Celebrity Speakers Limited v David Daniel & Ors

An interim injunction restraining a former employee under post-termination restrictions should be refused where the evidence does not establish a sufficient basis for the alleged misuse of confidential information, and where the covenant’s limited scope makes damages an adequate remedy. The court must assess the covenant as drafted, including any qualification limiting it to activities with which the employee was materially concerned during the relevant period. The balance of convenience may favour the employee where the restraint would cause substantial personal and professional harm, while the employer’s likely loss is limited and compensable in damages.

Celebrity Speakers Limited applied for interim injunctive relief against its former director and employee, David Daniel, Andrew Leighton-Pope and D&A Associates Limited. The claimant alleged unauthorised access to its database, misuse of confidential information and threatened breach of nine-month post-termination restrictive covenants.

Mr Daniel had been furloughed for much of the relevant period and placed on garden leave during his notice period. The defendants argued that the covenant was limited by clause 21.2(b) to activities with which he had been concerned during the twelve months before termination. The issues were whether there was a serious issue to be tried, whether the covenant could apply on the evidence, whether damages would be adequate, and where the balance of convenience lay.

1. The application for interim injunctive relief was refused.

2. The evidence concerning access to the claimant’s database raised a triable issue, but it did not establish a sufficient basis for concluding that Mr Daniel had used the database to extract commercial information or build a competing database. The uncertainties concerning IP geolocation further weakened the claimant’s requested inference.

3. Clause 21.2(b) materially restricted the operation of clause 21.1. It confined the post-termination restraints to services or activities with which Mr Daniel had been concerned to a material extent during the twelve months before termination. His furlough and garden leave meant that any relevant activities during that period were likely to have been very limited. The covenant’s practical scope was therefore correspondingly narrow.

4. There remained a serious issue to be tried as to whether clause 21.1 could apply to any activities undertaken during the relevant period. However, given the limited likely scope of the covenant and the effect of the pandemic on the claimant’s business, damages were likely to be an adequate remedy and relatively small.

5. The balance of convenience favoured refusing the injunction. The potential harm to Mr Daniel from being restrained outweighed the claimant’s potential loss requiring protection. The court was not satisfied that he was seeking to take the database and establish a competing business.

First-instance decision. No appellate history is stated in the judgment.