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OUTER HOUSE, COURT OF SESSION

[2007] CSOH 146

A462/07

OPINION OF LADY PATON

in the cause

SEABROKERS LIMITED

Pursuer;

against

GRAEME ALEXANDER RIDDELL

Defender:

________________

Pursuer: Napier, QC; Paull & Williamsons

Defender: Truscott, QC; Simpson & Marwick, W.S.

15 August 2007

[1] The defender seeks recall of the following interim interdict, granted on 23 July 2007:

"The Lord Ordinary, having heard counsel for the pursuer, no caveat having been lodged, ad interim interdicts the defender for a period of 12 months commencing on 23 July 2007 either solely or jointly with or as manager or agent or officer or employee for any person, firm or company from directly or indirectly carrying on or being engaged, concerned, interested or employed in a business which is providing ship brokerage services in direct competition with the ship broking business of the pursuer in which the defender had been involved in the 12 months preceding 23 July 2007."

The motion for recall was opposed by the pursuer on the basis that the restrictive covenant was valid, and was necessary to protect the legitimate interests of the pursuer. The case came before the Vacation Court on 3 August 2007. Reference was made to affidavits and productions. Certain matters of fact were in dispute.

Defender's employment with the pursuer
[2 ] In January 2006 the defender entered into a contract of employment with the pursuer, a company providing ship brokerage services. Clauses 1.11 and 1.13 of the contract provided:

"1.11 TERMINATION OF EMPLOYMENT

For new employees: This contract of employment may be terminated by you or the Company giving the appropriate length of notice. The first six months will be treated as a probationary period during which time your employment may be terminated by yourself or by the Company on one month's written notice.

Following completion of 6 months service, you are thereafter required to give the Company 3 calendar month's written notice of termination.

Following completion of 6 months service, you are entitled to receive 3 calendar month's written notice of termination.

The Company reserves the right to make payment in lieu of notice.

The Company may require you to remain away from work during all or part of your notice period (whether you or the Company gave notice). The Company will notify you in writing as to what duties under your scope of work are expected of you during garden leave. Whilst on full pay during such time, you will not be permitted to work for any other person, firm, client, corporation, or on your own behalf without the Company's prior written permission.

At the commencement of the notice period, you must return any and all Company documentation, including any contact lists and any notes relating to existing or potential contracts. During this period you are not permitted to make any contact with existing or potential clients unless directed by the Company.

You will remain entitled to any contractual benefits during the notice period unless mutually agreed otherwise.

The normal retirement age is sixty five years. This may be extended at the Company's discretion and with the mutual agreement of the parties involved ...

1.13 QUARANTINE PERIOD

Upon termination of employment, the Company may notify you of the length of a quarantine period, commencing from the date of termination, subject to a maximum of 12 months. During the quarantine period, you shall not, on a whole or part time basis, carry on, or be engaged, concerned, interested or employed in a business which is carrying on business in direct competition with the Company's business in which you had been involved in the 12 months preceding the termination of your employment.

If this results in you having to refrain from accepting any genuine documented offers of employment, the Company will have the right to choose to cancel this quarantine clause in force, or if the quarantine clause is to remain applicable, to pay you salary equivalent to your basic salary at the time of termination, for the remaining part of the quarantine period.

If it is agreed that the Company will pay such salary, any other income that you may receive during the quarantine period will be deducted from the Company's payment i.e. the Company will be required only to make the net payment. You have the sole obligation to inform the Company immediately of any alternative income. In the event of alternative income being received, you have an obligation to provide the Company with substantiating documentation."

[3 ] An affidavit by Kathleen Gay, the General Manager of the pursuer, describes the Aberdeen office as staffed by herself, a Deputy General Manager, an Accountant, three brokers, two administrative staff, and three trainee brokers. In paragraph 4 of the affidavit, Miss Gay states:

"4. As a trained broker and the key principal contact for Seabrokers' major client, BP, [the defender] was regarded as a senior employee within the Seabrokers team. Our employees are located in a relatively small open-plan office. This means that all employees have a good knowledge of what is going on in the Company and can readily deputise for colleagues who are absent in order to meet client demands. [The defender] was therefore privy on a daily basis to an extensive amount of information, much of it highly sensitive information, flowing between colleagues regarding Seabrokers' operations ...

