Phoenix Group Partners LLP v Ayosag [2010] EWHC 846 (QB)
Reasons for discharging an injunction arising from alleged breach of restrictive covenants.
The defendant worked as an equity derivatives broker for 5 months before resigning. His service agreement required three months notice and he started work with another firm the day after that period lapsed but had also asked the claimant to relax the restrictions on him, which were broadly not to use confidential information and, for a period of six months, not to deal with clients who were, or may become their customers of the claimant. They applied for injunctive relief , which was granted, restraining the defendant.
In this judgment, Sir Charles Gray identifies that the issues that would arise in any potential trial would be whether any actual or potential breaches have been and if so whether the restrictions are enforceable. He reviews the cases submitted and the relevant principles involved. He states that the validity of the non-compete restrictions are judged by the circumstances existing at the date of the contract but that the breaches are judged by reference to the date of the acts relied on. In this light, he finds that a trial judge would find that the claimant's had not carried out any genuine trading in the specific type of deals that that the defendant now engaged in, distinguishing this case with those of TFS Morgan and Dawnay Day, and concluding that the defendant would not be found in breach. He also rejects the claims that the defendant had misused confidential information. However he rejects the submission that the covenants were unenforceable as being unreasonably wide but qualified the limits of its geographical ambit.
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Neutral Citation Number: [2010] EWHC 846 (QB)
Case No: HQ10X01149
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 21 April 2010
Before :
SIR CHARLES GRAY
(Sitting as a Judge of the High Court)
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Between :
**PHOENIX PARTNERS GROUP LLP (Claimant)
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MAURICE ASOYAG (Defendant)**
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Alistair McGregor QC (instructed by Messrs SJ Berwin LLP) for the Claimant
Thomas Croxford (instructed by Messrs Salans LLP) for the Defendant
Hearing dates: 31 March 2010
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Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
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SIR CHARLES GRAY
**Sir Charles Gray :
**1.These are my reasons for having discharged on 31 March 2010 an injunction granted by Hickinbottom J on 25 March 2010.
2.The Claimant, Phoenix Partners Group LLP ("Phoenix"), provides brokering services in relation to a range of financial products including equity derivatives. The Defendant, Maurice Asoyag ("Mr Asoyag"), was employed by Phoenix on the terms of a service agreement dated 9 July 2009. Mr Asoyag had previously worked for a number of financial institutions including Credit Suisse, Merrill Lynch, and Nomura. Since May 2008, he had been working as a trader in stock options but he has no experience of working as a broker in that field.
3.During his employment by Phoenix, Mr Asoyag brokered equity derivatives related to various indices including in particular the FTSE, EuroStoxx and DAX as well as cash equities derivatives.
4.On 8 December 2009 Mr Asoyag resigned from his employment with Phoenix. His contract required him to give three months' notice of termination. Upon his resignation Mr Asoyag was placed on three months' garden leave in accordance with clause 4.5 of his contract and the effective date of the termination of his employment was accordingly 7 March 2010.
5.In early December 2009 Mr Asoyag had been offered employment by GFI Holdings Limited ("GFI"). He informed M. Hervé Botbol, the Managing Director of Phoenix, of the offer GFI had made to him. The arrangement between Mr Asoyag and GFI was that he should commence his employment with GFI on 8 March 2010, that is the day after the expiry of his garden leave. A few days before that he had asked M Botbol if he might be relieved from the various post-termination restrictions in his contract with Phoenix. That request was declined. Mr Asoyag nevertheless started work for GFI on 8 March 2010.
6.Mr Asoyag had been engaged by GFI to carry out broking on the EuroStoxx index. He is not permitted by GFI to carry out any other brokerage. Two days after Mr Asoyag started working for GFI solicitors acting for Phoenix wrote to him seeking undertakings from him but Mr Asoyag declined to do so. On 25 March 2010 Phoenix sought and obtained injunctive relief restraining Mr Asoyag from acting in breach of the post-termination restrictions in his contract of employment with Phoenix and further restraining him from using confidential information acquired during his employment with Phoenix. Notice of Phoenix's application had been given to Mr Asoyag but not until very shortly before the hearing in front of Hickinbottom J.
