Case No: HC10CO1337   
Neutral citation number: [2010] EWHC 2051 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL

Date: Friday, 16 July 2010

BEFORE:
HIS HONOUR JUDGE HODGE QC
sitting as a Judge of the High Court
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Between
EXCEPTION VAR LIMITED
EXCEPTION VAR GROUP LIMITED
Applicants/Claimants
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(1) HOWARD GOFF
(2) ANDREW STEELE
(3) ANN HARWOOD
(4) STEVE STREVENS
(5) CHRISTOPHER NUTTALL
(6) CELINE NUTTALL
(7) SONIA BRUNSDON
(8) MARK SYKES
(9) NCAB GROUP UK LIMITED
(10) NCAB HOLDINGS AB
(11) HANS LENNART STAHL
(12) ANDERS ERIK FORSEN
(13) HELEN BICKNELL

Respondents/Defendants
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MR P DOWNES QC (instructed by HBJ Gateley Wareing LLP) appeared on behalf of the Claimants

MR P MOSER and MR O DRAPER (instructed by Davenport Lyons) appeared on behalf of the Defendants

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Judgment

1.	JUDGE HODGE QC:  This is my extemporary judgment in the case of Exception Var Limited (together with another proposed claimant, Exception Group Limited, its holding company) as applicants, against Howard Goff, as the first defendant and respondent, claim number HC10C01337.

2.	This interim application raises interesting and difficult questions as to the circumstances in which an applicant should be denied interim injunctive relief on the grounds of delay.  The substantive claim between the existing claimant and the first defendant, a former director and employee of the first of the claimants, Exception Var Limited, is for breach of contract and/or breach of confidence and/or breach of fiduciary duty, inducing a breach of contract, misuse of the claimant’s confidential information and trade secrets, conspiracy to cause economic loss to the claimant by unlawful means, and infringement of the claimant’s database rights.

3.	The instant application, by application notice dated 8 July, and issued on behalf not only of the existing claimant but also its holding company, Exception Group Limited, seeks orders that the holding company be joined into the proceedings as second claimant, and that the first defendant be restrained from breaching the terms of an investment agreement entered into between himself with others and the proposed second claimant on 9 February 2005; and also that the first claimant be granted springboard relief against the first defendant.  The application notice states that the terms of a draft order will follow shortly, as will the further evidence.

4.	The draft order seeks to enforce the terms of restrictive provisions contained in the investment agreement between the proposed second claimant and the first defendant, and also seeks springboard injunctive relief in favour of the first claimant.  The draft order that has been served does not in terms address the need for joinder of the proposed second claimant; nor does it contain any provision for the service of consequential Particulars of Claim.  There are in existence already Particulars of Claim which were verified by a Statement of Truth by Mr Craig Wright, the chief executive officer of the proposed second claimant and a director of the first claimant, on 3 June 2010.

5.	The evidence principally in support of the application is contained in the second witness statement of Mr Craig Richard Wright, the Chief Executive Officer of the proposed second claimant, dated 9 July 2010, together with exhibit CRW1, and the second witness statement of Mr Neil Matthew Warner, the claimants’ solicitor, dated 13 July 2010, together with exhibit NMW2.  The latter witness statement addresses the delay in making this application.

6.	The respondent’s evidence in answer consists of two witness statements, his first and second, from Mr Ian Nigel Gilroy, an associate solicitor at Davenport Lyons (the solicitors for the first defendant and respondent), dated 14 and 15 July 2010, together with exhibit ING1.  Although no one has referred to it, there is with the court also a first witness statement from Mr Timothy Murphy, the Finance Director for the first and second claimant, dated 15 July 2010; but that addresses only the financial position of the claimants.  In addition to those witness statements, there are also before the court witness statements and exhibits prepared for the purposes of earlier interim applications.  In total, the number of pages before the court exceeds 1,000.

7.	On this application, the claimants and applicants are represented by Mr Paul Downes QC, and the first defendant is represented by Mr Phillip Moser, leading Mr Draper.  I have had the benefit of pre-reading for a period of a little over two hours the evidence and the written skeleton arguments.  At the outset of this hearing, I drew attention to the fact that this is an application in the interim applications list and, as such, the time for the hearing, including pre-reading and judgment, should not exceed two hours.  Indeed, Mr Downes in his skeleton argument had estimated the pre-reading at 45 minutes and the length of the hearing at an hour.