Following his probationary period, [the defender] then worked as a shipbroker. He became the main contact within Seabrokers for its major client, BP. His work was largely carried out by phone or e-mail. [The defender] was heavily involved in providing a full range of ship broking services to BP. He carried out all elements of ship broking work for them, including long-term chartering and short-term chartering. He was also involved in all of the other aspects of the service that we provide to them, including vessel logs and invoicing. In practice, the client would contact [the defender] to discuss its requirements and he would then be required to liaise with ship and vessel owners with a view to sourcing a vessel which met the customer's requirements. In his role, he therefore had an extensive amount of contact and dialogue with clients and with ship and vessel owners. In his role as the main contact for BP, [the defender] also attended the fortnightly BP Marine Strategy Meetings held between Seabrokers and BP. These were held by conference call ... A range of highly confidential matters would be discussed, including BP's marine strategy and the strategic placement of vessels. BP would discuss their marine strategy with [the defender] in considerable detail and would seek advice from him in relation to that strategy. It is important to stress that [the defender] was dealing on a regular basis with senior BP employees who had the authority to arrange and authorise the chartering of vessels at significant expense to BP ..."

[4 ] In paragraph 7 of her affidavit, Miss Gay explains that the pursuer initially had a five year exclusive contract with BP, which ended in November 2006. The contract was extended for one year until November 2007. BP would then decide whether to extend the contract further, or whether to put the services out to tender.

[5 ] In paragraph 14 of her affidavit, Miss Gay lists certain information to which the defender had access, described as highly confidential and sensitive information regarding the business of the pursuer and its clients.

[6 ] The defender in his affidavit disputes certain aspects of Miss Gay's assessment of his role in the company. In paragraphs 7 and 8 of his affidavit, he states:

"7. The pursuers state that my training gave me access [to] all parts of the business and allowed me access to documentation and information of high commercial value. I would not agree with that. I worked only in the pursuers' Aberdeen office. I was employed as a spot broker. That is a role that the pursuers recognise, both organisationally and financially, as a junior post. The post gave me exposure to day to day business only. Conditions change so quickly on the spot market that any documentation or information that I obtained would now be out of date. In any event the information I was party to, whether contractual or financial, is information that would be readily known in the market or could easily be obtained by brokers working elsewhere.

8. The pursuers also maintain that I had access to commercially sensitive information which included the strategic and business plans of the pursuers. I am not sure exactly what information they are referring to but I certainly do not retain any such information. As I have already mentioned, I was employed as a spot broker. Spot brokers would not have access to commercially sensitive information such as strategic and business plans. Only senior management would have access to that sort of information. Insofar as the business plans of the pursuers' major clients are concerned, Mrs Kathy Gay, who was managing director of the pursuers in Aberdeen, would deal with the business plans of major clients such as BP and Apache."

The defender denied any particular knowledge of the pursuer's pricing structure, pointing out that prices and rates were constantly changing. While he had knowledge of procedures developed for particular clients, many of those procedures were common to all clients. The defender also commented that he was not involved in delivering the additional "value added" services which the pursuer provided to exclusive clients.

Termination of employment
[7 ] In early 2007, the defender learned that there was a vacancy in another ship broking company, namely Seascope Limited. He applied for the post, enclosing a curriculum vitae, which contained bullet points listing his experience and expertise, including the following:

Developed a comprehensive understanding of North Sea spot market and activities around the world,
Developed sound and effective negotiating and chartering skills,
Delivered a range of innovative solutions to clients,
Clients such as Shell UK, NAM, BP UK, BP N, Apache, Perenco, ConocoPhillips, MOG, UTEC, and IMAR Survey,
Prepared/Evaluated tenders, cost breakdowns, financial proposals and contracts,
Compiled, investigated HSE and Safety information,
Reconciled all issues relating to invoices and third party costs.

