Landmark Brickwork Ltd v Sutcliffe & Ors

At the interlocutory stage the court does not try the substantive claim or make final findings of fact. It asks whether there is a serious issue to be tried, whether damages are an adequate remedy, and where the balance of convenience lies. A post-termination restraint must be certain and no wider than reasonably necessary to protect confidential information or customer connections. An area covenant may fail where its geographical scope is inherently uncertain or lacks functional correspondence with the employer’s business. A court may require information needed to give effect to injunctive relief or undo unlawful harm, but not disclosure which merely helps establish the claim. A mandatory interim injunction requires a high degree of assurance that the claimant will ultimately succeed.

The claimant, a specialist brickwork and stonework contractor, sought interlocutory injunctions against its former managing director, an associated individual and a related company. It alleged breaches of post-termination covenants, misuse of confidential information, diversion of business opportunities, and participation in or inducement of those wrongs.

The application concerned restraints on competition, customer dealings and interference with suppliers, orders concerning a downloaded customer list, disclosure of tenders and documents, and preservation of a business plan. The court considered which orders raised serious issues to be tried and whether the discretionary requirements for interim relief were satisfied.

1. Interlocutory approach. The court did not try the claim or make findings of fact. The applicable considerations were whether there was a serious issue to be tried, whether damages were an adequate remedy, and where the balance of convenience lay, applying American Cyanamid Co v Ethicon [1975] AC 396.
2. Restrictive covenants. The area covenant was too uncertain to be enforceable. The expressions referring to places south of named counties and to any other place where the claimant operated had no sufficiently certain meaning. There was also no evidence of functional correspondence between the prohibited area and the claimant’s operations. The customer non-solicitation and non-dealing restraints raised serious issues, particularly because the former managing director might possess confidential information and influence over customers even without personal dealings. The separate restraint on accepting orders did not raise a serious issue because passive acceptance of an unsolicited order would not misuse customer connection or confidential information.
3. Confidential information and springboard relief. The claim concerning the downloaded customer list raised a serious issue. The relief sought was principally protection against use or disclosure of confidential information, rather than a springboard order in the narrower sense described in Roger Bullivant Ltd v Ellis [1987] IRLR 491. A customer list obtained in breach of fidelity could be protected after termination, following Robb v Green [1895] 2 QB 315.
4. Disclosure and mandatory relief. Identification of the downloaded customer details could assist in giving effect to the substantive injunction and was permissible. Disclosure of tenders, however, would merely assist the claimant in proving its case and was refused. A mandatory order requiring withdrawal of tenders carried a greater risk of injustice and required a high degree of assurance of success, which the evidence did not provide.
5. The claimant’s cross-undertaking was not shown to be inadequate, and the balance of convenience favoured the injunctions supported by serious issues to be tried. Orders were granted against the first defendant concerning customer dealings, suppliers and the downloaded list, and against the third defendant restraining participation in breaches. The remaining applications were dismissed. The second defendant was ordered only to preserve documents relating to any relevant business plan.