Tullet Prebon (Australia) Pty Ltd v Simon Purcell

Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR (337) Dalgety Wine Estates Pty Ltd v Rizzonn (1979) 141 CLR 552 Esso Petroleum Co Ltd v Harpers Garage (Stourport) Ltd [1968] AC 269 CASES CITED : Eurobrokers Limited v Rabey [1995] IRLR 2006 GFI Group Inc v Eaglestone [1994] IRLR 119 J C Williamson Limited v Lukey and Mullholland (1931) 45 CLR 282 Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 Thomas Marshall Exports Ltd v Guinle (1979) Ch 227 Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395

PARTIES : Tullet Prebon (Australia) Pty Limited (Plaintiff) Simon Purcell (Defendant)

COUNSEL : J Fernon SC / R Foreman (Plaintiff) M Elliott (Defendant)

SOLICITORS : Freehills Solicitors (Plaintiff) Horton Rhodes Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2305/08 TULLET PREBON (AUSTRALIA) PTY LTD v SIMON PURCELL JUDGMENT 1 HIS HONOUR: The plaintiff (TP (Australia)), is, by its own description, a brokerage firm which acts as an intermediary facilitating trading activities between, for example, commercial and investment banks in the wholesale financial market. The transactions which TP (Australia) facilitates include interest rate and currency swaps. There are a number of competitors in that market in this state, including BGC Partners (Australia) Pty Ltd (BGC). 2 TP (Australia) has employed the defendant (Mr Purcell) since about January 1999. There is at least an arguable case that Mr Purcell is still employed by TP (Australia). TP (Australia) contends that he is; Mr Purcell says that his employment has come to an end. 3 Subject to interlocutory injunctive relief that has been granted, Mr Purcell has taken up, or purported to take up, employment with BGC. 4 TP (Australia) seeks interlocutory relief to enforce negative stipulations in Mr Purcell's contract of employment. The orders sought include that he not work for BGC or anyone else for a number of months, that he not solicit customers of TP (Australia), and that he not solicit those customers to shift their business from TP (Australia) to another broker.

The issues 5 As to whether there is a serious question to be tried, the issues as they were framed include the following:

(1) Is the contract between TP (Australia) and Mr Purcell on foot (as TP (Australia) contends)?

(2) Alternatively, is that contract at an end, in circumstances such that TP (Australia) is not entitled to enforce the post-termination restraints (or other restraints) set out in it (as Mr Purcell contends)?

(3) If the contract is on foot: ought the express negative stipulations given by Mr Purcell be enforced?

(4) If the contract is on foot, is Mr Purcell on "gardening leave" pursuant to clause 11.4?

(5) If Mr Purcell is on gardening leave, is clause 11.4 an illegal restraint of trade? 6 The issues relating to questions of discretion (including, of course, balance of convenience) include the following:

(1) Are damages an adequate remedy? There are a number of questions involved here, including the difficulty or otherwise of assessing damages (if TP (Australia) succeeds in showing either that the contract is on foot, or that Mr Purcell has repudiated it) and the impact of a liquidated damages clause (clause 10.4) in the contract. (2) The prejudice to Mr Purcell if injunctive relief is granted, including loss of connection with customers. (3) The lack of prejudice to TP (Australia) if injunctive relief is not granted (including, so it is said, the sufficiency of damages as a remedy.) (4) A related point: the significance of undertakings given by TP (Australia) as to the payment of Mr Purcell's salary and bonus entitlements, in circumstances where he is not actually performing duties. (5) The strength of TP (Australia's) case. This raises again the question of repudiation (and by whom) as well as the question of the likelihood of the grant of injunctive relief, whether the grant of such relief would, in effect, compel Mr Purcell specifically to perform his contract and whether the relief sought on an interlocutory basis would be final in effect. (6) The impact of injunctive relief on a third party, namely, BGC. Relevant terms of the contract 7 The contract is in writing. It is constituted by an offer dated 24 July 2007, accepted by Mr Purcell on 29 July 2007. The commencement date is 1 August 2007 and the term of the contract is two years from then (i.e. until 31 July 2009). 8 The letter of offer provided that Mr Purcell would have the use of a city carpark space provided by TP (Australia), and other fringe benefits. It also provided that Mr Purcell's employment could be terminated in certain circumstances: Notice: Your employment with TPAust may be terminated by either party giving to the other at least three month's notice to the effect. Save in respect of termination in accordance with this Agreement, such notice is not to expire before the 2nd year anniversary of the Commencement Date. TPAust may in its absolute discretion give you a payment of your Base Remuneration only in lieu of such notice.

