Hine Solicitors Ltd v Kathryn Natasha Jones
| Jurisdiction | England & Wales |
| Judge | Mr Justice Constable |
| Judgment Date | 06 July 2023 |
| Neutral Citation | [2023] EWHC 1708 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: KB-2023-002708 |
[2023] EWHC 1708 (KB)
Mr Justice Constable
Case No: KB-2023-002708
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Oliver Lawrence for the Claimants
Lucy Bone (instructed by Blandy & Blandy LLP) for the Defendants
Hearing date: 6 July 2023
Approved Judgment
Introduction
This is an application for an interim injunction brought by the Claimant, Hine Solicitors Limited (‘HSL’) against the first defendant, Ms Kathryn Jones.
HSL is a firm of solicitors with 14 branches including in Oxford where Ms Jones worked from 2015. Ms James had previously started as a trainee at HSL in 2007, qualifying into the family department. She left in 2012. In March 2015, Ms Jones rejoined as an employee with a standard employment contract including mutual notice periods. Ms James was able to resign on three months' notice. Ms Jones worked at the Oxford branch, dealing with clients in the family department only.
Ms Jones provided three months notice of her intended resignation on 2 February 2023. As set out further below, it is disputed by HSL that she was entitled to do so. Ms Jones joined the Second Defendant in its office in Marlow from 5 May 2023.
As originally drafted, the application sought to prohibit Ms Jones from taking any employment save at HSL for a period of two years. That application was withdrawn. On 3 July, a further draft order was provided to Ms Jones setting out an order which sought to prevent her from (a) enticing away or attempting to entice away from HSL any client of HSL until 8 May 2025 and (b) doing business with any client of HSL on behalf of another law firm until 8 May 2025. This has been refined further in the application for me in which the relief sought is now limited to an order preventing Ms Jones from enticing away or attempting to entice away any client of HSL until 8 May 2025. Within the draft order, ‘Client’ is defined to mean any person, firm, company, business entity or other organisation who is a customer of HSL.
The basis of the application as contended for by HSL is that the contract of employment entered into by Ms James on 10 February 2022 was a contract which, pursuant to clause 9.1, provided an obligation to work a minimum employment term of three years prior to the ability to give notice. As such, it is said that Ms Jones was not entitled to resign, on three months' notice as she purported to do on 2 February 2023, and that her employment contract remains in existence in circumstances where the alleged act of repudiatory breach by Ms Jones was not accepted by HSL. The injunctive relief sought is said to be required to prevent breach of the common law implied duty of fidelity on the part of the employee.
Ms Jones disputes the claimed injunctive relief.
The Law
The test to be applied on an application for interim injunctive relief is the well known American Cyanamid test. HSL must show that:
(1) there is a serious issue to be tried
(2) damages are an inadequate remedy;
(3) the balance of convenience is in favour of granting the injunction.
Mr Lawrence contends, on behalf of HSL, that the case is entirely suitable for being dealt with as an expedited trial. He says that the issue of a speedy trial is a matter for the court to consider at this stage as the outcome may have a bearing on how matters proceed. However, as Ms Bone contended, there is no application before the Court for an expedited hearing, with draft directions, and it would be inappropriate in these circumstances for me to approach the issue on the basis that an expedited hearing is either warranted or possible.
In these circumstances, Ms Bone relies upon the dicta of Staughton LJ in Lansing Linde v Kerr [1991] 1 WLR 251, CA, in which he stated:
“ If it will not be possible hold a trial before the period for which the plaintiff claims to be entitled to an injunction has expired or substantially expired, it seems to me that justice requires some consideration as to whether the plaintiff would be likely to succeed at trial. In those circumstances it is not enough to decide merely that there is a serious issue to be tried….On a wider view of the balance of convenience it may still be right to impose such a restraint but not unless there has been some assessment of the plaintiff's prospects of success…”
In the present case, the injunction is sought through to May 2025. It is likely that if there were a short trial in 9–12 months' time, given that it will be relatively straightforward and contained, there would still be a considerable period to run; but it is equally true that a substantial period would have expired. Whilst I do not consider it appropriate to elevate the first limb of the test to considering in detail the prospects of success that HSL's case may enjoy when considering whether there is a serious issue to be tried, I will in due course bear in mind the dicta from Lansing Linde in the context of the balance of convenience.
