Beckett Investment Management Group Ltd. Beckett Financial Services Ltd. Beckett Asset Management Ltd & Ors v Hall & Ors

In order to explain the issues which arose in this action it is necessary to go into a certain amount of history. The first defendant, Mr. Glyn Hall, is an Independent Financial Adviser (“IFA”), and holds an appropriate registration with the Financial Services Authority (“FSA”). Mr. Hall’s particular field of expertise is investment advice and pensions transfer. It is in those fields that he is registered with FSA.

On 1 September 1996 Mr. Hall commenced employment with a company called Remington Collins Ltd. (“Remington Collins”). Remington Collins carried on business at that time as a provider of general insurance broking and financial services. It was based in Leicester. A director of, and shareholder in, Remington Collins was Mr. Michael Remington. Mr. Hall became a director of Remington Collins and he managed the financial services division of the company. Mr. Hall and Mr. Remington became friends.

In March 1999 the shareholding in Remington Collins was sold to Beckett Group Ltd. (“Beckett Group”). Beckett Group was based in Bury St. Edmunds in Suffolk. Remington Collins was renamed Beckett Remington Collins Ltd. Mr. Hall became an employee of Beckett Group and was put in charge of the office of Beckett Group in Leicester. Mr. Remington continued for a period with an involvement with Beckett Remington Collins Ltd., but ceased his association in July 2002.

As from the time of the acquisition of Remington Collins, and perhaps before, the activities of Beckett Group and its subsidiaries were arranged in such a way that there was a financial services division and a general insurance division. It appears that the financial services division was in fact carried on by a separate company, a subsidiary of Beckett Group called Beckett Financial Services Ltd. (“BFS”). BFS was the second claimant in this action. It seems that some, at least, of those who in fact worked for BFS were actually employed by Beckett Group, with a charge for the provision of the services of the employee being passed on to BFS. As I have indicated, Mr. Hall was at this stage employed by Beckett Group although actually working for a subsidiary company.

As from 1 April 2002 Mr. Yogesh Yadev, the second defendant, was employed by Beckett Group as a senior consultant. He was based in Leicester and his line manager was Mr. Hall. Mr. Yadev is also an IFA and appropriately registered with FSA. Again his particular field is investment advice.

With effect from 1 July 2002 Mr. Hall was appointed sales director of BFS, with responsibility for new business consultants and administrators in Leicester, King’s Lynn and Bury St. Edmunds.

Some time prior to December 2003 the insurance broking arm of National Farmers’ Union, which seems to have been called National Farmers’ Mutual Insurance Group (“NFMIG”), expressed an interest in acquiring the general insurance division of Beckett Group. A sale of that division was agreed. The mechanism for the sale seems to have been a transfer of the shares in Beckett Group to the purchaser. That brought about a re-organisation of the companies and businesses which had been operating under the umbrella of Beckett Group. Thereafter, in place of Beckett Group, the holding company was Beckett lnvestment Management Group Ltd. (“BIMG”), the first claimant in this action. That company had in fact existed prior to the sale of the general insurance business of Beckett Group to NFMIG, but what its role had then been did not emerge in evidence. BFS was thenceforth a subsidiary of BIMG. Another company which became a subsidiary of BIMG was Beckett Asset Management Ltd. (“BAM”). The business of BAM was to undertake the giving of investment advice and management for private investors, trustees and pension funds. BAM was the third claimant in this action.

Following the re-structuring of the various companies and businesses to which I have referred, new contracts of employment were made between BIMG and Mr. Hall and Mr. Yadev, respectively. Thenceforth each was employed by BIMG, but was based in practice at the office of BFS in Leicester. Mr. Hall was employed by BIMG as sales director and in that role had much wider responsibilities than just working for BFS. Mr. Yadev, on the other hand, was employed as a senior consultant and was solely concerned during his employment with work for BFS.

Although Mr. Hall and Mr. Yadev were each employed in different roles, the material terms of the contract which each entered into with BIMG were identical. Each contract was dated 1 January 2004. In each the expression “the Company” was defined as BIMG. For present purposes the other relevant terms of each contract were these:-

“1.

DEFINITIONS

In this Agreement unless the contract otherwise requires the expression “Subsidiary Company” shall mean Beckett Financial Services Limited, Beckett Asset Management Limited and any other company which is for the time being a subsidiary or holding company of either of them (as such expressions are defined in the Companies Acts).

2.

APPOINTMENT, JOB TITLE AND RESPONSIBILITIES

….

2.2

In order to help in the efficiency and smooth running of the Company, the Company may require the Employee to work in any section or any Subsidiary Company, carrying out other duties within his/her capacities, as the workload so requires.

15.

BEST ENDEAVOURS, OTHER BUSINESS COMMITMENTS AND PRIVATE WORK

During the Employee’s employment with the Company the Employee shall:

15.1

devote the whole of his/her working time, attention and abilities to the business and interests of the Company and shall well and faithfully serve the Company and use his/her best endeavours to promote the interests of the Company.

15.2

faithfully and diligently obey and act upon all reasonable and lawful instructions and directions given to him on behalf of the Company.

15.3

not without the prior written consent of a Director of the Company be directly or indirectly engaged, concerned or interested in any other business competing in any respect with the business for the time being of the Company PROVIDED THAT nothing in this paragraph shall prohibit the Employee from holding a designated investment as defined in the Financial Services and Markets Act 2000 (FSMA) so long as the Employee does not hold any more than 3% of the Shares or Stock of any class of any one company.

…

16.

TRADE SECRETS AND CONFIDENTIAL INFORMATION

16.1

The Employee HEREBY AGREES that both during the period of his/her employment by the Company and at all times thereafter he/she shall not (except in the proper course of his/her duties or as required by law or any government authority or otherwise with the prior consent in writing of the Board of Directors of the Company) use copy divulge or communicate or procure or allow or permit to be used copied divulged or communicated to any person firm company or organisation any trade secrets or confidential information belonging to the Company, which he/she may have received or obtained during his/her employment by the Company including (but not limited to):-

(i)

Details of the Company’s (or Subsidiary Company’s) actual or potential clients (including any list, card index system, database or other compilation giving the identity of such clients, their address and/or telephone and/or facsimile and/or e-mail numbers and/or any individual point of contact).

(ii)

Prices or other terms of business negotiated or being negotiated between the Company and/or any Subsidiary Company and any actual or potential client

(iii)

The Company’s (or Subsidiary Company’s) plans for product and service development

(iv)

Proposals and tenders made by the Company (or Subsidiary Company) to clients for proposed contracts or business

(v)

The Company’s (or Subsidiary Company’s) business plans

(vi)

The Company’s (or Subsidiary Company’s) opportunities for carrying out business with any actual or potential client

This restriction shall continue to apply after the termination of the Employee’s employment without limit in point of time but shall cease to apply to information or knowledge which may come in to the public domain otherwise than through the fault of the Employee.

16.2

The Employee HEREBY AGREES that both during the period of his/her employment by the Company and at all times thereafter he shall not (except in the proper course of his/her duties or as required by law or any government authority) use copy divulge communicate procure or allow or permit to be used copied divulged or communicated to any person firm company or organisation any trade secrets or confidential information of any client of the Company (or Subsidiary Company) which shall have been imported to or entrusted in the Company (or Subsidiary Company) in circumstances of confidence or disclosed to the Company (or Subsidiary Company) pursuant to a written agreement containing restrictions on the Company’s (or Subsidiary Company’s) use or disclosure of such trade secrets or confidential information and which the Employee shall have received or obtained at any time during his/her employment by the Company (or Subsidiary Company) including but not limited to medical information, financial information and personal details.

This restriction shall continue to apply after the termination of the Employee’s employment without limit in point of time but shall cease to apply to information or knowledge which may come in to the public domain otherwise than through the fault of the Employee.

16.3

All notes minutes memoranda correspondence accounts reports or other documents or items concerning any of the above or any copies or reproductions thereof (whether or not made by him/her and whether stored in human readable or machine readable form) shall remain the property of the Company (or Subsidiary Company) and shall be delivered up to the Company (or Subsidiary Company) forthwith by the Employee on the termination of the Employee’s employment by the Company, together with all and any other property of the Company (or Subsidiary Company) then in his/her possession custody power or control.

17.

RESTRICTIONS AFTER TERMINATION OF EMPLOYMENT

17.1

For the following meanings:

17.1.1

“the Business of the Company” shall mean the business of the supply of the Prohibited Services carried on by the Company at the date of the termination of the Employee’s employment with it;

17.1.2

“the Prohibited Services” shall mean the provision of advice in relation to pensions, life assurance, investments and other advice of a type provided by the Company in the ordinary course of its business at the date of termination of the Employee’s employment with it;

17.1.3

“Relevant Client” shall mean any person, firm, company or organisation whom or which was at any time during the period of twelve months immediately prior to the termination of the Employee’s employment a client of the Company (or Subsidiary Company) with whom or which the Employee dealt in the course of his/her employment during that twelve month period; if the Employee so dealt with an individual in that individual’s capacity as an officer, employee or representative of any firm, company or organisation that firm, company or organisation shall be deemed to be a Relevant Client and the individual shall also be deemed to be a Relevant Client in his or her personal capacity as well. If the Employee had, on behalf of the Company, during the twelve-month period, dealt with an individual on behalf of others that individual and those others shall be deemed to be Relevant Clients as well.

17.2

The Employee HEREBY AGREES with the Company that for the period of his/her employment and for the period of twelve months immediately following the termination of his/her employment with the Company he shall not, whether on his/her own account or with, through, for or on behalf of any other person, firm, company or organisation, directly or indirectly, canvass or solicit, or procure to be canvassed or solicited, the custom of any Relevant Client for the purpose of supplying, or of seeking to supply, thereto any Prohibited Services.

17.3

The Employee HEREBY AGREES with the Company that for the period of his/her employment and for the period of twelve months immediately following the termination of his/her employment with the Company he/she shall not, whether on his/her own account or with, through, for or on behalf of any other person, firm, company or organisation, directly or indirectly, deal with or attempt to deal with, any Relevant Client for the purpose of supplying, or of seeking to supply, thereto any Prohibited Services.

17.4

The Employee HEREBY AGREES with the Company that for the period of his/her employment and for the period of twelve months immediately following the termination of his/her employment with the Company he/she shall not, whether on his/her own account or with, through, for or on behalf of any other person, firm, company or organisation, directly or indirectly, solicit or endeavour to entice away from the Company any employee of the Company who at the date of termination of the Employee’s employment was employed by the Company or Subsidiary Company:

17.4.1

to manage all or part of the Company’s relationships with clients or to generate new clients for the Company;

17.4.2

who would have had direct dealings with clients of the Company or Subsidiary Company in the last twelve months of the Employee’s employment with the Company;

17.4.3

who would have had knowledge of the Company’s or Subsidiary Company’s confidential dealings with its clients in the last twelve months of the Employee’s employment with the Company;

17.5

The provisions of clauses 17.2 to 17.4 and each of the sub clauses of the clause 17.4 are separate and the invalidity or unenforceability of any of them shall not affect any of the others. If any of the clauses are found to be invalid or unenforceable the parties agree that the invalid or unenforceable provision shall be deemed removed therefrom.”

In 2004 the managing director of BIMG was Mr. Keith Isherwood. In about June 2004 Mr. Isherwood approached Mr. Hall to enquire whether he, and perhaps others then working in the Leicester office of BFS, would be interested in acquiring the Leicester business of BFS. The price suggested was £500,000. Mr. Hall decided to discuss this proposal with Mr. Yadev and two other employees working at that time in the Leicester office of BFS, Mr. P.K. Patel and Mr. Crisp. He also decided to discuss the matter with Mr. Remington to see whether he might be interested in investing in the proposed acquisition. The proposal in fact came to nothing. Mr. Hall, Mr. Yadev and Mr. Remington all came to the conclusion that, as the total value of BIMG and its subsidiaries had been valued at £750,000 at the time of the sale of the general insurance business to NFMIG, the price being sought for the Leicester office of BFS was excessive. They felt that the value of that office was no more than between 20% and 25% of the value of the whole group. However, the materiality of this event to the matters in issue in this action was that it was an occasion upon which Mr. Hall, Mr. Yadev and Mr. Remington considered going into business together and Mr. Yadev came to appreciate that Mr. Remington might be prepared to invest in a suitable financial services business. It is also material to record that during the discussions between Mr. Hall and Mr. Yadev at this time Mr. Yadev indicated to Mr. Hall that he would like to run his own business at some stage.

