the republic of trinidad and tobago in the high...

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THE REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

CV 2016 – 00289

BETWEEN

INTERNATIONAL SHIPPING LIMITED

Claimant

AND

NIKKI RAMANAN

MACHEL RAJKUMAR

NICOLE SALVADOR

STRATEGIC LOGISTICS LIMITED

Defendants

Before: Mr Justice Ronnie Boodoosingh

Appearances:

Mr Rajiv Persad and Mr Lee Merry for the Claimant

Mr Gerald Ramdeen and Mr Darryl Heeralal for the Defendant

Date: 11 March 2016

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RULING

1. The present application by the claimant, International Shipping Limited (the claimant or

ISL), is for the continuation of a springboard injunction granted by Charles J on 4 February

2016. The defendants seek its discharge.

Preliminary Matters

2. Certain preliminary objections were made by Counsel for the defendant. First, relying on

the case of Aldanac Industries Limited v Black (1962) 5 WIR 233 per Wooding CJ, the

defendant says the affidavit in support of the injunction was sworn before the claim was filed and

that this makes the application invalid. In that case, Wooding CJ noted that an affidavit could

only be sworn in matters of that kind after the writ of summons had been duly issued because

Order 32 r. 2 of the then RSC, required every affidavit must be intituled in the cause or matter in

which it is sworn, and it cannot be intituled unless there is a cause or matter. The affidavit had

been sworn some three days before the writ had been issued.

3. This, in my view, is different from the present Part 31 of the CPR on affidavits. 31.2 (a)

provides it must be headed with the title of the proceedings. The affidavit here was sworn the

day before the application was made. An application for interim injunctive relief must be

supported by evidence. There is no specific provision as to when the evidence should be sworn.

It makes sense that it should be as close to the filing of the application as possible. Usually, the

last step before filing the application should be to have the affidavit sworn. Further, the CPR

does contemplate that in appropriate cases an injunction may be sought even where a claim has

not as yet been filed. Even if this was an irregularity, the rules do provide that the court can

make an order on the undertaking that the evidence will be re-sworn. However, in my view the

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Aldanac situation is distinguishable and I do not think there is a need for the affidavit to be re-

sworn.

4. Second, the defendant took objection to certain paragraphs of the affidavit of Shivana

Lauglin, sworn in support of the application. The affidavit did state that the information was

within her knowledge and where it was not within her knowledge, the source was generally

stated as was the belief of the deponent. The deponent might have been more careful to identify

wherever a fact was asserted on information and belief to specify the source. In some cases the

source is readily apparent. But the approach I chose to take was to consider the affidavit as a

whole and to attach such weight as could be attached to particular statements in the affidavit.

Where it was clear that assertions could not have been within her knowledge and the source was

not stated, I disregarded the evidence as required. What I have relied on will be clear in the rest

of the judgment.

5. A third point was taken on delay. It was advanced that the first and second defendants

had become directors of the fourth defendant in July 2015 so time for the injunction should run

from then. I disagree. As is evident from the Shivana Laughlin affidavit, the events started to

unfold as knowledge came to the leadership of the claimant company in December 2015. An

investigation was then undertaken. The evidence then had to be compiled and presented. This

would not have been a run of the mill application, but would have taken some time for

instructions to be given and relevant research to be undertaken. The application was filed on 3

February 2016. In those circumstances, there is no unreasonable delay by the claimants.

6. The fourth point concerned the terms of the injunction which the defendant submitted

was far too wide and unworkable. This will be dealt with later when I come to relief.

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Evidence

7. The claimant is a limited liability company in the business of freight forwarding,

intermodal transportation, marine insurance, customs brokerage and logistics. It is a line agent

for Evergreen Line, the fourth largest global carrier in the world. It owns and operates a custom

bonded warehouse in El Socorro. It is a family controlled company. The company was started

in 1997 by Michael Laughlin. His daughter, the deponent for the injunction application, Shivana

Laughlin, and her mother, Aysha Laughlin, are key managers in the company. It is a family

dominated business even though non-family members hold important positions.

8. The defendants are Nikki Ramanan (Ramanan), Machel Rajkumar (Rajkumar), Nicole

Salvador (Salvador) and Strategic Logistics Limited (SLL) respectively. Ramanan and

Rajkumar are directors of SLL, along with Ramanan’s husband, Sheldon Ramanan, an attorney-

at-law. Salvador is a manager at SLL. They are all former employees of the claimant. SLL is

also undertaking business in some of the same areas as the claimant, particularly in the provision

of brokerage services. It can be seen to be a competitor of the claimant company as far as this

business is concerned.

9. Ramanan and Rajkumar were terminated as employees of the claimant in December

2015. Salvador resigned in December 2015. Ramanan was the Brokerage manager from 17

November 2014 and had worked at the claimant company before. According to the claimant,

she supervised some employees, coordinated brokerage jobs, did administrative functions,

authorised payments, approved billings on brokerage services, ensured files were secured,

contacted clients, reported to directors and had keys and access codes to the premises. Rajkumar

was a Document Supervisor. He checked data, classified items under the Customs Common

External Tariff, handled imports and export shipments at various ports, entered data to apply for

import permits and licences, contacted clients, ensured documents were attached to customer

files, secured files and held keys and access codes. Salvador was Account Executive. She

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visited customers, kept contact with them, prepared sales plans, quotations, bookings reports,

daily sales reports; attended meetings, visited customers to assist with collection of accounts

receivables. I should note that the first three defendants dispute some of the functions attributed

to them. Nonetheless the majority of these functions are accepted.

10. SLL was incorporated on 21 July 2015. Thus Ramanan and Rajkumar were directors of a

competitor while they worked for the claimant company.

11. The claimant is saying that the first three defendants breached their duty of fidelity and

confidentiality and owed a fiduciary duty to the claimant as implied terms of their contracts of

employment. While there were restrictive covenant clauses in the contracts of Salvador and

Ramanan, the claimant is not relying on these for the purposes of the injunction hearing. There

was a non-disclosure clause in the contract of Rajkumar. The claimant is also not relying on this

clause. This is an important fact in this case.

12. The key facts alleged by the claimant in support of the application for the injunction

include the following. Salvador dealt with the clients of the claimant. She visited them,

contacted them, dealt with their business and issues. Ramanan also had access to the clients as

did Rajkumar.

13. The management of the claimant in the last quarter of 2015 started to receive complaints

from clients about the slow pace at which the Customs Brokerage Department was functioning.

There was a backlog of shipping documents which was causing delays in customs clearance of

clients’ shipments. This had not happened before to the extent it was happening. On 10

December 2015, a meeting was held to discuss this. The first two defendants were present.

Ramanan identified another employee, one Kirk Ramcharitar as a slow performer. An

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arrangement was made that both Ramanan and Rajkumar would be paid extra remuneration to

assist with clearing the backlog.

14. Ramcharitar met with Shivana Laughlin and her mother Aysha Laughlin. He informed

them that Rajkumar and Ramanan were operating a business in direct competition with ISL. He

stated these operations were being conducted during office hours and using ISL’s resources such

as their software program. He gave a name of Antonio Gomez who was being used as a licensed

customs broker, who did not do work for ISL.