7.The provisions in the contract of service made between Phoenix and Mr Asoyag upon which the injunctive relief was based are contained in Clause 12 of Mr Asoyag's contract of employment. So far as material those clauses provided:
"12.1 The Employee acknowledges that during the course of his employment with the Company, he will receive and have access to Confidential Information and accordingly he is willing to enter into the covenants set out in this Clause 12 in order to provide the Company and any Group Companies with what he considers to be reasonable protection for those interests.
12.2 The Employee shall not, in any Capacity, save in respect of a Permitted Interest or with the prior written consent of the Members (which shall not be unreasonably withheld), for a period of six months (subject to Clause 12.6) from the Termination Date within the Restricted Area carry on or be concerned or engaged or interested in any part of a trade or business which competes with any part of any trade or business carried on by the Company in which the Employee shall have been actively engaged or involved at any time during the Period…
12.3 The Employee shall not in any Capacity for a period of six months from the Termination Date (subject to Clause 12.6) in competition with the Company or any Group Company and in relation to the business activities of the Company in which the Employee has been engaged or involved during the Period:
(a) solicit approach or offer goods or services to or entice away from the Company any person, firm or company who was either
(i) a client or customer of the Company during the Period with whom the Employee has been actively engaged or involved by virtue of his duties under this agreement during the Period; or
(ii) a prospective client or customer of the Company with whom or which as at the Termination Date there are negotiations ongoing with a view to him or it becoming a customer or client of the Company or any other Group Company and where the Employee has been actively engaged or involved in such negotiations in the performance of his duties under this agreement;
(b) deal with or accept custom from any person, firm or company who was either
(i) a client or customer of the Company during the Period with whom the Employee has been actively engaged or involved by virtue of his duties under this agreement during the Period; or
(ii) a prospective client or customer of the Company with whom or which as at the Termination Date there are negotiations ongoing with a view to him or it becoming a customer or client of the Company or any Group Company and where the Employee has been actively engaged or involved in such negotiations in the performance of his duties under this agreement ….".
8.Confidential Information is defined in the definition provision as comprising
"all information which may be imparted or obtained in confidence or be of a confidential nature (whether imparted in writing, verbally or otherwise and whether imparted directly or indirectly) relating to the business or prospective business, current or projected plans or internal affairs of the Company or any Group Company including without limitation:
(a) information relating to the current or prospective marketing or sales of any products or services of the Company or any Group Company, including lists of customers' and vendors' names; addresses and contacts; sales targets and statistics; market share and pricing information; price trade data and trade history data; client trading activity; marketing surveys; research and reports; and advertising and promotional material…
(b) any other commercial, financial or technical information relating to the business or prospective business of the Company or any Group Company or to any past, current or prospective client, customer …"
9.In the same clause the Restricted Area is defined to comprise England, France, Israel, Hong Kong and North America.
10.The issues which would arise in the event of any trial of this action taking place are, firstly, whether any actual or potential breaches of any of the restrictive covenants set out above have been established and secondly, if so, whether those restrictions are enforceable. There is little disagreement between the parties as to the principles to be applied in the determination of those questions. I can therefore summarise them quite briefly.
11.It is rightly conceded by Mr Alistair McGregor QC on behalf of Phoenix that the onus of establishing that the post-termination restrictions in question are enforceable and not void in law as being unlawful restraints of trade is upon Phoenix. In the ordinary way on an application for interlocutory injunctive relief a claimant would be required to establish no more than that there is a serious issue to be tried both in relation to the issue of breach and the issue of enforceability. In the present case, however, since the period of injunction sought by Phoenix is less than three months in duration, so that in practice there is no possibility of the trial taking place before the expiry of the covenants, some consideration needs to be given to the question whether Phoenix would be likely to succeed in establishing an entitlement to injunctive relief at a trial: see Lansing Linde v Kerr [1991] ICR 428 per Staughton LJ at 436.
