Proactive Group Holdings Inc & Anor v HJ 2024 Limited & Ors
[2024] EWHC 2821 (KB)
Morgan Fire Protection Limited v Robert Peter Mogford & Anor
17 May 2024
[2024] EWHC 1192 (KB)
High Court
A fire protection company sued its former employee for stealing clients and using confidential information after he started his own business. The judge mostly agreed with the company and ordered the ex-employee to stop working with the clients he had while at the company for one year. The ex-employee can ask permission to work with those clients. The judge also said it's too early to decide who pays the legal fees.
Key Facts
- •Morgan Fire Protection Limited (Claimant) sought interim injunctions against Robert Peter Mogford and General Fire Protection Limited (Defendants) for breach of restrictive covenants and misuse of confidential information.
- •Mogford, a former employee of the Claimant, started his own competing fire protection company (Second Defendant) and allegedly solicited the Claimant's clients.
- •Mogford's employment contract contained confidentiality and post-termination non-competition clauses.
- •The Claimant alleged Mogford used confidential customer information obtained during his employment.
- •Mogford denied soliciting clients, claiming they approached him, and alleged the Claimant breached his contract and the Data Protection Act (DPA).
Legal Principles
Test for injunctive relief: (1) serious issue to be tried; (2) inadequacy of damages; (3) balance of convenience.
American Cyanamid Co v Ethicon Ltd [1975] A.C. 396
The 'serious issue to be tried' test is not onerous; it excludes only frivolous or vexatious claims. Some assessment of merits may be undertaken at the balance of convenience stage.
Planon Limited v Gilligan [2022] EWCA Civ 642
An express confidentiality provision does not oust implied common law duties; the implied duty exists unless expressly released.
Roger Bullivant Ltd v Ellis [1987] ICR 464 (cited)
Enforceability of restrictive covenants depends on reasonableness; factors considered include scope, duration, and protection of legitimate business interests.
SBJ Stephenson Ltd v Mandy [2000] F.S.R. 286 (cited)
Delay in bringing an injunction application may be relevant to the balance of convenience, but not automatically a reason for refusal.
Lawrence David v Ashton [1989] IRLR 22 (cited); Picnic at Ascot v Kalus Derigs [2001] F.S.R 2 (cited)
Outcomes
Interim injunction granted.
Serious issues to be tried regarding breach of contract and misuse of confidential information; damages inadequate due to difficulty in quantification and Defendant's limited resources; balance of convenience favoured the Claimant.
Injunction terms modified from Claimant's initial request.
Concerns raised about the breadth and clarity of the original draft order, particularly regarding the definition of 'confidential information' in clause 25 of the employment contract.
Costs reserved.
Balance of convenience not so clear as to justify costs against the Defendant; hearings were necessary due to the complexities of the case.
Application for permission to appeal refused.
No realistic prospect of success on appeal.