15. Checks were made on the computer system by the IT Manager, Kwasi Thomas, on their

ACE and Outlook email. 30 entries were found with a brokerage sequence beginning with “SL”

which is not a numbering/coding system followed by ISL. These entries listed Gomez as broker.

Entries were made between 6 November 2015 to 16 December 2015. 13 of the 16 clients listed

in these transactions were ISL clients.

16. The only persons having access to the ACE programming were members of the Customs

Brokerage Department, including Ramanan and Rajkumar along with Thomas. There was a

unique pin that each customs clerk had.

17. Laughlin spoke to a Suresh Mohan at Customs and Excise who was the head of their

programming section of their software system called Asycuda. He checked the 30 enteries and

the unique pin on them belonged to Ramanan. The pin was associated with a broker Antonio

Gomez and a company named Strategic Logistics Limited, the fourth defendant, of which

Ramanan, as noted above, was a director.

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18. Laughlin checked the Asycuda programme about 22 December 2015 and was able to

verify that each of the 30 shipments were cleared through customs by SLL before 17 December

2015. ISL received no fees for these.

19. Ramanan, on behalf of SLL, also had an email exchange with Neil Khan, an employee of

ISL in respect of an ISL client, Terrence Lalla.

20. On 17 December 2015 a meeting was convened. Ramanan and Rajkumar were asked if

they were familiar with a company named Strategic Logistics Limited and they both disavowed

knowledge of it.

21. ISL obtained a copy of a Declaration of Authorisation Form which had the handwriting

of Rajkumar and Ramanan showing SLL was conducting business with Gomez.

22. An investigation showed customer files were missing in relation to clients to whom SLL

provided services; at least 10 of the 30 transactions were entered in ISL’s log book between 26

October 2015 and 9 December 2015, but the documents are missing from the office; between 17

November 2015 and 17 December 2015 Ramanan and Salvador emailed the formats for the

ISL’s customer listings, cost rates, sell rates, invoice formats, cheque request formats, and

voucher formats to their personal email addresses. The brokerage contact list with the names

and contact information for all of ISL’s customs brokerage clients was also emailed by Ramanan

to her private email address. Salvador emailed an agent in China to get work for SLL about 21

October 2015. On 15 December 2015 Salvador sent an email from her work email to SLL’s

email address addressed to “Nik”, the name Ramanan was referred to in the office for short.

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23. After 17 December 2015, Laughlin spoke to several clients who told them that Ramanan

had been telling them that ISL had a backlog of work and were unable to customs clear their

cargo rent and demurrage free. They were told that SLL could do the work faster and save them

from rent and demurrage fees.

24. Most of the 30 transactions made by SLL were assigned to their Account Executive,

Salvador.

25. On 18 December 2015 Salvador was confronted about SLL and she denied knowing

about SLL. Salvador tendered her resignation on 21 December 2015.

26. The first 3 defendants had access to ISL’s brokerage fee calculator designed by ISL’s

Financial Comptroller, commodity classifications performed by their consultant Clive

Ragoonath, ISL’s price list with rates used for customer invoicing and ISL’s customer listing

with contact information.

27. Three employees have informed ISL management of approaches by SLL. The employees

were promised a “side cut” if they passed any disgruntled ISL customers to SLL. Laughlin also

said Ramanan approached Ragoonath to move to SLL. Clients have informed Laughlin of

approaches to them to switch to SLL.

28. ISL has sustained losses to date of foregone brokerage revenue, demurrage and rent paid

and overtime paid to staff to clear their backlog, which they had never experienced before.

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29. ISL says the defendants are using confidential information, the property of ISL, to further

their business interests and to gain an unfair advantage over them. They have also solicited their

employees and clients.

30. Some of these contentions have been supported by documents such as the email print

outs; the client listing with the “SL” numbers with Gomez as broker; the registration records for

SLL; the declaration of authorisation for Gomez.

31. Some of these matters have been disputed and some have not. Ramanan, for example,

denies that the information is of a confidential nature. She denied that the “SL” coding could

only be entered from the claimant’s computers. She denies they approached any clients. She

denies they approached employees. She denies that all of the documents are ISL documents.

Some, she says, are essentially standard documents in the industry. Ramanan denies certain of

the responsibilities including having the custody of client files and being responsible for securing

them. Salvador says she put together certain of the documents such as the brokerage lists.

Rajkumar denies certain of the responsibilities attributable to him. Rajkumar says the customers

who went to SLL were not solicited, but went of their own accord. This seems fairly odd to me

since the customers could only know of SLL, which was new to the market, if somebody had

told them about it.

32. At paragraph 59 Ramanan says brokerage services are the mainstay of the company and

to continue the injunction will cripple it. Salaries of employees have been cut since the

injunction and they have lost customers since they are unable to clear the goods of those

customers.

33. At paragraph 34 Ramanan does say however that the third defendant would have referred

some of the customers of ISL, who were having problems, to the fourth defendant.

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34. This could only, of course, be done if there was some discussion between the owners of

the fourth defendant and the third defendant.

35. The court cannot at this stage make definitive findings on these disputed matters. The

court must necessarily look to see what the evidence is, see what is not disputed, and form some

views on the evidence as a whole. Where there is a keen contest on the facts the court cannot

come to any clear conclusions without hearing cross-examination at a trial: USB Wealth

Management case. There were many affidavits filed. There were allegations and denials and

counter-allegations. The approach I have taken is to try to determine the application on what is

agreed and to rely on uncontested matters as far as possible. I have relied on ‘admissions’ of the

defendants. I have also tried to form views, where appropriate, on the strength of competing

evidence. For example, where there were rival contentions by Thomas and Ramanan I noted that

he is an Information Technology specialist and his evidence seemed more detailed and specific.

On other issues, I have found it unnecessary to resolve sharp conflicts on facts and I leave those

to be resolved at the trial.

36. Each case turns on its own circumstances. The nature of the alleged breaches is

important. Ramanan deposes that granting this injunction is likely to cause serious hardship on

the fourth defendant. This to my mind illustrates that the fourth defendant’s operation, at this

time, is significantly dependent on the business it is getting from the claimant’s present or former

clients.

37. These three defendants were important members of a close-knit business enterprise even

though they were not the entirety of the claimant’s brokerage services team or department. But

the brokerage business of the claimant, according to the claimant, comprises about 25% of its

business.

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38. The claimant, through its counsel, has said they are not pursuing this application for an

injunction based on the restrictive covenants in the contracts of Ramanan and Salvador and on

the written terms of the contracts of the first 3 defendants. They base the application on the

duties of fidelity to their employer, confidentiality, fiduciary obligations of an employee and

unlawful conduct.

