High Court of Ireland Decisions

2005 IEHC 155

BRIGHTWATER v. GEMMA ALLEN & ROBERT WALTERS LIMITED (2005/93P)

Note of ex tempore judgment delivered by Miss Justice Laffoy on 12^th May, 2005.

The first defendant was employed by the plaintiff, an Irish company which is a recruitment specialist, from 7^th July, 2003 until 29^th November, 2004. Having resigned on 2^nd November, 2004, she was on "garden leave" until 29^th November, 2004. During her employment with the plaintiff, the first defendant worked in the plaintiff's legal division. Her contract of employment contained a restraint clause which provided that she would not for a period of six months after the termination of her employment, howsoever arising, directly or indirectly, canvass, solicit or approach for business any person, firm or company who on the date of termination of her employment or within the previous six months was or had been a client of the plaintiff or someone who had been placed by the plaintiff or was on the plaintiff's books for that purpose.

Following her departure from the plaintiff, the first defendant took up employment with the second defendant which also carries on the business of recruitment specialist.

In the substantive action the first defendant contends that the restraint clause is unenforceable on various grounds.

On 17^th January, 2005 in this court the plaintiff sought an interlocutory injunction to restrain certain activity on the part of the defendants which it was alleged was occurring in contravention of the terms of the restraint clause in the first defendant's contract with the plaintiff. The application was resisted in part by both defendants, neither of whom filed an affidavit in reply. The outcome was that the court accepted undertakings from both defendants in the following terms:

(a) to refrain from directly or indirectly disclosing or divulging to any person, firm or company any information (whether in hard copy or computer format) concerning the plaintiff's business, finances, dealings, transactions or other affairs which might have come to the knowledge of the first defendant during the course of her employment;

(b) to refrain from using any confidential information and/or using the plaintiff's property including all documents, correspondence and papers (whether in hard copy or computer format) belonging to the company;

(c) to surrender and forthwith deliver to the plaintiff all the plaintiff's property including all documents, correspondence and papers (whether in hard copy or in computer format) belonging to the plaintiff;

(d) to forthwith furnish a list of all information and/or documentation (whether in hard copy or in computer format) concerning the plaintiff's business, finances, dealings, transactions or other affairs disclosed and/or divulged by the defendants since the first defendant's departure from the plaintiff;

(e) to forthwith furnish a list of persons canvassed, solicited, approached and/or placed by the defendants on or since the first defendant's departure from the plaintiff's employment who were placed on the plaintiff's books and/or recruited by the plaintiff; and

(f) to forthwith furnish a list of all of the plaintiff's property (whether in hard copy or in computer format) taken by the defendants on or since the first defendant's departure from the plaintiff.

Although the perfected order seems to me not to fully reflect this, it is common case that the first defendant alone gave an undertaking to forthwith furnish a list of persons, firms or companies solicited by her after her departure from the plaintiff.

The court ordered that the first defendant be restrained pending the trial of the action from –

(i) directly or indirectly canvassing, soliciting, or approaching for business any person, firm or company who on the date of the termination of her employment with the plaintiff or within the previous six months was and/or had been a client of the plaintiff,

(ii) directly or indirectly soliciting, approaching and/or canvassing for business any person who was or had been placed on the plaintiff's books and/or recruited by the plaintiff.

Further the court ordered that the second defendant be restrained pending the trial of the action from –

(i) using the first defendant directly or indirectly for canvassing, soliciting, or approaching for business any person, firm or company who on the date of the termination of the first defendant's employment with the plaintiff or within the previous six months was or had been a client of the plaintiff, and

(ii) directly or indirectly using the first defendant for soliciting, approaching and/or canvassing for business any person who was or had been placed on the plaintiff's books and/or recruited by the plaintiff.

The foregoing undertakings were accepted and orders made on the basis of the usual undertaking as to damages given by the plaintiff and an undertaking by the plaintiff to furnish to the second defendant within 48 hours, a list of the names of employer clients engaged for reward affected by the order, together with a list of candidate clients placed with an employer within six months up to 29^th November, 2004. The plaintiff's undertaking was not strictly complied with in that what the plaintiff contends is the full list was not produced until 2^nd February, 2005, a significantly shorter list having been produced on 19^th February, 2005.