The defender was successful in his application. By letter dated 23 April 2007 he wrote to Miss Gay, resigning from his post with the pursuer. In the second paragraph he stated:

"I realise that my contract of employment requires me to continue work with the Seabrokers team for a period of 3 months, (plus cooling off period if applicable) however I'd be grateful to be released earlier, and will assume that this is acceptable unless you inform me to the contrary."

[8 ] By letter dated 25 April 2007, Miss Gay replied inter alia as follows:

"I am writing to acknowledge receipt of your resignation from Seabrokers Limited ("the Company"). In accordance with your contract of employment, you are required to give three months contractual notice of your termination. Accordingly this means that your employment will terminate with the Company on 23 July 2007.

In accordance with Clause 1.11 of your contract, you are hereby placed on garden leave for the remainder of your notice period. During this period, you are not permitted to work for any other person, firm, client, corporation or on your own behalf without the Company's prior written permission. You will continue to receive your contractual pay and benefits during this notice period and whilst you remain on garden leave.

Furthermore, in accordance with Clause 1.13 of your contract, the Company hereby notifies you that with effect from the end of your notice period, you will be placed on a further quarantine period, up to a maximum of 12 months. During this quarantine period, you are not on a whole or part time basis to carry on or be engaged, concerned, interested or employed in a business which is carrying on business in direct competition with the Company's business in which you have been involved in the period of 12 months preceding the termination of your employment.

If the quarantine period referred to above results in you having to refrain from accepting any genuine documented offers of employment, the Company will have the right to either terminate the quarantine period or to continue with it, subject to you receiving payments of salary equivalent to your basic salary as at the time of termination, for the remaining part of the quarantine period. In the event that the Company does pay such salary during the quarantine period, any other income that you may receive will be deducted and the Company's payment will be the net payment only. You have an obligation in accordance with your contract of employment to inform the Company immediately of any alternative income. In the event of alternative income being received, you have an obligation to provide the Company with substantiating documentation.

You stated that you were intending to take up employment with Seascope Limited. As you will be aware, this business is a direct competitor to the Company and accordingly, you are prevented during the notice and quarantine periods from taking up such employment. In the event that you provide documented evidence of an offer of employment from Seascope Limited, the Company will give consideration to payment of your basic salary during the quarantine period.

In the event that you do not adhere to your contractual obligations as provided for above, the Company will take all necessary steps to enforce the obligations you have entered into, through Court processes. We trust that this will not be necessary."

[9 ] The defender duly served a three month period of garden leave, during which he did not attend at the pursuer's office in Aberdeen. At the end of the three month period, the pursuer sought and obtained the interim interdict quoted in paragraph [1] above. In the summons, the pursuer averred inter alia:

"7. It has come to the knowledge of the pursuer that the defender is intending to take up employment as a broker with a direct competitor based in Aberdeen, Braemar Seascope Ltd. ... It is believed the defender is to start employment immediately on the expiry of his contract of employment with the pursuer on 23 July 2007, and that he will be employed to carry out duties similar to those he carried out with the pursuer ... In these circumstances, the pursuer is reasonably apprehensive that when the defender starts work with Braemar Seascope he will be acting in breach of Clause 1.13 of his contract of employment ..."

The First Conclusion of the summons as originally drafted sought interdict without limit of time. At the hearing of the pursuer's motion for interim interdict, Lord Mackay of Drumadoon made this point to Mr Napier Q.C. who appeared on behalf of the pursuer. Senior counsel then moved to amend the summons at the bar, by inserting the words "for a period of twelve months commencing 23 July 2007". Interim interdict was then granted in the terms quoted in paragraph [1] above. The defender seeks recall, arguing inter alia that he will suffer prejudice if unable to work for Seascope Limited during the next year, for several reasons including inter alia the fact that he would at best receive a salary of only £30,000 per year (if the pursuer chose to exercise the right in terms of Clause 1.13) whereas his new salary at Seascope Limited would be £35,000 per year.