Law on Injunctions

39. In National Commercial Bank Jamaica v Olint Corporation [2009] 1 WLR 1405 at

paras 16 to 19, Lord Hoffman gave guidance on the approach the court should take to deciding

whether to grant interim injunction relief:

“16. The second feature is the basis upon which Jones J decided to refuse an

interlocutory injunction and the Court of Appeal decided to grant one. It is often

said that the purpose of an interlocutory injunction is to preserve the status quo,

but it is of course impossible to stop the world pending trial. The court may order

a defendant to do something or not to do something else, but such restrictions on

the defendant's freedom of action will have consequences, for him and for others,

which a court has to take into account. The purpose of such an injunction is to

improve the chances of the court being able to do justice after a determination of

the merits at the trial. At the interlocutory stage, the court must therefore assess

whether granting or withholding an injunction is more likely to produce a just

result. As the House of Lords pointed out in American Cyanamid Co v Ethicon

Ltd [1975] AC 396, that means that if damages will be an adequate remedy for

the plaintiff, there are no grounds for interference with the defendant's freedom of

action by the grant of an injunction. Likewise, if there is a serious issue to be

tried and the plaintiff could be prejudiced by the acts or omissions of the

defendant pending trial and the cross-undertaking in damages would provide the

defendant with an adequate remedy if it turns out that his freedom of action

should not have been restrained, then an injunction should ordinarily be granted.

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17 In practice, however, it is often hard to tell whether either damages or the

cross-undertaking will be an adequate remedy and the court has to engage in

trying to predict whether granting or withholding an injunction is more or less

likely to cause irremediable prejudice (and to what extent) if it turns out that the

injunction should not have been granted or withheld, as the case may be. The

basic principle is that the court should take whichever course seems likely to

cause the least irremediable prejudice to one party or the other. This is an

assessment in which, as Lord Diplock said in the American Cyanamid case

[1975] AC 396, 408:

"It would be unwise to attempt even to list all the various matters which

may need to be taken into consideration in deciding where the balance lies,

let alone to suggest the relative weight to be attached to them."

18 Among the matters which the court may take into account are the prejudice

which the plaintiff may suffer if no injunction is granted or the defendant may

suffer if it is; the likelihood of such prejudice actually occurring; the extent to

which it may be compensated by an award of damages or enforcement of the

cross-undertaking; the likelihood of either party being able to satisfy such an

award; and the likelihood that the injunction will turn out to have been wrongly

granted or withheld, that is to say, the court's opinion of the relative strength of

the parties' cases.

19 There is however no reason to suppose that, in stating these principles, Lord

Diplock was intending to confine them to injunctions which could be described as

prohibitory rather than mandatory. In both cases, the underlying principle is the

same, namely, that the court should take whichever course seems likely to cause

the least irremediable prejudice to one party or the other: see Lord Jauncey in R v

Secretary of State for Transport, Ex p Factortame Ltd (No 2) (Case C-213/89)

[1991] 1 AC 603, 682-683. What is true is that the features which ordinarily

justify describing an injunction as mandatory are often more likely to cause

irremediable prejudice than in cases in which a defendant is merely prevented

from taking or continuing with some course of action: see Films Rover

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International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670, 680. But this is

no more than a generalisation. What is required in each case is to examine what

on the particular facts of the case the consequences of granting or withholding of

the injunction is likely to be. If it appears that the injunction is likely to cause

irremediable prejudice to the defendant, a court may be reluctant to grant it unless

satisfied that the chances that it will turn out to have been wrongly granted are

low; that is to say, that the court will feel, as Megarry J said in Shepherd Homes

Ltd v Sandham [1971] Ch 340, 351, "a high degree of assurance that at the trial it

will appear that the injunction was rightly granted".

40. In other cases, it will be necessary to apply a higher standard. In this case, for example,

the real benefit of the injunction remedy will be up to the trial, if so long. A springboard

injunction cannot be permanent and therefore the real effective time for its operation will be in

this period. While the trial will go on as far as damages are concerned, it is unlikely that an

injunction will have effect after trial. Thus a higher degree of proof is necessary to apply at this

stage in respect of the granting of the injunction since it is at this stage that the effective

injunctive relief is relevant. There must necessarily be an assessment of the strength of the

claimant’s case on the breaches which have been advanced.

41. In CEF Holdings Limited v Brian Mundey and Others [2012] EWHC 1524 (QB)

Silber J noted at paras 25 to 30:

25. The first issue that has to be resolved is how this court should approach this

interim application. CEF contend that I should apply the normal American

Cyanamid test ([1975] AC 39) and this entails considering whether there is at

least a serious question to be tried and then applying the balance of convenience

test. The defendants disagree, and they contend first that the American

Cyanamid test is not appropriate as no trial can take place, or at least no

judgment can be obtained, before the periods in the restraint provisions expire by

September or mid-October 2012. So they contend that CEF has to satisfy the

court that it will be more likely than not that it will obtain the relief if a trial were

to take place.

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26. The defendants derived support for that contention from the comments of

Lord Diplock in NWL Ltd v Woods [1979] 1 WLR 1294 at 1306 in which

having stated that a Court ought to "give full weight to all the practical realities of

the situation to which the injunction will apply" and he proceeded to explain that

the American Cyanamid approach:-

"was not dealing with a case in which the grant or refusal of an injunction

at that stage would, in effect, dispose of the action finally in favour of

whichever party was successful on the application, because there would

be nothing left on which it was in the unsuccessful party's interest to

proceed to trial.. Cases of this kind are exceptional but when they do

appear they bring into the balance of convenience an important additional

element".

27. The post-termination contractual restraints on the Third to Nineteenth

Defendants will expire between early September 2012 and mid-October 2012, as

they had all left CEF's employment by mid-April 2012. The Springboard relief

sought by CEF is only sought until 6 months after the termination of the

employment of the First and Second Defendants who left CEF's employment on 5

March and 4 April 2012 respectively, and so if injunctive relief was granted, it

would only last till 3 October 2012. CEF contend that there should be a speedy

trial and that court time would be available towards the end of July of this year. I

think that it is highly unlikely that the case would be ready for trial by then,

especially as CEF anticipates joining many further parties as defendants to this

action, such as any other Branch Managers who "have decided to leave CEF but

are still in its employ before moving to Yesss". In addition, the pleadings are at

their early stages as Claim Forms with a fourth version of the Particulars of Claim

having been served on 22 May 2012 and not all the Defendants have yet been

served. I gather that CEF have offered the Bond Pearce Defendants and Corporate

Defendants extensions of time for service of their Defences until 17th July 2012.

There were at the time of the hearing, for example, as I will explain in Section

VIII below, serious jurisdictional issues that will have to be resolved relating to

the right of CEF to sue some of the Gateley Defendants, who are domiciled in

either Scotland or Northern Ireland and this will further delay the start of the trial.

