White (Marion) Ltd v Francis
|England & Wales
|LORD JUSTICE DAVIES,LORD JUSTICE BUCKLEY
|30 June 1972
|Judgment citation (vLex)
| EWCA Civ J0630-3
|Court of Appeal (Civil Division)
|30 June 1972
 EWCA Civ J0630-3
In The Supreme Court of Judicature
The Court of Appeal
(From: His Honour Deputy Judge Solomon Leighton Buzzard County Court)
Lord Justice Davies
Lord Justice Buckley and
Lord Justice Stephenson
Mr. HAROLD BURNETT (instructed by Messrs. Tuckey & Rylatt, Harpenden, Herts.) appeared on behalf of the Appellants (Plaintiffs).
Mr. MICHAEL ADDISON (instructed by Messrs. Austin & Carnley, Leighton Buzzard, Beds.) appeared on behalf of the Respondent (Defendant).
(without calling upon Counsel for the Appellants to reply)
Lord Justice Buckley will give the first judgment.
This appeal relates to a covenant inrestraint of trade contained in an agreement between the plaintiff company and the defendant in circumstances which I will explain. The plaintiff company carry on business as hairdressers. They own a number of salons in the counties of Hertfordshire and Buckinghamshire, and amongst them they have a ladies' hairdressing salon at 3 High Street, Leighton Buazard. In May of 1968 the defendant, who was then already a qualified ladies' hairdresser, entered the employment of the plaintiff company and was employed at the salon at Leighton Buzzard that I have mentioned. She had no written contract of employment at that date. She was, I think, a young lady of about 20 when she entered the employment of the company. In the year 1970 she was offered employment at a higher rate of remuneration by a. rival hairdressing establishment situated quite close to the Leighton Buzzard salon of the plaintiff company. She was minded to accept this offer. This resulted in conversations taking place between herself and her employers, in consequence of which it was agreed that she should remain in the employment of the plaintiff company upon improved terms which were incorporated in a written document which is dated 7th July, 1970, v/hich contains the covenant to which these present proceedings relate. By that agreement, after reciting that the defendant had been in the employment of the company from the 21st May, 1968, the company agreed to employ her and the defendant agreed to serve the company from the 30th June, 1970, for twelve months and, in the event of the employment continuing after the expiration of that period of twelve months, then until the employment should beterminated by notice under the agreement, that is to say by two weeks notice on either side. Her wage was increased, and her commission terms were also improved.
The agreement contained the following clause, clause 5; and although we are only concerned with the first part of the clause I shall read a substantial part of this clause. "The Assistant shall not during the continuance of her employment hereunder or within twelve months after she shall have ceased to be in the service of the Employer (both of which periods are hereinafter included in the expression 'the prohibited period') either solely or jointly with any other person or persons or Company and either on her own behalf or on behalf of any other person or persons or Company directly or indirectly carry on or assist in carrying on either as principal or as manager agent or servant or assistant or in any-other capacity whatsoever or be in any way engaged or concerned or interested in the business of a Ladies' Hairdresser within one half mile of any premises of the Employer where the Assistant shall have served during the three months last preceding the cessation or determination of his employment hereunder (hereinafter referred to as 'the prohibited area')".
Pausing there, I have so far read to the end of the covenant which is directly relevant in the present case, but I read on. "And the Assistant shall not during the prohibited period permit or suffer her name to be used or employed in carrying on or in connection with such business as aforesaid within the prohibited area.
And the Assistant shall not during the prohibited period promote or assist in promoting any Company formed or to be formed for the purpose of carrying on such business as aforesaid within the prohibited area or be or become a member or director manager secretary or other officer of any Company for the time beingcarrying on such business as aforesaid within the prohibitedarea.
"And the Assistant shall not during the prohibited period endeavour or attempt directly or indirectly to induce any person or persons or Company who shall be known to the Assistant to have been at any time during her eirraloyment hereunder a customer or customers of the Employer in their said business to cease from employing or dealing with the Employer in the way of their saidbusiness or so to employ or deal with any person persons or Compaiiy other than the Employer". It would be interesting to know how a company could be "a customer" of a hairdressers' shop; but I pass that over.
"And during the aforesaid period after she shall have ceased to be in the service of the Employer the Assistant shall not on her own account or on account of any other person or persons or Company attend in connection with such business as aforesaid at the residence of any person residing within the prohibited area". Then there is one more paragraph, which I do not think I need to read.
Now, owing to an unfortunate occurrence the detailo of which I do not think I need go into, the defendant was summarily dismissed from her employment on the 6th April, 1971 - that is, before the period of twelve months fixed under the agreement had expired. But the learned judge found that the plaintiff company was justified in dismissing her, and no question nov; arises as to the propriety of that dismissal. That was on the 6th April, 1971. On the 14th April, 1971, just about a week after she left the company's employment, the defendant entered the employment of a rival hairdresser carrying on business under the name of "Johnnie's Salon" in Bridge Street at Leighton Buzzard, which was only about 150 yards from the plaintiff company's premises - a clear breach of the terms of the covenant, both in respect of time and area.
In consequence, the plaintiff company sued the defendant in proceedings which were commenced in the County Court on the 27th April, 1971. In those proceedings the plaintiff company claimed an injunctior to restrain the defendant for a period ending on the 5th April, 1972, from (putting it shortly) acting in breach of the covenant; an injunction to restrain her from soliciting customers; and damages. The defendant eounterclaimed for damages for wrongful dismissal. As I have already said, the learned judge came to the conclusion that that counterclaim was not justified, and the counterclaim was dismissed.
On the pleadings, no question was raised as to the validity of the covenant contained in clause 5 of the a.greement. The case was heard in November, 1971, and the learned deputy County Court judge delivered his judgment on the 25th November. On the 31st December, 1971, Notice of Appeal was served, and that appeal has come before us now.
By the present time the period during which the covenant was capable of operating had come to an end, for twelve months had expired since the termination of the lady's employment by the plaintiff company. It had not expired when the proceedings in the County Court were instituted: it had not expired when the matter was heard in the County Court: and it had not expired at the time when the Notice of Appeal was served. We heard submissions at the beginning of the hearing of this appeal as to whether or not in these circumstances the appeal should proceed, and on those sub-missions, for myself, I reached the conclusion that in the exercise of our discretion it would be right that we should allow the appeal to proceed and that if we were in the appellants' favour we should grant relief in a declaratory form.
The learned judge in his judgment dealt with the point with which we are now concerned - the only point which is still alivein this case, and that is the validity of the covenant inrestraint of trade - in the following way. The point was one which it seems...
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