Cases - Espley v Williams

Record details

Name

Espley v Williams

Date

[1997]

Citation

1 EGLR 9

Keywords

Estate agency

Summary

The plaintiff and defendant entered into a partnership to run an estate agency in Christchurch. By the partnership agreement, the defendant covenanted that he would not, within a period of 2 years from the date of termination of the partnership, practice as an estate agent, either on his own account or in conjunction with anybody else, within 2 miles of the premises. The defendant left the partnership in May 1995 and later that year obtained employment with a rival estate agent within a 2-mile radius. The plaintiff sought an injunction.

The defendant contended that another 2-year covenant he had agreed to - not to solicit business or otherwise interfere with the relationship between the plaintiff and any former customers - was sufficient to protect the plaintiff's goodwill. He claimed that the 2-mile covenant merely protected the plaintiff from legitimate competition.

The judge found that the 2-mile covenant was not a mere covenant against competition but protected the goodwill of the business. The defendant's intimate knowledge of the residential market in Christchurch coupled with experience could give a competitive edge to a rival. Recommendations to third parties to instruct the defendant based on past dealings could also damage the plaintiff, and in that instance the defendant would not have solicited or canvassed those instructions.

The Court of Appeal found no reason to fault the judge's findings, so the defendant's appeal was dismissed. Lord Justice Henry observed that a non-solicitation covenant is difficult, if not impossible, to enforce in practice, and the judge was entitled to find that it did not protect the plaintiff's interest. As regards the time and distance of the restriction, Lord Justice Henry observed that it was customary in Christchurch and had, unsurprisingly, not been attacked by the defendant. However, he noted that the mere fact that a restriction is customary does not tie the judge's hands.