28. Even if I am wrong and the case would be ready for trial by July, it is

highly unlikely that a judgment would be given at the end of the trial, which

would last for at least ten days. Judgment is much more likely to be reserved and

then to be given at the end of September or much more likely in early October

2012 by which time the periods of restraint will have expired or at least almost

expired. In those circumstances, I consider that the defendants are correct in

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contending that I should not apply the American Cyanamid test, because as

Staughton LJ explained in Lansing Linde v Kerr [1991] 1 WLR 251 at 258,:-

"If it will not be possible to hold a trial before the period for which the

plaintiff claims to be entitled to an injunction has expired, or substantially

expired, it seems to me that justice requires some consideration as to

whether the plaintiff would be likely to succeed at a trial. In those

circumstances it is not enough to decide merely that there is a serious

issue to be tried."

29. Similar approaches were advocated in cases such as Lawrence David Ltd

v Ashton [1989] ICR 123, 135. In those circumstances, the proper approach is not

to apply the American Cyanamid test on this application, but instead to consider

in respect of claims for an injunction whether it is more likely that CEF would

succeed at trial. In case I am wrong on this approach, I will also then consider

what my decision would have been if the American Cyanamid test was

applicable.

30. No claim is made and no evidence has been adduced showing that any of

the individual defendants are in breach of the Customer Connection Restriction

Clause and so it must be assumed for the purpose of this application, first that this

provision is valid, and second that it would preclude the Third to Nineteenth

Defendants from dealing or inducing or soliciting or endeavouring to entice away

from CEF a customer or potential customer with whom the employee concerned

had contacts or dealings during the period of six months before the termination of

his employment. This is an important factor to be taken into account when

considering whether the terms of the Employee-Recruitment Restriction covenant

and the Non-Competition covenants are reasonable and enforceable.

Springboard Injunction

42. The springboard injunction came about from the case of Roger Bullivant Ltd v Ellis

[1987] 1 ICR 464. In Clear Edge – UK Limited v Gary Elliot and Others [2011] EWHC

3376 (QB) at paras 50 to 52 sets out the basis:

“50. So far as springboard relief is concerned, the jurisdiction to grant such

relief appears from the decision of the Court of Appeal in Roger Bullivant Ltd. v.

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Ellis [1987] 1 ICR 464. In that case an employee resigned and took with him,

among other things, a card index showing the names and addresses of the

plaintiff's former customers. The Defendant started a competing business and

there was a strong prima facie case that the former employee had contacted the

customers who were identified on the card index.

51. An injunction was granted by Falconer J, the relevant part of which was a

restriction on the Defendants from entering into or fulfilling any of the contracts

with customers which had been made with or through any person whose name

appeared on the card index which had been removed from the possession of the

plaintiffs. Nourse LJ observed at page 473 H that the card index information was

not a trade secret or an equivalent within the Faccenda Chicken categorisation but

fell within class 2 in that categorisation; but there had been a breach of the duty of

good faith in copying the card index. He went on to say at page 474 H:

"The value of the card index to the Defendants was that it contained a

ready and finite compilation of the names and addresses of those who had

brought or might bring business to the plaintiffs and who might bring

business to them. Most of the cards carried the name or names of

particular individuals to be contacted. While I recognise that it would

have been possible for the first Defendant to contact some, perhaps many,

of the people concerned without using the card index, I am far from

convinced that he would have been able to contact anywhere near all of

those whom he did contact between February and April 1985. Having

made deliberate and unlawful use of the plaintiffs' property, he cannot

complain if he finds that the eye of the law is unable to distinguish

between those whom, had he so chosen, he could have contacted lawfully

and those whom he could not. In my judgment it is of the highest

importance that the principle of Robb v. Green [1895] 2 Q.B. 315 which,

let it be said, is one of no more than fair and honourable dealing, should be

steadfastly maintained."

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52. On that basis at page 476G he described the purpose of Falconer J in

granting the injunction as being:

"... to prevent the Defendants from taking unfair advantage of the

springboard which he considered they must have built up by their misuse

of the information in the card index."

43. An employee owes a duty of fidelity to his employer. In some cases this will extend to

fiduciary duties. In Clear –Edge Popplewell J noted at paras 38:

38. I must now say something about the law as it applies to the obligations of

employees and the nature of springboard relief. In Helmet Integrated Systems

Limited v. Tunnard and others [2006] EWCA Civ. 1735, [2007] IRLR 126,

Moses LJ said this at paragraph 26:

"26. ... An employee must act with good faith towards his employer (see

e.g. Robb v Green [1895] 2 QB 315 at 317). An employee must receive

and obey the instructions of his employer, and devote his time and talents

to his employer's business. But whilst he must not compete with his

employer during the course of his employment, the duty of fidelity

imposes no inhibition on his competing against his former employer once

he has left. He is entitled to take the skill he has acquired and developed

during the course of his employment and apply it for his own benefit once

he has left, even if that involves competing against his former employer.

He may also take with him and use knowledge and information which he

has acquired, provided he does not use or disclose information properly

described as a trade secret (see e.g. Faccenda Chicken Ltd v Fowler

[1987] Ch 117 at 136).

27. This freedom to compete, once an employee has left, unrestrained by any

enforceable covenant, carries with it a freedom to prepare for future activities,

which the employee plans to undertake, once he has left. In Robb v Green (q.v.

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supra) Hawkins J concluded that a manager who had copied a list of customers

was liable in damages for breach of an implied term not to use such information

to the detriment of his employer. But he observed, in words echoed frequently

thereafter, that each case would depend upon its own circumstances and there will

be cases where an employee may legitimately canvass, issue circulars, have a

place of business ready and hire employees (see page 15). The Court of Appeal

made no observation suggesting disagreement when it affirmed Hawkins J's

conclusion.

The Legitimacy of Preparatory Activity

28. The battle between employer and former employee, who has entered into

competition with his former employer, is often concerned with where the line is to

be drawn between legitimate preparation for future competition and competitive

activity undertaken before the employee has left. This case has proved no

exception. But in deciding on which side of the line Mr Tunnard's activities fall, it

is important not to be beguiled into thinking that the mere fact that activities are

preparatory to future competition will conclude the issue in a former employee's

favour. The authorities establish that no such clear line can be drawn between that

which is legitimate and that which breaches an employee's obligations."

Fidelity

44. The law on the obligation of good faith and fidelity has been set out in the case of QBE

Management Services (UK) Ltd v Dymoke [2012] EWHC 80 (QB) and [2012] EWHC 116

(QB) at para 169 per Haddon-Cave J:

[169] The general principles relating to employees duties of good faith and fidelity

are settled and can be summarised in the following propositions:

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(1) It is indisputable that an employee owes his employer a contractual duty of

"fidelity", but how far it extends will depend on the facts of each case (per Lord

Green MR in Hivac v Park Royal [1946] Ch 169 at 174, [1946] 1 All ER 350, 115

LJ Ch 24).

(2) The more senior the staff the greater the degree of loyalty, fidelity and diligence

required (per Openshaw J in UBS Wealth Management (UK) Ltd v Vestra Wealth

LLP [2008] EWHC 1974 (QB), [2008] IRLR 965 at para 10).

(3) The first task of the court is to identify the nature of the employee's obligations

of fidelity and then to decide whether the employee's activities are in breach (per

Moses LJ in Helmet Integrated Systems v Tunnard [2006] EWCA Civ 1735, [2007]

IRLR 126 at para 32, [2007] FSR 437).