9 The contract also included certain standard terms. By clause 10.1 of those standard terms, Mr Purcell's duties were said to be those assigned to him by TP (Australia) from time to time. They were duties to be performed faithfully and diligently. By clause 10.2, Mr Purcell was to devote the whole of his working time and attention to the service of TP (Australia) and its related companies. 10 Clause 10.3 prevented Mr Purcell from taking employment with, or rendering services to, anyone else: 10.3 During the Term you shall not, directly or indirectly, accept employment with or render services to, or enter into or in any manner take part in or lend your name, counsel or assistance to any person doing business whether as proprietor, principal, investor, partner, director, officer, employee, consultant, advisor, agent, independent contractor or in any other capacity whatsoever for any purpose which would or could reasonably be expected to be competitive with any business of TPAust or any other Group company. 11 Clause 10.4 dealt with a number of matters, including liquidated damages for breach: 10.4 You acknowledge that TPAust is relying upon you providing your services for the full Term so that TPAust is entitled to insist upon strict compliance by you with the terms of your employment during the Term. You also acknowledge · the vital interest of TPAust in engaging and retaining its employees and that the level of your benefits, including base remuneration and bonuses (if any), constitutes adequate consideration for your obligations and commitments under this Agreement; · that, given the special nature of the services you will provide, it may not be possible for TPAust to accurately estimate and/or establish the loss it will suffer if your employment, in breach of the terms of this Agreement.