12.It is common ground that the validity or otherwise of restrictive covenants falls to be determined at the date when the contract was entered into and not at the date when the covenants are sought to be enforced: see Gledhow Autoparts Limited v Delaney [1965] 1WLR 1366.
13.In Stenhouse Australia Limited v Phillips [1974] AC 391, Lord Wilberforce at 400 considered the subject matter in respect of which an employer may legitimately claim protection from an employee by a covenant which is in restraint of trade. He said:
"The employers' claim for protection must be based upon the identification of some advantage or asset inherent in the business which can properly be regarded as, in a general sense, his property, and which it would be unjust to allow the employee to appropriate for his own purposes, even though he, the employee may have contributed to its creation".
14.In the case of post-contract restrictions, Sir Christopher Slade, with whom the other members of the court agreed, said in Office Angels Limited v Rainer Thomas & O'Connor [1991] IRLR 214:
"(1) If the Court is to uphold the validity of any covenant in restraint of trade, the covenantee must show that the covenant is both reasonable in the interests of the contracting parties and reasonable in the interests of the public…;
(2) A distinction is, however, to be drawn between (a) a covenant against competition entered into by a vendor with the purchaser of the goodwill of the business, which will be upheld as necessary to protect the subject matter of the sale, provided that it is confined to the area within which competition on the part of the vendor would be likely to injure the purchaser in the enjoyment of the goodwill he has bought, and (b) a covenant between master and servant designed to prevent competition by the servant with the master after the termination of his contract of service…
(3) In the case of contracts between master and servant, covenants against competition are never as such upheld by the Court…
(4) The subject matter in respect of which an employer may legitimately claim protection from an employee by a covenant in restraint of trade was identified by Lord Wilberforce [in the passage quoted above].
(5) If, however, the Court is to uphold restrictions which a covenant imposes upon the freedom of action of the servant after he has left the service of the master, the master must satisfy the Court that the restrictions are no greater than are reasonably necessary for the master in his business… For any covenant in restraint of trade to be treated as reasonable in the interests of the parties, it must afford no more than adequate protection to the benefit of the party in whose favour it is imposed".
15.Mr McGregor referred in addition to TFS Derivatives Limited v Morgan [2005] IRLR 246, a decision of Mrs Justice Cox. The facts in that case are in significant respects similar to those in the present case. Mrs Justice Cox upheld a covenant in a contract between an equity derivatives broker and his former employer. The contract of employment included a clause by which the employee agreed that for a period of six months following the termination of his contract, less any period of "garden leave", he would not "… undertake, carry on or be employed, engaged or interested in any capacity in either any business which is competitive with or similar to a relevant business within the territory or any business an objective or anticipated result of which is to compete with the relevant business within the territory".
16.Another authority relied on by Mr McGregor was Dawnay Day & Co Limited v De Braconier D'Alphen & Others [1997] IRLR 285. The Judge, Robert Walker J (as he then was), in that case upheld restrictive covenants as being reasonably required to protect the employer's interests in their customer connection. It is to be noted, however, that the covenants in that case were contained in a shareholders' joint venture agreement between the claimant investment bank and three individuals who had formerly been employed by the bank as managers.
17.Although in the end the post-termination restraints in the present case have to be considered cumulatively, it is convenient to start by looking at them individually. Clause 12.2, which provides that the employee shall not compete with its former employer for a period of 6 months (less any time spent on garden leave), does not appear to me to be unreasonable. I did not understand Mr Croxford, who appeared for Mr Asoyag, to suggest otherwise. Nor in my judgment does anything turn on the geographical ambit of the restraint. The evidence, such as it is, suggests that Phoenix conducts its business in England and France and to an extent in North America. The reasons for adding Hong Kong and Israel are less clear. Since it is common ground that the covenant, if necessary, be severed to exclude those territories, I need say no more about it.