(4) The mere fact that activities are described by an employee as "preparatory" to

competition does not mean that they are legitimate (per Moses LJ I Helmet

Integrated Systems v Tunnard [2006] EWCA Civ 1735, [2007] IRLR 126, at para

28, [2007] FSR 437).

(5) It is a breach of the duty of fidelity for an employee to recruit or solicit another

employee to act in competition (see British Midland Tool v Midland International

Tooling Ltd [2003] EWHC 466 (Ch), [2003] 2 BCLC 523).

(6) Attempts by senior employees to solicit more junior staff constitutes particularly

serious misconduct (Sybron Corp v Rochem Ltd [1984] Ch 112, [1983] 2 All ER

707, [1983] IRLR 253).

(7) It is a breach of the duty of fidelity for an employee to misuse confidential

information belonging to his employer (see Faccenda Chicken Ltd v Fowler [1987]

Ch 117, [1986] 1 All ER 617, [1986] IRLR 69).

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(8) The court should ask whether the activities in which the employee is engaged

affect his ability to serve his employer faithfully and honestly and to the best of his

abilities (see Shepherds Investments Ltd v Walters [2006] EWHC 836 (Ch), [2007]

IRLR 110 at para 131, [2007] 2 BCLC 202).

45. Thus focus is placed on the employee’s actions while in the employ of his employer. An

important distinction arises after he leaves employment. Thus encouraging others to leave after

leaving the employment can in most cases be considered to be fair game.

46. In Hivac Limited v Park Royal Scientific Instruments Limited and Others 1 Ch 169

at 174 to 175 Lord Green MR noted:

“It has been said on many occasions that an employee owes a duty of fidelity to

his employer. As a general proposition that is indisputable. The practical

difficulty in any given case is to find exactly how far that rather vague duty of

fidelity extends. Prima facie it seems to me on considering the authorities and the

arguments that it must be a question on the facts of each particular case. I can

very well understand that the obligation of fidelity, which is an implied term of

the contract, may extend very much further in the case of one class of employee

than it does in others. For instance, when you are dealing, as we are dealing here,

with mere manual workers whose job is to work five and a half days for their

employer at a specific type of work and stop their work when the hour strikes, the

obligation of fidelity may be one the operation of which will have a

comparatively limited scope. The law would, I think, be jealous of attempting to

impose on a manual worker restrictions, the real effect of which would be to

prevent him utilizing his spare time. He is paid for five and a half days in the

week. The rest of the week is his own, and to impose upon a man, in relation to

the rest of the week, some kind of obligation which really would unreasonably tie

his hands and prevent him adding to his weekly money during that time would, I

think, be very undesirable. On the other hand, if one has employees of a different

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character, one may very well find that the obligation is of a different nature. A

manual worker might say: "You pay me for five and a half days work. I do five

and a half days work for you. What greater obligation have I taken upon myself?

If you want in some way to limit my activities during the other day and a half of

the week, you must pay me for it." In many cases that may be a very good answer.

In other cases it may not be a good answer because the very nature of the work

may be such as to make it quite clear that the duties of the employee to his

employer cannot properly be performed if in his spare time the employee engages

in certain classes of activity. One example was discussed in argument, that of a

solicitor's clerk who on Sundays it was assumed went and worked for another

firm in the same town. He might find himself embarrassed because the very client

for whom he had done work while working for the other firm on the Sunday

might be a client against whom clients of his main employer were conducting

litigation, or something of that kind. Obviously in a case of that kind, by working

for another firm he is in effect, or may be, disabling himself from performing his

duties to his real employer and placing himself in an embarrassing position. I can

well understand it being said: "That is a breach of the duty of fidelity to your

employer because as a result of what you have done you have disabled yourself

from giving to your employer that undivided attention to his business which it is

your duty to give." I merely put that forward, not for the purpose of laying down

the law or expressing any concluded opinion, but merely as illustrating the danger

of laying down any general proposition and the necessity of considering each case

on its facts.

47. In the textbook Labour Law, Fifth Edition by Simon Deakin and Gillian Morris, the

authors at page 313 noted in respect of the Hivac decision:

“A critical point about the duty set out in Hivac is that it only applies to the period

when the contract of employment is in force; if the employer wishes to restrain

post-contractual competition by the employee, it must do so by way of

restrictive covenant. If there is no such express term, the employee is allowed,

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in principle, to take certain steps by way of preparation for setting up in

competition with the employer, but must not do so if that involves making use of

confidential information.”

Fiduciary Duties

48. In Caterpillar Logistics v Huesca de Crean [2012] 3All ER 129 Stanley Burnton LJ

quoted Elias J in Nottingham University v Fishel as follows:

[59] In Nottingham University v Fishel [2000] IRLR 471 at 482-483, [2000] ICR

1462 at 1490, Elias J (as he then was) said:

'86. It is important to recognise that the mere fact that Dr Fishel is an

employee does not mean that he owes the range of fiduciary duties referred

to above. It is true that in [A-G v Blake (Jonathan Cape Ltd, third party)

[1998] 1 All ER 833, [1998] Ch 439] Lord Woolf, giving judgment for the

Court of Appeal, said that the employer-employee relationship is a

fiduciary one. But plainly the court was not thereby intending to indicate

that the whole range of fiduciary obligations was engaged in every

employment relationship. This would be revolutionary indeed, transforming

the contract of employment beyond all recognition and transmuting

contractual duties into fiduciary ones. In my opinion, the court was merely

indicating that circumstances may arise in the context of an employment

relationship, or arising out of it, which, when they occur, will place the

employee in the position of a fiduciary. In Blake itself, as I have indicated,

it was the receipt of confidential information. There are other examples.

Thus every employee is subject to the principle that he should not accept a

bribe and he will have to account for it (and possibly any profits derived

from it) to his employer. Again, as Fletcher-Moulton LJ observed in [Re

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Coomber, Coomber v Coomber [1911] 1 Ch 723 at 728], even an errand

boy is obliged to bring back my change, and is in fiduciary relations with

me. But his fiduciary obligations are limited and arise out of the particular

circumstances, namely that he is put in a position where he is obliged to

account to me for the change he has received. In that case the obligation

arises out of the employment relationship but it is not inherent in the nature

of the relationship itself.

87. As these examples all illustrate, simply labelling the relationship as

fiduciary tell us nothing about which particular fiduciary duties will arise.

As Lord Browne-Wilkinson has recently observed:

"... the phrase 'fiduciary duties' is a dangerous one, giving rise to a

mistaken assumption that all fiduciaries owe the same duties in all

circumstances. That is not the case." [Henderson v Merrett

Syndicates Ltd, Hallam-Eames v Merrett Syndicates Ltd, Hughes v

Merrett Syndicates Ltd, Arbuthnott v Feltrim Underwriting Agencies

Ltd, Deeny v Gooda Walker Ltd (in liq) [1994] 3 All ER 506 at 543,

[1995] 2 AC 145 at 206.]