Mr. Hall was appointed a director of BAM as well as being a director of BIMG and remaining a director of BFS. He was responsible for the running of the Leicester office of BFS. It was common ground before me that his administrative burdens were considerable and that he worked hard and for long hours. An aspect of the administrative burdens which Mr. Hall had to discharge was that his opportunities for selling financial services products to clients was limited, certainly as compared with Mr. Yadev. That had an impact on his income, because it restricted his opportunities to earn commission. It is also fair to say that Mr. Hall did not find administration conducive in any event.

With effect from 1 September 2005 Mr. Yadev was appointed an Associate Director of BIMG. It appears that this was a largely honorific title conferred in recognition of his achievements in generating business for BFS. Mrs. Lynne Hobden-Clarke, the personnel director of BIMG, told me in her evidence that, amongst other things, the conferring of the title Associate Director upon an individual indicated that the individual concerned was considered to have the potential to become a director of BIMG in the fullness of time. However, the individual did not become a director of the company in a formal sense by being appointed an Associate Director.

The facts which I have set out so far in this judgment were not, I think, in dispute. What I now turn to is the account given by Mr. Hall, Mr. Yadev, Mr. Remington and Mr. Kenneth Barker on behalf of the defendants of developments from about the autumn of 2005. That account was not challenged in detail as to the specific facts described by the witnesses to which I have referred, but the case for the claimants was that it should be inferred from the eventual outcome of events that the account which I am about to set out was not true and that the reality was something much more nefarious.

By the autumn of 2005 Mr. Yadev had decided that he would like to pursue the idea of setting up his own business. He made contact with Mr. Remington to discuss the matter with him. Mr. Remington was interested. He introduced Mr. Yadev to his, Mr. Remington’s, wife, Beverley, and also to his accountant, Mr. Barker. Mr. Barker had been the accountant to Remington Collins and he had known Mr. Hall since he joined Remington Collins. He was in fact a client of Mr. Hall at BFS, as was his wife, and he had referred various of his own clients who needed financial advice to Mr. Hall. In addition, Mr. Barker was Mr. Hall’s personal accountant.

In his initial discussions with Mr. Yadev Mr. Remington did suggest that Mr. Hall should be included in any new business which Mr. Yadev was to establish, but Mr. Yadev was not keen. He had recently had differences with Mr. Hall over business matters at BFS. Also Mr. Yadev was concerned about the fact that Mr. Hall was a director of BIMG. At that stage it was left that Mr. Remington would speak to Mr. Hall at some future date, but that nothing would be done for the time being.

Following discussions in November 2005 Mr. Barker purchased for Mr. Yadev a shelf company called Trueway Finance Ltd., to which I shall refer in this judgment as “Trueway” in the period while it had that name. Trueway was incorporated on 8 June 2005. On 24 July 2006 the name of Trueway was changed to that of Hyrifa Ltd., the third defendant. I shall use the name “Hyrifa” to refer to the company after 24 July 2006. It was not in dispute that the name Hyrifa was a contraction of the words Hall Yadev Remington Independent Financial Advisers.

Once Trueway was acquired 5,000 £1 shares were issued and allocated to Mrs. Remington and to Mr. Yadev and his wife. Five hundred shares were issued to Mrs. Remington and 2,250 each to Mr. Yadev and Mrs. Yadev. Mrs. Remington was appointed the Company Secretary and a director. Mr. and Mrs. Yadev were appointed directors. Mr. Barker’s firm, Barker & Co., was appointed as accountant and auditor to Trueway.

In December 2005 Mr. Remington became aware that a firm of accountants in Leicester, Messrs. Clear and Lane, was thinking of altering its existing arrangements for providing clients with financial advice. He learned that through a golfing partner, Mr. Jim Reece, who was also a partner in the firm. Mr. Remington thought that there was an opportunity for Trueway to become the mechanism by which financial advice was provided to the clients of Messrs. Clear and Lane. Some discussions took place and Mr. Remington prepared a proposal in writing, in fact dated 8 February 2006. However, in the event, nothing came of the proposal. Messrs. Clear and Lane made an arrangement with a different IFA.

With the assistance of Mr. Barker, in January 2006 Trueway opened a bank account with Allied Irish Bank, which is a trading style in Great Britain of AIB Group (UK) plc.

On about 27 January 2006 an application was made on behalf of Trueway for authorisation by FSA. The application form was long and complicated and required quite a lot of information to be provided. Included in the information submitted with the application was an organisation chart prepared by Mr. Yadev in which he indicated that Miss Amy Hall was to undertake office administration for the company. Mr. Yadev was asked about that in cross-examination. He said that he knew Miss Hall, who is the daughter of Mr. Glyn Hall, he held her in high esteem and wished to employ her once Trueway had obtained its authorisation, but at that stage he had not even approached her about possibly being employed.

In another part of the form submitted to FSA seeking authorisation Mr. Yadev had to indicate the number of clients he anticipated advising at authorisation. The number he gave was 50. His evidence was that at the time he gave that estimate he thought that authorisation would be obtained by the end of March 2006. He was cross-examined as to where the 50 clients were going to come from. He told me that some would be clients of Messrs. Clear and Lane, some would be relations of his, and some would be introduced to him as clients by a Mr. Dowsett.

By about the beginning of April 2006 Mr. Hall felt that he could no longer shoulder the burden of being the sales director of BIMG. He decided to resign. He wrote to the chairman of BIMG, Mr. Robert Beckett, a letter dated 4 April 2006 in which he said this:-

“After a great deal of thought I regret that I am formally tendering my resignation. Unfortunately my work load has become more and more intolerable and I simply feel it will continue unless I take this action.

I currently have no alternative employment planned and am happy to work my notice in full. Obviously my position as a Director needs to be addressed but again I am happy to carry this on until you feel an announcement to the staff is appropriate.

Apart from my wife no one else is aware of my resignation although it should not come as a surprise to my fellow directors. I will carry on working normally until told otherwise.

I sincerely wish you and all the staff at BIMG success and good fortune in the future.”

It is right to say that the receipt of Mr. Hall’s resignation prompted various of the other directors of BIMG to try to persuade him to change his mind. He had a meeting at an hotel in Huntingdon with Sally Austerberry, another director, to talk through his feelings. The upshot of that meeting was that it was appreciated within BIMG that Mr. Hall wished to give up his administrative responsibilities, but might be persuaded to stay if his duties were confined to a sales and advice role.

After giving his resignation Mr. Hall attended two meetings of the board of directors of BIMG, one on 25 April 2006 and the other on 30 May 2006.

In conjunction with the application of Trueway to FSA for authorisation Mr. Yadev had named as his current employer, from whom a reference could be sought, Mr. Hall. An application from FSA for a reference was received by Mr. Hall on 28 April 2006. That prompted a meeting between Mr. Hall and Mr. Yadev. Before that meeting Mr. Hall spoke to Mrs. Hobden-Clarke. The effect of the discussion was set out in an e-mail which Mr. Hall sent Mrs. Hobden-Clarke later in the day. The material part of the e-mail was:-

“I made the one to one with Yogi a bit earlier to cut the suspense!

He has resigned and as you suggested he has agreed the reduction in his notice period in writing to me.

I have accepted his resignation and given him up to May 12^th to tidy things up after which he will go on to Garden Leave until May 31^st.

I have also asked for his work in progress to pick up on any potential business opportunities.

He tells me he is going to work on his own using his contacts in the Asian Business Community.

I intend to tell the staff in Leicester on Tuesday morning, so please keep the news confidential. I will send out a general email some time on Tuesday.

We will obviously miss his figures and profit contribution.”

Mr. Yadev formally submitted his resignation by a letter dated 28 April 2006. His letter was addressed to Mr. Hall and said this:-

“Further to our meeting today I formally give you notice of my resignation, which I had intended to do before the FSA applied for a reference.

I accept your offer of releasing me from my three months notice period and understand I will only be paid up to May 31^st 2006.

On a personal note I would like to thank you for the help and support you have always given me, without which I am sure I would not have achieved the success that I have at my time with Becketts. Your guidance and knowledge have always been invaluable in the overall experience I have gained, which will stand me in good stead for the future.

I wish you and Becketts all the best.”

Mr. Hall’s reply to Mr. Yadev’s letter of resignation was also dated 28 April 2006. He wrote as follows:-

“Thank you for your letter of resignation dated 28.04.06 which I accept on behalf of Beckett Financial Services Limited.

As per your request we will release you from the three month notice period in your contract of employment. You will be employed and paid by Beckett Financial Services Limited up to May 31^st 2006 plus any outstanding entitlement.

I would like you to supply me with your work in progress and as agreed you will be expected to work normally up to May 12^th after which you will be on garden leave until May 31^st.

Please return any company property and office keys on May 12^th other than the mobile phone Sim Card which you can keep until May 31^st should we wish to contact you during your garden leave.”

Mr. Hall and Mr. Yadev both told me that at their meeting on 28 April 2006 Mr. Yadev told Mr. Hall that he was intending to establish his own business and that he wished to employ Mr. Hall’s daughter in that business. Mr. Yadev asked Mr. Hall if he had any objection to Mr. Yadev approaching Miss Hall. Mr. Hall said no. At that stage, each of them told me, Mr. Yadev did not suggest to Mr. Hall that he might like to join him in his proposed new business.

After Mr. Yadev resigned Mr. Hall wrote a letter in standard form to a number, at least, of those with whom Mr. Yadev had had dealings whilst at BFS to inform them that Mr. Yadev was leaving and to invite them to contact Mr. Hall if they needed any advice. The specimen of the letter in question which was put in evidence was dated 9 May 2006.

Trueway was granted authorisation by FSA on 16 May 2006 and commenced business from that date.

In a letter dated 23 May 2006 to Mr. Yadev Mrs. Hobden-Clarke reminded him of his contractual obligations following the termination of his employment.

I have already mentioned that following the giving of his resignation on 4 April 2006 Mr. Hall was engaged in various conversations with other directors of BIMG in which they tried to persuade him to stay with BIMG at least in some capacity. The detail of those conversations is not material for present purposes. However, it is material to record where matters appear to have reached by 23 May 2006. In an e-mail of that date to Mr. Hall Mrs. Hobden-Clarke wrote:-

“I wish to confirm formally the discussions of last week with Chris Barnes and me. Kindly respond to this e-mail to signify that you agree to the terms and to allow me to make an announcement to all staff.

We acknowledge the letter of resignation that you have sent to Sally Austerberry and Bob Beckett, however, you will be changing role within the company as opposed to leaving. The resignation has therefore been withdrawn.

Decisions:

-

You will be relinquishing your management responsibilities for the Leicester Office

-

Your new role will be as a Consultant and your job title will be Associate Director

-

The standard bonus terms will apply to the sales income you generate

-

All other terms and conditions of employment will remain the same, i.e. salary and staff benefit package

-

We have agreed you will take a month’s holiday, commencing at some point in June or July (to be decided)

-

Carolyn Davies-Jones will be your dedicated support

We would like to reserve the right to ask you to continue to attend Board meetings for a couple of months, until we are confident that the management handover is complete. You have a wealth of knowledge and experience of the Leicester office that will be extremely beneficial to us all.

We are delighted that you have decided to stay and we wish you every success as an Associate Director.”

Attached to the e-mail was a proposed announcement to staff in these terms:-

“GLYN HALL

At his own request, Glyn will be relinquishing his management responsibility for the Leicester Office to concentrate on developing his portfolio of clients. He will be an Associate Director with Carolyn Davies-Jones continuing to provide his administrative support.

We are very appreciative of Glyn’s contribution to the business as a Director and look forward to working with him in his new role. There will be a few transitional weeks and then Glyn will be taking a holiday before moving completely into consultancy.

If you have any management queries or issues about the Leicester Office kindly refer them to a member of the Board.

I am sure you will join me in wishing him every success.”

Mr. Hall replied the same day by e-mail:-

“I have now personally told everyone at Leicester (excluding Tracey & Fran who is on holiday for a week) plus Paul Fisher.

Your announcement to the staff is fine with me and as far as I am concerned can be issued.

I really would like to see a complete change and feel I have resigned from my current position with an absolute definite last day in that job of June 30^th 2006.

Although I am very positive about working as an Associate Director with my clients and professional connections and looking forward to more quality time when freed up from my management responsibilities I do [sic] would not want a further three month notice period, with the best will in the world I am taking a leap of faith that I will be able to work under the new regime and with Chris’s new recruits.

