EVILLE & JONES (GROUP) LIMITED v DR JASON ALDISS

Summary judgment requires a realistic, rather than fanciful, prospect of success. The court must avoid a mini-trial and should decide a short legal or construction point where the evidence and argument permit it. Detailed factual disputes, disputed inferences and cases requiring disclosure or cross-examination should ordinarily proceed to trial.

Restrictive covenants in a shareholders’ agreement remain subject to the restraint of trade doctrine. They may be enforced where they protect a legitimate interest and go no further than reasonably adequate for that purpose. A conditional order requires a defence which may succeed but is improbable to succeed; doubts about the defence are insufficient.

The claimants sought summary judgment under CPR Part 24 against Dr Jason Aldiss in respect of alleged breaches of restrictive covenants in a shareholders’ agreement and an equitable duty of confidence. The alleged breaches concerned competition, solicitation of customers and employees, misuse of confidential information and related conduct.

The court considered separately whether the covenants were enforceable, whether the alleged breaches could be determined summarily, and whether a conditional order should be made under CPR 24.6 and Practice Direction 24.

1. Enforceability of covenants. The covenants were restraints of trade and were prima facie unenforceable unless reasonable. The claimants had to establish a legitimate interest requiring protection and that the restraints went no further than adequate for that purpose. Applying the circumstances of the agreement, including Dr Aldiss’s senior managerial position, access to confidential information and the long-term nature of the claimants’ contracts, the court held that the restraints and their 18-month duration were no more than adequate. Dr Aldiss therefore had no real prospect of successfully defending the enforceability issue.
2. Alleged breaches. The court declined to enter summary judgment on the alleged breaches. The evidence raised substantial disputes about the nature of the competing businesses, the scope of the relevant business during the contractual period, and Dr Aldiss’s involvement. Determining those matters would require a mini-trial. The absence of full disclosure, final witness statements and cross-examination meant that the defence could not be described as fanciful or as having no reasonable prospect of success.
3. Conditional order. Under CPR 24.6 and Practice Direction 24, a conditional order may be made where a defence may succeed but is improbable to do so. It is unnecessary to show that the defence is shadowy or of doubtful good faith. The court nevertheless concluded that it could not properly find success improbable without undertaking the prohibited factual investigation. No conditional order was made.
4. The application therefore succeeded only on the issue of enforceability and was refused in relation to the alleged breaches and the proposed conditional order.