Hatt & Company (Bath) Ltd v Pearce

JurisdictionEngland & Wales
JudgeLORD JUSTICE MEGAW,LORD JUSTICE ROSKILL
Judgment Date03 February 1978
Judgment citation (vLex)[1978] EWCA Civ J0203-4
CourtCourt of Appeal (Civil Division)
Date03 February 1978

[1978] EWCA Civ J0203-4

In The Supreme Court of Judicature

Court of Appeal

(Civil Division)

(On appeal from Order of His Honour Judge Russell - Bath County Court)

(Revised)

Before:

Lord Justice Megaw

and

Lord Justice Roskill

Hatt & Company (Bath) Limited
and
Vivien Mary Pearce

Mr. JAMES WIGMORE (instructed by Messrs. Hextall, Erskine & Co., Agents for Messrs. Cartwrights, Bath) appeared on behalf of the Appellant (Defendant).

Mr. HAROLD BURNETT (instructed by Messrs. Stone, King & Wardle, Bath) appeared on behalf of the Respondents (Plaintiffs).

LORD JUSTICE MEGAW
1

This is an appeal from an interlocutory order made by Judge Russell in the Bath County Court on 30th November, 1977. The action out of which the appeal arises was between Hatt & Co. (Bath) Ltd. - who, we are told, are an old-established firm of hairdressers carrying on that business in the City of Bath - as plaintiffs, and Miss Vivien Mary Pearce as defendant. Miss Pearce is a young lady who, while she was still a minor, entered into a contract of employment with the plaintiffs to be employed by them as an apprentice in the hairdressing business. The actual date which appears on the relevant contract, I think I am right in saying, is 5th August, 1974. It was, I believe, round about that date that Miss. Pearce began her work with the plaintiffs, but I think there is some reason to suppose that the agreement was actually made by oral discussion some time later, perhaps in November, 1974, and was then antedated to 5th August, 1974. Nothing turns on that ante-dating, at least for the purposes of this appeal. Let me also say at this stage, as covering everything that I am going to say hereafter, that, as this is an interlocutory appeal, in a matter which will or may have to be determined at a hearing hereafter, on evidence which may conceivably be different from the evidence, such as it is, that is before us on this interlocutory application, nothing that I say is to be taken as indicating any kind of final view on any issue of fact or law that may fall to be considered.

2

Miss. Pearce continued to work under that contract for some time; but on 17th October, 1977, she left the plaintiffs' employment. I think by agreement between the parties, she was not required to give the full period of notice that would have been required under the contract. Nothing turns on that.

3

The contract of employment contained a term which provided restrictions upon Miss. Pearce's future employment, for a period ofone year after she should leave the service of the plaintiffs, in relation to the work in a hairdressing establishment within a specified distance from the place where the plaintiffs carried on their business. We are not concerned, as I see it, in this appeal with any of the detail or provisions of that contract. It is in issue between the plaintiffs, quite plainly, as to whether the provision as to limitation on Miss. Pearce's scope of employment after leaving the service of the plaintiffs is or is not valid in accordance with principles applied by the courts in relation to the doctrine of restraint of trade. Miss. Pearce then took, or was about to undertake, other employment which the plaintiffs allege involves a breach of that term of the contract.

4

The plaintiffs then issued a plaint, followed by particulars of claim, on 11th November, 1977, in Bath County Court; and they gave notice straight away that they would be seeking to obtain an interlocutory injunction, pending the hearing of the action in the County Court, to restrain Miss. Pearce from undertaking the other employment. That application for an interlocutory injunction came before Judge Russell on 25th November. The defendant submitted that the County Court judge had no jurisdiction to grant that interlocutory relief.

5

In the particulars of claim the plaintiffs claimed an injunction to restrain the defendant from carrying on her employment with another firm, and the sum of for damages. The particulars of claim set out the alleged breach of contract and asserted that "By reason of the premises the plaintiff has suffered damage. It has lost goodwill for which it demands the sum of fl damages". The pleading goes on to say "The defendant threatens and intends unless restrained from so doing to continue to commit the breach of the said agreement". And so the prayer was as I have indicated.