On this application the plaintiff seeks leave to serve orders of attachment directed to the first defendant and to three named directors of the second defendant on the grounds that the defendants are in breach of the undertakings given to the court and the orders made on 17^th January, 2005. The plaintiff also seeks orders sequestering the assets of the defendants and the named directors and fining them for contempt.

The factual basis of the plaintiff's assertion that the defendants are in breach of the undertakings received by and the orders made by the court may be conveniently summarised as four complaints.

Before considering each complaint in turn, I propose dealing with an issue which was raised at the hearing of the motion, namely, the appropriate standard of proof where it is alleged that a party to civil litigation has committed contempt of court by reason of breach of an undertaking to, or an order of, the court. It was submitted on behalf of the defendant that the appropriate standard is the standard applicable in criminal cases – proof beyond reasonable doubt. Counsel for the defendant referred to the decision of the Court of Appeal of England and Wales in In re Bramblevale Limited [1970] Ch. 128 and, in particular, the observations of Lord Denning M.R., at p. 137. He also referred to the decision of this Court (Carroll J.) in S.P.U.C. v. Grogan [1989] IR 753, in which it was held that newspaper reports of breaches of an injunction were hearsay evidence and not satisfactory proof of contempt of court for the purpose of committal to prison. When the court raised the issue, counsel for the defendant indicated that he was unable to trace any Irish authority directly in point.

In fact, such authority does exist. It is a decision of this Court (Keane J.) in National Irish Bank Limited v. Graham [1994] 1 I.R. 215. In his judgment, Keane J. stated as follows (at p. 220):

"The present application is unusual in that there is no direct evidence of the alleged contempt. It is clear that before the court takes the serious step of depriving a person of his or her liberty for failure to comply with an order of the court, it must be satisfied beyond reasonable doubt that he or she has in fact committed the alleged contempt. (See the observations of Lord Denning M.R. in In re Bramblevale Limited [1970] 1 Ch. 128)."

The first complaint of the plaintiff is that the first defendant removed client information in relation to both employers and candidates, the property of the plaintiff, from the plaintiff's databases prior to her departure so as to avail of it while working for the second defendant and that she has failed to surrender that information to the plaintiff in accordance with the undertaking given by her to the court. The evidence adduced by the plaintiff in support of this complaint is a report prepared by RITS in relation to data found on the hard disc of the computer used by the first defendant while she was employed by the plaintiff, which report is verified by an affidavit sworn by Simon McCourt on 26^th April, 2005, and an affidavit sworn on 28^th April, 2005 of Michael Anthony Wooding, an IT consultant retained by the plaintiff. At its height, the evidence of the IT experts is that the hard disc of that computer disclosed that data had been extracted from a number of separate but interlinked data bases maintained by the plaintiff in its system and had been used to compile a document, fragments of which were found on the hard disc of that computer. The plaintiff adduced no evidence that the resulting document had been removed (in the sense of its contents being divulged to a third party) from the plaintiff either in hard copy or e-format, although the court was asked to draw the inference that this had taken place. In her replying affidavit sworn on 5^th May, 2005, the first defendant has averred unequivocally that she did not remove or create any client list for the purpose of disclosing confidential information to the second defendant and that she did not disclose any such information to the second defendant. The plaintiff did not seek to have the first defendant cross-examined on her affidavit, although I understand that the possibility of this occurring was raised when the motion was before the court on an earlier occasion. In relation to this complaint I am not satisfied that the plaintiff has established beyond reasonable doubt that either defendant has been in breach of the order of 17^th January, 2005.

The second complaint relates to an advertisement which appeared on the IrishJobs.ie website on 28^th January, 2005, in which the first defendant was named as a contact in connection with a legal position for a medical negligence lawyer advertised by the second defendant, which the plaintiff contends was "one of the plaintiff's jobs". While contending that there was nothing in the order of 17^th January, 2005 which obliged the defendants to do so, the defendants, through their solicitors, notified the plaintiff's solicitors on 9^th February, 2005, the day following receipt of the complaint, that the first defendant's name had been removed from the advertisement and that its inclusion in the first instance had been inadvertent and due to administrative oversight. Another similar advertisement on the IrishJobs.ie website gave rise to a further complaint by the plaintiff's solicitors on 11th February, 2005. In response to that complaint the defendants' solicitors informed the plaintiff's solicitors that the appearance of the first defendant's name on the advertisement was not intentional and that it was beyond the defendants' control, in that they had no control over stored search engine pages. However, the first defendant had requested that her name be removed from the advertisement and had requested that her account with Irish Jobs be closed until further notice. I do not think it is necessary to determine the issue which has arisen between the parties as to whether the inclusion of the name of the first defendant as a contact person in these advertisements was in breach of the order of 17^th January, 2005. Even if it were, as the defendants remedied the breaches before this motion was issued, it would not be just to deprive the first defendant of her liberty because of historical breaches.

