J M Finn & Company Ltd v Thomas Brook Holliday
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Simler Dbe,The Honorable Mrs Justice Simler Dbe |
| Judgment Date | 08 November 2013 |
| Neutral Citation | [2013] EWHC 3450 (QB) |
| Court | Queen's Bench Division |
| Date | 08 November 2013 |
| Docket Number | Case No: TLQ/13/0997 |
[2013] EWHC 3450 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Simler Dbe
Case No: TLQ/13/0997
Mr D Tatton-Brown ( Bryan Cave LLP) for the Claimant
Mr C Quinn ( Direct Access) for the Defendant
Hearing dates: 30 th— 31 st October 2013
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The Claimant company is an investment manager and stockbroking firm. It has a head office at 4 Coleman Street in the City of London and regional offices in Bristol, Leeds, Bury St Edmunds, Ipswich and Cardiff. It has more than 300 staff and as at the end of December 2012, had about £6.5 billion worth of funds under management or administration.
The Defendant was employed by the Claimant in May 1999 as an investment adviser. He describes himself as an old-fashioned stockbroker. He graduated from Cambridge in 1984 and has worked in the financial sector throughout his working life. He turned to fund management in 1994, spending 5 years at Singer and Friedlander. Before his resignation in 2013, he provided investment advice to approximately 275 clients with about 650 accounts between them.
The claim arises out of the Defendant's resignation and his desire to join a competitor, Hargreave Hale Ltd, as soon as possible. Having received his letter of resignation the Claimant exercised an express contractual right to place the Defendant on garden leave and sought to hold him to his twelve-month contractual notice period. Within a month of having been placed on garden leave the Defendant resigned summarily relying on an alleged repudiatory breach of contract by the Claimant and indicating that he regarded himself as free to commence employment with Hargreave Hale in consequence. The Claimant's solicitors responded to that purported summary resignation seeking assurances that the Defendant would not take up employment as indicated; and in the alternative indicating that an urgent application for an injunction would be made immediately. An application and the claim in these proceedings was issued on 12th August 2013, no assurances having been proffered by the Defendant. There was a contested hearing before Michael Bowes QC (sitting as a Deputy High Court Judge) on 16th August 2013 and an interlocutory injunction was granted together with directions for an expedited trial.
Although the following issues arise for decision in this case, the parties have been unable to agree on the order in which these issues should be dealt with, accepting that this is a case in which a variety of entirely sensible but different views could be taken as to the most desirable way in which to order these issues. I propose to deal with the issues as follows:
a) Was the Defendant constructively dismissed: the Defendant maintains that he was constructively dismissed and that his employment contract therefore came to an immediate end upon his acceptance of the Claimant's repudiatory breach. If that contention is right and his contract of employment is at an end, it is common ground that, he would, as he asserts, be free to join a new employer and no injunction could be granted against him.
b) If there has been no constructive dismissal, the next question that arises is the proper approach to the question whether and if so how the court should enforce the negative covenants contained in the garden leave provision in the Defendant's contract of employment. So far as this issue is concerned there is some divergence between the parties as to the proper approach.
c) Even if the restraints are enforceable the court will nevertheless have to consider whether to exercise discretion to grant an injunction in relation to the garden leave clause.
d) Finally, if the garden leave provisions are enforceable but the court exercises discretion to refuse an injunction in this case, the question of damages may arise.
Approach to the evidence
I heard oral evidence on behalf of the Claimant from two witnesses: Mr Steven Sussman, the Claimant's Managing Director, and Mr Mark Powell, a Senior Investment Manager who took on a small number of Mr Holliday's charity clients. For the Defendant I heard oral evidence from Mr Tom Holliday himself. Where there was conflict I preferred the evidence of the Claimant's witnesses to that of Mr Holliday. I found Mr Holliday to be an unreliable witness. He was very ready to make assertions with great conviction, that were not true and I cannot accept that he believed them to be true. He was overly defensive and sought to avoid answering questions wherever possible; and when pressed to do so, his evidence was inconsistent with contemporaneous documents and his explanations implausible and opportunistic. Examples are given below. I have therefore relied on the contemporaneous documents as a more accurate account of events where possible.
