Mason v Provident Clothing and Supply Company
| Jurisdiction | UK Non-devolved |
| Date | 1913 |
| Court | House of Lords |
Restraint of Trade - Agreement by Employee not to be engaged in Business the same as or similar to that of Employer - Reasonableness of Restriction - Vagueness - Injunction.
By a contract for the employment of the defendant as canvasser by the plaintiffs, a clothing and supply company having branches all over England, described in the contract as carrying on business on the check and credit system “at London in the county of Middlesex (amongst other places),” the defendant agreed that he would not within three years after the termination of the employment be in the employ of any person, firm, or company carrying on or engaged in a business the same as or similar to that of the plaintiff company, or assist any person employed or assisting in any such business, “within twenty-five miles of London aforesaid where the company carry on business”:—
Held, assuming, without deciding, that the agreement was not too vague as regards the area of restriction to be enforced by injunction, that the restriction was wider than was reasonably necessary for the plaintiffs' protection.
APPEAL from an order of the Court of Appeal reversing an order of a Divisional Court on an appeal from the Clerkenwell County Court.F1
By an agreement for partial services as canvasser and collector dated March 25, 1908, and made between the respondents, therein described as carrying on “the business of a general clothing and supply company on the check and credit system at London in the county of Middlesex (amongst other places),” of the one part, and the appellant, therein described as “of No. 64, Tuffnell Park Road, Islington, London aforesaid,” of the other part, the respondents agreed to employ the appellant in the capacity of a canvasser until the engagement for services created by the agreement should be terminated as thereinafter mentioned. The appellant was to be remunerated by a commission on sums collected by him for the respondents as therein mentioned, and the agreement provided that the appellant's engagement might be terminated by either party at any time on giving two weeks' notice.
Clause 8 of the agreement provided as follows:—
“And in consideration of the premises the said William Milne Mason hereby agrees that he shall not within three years after the termination of his engagement and services with the company be in the employ of, or be engaged in any manner whatsoever whether on his own account, or as partner with, or agent, or manager, or assistant, for, any person or persons, firm or firms, company or companies, carrying on or engaged in the same or a similar business to that of ‘The Provident Clothing and Supply Co. Ltd.’ carried on as aforesaid or be engaged by, or assist or help (either directly or indirectly) any person or persons who shall be employed (whether for remuneration or not) by any person or persons, firm or firms, company or companies, carrying on the same or a similar business as aforesaid, or who shall be assisting or helping (either directly or indirectly) in the carrying on of the same or a similar business, or assist or help any one in the formation of such a business, society or club as aforesaid within twenty-five miles of London aforesaid where the company carry on business or within twenty-five miles of any place where the said William Milne Mason shall have been employed by the company at any time during the continuance of this agreement. And if the said William Milne Mason shall be engaged as aforesaid he shall forfeit to the company the sum of twenty-five pounds by way of liquidated damages, and not as a penalty.”
The “check and credit” system as carried on by the respondents may be briefly described as follows: The respondents invited members of the public (who must be householders or other approved persons whose financial position was satisfactory to the respondents) to become members of their society. In order to become a member, an applicant must apply for what was known as a “check,” or “share” of the company, the value of which might be anything from 10s. up to 10l. The price charged by the respondents for these “checks” or “shares” was the nominal value of the check, plus an additional sum by way of interest (called “poundage”) of 1s. in the pound on the nominal value of the check. The amount of the check was payable by the member to the respondents by weekly instalments of 1s. in the pound. The check was issued to the member on payment by him of the sum charged for poundage and of three weekly instalments. Arrangements were made by the respondents with various local shopkeepers for the supply of goods of every description to members on presentation of these checks, and a list of such shops was given to the members. All goods so supplied were charged by the shopkeepers to the respondents and paid for by them, the shopkeepers allowing to the respondents a considerable discount in consideration of the introduction of the business and of the security for payment which the shopkeepers thus obtained. Members were not obliged to spend the whole amount of the check at any one shop or time, but might go to as many shops as they liked, provided they were included in the respondents' shop list. On the occasion of each purchase the shopkeeper indorsed the amount expended at his shop on the back of the check and signed or initialled it and returned it to the member until the whole amount of the check was exhausted. In the latter case the check was retained by the shopkeeper with whom the final instalment was spent.
The whole of this business was conducted by the respondents by means of canvassers whose duty it was to canvass for orders for checks and to collect the weekly instalments as they became due. The respondents employed between 6000 and 7000 canvassers in England and they had about 100 different branches to which these canvassers were attached. They had fifteen district offices in London and about 1000 canvassers were attached to those offices. These canvassers required a special training from the respondents' manager to qualify them for the performance of their duties and received printed instructions to be observed by them as to the mode in which persons were to be canvassed. Each canvasser had a special district assigned to him.
The appellant was attached to the respondents' Islington branch office and was employed exclusively in that district. He was dismissed by the respondents on May 16, 1911, and shortly afterwards he entered the employ of the People's Supply Company, who carried on a similar business at 315, Upper Street, Islington.
The respondents brought an action against the appellant in the county court for an injunction to restrain him from violating clause 8 of the agreement, and for damages. The county court judge granted an injunction, but his order was reversed by the Divisional Court (Pickford and Avory JJ.) upon the ground that the clause was too vague to be capable of being enforced by injunction.
