Re-Use Collections Ltd v Mr. Keith Sendall and Another
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Stephen Davies |
| Judgment Date | 19 November 2014 |
| Neutral Citation | [2014] EWHC 3852 (QB) |
| Docket Number | Case No: HQ13X02852 |
| Court | Queen's Bench Division |
| Date | 19 November 2014 |
[2014] EWHC 3852 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
His Honour Judge Stephen Davies
SITTING AS A JUDGE OF THE HIGH COURT
Case No: HQ13X02852
Spencer Keen (instructed by MILS Solicitors, London SW5) for the Claimant
Akhlaq Choudhury (instructed by Coldham Shield & Mace Solicitors LLP, Chingford, London E4) for the Defendants
Hearing dates: 21 – 25, 28 July, 2 – 3 Oct. 2014;
Summary
The claimant, Reuse Collections Limited ("Reuse"), claims that:
(1) Its former employee, the first defendant, Keith Sendall, has acted in breach of duty as regards his involvement in setting up a competing business carried on by the second defendant, May Glass Recycling Limited ("May Glass").
(2) May Glass, a company whose directors are Keith Sendall's sons Fred Sendall and Bill Sendall, who were also both former employees of Reuse, has induced or procured Keith Sendall's breaches and/or has unlawfully conspired with him to do so.
HHJ Seymour QC, sitting as a High Court Judge, granted an interlocutory injunction against the defendants on 4 June 13, when he also ordered that there should be an expedited trial. Regrettably, and due largely to continuing disputes as to the adequacy of the defendants' disclosure, the trial did not come on for hearing until 14 July 14. Even then it was unable to conclude in the 5 days allocated, due to both parties making further belated disclosure, so that a further 1 day had to be allocated, on 28 July 14. The evidence could not be concluded on that day either, due to yet further belated disclosure by the defendants, so that the conclusion of the evidence and closing submissions had to be adjourned for a further 2 days on the first dates convenient to the parties, 2 – 3 Oct. 14. Supplemental written submissions followed, after which this judgment was produced in draft.
Reuse had in June 14 agreed to the injunction being lifted, and no claim for a permanent injunction has been pursued before me, but the question as to whether or not the defendants' conduct was such as to justify the grant of an injunction in the first place, together with Reuse's claim for damages and Keith Sendall's counterclaim for damages for wrongful dismissal, remain hotly disputed and require resolution.
There are a number of issues which I must address, which may be summarised as follows:
(1) Did Keith Sendall owe a fiduciary duty to Reuse in addition to an (admitted) duty of fidelity and good faith?
(2) Were certain restrictive covenants contained in the contract of employment signed by Keith Sendall on 22 Feb. 13 binding upon him? In particular:
(a) Did Keith Sendall provide consideration for undertaking the covenants?
(b) Are the covenants unreasonably wide and thus void as being contrary to public policy?
(c) Was Keith Sendall discharged from the covenants by reason of his being constructively and wrongfully dismissed by Reuse?
(3) To what extent was Keith Sendall involved in setting up the competing business established by May Glass, and did that involvement put him in breach of his obligations to Reuse?
(4) Is May Glass liable for inducing or procuring Keith Sendall to breach his contract with Reuse or for conspiring with Keith Sendall for him to do so?
(5) On the basis of the facts as I find them to be, was Reuse entitled to the interlocutory injunction which it obtained on 4 June 2013?
(6) What if any loss and damage has Reuse suffered as a result of such unlawful conduct on the part of Keith Sendall and/or May Glass as I may find proved against them?
(7) Has Keith Sendall established his counterclaim?
My conclusions in relation to each of those issues are as follows:
(1) Keith Sendall did not owe any fiduciary duty to Reuse.
(2) Reuse did not provide consideration, and the covenants were of unreasonable duration, but if they had applied Keith Sendall would not have been discharged because he was not constructively dismissed.
(3) Keith Sendall was directly and intimately involved in setting up the competing business established by May Glass, and was in breach of his duty of fidelity and good faith as a result.
(4) May Glass is liable for conspiring with Keith Sendall to breach his contract with Reuse.
(5) Reuse was entitled to the interlocutory injunction which it obtained on 4 June 2013 as against both Keith Sendall and May Glass.
(6) Reuse has suffered loss and damage which it is entitled to recover against Keith Sendall and May Glass, which I quantify in the total sum of £51,822.20.
(7) Because Keith Sendall was not wrongfully dismissed by Reuse his counterclaim fails.
My reasons are given in the following sections of this judgment:
(A) A brief history of relevant events [pars. 6 – 24].
(B) An assessment of the witnesses' credibility and reliability [pars. 25 – 55].
(C) My decision and reasons in relation to the issues in the case [pars. 55 – 234].
A. RELEVANT HISTORY OF EVENTS
Reuse is a company which was formed in 2000. It took over the operation of what had been a family run glass recycling business, which had been founded in 1922 by Keith Sendall's maternal grandfather. It remained as a family run business until the 1990's. Keith Sendall had joined the business in 1980, had become a director of the business until it left family control, and had remained in employment with the business ever since until the events in issue. His cousin, Mick Keogh, was also a longstanding employee and former director of the business. In due course members of the next generation of the family had also joined the business, as relevant to this case Fred and Bill Sendall and Mick Keogh's son, Dominic Keogh.
