Team Tours Direct Ltd v Aspire Sports Tours Ltd & Anor

Post-termination restraints are enforceable where they protect a legitimate business interest and go no further than reasonably necessary. The assessment considers the covenant’s proper construction, the employer’s protectable interests, the parties’ circumstances when contracting and the covenant as a whole.

Contract damages remain compensatory. Difficulty quantifying loss permits a best estimate, but does not justify inventing loss or awarding damages merely to strip the defendant’s profits. Negotiating damages may be awarded where misuse of a contractual restriction deprives the claimant of the economic value of a valuable right.

Copyright infringement requires proof of copyright ownership and a protected original work, not merely copying or visual similarity.

Team Tours Direct Limited claimed damages and an injunction against Aspire Sports Tours Limited and Robin Sharpe. It alleged misuse of confidential information, breach of contractual post-termination restraints, copyright infringement and related wrongdoing after Mr Sharpe left his employment and AST began competing with TTD.

Mr Sharpe denied liability and counterclaimed damages for alleged wrongful summary dismissal. The principal issues were whether he had a written employment contract, whether its confidentiality, property-return and restrictive-covenant provisions were enforceable and breached, the proper measure of damages, AST’s liability for procuring breaches, and whether TTD owned copyright in promotional films and website material.

1. Employment and counterclaim. Mr Sharpe had a written employment contract on TTD’s standard 2014 terms. His attendance at the premises contrary to instruction, unauthorised laptop password, copying and deletion of company data, and obstructive conduct constituted gross misconduct justifying summary dismissal. His counterclaim was dismissed.
2. Restrictive covenants. The court adopted the principles summarised in Pickwell v Pro Cam CP Limited [2016] EWHC 1304 (QB). The covenant must first be construed. The employer must then establish a legitimate interest requiring protection, and show that the restraint is no wider than reasonably necessary. Reasonableness is assessed from the perspective of reasonable parties when the contract was made, considering the contract as a whole and the relevant factual circumstances. TTD had legitimate interests in its customer and supplier connections. The six-month restrictions were modest and reasonable in the circumstances. The contrary reliance on Bartholomews Agri Food Limited v Thornton [2016] EWHC 648 (QB) was rejected as factually and contractually inapposite.
3. Breach. Mr Sharpe breached the property-return and confidentiality obligations by retaining copied files and using confidential customer and supplier information. He also breached the restrictive covenants by soliciting TTD customers and suppliers, directly or indirectly through AST.
4. Damages. Applying Morris-Garner v One Step (Support) Ltd [2018] UKSC 20, damages for breach of contract are compensatory. The claimant must prove loss, although the court may estimate substantial loss that cannot be measured precisely. TTD failed to prove its claimed lost profits, goodwill and staff-time losses. It did prove the cost of the forensic report. The misuse of confidential information deprived TTD of the valuable right to enforce its covenants and obtain a release. Damages of £10,000 were awarded for that deprivation, including damages in lieu of an injunction concerning retained confidential information.
5. AST’s liability. AST could not have procured the laptop-related breach because it did not exist when that breach occurred. It did procure the later breaches and was jointly and severally liable with Mr Sharpe for the £10,000 award.
6. Copyright. TTD failed to prove ownership of copyright in the promotional films or that the relevant website material constituted protected original works. Similarity and copying were insufficient. The copyright claim was dismissed.
7. Orders. Judgment was entered against Mr Sharpe for £12,929 and against AST for £10,000, with joint and several liability for £10,000. Mr Sharpe’s counterclaim was dismissed. Consequential matters were adjourned for further submissions.