Spill Bidco Limited & Ors v Bruce William Wishart & Ors

Restrictive covenants prohibiting a person from being “concerned” in a competing business may be breached by lending funds or providing assistance, even where the person does not carry on the business or hold a proprietary interest in it. The court must assess the covenantor’s activities cumulatively and in their factual and commercial context. A person who merely becomes a creditor will not ordinarily be concerned in the business, but lending coupled with support, assistance or intervention may suffice.

Post-sale restraints imposed on a seller who had significant personal goodwill may be reasonable in principle, subject to their duration, geographical scope and protection of legitimate interests. A non-executive director remains subject to core duties of good faith and loyalty.

The claim arose from the sale of the share capital of Empteezy Holdings Limited and related contractual arrangements under which Bruce Wishart became a non-executive director of Spill Topco Limited. The claimants alleged that he breached restrictive covenants in the share sale agreement and investment agreement, and his statutory, fiduciary and common-law duties as a director.

The allegations concerned financial support and business assistance given to rival businesses in Spain and the United Kingdom, together with alleged misuse of information and failures to refer opportunities to the group. The claimants sought judgment on liability and non-pecuniary relief as preliminary issues. The court determined which allegations amounted to breaches and which did not.

1. Construction. The share sale agreement, investment agreement and appointment letter were construed together. The SPA’s references to “the Company” and “the Board” were construed as references to Spill Bidco Limited and its board. The relevant contractual language was interpreted by reference to its natural meaning, the contractual scheme, commercial purpose and factual context, applying the guidance in Arnold v Britton [2015] UKSC 36.
2. Meaning of “concerned”. A person who lends funds for use in a business may thereby become “concerned” in it. Mere creditor status is generally insufficient, but the court must examine how the creditor relationship arose and the covenantor’s conduct as a whole. Lending coupled with assistance, support or intervention may constitute being concerned in the competing business. William Corey v Harrison and Batts Combe Quarry Ltd v Ford supported that approach. The contrary authorities were materially distinguishable because they concerned narrower covenants or interim relief.
3. Restraint of trade. The doctrine applied to the covenants. The decision in Penninsula Securities v Dunnes Stores (Bangor) Ltd [2021] AC 1014 concerned restraints relating to land and did not establish that the doctrine’s application had been displaced in a share sale. Applying the guidance in Quantum Actuarial LLP v Quantum Advisory Ltd [2022] 1 AER (Comm) 473, the restraints were reasonable in concept, form and extent, having regard to the transaction, Mr Wishart’s role and goodwill, the negotiated circumstances, geographical scope and duration.
4. Directors’ duties. Under article 74(1)(a) of the Companies (Jersey) Law 1991, Mr Wishart owed duties of good faith, loyalty and care to Spill Topco. His non-executive status did not remove the core duties applicable to a director. The court applied the fiduciary principles described in Bristol and West Building Society v Mothew [1998] Ch 1.
5. Application. Funding Apex and assisting it to source products amounted to breaches of the SPA and Investment Agreement. Providing advice and information to the United Kingdom rival also amounted, by a narrow margin and viewed cumulatively, to contractual breaches and breaches of loyalty. Other allegations, including authorising storage at Livi’s premises, were not established as breaches. The conduct was dishonest only in relation to the misleading description of Apex as a sister company, not generally.
6. Disposition. Judgment was entered for Spill Bidco and Spill Topco on the contractual claims, and for Spill Topco on the director-duty claims, only to the extent set out in the judgment. Issues concerning relief under article 212 of the Companies (Jersey) Law 1991, section 1157 of the Companies Act 2006 and any injunction were reserved for further submissions.

First-instance judgment following trial. The court determined liability and non-pecuniary relief as preliminary issues pursuant to the order of HHJ Cawson KC dated 28 May 2025.