8.	It was in those circumstances that I imposed a limit on the submissions, which both parties’ advocates slightly exceeded, but which they made all best endeavours to adhere to.  In the event, therefore, Mr Downes addressed me for some 45 minutes in support of the application, Mr Moser for some 40 minutes in answer to the application, and Mr Downes replied for about 20 minutes.  I am entirely satisfied, given the amount of pre-reading I have done, that both parties’ advocates have had ample opportunity to address the court to the full extent required in the best interests of their clients.

9.	The background to the matter can be quite shortly stated.  The substance of the dispute between the parties relates to the circumstances in which the 1st to 8th defendants and the 13th defendant (although she may not yet formally have been joined by any perfected court order) left the employment of the first claimant.  Essentially, what is said is that those defendants entered into a conspiracy with the other defendants, the 9th defendant (NCAB Group UK Limited), the 10th defendant (its holding company), and the 11th and 12th defendants, senior officers of the 10th defendant, to move themselves and the claimant’s customers to NCAB Group UK Limited, which is and was at all relevant times an actual or potential competitor of the first claimant.

10.	It is said by the claimants that this conspiracy was put into effect through dishonest breaches of contract and, in some cases, breaches of the fiduciary duties owed by the former employees to the claimant.  It is said that the present respondent, Mr Goff (the first defendant), who was the managing director of the first claimant company, was in league with the other defendants and was the moving spirit of this conspiracy.

11.	The first claimant says that it has suffered loss, amongst other things as a result of customers moving away from it and to NCAB as a result of the alleged conspiracy being put into effect.  The way in which it is expressed in paragraph 3 of Mr Warner’s second witness statement is as follows, I quote:

“Mr Goff was the Managing Director of Exception VAR and a Director on the Board of Directors of that company.  There is now evidence that he was at the heart of a conspiracy to transfer key employees, confidential information and the business of Exception VAR to a new UK based business for one of Exception VAR’s main competitors, the NCAB Group based in Sweden.  He has taken active steps to cover both his own steps and those of his co-conspirators through dishonest deception and the deliberate destruction of evidence.”

12.	Much of this is said to be covered in Mr Warner’s first witness statement, in which he has also asserted that Mr Goff has not sought to deny his dishonest behaviour.

13.	The primary case of the 1st to 8th defendants is that they did not, in moving from the claimant to its competitor, breach any duties owed to the claimant.  Alternatively, and in any event, it is said by them that any such breaches have occasioned no loss to the claimant.  It is said that this case concerns a group of employees on relatively modest incomes - I interpose to say that the first defendant’s basic salary would appear to have been in the order of £125,000 - who elected to move employers for no greater remuneration.  It is said that most of them were not bound by restrictive covenants in their contracts.  It is also said that in financial terms, the main dispute concerns one customer called Stoneridge.

14.	It is said by the defendants that the first relevant contact between NCAB and the first defendant in this case was in September 2009 and that it was before that date that Stoneridge had already decided to move from the claimant.  It is therefore said that none of the acts complained of could have been causative of damage to the claimant in relation to that customer.

15.	That is a brief description of the battle lines drawn between the parties.  I should make it clear that this is by no means the first occasion on which interim applications have been made in this court.  A search and seizure order was granted to the first claimant by Roth J on 21 April 2010, and it was apparently served on the first defendant on 23 April 2010.  The return date was 29 April 2010 before Morgan J.  On that occasion, the first defendant, through a letter from his solicitors, gave his consent to the order that was made on that day.  That order included injunctive relief in paragraphs 10 through to 12.  Paragraph 11 provided that:

“Until the earliest of trial, or 18 July 2010, or further order of the court, the first respondent must not (a) solicit or encourage any employee of the applicant to become employed by NCAB Group UK Limited or NCAB Holdings AB, or the NCAB Group (b) solicit or encourage any supplier or customer of the applicant to become a supplier or customer of NCAB Group UK Limited or NCAB Holdings AB or the NCAB Group (c) be employed in any capacity, paid or unpaid, by any of those three entities or (d) advise or assist any of those three entities in its business, including without limitation, advising or assisting in the recruitment of staff or the solicitation of customers or suppliers.”
(Quote unchecked)