Accordingly, if your contract of employment is terminated for breach or repudiation on your part, including if you resign or otherwise seek to leave the employment of TPAust without serving TPAust with the required notice for the period to the Contract End Date, without prejudice to any additional rights or remedies available to TPAust, you shall on the day following termination of your employment (Date for payment) pay to TPAust, as a debt due and owing, an amount calculated as follows: 50% x Your Average Net Brokerage x No. of whole months from the date that you cease providing services to TPAust to the Contract End Date. You further agree that such amount is a genuine pre-estimate of the loss that TPAust is likely to suffer as a result of premature termination of your employment, and that from the Date of Payment interest at the Reserve Bank of Australia base lending rate (from time to time) plus 2% shall accrue on such amount until it is paid. 12 By clause 10.5, Mr Purcell agreed that if he were to be directly or indirectly approached or solicited by someone else, to take up employment with someone else, he must immediately report that fact, with relevant details, to a director of TP (Australia). 13 Clause 11.4 dealt with the topic of what is often known as "gardening leave": 11.4 If TPAust wishes to terminate your employment, or if you wish to leave the employment of TPAust, and whether or not either party has given notice to the other, it may not be appropriate for you to continue performing your duties for TPAust having regard not only to your position but also your access to, and knowledge of, confidential information and trade secrets about the business of TPAust and other companies in the Group and the need to protect the trading connections and proprietary information of TPAust and the other companies in the Group. You therefore agree that in such circumstances TPAust shall not be required to provide you with any work and that, whilst it continues to meet your contractual entitlements, TPAust may require you not to attend for work during the remainder of the Term or any period of notice. If you are required not to attend for work under this clause you shall not be entitled to be compensated for any bonus or profit share (other than any guaranteed minimum bonus accruing thereafter) which, because it is determined directly by reference to your personal performance, you may thereby be prevented from earning. For so long as you are not required to work, you will remain employed by TPAust and be bound by all the terms of this Agreement. You will not directly or indirectly work for any person, have any contact with any Client or any Employee without the prior written consent of TPAust provided that TPAust reserves the right to require you to mitigate loss during your notice period including that you seek and accept alternative employment that TPAust considers acceptable. 14 Clause 12 set out a number of what were called "post-termination restrictions". Despite their name, at least some of those restrictions, in fact, applied (or were stated to apply) during the term of the agreement. 15 Before I set out the relevant provisions of clause 12 (i.e. subclauses .1 and .2), I should note that the clause bears some evidence of negotiation. Each of the subclauses to which I have referred states, in the printed document, a period of six months. In each case, the figure "6" has been struck through and the handwritten figure "3" has been written in and initialled. 16 I set out clause 12 as far as it is relevant: 12.1 During the Term and for a period of 3 months' following the termination of your employment, you irrevocably agree that you shall not, either directly or indirectly, and whether on your own behalf or on behalf of another person or entity, do or attempt to do any of the following: (a) entice, induce or encourage a Client to transfer or remove business from TPAust; (b) solicit or accept business from a Client for a business similar to a Restricted Business in competition with TPAust; or (c) entice, induce or encourage an Employee to terminate the Employee's employment with TPAust, whether or not the Employee would commit a breach of that Employee's contract of employment. 12.2 During the Term and, subject to Clause 12.3, at TPAust's option for an additional period of 3 months following the termination of your employment you shall not, either directly or indirectly, and whether on your own behalf or on behalf of another person or entity, do or attempt to do any of the following: (a) undertake, carry on or be employed, engaged or interested in any capacity in a business similar to a Restricted Business, which trades or an objective or anticipated result of which is to trade in the Territory in competition with TPAust; (b) employ, engage or retain the services of an Employee of TPAust for the purpose of a business which competes in the Territory with a Restricted Business. The relevant facts 17 To some extent, there are differences between the parties as to certain events and their significance. This being an interlocutory application, there has been no attempt to explore those differences through cross-examination. To the extent that there are differences, it is not possible for me to resolve them. Thus, to some extent, what I say should be regarded as being provisional. 18 As I have said, the contract of employment on which TP (Australia) relies was constituted by an offer of 24 July 2007, accepted some five days later. Both before and after the date of making the contract, Mr Purcell was in negotiation with BGC, with a view to taking up employment with BGC. To the extent that it is relevant (after 29 July or 1 August 2007), neither the fact of that negotiation nor the detail was disclosed to anyone at TP (Australia). 19 It may be that Mr Purcell was using the negotiations with BGC at this time simply as a means for improving the terms of the contract that he was seeking to negotiate with TP (Australia). There is certainly some evidence, in the form of internal e-mails passing between officers of BGC, to support that proposition. 20 It would appear that Mr Purcell performed, or continued to perform, his duties for TP (Australia) for some months after 1 August 2007. However, in about March 2008, he resumed negotiations with BGC. Again, neither that fact nor the substance of the negotiations appears to have been revealed to anyone at TP (Australia) (at least, before the events of 4 April 2008, to which I will turn in a moment). 