88. This is particularly true in the employment context.

89. The employment relationship is obviously not a fiduciary relationship in

the classic sense. It is to be contrasted with a number of other relationships

which can readily and universally be recognised as "fiduciary relationships"

because the very essence of the relationship is that one party must exercise

his powers for the benefit of another. Trustees, company directors and

liquidators classically fall into this category which Dr Finn, in his seminal

work on fiduciaries, has termed "fiduciary offices". (See PD Finn,

Fiduciary Obligations (1977)). As he has pointed out, typically there are

two characteristics of these relationships, apart from duty on the office

holder to act in the interests of another. The first is that the powers are

conferred by someone other than the beneficiaries in whose interests the

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fiduciary must act; and the second is that these fiduciaries have

considerable autonomy over decision making and are not subject to the

control of those beneficiaries.

90. By contrast, the essence of the employment relationship is not typically

fiduciary at all. Its purpose is not to place the employee in a position where

he is obliged to pursue his employer's interests at the expense of his own.

The relationship is a contractual one and the powers imposed on the

employee are conferred by the employer himself. The employee's freedom

of action is regulated by the contract, the scope of his powers is determined

by the terms (express or implied) of the contract, and as a consequence the

employer can exercise (or at least he can place himself in a position where

he has the opportunity to exercise) considerable control over the employee's

decision-making powers.'

49. The headnote of the Caterpillar case states at (i):

“It was well established that the relationship between an employer and employee

was not a relationship in which the employee was a fiduciary in the sense that a

trustee or a solicitor was to his beneficiary or client, even though an employee

owed certain fiduciary duties to its employer. The principle under which barring-

out relief was available was confined to solicitors and the like, and there was no

authority to justify the extension of that relief to the ordinary relationship of

employer and employee. An employee could only be a fiduciary of the employer

such as to be amenable to the jurisdiction to grant barring-out relief in the most

exceptional circumstances. In the instant case there was nothing exceptional

which would justify the grant of such relief. Moreover, the claimant had not

contracted for barring-out relief. It could have required the defendant to enter into

an express covenant not to enter the employment of a customer or a competitor,

and any such covenant would have had to have been limited in time and

reasonable as between the parties and in the public interest. The claimant had not

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sought such a covenant, but had instead obtained from the defendant her

agreement in respect of its confidential information. It was no answer to say that it

was not the practice for employers to contract for express covenants in such a

way. Accordingly, the injunctive relief would not be granted (see [49], [58], [60],

[61], [64], [74]-[76], below); Prince Jefri Bolkiah v KPMG (a firm) [1999] 1 All

ER 517 applied; Rakusen v Ellis, Munday & Clarke [1911-13] All ER Rep 813,

Nottingham University v Fishel [2000] IRLR 471 and PCCW HKT Telephone Ltd

v Aitken [2009] 2 HKC 342 considered.”

Springboard Principles

50. The springboard injunction principles were summarised in the QBE Management case

at paras 239 to 247:

[239] The principles behind "springboard" relief are now well-established and, in

my view, can be summarised as follows.

[240] First, where a person has obtained a "head start" as a result of unlawful

acts, the court has the power to grant an injunction which restrains the wrongdoer,

so as to deprive him of the fruits of his unlawful acts. This is often known as

"springboard" relief.

[241] Second, the purpose of a "springboard" order as Nourse LJ explained in

Roger Bullivant v Ellis [1987] IRLR 491, [1987] FSR 172, [1987] ICR 464 is "to

prevent the Defendants from taking unfair advantage of the springboard which

[the Judge] considered they must have built up by their misuse of the information

in the card index" (at p 476G). May LJ added that an injunction could be granted

depriving Defendants of the springboard "which ex hypothesi they had unlawfully

acquired for themselves by the use of the Plaintiffs' customers' names in breach of

the duty of fidelity" (at 478E-G). The Court of Appeal upheld Falconer J's

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decision restraining an employee who had taken away a customer card index from

entering into any contracts made with customers.

[242] Third, "springboard" relief is not confined to cases of breach of confidence.

It can be granted in relation to breaches of contractual and fiduciary duties (see

Midas IT Services v Opus Portfolio Ltd, unreported Ch D, Blackburne J 21

December 1999, pp 18-19), and flows from a wider principle that the court may

grant an injunction to deprive a wrongdoer of the unlawful advantage derived from

his wrongdoing. As Openshaw J explained in UBS v Vestra Wealth (supra) at paras

3 and 4:

"There is some discussion in the authorities as to whether

springboard relief is limited to cases where there is a misuse of

confidential information. Such a limitation was expressly rejected in

Midas IT Services v Opus Portfolio Ltd, an unreported decision of

Blackburne J made on 21 December 1999, although it seems to have

been accepted by Scott J in Balston Ltd v Headline Filters Ltd

[1987] FSR 330 at 340. In the 20 years which have passed since that

case, it seems to me that the law has developed; and I see no reason

in principle by which it should be so limited.

In my judgment, springboard relief is not confined to cases where

former employees threaten to abuse confidential information

acquired during the currency of their employment. It is available to

prevent any future or further economic loss to a previous employer

caused by former staff members taking an unfair advantage, and

'unfair start', of any serious breaches of their contract of

employment (or if they are acting in concert with others, of any

breach by any of those others). That unfair advantage must still exist

at the time that the injunction is sought, and it must be shown that it

would continue unless retrained. I accept that injunctions are to

protect against and to prevent future and further losses and must not

be used merely to punish breaches of contract."

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[243] Fourth, "springboard" relief must, however, be sought and obtained

at a time when any unlawful advantage is still being enjoyed by the

wrongdoer: Universal Thermosensors v Hibben [1992] 3 All ER 257,

[1992] 1 WLR 840, [1992] FSR 361 Nicholls V-C; see also Sun Valley

Foods Ltd v Vincent [2000] FSR 825 esp at 834.

[244] Fifth, "springboard" relief should have the aim "simply of restoring

the parties to the competitive position they each set out to occupy and

would have occupied but for the Defendant's misconduct" (per Sir David

Nicholls VC Universal Thermosensors v Hibben [1992] 1 WLR 840 at

855A). It is not fair and just if it has a much more far-reaching effect than

this, such as driving the Defendant out of business 855A:

[245] Sixth, "springboard" relief will not be granted where a monetary

award would have provided an adequate remedy to the Claimant for the

wrong done to it (Universal Thermosensors v Hibben [1992] 1 WLR 840

at 855B).

[246] Seventh, "springboard" relief is not intended to punish the

Defendant for wrongdoing. It is merely to provide fair and just protection

for unlawful harm on an interim basis. What is fair and just in any

particular circumstances will be measured by (i) the effect of the unlawful

acts upon the Claimant; and (ii) the extent to which the Defendant has

gained an illegitimate competitive advantage (see Sectrack NV v (1)

Satamatics Ltd (2) Jan Leemans [2007] EWHC 3003 (Comm) Flaux J).