18.The real contest between the parties in relation to clause 12.2 is (paraphrasing that clause) whether or not the part of the business of GFI in which Mr Asoyag has contracted to be engaged or interested can be said to compete with any part of the business carried on by Phoenix in which Mr Asoyag was actually engaged or involved during his employment with Phoenix.
19.The case for Phoenix is that Mr Asoyag's work for GFI would compete with those parts of Phoenix's business with which Mr Asoyag was involved during his employment with Phoenix. The contention on behalf of Mr Asoyag is that Phoenix is not currently engaged in Eurostoxx Broking which is, according to his evidence, the Desk (and the only Desk) which GFI recruited him to join and to head up.
20.The background and experience of Mr Asoyag before he joined Phoenix is dealt with at paragraphs 5-14 of his witness statement. He says that he had a number of potentially valuable contacts and existing relationships before he joined Phoenix, including relationships with Eurostoxx traders at Nomura and with the head of the Equity Index Derivative Trading at Deutsche Bank and with Eurostoxx traders at Merrill Lynch.
21.I did not understand Mr McGregor to dispute Mr Asoyag's claim to have had significant trading contacts prior to his joining Phoenix. Indeed Mr McGregor argued that one of the reasons why Phoenix recruited Mr Asoyag was because Phoenix believed that some of those contacts could be successfully induced to do business with Phoenix in the field of Eurostoxx.
22.Whilst I recognise that the validity of the non-compete restriction of clause 12.2 must be judged by reference to the circumstances existing at the date of the contract, the question whether Mr Asoyag is acting or has acted in breach of that clause must be judged by reference to the dates when the acts relied on by Phoenix as constituting breaches took place. The use of the present tense in clause 12.2 ("competes") appears to me to permit of no other interpretation. Accordingly I have to consider whether at trial it is likely that the activities which GFI have employed Mr Asoyag to carry out can be said to compete with Phoenix's business.
23.Mr Croxford accepts that when Mr Asoyag was employed by Phoenix his trading activity was as to around 80% in the Eurostoxx market. However, Mr Croxford argues that it is clear from the evidence that since Mr Asoyag's departure such trades as Phoenix have carried out in that market are so insignificant that they cannot be said to amount to "competition" between Phoenix and GFI within the meaning of clause 12.2.
24.The evidence of M. Botbol at paragraph 27 of his first witness statement may be summarised as follows: he says that Phoenix needs the protection of an injunction for reasons including the fact that Phoenix has not made any voluntary or affirmative decision to refrain from brokering Eurostoxx trades or to exit that area of brokering; when Mr Asoyag joined Phoenix, he did "the lion's share" of brokering Eurostoxx's trades; since the resignation of Mr Asoyag Phoenix has only been able to broker a small number of trades on the Eurostoxx exchange because he (M. Botbol) is now the only one who can broker trades in this market and that he has been actively recruiting for a replacement for Mr Asoyag but to date has been unable to hire a suitable candidate.
25.In support of his assertion that Phoenix has continued to carry out trades, albeit a small number of trades, M. Botbol exhibits at page 7 of HB1 a document listing the three Eurostoxx trades which Phoenix carried out between 17 December 2009 and 12 March 2010. Those trades generated an income of no more than €13-15,000. That is approximately 3% of the average fee income per month generated whilst Mr Asoyag was employed at Phoenix. The last trade carried out by Phoenix was on 12 March 2010, that is, on the day after Mr Asoyag gave notice to Phoenix that he was about to start work with GFI.