The Court of Appeal (Vaughan Williams, Kennedy, and Buckley L.JJ.) reversed the order of the Divisional Court and restored the order of the county court judge subject to a modification in the form of the injunction.
1913. June 27, 30. Rawlinson, K.C., and J. B. Matthews, for the appellant. 1. This agreement is in unreasonable restraint of trade. Upon the construction of the agreement the twenty-five miles area does not apply to the first part at all. Therefore there is no limit as regards space. Assuming that it does apply it qualifies the employer and not the employee, and the appellant might be restrained from working for a similar company, say, at Newcastle. Upon any construction of the agreement a radius of twenty-five miles is wider than is reasonably required for the protection of the respondents. Sir W. C. Leng & Co. v. AndrewsF2 is in point.
2. The agreement is too vague to be enforced by injunction. “London aforesaid” must mean London in the county of Middlesex, but there is no such place in existence. But apart from that objection there is no certainty about the meaning of the word “London.” The Court will not grant an injunction which is not absolutely clear and definite.
Danckwerts, K.C., and W. J. Waugh, K.C. (with them Harold Newell), for the respondents. Having regard to the peculiar nature of the respondents' business the restriction is not wider than is required for their reasonable and necessary protection. The fact that the canvassers receive special instruction from the respondents' manager is an element to be taken into account. Every trader has a peculiar mode of conducting business, and in modern times the profits of a business are largely dependent on the mode in which the business is conducted. Every employee in the ordinary course of business would naturally acquire certain facilities in the art of conducting the business in the manner adopted by his employer, and the employer is entitled to say “I will not have the skill and knowledge acquired in my employment imparted to my trade rivals.” The question does not depend upon personal contact with the employer's customers, but upon the general knowledge of the employer's business. It is that general knowledge which puts the prentice in a position to compete with his master and makes him a source of danger against which the master is entitled to protect himself: Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co., Ld.F3; Dowden & Pook, Ld. v. PookF4; Haynes v. DomanF5; Dubowski & Sons v. GoldsteinF6; Badische Anilin und Soda Fabrik v. Schott, Segner & Co.F7
These partial restraints are for the benefit of the public and of the employees themselves, because the employer will not withhold from his employee instruction in the secrets of...
To continue reading
Request your trial
-
Gledhow Autoparts Ltd v Delaney
...the position which had been established by two leading decisions in the House of Lords, ( Mason v. Provident Clothing & Supply Company 1913 Appeal Cases 724) and ( Morris v. Saxelby 1916 1 Appeal Cases 688). The judgment of Lord Justice Younger was approved by Lord Justice Atkin. The effect......
- Herbert Morris, Ltd v Saxelby
-
M & S Drapers (A Firm) v Reynolds
...1920, 9 K.B. 571) must be read in the light of the recent decisions of the House of Lords in ( Mason v. Provident Clothing & Supply Co. 1913 A.C. 724) and Morris v. Saxebly (Supra). 14 Since those decisions it has been recognised that as the time of the restriction lengthens and the space o......
-
Attwood v Lamont
... ... , servant, or agent to any other person, persons or company carry on or be in any way directly or indirectly concerned ... Mason v. Provident Clothing and Supply Co. [ 1913 ] A. C ... ...
-
Sharpening The Blue Pencil: The UK Supreme Court Clarifies The Law Of Restrictive Covenants
...was here, he would go to prison until he paid a fine to the King". Lord Moulton in Mason v Provident Clothing and Supply Co Ltd [1913] AC 724 "...the courts will sever in a proper case where the severance can be performed by a blue pencil but not otherwise" - Bailhache J in Attwood v Lamont......
-
Trade Secrets' Under New Zealand Law
...n 36, at [12.97]-[12.101]. 114 Gallagher Group Ltd v Walley [1999] 1 ERNZ 490 at [20] citing Mason v Provident Clothing & Supply Co Ltd [1913] AC 724 at 733. of confidentiality (whether express or implied), adjudicators may distinguish between trade secrets and other confidential informatio......
-
Illegality
...(1975), 65 DLR (3d) 193 (Ont CA), leave to appeal to SCC refused (1976), 11 OR (2d) 129n (SCC). 155 Elsley , above note 140 at 924. 156 [1913] AC 724 (HL) [ Mason ]. 157 [1916] 1 AC 688 (HL). THE LAW OF CONTR ACTS 528 ple, the defendant had worked as a draftsman and then engineer for severa......
-
Restraint of Trade Agreements in Employment Contracts: Time for Pacta Sunt Servanda to bow out?
...v Bray 2006 4 All SA 183 (C) para 303 Magna Alloys v Ellis 1984 4 SA 874 (A) 8934 Mason v Provide nt Clothing and Supp ly Company Limited [1913] AC 724 7335 2008 2 SA 375 (C)6 Advtech Resou rcing Ltd t/a Communic ate Personnel Group v K uhn 2008 2 SA 375 (C) para 287 2008 6 SA 229 (D) (2011......
-
The Common Law Obligations of the Employee under the Contract of Employment
...C.L.L.C. ¶210-011 at 141,056–59 (Ont. C.A.) [ Lyons ]. The leading English authorities are Mason v. Provident Clothing and Supply Co. , [1913] A.C. 724 (H.L.) and Morris (Herbert) Ltd. v. Saxelby , [1916] 1 A.C. 688 (H.L.) [ Saxelby ]. 8 Lyons , ibid .; Atlantic Business Interiors v. Hipson......