Romero Insurance Brokers Ltd v Andrew Templeton and Another
| Jurisdiction | England & Wales |
| Judge | Sir Raymond Jack |
| Judgment Date | 10 May 2013 |
| Neutral Citation | [2013] EWHC 1198 (QB) |
| Docket Number | Case No: HQ12X04769 |
| Court | Queen's Bench Division |
| Date | 10 May 2013 |
[2013] EWHC 1198 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
HIGH COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Raymond Jack Sitting as a Judge of The High Court
Case No: HQ12X04769
Mr Akhlaq Choudhury (instructed by Eatons Solicitors) for the Claimant
Mr Dale Martin (instructed by Baxter Caulfield) for the Defendants
Hearing dates: 23, 24, 25 April 2013
Introduction:
On 22 November 2011 the first defendant, Mr Andrew Templeton, entered a contract of employment as a corporate manager with the claimant, Romero Insurance Brokers Limited. The employment began on 1 December, a week later. Mr Templeton was to be the manager of a small new office of Romero to be opened in the following February in Halifax, the main office of Romero being in Leeds. Mr Templeton has been in insurance broking all his working life. He is now 52. Between 1994 and January 2010 he was employed by Alec Finch & Co Ltd in their Halifax office and had become a board director. On leaving he was subject to restrictive covenants which prevented him approaching his former clients for 12 months. He had acquired a substantial following as a broker in Halifax. A major aim of his employment by Romero was that he should persuade many of his former clients to join him at Romero. Although Mr Templeton thought that he had been successful in building up Romero's Halifax business, Romero was less happy. Following a meeting on 6 August 2012 Mr Templeton agreed to a reduction in his salary. The reduction might be made up if turnover increased. On 28 September 2012 a meeting took place which led to his resignation on 8 October claiming constructive dismissal. On 9 October he commenced employment with the second defendants, Eastwood & Partners Limited, which has its main offices in Huddersfield. It also has an office in Halifax. Eastwood's hope was that Mr Templeton would bring a substantial number of ex-Romero clients to Eastwood. He has succeeded in that.
On 13 November 2012 Romero issued proceedings against Mr Templeton and sought an interim injunction to enforce the restrictive covenants in his contract of employment. That application was dismissed on 23 November on the ground that Romero had not proceeded with due expedition. Directions were given which included directions for a speedy trial.
On 21 December 2012 Eastwood was joined as second defendant on the basis that it had induced Mr Templeton's alleged breaches of covenant. Eastwood has undertaken to pay any damages found due from Mr Templeton, because, as Mr Eastwood very fairly put in his evidence, Eastwood have had the benefit of the clients. At the end of the trial Eastwood also undertook to be responsible for any costs awarded against Mr Templeton, and not to ask for any costs itself even if successful. It was agreed by counsel that in these circumstances no separate consideration of the case against Eastwood was necessary.
At the start of the trial on Tuesday 23 April 2013 an application was made that Romero might rely on a further witness statement by its managing director, Mr Simon Mabb, which had been served late on Friday 19 April. It set out a greatly increased claim for damages. Romero had given no disclosure as to damages refusing to do so on the ground that disclosure would reveal confidential information. But no application to the court for disclosure was made on behalf of the defendants. I decided that the least unsatisfactory course was that I should not decide the quantum of damage — if it arose, in this trial, but that it should be determined subsequently at Romero's expense.
The issues as they stood at the trial can be shortly stated:
(1) Had Romero's conduct amounted to a constructive dismissal of Mr Templeton in the sense that it amounted to a repudiation of his contract of employment which he could accept by resigning?
(2) Had Mr Templeton removed any documents containing confidential information from Romero and used the information in the course of Eastwood's business?
(3) Was the 12 month covenant in a separate agreement with Romero prohibiting the procuring of orders from entities who had in the 6 months prior to the termination of Mr Templeton's employment done business with or been a client of Romero and with whom Mr Templeton had dealings enforceable?
(4) Should Romero now be granted any relief by way of injunction?