16.	That injunction was limited, until the earliest of trial, or 18 July 2010, or further order of the court.  Paragraph 12 contained an injunction, limited until trial or further order, preventing the first respondent from disclosing to any of the three identified entities, or from copying, making use of, or in any other way (except for dealings required for the furtherance of these proceedings) dealing with, various identified confidential information or trade secrets, and various identified documents, data or information.  That injunction in relation to confidential information continues beyond 18 July.

17.	The matter came before the court again on two occasions in May 2010, the first on a without notice application before Norris J on 14 May 2010, when the first claimant was given permission to rely upon various documents and pieces of information disclosed as a result of the implementation of the search order made on 21 April.

18.	The return date of that application was on 27 May 2010, when further relief was granted by Sales J.  The relevance of those two hearings is that it is, I think, accepted by the first claimant that, on the material then available to it, it could have made the application for relief which is before me today.  Essentially, what had happened was that on 29 April 2010, the first claimant had sought to enforce restraints limited in time until what was then the contemplated date of the termination of the first defendant’s employment with the first claimant.

19.	The first defendant had given notice of his resignation on or about 20 January 2010; and it had been agreed between the parties that his resignation would take effect on 18 July 2010.  On 3 February 2010, the first defendant had been placed on gardening leave.  The significance of that is that, although in his employment contract there were post-termination restraints which were expressed to last for six months from the termination of his employment, if placed on gardening leave the period of restraint had begun with the date on which the gardening leave commenced.  Thus, at the time when the matter came before Morgan J on 29 April, the position was that the first defendant was still within his notice period, such notice to expire on 18 July, but the six-month period beginning with his going on gardening leave would expire on 3 August.

20.	What the first claimant had sought on 29 April, and what the first defendant agreed to, was that he should be subject to restraints (otherwise than in relation to confidential information) which continued until the anticipated end of his period of employment on 18 July; but no relief had been sought going beyond that in reliance upon the post-termination restraint provisions of his contract of employment.  In fact, following the implementation of the search orders on 5 May, Mr Goff’s employment was summarily terminated in any event.

21.	It appears that it was not until early in July, and prompted by discussions at a conference with counsel, that it came to light (so far as the claimants’ legal representatives were concerned) that, in addition to the restraints contained in Mr Goff’s contract of employment, he had also entered into restraints in a share agreement bearing the same date (9 February 2005) as his employment agreement.

22.	The content of those restraints was referable in terms to the restraints in the employment agreement, but the duration of the restraints was different.  The restraints were expressed to remain in force (by clause 5.3 of the investment agreement) for six months following the date of termination of the service agreement, or six months following the date that Mr Goff ceased to hold any ordinary shares in the claimant.  Thus, the period of gardening leave was not to be taken into account for the purpose of determining the period during which Mr Goff was to be subject to any restraint.  The investment agreement, of course, was not between Mr Goff and the first claimant, but between Mr Goff and the proposed second claimant.

23.	To summarise the position then: Mr Goff is presently subjected by order to restraints fashioned by the content of his duties as an employee of the first claimant until Monday next week, 18 July.  If valid and enforceable, he is subject to restraints imposed by his employment agreement with the first claimant until 3 August.  If valid and enforceable, he is also subject to restraints in favour of the proposed second claimant which would continue until either six months following the date of the termination of his service agreement (which would be until 5 November 2010) or, if earlier, six months following the date from when Mr Goff ceased to hold any ordinary shares.

24.	So far as that is concerned, Mr Goff signed a form transferring his shares for a nominal value of 1 penny per share, making £7.50 in total, on 25 March 2010.  He apparently received the consideration for those shares on 29 March 2010; but, because of the need to obtain waivers of pre-emption rights from all the other shareholders, Mr Goff did not formally cease to have his name on the share register until, apparently, 29 June 2010.  Thus, there may be a question as to whether the restraints in the investment agreement continue until 5 November, or whether they end earlier, on either 25 or 29 September, depending upon the date that he can be said to have ceased to hold any ordinary shares.