26.It seems to me that if this matter were to proceed to trial, the trial judge is likely, to put it no higher, to draw the inference that the trade on 12 March 2010 was carried out solely in order to bolster Phoenix's case that it is still active in the Eurostoxx market. The reality is in my judgment that there has been no genuine trading by Phoenix in the Eurostoxx market since 14 January 2010. I see no prospect of any such trading being resumed during the remaining portion of the 3 month restraint period provided for in Mr Asoyag's contract.
27.This conclusion appears to me to be borne out by the evidence of M.Botbol himself: he says that on Mr Asoyag's arrival at Phoenix there was no real business in that market. Further, according to the evidence of Mr Asoyag, he was essentially broking in Eurostoxx with contacts known to him before he joined Phoenix. In paragraph 34 of his second witness statement Monsieur Botbol attributes Phoenix's inability to hire a replacement for Mr Asoyag to its limited resources and inability to offer large sign-on bonuses to attract brokers. At paragraph 40, however, Monsieur Botbol asserts that as recently as 26 March 2010 (that is after the departure of Mr Asoyag) Phoenix brokered several Eurostoxx prices/quotes and traded one of them. I shall return to that assertion hereafter.
28.Such being the state of the evidence I return to the question whether there is a real prospect that Mr Asoyag's broking on behalf of GFI in the Eurostoxx market would at trial be held to amount to competing with any part of the business carried on by Phoenix at the time of those trades on the part of GFI. In my judgment the answer to that question must be no. The position in the present case is in important respects different from the position which obtained in TFS v Morgan and in the Dawnay Day case.
29.I turn next to the question whether, as Phoenix alleges, Mr Asoyag is or has been acting in breach of clause 12.3 of the contract which prohibits him from soliciting or dealing with clients and customers or prospective clients and customers of Phoenix for a period of 6 months from the termination of his contract. By its express terms clause 12.3 restricts Mr Asoyag from soliciting and dealing "in competition with Phoenix" in relation to the business activities of Phoenix in which Mr Asoyag was engaged or involved during his employment by Phoenix.
30.It is accepted on behalf of Phoenix that the business which Mr Asoyag has been employed by GFI to carry out is exclusively confined to trades carried out on the Eurostoxx Desk. I have already explained why I do not accept that Mr Asoyag's trading on behalf of GFI in Eurostoxx cannot be said to "compete with" any part of the business of Phoenix since Phoenix does not operate in that market. Any solicitation of clients or customers which Mr Asoyag might carry out during the restraint period and any dealings by him on behalf of GFI would necessarily be in the field of Eurostoxx brokering which forms no part of Phoenix's business. I see no real prospect of Phoenix being able to establish at any trial that Mr Asoyag would be acting in breach of the covenant contained in clause 12.3 of the contract of employment.
31.My conclusions on the construction of clauses 12.2 and 12.3 of themselves entitle Mr Asoyag to the discharge of most of the injunctive relief granted on 25 March 2010 since those are the two clauses on which Phoenix principally relied in support of its entitlement to post-contract relief. I should nevertheless deal with Phoenix's further contention that Mr Asoyag has improperly made use of confidential information belonging to Phoenix. At paragraph 9 of his first witness statement M. Botbol sets out at paragraph 9 (a-l) the range of confidential information belonging to Phoenix to which Mr Asoyag is said to have had access during his employment. At paragraphs 34-35 of that witness statement M.Botbol claims to have discovered evidence showing that Mr Asoyag took away confidential information consisting in a partial client list for Phoenix's equity derivatives desk which is said to have been sent by email dated 19 August 2009 to his own personal hotmail account. It is said that this information would be valuable to a competitor such as GFI. M. Botbol refers to another email sent to his personal account in August 2009 outlining how Phoenix might work with SOCGEN.