There are a number of outstanding issues at Leicester that I appreciate I will not be able to drop, including Tracey and the Lewin Hickin Court Case (I have a meeting with our solicitors this afternoon) so I am happy to have a sensible handover as you suggest. I have spent a lot of time and effort on BFS Leicester so professional pride dictates my involvement on some key issues.

I would probably anticipate that I will need to work up to the end of June before taking anytime off bearing in mind we do not know when Tracey will be back and my prolonged absence could leave just Dave as an IFA before the new recruits come on board. ”

Mrs. Hobden-Clarke in her turn replied to that e-mail:-

“Thank you for your response and I note the points you have made. As we will all be at the Board Meeting on 30^th May, perhaps we can discuss the finer details then.

We will work to 30^th June 2006, and appreciate your support in the handover.”

It appears that it was at about this time, Mr. Yadev and Mr. Hall were both a little vague in their evidence about exactly when, Mr. Yadev and Mr. Hall had a meeting which had been arranged through Mr. Remington. Mr. Remington had become aware from Mr. Hall in April 2006 that Mr. Hall had resigned from BIMG. After Mr. Yadev had also resigned from BIMG Mr. Remington thought that it would be a good idea for Mr. Yadev and Mr. Hall to discuss whether Mr. Hall would like to join Mr. Yadev in his new venture. In their meeting Mr. Yadev told Mr. Hall that he was enjoying working for himself and that things were going well. He asked whether Mr. Hall would like to join him. Mr. Hall did indicate that he would be interested in that proposition. There were a couple of subsequent meetings at which there was discussion about when Mr. Hall would be able to start, about the issue of shares in Trueway to Mr. Hall and his wife, and about the change of the name of Trueway to reflect the involvement of Mr. Hall in the company. Mr. Hall told me that he did not at the stage of his meeting with Mr. Yadev in May 2006 consider that he was committed to joining Mr. Yadev. He said that he considered that all of the various options which had been open to him, including staying with BIMG, remained open. However, in fact he continued on the course of leaving BIMG and joining what became Hyrifa.

Certainly by about the middle of June 2006 Mr. Hall had become concerned that formally he remained a director of BIMG, BFS and BAM, notwithstanding his view that his resignation as a director had effectively been accepted on 23 May 2006 when staff were informed that he was resigning as a director and thenceforth was to be an Associate Director. On 20 June 2006 Mr. Hall sent an e-mail to Mrs. Hobden-Clarke in which he said:-

“As you know I am keen to draw a line under my role as a Director on 30.06.06 as per my resignation letter.

I would like to be removed as a Companies House Director on or before that date and wonder if you have the forms to action this. ”

At about the date of that e-mail Mr. Hall had been in contact with Mr. Barker, in his capacity as Mr. Hall’s accountant, to enquire whether it was possible to discover whether his resignation as a director had been recorded at Companies House. Mr. Barker checked the Companies House website and found that he remained a director. Mr. Hall then down-loaded Forms 288b from the Companies House website, completed them so as to show his resignation as a director of each of BIMG, BFS and BAM, and forwarded them to Sally Austerberry under cover of a letter dated 26 June 2006. In his letter he said:-

“Further to my emails with Lynne, I have enclosed 3 x Companies House Forms 288b evidencing my resignation as a Director from BIMG, BFS and BAM.

I have made my resignation effective from last Friday June 23^rd and as suggested by Lynne have kept copies.”

It was suggested to Mr. Hall in cross-examination that he only resigned as a director of each of the claimant companies on 23 June 2006, because that was the date on the forms. He said that his view was that his resignation had been effective as from 23 May 2006, but that he completed the forms as he did because he did not, on principle, back-date documents.

On 30 June 2006 Mr. Hall told Mr. Christopher Barnes, who by this date had replaced Mr. Isherwood as managing director of BIMG, that he would not, after all, be continuing in the employ of BIMG. It was common ground between Mr. Hall and Mr. Barnes that in that conversation, or one shortly thereafter, Mr. Barnes told Mr. Hall that he recognised that clients with whom Mr. Hall had dealt whilst at BFS would wish to follow him to wherever he was going. It was also common ground that Mr. Barnes had said to Mr. Hall, following that comment, “Be professional.” Mr. Hall told me that he understood from those words that Mr. Barnes did not object to Mr. Hall continuing to deal with clients with whom he had dealt whilst at BFS, but that Mr. Hall should not try to solicit such clients to follow him. Mr. Barnes told me in cross-examination that what he had meant by saying, “Be professional”, was that he expected Mr. Hall to comply with the restrictive covenants in his contract of employment. At the relevant meeting there was then some discussion about handing over Mr. Hall’s role in Leicester to Mr. Ben Ryrie, who had been appointed to take over the administration at that office, but who would not be starting until August. Mr. Hall agreed to participate in effecting a smooth transfer.

Following the meeting on 30 June 2006 Mrs. Hobden-Clarke wrote a letter dated 5 July 2006 to Mr. Hall. The material part of the letter was in these terms:-

“It is with regret that we accept your resignation given verbally to Chris Barnes on Friday, 30^th June 2006.

Following our discussion on Monday, I would like to confirm the arrangements for the coming weeks. We will continue to pay your salary up to and including Friday, 11^th August 2006 and we appreciate your willingness to conduct a handover with the new Associate Director Sales at the beginning of August. Our job offer has been verbally accepted and Ben Ryrie is due to join us on Monday, 31^st July.

We do not require you to come into the office unless it is to complete the handover of clients, related documentation or to see Ben. We would also like you to assist the Leicester team with any telephone queries. When I have produced Ben’s schedule for his first two weeks, I will send you a copy to your home address. ”

A particular problem which Mr. Barnes anticipated as a result of the departure of Mr. Hall was that an important client of BFS, Thomas May & Co., might choose not to remain a client. Mr. Barnes asked Mr. Hall in effect to assist in BFS keeping that client and to act as a consultant to BFS for that purpose. Mr. Hall and Mr. Barnes met on 5 July 2006. The effect of the conversation on that occasion, which may have been that on which the use of the expression “Be professional” took place, was summarised, at least in part, in an e-mail which Mr. Barnes sent to Mr. Hall on the same day. For present purposes the material parts of the e-mail were these:-

“As promised here is the summary note of our discussion detailing the process/timings of your “exit”.

1.

You will continue to be around the business for the next few weeks but I am not anticipating an overly proactive approach.

2.

Early next week you will meet with Brian Carruthers at Thomas May and inform him that you will be leaving Becketts on the basis of a “lifestyle” choice and that you will be around the business on a consultancy basis at least until the end of the year. …

3.

During the next week you will also shape letters to your clients and any other connections as appropriate advising them that you are leaving the business and that other advisers will be contacting them shortly such that ongoing advice and consultancy is maintained – please submit for approval via Angie with a copy to me.

4.

You will hand over the “reins” to Ben by spending a few days with him when he first joins the business. …

5.

After the handover your consultancy work with us can commence – This will be predominantly around maintaining and growing referrals from professional connections. Please let me know how many days each month you feel is practical (We discussed 3 per month) together with the level of fee you feel is appropriate. …”

Mr. Hall replied to the e-mail of Mr. Barnes of 5 July 2006 in an e-mail dated 9 July 2006. What he said was:-

“Just to let you know I do have an appointment with Brian Carruthers on Monday PM. As discussed I will be giving him the party line to help Becketts to keep TM & Co fully on board – including I will be around in some consultancy capacity.

I am happy to help be involved where necessary until the end of the month and also have client work to finish off which must add up to £20,000 commission for BFS. I will be available for a few days to spend time with Ben at the beginning of August. I am just waiting for a price for the Jag from Lombard – I don’t think this will be attractive so I have plans to have my own car by the end of the month, so handing over to Ben should not be a problem.

I will draft a letter to clients and pass through you and Angie to agree.

I have been thinking through the consultancy role and I am not sure developing professional connections would work for either of us! I have gained professional connections because I have persuaded them that I know what I am talking about and I can help their clients – I think we need to think this through a bit more.

To be honest gaining professional connections for Becketts (if it could be made to work) could cut across my own consultancy plans for the future.

So in short – happy to help and will say the right things to the right people, but options open.”

By 14 July 2006 it had been agreed between Mr. Hall and Mr. Yadev that Mr. Hall would have a 22.5% shareholding in Hyrifa and that Mrs. Hall would have a similar stake. To achieve this the issued share capital of Hyrifa was to be increased to 10,000 £1 shares, of which 2,250 would be issued to each of Mr. Hall and Mrs. Hall at par. In order to maintain the percentage of the issued shares held by Mrs. Remington she was to subscribe for a further 500 shares at par.

At the end of July 2006 Mr. Hall agreed with Mr. Barnes that he would provide consultancy services to BIMG at a rate of £333 per day. A form of consultancy agreement was entered into in writing dated 7 August 2006. In the event the agreement was terminated by BIMG in September 2006. I need not be concerned for the purposes of this judgment with the circumstances in which the consultancy agreement was brought to an end.

Mr. Hall’s employment by BIMG came to an end on 11 August 2006, a Friday. His employment with Hyrifa began the following Monday. In a letter sent to various contacts of Mr. Hall dated 8 August 2006 Mr. Ryrie said this:-

“Glyn Hall will shortly be leaving Beckett Financial Services and I am sure that you would want to join me in wishing him well in whatever the future holds for him.

Beckett Financial Services is still committed to maintaining and growing the relationship that has been built between you and our Leicester office. We will continue to provide you with a level of advice you need in order that you meet your financial aims by providing access to a qualified independent financial adviser.

Over the next few weeks we will be bringing a few new faces into the team, who have a strong background in the financial services industry and who will be more than willing to help you.

I would like to thank Glyn for his loyalty and commitment to all of the clients of Beckett Financial Services that he has dealt with over the last 10 years.

Please don’t hesitate to contact me if you have any questions or queries.”

I shall come in due course to the various ways in which claims made on behalf of the claimants against the defendants were put as a matter of law. However, the general thrust of the case was based upon the contention that, notwithstanding what Mr. Hall and Mr. Yadev said about how they had come to join together in Hyrifa, the pair of them had in fact set out to collaborate from about November 2005 and had deliberately planned to take clients from BFS. There was no direct evidence in support of those contentions. The case for the claimants was founded entirely upon inferences which it was said should be drawn from particular circumstances which, largely, were not in dispute.

One of the matters relied upon as indicating a plan on the part of Mr. Hall and Mr. Yadev from about November 2005 to set up in competition to BFS was that the figures of monthly sales achieved by Mr. Yadev for BFS showed a radical reduction, so it was contended, from about November 2005 until he left in May 2006. The relevant figures were put in evidence. Mr. Yadev did not contest the figures – he himself, as I understand it, had prepared them. He did, however, dispute that what they showed was that he was not giving his full effort to BFS while his employment by BIMG continued. He contended that his sales figures compared well with those achieved over the relevant period by other salesmen. That contention was not put to the test, as no figures from other salesmen were put in evidence. However, it is not true to say that on his own figures Mr. Yadev’s sales declined from about November 2005. The position was more complicated. On a month by month basis the figures varied quite dramatically during 2005. The worst single month was in fact January. The best single month was December. From a peak in July there was a downward trend, with a blip in September, until the spectacularly successful December figures. The figures in 2006 showed a high in January and a low in April, but there was no consistency. March was better than February. Overall I do not consider that the suggestion put to Mr. Yadev was supported by the figures upon which the suggestion was supposedly based.

A further matter upon which Mr. Christopher Lundie, who appeared on behalf of the claimants, relied in support of the case that a more sinister interpretation should be placed upon events than that for which Mr. Hall and Mr. Yadev contended was that in his application on behalf of Trueway to FSA for authorisation Mr. Yadev had indicated that he expected to be advising 50 clients by March 2006, that is to say within two months of the date of the application. Mr. Lundie submitted that the only possible source of so many clients was the existing clients of BFS which Mr. Yadev had been looking after. Mr. Yadev’s evidence was that whilst at BFS he looked after about 300 clients. I have already set out Mr. Yadev’s answer to the suggestion made by Mr. Lundie.