25.	A number of points can be made at this stage: First, although the proposed second claimant was not, and still is not, a party to these proceedings, it is quite clear that it was represented by counsel at all four of the hearings in April and May for the purpose of giving undertakings in damages.

26.	Secondly, it is clear that, in order to enforce the investment agreement, the second claimant needs to be joined as a party to these proceedings.  The draft order at present contains no provision for its joinder, nor is there any draft amended particulars of claim setting out any claim founded upon the investment agreement.  In his skeleton argument, Mr Downes suggests that such amended particulars could be served by 30 July.

27.	Thirdly, it is clear that the injunctive relief in paragraph 11 of Morgan J’s order, to which Mr Goff had consented, was founded upon an enforcement of the pre-termination employment duties owed by Mr Goff to the first claimant.

28.	Fourthly, it is clear that paragraph 12 of that same order protects the first claimant against the use of confidential information until the trial; and that protection will continue, irrespective of the falling away of the protection ordered by paragraph 11 of that order; and will also continue irrespective of the outcome of the present application.

29.	Fifthly, it is clear that it would have been open to the first claimant to have sought to enforce the restrictive covenants applying post-termination of employment, as contained in the employment agreement, in respect of the period up until 3 August 2010.  In other words, for a further two weeks beyond the termination date of the paragraph 11 restraints.  At no time prior to the issue of the present application notice on 8 July did the first claimant seek to do so.

30.	Sixthly, it would have been open to both the first claimant and the second claimant to have made the present application at the time of the 14 or 27 May hearings: it would have been open then for the first claimant to have applied for springboard relief, or to enforce the post-employment, employment agreement termination restraints: and for the second claimant to have sought to enforce the restraints in the investment agreement.

31.	There is no real dispute as to the applicable law on the enforceability of post-termination restraints.  I was taken by Mr Downes in his skeleton argument to Beckett Investment Management Group Limited v Hall [2007] EWCA Civ 613, reported at [2007] ICR 1539, and, in particular, to paragraphs 21 and 22.  Essentially, I have to consider whether the claimants have legitimate business interests requiring protection; and, secondly, whether the restraints sought to be enforced provide no wider protection than is reasonably necessary for the protection of those interests.

32.	I was also referred, in connection with restraints contained in a sale or investment agreement, to the case of Dawnay, Day & Co Ltd v D'Alphen [1998] ICR 1068.

33.	On the proper approach to the grant of springboard relief, and to conflicts of evidence, I was taken to the decision of Openshaw J in the case of UBS Wealth Management UK Limited v Vestra Wealth LLP [2008] EWHC 1974 QB, reported at [2008] IRLR 965.  At paragraph 2, Openshaw J referred to the case of Roger Bullivant Limited v Ellis [1987] IRLR 491 as the foundation of the jurisdiction of the granting of springboard relief.  At paragraph 3, Openshaw J acknowledged that there had been some discussion in the authorities as to whether springboard relief was limited to cases where there was a misuse of confidential information.

34.	At paragraph 4, he expressed the view that, in his judgment, springboard relief is not confined to cases where former employees threaten to abuse confidential information acquired during the currency of their employment. It was 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 were 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 was sought, and it must be shown that it would continue unless restrained.  The judge accepted that injunctions were to protect against and to prevent future and further losses and must not be used merely to punish past breaches of contract.

35.	At paragraph 5 of his judgment, Openshaw J indicated that valuable guidance as to how the court should proceed when faced with stark conflicts of evidence was given by the judgment of Staughton LJ in Lansing Linde Limited v Kerr [1991] IRLR 80 at 83.  Staughton LJ had indicated that, if it was not possible to hold a trial before the period for which the plaintiff claimed to be entitled to an injunction had expired, or substantially expired, it seemed to him that justice required some consideration as to whether the plaintiff would be likely to succeed at a trial.  In those circumstances, it was said to be not enough to decide merely that there was a serious issue to be tried. The assertion of such an issue should not operate as a lettre de cachet by which the defendant was prevented from doing that which, as it later turned out, he had a perfect right to do for substantially the whole of the period in question.  On a wider view of the balance of convenience, it might still be right to impose such restraint; but not unless there had been some assessment of the plaintiff’s prospects of success.