Mr Quinn criticised the Claimant's choice of witnesses as peculiar. He argued that I should draw adverse inferences from the Claimant's failure to call witnesses who were in a position to give important evidence. He maintained that Mr O'Rourke was a more appropriate witness to give evidence about what had happened to Mr Holliday's clients in the period after his resignation; that Mr Powell had had no involvement in producing the tables relied on in relation to client activity and a more appropriate witness would have been Sue Harwood, the Claimant's Human Resources Manager; and finally that David Barstow who was involved in distributing Mr Holliday's clients among the remaining investment managers, would have been an important witness with evidence that would have assisted me. I have no doubt that these individuals had evidence to give that would have assisted me in resolving the issues which arise in this case. I do not however consider that their absence as witnesses should be held against the Claimant. Although this point was explored with the Claimant's witnesses during the course of cross-examination, until cross-examination it had never previously been suggested to the Claimant by Mr Holliday that Mr Powell was a less appropriate witness than Peter O'Rourke or that Sue Harwood and David Barstow ought to have been called in preference to either him or Mr Sussman. In those circumstances, having failed to give notice to the Claimant of this point in a manner which afforded the Claimant an opportunity of addressing the position before trial, in my judgement it would be unfair and inconsistent with the overriding objective to draw any adverse inference about the choice of witnesses here.
In any event I am satisfied that whilst other witnesses could have been called, both Mr Sussman and Mr Powell had important evidence to give. Mr Powell, whilst principally acting in relation to charity clients, has 12% of his practice made up of private clients in respect of whom he has £25 million of funds under management. He is accordingly, an entirely appropriate exemplar of a senior investment manager taking on Mr Holliday's former clients. So far as criticisms made in relation to his lack of involvement in the tables produced by him, I am satisfied that the raw data underlying the tables attached to Mr Powell's witness statements has been disclosed. This included at least, all correspondence with these clients generated since Mr Holliday was put on garden leave —for example the initial contact letter by the newly allocated investment manager, any response from the client to that letter, and any follow-up correspondence. I am satisfied that this raw data would have enabled Mr Holliday to produce his own statistics and to assess the veracity of the statistics set out in the tables attached to Mr Powell's witness statement. So far as Mr Sussman's evidence is concerned, as already indicated, he is the Managing Director of the Claimant firm, knows how it operates and understands the nature of stockbroking and stockbroking relationships. Again so far as he is concerned, I am satisfied that he had relevant, reliable evidence to give.
Mr Holliday's contract of employment
Mr Holliday commenced employment with the Claimant in May 1999. He was provided with a statement of terms and conditions which so far as relevant provided that the notice period to terminate his contract of employment (whether by him or the employer) was one calendar month in writing during the first 6 months (probationary period) and thereafter, 3 calendar months' notice. In addition, there was an express provision entitling the Claimant at any time after notice of termination of employment had been given to require the Defendant not to attend any place of work, not to incur any obligations whatsoever on behalf of the Claimant and otherwise to be suspended from the performance of any duties and obligations. There was also a non-solicitation and non-competition covenant for a period of 6 months following termination of employment; and a confidentiality clause in respect of the affairs concerns transactions and business with them for clients in respect of the Claimant Firm.
By letter dated 8th May 2008 the Claimant set out revised terms and conditions of employment ("the Revised Terms") agreed in discussion with Mr Holliday. Mr Holliday signed that letter indicating that he had read and accepted the Revised Terms, on 12th May 2008. By letter dated 13th May 2008, his solicitor, Mr I.E. Bloom of Ross & Craig solicitors, wrote:
"I am pleased to say that I have spoken with Tom about the matters raised by you in your letter and he accepts and understands the position. In these circumstances, he also...
To continue reading
Request your trial
-
Icap Management Services Ltd v Dean Berry (First Defendant) BGC Services (holdings) LLP (Second Defendant)
... ... Management Services Ltd (or "IMSL") was a service company providing services to companies in the ICAP Global Broking ... garden leave was recently set out by Simler J in JM Finn & Co Ltd v Holliday [2014] IRLR 102 ... In that case the ... International v George (unreported) per Sir Thomas Bingham MR at paragraph 6). As Mr Oudkerk accepts in his ... ...
-
12 Month Garden Leave Upheld As Reasonable By UK Courts
...November 2013, the English High Court held in JM Finn & Co Ltd v Holliday ([2013] EWHC 3450) that a garden leave covenant of 12 months' duration was reasonable in circumstances where a client base needed to be secured. Holliday had been employed by stockbroking firm, Finn & Co, as a......