The Events
I have mentioned the meeting on 6 August 2012 at which Mr Templeton was requested to accept a lower salary. It was followed by negotiations in which Mr Templeton improved his position. But with a basic salary of £60,000 reduced from £76,500 he was likely to be substantially worse off unless he quickly achieved substantial increases in turnover. He was not bound to agree to these new terms but he appreciated that if he was to have a future with Romero it was in his interest to do so. The revised terms were sent to him on 20 August.
At a meeting on 14 September 2012 between Mr Justin Romero-Trigo, Romero's chairman and majority shareholder, and Mr Mabb, Mr Mabb was asked to produce a report to review how the company's income might be increased. The report was probably ready at the beginning of the week commencing 24 September. It suggested that account executives should either work to get new business or work on existing clients but not both. It made suggestions in respect of 10 individual account executives including Mr Romero and Mr Templeton. It suggested in respect of Mr Templeton that he might move from Halifax to Leeds because with Mr Mabb's involvement with the Halifax office there was no need for a manager there, and that at Leeds Mr Templeton could spend all his time on new business development. The report stated "N.B. This would be a change in role and one that will require some HR involvement and potentially putting him at risk of redundancy for that role [i.e. his position as corporate manager in Halifax] as there will no longer be a requirement for that role." I consider that the move from Halifax and the requirement to work only on new business would have been most unwelcome to Mr Templeton for three reasons. First, it would have meant giving up the clients he had brought to Romero who were many of them drawn from his former following at Finch. Second it would have meant moving from Halifax where he lived and had also worked for very many years. Third, it appeared to me that Mr Templeton was temperamentally better suited to the work he was doing in Halifax with much of his time being spent managing his clients rather than suited to the aggressive seeking of new business required by Mr Romero. It was suggested that the report was an invention prepared for the purpose of the case after the events. I have no hesitation in rejecting that. It has the hallmarks of a genuine document.
A major reason for suggesting that the report was not genuine was that at the meeting on 28 September there was no reference to Mr Templeton being offered an alternative job in Leeds. Nor was that referred to in the letter presented to him at the meeting. That only stated "We will also consider alternative vacancies within our organisation where available." This was in part of the letter which seems to be in a standard form rather than specific to Mr Templeton's case. In his evidence Mr Mabb accepted that he had not mentioned Leeds at the meeting. But he also said that he wanted Mr Templeton to come to Leeds and that the meeting "was not a nice thing to have to do." The Leeds possibility was not referred to subsequently. One way for Mr Mabb to have handled the meeting would have been for Mr Mabb to say that the company wanted him to give up his existing position and to come to Leeds to concentrate on new business and then to move on to the redundancy situation from there. But that was not done. I think that the most likely explanation for there being no reference in the letter to the alternative of moving to Leeds and no reference to it by Mr Mabb at the opening of the meeting is that the move away from Halifax and the giving up of his clients would have been deeply unattractive to Mr Templeton.
Before the meeting Mr Mabb took what he called HR advice as to how the situation should be handled in accordance with, in particular, the law relating to unfair dismissal. A carefully drafted letter addressed to Mr Templeton and dated 28 September 2012 was prepared. It began:
"Following our consultation meeting on 28 th September 2012 we confirm that the company is currently considering a restructure which could result in potential redundancy. The purpose of the letter is to inform you that unfortunately the proposed restructure would put your job at risk of redundancy, and that a period of consultation will now commence."
When he got into work on 28 September Mr Templeton found that a number of emails had disappeared when he accessed the company system and also that his electronic diary was blank. He thought that this must have been done remotely from the Leeds office. He told Mrs Whiteley who worked with him in the Halifax office and had worked with him at Alec Finch, and she looked at his screen. It is a helpful piece of the background that she had heard rumours that the directors were unhappy with Mr Templeton's performance. Mr Templeton was still able to send emails and still had access to the main system which contained all the information about clients. A director, Mr Nicolson, was able to insert an engagement into his diary. I do not think that Mr Templeton's computer problems that morning arose because it had been decided to cut him out of the system in anticipation of his leaving. Mr Templeton told Mrs Whiteley at lunch that he thought he was 'going to get the push'.
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