36.	Staughton LJ emphasised “some assessment” because the courts constantly sought to discourage long interlocutory battles on affidavit evidence.  Where an assessment of the prospects of success was required, it was for the judge to control its extent.  At paragraph 6, Openshaw J indicated that, in an interim application of that kind, all he could do was to form the best view that he could of the relative strengths of the rival arguments.

37.	On the grant of injunctive relief, I was referred by Mr Moser to the judgment of Arnold J in the recent case of Vestergaard Frandsen AS v Bestnet Europe [2009] EWHC 1456 (Ch), reported at [2010] FSR 2, in particular, at paragraph 12 of the principles set out in the headnote.  That judge held that considerable caution was required, both as to whether to grant an injunction at all, and, if so, as to its form and duration.  The court had to be careful to ensure that such an injunction did not put the claimant in a better position than if there had been no misuse (in that case) of confidential information.  The duration of any such injunction ought not to extend beyond the period for which the claimant’s legitimate advantage might expect to continue.

38.	At paragraph 17 of the headnote, the judge held that the restraint that had been sought was, in substance, an injunction to restrain the defendants from benefiting from past misuse of confidential information; such an injunction was said not to be justified.  The claimant’s remedy for past misuse had to be a financial one.  Granting the injunction sought might have resulted in putting the plaintiffs into a better position than if there had been no misuse.  Those are the legal principles by reference to which I direct myself.

39.	I am satisfied in the present case that there is more than a serious issue to be tried.  I am satisfied that the claimants have real prospects of success on the issues both of the existence and the enforceability of the restraints contained both within the employment agreement and the investment agreement.  Mr Goff has said that he made it clear at the time of entering into the employment agreement that he did not accept those restraints.  I find that difficult to reconcile with certain of the pre-February 2010 contemporaneous documents to which I have been taken and, in particular, a letter from Mr Goff dated 25 January 2010, which is to be found at page 563.  In any event, Mr Goff signed the both employment, and the investment, agreements, and he did not openly take issue with the binding nature of the restraints until February of this year.  The burden on him is to displace the terms of the agreements into which he has entered.  

40.	I am satisfied that the restraints (certainly in the context of an investment agreement entered into in the circumstances in which it was) have a real prospect of being held to be enforceable.

41.	On the issue of the duration of the investment agreement restraint, I am less satisfied that it would extend beyond 29 September, being six months after Mr Goff received the nominal consideration of £7.50 which was represented by the nominal value of his shares.  The investment agreement provides for the restrictions to remain in force for six months following the date that Mr Goff ceases to hold any ordinary shares.  It seems to me that, once he had executed the share transfer and received the nominal consideration for the purchase of his shares, at least in equity, he could be said to have ceased to hold any ordinary shares.  The fact that, because of the need to obtain waivers of pre-emption rights, it was not until some months later that, due to factors entirely outside his control, the change in his shareholding was noted on the register does not seem to me to be something that should affect the validity of the duration of the restraint.  Therefore, if I were expressing an assessment of the prospects of success, I would say that Mr Goff has real prospects of establishing that the restraints should not extend beyond 29 September; but that the claimant has real prospects of establishing that he is subject to the restraints until then. 

42.	On the issue of springboard relief, Mr Moser points to the fact that it is only in UBS v Vestra that the High Court has expressly applied springboard relief beyond the field of misuse of confidential information; and he emphasises that, even in that case, the judge was at pains to stress that the principle should not be extended beyond the period during which the parties ought to be enjoying (and could be said to continue to enjoy) a springboard advantage gained as a result of the relevant breach of duty.

43.	Mr Moser submits that there is no practical (as opposed to punitive) rationale for the springboard relief sought.  He submits that the evidence before the court suggests that any unfair advantage has dissipated; and he submits that the first claimant in his witness evidence makes no real attempt to show how keeping Mr Goff out of employment for three further months would prevent further losses.