Submissions
Submissions on behalf of the defender
[10 ] Senior counsel for the defender contended that Clause 1.13 was too wide and too convoluted to be enforceable. Moreover the wording of the interim interdict did not accurately reflect the wording in Clause 1.13. Also it was not clear in the circumstances when the decision in relation to the quarantine period had been taken, and on what basis. For example, if an employee had enjoyed a certain level of contact with certain customers, a certain period might be chosen for the company's protection. The defender's position was that he had worked in the spot market (namely receiving requests from clients for the hire of a vessel for a particular purpose such as moving a rig from one place to another, and finding a vessel at acceptable rates, the period of hire being 30 days or less). In the spot market, prices, rates, and deals, depended upon current market conditions. The defender was not in the management or executive levels of the company. He did not have the degree of knowledge attributed to him by the pursuer in Article 5 of Condescendence and in Miss Gay's affidavit. He had no commercially sensitive information, for example about pricing structures, nor any knowledge which would damage the pursuer's legitimate trading interests if he joined Seascope Limited. He was not involved in the extra administrative services rendered to BP. In the ship broking business, most clients retained a steady ship broker. Clients did not go from broker to broker, searching for the best price for a deal. Reference was made to a diagram illustrating the settled nature of client-broker relationships. The defender had offered an undertaking which would protect the pursuer's interests. By letter dated 2 August 2007, he had offered "not to approach either BP North Sea or Apache North Sea at any time within the next 12 months". Such an undertaking would protect the pursuer's legitimate interests. While the defender acknowledged that he had spent 80% to 90% of his working time looking after the pursuer's client BP, it was unlikely that BP would seek to move away from the pursuer. In any event, if the pursuer's true concern was the renewal of BP's contract in November 2007, the appropriate period of quarantine was until the end of November 2007.

[11 ] Counsel added that a potentially contentious point about non-payment of bonuses was not to be argued by the defender.

[12 ] The following authorities were then referred to: Axiom Business Computers Limited v Kenny, 20 November 2003 (Lord Bracadale), paragraphs [7] to [10]; Scully UK Ltd v Lee [1998] IRLR 259, paragraphs 8 and 9; Malden Timber Ltd v McLeish, 1992 S.L.T. 727; Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd, [1968] AC 269, at page 301; Malden Timber Ltd v Leitch, 1992 S.L.T. 757; Stenhouse Australia Ltd v Phillips [1974] AC 391, at page 402C-E; Dallas McMillan & Sinclair v Simpson, 1989 S.L.T. 454; and Commerzbank AG v Keen, [2007] IRLR 132, paragraph 11. It was for the court to decide whether there was a legitimate interest to protect, and whether the restraint applied was sufficient to achieve that objective without running contrary to public policy. In the present case, if it were assumed that the employer had in fact selected the maximum period of 12 months, the consequence was that the defender was prohibited from working for 15 months (being the total of the garden leave of 3 months, and the quarantine period of 12 months). No reason had been given for the maximum period being chosen in the exercise of the discretion contained in Clause 1.13. It was questionable whether such a period was necessary, bearing in mind the defender's type of work (spot broking) and the fact that BP's contract fell to be renewed in November 2007. Ultimately, counsel submitted that the period of the interim interdict imposed on the basis of Clause 1.13 was too long, but also geographically too wide, being in effect world-wide. It was not clear on what basis the employer had exercised the discretion, nor what legitimate interests were sought to be protected. The restraint imposed was therefore unreasonable. Indeed not only was the basis of the exercise of the discretion unclear, but also the defender's primary position was that Clause 1.13 had never actually been operated. The discretion contained therein had never apparently been exercised during the course of the defender's employment.