21 On 30 March 2008, Mr Purcell signed, and thereby accepted, a written offer of employment from BGC. Again, he did not disclose that fact, or any details of the contract, to anyone at TP (Australia) until 4 April 2008. 22 It is clear that the contract signed by Mr Purcell with BGC offered him employment in a similar (if not identical) capacity to his employment by TP (Australia). As I have said, it appears to be undisputed that TP (Australia) and BGC are rivals in the relevant field of financial activity. 23 Clause 1(a) of the contract between BGC and Mr Purcell provided that its provisions, "will come into effect on the date hereof". No date is specified except, as I have indicated, that Mr Purcell has dated his signature as having been affixed on 30 March 2008. The subclause continues to note that Mr Purcell's employment, "will commence as soon as you are free and able to do so, but in any event, no later than [TBC]...". (I take the letters "TBC" to indicate "to be confirmed".) It obliges Mr Purcell to "take all such lawful action (including resigning from your current employment) as shall be necessary to enable you to comply with your obligations...and commence your duties...at the earliest possible time". 24 I interpose to note that it is quite clear that BGC through its officers, was aware that Mr Purcell had signed a contract of employment with TP (Australia) in about July or August of 2007. 25 Under the contract with BGC, Mr Purcell was obliged well and faithfully to serve BGC and to devote the whole of his working time to its business. He was required to report any attempt at poaching (clause 8.1), and to give details of any alternative offer of employment (clause 8.2). There was an express provision for gardening leave (clause 9.2), and restrictions on what Mr Purcell might do during the term of any gardening leave (clause 9.3). 26 The contract also provided for post-termination restraints (clause 15.2). Those restraints were expressed to inure during the term of Mr Purcell's employment and for a period of six months after the termination. They relate to soliciting customers of BGC, seeking to divert business from those customers to other entities, and being employed in competing businesses. Mr Purcell agreed that those restraints were reasonable and necessary for the protection of the legitimate interests of BGC (clause 15.4.1). 27 On 4 April 2008, Mr Purcell disclosed to officers of TP (Australia) that he either was resigning, or wished to resign. First of all, he spoke to Mr Finn, who appears to have been Mr Purcell's immediate manager. Mr Finn had some premonition that Mr Purcell was going to leave. He asked Mr Purcell when Mr Purcell was leaving, to which Mr Purcell replied, "Pretty much straight away". (Mr Purcell gives a slightly different version of this conversation, in which he asserts that before he said, "Pretty much straight away", he said "Resigning?"). 28 There was some further conversation between the two, as to which there is very little difference. They then went to speak to Mr Tullet, who was the managing director of TP (Australia). There are some differences as to what was said there. On Mr Finn's account, (Mr Tullet has not sworn an affidavit), Mr Purcell said, "Neil, I am resigning. I am going to BGC". Mr Purcell says that he said, "Hi Neil. Look, this is very difficult for me to say but I am here to hand in my resignation". 29 According to Mr Finn, Mr Tullet reminded Mr Purcell of his contractual obligations and asked if Mr Purcell could be persuaded to change his mind. Mr Finn said that Mr Purcell replied, "No, I have already made up my mind and I have signed a contract". Mr Purcell agrees that Mr Tullet did ask whether anything could be done to cause Mr Purcell to change his mind, and agrees that he said "No". He does, however, say that he gave some more detail. 30 It is common ground that Mr Tullet directed Mr Finn that Mr Purcell was to leave straight away, and that Mr Purcell's access card should be collected. However, Mr Purcell says that this occurred earlier in the conversation, before the reference to legal considerations or the possible changing of minds. 31 On Mr Purcell's account, he asked whether he could say goodbye to his colleagues and Mr Tullet agreed. 32 It is common ground that Mr Purcell then packed up his effects, farewelled his work colleagues, drove his car out of the car park and handed his access card (which gave access to TP (Australia's) premises and trading room as well as the car park) to Mr Finn. 33 Mr Purcell gave evidence that the connection between brokers in his position and the customers with whom the broker traded was a strong personal relationship. He said that at least two customers for whom he worked whilst he was at TP (Australia) had been people for whom he worked for some 17 or 18 years, over which time he had been employed at a number of different brokers and at least one of them had been employed by a number of different banks. Mr Purcell said that the relationship between a broker and a customer was very important to the broker. He said that it was sustained by constant close contact, and that if that contact were broken, the relationship would weaken. 34 It appears to be common ground that most customers will deal with more than one broker. That would make sense in the competitive market that the evidence in this case suggests exists. Thus, Mr Purcell said, if he were deprived of the opportunity to remain in contact with customers, the customer would deal with other brokers and might form stronger relationships with them. 35 There is clear, and unrebutted, evidence from Mr Finn that over the last eight years or so, TP (Australia) has spent large sums of money or fostering Mr Purcell's connection with customers. At least, in recent times, it would appear that TP (Australia) has provided about $5000 per month for Mr Purcell to cultivate and maintain customer connection by entertaining the representatives of the customers. 36 On that basis, it is at least arguable that the customer connection is a legitimate asset of TP (Australia), paid for and maintained at its expense. In my view, that is at least arguable, notwithstanding the personal aspect of the relationship to which Mr Purcell deposed. 37 I now return to the issues.