44.	I bear these submissions in mind; but, on the issue of springboard relief, in principle, I can see strong justification for extending the protection that had been intended to be afforded by the contractual restraints in the service agreement for six months from the date when Mr Goff started to abide by those restrictions.  There is a strong case, on the evidence before the court, that, until the service of the search order, and whilst he was on gardening leave, Mr Goff was acting in breach of the duties that he owed both as an employer and as a director of the first claimant company.  I do not see why, having regard to the justification for the grant of springboard relief, Mr Goff should be entitled to take advantage of the six-month period of gardening leave when, in fact, during part of that time he was acting in breach of the restraints.  It seems to me that a principled application of the springboard doctrine would lead to the view that Mr Goff should be restrained for six months from the time when he first started to observe the restraints, rather than from the date when he was put on gardening leave.

45.	On the claimant’s case, as set out at paragraph 23 of Mr Wright’s second witness statement, Mr Goff did not begin to abide by the restrictions until after he was served with the search order on 23 April 2010.  On that basis, and subject to questions of delay, it seems to me that there would be justification for the grant of springboard relief until 23 October 2010.

46.	But, Mr Moser submits on Mr Goff’s behalf, there has been delay in bringing this application forward, which has caused prejudice to the position of Mr Goff.  What is said is that he had thought, and thought for good reason as a result of the terms of the injunction to which he had consented on 29 April, that he would be entitled to enter into employment with the ninth defendant from 18 July, next Monday; and he has ordered his affairs accordingly. 

47.	There is no witness statement from Mr Goff himself; but, at paragraph 12 of his witness statement, Mr Gilroy says that the period of the first defendant’s unemployment was due to end after 18 July as a matter of fact and pursuant to the consent order.  Failing that, the first defendant and the claimant had been proceeding on the basis that the first defendant’s employment was set to end, at the latest, after 3 August (i.e., six months from gardening leave) if restrictive covenants in the first defendant’s terms of employment applied, which is in dispute.  At paragraph 24, Mr Gilroy states that the claimant applied for, and Mr Goff consented to, the 29 April order as both parties agreed at the time, 2½ months ago, that Mr Goff’s employment could commence thereafter; that is to say, about two weeks before the time he could do so if he was rightfully subjected to restricted covenants.  At that time the claimant presumably considered it was entitled to prevent Mr Goff from working until 18 July and not thereafter.  Alternatively, presumably it considered that that was a reasonable date.  Had the claimant applied at the time for an extended period, whether November 2010 or April 2011 or some other arbitrary date, then Mr Goff would have resisted that order; he would have known on 29 April whether he had been successful in that endeavour or not, because he would either now be working for NCAB UK, or he would have had to immediately try and seek alternative employment, either in the interim or the long term.  In short, Mr Gilroy says, the claimant is now seeking a second bite of the cherry; and at a time - the last possible day in fact - which particularly inconveniences the first claimant.  Mr Gilroy continues at paragraph 25:

“I am told by Mr Goff and verily believe that he does not have sufficient resources to support himself and his family without any income for such an extended period and as such the Claimant effectively sought to prevent him from being able to leave their employ.  That was, I understand the subtext of his conversation with Mr Giles at the time and why Mr Giles agreed to amend the agreement (although that in fact never happened).  The First Defendant believes this Application to be driven by personal malice and revenge.”

48.	Mr Moser submits that the court should not, at this late stage, seek to enforce the terms of the investment agreement restraint, nor should it grant springboard relief; and there is no unfair competitive advantage, going forward, to redress.  Essentially, the application, insofar as it is put on springboard principles, is really directed to the punishment of Mr Goff, rather than the protection of any ongoing legitimate business interest of the first claimant.

49.	I was initially attracted to those submissions. It did seem to me to be wrong that, so late in the day, the first claimant should have been advancing a springboard case, and the second claimant coming forward to seek to enforce the restraint contained in the investment agreement. It would have been open to both entities to have taken steps to that end much earlier, and certainly in May of this year.  I was also concerned that this application was made in the week before Mr Goff was contemplating starting employment, and also during a week when the defence was due to be served (it was, in fact, served yesterday), thereby diverting the attention of the defendants and their legal advisors away from the task of settling the defence.