6

There were affidavits before the learned judge on behalf of theparties. The only passage in any of the affidavits to which I need make reference is in paragraph 12 of an affidavit put in on behalf of the plaintiffs from by Mr. Eric Stanley Davis on 30th November, 1977. That paragraph reads: "Although an agreement for damages" - there must be something wrong there: I think it means "a claim for damages" - "in this action has been limited to £1 this in no way represents the likely, damage to the plaintiff company but only the realisation that if a substantial award of damages was allowed the defendant would not be able to pay them".

7

The submission to the learned judge, which has been repeated in this Court, on the question of jurisdiction was this. It is said that it is a principle of law, to be deduced from cases decided by this Court, that the County Court has no jurisdiction to entertain an application for an injunction unless the claim for the injunction is "ancillary" to some other claim which would properly be before the court within what I may call its specific jurisdiction. If one takes, for example, section 39 of the County Courts Act, 1959, it provides that the County Court shall have jurisdiction to hear and determine any action founded on contract or tort where the debt due or the damage claimed is not more than £1,000. Then, of course, there are various other sections giving County Courts jurisdiction in other types of litigation. Then comes section 74 of the County Courts Act, 1959, which provides: "74 (1) Every County Court as regards any cause of action for the time being within its jurisdiction shall (a) grant such relief, redress or remedy or combination of remedies either absolute or conditional….as ought to be granted or given in the like case by the High Court and in as full and ample a manner". For what it may matter, the marginal note to that section in the County Courts Act, 1959, is: "General ancillary jurisdiction".

8

The submission which was made to the County Court judge andwhich was again put forward, very clearly and emphatically by Mr. Wigmore on behalf of the defendant in this Court, was that in the present case the claim for an injunction was the primary, or effective, or main claim: it was the essence of the relief claimed; and although, indeed, there was in the particulars of claim a claim for damages, limited to £1 both because of the smallness of the amount and because of the general nature of the action, that claim for damages was "ancillary" to the claim for the injunction and not vice versa. Therefore, it is said, the County Court had no jurisdiction. If any such claim, framed in that way, were to be heard by the courts, it would, it was submitted, have to be presented and pursued in the High Court and not in the County Court.

9

The foundation of Mr. Wigmore's argument is a decision of this Court, a Court consisting of the Master of the Rolls, myself and Lord Justice Stamp, on Tuesday 14th March, 1972, in an action Ambridge (Reading) Ltd. trading as Manpower (Reading) v. Mervyn Hedges and Others. It has been reported, at any rate so far as the researches of counsel go, only in "The Times" newspaper. We have had before us the transcript of the judgments. The leading judgment, with which the other two members of the Court simply expressed their agreement, was given by Lord Denning, Master of the Rolls. It was a case in which the plaintiff company, Arnbridge (Reading) Ltd., had gone before the County Court judge at Swindon to apply for an interlocutory injunction to restrain the three defendants from conducting a business which they had recently opened at Swindon. The defendants had attended by their solicitor and had asked for an adjournment to answer the affidavit. That adjournment had been refused, and the County Court judge had granted an injunction restraining the defendants from entering into any dealings with any person who at any time during the course of their employment by the plaintiff was a customer of the plaintiff in relation to thedefendants' business as an employment bureau and a supplier of labour. The Master of the Rolls said this: "Reading through the particulars of claim, it seems plain to me that the essence of these proceedings before the County Court judge was for an injunction. True it is that there is a sentence at the end of the particulars of claim claiming 'that the plaintiffs have suffered and will suffer loss and damage'. But that is not sufficient to give the County Court judge jurisdiction to grant an injunction. It has been settled for years that in the County Court a claim for an injunction is only permissible when it is ancillary to a claim for damages. This case seems to be the reverse: the substantial claim is for an injunction and the ancillary claim is only for damages. Only a week or two ago some plaintiffs did likewise. They went to the County Court for an injunction, whereas they ought to have gone to the High Court. I deprecate this course. I hope we have seen the last of these excursions to the County Court".

10

The case of "only a week or two ago" to which the Master of the Rolls was referring was, no doubt, Ipswich Group Hospital Management Committee v. B.B.C., which is reported in "The Times" newspaper for Thursday 2nd March, 1972. In the following paragraph of the Master of the Rolls's judgment (which I need not read) he made it perfectly clear that, apart from the question that he had dealt with in the preceding paragraph, the case was one in which an injunction...

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