The seriousness or egregiousness of the particular breach has no bearing

on the period for which the injunction should be granted. In this regard, it

is worth bearing in mind what Flaux J, said at para 68:

"68 I agree with Mr Lowenstein that logically, the

seriousness of the breach and the egregiousness of the

Defendants' conduct cannot have any bearing on the period

for which the injunction should be granted - what matters is

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the effect of the breach of confidence upon the Claimant in

the sense of the extent to which the First Defendant has

gained an illegitimate competitive advantage. In my

judgment, Mr Cohen's submissions seriously underestimate

the unfair competitive advantage gained by the Defendants

from access to the Claimant's 'customer list' and ignore, in

any event, the impact (if the injunction were lifted) of actual

or potential misuse of other confidential information such as

volume of business or pricing information. It is important in

that context to have in mind that the Claimant maintains in

its evidence that all the information said to be confidential

remains confidential." (Emphasis added)

[247] Eighth, the burden is on the Claimant to spell out the precise nature

and period of the competitive advantage. An "ephemeral" and "short term"

advantage will not be sufficient (per Jonathan Parker J in Sun Valley

Foods Ltd v Vincent [2000] FSR 825 esp at 834).

51. In UBS Wealth Management (UK) Ltd and Another v Vestra Wealth LLP and

Others [2008] EWHC 1974 Openshaw J provides some useful guidance on how the court

should look at the responsibility of employees and how the court should approach the issues. At

para 4 he said:

4. In my judgment, springboard relief is not confined to cases where former

employees threaten to abuse confidential information acquired during the

currency of their employment. It is available to prevent any future or further

serious economic loss to a previous employer caused by former staff members

taking an unfair advantage, an 'unfair start', of any serious breaches of their

contract of employment (or if they are acting in concert with others, of any breach

by any of those others). That unfair advantage must still exist at the time that the

injunction is sought, and it must be shown that it would continue unless

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restrained. I accept that injunctions are to protect against and to prevent future and

further losses and must not be used merely to punish past breaches of contract.

52. Further at para 10:

10. Every business is entitled to expect loyalty, fidelity and diligence from its

staff. That is part of the bargain for which they are paid. It is only right that during

the currency of their employment and for so long as is reasonable during the

currency of their restrictive covenants thereafter, they should serve and respect the

legitimate interests of their employer or former employer and their clients. The

more senior the staff, the greater the remuneration and the greater the degree of

loyalty, fidelity and diligence is required.

53. At para 15 Openshaw J. noted:

15. I accept, of course, that the public interest requires that those with skill and

enterprise are entitled to deploy their talents so as to generate wealth and

employment for themselves and others. Our market economy is based on the

encouragement and protection of fair competition. Such a right has been recognised

many times, perhaps most clearly in the judgment of Cumming-Bruce LJ in GD

Searle & Co v Celltech Ltd [1982] FSR 92 at p.99:

'The court seeks to uphold the obligation of free contracting parties to

a contract of service to honour their contractual obligations. On the

other hand, the court seeks to respect the rights of servants to advance

in their chosen trade and profession, and in this connection to

promote their own private interest by changing their employment,

and also to promote the public interest by better use of the servants'

personal aptitudes, experience and skill.'

At p.101:

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'The picture that emerges is the market for labour in operation for the

benefit of the employees and of the public, but in the short term,

naturally to the disadvantage of the employer who loses in the

competitive bargaining process. The usual procedure by which a

business protects itself from competition for its employees is a

restrictive covenant; that is conspicuous by its absence in the relevant

contracts. If there were such covenants, the employee could invite the

court to avoid them if on accepted principles of law they were

unreasonable in their width or their duration ... The law has always

looked with favour upon the efforts of employees to advance

themselves, provided that they do not steal or use the secrets of their

former employer. In the absence of restrictive covenants, there is

nothing in the general law to prevent a number of employees in

concert deciding to leave their employer and set themselves up in

competition with him.'

54. Finally at para 44:

44. It is argued by the defendants that to impose an injunction upon a newly

established business open for trade only this very morning would be unfairly to

cast over its start up the suspicion that its inception was based on unlawfulness. I

see no unfairness at all, except to the legitimate business interests of UBS who are

entitled to go to court to protect their staff and client base against the threat of

unlawful and unfair competition, of which there seems to me to be a very strong

prima facie case. Vestra may of course continue to trade, but, as with any start-up

business, it must build up its own client base and not poach the ready-made client

base from its previous employers at a time when they are subject to restrictive

covenants. If Vestra is indeed a start-up business, a delay of only a couple of

months will not be critical. It can, if the action by the claimants fails, be

adequately compensated in damages, whereas the loss to UBS of its clients will be

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incalculable and permanent. As Mr McGregor has put it, unless the relief is

granted, the defendants' plan will have succeeded.

55. In CEF Holdings Limited v Brian Mundey and Others [2012] EWHC 1524 (QB) the

nature of the evidence which the claimant must produce for injunctive relief to be granted was

set out by Silber J at para 130:

130. I have concluded that these principles present insuperable difficulties for

CEF, as it has not discharged the burden of showing the precise nature and period

of any competitive advantage, which the corporate defendants or any other

defendant acquired as a result of their alleged conspiracy or wrongful conduct if

correct. No evidence was given to show what unfair advantage was obtained by

the corporate or any defendants in terms of the length of time that it would have

taken for them to achieve lawfully what they achieved unlawfully, if CEF's

account of the First and Second Defendants' wrongful behaviour, including acting

as "recruiting sergeants" was correct. To obtain Springboard relief, a claimant has

to prove the precise period and the nature of the competitive advantage, but there

is no evidence to that effect.

56. If the injunction is to be granted the length of time for the injunction must be as stated by

Silber J at para 129:

129. The judge in that case also explained correctly in my view in paragraph

285(1) of his judgment that:-

"the appropriate measure for the length of a spring board injunction is the length

of time that it would have taken the wrongdoer to achieve lawfully what he in fact

achieved unlawfully, relative to the victim"

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Application to Evidence

57. Given the positions held by the first three defendants, it can be said that there is a strong

case regarding at least the duty of fidelity owed to their employer while they were in the employ

of the claimant. What they appear to have gotten is access to a client list base from the claimant.

They also got ‘ready-made’, the precedents of the various documents used in the brokerage

industry. There is no real dispute that these documents were emailed to the first defendant’s

private email after the formation of the rival company.

58. The position seems far less clear regarding whether they owed a fiduciary duty of the

kind contemplated by the claimant or whether there was a breach of confidentiality. The cases

cited above do not mesh entirely with the evidence presented to the standard required at this

stage.

59. There is evidence that the client lists were emailed in December 2015 to Rananan’s

private email. The fact that this was not done before is of some moment. Further, it is clear that

SLL was doing business with customers of the claimant at the time when Ramanan was

employed with the claimant. It is arguable that she had a duty to inform her employer that she

had already embarked on a competitive business and was pursuing it while in the employ of the

claimant. Moreover, this was being done with the involvement of Rajkumar, who was also a

director of the fourth defendant, and Salvador, who had at least referred customers to SLL and

had then moved over to employment there immediately on her resignation from the claimant.

