Neil Leslie Humphrey & Anor v Paul Craig Bennet & Anor
[2023] EWCA Civ 1433
Mimo Connect Limited v Matthew Robert Buley & Ors
28 July 2023
[2023] EWCA Civ 909
Court of Appeal
A company sued its ex-employees for stealing clients and secrets. A lower court refused to immediately stop them. The higher court said the lower court was wrong, ordered the ex-employees to stop, and set up a fast trial to resolve the whole thing.
Key Facts
- •Mimo Connect Ltd (Claimant) appealed a Deputy Judge's decision refusing interlocutory injunctions against Matthew Buley, Grace Avalon Fever, M/Y Connect Maritime Ltd, and Karl Mardell (Defendants).
- •Defendants were former directors and shareholders of Claimant, allegedly misusing confidential information and diverting clients to a competing company (Third Defendant).
- •A Shareholders' Agreement contained restrictive covenants regarding competition and client dealings.
- •Defendants resigned, allegedly with insufficient notice.
- •The Deputy Judge accepted limited undertakings from Defendants but refused broader injunctions.
- •The Claimant argued the balance of convenience favored granting the injunctions and a speedy trial.
Legal Principles
American Cyanamid Co v Ethicon Ltd [1975] AC 396 test for interlocutory injunctions (arguable case, inadequacy of damages, balance of convenience)
American Cyanamid Co v Ethicon Ltd [1975] AC 396
QBE Management Services Ltd v Dymoke & Ors [2012] EWHC 80 (QB) guidance on springboard injunctions
QBE Management Services Ltd v Dymoke & Ors [2012] EWHC 80 (QB)
London Borough of Islington v Elliott & Anor [2012] EWCA Civ 56 test for quia timet injunctions (imminent danger, substantial apprehended damage)
London Borough of Islington v Elliott & Anor [2012] EWCA Civ 56
Roger Bullivant Ltd v Ellis [1987] ICR 464 and PSM (relevant to financial position and cross-undertaking)
Roger Bullivant Ltd v Ellis [1987] ICR 464 and PSM
Olint Corporation Ltd v National Commercial Bank Jamaica Ltd [2008] 12 JJC 2201 (balance of convenience: least irremediable prejudice)
Olint Corporation Ltd v National Commercial Bank Jamaica Ltd [2008] 12 JJC 2201
Guest Services Worldwide Ltd v Shelmerdine [2020] EWCA Civ 85 and Quantum Actuarial LLP v Quantum Advisory Ltd [2021] EWCA Civ 227 (reasonableness of restrictive covenants)
Guest Services Worldwide Ltd v Shelmerdine [2020] EWCA Civ 85 and Quantum Actuarial LLP v Quantum Advisory Ltd [2021] EWCA Civ 227
Outcomes
Appeal allowed.
The Deputy Judge erred in refusing a speedy trial and in finding the limited undertakings sufficient to protect the Claimant's interests. The balance of convenience favored granting broader injunctions.
Speedy trial ordered.
The 12-month duration of the covenants made a speedy trial necessary to avoid potential injustice to the Claimant.
Broader injunctions granted (or undertakings accepted).
The limited undertakings were inadequate to protect the Claimant's interests given the evidence of misuse of confidential information and client diversion.
Springboard relief granted.
To prevent Defendants from unfairly benefiting from their breaches.
No variation of Linden J's cost order.
The Deputy Judge was entitled not to interfere with the order, and application to Linden J for variation would be necessary.
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