[13] So far as the balance of convenience was concerned, counsel submitted that the balance of convenience favoured the defender. The defender was currently suffering prejudice. He had offered an undertaking which would protect the pursuer's legitimate interests, but was being prevented from working and from earning £35,000 per year (as opposed to £30,000). Also the pursuer's prima facie case was weak: that tended to support the balance of convenience being in the defender's favour.

Submissions on behalf of the pursuer
[14 ] Senior counsel for the pursuer submitted that Clause 1.13 made clear what was being prohibited. There were various aspects of the business of ship broking, and the wording used in the First Conclusion reflected the work in which the pursuer had been engaged: cf. International Computers Limited v Eccleson, 4 May 2000 (Lord Gill) paragraphs [32] to [34]. In relation to the employer's exercise of the discretionary power in Clause 1.13, one could not argue backwards from the exercise of the power in an endeavour to measure the reasonableness of the clause. Furthermore, the reasonableness of the restraint clause had to be determined as at the date when the contract was signed (i.e. January 2006), and not by reference to events in 2007: Scorer v Seymour Jones [1966] 1 W.L.R. 1419, Salmon LJ.

[15 ] It was inappropriate to subject a letter such as that written by Miss Gay on 25 April 2007 to the level of scrutiny suggested by the defender's counsel. While the letter might have been better drafted, it would be a narrow, legalistic approach to suggest that the discretionary power in Clause 1.13 had not been exercised. When the letter was looked at in context, the power had been exercised (namely the imposition of a quarantine period of 12 months). As for the failure to explain the reason for the restriction period selected, that was not a matter relevant to the issue of reasonableness.

[16 ] The general principles applicable were as set out in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co. [1894] AC 535 at page 565; Malden Timbers Ltd v McLeish, 1992 S.L.T. 727, Lord Caplan at page 730 et seq.; Scully UK Ltd v Lee [1998] IRLR 259; and Axiom Business Computers Ltd v Kenny, 20 November 2003 (Lord Bracadale).

[17] In relation to the alleged world-wide effect of the restraint, counsel submitted that the interim interdict did not have that effect. The Aberdeen office was primarily concerned with the provision of services in particular sectors of the North Sea. Counsel contended that the fact that a vessel might initially be situated elsewhere in the world (for example, South America or Australia) resulting in world-wide correspondence and communication to bring about a contract whereby the vessel was moved from such an area to the North Sea to perform the work did not mean that the business or interim interdict was world-wide.

[18 ] The undertaking offered by the defender did not give the pursuer sufficient protection. The work done by the pursuer was outlined in Miss Gay's affidavit, quoted above. The defender had been exposed to all aspects of the pursuer's operations in the course of his training and subsequent work. While he carried out a considerable amount of spot broking, it was not accepted that spot broking was all that he had done. As the curriculum vitae which the defender sent to Seascope Limited indicated, the defender had acquired many skills which went beyond spot broking. Further, in the context of a relatively small office, he had often been asked to deputise for senior management, all as described in the affidavits of the defender and Miss Gay. Thus he had access to sensitive and confidential information relevant to strategic and policy decisions essential for the pursuer's success in the ship broking business. He had access to marketing strategies, the steps taken to secure contracts, and the features and services offered which gave the pursuer a competitive edge. He was well aware of the pursuer's current market strengths and weaknesses.

[19 ] It was not necessary for an employer to spell out in the contract of employment what the legitimate interests of the business were: cf. Office Angels Ltd v Rainer-Thomas and O'Connor, [1991] IRLR 214, Sir Christopher Slade at paragraph [39]. In the present case, there were at least two legitimate interests requiring protection: (i) confidential information; and (ii) trade connections: cf. Thomas v Farr plc [2007] IRLR 419; PR Consultants Scotland Ltd v Mann [1996] IRLR 188.

[20] Counsel then examined the reasonableness of the restriction imposed from the point of view of the public interest and the parties. In relation to the latter, it was pointed out that the contract was structured as a training contract which was to develop into an employment contract.