Issues relating to repudiation or termination 38 The case for TP (Australia) was that Mr Purcell had repudiated the contract of employment and his obligations under it by announcing his resignation and by taking up employment with BGC. However, the case for Mr Purcell was that it was TP (Australia) that had repudiated the contract. Mr Elliott, of counsel, who appeared for Mr Purcell, pointed to the notice provisions in the offer of employment to Mr Purcell, and to the conditional nature of the commencement date of his employment by BGC. The submission failed to mention the undoubted fact that, whatever the contract between Mr Purcell and BGC may have provided as to the commencement of performance of work obligations, Mr Purcell had started to work, or had purported to start to work, for BGC. 39 Mr Elliott submitted that what Mr Purcell was doing on 4 April 2008 was giving notice to TP (Australia) that would expire at the end of the contract on 31 July 2009. Further, Mr Elliott submitted, when Mr Tullet replied (as on any view, he did), by indicating that Mr Purcell should leave forthwith and should hand in his access card, TP (Australia) had repudiated the contract. Mr Elliott submitted that Mr Purcell accepted that repudiation by leaving as requested and handing in his access card. 40 I have to say that I view that as a somewhat fanciful reconstruction of the facts. There is absolutely nothing, even in Mr Purcell's account, in the relevant conversations to suggest that he was giving notice to expire in some 15 or 16 months time. (Nor did Mr Purcell say on oath that this was what he was intending or trying to do.) On the contrary and, again, even on Mr Purcell's account, it is reasonably clear and, in any event, I think the better view, in so far as it can be assessed at present, that Mr Purcell was intimating that the relationship, at least, as far as he was concerned, was then and there at an end. 41 There are a number of matters that support what I think is the preferable view. One is the resumption of contact between Mr Purcell and BGC in March 2008. Another is the fact that Mr Purcell had signed a contract with BGC on 30 March 2008. A third, and in my view important, one is that Mr Purcell had commenced work with BGC, in circumstances where (until the hearing yesterday and today) it was not suggested that he was doing so by reason of an accepted repudiation on 4 April 2008. 42 In this context, I note that on 6 April 2008 TP (Australia's) solicitors wrote to Mr Purcell. The letter pointed out that Mr Purcell was not entitled to terminate his employment and said that TP (Australia) elected to continue that employment. However, it said, in the circumstances, Mr Purcell would be sent on gardening leave pursuant to clause 11.4. Nonetheless, the letter did offer Mr Purcell the opportunity of returning to work. 43 Mr Purcell's solicitor replied on 9 April 2008. He referred to the letter in question, and to Mr Purcell's version of the events of 4 April 2008, and said: "In those circumstances,...your client has evinced its intention to no longer be bound by the employment agreement by summarily dismissing our client. Our client accepts that repudiation." 44 There was no suggestion in the letter that the repudiation had been accepted by Mr Purcell by the events of 4 April 2008. 45 In all the circumstances, I think that there is a serious question to be tried as to whether (as TP (Australia) contends) the contract remains on foot because the only evidence of repudiation is that found in Mr Purcell's words and deeds, which repudiation (if it exists) has not been accepted. 46 If, for whatever reason, the contract had come to an end, then TP (Australia) would be entitled to enforce the post-employment restraints, unless it had come to an end through TP (Australia's) repudiation, accepted by Mr Purcell. Whilst I cannot say that, on a final hearing, the Court could not, or will not find that TP (Australia) did not repudiate the contract, my view of the evidence is that it is the less preferable of the competing views open. Enforcement of the express negative stipulations 47 The stipulations have effect, both during the term of the contract (which, as I have said, goes until 31 July 2007), and for a period of three months thereafter. TP (Australia) submitted, on the authority of the decision of the Court of Appeal in Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337, that the restraints were enforceable. It submitted that this was a case of an express negative stipulation which, if not always, at least in general, would be enforced. 48 TP (Australia) relied on a number of other decisions, including the decision of the High Court of Australia in J C Williamson Limited v Lukey and Mullholland (1931) 45 CLR 282 and Dalgety Wine Estates Pty Ltd v Rizzonn (1979) 141 CLR 552. 49 It is clear that an express negative stipulation in a contract of employment may be enforced, even if the effect of enforcement is to "sterilise" the employee during the period of the enforcement. However, if the effect of enforcement would be either to compel specific performance of the contract or to leave the employee destitute, injunctive relief may be refused: a point made in Curro at 346. 50 TP (Australia) relied also on the decision of Megarry V-C in Thomas Marshall Exports Ltd v Guinle (1979) Ch 227. In that case, the Vice Chancellor said, at 243, that the Court's inability to compel an employee to work for his employer does not mean that the Court should not restrain the employee from committing other breaches of the contract. 51 In this case, there are a number of competing considerations. One is Mr Purcell's evidence that he will sustain detriment, by being deprived of contact with customers, if he is kept out of the workforce. Counterbalancing that is the fact that Mr Purcell, who must be taken to be a person of considerable experience and, I would think, business acumen, agreed to the terms sought - and did so after investigating alternative employment. 52 Another matter to take into account is that this is not a case (and I say this despite Mr Elliott's submission to the contrary) where the grant of an injunction would compel specific performance. TP (Australia) has undertaken to the Court to continue to pay Mr Purcell's salary, and his bonus entitlements, during the period of any restraint, whether or not Mr Purcell returns to work. There is no reason to think that Mr Purcell will be unable to meet his commitments and support his family whilst he is being paid those amounts. There is no evidence that Mr Purcell needs the substantially greater salary offered by BGC to enable him to survive. 53 The Court of Appeal pointed out in Curro, at 348, that in the case of a contract for special services it might not be appropriate to restrain someone from working. In general, of course, an employee cannot demand to be given work and the employer's obligation is limited to payment of the agreed remuneration (Curro at 342). However, where there are people whose employment requires them to be kept in the public eye, there may be exceptions. It is perhaps arguable that this is such a case. However, that does not mean that the restraint is not enforceable. It is a question to be considered later, in balancing the various discretionary considerations. Gardening leave 54 Mr Elliott submitted that clause 11.4 was void, as being in restraint of trade. He relied on the decision of Habersberger J in Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115. His Honour considered the point at [145] and following, and concluded at [150] that: "the attempt to obtain injunctions requiring Mr Hillard to serve the remainder of his lengthy period of notice is principally directed towards preventing him for as long as possible from operating in competition with [the plaintiff]. That is not a legitimate purpose and, in my opinion, the Court should not support it...".