32.Mr Asoyag in his witness statement answered these allegations of breach of confidence as follows: he reiterates that he had strong pre-existing relationships with the banks and denies that he came to know them in the course of his employment with Phoenix. Moreover he asserts that the information for which M. Botbol claims confidentiality would not have any valuable currency after 3 months, especially since many of the commission rates are fixed every 6 months and most of them are standard rates. As to the emails sent to his personal accounts in August 2009, Mr Asoyag points out that the email sent on 14 August 2009 itself contains an earlier email sent from an employee of SOCGEN to a Mr Ahmad and other Phoenix employees and contains non-technical information about a platform on which to trade a cash equity. Mr Asoyag denies that the email has the necessary quality of confidence. As to the email sent on 19 August 2009, Mr Asoyag recalls that the email containing the telephone numbers was sent to him by Mr Miska in order to enable Mr Asoyag to arrange to have the numbers programmed into his switchboard in readiness for his return to London from France (where he had been working for Phoenix). Mr Asoyag asserts that Mr Miska, who had recently joined Phoenix, mistakenly thought that he (Mr Asoyag) was working on FTSE clients and so sent the wrong numbers. Mr Asoyag says that he has never used those numbers for purposes other than working for Phoenix and has no intention of doing so in the future. Finally Mr Asoyag points out that it should have been apparent to Phoenix that it was wrong for Phoenix to allege that he had sent an email to his own personal email account given that Phoenix were aware that the telephone numbers had been entered by Sonia Alvesmeira (another employee of Phoenix) to Mr Miska.
33.Mr McGregor submitted that this explanation by Mr Asoyag raises more questions than it answers. He invited the court to order the deletion from Mr Asoyag's computer of the email of 14 August 2009 and the information contained in that email be embargoed from disclosure to GFI.
34.In the heavily redacted form in which they were exhibited to the first witness statement of M. Botbol, the emails were, at least to me, difficult to follow. I am satisfied that the sending of the emails, far from disclosing impropriety on the part of Mr Asoyag, were in reality wholly unobjectionable.
35.I am not persuaded that it is likely that Phoenix will be able at any trial to make good the allegations of breaches of confidence on the part of Mr Asoyag. As to the SOCGEN email sent on 14 August 2009 that appears to have been nothing more than a sales pitch. The explanation of Mr Asoyag for sending that document to his London email account, namely that it might be needed in connection with setting up the post he was due to take up in London, seems credible. As to the emails of 19 August, it appears to me in the light of earlier emails now exhibited to the 2nd witness statement of M.Botbol that there is nothing sinister about them. Ms Alvesmeira, who herself dealt with FTSE clients, wrongly assumed that Mr Asoyag also would be dealing with those clients. Mr Miska made the same assumption. I have no reason to doubt the evidence of Mr Asoyag that the reason why the emails were sent to his hotmail account in London was that he did not have remote access to his Phoenix email at that date. I see no real likelihood that Phoenix would be able to establish at any trial that the telephone numbers of FTSE clients would have been of any interest to Mr Asoyag.
36.I am not persuaded that there is a serious issue to be tried as to the alleged breach of confidence on the part of Mr Asoyag in having the list of traders and banks.
37.It is in my judgment regrettable that the emails exhibited to Mr Botbol's first witness statement were excessively and inappropriately redacted. It is also regrettable that, after receiving Mr Asoyag's explanation for the list of telephone numbers being emailed to London, Phoenix persisted in the allegation that Mr Asoyag was guilty of breach of confidence.
38.For the reasons which I have set out, my conclusion is that the prospects of Phoenix being able to establish at trial any breaches of the restrictive covenants contained in clause 12.2 and 12.3 of Mr Asoyag's contract of employment or any breaches of confidence on his part are insufficient to justify the continuance of the injunction.
39.I should nevertheless deal briefly with three issues upon which I heard argument. The first is whether the post-termination restraints contained in clause 12.2 and/or 12.3 are unenforceable as being in unlawful restraint of trade. The second is whether the injunction would in any event have been discharged on the ground that damages would be an adequate remedy for Phoenix. The third is whether Phoenix failed to make full and frank disclosure on the application to Hickinbottom J with the result that Mr Asoyag would be entitled to the discharge of the injunction on that ground in any event.
