom to work where he chooses, and with whom he chooses, should not be restricted by enforcing a clause which is of doubtful validity. See T. Lucas v. Mitchell (1974) Ch. 128, and George, Orridge Ltd. v. Lee. 21st January 1973 (unreported). Whereas if the clause were prima facie valid, I should be prepared to grant an Interloc-utory injunction, as was done in the milkman's case: see Home Counties Dairies v. Skilton (1970) 1 W.L.R. 527. And If desiredby either party, I should grant a speedy trial. Nearly always, however, these oases do not go to trial. The parties accept the prima facie view of the Court or settle the case. At any rate, in 99 cases out of 100 it goes no further. I should have thought that our practice in these cases was sensible and convenient. It enables the parties to adjust their differences speedily and cheaply instead of a trial which might be long and expensive.
But Mr. Turner-Samuels has submitted that we have to throw overboard all our accustomed practice. He draws our attention to the recent decision of the House of Lords in the American Cyanamid Co. (1975) 2 W.L.R. 316. According to that case, he says that we are no longer to ask whether the plaintiff has made a prima facie case. We have only to ask: is there a serious question to be tried? If there is, then we should take measures to preserve the status quo. In this case there is no doubt a serious question to be tried as to the validity of the clauses. The status quo was that Mr. Fisher was employed by solicitors in Fleet Street. He only went to Amhurst Brown & Co. on 28th October 1974: and the writ was issued on the 6th November 1974? together with the application for an Injunction. So, according to Mr. Turner-Samuels, the status quo is to be preserved by preventing him working for Amhurst Brown & Co., or for any other firm in these postal districts of Walthamstow and Chingford and even though the claim is of doubtful validity.
3 THE AMERICAN CYANAHID CASE
The American Cyanamid case was only reported a little while ago, but we have already had two cases in which its effect has been canvassed in this Court. It has perplexed the profession. It has been criticised in the Law Journal. So much that Counsel have appealed to us for guidance.
Let me state at once the course of the proceedings in the American Cvanamid case. It is reported in 1974 Fleet Street Patent Reports...
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