60. The client list of the claimant would have been confidential to the claimant. From the

admissions of the defendant, SLL was doing business with clients or former clients of the

claimant. A large part of the defendant’s business is also based on customers who had done

business with the claimant within a year or two.

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61. While the defendants may have been entitled to start making preparations towards their

future while in the employ of the claimants, the conduct here which impacts on their duty of

fidelity is whether they were entitled to begin the process of doing business with the claimant’s

clients on a competitive basis while they remained in the employ of the claimant.

62. They did therefore appear to have gotten a head start as far as the customer listing and the

forms and documents were concerned. In this context it can be said, with some assurance, that

there was an unfair advantage in terms of the start up of their business while they were employed

with the claimant.

63. The unfair advantage must continue at the time of the injunction and it must be shown

that it would continue unless restrained. The defendants have acknowledged through the

Ramanan affidavit that the new business depends significantly on the pool of persons who use

brokerage services from the claimant. The fourth defendant is likely to continue to seek

business. It is therefore likely that the defendants would continue to compete with the claimants

making use of the client list.

64. However, the injunction is not intended to punish the defendant even for patently

egregious conduct. Its intent is simply to restore the parties to the competitive position they

would have occupied, but for the misconduct or breach.

65. The defendants would have been entitled on leaving the employment of the claimant to

build up their own client base and even to approach the clients of their former employer. But a

distinction has to be made about what they would have been entitled to do before or after they

left the employ of the claimant. In this regard it is significant that the first two defendants did

not resign but were terminated from employment. There is no statement in the affidavits of

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Ramanan nor Rajkumar that there had been any identifiable date for them to leave the claimant’s

employment.

66. I must also consider if damages would be an adequate remedy. If the claimant establishes

its case at trial of a breach of the duty of fidelity it is likely to be entitled to an award of damages

but the extent will have to be proved. The claimant has alleged loss of reputation and loss of

business. Damages will be the natural remedy for this.

67. The question is whether this is an adequate remedy or whether having regard to the

evidence before me now it can be established that it would be just that they receive some

injunctive remedy, albeit for a limited time. Damages will not be adequate, in my view, to

restore the competitive advantage. The claimant is likely to need an opportunity to take

measures to restore the confidence of its customers and to regain competitiveness in respect of

some of their customers. They may be required to do some work on seeking to regain their

customers or to offer competitive rates to them to secure or get them back.

68. The critical question is what would be an appropriate period for this to happen. Bearing

in mind that the claimants are not relying on any restrictive covenant provisions, how far should

vindication of the duty of fidelity take the claimants? What would have been a reasonable time

bearing in mind that their employment ceased in December 2015 for the defendants to have had

to build up a client base, make approaches and seek legitimately to lure the claimant’s customers

away from the claimant? How long would the process of designing their own documents and

systems have taken bearing in mind that they would have been entitled to begin this process on

their own time before they left the claimant’s employment? The seriousness of the breach does

not impact on the length of time for the injunction.

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69. Had there been restrictive covenants applicable then this may have guided the time for

the injunction to apply once the covenants were found to be reasonable. It is for the claimant to

show by evidence the precise nature and period of the competitive advantage. The nature is of

the type dealt with in the Hivac and Bullivant cases where there has been access to the client lists

and documents. I do not think a strong enough case has been made out regarding any approach

to employees of the claimant to join them. In any event that would have been of more relevance

while the first three defendants were employed with the claimant. There is no continuing

restrictive covenant concerned here.

70. The claimant company had knowledge of these happenings only in December 2015.

Events moved fast. The injunction was sought in early February 2016. There was an

investigation process. There would necessarily have been time needed to find out exactly what

had happened and to what extent it affected them. Some more time has since passed. No doubt

they have been active at work in trying to regain any competitive advantage lost.

71. At the same time the defendants as competitors out of the employment of the claimant are

entitled to work at building their business. Had they left and then started competing, the

defendants would have been entitled to approach clients of their previous employers in legitimate

ways and to offer them their services on a competitive basis. There is a balance between the

economic rights and interests among competitors in a free market. There is no property in

customers. No one has a monopoly on particular customers. So there is a balancing exercise to

be done here.

72. That balancing act takes us to the appropriate period for the injunction. Just over two

months have passed since the events have unfolded. In my view, in the absence of a restrictive

covenant, the period necessarily must be on the lower end. I am satisfied that a further period,

albeit a short one, will restore the parties to the competitive fairness as contemplated by the

authorities. I have considered in this regard as relevant that a lengthy client base list has been

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provided by the claimant. These are customers the claimant says it has done business with

during the 2014 to 2015 period. While extensive, a two year period is reasonable in the

circumstances. I would not have been minded to continue an injunction regarding customers

with whom the claimant had last done business before 2014.

73. The terms of the injunction also have to be modified. It cannot apply to approaching

employees of the claimant. There is no real risk that the claimant’s employees will leave in any

significant number to go to the fourth defendant. And the duty not to recruit would have passed

when the first three defendants left the employ of the claimant. There is also no clear evidence

that the defendants have disclosed information concerning the claimant’s fee calculator,

commodity classifications, prices or rates. As noted, there is no restrictive covenant operational

here and there is no clear duty on the defendants not to disclose this information at this stage.

74. It was raised by Counsel on behalf of Defendant Salvador that she has since changed

employment and she is no longer employed with the fourth defendant. In my view, however,

this does not prevent her from working on a part-time basis for the fourth defendant. If any of

the defendants are permitted to avoid the injunction, this is likely to defeat its purpose.

75. I will therefore order that the injunction in the following form is to continue until 30

April 2016. The Defendants are restrained by themselves or through any other persons from

providing customs brokerage services to any of the clients of the claimant listed in the Schedule

marked as Exhibit SL 15 to the affidavit of Shivana Laughlin filed 3 February 2016. A copy of

that Schedule is to be attached to the order made under this ruling. The other parts of the

injunction granted by Charles J on 4 February 2016 are discharged.

76. I consider up to this period to be the length of time it would have taken the defendants to

build up a client list, make approaches, prepare the appropriate documents and forms and

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compete legitimately with the claimant. In other words, to achieve lawfully what there is a

sufficiently strong case that they achieved unlawfully in relation to the claimant. In the interim

the fourth defendant is entitled to take on work from any other customers and continue its

business operations. This will, in my view, allow it to continue in business until such time as

they may properly compete for whatever business is available in the brokerage industry. In

granting the injunction, I have noted that the claimant company has a substantial client base and

they have properly given an undertaking that they can compensate the defendants for losses they

may incur on account of the injunction if ultimately the claimant does not succeed at trial.

77. I reserve on the costs issue to the end of the claim to be dealt with in the round. Finally, I

wish to record my appreciation to the very able counsel on both sides for their thoroughness and

for the quality of the assistance provided to me in their submissions in what is a novel

application in this jurisdiction.

Ronnie Boodoosingh

Judge

the republic of trinidad and tobago in the high...

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