40.Mr McGregor's submission is that on their proper construction the post-termination restraints contained in the contract of employment were both reasonable and lawful in terms of their duration, the ambit of the restraints imposed and their geographical extent. He contends that Phoenix had a legitimate interest in protecting itself both in regard to its clients and its products and prices. He relied on TFS Derivatives v Morgan and on Dawnay Day.
41.The case advanced by Mr Croxford in relation to both clauses 12.2 and 12.3 is that the restraints are unlawful and therefore unenforceable because Phoenix has failed to identify any confidential information deserving of protection and the extent of the restrictions imposed is unreasonable. Mr Croxford points out that much of the allegedly confidential information was known to Mr Asoyag prior to his joining Phoenix and accordingly was not made known to him as an incident of his employment. He argues further that the covenants contained in both 12.2 and 12.3 are unreasonable inasmuch as they restrain Mr Asoyag from employment with any form of competitor notwithstanding that his role at GFI is confined to the Eurostoxx Desk. Both the extent and the period of the restraints are greater than necessary.
42.With one qualification, I have concluded that it is unlikely that Mr Asoyag would be able to establish at trial that either of the covenants contained in clauses 12.2 and 12.3 are unenforceable as being an unreasonable restraint of trade. In arriving at that conclusion I have borne in mind the relatively limited duration of the covenant contained in clause 12.2 and the fact that the restriction is confined to participation in a business which competes with that part of Phoenix's business in which Mr Asoyag was involved whilst employed with them. I reject the submission that the covenants not to solicit or to deal with Phoenix's clients or customers are unreasonably wide. It appears to me that there are in this connection parallels to be drawn between the present case and the facts in TFS Derivatives and Dawnay Day. No doubt the draftsman of the covenants in the present case had those two authorities in mind.
43.The qualification to which I have referred relates to clause 12.2 and to its geographical ambit. I am not persuaded that it was reasonable in order to protect the legitimate commercial interests of Phoenix to extend the restraint to either Israel or Hong Kong or North America. I accept that Eurostoxx Broking has some International ramifications but not such as are in my judgment sufficient to justify the wide geographical restraints contained in the definition in the contract of "Restricted Area".
44.The second issue is whether an injunction would have been refused on the ground that damages would be an adequate remedy. I am satisfied that the potential damage to Phoenix, if an injunction were to be refused, would be limited and in any event capable of quantification. The limited duration of the restraints is an important factor to be taken into consideration. By contrast, if an injunction were to be continued against Mr Asoyag but later discharged at trial, the damage to Mr Asoyag would not be easily quantifiable. It would be hard to quantify the damage which Mr Asoyag would or might suffer if he were to be restrained from dealing with his former contacts, albeit over a short period.
45.Finally I turn to the question whether it can be said that Phoenix failed to make full and frank disclosure at the hearing before Hickinbottom J on 25 March 2010. As I have said, Mr Asoyag's legal advisers were informed that the application was going to be made but the period of notice was so short that they were unable effectively to oppose the granting of an injunction. As is well known, the duty of disclosure on the party applying for injunctive relief is a heavy one. I have criticised earlier in this judgment the manner in which Phoenix dealt in its evidence with the emails sent on 14 and 19 August 2009. Even assuming the information contained in those emails to be confidential, it appears to me that Phoenix is open to serious criticism for persisting in the allegation of breach of confidence in relation of those two emails once they had received the explanation contained in Mr Asoyag's witness statement. I have also criticised the manner in which the emails were redacted at the time of the hearing on 26 March. Whilst I do consider that the appropriate course for Phoenix to have adopted would have been to withdraw that particular allegation of breach of confidence against Mr Asoyag, I have concluded with some hesitation that the failure to make such a withdrawal is not such as would have justified my refusing to grant injunctive relief if I had otherwise thought it appropriate to continue the injunction.
Published: 27/04/2010 14:01