The next matter upon which the claimants relied, heavily, was that after the end of his employment by BIMG Mr. Yadev retained 17 files relating to clients of BFS. These files were returned surreptitiously. What happened was that someone in BFS noticed that some files were missing. Mrs. Hobden-Clarke telephoned Mr. Hall on about 6 September 2006 to ask him whether he had any idea where the missing files might be. Mr. Hall said that he did not have any files. That was in fact not strictly correct because he did have a BFS file relating to a Self Invested Personal Pension of himself and Mr. Remington, but for present purposes I do not think that that is important. What was important, contended Mr. Lundie, was that in the course of the conversation Mr. Hall asked Mrs. Hobden-Clarke, who had mentioned the possibility of taking legal advice in the light of rumours concerning Mr. Yadev, whether it would make any difference if the missing files turned up. Mr. Hall then told Mrs. Hobden-Clarke that he would speak to Mr. Yadev. Mrs. Hobden-Clarke agreed that that should be done. The next thing that happened from the point of view of the claimants was that the 17 files, which were produced in court and were of considerable bulk, appeared on the doorstep of Mr. Jag Hir, a broker consultant with Scottish Equitable. He telephoned Mr. Barnes on 8 September 2006 to say that he had got them. In that way the 17 files were returned to the claimants. The claimants contended that there were other missing files and suggested that Mr. Yadev or Mr. Hall had retained those also. However, apart from Mr. Hall’s own file concerning his SIPP with Mr. Remington, there was no evidence that Mr. Yadev or Mr. Hall had retained after the end of their respective employments any files of BFS.

Mr. Yadev’s evidence was that he was permitted during the course of his employment to remove files from the office if he needed to do so to work on them at home. That was what he had done in the case of each of the 17 files to which I have referred. He had not, he said, consciously retained the files after his employment had come to an end, but had simply forgotten that he had them. He had not made any use of any of the files, he contended. In fact on one of the files, that of a Mr. Randall, there was a document produced after Mr. Yadev had left BIMG. Mr. Yadev explained that that document had been misfiled. He told me, and it was not in dispute, that it is not the practice within the financial services industry for a client’s file to be passed from one adviser to another when a new IFA is instructed in place of his predecessor. All of the information the new IFA needs can be obtained from the client. The evidence was that in the cases of, I think, four of the 17 clients the subject of the files Mr. Yadev had retained he, through Hyrifa, had continued to act.

It was not in dispute that after leaving BIMG both Mr. Yadev and Mr. Hall had continued to act for clients for whom they had acted whilst employed by BIMG. The evidence was that Hyrifa had done business for 32 clients who had been clients of BFS and had been in contact with, but not done business for, a further 31. Mr. Hall and Mr. Yadev each told me that they had been prepared to act for former clients of BFS who wished them to act for them. Mr. Hall told me that his understanding was that as long as he did not solicit business from clients of BFS he was not acting in breach of his contract of employment with BIMG in accepting business from such clients. He said that his understanding was based on discussions with Mrs. Hobden-Clarke. Mrs. Hobden-Clarke in her evidence did indeed seem to take the view that Mr. Hall ascribed to her. Mr. Hall also relied upon his understanding of the effect of the “Be professional” discussion with Mr. Barnes. Mr. Yadev told me that his view was that he could act for former clients of BFS if the client in question insisted that he should act. He did not explain how he came to take that view, but some rather curious evidence seemed to support the fact that it was his view. The evidence concerned a Mrs. J.M. Carter. Mrs. Carter wrote to Mr. Yadev on 16 July 2006 at Trueway. The letter in question was not put in evidence, but Mr. Yadev’s reply, dated 20 July 2006, was. What he wrote was:-

“Thank you for your letter dated 17^th July 2006, the contents of which have been duly noted. However, due to the terms and conditions of my contract of employment with Beckett Financial Services, I am unable to continue to act as your Independent Financial Advisor (IFA). In the circumstances, I have no alternative but to ask you to revert back to Beckett Financial Services for further help and assistance. ”

However, Mr. Yadev did, in the event, undertake business for Mrs. Carter. He said that this was because she had insisted that he act for her. Mr. Yadev was cross-examined about the letter of 20 July 2006. It was suggested to him that the fact that he wrote such a letter showed that he understood perfectly well that he should not have been acting for clients of BFS. His answer was that he wrote this letter, which was the only one which he had written in such terms, because Mrs. Carter had written to him. Subsequently she had insisted that he act for her, and he had agreed. In other cases, said Mr. Yadev, former clients of BFS who approached him to act for them did so by telephone. During the initial telephone conversations, he said, he explained his position as set out in his letter dated 20 July 2006 to Mrs. Carter, but each of his interlocutors insisted that he act for them.

Mrs. Carter was not called to give evidence at the trial, but a letter dated 1 November 2006 written by her to the solicitor acting on behalf of the defendants was shown to me by Mr. Peter Oldham in the course of his cross-examination of various of the witnesses called on behalf of the claimants. In her letter Mrs. Carter said this:-

“I am a client of Hyrifa Limited and a Magistrate at the Loughborough Magistrates Court. A position which I have held for over seven years.

Following Yogesh Yadev’s departure from Beckett Financial Services Limited, I was very concerned who would continue to look after my personal financial affairs, as I had built up a very strong personal working relationship with Yogesh, such that he would help and advise me in areas over and above that of a normal financial advisor.

Since Yogesh’s departure I had no contact by Becketts other than to inform me that he was leaving. In the circumstances I took it upon myself to trace Yogesh’s details from the Financial Services Authority website, and then wrote to him to request that he continue to act as my adviser.

Further more I can confirm that Yogesh did not contact me to transfer my business and I approached him of my own free will. In view of the help I receive from Yogesh, it would not be possible for me to deal with Becketts or another advisor and if forced to do so would cause a great deal of anxiety and stress for me.”

It was plain from the evidence that Mr. Hall and Mr. Yadev did not wish BFS to discover that former clients had defected to Hyrifa. A specimen of a type of letter drafted by Mr. Hall and Mr. Yadev for a former client of BFS to write to the provider of a pension plan, or similar, to inform it of the instruction of Trueway or Hyrifa in place of BFS, was put in evidence. The text of the specimen said this:-

“I write with reference to my policy as detailed above and to inform you that I have appointed Trueway Finance Ltd. of Jupiter Court, 1A Dominus Way, Meridian Business Park, Leicester LE19 1RP to act as my Financial Advisers.

Please transfer the serving rights to their agency, and supply them with any information that they may request. Please also ensure that my previous advisers are not advised of this change.

I look forward to receiving the necessary confirmation, that you have updated your records accordingly.”

Both Mr. Hall and Mr. Yadev were asked about that specimen letter. Each said that the purpose of asking for the previous advisers not to be told of the change was to avoid pressure being put on the client by the previous adviser to change back. They each said that such a form of letter was used in any case in which Trueway or Hyrifa was taking over a client from a previous adviser, and was not simply used where the previous adviser was BFS. They also each said that a similar form of letter had been used by them whilst at BFS. That assertion did not appear to be challenged.

One of those who had, over the years, introduced clients to Mr. Hall whilst he was at BFS was Mr. Barker. In his evidence he told me that, once Mr. Hall had decided to leave BIMG and join Hyrifa, he felt that he should inform those whom he had introduced to Mr. Hall in the first place what Mr. Hall had done and where he could be found. He sent letters to about 30 clients which, omitting the details of Mr. Hall’s address, telephone numbers and e-mail address at Hyrifa, said this:-

“This is just to let you know that Glyn Hall has recently left Beckett Financial Services Ltd. to start his own Independent Financial Services company based near the M1/M69 close to Fosse Park.

His full details are:

…

I have worked with Glyn for many years and he has teamed up with another former Beckett employee and I am confident that they will provide a very efficient and personal service through their new company.

It is entirely up to you whether you stay with Beckett Financial Services Ltd. or switch to the new company, but I thought as it was through me that you were introduced to Glyn Hall, that you should know of the recent changes.”

Mr. Barker was required to attend court to be cross-examined, amongst other things, about this document. He confirmed his written evidence that he prepared the document of his own accord and did not show it to Mr. Hall before it was sent.

A number of witnesses made statements on behalf of Mr. Hall and Mr. Yadev which were put in evidence, but were not required to attend court to be cross-examined. They included Mr. Peter Stevenson, the managing director of a company called A.M. Widdowson & Son Ltd. Mr. Stevenson said in his witness statement, amongst other things, this:-

“12.

In the summer of this year, and I would estimate around July or August 2006, I telephoned Mr. Hall to discuss Widdowson’s financial business. When I spoke to Mr. Hall, he explained to me that he was leaving BFS. I asked Mr. Hall to tell me where he was moving to, since my immediate intention was to transfer my personal business and the business of Widdowson to him.

13.

I insisted that Mr. Hall tell me where he was moving to, and he advised he was moving to Hyrifa Limited. For the avoidance of any doubt, Mr. Hall (nor anybody on his behalf) has not sought to solicit Widdowson’s or my personal business. I confirm that I chose to transfer the business of Widdowson to Hyrifa Limited from the first moment I became aware of Mr. Hall leaving.”

Another witness who gave evidence only in writing and who was not called for cross-examination was Mr. David Rowlson. Mr. Rowlson is a senior employee of Forest Financial Planning Ltd. and in that capacity an introducer of clients to Mr. Hall both while he was at BFS and now. Forest Financial Planning Ltd. was also a client of BFS which had transferred its affections to Hyrifa. In his witness statement Mr. Rowlson described his contact with Mr. Hall in late July or early August 2006:-

“13.

In late July or early August 2006, I contacted Mr. Hall and he told me he had decided to join a former colleague Mr. Yadev in a new business that Mr. Yadev had set up in association with Mr. Remington. I informed him that I would want him to look after my clients in the future, and we agreed to talk when he joined Hyrifa Limited the following month.

14.

I felt reassured because I trusted Mr. Hall and knew that business would be run on a sound financial footing if Mr. Remington were involved.

15.

Subsequently, I contacted Mr. Hall and asked him to look after the clients of Forest Financial Planning Limited, and I was delighted that he agreed. By this point, Mr. Hall was working at Hyrifa alongside Mr. Yadev. I would stress that Mr. Hall made no attempt whatsoever to solicit my business and the business of Forest Financial Planning Limited at any stage. I made the running to ensure that our relationship continued.”

Mr. Lundie submitted that the evidence of Mr. Stevenson and that of Mr. Rowlson which I have quoted in fact amounted to Mr. Hall soliciting the business of Mr. Stevenson, A.M. Widdowson & Son Ltd., Mr. Rowlson and Forest Financial Planning Ltd. He contended that by responding to enquiries as to where he was going and what he was going to do in the terms which he did Mr. Hall crossed the line between merely providing information and actively soliciting. That submission was not made in relation to any other cases. Other witnesses who gave evidence which was not challenged that they had transferred their business from BFS to Hyrifa on their own initiative, and not as a result of solicitation, were Mr. Brian McArdle, a solicitor, Mr. Graham Smith, an accountant, Mr. Richard Fogg and Mr. Michael Smith.

Other matters upon which Mr. Lundie relied in support of the contentions that it should be inferred that the setting up of the business of Trueway and Hyrifa was long planned by Mr. Hall and Mr. Yadev, and that fundamental to it was taking clients from BFS, were conveniently summarised by him in paragraph 25 of his written closing submissions, in which he identified both Mr. Hall and Mr. Yadev by their respective initials:-

“(1)

The background of the approach to AH [Miss Amy Hall] is scarcely credible [YY p33 2/152] was either prepared to mislead the FSA or this Court to advance his own interests.

(2)

GH’s insistence that he resigned his directorships on 4.4.2006 was plainly an attempt to “push back” in time his fiduciary duties [GH 2/62 p14] and was supported by YY [YY2/121 p28]. GH’s suggestion that he was prevented from resigning is not credible [GH 2/85-6 p18-22].

(3)

GH’s insistence that he was a mere employee of D3, a partial truth designed to hide the bigger picture [GH 2/69 p40, 2/121]. GH retreated to “I am an employee” when asked about the details of the business [GH xx].

(4)

GH & YY sought to downplay number of clients who had moved to Becketts [YY 2/125 p45-57] (McBean, Morrison, Allen) and gave misleading evidence about the background to the move of certain clients – Gas Containers [2/133 p16], Widdowsons [2/134 p18].

(5)

GH’s “final” resignation is linked with his decision to join YY and was motivated by his wish to take up a “more financially rewarding position” [GH 2/91, p39]. It was only likely to [be] financial[ly] more rewarding if his client base followed him which he expected …

(6)

It is simply not credible that GH and YY did not have discussions about the business of D3, its future client base and their covenants (of which YY was fully aware at the date of their “combination” [3/168C] [this was the letter dated 20 July 2006 to Mrs. Carter]

(7)

That they knew they were doing wrong to Becketts (acting in a manner inconsistent with there [sic] duty of loyalty) is apparent from their own evidence: YY not wishing to compromise GH, YY’s guilt regarding the files, the client change of authority letters template for D3, the absence of any approach to Becketts (cf advice of LHC [Mrs. Hobden-Clarke] to GH.”