The business, having left family ownership, was transferred into the ownership of Reuse, which itself was acquired about 7 years ago by an Australian company owned and controlled by Anthony Johnston, who is now Reuse's managing director. Mick Keogh was still employed by Reuse as its general manager, based at its principal place of business at South Kirkby, West Yorkshire, and Keith Sendall was still employed as the manager of the depot at Dagenham, Essex. Dominic Keogh was employed as a regional glass purchasing manager at Dagenham, and Fred and Bill Sendall were employed at Dagenham as drivers.
I should say something about the nature of Reuse's business, together with that of its parent company Reuse Glass Ltd ("Reuse Glass"). In summary:
(1) What Reuse does is to obtain quantities of waste glass from various suppliers, and to process that waste glass into a form which it can sell on to its various customers, who use it for manufacturing new glass products.
(2) Reuse secures its waste glass from a number of different suppliers and in a number of different ways, reflecting the fact that waste glass comes in many different types and from many different sources. In some cases it may obtain waste glass simply by being allowed to leave a skip at a particular site, which once full it takes away and replaces with another empty skip. In other cases it may enter into a formal written contract with a business which produces substantial quantities of waste glass on a regular basis as a by-product of its operations. Depending on the circumstances, Reuse in some cases agrees to pay its supplier for the privilege of obtaining the waste glass, whilst in other cases it is paid by the supplier for removing the waste glass.
(3) Although there are a number of different types of waste glass, the two principal types (at least so far as this case is concerned) are plate glass and bottle glass. Plate glass comes from a variety of sources, principally windows and car windscreens. It may be "clean", or mixed with other items, for example window or windscreen surrounds. Bottle glass, as its name indicates, is derived from empty glass bottles, although it may also contain glass from other sources, and again may be clean, or mixed with a variety of other items.
(4) The waste glass is transported to a number of depots (or "transfer stations") operated by Reuse around the UK, one of which is at Dagenham. Here the glass is graded and then stored, ready for onward transmission to the S. Kirkby site, where contaminants such as the plastic surrounds mentioned above are removed, and the glass is then processed by crushing and screening to produce a furnace ready final product, known as "cullet", which is suitable for melting down and re-use to make new glass products.
(5) At trial it emerged that although clean plate glass was processed in this manner at S. Kirkby and then sold on to the end customer, principally Saint Gobain, the well known glass manufacturing company, mixed plate glass was dealt with differently, being sent to a site at Doncaster, operated by the parent company Reuse Glass, where it was processed to produce cullet. This is relevant to the quantum of Reuse's damages claim, as I explain later.
(6) Reuse is a substantial company, employing just short of 100 people with a turnover to the y/e 31 Jan. 13 of £26.3M. It acquires over 400,000 tonnes of waste glass yearly.
(7) Dagenham is one of 3 large depots operated by Reuse, which in effect services South East England. It handles around 25% of the total glass acquired by Reuse, and around 12 of its employees are based at the depot.
Returning to the chronology, in Sept. 11 Mark Wilson was brought in by Mr Johnston to become Reuse's CEO in order to turn around its fortunes as a loss making business. Shortly afterwards, in Nov. 11, Mick Keogh left Reuse. Mark Wilson suggests that this was a response to an investigation in relation to financial and stock discrepancies at Reuse, and I am invited to conclude that this is because he was implicated in certain irregularities whilst employed by Reuse. That however is...
To continue reading
Request your trial
-
James Pickwell and Another v Pro Cam CP Ltd
...has been given to a point on consideration which is similar to that in the instant case: Reuse Collections Ltd v Keith Sendall & Ors [2014] EWHC 3852, [2014] IRLR 226. The facts concerned a glass recycling business which had previously been owned by Mr Sendall's family. He had joined the fa......
-
John Seneschall v Trisant Foods Ltd ((in Liquidation))
...at [69]; that includes a breach by an employer of its implied duties of good faith and fidelity: see Reuse Collections Ltd v Sendall [2014] EWHC 3852. ii) The tort of deceit actionable by the claimant will also suffice: Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435, at 462. ......
-
Allfiled UK Ltd (Applicant/Claimant) v Dan Eltis and Others
...duties of good faith and fidelity, the decision of HHJ Stephen Davies sitting as a Judge of the High Court in Re-Use Collections Limited v Mr Keith Sendall and another [2014] EWHC 3852 (QB), which in turn cited the following helpful distillation of the contractual duty of fidelity in the ju......
-
Tenon FM Ltd v Susan Cawley, B38 Support Services Ltd and Others
...... to work for them, and (b) attempting to persuade another employee of the claimant, Miss Freitas, to come to work for ...Even in the case of Re-Use Collections Limited and Sendall [2014] EWHC 3852 where ......
-
Post Termination Restrictions: Always Consider Consideration
...recent case of Re-Use Collections Ltd v Sendall [2014] EWHC 3852 (QB) is a timely reminder to employers everywhere of the importance of providing meaningful consideration when attempting to tie-up existing employees with new post-termination If you don't, the risk is that no matter how well......
-
Post Termination Restrictions: Always Consider Consideration
...recent case of Re-Use Collections Ltd v Sendall [2014] EWHC 3852 (QB) is a timely reminder to employers everywhere of the importance of providing meaningful consideration when attempting to tie-up existing employees with new post-termination If you don't, the risk is that no matter how well......