[21 ] Confidential information: Counsel accepted that "for a restraint to be reasonable, it must afford no more than adequate protection": Malden Timber Ltd v McLeish, 1992 S.L.T. 727 at page 731 (the third principle). The appropriate criteria when deciding what was adequate in relation to confidentiality were (a) the nature of the confidential information; (b) the duration of any restraint; and (c) the existence of alternative mechanisms for enforcing confidentiality.

[22 ] In relation to (a), the nature of the confidential information, the defender, during his training and work with the pursuer, had been given access to all the commercial and marketing strategies which had made the firm successful. He often deputised for senior management. He had seen how the "value added" services, such as the keeping of the ship's log, or the invoicing of third party work, assisted business. He knew the pursuer's current market strengths and weakness: cf. Thomas v Farr plc, cit. sup. His own curriculum vitae did not hold him out as a mere spot broker, but emphasised the range of skills and experience he had achieved, and the qualities he could offer. Moreover the defender had regularly dealt with the staff at BP who would have considerable influence when the contract came to be renewed in November 2007. If an employer could not protect such confidential information, that would be a disincentive to training someone such as the defender (in other words, a public interest point). In terms of Clause 1.13, the pursuer was prepared to pay the defender £30,000 per year while he was not working for the company, in order to protect the company's legitimate interests. A company would not be prepared to undertake such a liability for an office boy, and thus the terms of the clause reflected the importance of the defender's position when he undertook six months training followed by work as a broker.

[23 ] In relation to (b), the period of the restraint, a period of one year was not excessive in view of the type of information which the pursuer had gained: cf. Malden Timber Ltd v McLeish, cit. sup. The defender had come to the pursuer unskilled and untrained in ship broking. He had been fully trained by the pursuer, and the pursuer now deserved protection. The pursuer's strategic plans were generally revised on an annual basis, to accord with clients' commercial practices. While accepting therefore that the period of restriction was a fact-sensitive issue, the restriction of one year was not prima facie excessive. Nor was the overall period of 15 months if garden leave were included.

[24 ] Turning to (c), alternative mechanisms, Clause 1.14 (the loyalty and confidentiality clause) did not give the pursuer sufficient protection. In counsel's view, that clause was too wide to be enforceable. It was not time-limited. It would be difficult to persuade a court to grant interim interdict in terms of the general prohibition in that clause. Moreover the second part of the clause related to "use", not to the divulging or communicating of information: accordingly there were problems with Clause 1.14. Reference was made to Littlewoods Organisation Ltd v Harris [1977] 1 W.L.R. 1472. It might be suggested that the employer could have drafted a better confidentiality clause, but counsel contended that it was not possible adequately to protect the relevant inside knowledge by a confidentiality clause. It was well-known that, in certain circumstances, only a non-compete or non-dealing clause would provide effective protection. In the present case, the defender was intending to work for a direct competitor with full inside knowledge of the pursuer's commercial secrets: cf. Littlewoods Organisation Ltd v Harris, cit. sup., Megaw L.J., and Thomas v Farr plc, cit. sup.

[25 ] Trade connections: Reference was made to Agma Chemical Co Ltd v Hart, 1984 S.L.T. 246; Scottish Farmers Dairy Co (Glasgow) Ltd v McGhee, 1933 S.C. 148; and PR Consultants Scotland Ltd v Mann [1996] IRLR 188, paragraph [9]. The pursuer's concern was not that Seascope Limited would approach BP and get their business, but that BP might put their contract out to tender. The fact that the defender had been working with certain representatives of BP during his time with the pursuer gave him a strong competitive advantage. He had had considerable contact with people likely to make decisions about the contract. Reference was made to Salmon L.J. in Scorer v Seymour Jones [1966] 1 W.L.R. 1419; and to Lord Wilberforce in Stenhouse Australia Ltd v Phillips [1974 ] A.C. 391. In all the circumstances, particularly bearing in mind the nature of a broking relationship, the restriction imposed was not an unreasonable one. A non-solicitation clause would in practice be useless, as it would be difficult to prove a breach. Non-solicitation was not equivalent to responding to approaches made by BP.