The validity or otherwise of most of these points depended upon the view which I formed of the evidence of Mr. Hall and Mr. Yadev. I shall indicate my view on that issue shortly. However, it is appropriate first to make a number of observations concerning Mr. Lundie’s written submissions in paragraph 25.

One important point in assessing the evidence of Mr. Hall and that of Mr. Yadev is to recognise that the first witness statement of each was produced at short notice in response to an application on the part of the claimants for interim injunctions to enforce the covenants in clauses 15, 16 and 17 of the contract of employment of each of Mr. Hall and Mr. Yadev. Each of the first witness statements said in terms that it had been prepared at short notice and might not contain all of the evidence which the maker might wish to give. Thus, for example, in his first witness statement Mr. Hall did indeed say that he had resigned as a director on 4 April 2006. That was indeed the date of his letter of resignation. He readily accepted in cross-examination that in fact the resignation as a director was not effective before 23 May 2006. What Mr. Lundie categorised in his submissions as Mr. Hall suggesting that he was prevented from resigning was in fact his evidence that BIMG did not deal as quickly as he would have wished with submitting appropriate Forms 288b to Companies House. In his first witness statement Mr. Hall said that he was an employee of Hyrifa, which is correct. He did not volunteer in his first witness statement that he is also a shareholder in the company, but he volunteered that in cross-examination. He is not a director of the company. He made that point when Mr. Lundie sought to cross-examine him about some of the details of the management of the business of the company. The so-called downplaying of the number of clients who had moved, in fact from, rather than to, BFS seems to be a reference to the fact that in his original witness statement Mr. Yadev said that two of the 17 clients whose files he retained after the end of his employment had become clients of Hyrifa, when in fact the number was four. The complaint about the misleading evidence concerning Gas Containers and Widdowsons was actually that in his first witness statement Mr. Yadev did not explain fully the circumstances in which each came to move to Hyrifa.

I was very impressed by both Mr. Hall and Mr. Yadev. I was also very impressed by the other witnesses who gave live evidence on behalf of the defendants, Mr. Remington, Mr. Barker, and Mr. Graham Smith. There were, as it seemed to me, no significant inconsistencies in any of the evidence relied upon on behalf of the defendants. I accept the evidence of all of the defendants’ witnesses without reservation.

In fairness I should say that I was also impressed by the witnesses called on behalf of the claimants, Mr. Barnes, Mrs. Hobden-Clarke, Mrs. Angela Bryant, another director of BIMG, and Mr. Ryrie. Each of them, as it seemed to me, gave evidence very fairly and tried to assist the court so far as he or she was able. However, none of their evidence contradicted in any material respect the evidence called on behalf of the defendants. The claimants’ entire factual case depended upon persuading me that I should not accept the evidence called on behalf of the defendants, but draw inferences adverse to the defendants consequent upon rejecting their evidence. That is not as matters have turned out.

It follows that I find that Mr. Yadev and Mr. Hall did not discuss Mr. Yadev’s proposed new business at all until the day Mr. Yadev handed in his resignation from BIMG, 28 April 2006, and that on that occasion the only references to the business were to the effect that Mr. Yadev was intending to establish a business of his own and that he wished to approach Miss Amy Hall to invite her to work in it. By this date Mr. Hall had written his letter of resignation of 4 April 2006, but had been in discussion with his fellow directors about the possibility that he would stay. The first discussion between Mr. Yadev and Mr. Hall was in May 2006 and at that time Mr. Hall agreed in principle to join Mr. Yadev in the new business. Mr. Hall even at that time was considering all his options. He made his final decision on 30 June 2006. Mr. Yadev and Mr. Hall, I find, each worked loyally and industriously for BIMG and BFS until each left his employment. I find that Mr. Hall and Mr. Yadev never discussed or agreed that each or either of them should act in breach of his contract of employment in order to advance the business of Hyrifa. In fact, as I find, each of them set out not to solicit the custom of any existing BFS customer, but each decided, independently, that it was not unlawful for him to act for a former client of BFS who specifically requested him to act. Whether that view, which I find was genuinely held by each of them, was correct as a matter of law is a matter to which I shall come. However, I find that they did not discuss the views to which they had come on this point at any stage prior to the commencement of this action. I accept that Mr. Yadev retained 17 files belonging to BFS after the termination of his employment by oversight and not out of some impure motive. In my judgment, on the evidence, Mr. Hall was not aware of who Mr. Yadev was acting for at Trueway or Hyrifa whilst Mr. Hall remained at BIMG. Even after Mr. Hall joined Hyrifa I accept that essentially Mr. Yadev and Mr. Hall each had his own customers with whom he dealt and was not aware in any detail of the identities of the clients of the other until that issue fell to be addressed in the context of the present action. I find that Hyrifa has in fact done business for 32 clients for whom BFS had previously done business and been in contact with a further 31. The consequences of that contact are matters to which I shall shortly turn.

In the context of the contact which I have found that Hyrifa had had with clients for whom BFS had at some stage in the past done business it is, I think material to say this. I was shown two identical copies of letters each dated 21 December 2006 written by Mr. Ryrie to former clients of BFS who had transferred their affections to different IFAs. As I understand it, in one case the transfer was to Hyrifa, but in the other case to a different IFA. I think that it was accepted that after the departures of Mr. Yadev and Mr. Hall the Leicester office of BFS was left essentially with one IFA, Mr. David Jones. Tracey Henson, who was on the books of the office, as it were, was on maternity leave. Mr. Ryrie’s letters of 21 December 2006 included the following passages:-

“Over the last 4 months we have been re-building the services our Leicester Office provide, along with a reformed team of advisers.

I believe that we are in a better position now to offer a comprehensive service that will meet all your financial needs, consequently, I will call you early in the New Year to make sure that you are happy with your current situation.

…Full Strength

The team has returned to full strength at the Leicester Office and with a skill range that means we can deal with all you[r] financial concerns. The team are:

David Jones

Tracey Henson

Caroline Bark

Andrew Nash

Tracey is currently on maternity leave and will return in the New Year. Andrew is new to the team for 2007 and is an excellent addition to the overall ability of the team to deal with your needs.”

The assertions which I have quoted from Mr. Ryrie’s letters dated 21 December 2006 seem in fact to have been rather optimistic. Material put before me during the course of the trial indicated that Mr. Nash is only registered with FSA as a trainee investment adviser, whilst the internal competence assessments of Mr. Jones and Tracey Henson showed that as at 11 August 2006 the areas in which Mr. Jones was considered competent to advise without supervision were six out of thirty-seven, limited to personal pensions, life assurance and permanent health insurance, and Tracey Henson was not considered competent to give any advice at all without supervision.

The materiality of these findings to the issues in the present action is that it appears that existing customers of BFS could not have had their needs adequately served by the staff available to BFS in Leicester during the latter half of 2006. That situation may still prevail. Thus it is not surprising that there appears to have been a groundswell of dissatisfaction following the departures of Mr. Yadev and Mr. Hall which prompted people to want to follow them to Hyrifa. The point was made on behalf of the claimants that staff based in Bury St. Edmunds could have serviced customers of the Leicester office, but there was no evidence that that ever happened or was ever suggested to Leicester-based clients.

The Particulars of Claim in this action set out a number of bases of claim against the various defendants. After explaining the parties and setting out the express terms of the two relevant contracts of employment the Particulars of Claim went on:-

“5.

It was an implied term of each of the Defendants’ Contracts of Employment with the First Claimant that they would serve the First Claimant with fidelity and in good faith.

6.

It was an implied term of each of the Defendants’ Contracts of Employment that they would not, during the course of their employment, use or disclose any of the Claimants’ confidential information or business secrets and/or that they would not after the termination of their employment, use or disclose, any of the Claimants’ business secrets.

7.

The First Defendant was at all material times a director of each of the First, Second and Third Claimants.

8.

The Second Defendant was at all material times until the termination of his employment on 11^th August 2006 [sic] a senior employee of the First Claimant who worked closely with the Claimants’ clients.

9.

By reason of the aforesaid the Defendants and each of them owed to each of the Claimants the following fiduciary duties:

a.

To act in good faith in the best interests of the Claimant;

b.

A duty not to place himself in a position in which his personal interests did or might conflict with the interests of the Claimant;

c.

A duty not to misappropriate or divert the assets of the Claimant (including its confidential information and corporate opportunities) and a duty to account to the Claimant for any assets so misappropriated or diverted together with all profits and income derived from such assets.

10.

Further or alternatively the Defendants owed to the Claimants a duty in equity in the same terms as the implied term set out in paragraph 6 above.

11.

Further or alternatively during their employment each of the Defendants became privy to information which was confidential to the Claimant in circumstances which imported an obligation on the Defendant to keep such information confidential.

12.

The Third Defendant is a company incorporated on 8^th June 2005. The Third Defendant has an issued share capital of 5000 Class A Ordinary Shares of which 2250 are held by the Second Defendant and a further 2250 are held by Mrs. Deval Yadev, the wife of the Second Defendant. Mrs. Deval Yadev has been a director of the Third Defendant since 28^th November 2005. The Second Defendant has been a director of the Third Defendant since 1^st of February 2006.

13.

The Third Defendant has been registered with the FSA as carrying on investment business since 16^th May 2006.

a.

The Second Defendant is registered with the FSA as being, inter alia, a Director and Investment Adviser with the Third Defendant from 16^th May 2006.

b.

The First Defendant is registered with the FSA as being an Investment Adviser with the Third Defendant from 12^th September 2006 and a Pension Transfer Specialist of the Third Defendant from 28^th September 2006.

14.

The First Defendant resigned as a Director:

a.

Of the First Claimant on 11^th August 2006,

b.

Of the Second Claimant on 11^th August 2006 and

c.

Of the Third Claimant on 11^th August 2006.

15.

The First Defendant’s employment with the First Claimant terminated on 11^th August 2006.

16.

The First Defendant’s Consultancy Agreement with the First Claimant was terminated by letter from the Claimants’ solicitors dated 21^st September 2006.

17.

The Second Defendant’s employment with the First Claimant terminated on 31 May 2006.

18.

On or from dates which are not yet known to the Claimants the Defendants wrongfully and with intent to injure the Claimants and/or to cause loss to the Claimants by unlawful means conspired and combined together. Each of the matters pleaded in paragraphs 19 to 31 below were carried out by the Defendants pursuant to and in furtherance of the said conspiracy.

19.

On a date which is not known to the Claimants the Second Defendant removed from the Claimants’ premises the Claimants’ files for certain of its clients. The Claimants are unable to provide a full list of the files removed until disclosure in this action but on 8^th September 2006 a box was deposited on the front doorstep of Mr. Jag Hir, which contained the Claimants’ files for certain of the Claimants’ clients.

20.

A list of those clients whose files were contained within the box is set out in Schedule 1 to these Particulars of Claim.

21.

The Second Defendant was the contact at the Claimants for each of those clients (save D K Randall for whom the First Defendant was the contact at the Claimants).

22.

The Claimants believe that certain other client files have been removed by the First and/or Second Defendant but which have not been returned to the Claimants. A list of the clients whose files the Claimants believe to still be missing is contained in Schedule 2 to these Particulars of Claim. [seven files]

23.

In the premises the Defendants breached clause 16.3 of their Contracts of Employment.

24.

Whilst in the employment of the Claimants the Defendants used, copied, divulged or communicated to the Third Defendant confidential information relating to the Claimants’ clients and the Claimants’ client opportunities with a view to and/or for the purpose of using and exploiting such information for the benefit of themselves and/or the business of the Third Defendant. Alternatively the Defendants procured or allowed or permitted the same to occur.

25.

The Claimant will rely upon the removal of the Claimants’ files as set out in paragraph 19 above and the fact that a large number of the Claimants’ clients have recently become clients of the Third Defendant. The Claimants will say that this, having regard to the matters set out below, constitutes prima facie evidence of misuse of the Claimants’ confidential information. The Claimant reserves the right to plead further particulars once the Defendants have given disclosure.

26.

In the premises the Defendants (and each of them) breached:

a.

Clauses 15.1 and/or 16.1 and/or 16.2 of their Contracts of Employment;

b.

The implied terms set out in paragraphs 5 and 6 above;

c.

The fiduciary/equitable duties set out in paragraphs 9 to 11 above.

27.

From about November 2005 the Second Defendant (without the written consent of a Director of the First Claimant) became directly or indirectly engaged, concerned or interested in the business of the Third Defendant which competed with or which was intended to competing [sic] with the business of the First Claimant. The Claimants believe that the Second Defendant’s wife (Mrs. Deval Yadev), who has been a director of the Third Defendant since 28^th November 2005, is a mere nominee for the Second Defendant.