The third and fourth complaints relate to the interaction between the first defendant and two firms of solicitors, O'Donnell Sweeney and A. & L. Goodbody.

Ian Moore, a partner in A. & L. Goodbody, has sworn an affidavit on 27^th April, 2005, in which he averred that his firm dealt with the first defendant while she was employed by the plaintiff and that the firm was a client of the plaintiff during the six months prior to her departure. Mr. Moore further averred that following the commencement of her employment with the second defendant the first defendant contacted his firm's H.R. department with a view to providing services to the firm. In an affidavit sworn by her on 6^th May, 2005, the first defendant corrected evidence contained in an affidavit sworn by her the previous day, 5^th May, 2005, and confirmed that her first communication with A. & L. Goodbody took place on 30^th November, 2004, when she informed two members of the personnel at that firm that she had commenced working with the second defendant and had proposed meeting them for lunch. Two conflicting accounts have been put forward by Mr. Moore and the first defendant in their respective affidavits as to the nature of subsequent contacts by the first defendant with A. & L. Goodbody. Mr. Moore controverted an averment in an earlier affidavit sworn by the first defendant on 25^th April, 2005 that her contacts were as a result of approaches from his firm to her and exhibited emails from the first defendant to his firm from which he asserted it was clear that the first defendant was putting forward candidates for employment by his firm. In her most recent affidavit, the affidavit of 6^th May, 2005, the first defendant referred to the fact that it had been disclosed in a letter dated 25^th January, 2005 from the defendants' solicitors to the plaintiff's solicitors that the first defendant had had dealings with A. & L. Goodbody "in relation to new and existing business in circumstances where A. & L. Goodbody was also a client of the Second Named Defendant".

Having considered the relevant emails, I have come to the conclusion that they were correctly characterised by Mr. Moore and that they cannot be construed as other than approaches initiated by the first defendant with a view to placing candidates with A. & L. Goodbody. I am satisfied that the plaintiff has established beyond reasonable doubt that there have been breaches of so much of the order of 17^th January, 2005 as restrained her from directly or indirectly canvassing, soliciting or approaching for business firms which had been clients of the plaintiff within the six months prior to her departure and restrained the second defendant from using her for that purpose.

In relation to the first defendant's interaction with O'Donnell Sweeney, the position is not so clear cut.

There is a conflict of evidence between the first defendant and Sharon Scally, a H.R. consultant with O'Donnell Sweeney. In her affidavit sworn on 28^th April, 2005 Ms. Scally averred that her firm dealt with the first defendant when she was employed by the plaintiff, contradicting an earlier averment by the first defendant that she was not aware that the firm was a client of the plaintiff while she was in the employment of the plaintiff. The first defendant did, however, disclose in the defendant's disclosure letter of 25^th January, 2005 that she had solicited O'Donnell Sweeney after her departure from the plaintiff. Moreover, O'Donnell Sweeney was not included in the first client list produced by the plaintiff on 19^th January, 2005. Ms. Scally also controverted an averment by the first defendant that contact between the first defendant and O'Donnell Sweeney after the making of the order of 17^th January, 2005 resulted from communication from O'Donnell Sweeney to her and asserted that it was she who directly instigated approaches for the purpose of introducing candidates to the firm.

While two of the emails exhibited in the affidavit of Ms. Scally (dated 8^th and 11^th February, 2005) corroborate Ms. Scally's assertion, one (dated 23^rd February, 2005) does not and I have not had sight of another (dated 9^th March, 2005). In the light of the evidence, I do not consider it to be appropriate to make a finding that this complaint has been proven beyond reasonable doubt.

Having regard to the limited finding of breach of the order of 17^th January, 2005, I will hear counsel for the defendants first and then counsel for the plaintiff as to the form of the order I should make.

Approved: ---- Mary Laffoy ----

May 12, 2005.