Serious Issue to Be Tried
The wording of Clause 9.1 lies at the heart of HSL's contention that Ms Jones remains employed (and that, as such, it is entitled to expect a restraint for a period of time reflecting the minimum term of employment). Clause 9.1 reads:
“ Your employment on your part is (subject to our right to give you notice as set out below) for an initial term of 36 months from the start of these contract terms and thereafter you can end your employment by giving three months written notice. The period of the said notice by youth must terminate on the third day of a calendar month. For the avoidance of doubt this means that notice cannot be given by you in the first 36 months of this contract of employment and as far as you are concerned you are in a fixed term contract for this period.”
In her witness statement and in the relevant correspondence, Ms Jones stated that she considered that she was entitled to leave on three months' notice notwithstanding the minimum period of employment by virtue of clause 9.5. This clause states:
“ If you leave during the fixed period of employment and all without giving the proper period of notice or leave during your notice. Without permission, in addition to not being paid for any unworked period of notice, the firm shall also be entitled as a result of your agreement to the terms of this contract to deduct up to a day's pay for each day not work during the notice., provided always that the Firm will not deduct a sum in excess of the actual loss suffered by it as a result of your leaving without notice (for example, to cover the additional cost of recruiting a replacement at short notice) and any sum so deducted will be a payment on account of damages of the firm's claim for your breach of contract. This deduction may be made from any final payment of salary which the Firm may be due to make to you. The amount to be deducted is a genuine attempt by the Firm to assess its loss as a result of your leaving without notice. It is not intended to act as a penalty upon termination.”
The argument initially deployed in justifying her departure was that notwithstanding the wording of clause 9.1, clause 9.5 contemplated the ability to leave during the fixed period of employment (see the first line). This is not an argument that was deployed by Ms Bone in the hearing before me. It is an unlikely construction of the employment contract that the clear words of clause 9.1 are, as a matter of construction, overridden somehow by clause 9.5. It seems clear to me that clause 9.5 is putting in place a damages regime of sorts which applies when, in breach of contract, the employee does one of the things referred to at the beginning of the clause. So whilst the clause contemplates that an employee may leave during the fixed term of their employment, this is not inconsistent with such an action being a breach of Clause 9.1 of the employment contract.
Ms Bone does, however, argue firstly that clause 9.1 is void because it purports to preclude her from giving lawful notice before the expiry of the fixed term. She relies upon the Employment Rights Act 1996 (‘ERA’) which provides:
“ s.86 Rights of employer and employee to minimum notice
…
(2) The notice required to be given by an employee who has been continuously employed for one month or more to terminate his contract of employment is not less than one week.
s. 203 Restrictions on contracting out
(1) Any provision in an agreement (whether a contract of employment or not) is void in so far as it purports—
(a) to exclude or limit the operation of any provision of this Act.”
Therefore, it is argued that clause 9.1 is void pursuant to s. 203 ERA, as it purports to limit the operation of s.83 ERA. It deprives Ms Jones of the statutory right to give notice subject to a minimum period.
Mr Lawrence contends that the statute in context does no more than provide both employer and employee the right to receive a certain period of notice of termination. Looked at another way, it imposes an obligation on the employee to give certain minimum periods of notice to the employer once they have been employed for a certain period of time, so as to provide some protection to the employer against being left in the lurch. This is not the same as entitling the employee to the right to give notice in circumstances where the parties have agreed otherwise.
In my judgment, the effect of clause 9.1 as contended for by Ms Bone is that any clause which purports to prevent an employee from working for a minimum term before the right to give notice arises is ineffective. This would have far-reaching effects. No support was provided for the proposition, be it by way of case law or from a leading text. I also note...
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