28.

In the premises the Second Defendant breached:

a.

Clause 15.1 and 15.3 of the Second Defendant’s Contract of Employment;

b.

The implied term set out in paragraphs [sic] 5 above;

c.

The fiduciary/equitable duties set out in paragraph 9 above.

29.

In furtherance of the conspiracy the Defendants have used or sought to use the confidential information and/or business secrets and/or corporate opportunities of the Claimants by:

a.

On their own account for with, through, for or on behalf of the Third Defendant directly or indirectly canvassed or solicited or procured to be canvassed or solicited the custom of clients of the Claimants (including Relevant Clients within the meaning of clause 17 of their Contracts of Employment);

b.

On their own account for with, through, for or on behalf of the Third Defendant directly or indirectly dealt with or attempted to deal with the clients of the Claimants (including Relevant Clients within the meaning of clause 17 of their Contracts of Employment) for the purpose of providing advice in relation to pensions, life assurance, investments and other advice of a type provided by the Claimants.

30.

A list of those of the Claimants clients whom the First and/or Second Defendants (or either of them) have dealt and for whom letters of authority have been received are set out in Schedule 3.

31.

In the premises the Defendants have breached:

a.

Clauses 16.1 and/or 16.2 and/or 17.2 and/or 17.3 of their Contracts of Employment;

b.

The implied term set out in paragraph 6 above;

c.

The fiduciary/equitable duties set out in paragraphs 10 and 11 above;”

This action first came before me on 6 November 2006 on the hearing of an application on the part of the claimants for interim injunctions against the defendants. The defendants on that occasion offered certain undertakings which I accepted and I made no substantive order on the application. I did, however, direct that a trial of liability and final injunctive relief take place commencing on 22 January 2007. As matters turned out it fell to me to preside over that trial. This judgment is thus concerned only with the question of liability in relation to the claims of the claimants and with the issue of final injunctive relief. I have not been concerned with any issue of quantum in relation to the claims of the claimants, nor have I been concerned with two elements of counterclaim raised on behalf of the defendants.

Notwithstanding the number and variety of the claims pleaded in the Particulars of Claim, by the end of the trial matters had advanced somewhat. Mr. Lundie indicated that the claims of the claimants were confined to those based on alleged breaches of the covenants against solicitation and dealing in the relevant contracts of employment, those based on alleged breaches of fiduciary duty and those based on conspiracy. Claims in respect of alleged breaches of clauses 15 and 16 of the relevant contracts of employment were not pursued. Indeed it is fair to say that those claims did not feature even in his written opening.

Moreover, Mr. Lundie indicated in his closing submissions that the claimants were not seeking any injunction against solicitation, and only sought findings that there had been solicitation in the cases of Mr. Stevenson and A.M. Widdowson & Son Ltd., and Mr. Rowlson and Forest Financial Planning Ltd. In relation to the contention that there had been solicitation in those cases Mr. Lundie relied on the evidence which I have already set out and submitted that the terms of the responses of Mr. Hall to enquiries went further than simply providing information in answer to enquiry. I reject that submission on the facts.

In relation to the claim based on alleged breach of fiduciary duty Mr. Lundie indicated that the claimants’ case was that there was a breach because Mr. Hall and Mr. Yadev had, on the facts which Mr. Lundie invited me to find, intended to set up in business from about November 2005 and had consciously decided to act in breach of their respective contracts of employment by acting for clients of BFS. Furthermore, in the case of Mr. Hall, so Mr. Lundie averred, he had acted in breach of his fiduciary duty by not informing BIMG, BFS and BAM whilst he continued as a director of those companies, that Mr. Yadev had already started dealing with persons who had been clients of BSF.

The claimants’ case in conspiracy was, Mr. Lundie told me, limited to the contention that Mr. Hall and Mr. Yadev had agreed in about May or June 2006 to use unlawful means in promoting the business of Hyrifa by each of them acting in breach of his obligations under clauses 17.2 and 17.3 of his contract of employment, and by Mr. Hall breaching his fiduciary duty to disclose to BIMG, BFS and BAM that Mr. Yadev was dealing with persons who had been clients of BFS.

In my judgment the factual foundation to support the claimants’ claims as pursued in respect of alleged breach of fiduciary duty and alleged conspiracy were not demonstrated by the evidence. Mr. Yadev and Mr. Hall did not agree that each or either of them would breach the terms of his contract of employment with BIMG or, indeed, that each or either of them would act for clients who had previously been clients of BFS. Each independently came to the view that acting for such clients, if they requested them to act, was lawful and they did not discuss the issue together before the commencement of this action. Moreover, on my findings Mr. Hall was unaware of who Mr. Yadev was acting for during the period whilst Mr. Hall remained at BIMG, and thus was not in a position to inform BIMG or BFS as to the identity of the clients.

In the light of my findings of fact the only live issue of law which requires to be addressed is the enforceability of clause 17.3 of the relevant contracts of employment.

Clause 17.3 of the relevant contracts of employment was, on its face, a clause by which it was sought to restrain the relevant employee from engaging in an activity after the termination of his contract of employment, a type of clause often described as a restrictive covenant or a covenant in restraint of trade.

I think that it was common ground that the first task of the court in considering a clause like clause 17.3 was to construe it. In Arbuthnot Fund Managers v. Rawlings [2003] All ER (D) 181 Chadwick LJ, with whom Newman J agreed, said, at paragraph 21, so far as is presently material,

“It is not suggested, in the present case, that there are disputed facts which need to be resolved before the task of construction can properly be undertaken. In addressing that task, it is necessary to keep in mind two factors; the first is that the exercise is one of construction; and that, in the construction of a covenant in restraint of trade, the same principles are to be applied as in the construction of any other written term.”

The other aspects which needed to be considered in order to reach a conclusion as to the enforceability of clause 17.3 were conveniently summarised by Cox J in TFS Derivatives Ltd. v. Morgan [2005] IRLR 246 in paragraphs 37 and 38 of her judgment, at page 251 as these:-

“37.

…Secondly, the court will consider whether the former employers have shown on the evidence that they have legitimate business interests requiring protection in relation to the employee’s employment. …

38.

Thirdly, once the existence of legitimate protectable interests has been established, the covenant must be shown to be no wider than is reasonably necessary for the protection of those interests. Reasonable necessity is to be assessed from the perspective of reasonable persons in the position of the parties as at the date of the contract, having regard to the contractual provisions as a whole and to the factual matrix to which the contract would then realistically be expected to apply. ”

I shall return to these second and third aspects. Logically one must start by considering what, on proper construction, is the meaning of the clause.

The principles applicable to the construction of written documents were conveniently set out by Lord Hoffmann in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 WLR 896 at pages 912H to 913E:-

“The principles may be summarised as follows.

(1)

Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.

(2)

The background was famously referred to by Lord Wilberforce as the “matrix of fact”, but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.

(3)

The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.

(4)

The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] AC 749.

(5)

The “rule” that words should be given their “natural and ordinary meaning” reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera SA v. Salen Rederierna AB [1985] AC 191, 201:

“if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion which flouts business commonsense, it must be made to yield to business commonsense.”

In the present case there are three particular issues which need to be considered in the context of the proper construction of clause 17.3. The first is what is the import of the word “deal”, for it is that which, on the face of it, the relevant employee agreed in clause 17.3 not to do for a period of twelve months after the termination of his employment. The same verb also appeared in the definition of the expression “Relevant Client” as one of the defining characteristics of what made someone a “Relevant Client”. The second issue is what was the category of persons with whom the relevant employee agreed not to “deal” over that period; specifically whether that category was sufficiently clearly identified to enable one to say precisely with whom the relevant employee was not to “deal”. The question really resolved itself into being what was a “client”. The third issue was whether the clause should be construed as preventing the relevant employee from giving to a “Relevant Client” advice of a sort provided not by BIMG, but by BFS or BAM. How that issue arose requires a little more explanation. If one substituted for the defined expressions in clause 17.3 the words of the definitions of those expressions (for simplicity limiting the definition of “Relevant Client” to the first part of it) the clause said this:-

“Mr. Hall/Mr. Yadev HEREBY AGREES with BIMG that for the period of his/her employment and for the period of twelve months immediately following the termination of his/her employment with BIMG he/she shall not, whether on his/her own account or with, through, for or on behalf of any other person, firm, company or organisation, directly or indirectly, deal with or attempt to deal with, any person, firm, company or organisation whom or which was at any time during the period of twelve months immediately prior to the termination of Mr. Hall’s/Mr. Yadev’s employment a client of BIMG (or BFS or BAM) with whom or which Mr. Hall/Mr. Yadev dealt in the course of his/her employment during that twelve month period for the purpose of supplying, or of seeking to supply, thereto, any provision of advice in relation to pensions, life assurance, investments and other advice of a type provided by BIMG in the ordinary course of its business at the date of termination of Mr. Hall’s/Mr. Yadev’s employment with it.”

The issue was whether what was prevented should be construed as limited to the sort of advice in fact given by BIMG, which did not actually give any advice at all, being a holding company, or whether it should be construed as including advice of the sort given by BFS or BAM.

The verb “deal” in English has a number of meanings. One is to distribute cards to players in a game. In relation to dealing with people The New Shorter Oxford Dictionary, 4^th edition, 1993, defines the verb as follows:-

“9.

v.i. Have to do with, have dealings with (esp w. neg); arch. negotiate, treat with, esp. in an underhand or secret way; do business, trade with a person, in goods etc. (lit. & fig.) 10. v.i. Foll. by with: be concerned with (a thing) in any way; busy or occupy oneself with, esp. with a view to discussion or refutation Also, take (esp. punitive or corrective) measures regarding, cope with, handle (a difficult person, situation) 11. v.i. Foll. by with or by: behave towards, treat (a person etc.) (in a specified way), conduct oneself.”

The word is thus potentially of wide import. Any interaction between one person and another can amount to them “dealing” together. However, the word can specifically describe doing business with someone.

Mr. Lundie did not make specific submissions as to the meaning of the word “deal”. At paragraph 40 of his written opening, in a passage adopted and repeated in his closing submissions, he contented himself with asserting that the word was a perfectly ordinary one. Mr. Oldham submitted that the word was undefined and too vague to have any worthwhile meaning attributed to it.

In my judgment, in the context of clause 17 of the relevant contracts of employment, that is to say, both in clause 17.3 and in the definition of “Relevant Client” in clause 17.1.3, the word “deal”, or its past participle “dealt”, meant “do business”. It was plain, as it seems to me, that it did not encompass any interaction at all with someone. The whole focus of clause 17, and in particular clause 17.3, was limiting the freedom of Mr. Hall or Mr. Yadev to undertake business with someone with whom he had previously undertaken business. While the word “deal” could have had a wider meaning, and encompassed any interaction with someone with whom Mr. Hall or Mr. Yadev had previously had an interaction, in my judgment it is plain from the context that that was not the intention.

Mr. Lundie submitted that the word “client” meant an actual client, without embarking on any submissions as to the indicia of a “client”. Mr. Oldham submitted that the word was too vague to convey any clear meaning.

The noun “client” again in English is capable of a number of meanings. One, according to The Shorter OxfordDictionary, is “A person using the services of any professional; a customer.” It is in that sense that it seems to me the word was used in the definition of “Relevant Client”. However, that conclusion conceals rather than highlights what the issue between the claimants and the defendants in relation to the word “client” actually was. Mr. Barnes contended that anyone who had been provided with a service by BFS or BAM and who had paid for that service became a client. Mr. Ryrie asserted that once a client had achieved the status of such, he retained that status for ever, because there was always the potential that he might require a further service, which would generate a fee or commission for BFS or BAM. It was these views as to the scope of the word “client” which Mr. Oldham particularly sought to challenge.

To be a “client” is not a status, but a description of a contractual relationship, past or present. Oliver J made that point in reverse in a different context in Midland Bank Trust Co. Ltd. v. Hett, Stubbs and Kemp [1979] Ch 384 at page 402G-H in referring to examples of those who provide services in this way:-

“The expression “my solicitor” is as meaningless as the expression “my tailor” or “my bookmaker” as establishing any general duty apart from that arising out of a particular matter in which his services have been retained. The extent of his duties depends on the terms and limits of that retainer and any duty of care to be implied must be related to what he is instructed to do. ”

Thus, as it seems to me, a “client” of a professional person describes someone for whom for the time being the professional person is in a contractual relationship under which he is to provide some service. Someone for whom the professional person has provided a service in the past, but is not doing so currently, is not a “client”: he has been a “client” in the past.