55 As against that, in Esso Petroleum Co Ltd v Harpers Garage (Stourport) Ltd [1968] AC 269, Lord Reid pointed out at 294, that whenever someone agrees to do something over a period", (and, I would add, to devote the whole of his attention to it), "he thereby puts it wholly or partly out of his power to 'exercise any trade or business he pleases' during that period". 56 His Lordship stated that if a person entered into a contract of service then, during the period of that contract, he could not engage in other activities. But he said that this was not in restraint of trade, except perhaps in very unusual circumstances. The unusual circumstances might arise, for example, where an employee agreed to work for no-one else, but was given neither work nor remuneration and thus deprived of livelihood. On any view, this is not such an unusual case. 57 Although the question is, at least, in part a question of law, I do not think that it is appropriate to decide it on this hearing. A resolution of the issue ought to take place in a hearing where the question arises against a properly exposed factual matrix and where the resolution of the question of construction can be informed by that matrix. 58 I should say that there was perhaps some question as to whether Mr Purcell is on gardening leave. I think that the better view is that he is; although, again, it is unnecessary, and certainly undesirable, to express any concluded view. On the one hand, as Mr Fernon of Senior Counsel (who appeared with Mr Foreman of counsel for TP (Australia)) pointed out, it was open to Mr Purcell at any time to return to work. On the other hand, as Mr Elliott pointed out, the letter of 6 April 2008, to which I have referred, made it clear that, unless and until he did so, he was on leave pursuant to clause 11.4. The adequacy of damages as a remedy 59 The principal questions that were debated here were the difficulty or otherwise of assessment of damages and the impact of the liquidated damages clause (clause 10.4) in the contract. 60 Both counsel sought to argue the point by reference to authority. I do not regard that as particularly helpful, in circumstances where the authorities on which each relied turned on their particular facts. Nonetheless, at least, at a very broad level, some possible guidance may be provided by those authorities. 61 If TP (Australia) is correct, it has been deprived and is being deprived of the benefit of Mr Purcell's services. No doubt (particularly, having regard to the levels of remuneration on offer), Mr Purcell's services are significant in terms of the income and profits that they generate. If TP (Australia) is right, but Mr Purcell is permitted to work for BGC, the question is how would one quantify the damages flowing from the hypothetical breach of contract. 62 A somewhat similar point arose before Barrett J in Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395. At [31], his Honour accepted the submission for the defendants that: "it should...be easy to discover what revenues the persons concerned would have brought home to the plaintiff over the balance of the respective contract periods".