50.	But it seems to me that, in the course of his reply, Mr Downes has supplied the answer to those concerns.  He submits, correctly, that I have to exercise the court’s discretion on a principled basis.  He acknowledges that there has been delay. He acknowledges that the claimants (if not their legal advisors) had available to them evidence which justified the extended period of restraint under the investment agreement.  He is prepared to accept, for the purpose of this application, that Mr Goff had an expectation that he could start work on Monday.

51.	He accepts that the court is entitled to form the view that, if an injunction were to be granted, that expectation would be defeated, and that Mr Goff would be out of pocket.  Mr Downes also accepts that, for practical purposes, the decision of this court whether or not to grant interim injunctive relief will be determinative of the parties’ substantive rights, because the claim for an injunction will not come on for trial before the period of restraint has expired.

52.	He submits that I should consider, first, whether the claimants have shown a sufficiently strong case that, first, Mr Goff is subject to the restraints in the investment agreement and, secondly, that the first claimant should be entitled to springboard relief.  I have already indicated that I am so satisfied on the evidence.

53.	Mr Downes then says that, on that footing, I should go on to ask whether the delay is such that the claimants should be deprived of their rights, in the case of the first claimant, to seek springboard relief, and, in the case of the second claimant, to enforce the covenants in the investment agreement, by way of injunction.

54.	He submits that, on the facts and on analysis, the delay is irrelevant.  First, he says that, although the parties agreed the terms of the injunction on 29 April, there was no express agreement that that injunction should exhaustively define the respective entitlements and liabilities of the parties.  It was not imposed in full and final settlement of their interim rights until trial.  Secondly, he says that Mr Goff’s anticipation that he could start work next Monday is, as a matter of law, irrelevant.  A party’s expectation that he can act in breach of legal rights is not a consideration to which the court can properly give weight unless such expectation has, in some way, been encouraged by the applicant for relief.  He says there is no evidence that that expectation was encouraged by the claimant.

55.	I would not accept that way of putting it.  It does seem to me that, by agreeing the terms of the injunction extending until 18 July, the first claimant did induce an expectation that the period of restraint would end at that time.  Although the injunction was in favour of the first claimant, the second claimant, by its legal representatives, was present at the time (for the purpose of giving undertakings as to damages to fortify the undertaking given by the first claimant); and it seems to me that the second claimant is similarly bound by that.  I, therefore, find that there has been an expectation created by the claimants.  But Mr Downes goes on to submit that a disappointed expectation is insufficient to disentitle a party to promote his legitimate interests unless the respondent can show that he has acted to his detriment in reliance upon the expectation.

56.	Mr Downes submits that the first defendant cannot do that.  He cannot do that because he must be able to point to the fact that, had he resisted the grant of injunctive relief, he would have been successful in doing so.  It does seem to me that, if the point had been taken in May (or indeed even at the earlier April hearing), Mr Goff’s resistance to either the injunction to restrain enforcement of the restraints in the investment agreement, or to resist springboard relief, would have been unsuccessful.  In other words Mr Goff is, in those terms, in terms of injunctive relief, no worse off now than he would have been in April or May.

57.	Can Mr Goff demonstrate that he has acted differently in some other way?  Since April, he has not been working.  He hopes to start with NCAB Group on Monday.  There is no countervailing evidence from Mr Goff to displace the inference, which I would naturally draw from all the circumstances of and evidence in the case, that had the injunction been sought in April or May, rather than in July, Mr Goff would simply have hung around waiting to join NCAB Group UK Limited in September, rather than on 18 July.

58.	For that reason, I accept Mr Downes’s submission there is really no legal or equitable basis to deprive the claimants of their prima facie entitlement to injunctive relief on the basis of delay.  There has been delay; but I do not see that it is delay that has been the cause of any prejudice to the first defendant sufficient to disentitle the claimants from what would otherwise be their legal or equitable rights.

59.	For those reasons, what I would propose to do is to grant interim injunctive relief in favour of the second claimant in support of the restraint in the investment agreement, but to do so only until 29 September; and to grant the first claimant springboard relief, but only until 23 October.  Those dates are referable to six months after the receipt of the money from the shares, and six months after the service of the search order, respectively.

60.	In the case of the relief under the investment agreement, it will be on condition that the second claimant is joined as the co-claimant, and that amended Particulars of Claim are served by the end of July.