In the context of the definition of the expression “Relevant Client” in clause 17.1.3 the words, “a client of the Company (or Subsidiary Company) with whom or which the Employee dealt in the course of his/her employment during that twelve month period”, thus means, in my judgment, a person for whom BIMG or BFS or BAM performed a service, and with whom Mr. Hall or Mr. Yadev (as the case may be) did business, during the twelve months prior to the termination of his employment.

The issue whether Mr. Hall and Mr. Yadev were prevented by clause 17.3 of their respective contracts of employment from providing advice of a type provided to a “Relevant Client” by BFS or BAM does not arise out of some linguistic difficulty or ambiguity in clause 17, specifically the definition of “the Prohibited Services” in clause 17.1.2, but from the practical consequence of interpreting that definition literally in the sense for which Mr. Oldham contended. His submission was that the words in the definition, “of a type provided by the Company in the ordinary course of its business at the date of termination of the Employee’s employment with it;” qualified everything which went before in the definition, namely, “the provision of advice in relation to pensions, life assurance, investments and other advice”. Mr. Lundie submitted that, on proper construction, the words quoted in the first part of the preceding sentence qualified only “other advice”, so that there was an absolute prohibition on giving advice in relation to pensions, life assurance and investments regardless of whether BIMG had itself carried on a business of giving such advice, and thus caught such advice actually given by BFS.

In my judgment there are two particular aspects to be considered in reaching a conclusion as to the proper construction of the definition of “the Prohibited Services”. One is the meaning of the words as a matter of English, read against the background of the relevant knowledge reasonably available to the parties at the date of the relevant contracts of employment. However, the other is a matter specific to the construction of covenants in restraint of trade in employment contracts. I shall come to the wider implications of the law specific to the construction of covenants in restraint of trade, but for the moment the issue is how the court should approach the construction of a clause which might be considered too wide in its scope to be enforceable as a matter of public policy. In relation to that issue Mr. Lundie reminded me, en passant in referring me to the decision of the Court of Appeal in Littlewoods Organisation Ltd. v. Harris [1977] 1 WLR 1472, of the words of Sir Nathaniel Lindley MR in Haynes v. Doman [1899] 2 Ch 13, at pages 25-26, quoted by Lord Denning MR in the Littlewoods case at page 1481:-

“Agreements in restraint of trade, like other agreements, must be construed with reference to the object sought to be attained by them. In cases such as the one before us, the object is the protection of one of the parties against rivalry in trade … the court ought not to hold a just and honest agreement void, even when to enforce it would be just, simply because the agreement is so unskilfully worded as apparently, or even really, to cover some conceivable case not within the mischief sought to be guarded against. Public policy does not require so serious a consequence to be attached to a mere want of accuracy in expression. To hold such an agreement wholly illegal and void is to lose all sense of proportion, and is not necessary for the protection of either the defendant or of the public.”

Mr. Lundie’s submission was that in construing a covenant in restraint of trade in a contract of employment the court should, if possible, construe it in a sense which meant that it was enforceable rather than in a sense in which it would be unenforceable as being too wide.

I accept the submission of Mr. Lundie up to a point. However, as he himself drew to my attention, in J.A. Mont (UK) Ltd. v. Mills [1993] IRLR 172, Simon Brown LJ had said:-

“As a matter of policy, courts should not too urgently strive to find, within restrictive covenants ex facie too wide, implicit limitations such as alone would justify their imposition. Otherwise, employers would have no reason ever to impose restraints in appropriately limited terms. Thus would be perpetuated the long-recognised vice of ex-employees being left subject to apparently excessive restraints and yet quite unable, short of expensive litigation and at peril of substantial damages claims, to determine precisely what their rights may be.”

The correct approach, as it seems to me, is to construe a covenant in restraint of trade in a contract of employment against the background that the parties to it presumably intended, or at least accepted, that the covenant was enforceable. In other words, one should not strain to achieve a construction that produces the result that the covenant is enforceable, but in applying the principles set out by Lord Hoffmann in the Investors Compensation Scheme case, one of the factors to be taken into account is that which I have mentioned.

In looking at the definition of “the Prohibited Services” in clause 17.1.2 as a matter of English both the construction for which Mr. Oldham contended and that for which Mr. Lundie contended appear possible. However, the construction for which Mr. Oldham contended would, as it seems to me, have produced in its application to clause 17.3 a clause which in principle would be enforceable as a covenant in restraint of trade, at least so far as the interest of BIMG in having such a clause was concerned, because it would be limited to restraining Mr. Hall and Mr. Yadev from giving advice of the type provided by BIMG in the ordinary course of business at the date of the termination of the employment of each. Mr. Lundie’s construction would have the effect that Mr. Hall and Mr. Yadev would be restrained from giving advice in relation to pensions, life assurance and investments in any event, even if BIMG had no interest in the giving of advice in respect of those matters at the date of the termination of the employments of Mr. Hall and Mr. Yadev. If BIMG had no such interest, then it would not seem that it had any legitimate interest in restraining Mr. Hall and Mr. Yadev from giving such advice. This is a matter which has another dimension in relation to the second of Cox J’s aspects of a covenant in restraint of trade in an employment contract identified in TFS Derivatives Ltd. v. Morgan, to which I shall come, but for the moment I am concerned only with what is the proper construction of clause 17.3. At this stage, therefore, it seems to me that I should attribute to the definition of “the Prohibited Services” a meaning which, subject to the outcome of my conclusion on Cox J’s second aspect, having considered the particular facts of this case, results in a clause which is enforceable, rather than a construction which makes it likely, whatever the particular facts of this case, that the clause will fail once one gets to that aspect.

However, there is a matter which arises both at the construction stage and at the stage of whether BIMG has legitimate business interests requiring protection in relation to the employment of Mr. Hall and Mr. Yadev. That is the fact that although on its face, with the construction which I have accepted of “the Prohibited Services”, clause 17.3 could be of value to BIMG, that would only be so if BIMG itself carried on business in the giving of advice in respect of pensions, life assurance, investments and other matters. In fact, at the date of the relevant contracts of employment, 1 January 2004 and thereafter until now, BIMG has not carried on any business at all. It has been but the holding company of the trading companies, BFS and BAM. Thus in fact BIMG seems to have no interest itself in the existence or enforceability of clause 17.3. BFS, on the other hand, would have had an interest. In those circumstances Mr. Lundie submitted that I should construe the definition of “the Prohibited Services” in clause 17.1.2 as if the words “the Company” were followed by the words “(or Subsidiary Company)”, as they are in other places in clauses 16 and 17. Mr. Oldham submitted that there was no warrant for any such construction, as the words used were plain.

In support of his submission Mr. Lundie relied upon a comment by Lord Denning MR in Littlewoods Organisation Ltd. v. Harris, at page 1482F:-

“The answer is, I think, the law to-day has regard to the realities of big business. It takes the group as being one concern under one supreme control.”

In his judgment in that case Megaw LJ did not indicate that he agreed with that observation. The third member of the Court of Appeal, Browne LJ, dissented in any event. Whatever precisely Lord Denning MR had in mind in making the comment upon which Mr. Lundie relied, it seems to me that it cannot have been intended to indicate that the well-established individual personality of a limited liability company in law was to be disregarded if the company in question was a member of a group of companies.

The issue in this case, I think, on this point is simply whether, applying the principles enunciated by Lord Hoffmann in the Investors Compensation Scheme case, the words “the Company” in clause 17.1.2 should be construed in the manner for which Mr. Lundie contended. What points in that direction is that, at the date of the relevant contracts of employment, to the knowledge of both BIMG and Mr. Hall and Mr. Yadev, BIMG had no business and therefore clause 17.3 would be of no practical utility unless thereafter BIMG commenced to carry on a business of a type which would fall within the definition of “the Prohibited Services”. What points against the construction for which Mr. Lundie contended was that there were many points in clauses 16 and 17 of the relevant contracts of employment where the expression “the Company (or Subsidiary Company)” was used, including in the definition of “Relevant Client”, also relevant to the construction of clause 17.3, and thus it should be concluded that if the parties meant to include in any particular reference to BIMG reference to its subsidiaries, they did so. In the end, in my judgment, the latter is the only sense one can make of the frequent use of the words “the Company (or Subsidiary Company)”, where they appear. Thus, even though the effect of such construction is to deprive clause 17.3 of practical utility, if otherwise enforceable, I hold that what was prevented by clause 17.3 of the relevant contracts of employment, as a matter of construction, was only doing business with “clients”, in the sense which I have construed that expression, for the purpose of supplying or seeking to supply advice of the type provided by BIMG at the dates of the respective terminations of the contracts of Mr. Hall and Mr. Yadev.

On the facts as I have found them, and as were not, on this point, in dispute, it follows that neither Mr. Hall nor Mr. Yadev was in breach of clause 17.3 because neither of them supplied or sought to supply advice of a type provided by BIMG in the ordinary course of its business at the date of the termination of his employment. It follows that the claims of the claimants against the defendants all fail.

Notwithstanding the conclusion which I have expressed in the preceding paragraph it seems to me to be appropriate for me to consider the other two aspects of a case in which it is sought to enforce a covenant in restraint of trade in a contract of employment identified by Cox J in TFS Derivatives Ltd. v. Morgan. The principles applicable to those two aspects were conveniently summarised by Sir Christopher Slade in giving the only substantive judgment of the Court of Appeal in Office Angels Ltd. v. Rainer-Thomas [1991] IRLR 214 at page 217:-

“(1)

If the Court is to uphold the validity of any covenant in restraint of trade, the covenantee must show that the covenant is both reasonable in the interests of the contracting parties and reasonable in the interests of the public: (see for example Herbert Morris Ltd. v. Saxelby [1916] AC 688 at p.707 per Lord Parker of Waddington).

(2)

A distinction is, however, to be drawn between (a) a covenant against competition entered into by a vendor with the purchaser of the goodwill of a business, which will be upheld as necessary to protect the subject-matter of the sale, provided that it is confined to the area within which competition on the part of the vendor would be likely to injure the purchaser in the enjoyment of the goodwill he has bought, and (b) a covenant between master and servant designed to prevent competition by the servant with the master after the termination of his contract of service: (see for example Kores Manufacturing Co. Ltd. v. Kolok Manufacturing Ltd. [1959] Ch 109 at p.118 per Jenkins LJ).

(3)

In the case of contracts between master and servant, covenants against competition are never as such upheld by the court. As Lord Parker put it in Herbert Morris Ltd. v. Saxelby (supra) at p.709:

“I cannot find any case in which a covenant against competition by a servant or apprentice has, as such, ever been upheld by the Court. Wherever such covenants have been upheld it has been on the ground, not that the servant or apprentice would, by reason of his employment or training, obtain the skill and knowledge necessary to equip him as a possible competitor in the trade, but that he might obtain such personal knowledge of and influence over the customers of his employer, or such an acquaintance with his employer’s trade secrets as would enable him, if competition were allowed, to take advantage of his employer’s trade connection or utilise information confidentially obtained.”

On this appeal we are not concerned with trade secrets. The plaintiff’s staff handbook contained special provisions (in clause 4.3) dealing with confidentiality, but no issue concerning confidentiality has been raised in this court.

(4)

The subject-matter in respect of which an employer may legitimately claim protection from an employee by a covenant in restraint of trade was further identified by Lord Wilberforce in Stenhouse Ltd. v. Phillips [1974] AC 391 (at p.400) as follows:

“The employer’s claim for protection must be based upon the identification of some advantage or asset inherent in the business which can properly be regarded as, in a general sense, his property, and which it would be unjust to allow the employee to appropriate for his own purposes, even though he, the employee, may have contributed to its creation.”

(5)

If, however, the Court is to uphold restrictions which a covenant imposes upon the freedom of action of the servant after he has left the service of the master, the master must satisfy the Court that the restrictions are no greater than are reasonably necessary for the protection of the master in his business: (see Mason v. Provident Clothing & Supply Co. Ltd. [1913] AC 724 at p.742 per Lord Moulton). As Lord Parker stressed in Herbert Morris Ltd. v. Saxelby (supra) at p.707, for any covenant in restraint of trade to be treated as reasonable in the interests of the parties “it must afford no more than adequate protection to the benefit of the party in whose favour it is imposed” [Lord Parker’s emphasis]”

It is thus plain that it is up to the employer by evidence in the first place to demonstrate that it has legitimate business interests which require protection in relation to the employment of the employee, and then, further, by evidence to show that the covenant provides no wider a protection than is reasonably necessary for the protection of those interests.