63 Thus, his Honour said: "it will simply be a matter of seeing what they in fact bring home to...their new employer, or to whichever other company employs them over the balance of the period". 64 As his Honour pointed out, if there were gaps, those gaps could be filled by extrapolation from historical data. 65 In the cases on which Mr Fernon relied, the courts in England took a different view. Thus, in GFI Group Inc v Eaglestone [1994] IRLR 119, Holland J adverted to the difficulty of assessment at damages. His Lordship said at [33] that: "A court trying to ascertain whether any one deal was lost to the plaintiffs after the move of the defendant to a rival firm would impose an impossible task upon any court, having regard to the potential weight of ephemeral factors other than customer connection - for example, price".

66 In Eurobrokers Limited v Rabey [1995] IRLR 2006, Reid QC, sitting as a Deputy High Court Judge, said at [16] that: "There is a very real difficulty in estimating whether or not the damage which the plaintiff would suffer by reason of the defendant's breach of contract could be accurately estimated in money because, essentially, what will happen if the injunction is not continued at all is that the plaintiff will be deprived of the opportunity of putting and keeping in place the new traders, so that they will deal with the people, in particular, five customers, who were customers of Mr Rabey's". 67 In this case, Mr Purcell's evidence is that customers will normally deal with several brokers. He says that it is the nature and extent of the relationship between a broker and a trader that will determine the extent of the trading relationship. However, it is also clear, both on his evidence and that of Mr Jones (for TP (Australia)), that other factors, such as price, are important. 68 In assessing this question, it is necessary to look at the purpose of the various restrictions. They cannot be intended to sterilise Mr Purcell for all time. On the contrary, I think, they are intended to do at least two things. One is to ensure that TP (Australia) has the benefit of Mr Purcell's services over the agreed period. The other is to give TP (Australia) a reasonable opportunity to introduce a new broker to the firm before the contractual expiry date, so that the new broker can begin to cultivate relationships with the customers in question. The three months post-termination restraint is clearly intended to enable the new broker, as it were, to find his or her feet. 69 Thus, in principle, I think that the point made by Reid QC in Eurobrokers - that the failure to grant an injunction will deprive TP (Australia) of the opportunity of putting someone else in Mr Purcell's place - is a valid one, and applicable in this case. 70 Further, when one considers the multitude of competing factors that are likely to dictate the placement of business, I do think that there are real difficulties with the assessment of damages in the event that an injunction is refused, but it is found that Mr Purcell did breach his contract. 71 Thus, although the point is difficult - in many ways, the most difficult on this application - I do not think that there is any safe basis on which I could conclude that damages are, or will be, an adequate remedy for the loss that TP (Australia) will suffer if on a final hearing its case is made out, but no injunction has been granted. Prejudice 72 In many ways, what I have said already is sufficient to deal with this. There is no prejudice to Mr Purcell through loss of income, having regard to the undertakings offered by TP (Australia). To the extent that Mr Purcell suffers prejudice by loss of connection with customers, that is the very matter that the clauses in question were designed to sustain. Further, that purpose of the clause indicates the real prejudice that TP (Australia) will suffer if some form of restraint is not imposed.

The strength of TP (Australia)'s case 73 In many ways, this involves a re-hashing of arguments with which I have dealt already. To the extent that it relied on the likelihood (or otherwise) of the repudiation case being found as TP (Australia), or Mr Purcell, contends is not something which requires repetition. 74 Mr Elliott did submit that the relief in question, if granted, would be, in effect, final. He referred to the decision of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533, in particular, at 535, where His Honour pointed out the significance, in some circumstances, of the strength of the applicant's case. 75 I do not agree that this is a case where the grant of relief as sought would, in effect, amount to the grant of final relief. I say that because, even on a final hearing, the issues to be decided are relatively limited. I would not have thought that the case would take more than two days to hear on a final basis. There is every likelihood that an expedited hearing for that length of time could be obtained in the near future. It is likely that a final decision would be given well before 31 July 2009 - indeed, I would have said, perhaps before 31 July 2008. 76 Whilst I accept that the grant of injunctive relief would have a significant impact on Mr Purcell, I do not accept that it would be, in effect, the equivalent of final relief. 77 In this context, Mr Elliott pointed again to the proposition that the grant of relief would, in effect, compel Mr Purcell to perform the contract. To some extent, I have dealt with that already. However, Mr Elliott relied on Mr Purcell's evidence that he had lost confidence in TP (Australia) by reason of certain things that were said in Mr Finn's affidavit. I have to say that I find that somewhat perplexing. The e-mails that have been obtained from BGC indicate that, after the failure of the discussions in July and August 2007, the employees of BGC exhibited some animus against Mr Purcell. They referred to him, among other things, as a "tool", an expression which I take to be derogatory in its denotation. It appears that Mr Purcell is perfectly prepared to work with people who have that view of him. Perhaps his hurt feelings have been assuaged by the higher salary on offer. In any event, I do not regard this submission as having any weight. Impact on a third party 78 Mr Elliott submitted that the grant of an injunction as sought would affect an innocent third party, BGC. There are at least two answers to that. The first is that BGC well knew that Mr Purcell had resigned with TP (Australia). There are two possibilities. BGC may have enquired as to the terms on which Mr Purcell resigned. If it did, there can be no problem. If it did not, again there can be no problem. On either view, BGC was prepared to take a chance as to when Mr Purcell might become available. 79 The second answer is that, on the terms of the contract, BGC is prepared to wait for as long as it may take for Mr Purcell to become free. If that proves to be longer than either of them anticipated then, again, it can hardly be a matter of complaint.