[26 ] The lack of geographical restriction in Clause 1.13 reflected the fact that the work was on one view international, although the pursuer's market was in fact the North Sea (UK, Norway, and Holland sections). The pursuer accepted that the defender could work as a ship broker in other areas, such as South America or Asia. Moreover while Clause 1.13 did not refer to ship broking as such, the clause had to be construed in context, not in a vacuum: PR Consultants Scotland Ltd v Mann [1996] IRLR 188. Thus the limitation imposed by Clause 1.13 was sensible and reasonable.

[27 ] Finally, in the context of the balance of convenience, there was a strong prima facie case for the pursuer, which was in itself a factor tending to tip the balance of convenience in favour of the pursuer. Moreover the defender was not faced with the choice of beginning paid employment with a new employer, as against being unable to work and remaining unpaid. On the contrary, the pursuer was willing to pay the defender his salary for a year (£30,000). Those were very generous provisions. Further, the defender could seek work in other parts of the world, for example South America, or Asia. By contrast, if no restraint were imposed and the pursuer lost the BP contract, the pursuer's loss would be enormous.

Discussion
[28 ] Unlike many similar clauses where an employer imposes a restraint upon an employee with effect from the date of termination of employment, Clause 1.13 does not provide a fixed quarantine period, but rather a sliding scale with a maximum of 12 months. It is open to the employer to impose no period of quarantine, or to impose a period of several months, or to impose a longer period provided that period does not exceed 12 months. The clause no doubt offers the employer a welcome degree of flexibility, in that the extent of the need reasonably to protect the legitimate interests of the company can be assessed in the light of the particular qualities and work experience of each individual employee to whom the clause applies.

[29 ] It follows, however, that on a proper construction of Clause 1.13, the employer has to exercise the discretionary power therein contained, and has to select a particular period of quarantine (or no period, as the case may be) in order to operate the clause and to impose a period of quarantine upon the employee. In my view, it is not enough for the employer simply to refer to Clause 1.13 without clearly specifying the quarantine period to be imposed.

[30 ] In the present case, Miss Gay's letter of 25 April 2007 states:

"Furthermore, in accordance with Clause 1.13 of your contract, the Company hereby notifies you that with effect from the end of your notice period, you will be placed on a further quarantine period, up to a maximum of 12 months [italics added]..."

There is no further indication of the precise period selected. Nor have I been referred to any further correspondence or communication indicating the precise period selected.

[31 ] In my opinion, the letter of 25 April 2007 failed to exercise the discretionary power contained in Clause 1.13. Had the letter advised the defender that in terms of Clause 1.13 he was to be placed on a further quarantine period "of 12 months" or "for the maximum period of 12 months", that would, in my view, have amounted to an exercise of the power, for in those circumstances the employer would clearly have indicated that a quarantine period of 12 months had been selected. But the terms of the letter as it stands suggest either an attempt to exercise the power (which has failed through lack of specification of the precise period chosen), or alternatively intimation that the power was about to be exercised and that the defender would be advised, prior to the termination of his employment on 23 July 2007, what period of quarantine had been selected by his employer to be imposed upon him.

[32 ] There having been no valid exercise of the discretionary power contained in Clause 1.13 prior to the termination of the defender's employment on 23 July 2007, there is in my view no valid basis for the interim interdict granted on 23 July 2007. I shall therefore recall the interim interdict.

[33 ] On the view which I have taken, it is unnecessary for me to reach any concluded opinion in relation to other arguments presented by counsel. For completeness, I record that the only written intimation relating to payment of the defender's basic salary during any period of quarantine was Miss Gay's letter dated 25 April 2007, which stated that the pursuer would "give consideration to payment of [the defender's] basic salary during the quarantine period [italics added]".

Decision
[34 ] For the reasons given above, I shall recall the interim interdict granted on 23 July 2007. I reserve meantime the question of expenses.