In the present case the evidence showed that BIMG had no legitimate interest, or, indeed, any interest at all, which would be protected by the covenant in clause 17.3. Thus, on my construction of that provision, BIMG fails additionally on that ground to make out a case against Mr. Hall or Mr. Yadev.

However, it is appropriate to consider the evidence in relation to the interests of BFS or BAM which could be benefited by clause 17.3 if it were relevant to take account of the positions of those parties.

No evidence at all was led to show that BAM had any legitimate interest in enforcing clause 17.3 as against either Mr. Hall or Mr. Yadev. Neither of them worked directly in BAM, although Mr. Hall was a director of that company. The business of BAM was quite different from that of BFS, in which both Mr. Hall and Mr. Yadev worked.

The evidence as to the interests of BFS in the enforcement of clause 17.3 was slight. Mr. Ryrie told me in paragraph 25 of his second witness statement that he thought that it was self-evident what was the reason for the clauses in clause 17 of the relevant contracts of employment. He did not elaborate. Mr. Barnes, at paragraph 36 of his witness statement, did give an explanation of why it was that, according to him, a non-dealing covenant for a period of one year was necessary. He said:-

“As the Court will appreciate there are significant difficulties in policing a non-solicitation covenant (as Mr. Yadev and Mr. Hall appear to appreciate in drawing a distinction between the two covenants) and that is why there is included a 12 month non-dealing covenant which gives Beckett the opportunity to try to stabilise its client base (into which much time and effort has been invested) following the departure of an adviser. We need this period of time to rebuild client contact, the nature of our business is sporadic and with some clients there may only be annual contact. It is important to rebuild personal trust and therefore a non dealing clause is important and necessary for the protection of our business interests. A 12 month non-dealing clause such as this is standard in the industry.”

On the question what was standard in the industry there seemed to be a difference between the evidence of Mr. Barnes and that of Mrs. Hobden-Clarke. At paragraph 34 of her witness statement Mrs. Hobden-Clarke said:-

“I believe that our restrictive covenants contained within our employment contracts to be “standard” within the industry. I believe this to be true because we often request the contracts of employment from new employees to check what restrictions there might be to their activities when joining us. All of the contracts that we have seen contain restrictions about approaching clients and staff for a specific period of time. We work in a service industry and our key assets are our staff and clients, hence we make reasonable restrictions during the first 12 months when staff leave us.”

Although in that paragraph Mrs. Hobden-Clarke spoke generally of the restrictive covenants in the contracts of employment, her only specific observations seemed to relate to non-solicitation. In cross-examination she told me that the periods of time for which restrictions were imposed by other contracts of employment which she had seen varied.

Mr. Barnes told me in cross-examination that the views which he had expressed as to what was standard in the industry in paragraph 36 of his witness statement were based on contracts which he had seen.

No contract of employment relating to someone other than Mr. Hall or Mr. Yadev or produced on behalf of someone other than Beckett Group or BIMG was put in evidence. There was reference during the evidence to the terms on which Tracey Henson had been employed by a firm called Lewin Hickin, but I was not actually shown a copy of that contract.

Although Mr. Barnes asserted that with some clients there might only be annual contact, the evidence in relation to contact between BFS and those for whom it had done business in the past suggested that with those who had used its services and were private individuals there might not be any regular contact at all. It all depended upon whether the individual thought that he or she needed advice about a particular matter and whether the individual wished to obtain the advice which he or she wanted from BFS or another IFA. It seemed that some individuals might not seek advice for a number of years, while others might be seeking advice more often than that. Even in the case of companies seeking advice there appeared to be no pattern of regularity. On the evidence, at the date of the departure of Mr. Hall Mr. Barnes considered it important to try to retain the business of Thomas May & Co., but identified no other customer in respect of which any particular effort should be made. I was left with the impression that whereas in the case of a milk roundsman or a bread roundsman the circumstances of daily life, and the human need for sustenance, meant that there were regular customers upon whom the roundsman was likely to call on most days, in the case of advice on financial services there was really no pattern of regularity.

What did seem clear was that an important, perhaps the most important, source of business for an IFA were introducers like Mr. Barker or Mr. Rowlson; that is to say, professionals in spheres other than financial advice who had clients who were likely to need financial advice. Clause 17.3 did not seek to prevent the obtaining of business from that source at all. It was also striking that, despite the explanation of Mr. Barnes that BFS needed a period after an adviser left to seek to rebuild trust between a “client” and a new adviser employed by BFS, on the evidence BFS took no steps at all after the departure of Mr. Yadev or that of Mr. Hall to try to do that. The most that happened was that in the cases of some “clients” letters were written explaining that the relevant employee had left.

In the end, therefore, the interest of BFS in those who had done business with it in the past, other than Thomas May & Co., appeared to be no more than the thought that because the person in question had obtained advice from BFS in the past in relation to financial services, if he needed similar advice in the future he might come back to BFS. However, there was no magic in the period of one year after the termination of the employment of a particular adviser as being the period within which he would return, if he was ever going to. Consequently, on the evidence, I am not satisfied that BFS had a legitimate business interest to be protected by clause 17.3 of the relevant contracts of employment, if otherwise BFS could take advantage of that provision.

The observations which I have made concerning the legitimate business interest issue in relation to BFS shade into the question of whether, if in fact BFS had had demonstrated that it had a legitimate business interest in clause 17.3 and was potentially able to rely on that provision, the requirement that clause 17.3 be no wider than was reasonably necessary for the protection of its interests was met.

As I have sought to show, the period of twelve months for which the restraint was sought was in fact purely arbitrary. The clause was thus, in my judgment, too wide on that account. If the reason for a covenant was that which Mr. Barnes described in paragraph 36 of his witness statement, what was needed was only a period long enough to enable BFS to make contact with a “client”, who on my construction of clause 17.3 would be either a person with whom BFS was currently doing business (assuming that BFS was entitled to rely on the provision at all) or someone with whom BFS had done business within the twelve months prior to the relevant departure, and thereafter to have an adequate opportunity, if the “client” was not immediately persuaded to continue to do business with BFS, to seek to change his mind. I would have thought that three months would have been adequate for that purpose. Any longer period would have the effect that the “client”, being unimpressed by the possibility of continuing to do business with BFS, was prevented from doing business with someone in whom he had confidence. Once BFS had made its pitch and had failed, to prevent a “client” from doing business with someone in whom he did have confidence seems to me to be contrary to public policy.

A further question arises by virtue of the extended definition of “Relevant Client” in clause 17.1.3, a matter which thus far I have passed over, but which merits attention. The material part of the definition for this purpose was:-

“if the Employee so dealt with an individual in that individual’s capacity as an officer, employee or representative of any firm, company or organisation that firm, company or organisation shall be deemed to be a Relevant Client and the individual shall also be deemed to be a Relevant Client in his or her personal capacity as well. If the Employee had, on behalf of the Company, during the twelve-month period, dealt with an individual on behalf of others that individual and those others shall be deemed to be Relevant Clients as well. ”

The first point to note about this extended definition is that it is a deeming provision; it provides that something should be considered to be so which was not in fact so. That is important. There was evidence that some individuals who did business with BFS on behalf of a company also did business with BFS on his own behalf. Mr. Peter Stevenson of A.M. Widdowson & Son Ltd. was an example of this, and there were others. However, on my construction of clause 17.1.3 that meant that, if BFS could rely on clause 17.3, both Mr. Stevenson and A.M. Widdowson & Son Ltd. were within the first category of “Relevant Client”, if they had each done business with it in the twelve months prior to the termination of the employment of the relevant employee: it was not the case that, but for the deeming provision, Mr. Stevenson would not have been a “Relevant Client”. Thus the object of the extended definition in clause 17.1.3 was to bring within the meaning of “Relevant Client” people who would not otherwise have done so. It does not seem to me that there was any justification for such an extended definition. I think that Mr. Lundie recognised that that was likely to be my conclusion on that point, because he submitted that if I came to the conclusion I have in fact reached, it would be possible to sever the words of the extended definition of “Relevant Client”, leaving only the first part. However, Mr. Oldham submitted that severance was not possible.

Mr. Oldham’s contention was that it was only possible to sever words from a covenant in restraint of trade which was too wide if the covenant in effect contained a number of different covenants and the effect of the severance was to delete one or more of the covenants, leaving something unobjectionable behind. It followed, he submitted, that if a covenant in restraint of trade included by incorporation a definition which was too wide, that could not be remedied by severance because there was but one covenant and any interference with the definition was in effect re-writing the covenant. In support of these submissions Mr. Oldham reminded me of the decision of the Court of Appeal in Attwood v. Lamont [1920] 3 KB 571. In that case Younger LJ, with whom Atkin LJ agreed, said, at page 593:-

“But the learned judges [in the court below] held also that they were entitled to sever the covenant by limiting it to the business of a tailor, and this they did.

Now I agree with the Master of the Rolls [the other member of the Court of Appeal in that case] that this was not a case in which upon any principle this severance was permissible. The learned judges of the Divisional Court, I think, took the view that such severance always was permissible when it could be effectively accomplished by the action of a blue pencil. I do not agree. The doctrine of severance has not, I think, gone further than to make it permissible in a case where the covenant is not really a single covenant but is in effect a combination of several distinct covenants. In that case and where the severance can be carried out without the addition or alteration of a word, it is permissible. But in that case only.

Now, here, I think, there is in truth but one covenant for the protection of the respondent’s entire business, and not several covenants for the protection of his several businesses. The respondent is, on the evidence, not carrying on several businesses but one business, and, in my opinion, this covenant must stand or fall in its unaltered form.”

Mr. Lundie did not suggest that the principle stated in that passage was inaccurate, but he did contend that it was not applicable in the circumstances of the present case. In paragraph 56 of his written opening Mr. Lundie put his submission in this way:-

“In any event the provisos and the extension of the definition of Relevant Client to include former clients are both capable of severance. The provisos are clearly severable (having been “bolted on” in the first place. Former clients can be excluded by blue pencilling the words “any time during the period of twelve months immediately prior to the”.”

In my judgment the submissions of Mr. Oldham based on the decision in Attwood v. Lamont are sound and I accept them. Consequently I should in any event have found that clause 17.3 was unenforceable as being wider than reasonably necessary for the protection of the interests of BFS, if I had come to the conclusion that BFS was entitled to rely upon clause 17.3 either directly or through BIMG.

In view of the conclusions which I have expressed it is unnecessary to consider a considerable range of other issues which Mr. Oldham raised on behalf of the defendants. There was a bald assertion that the claims which were pursued on behalf of the claimants against the defendants were oppressive and an abuse. It was not, however, suggested, as I understood it, that if I came to the conclusion that in some way the claims were oppressive or an abuse that provided the defendants with some independent ground of defence. In fact, as it seemed to me, the characterisation of the claims given to them by Mr. Oldham amounted on analysis to little more than a colourful summary of the various contentions of Mr. Oldham as to why it was that the claims were misconceived. I think that that would have been a more measured description and one which fairly represents the conclusions to which I have come.

Mr. Oldham identified no fewer than eight objections to the enforceability of clause 17.3. I have dealt with the principle objections. I am not persuaded that those with which I have not specifically dealt would, on their own, have justified the conclusions which I have reached.

It was contended by Mr. Oldham, as I have recorded, that Mr. Barnes, by his “Be professional” comment to Mr. Hall, had waived the benefit of clause 17.3, at least in the case of Mr. Hall. I am not persuaded that that was correct. The comment was, objectively, equivocal, and Mr. Hall and Mr. Barnes each told me that the expression was understood by him in a different sense from that in which it was understood by the other.

Given my findings of fact, it has not been necessary to consider whether Mr. Yadev owed any fiduciary duties to BIMG or BFS. My failure to consider that point, because if any duty was owed there was no breach, should not, however, be interpreted as suggesting that I was satisfied that in principle Mr. Yadev did owe fiduciary duties. If anything, my inclination was against that proposition.

Mr. Oldham submitted that, if I were satisfied that there had been breaches on the part of Mr. Hall and/or Mr. Yadev of enforceable covenants in restraint of trade in their respective contracts of employment, there were no fewer than five reasons why I should not have granted injunctions to restrain further breaches. In the circumstances I do not have to consider those matters, but I have to say that, if I had found that there had been breaches of enforceable covenants in restraint of trade, I should have been inclined to grant appropriate injunctions.

For the reasons which I have given, the claims of the claimants against the defendants all fail and the action is dismissed.