Other considerations 80 As I have said, I think that a real and significant interest of TP (Australia) is its interest in protecting its own customer connection, fostered and sustained at its own substantial expense, for such time as may be necessary as to enable another employee to build up his or her own connection with customers. That is a legitimate interest and clearly one that may be protected by a not excessive restraint of trade. 81 In this case, the parties by their contract agreed that three months was a reasonable period of protection (clauses 12.1, 12.2), but they did so in circumstances where, as I have pointed out, TP (Australia) would know that the contract was coming to an end and could employ someone before the termination to work with Mr Purcell and "pick up the ball". In other words, the parties agreed on a three month restraint as sufficient, in circumstances where the actual period of establishment of the connection could and, in all likelihood would, have commenced well before the termination of Mr Purcell's employment. It would then be consolidated in the three months following that termination. That is not this case. 82 In passing, I note that the equivalent period of restraint under Mr Purcell's contract with BGC is some six months. 83 At first, I thought that it might be appropriate to limit the restraint to a period of three months. However, the factors to which I have just pointed suggest that a restraint so limited would be insufficient. In addition, it would fail to give any weight to the very real public interest that contracts freely negotiated between sophisticated parties should be enforced, or (in the context of contracts of employment) that egregious breaches should be restrained. 84 It did not seem to be in doubt that negative stipulations could be enforced according to their terms. As I have sought to indicate, the debate ranged around other considerations. Although I do not wish to under-estimate the strength of the arguments that were put for Mr Purcell, it should be apparent from what I have said that I do not regard those arguments as being so strong that, on discretionary grounds, relief should be refused. 85 I should also note that TP (Australia) sought to make out a case based on confidential information. It suggested that Mr Purcell was in possession of confidential information and that he would take that with him to BGC unless restrained. I have to say that I regard that case as weak and I would not have granted injunctive relief based on it. It is fair to say that, although the case was not abandoned, it tended to fade somewhat from view as the hearing progressed. 86 In summary, I think, what is required is the balancing of the self-inflicted risk of loss of connection, coupled with the fact that Mr Purcell will not starve, against the legitimate interests of TP (Australia) that I have identified. There is also to be balanced the consideration that contracts should not be regarded as things that are free to be broken at will. As I have said, it is open to conclude that Mr Purcell is an experienced man and that he was not under my any misapprehension as to the extent of his obligations. In this context, I take into account the fact, to which I have drawn attention already, that clauses 12.1 and 12.2 bear clear evidence of renegotiation. 87 Nor do I think that it is in any way appropriate to grant some relief merely against solicitation; that would be meaningless in the absence of a restraint on undertaking other employment. 88 Balancing the various considerations to which I have referred, in the light of my analysis of the issues as they were argued and the protection offered to Mr Purcell by the undertakings offered, I have come to the conclusion that TP (Australia) should have the interlocutory relief sought. That relief should be granted on the undertakings to which I have referred which, in summary, include the usual undertaking as to damages and undertakings as to the payment of salary and bonus. They should also be granted on condition of an undertaking by TP (Australia) to the Court forthwith to make and diligently to prosecute an application for expedition. 89 Any delay on the part of TP (Australia), or any presently unforeseen circumstances, can be dealt with by the reservation of liberty to apply. 90 I note that the plaintiff by Senior Counsel renews the undertakings given to the Court yesterday. 91 I extend up until 4pm tomorrow order 1 made on 11 April 2008 as from time to time extended. 92 I stand the proceedings over until 9.30am tomorrow before me. 93 I direct the plaintiff to bring in short minutes of order to give effect to my reasons and to the matters discussed thereafter.

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