JEC Property Company Ltd v Amesbury

JurisdictionCayman Islands
Judge(Levers, J.)
Judgment Date03 October 2007
Date03 October 2007
CourtGrand Court (Cayman Islands)
Grand Court

(Levers, J.)

JEC PROPERTY CONSULTING LIMITED
and
AMESBURY, AQS CAYMAN LIMITED and ROWLANDSON

S. Wilson for the plaintiff;

W.A. Sykes for the first defendant;

Ms. K. Houghton for the second and third defendants.

Cases cited:

(1) American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396; [1975] 1 All E.R. 504, applied.

(2) Cayne v. Global Natural Resources plc, [1984] 1 All E.R. 225, referred to.

(3) David (Lawrence) Ltd. v. Ashton, [1991] 1 All E.R. 385; [1989] I.R.L.R. 22, applied.

(4) Lansing Linde Ltd. v. Kerr, [1991] 1 W.L.R. 251; [1991] 1 All E.R. 418, referred to.

(5) Mothercare Ltd. v. Robson Books Ltd., [1979] F.S.R. 466, referred to.

(6) NWL Ltd. v. WoodUNK, [1979] 3 All E.R. 614; sub nom. NWL Ltd. v. Nelson (The Nawala), [1979] 1 W.L.R. 1294, applied.

(7) Nordenfelt v. Maxim Nordenfelt Guns & Ammunition Co. Ltd., [1894] A.C. 535; [1891–4] All E.R. Rep. 1; (1894), 63 L.J. Ch. 908; 71 L.T. 489; 10 T.L.R. 636, dicta of Lord Macnaghten applied.

(8) Office Overload Ltd. v. Gunn, [1977] F.S.R. 39; (1976), 120 Sol. Jo. 147, referred to.

Injunctions-interlocutory injunction-restraint of competition-balance of convenience against party seeking to enforce covenant in restraint of competition if granting injunction effectively disposes of case in plaintiff”s favour since covenant likely to expire before trial

Employment-restraint of competition-reasonableness-factors to consider-(a) defendant”s being deprived of employment; (b) damage to plaintiff”s business; (c) damage to goodwill of plaintiff”s business; (d) preserving plaintiff”s confidential information; (e) public interest; and (f) preserving plaintiff”s financial investment

The plaintiff brought an action for damages against the first defendant for allegedly breaching a covenant in restraint of competition in his contract of employment.

The first defendant was employed by the plaintiff as a quantity surveyor under a one-year contract, which provided, inter alia, that at the end of the contract term, he would not carry on similar work for another firm of surveyors for a period of one year. After a year, the terms of a second year”s contract were discussed but never reduced to writing, although the first defendant continued to work for the plaintiff for a further year before leaving to work for an architectural company. Five months later, the plaintiff brought the present proceedings. It alleged that the first defendant had breached the terms of the original contract, which continued to apply to his second year of employment, and that he had also removed confidential information. It sought damages and an ex parte injunction to restrain him from breaching the contract until the matter came to trial. An injunction was granted for 14 days and the plaintiff brought the present proceedings to extend it to cover the one-year period from the first defendant”s leaving date.

The plaintiff submitted that (a) the first defendant was bound by the covenant as he had continued to work under the terms of the written contract for a second year; (b) by performing similar work at another company, he had put it into direct competition with the plaintiff”s business; and (c) the first defendant had also removed and retained confidential information.

The first defendant submitted in reply that (a) the covenant had already

expired, since the contract had not been renewed for a second year as its terms had never been agreed; (b) in any event, the covenant did not apply in the circumstances because his current employer was not a surveying organization; (c) the plaintiff had failed to particularize the confidential information that had allegedly been removed; (d) as he had moved to the Islands with his young family and started to build a home, an injunction preventing him from working for a year would cause them irreparable loss since he was the sole breadwinner; and (e) furthermore, due to the plaintiff”s five-month delay in bringing the action, the covenant was likely to expire before the case came to trial, and granting the injunction would therefore effectively decide the case in the plaintiff”s favour.

Held, dismissing the application:

The extension of the injunction would be refused. The court would take into account the following factors in considering whether to grant or extend an interlocutory injunction to enforce a clause in a contract which was in restraint of competition: (a) whether there was a serious action to be tried; (b) whether damages were an adequate remedy; (c) whether the balance of convenience favoured granting the injunction; (d) whether the covenant was contrary to public policy; and (e) whether it was void for unreasonableness. In assessing whether the covenant was reasonable, so as to prevent its being void, the court would consider (a) the defendant”s being deprived of employment; (b) the damage to the plaintiff”s business; (c) the damage to the goodwill of the plaintiff”s business; (d) preserving the plaintiff”s confidential information; (e) the public interest; and (f) preserving the plaintiff”s substantial financial investment. Although the covenant here was not unreasonable, as the first defendant was in a position to compete with the plaintiff for work, granting the interlocutory injunction would effectively dispose of the case in the plaintiff”s favour, since it could only last a further five months because of the plaintiff”s delay in bringing the action and it was unlikely that a trial would take place before then. Given that the first defendant would therefore be prevented from supporting his family for a whole year and thus risked suffering an injustice which could not be compensated by damages, the balance of convenience was heavily in favour of refusing to extend the injunction (paras. 16–18; paras. 21–22; paras. 24–28).

1 LEVERS, J.: This is an application by the plaintiff in this case to extend an ex parte injunction granted on September 12th, 2007 in the following terms:

‘(1) An...

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