Matrix Risk Management Ltd v Singh [2017] FJHC 751; HBC139.2017 (4 October 2017)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No.: HBC 139 of 2017

BETWEEN : MATRIX RISK MANAGEMENT LIMITED a limited liability company having its registered office at Suva, Suva.

PLAINTIFF

AND : ITESH SINGH of Nadawa, Nasinu, occupation unknown to the Plaintiff.

FIRST DEFENDANT

AND : ETUATE BAKANICOVA TALENIWESI of Nawaka, Nadi, Operations Manager.

SECOND DEFENDANT

AND : MATRIX GUARDS PTE LIMITED a limited liability company having its registered office a Level 8 FNPF Place, Victoria Parade, Suva.

THIRD DEFENDANT

AND : RICHARD JAGDISHWAR LAL of 88 Navurevure Road, Tamavua, Suva, Businessman.

FOURTH DEFENDANT

AND : LAWRENCE ROBERT of 28 Vere Road, Laucala Beach Estate, Suva.

FIFTH DEFENDANT

Counsel : Mr. V. Prasad for the Plaintiff
Mrs. R. Lal for the Defendant

Date of Hearing : 27^th July, 2017
Date of Judgment : 4^th October, 2017

Catch words: Injunction-material non-disclosure - discharge of ex parte orders-implied term of contract - absence of employment contract for General Manager - confidential information-trade cecret-obligations in the absence of employment contract after termination of contract.

JUDGMENT

INTRODUCTION

1. Plaintiff filed ex-parte motion seeking injunction, against defendants restraining canvassing, soliciting or dealing with any client of the Plaintiff and restraining directly or indirectly canvassing employees to leave Plaintiff. It sought inter alia an order restraining defendants from disclosing any confidential information or infringing intellectual property of the Plaintiff. 1^st and 2^nd Defendants were ex-employee of the Plaintiff and they held General Manager and Operational Manager positions respectively. One post was made redundant and the other person resigned and joined 3^rd Defendant Company. Third Defendant Company also had word ‘Matrix’ in their name which is also contained in the name of the Plaintiff it allege that Defendants had successfully diverted some of the clientele of the Plaintiff to the 3^rd Defendant. Some of the essential and critical trained staff had also joined 3^rd Defendant and according to the Plaintiff it had become difficult to provide the essential services such as cash transport to its clients. 1^st and 2^nd Defendants did not have a written employment contract with Plaintiff, though the employees of the Plaintiff had written employment contracts that contained confidentiality clauses. The Plaintiff state that such restraint regarding confidentiality is implied, hence 1^st and 2^nd Defendant should be restrained as they had hindered the operations of the Plaintiff. This was due to similarity in the name by using word ‘Matrix’, encouraging trained staff to resign en mass and also using confidential information and also infringement of intellectual property rights of the Plaintiff. The Plaintiff obtained interim injunction on ex parte basis restraining the Defendant from soliciting its clientele and employees and also regarding usage of confidential information.
   

FACTS
2. The Plaintiff is a security service company having its presence in Fiji for over 15 years and also employs about 500 security officers. It has also obtained license for such services and has clientele of premier multinational organizations like ANZ Bank, Vodafone, British American Tobacco, Sofitel, Sheraton etc.

3. 1^st Defendant held the position of General Manager of the Plaintiff for over 12 years. 2^nd Defendant was the Manager Operations of the Plaintiff and was employed since its start of operations. He had tendered his resignation on 12^th May, 2017.
   
4. The Plaintiff allege that by virtue of their senior positions in the Plaintiff’s hierarchy that they held vital confidential information about the Plaintiff including operational procedures, costing/pricing models and more importantly confidential information regarding clientele.
   
5. Though there was no specific employment contracts for the 1^st and 2^nd Defendants there were specific contracts for other managerial positions and those employment contracts contained a clause for confidentiality and also protection of intellectual property rights of the employer.
   
6. The Plaintiff states that such obligations for intellectual property protection and confidentiality is needed for business efficacy, hence they are implied obligations on all senior employees including the 1^st and 2^nd Defendants.
   
7. 3^rd Defendant was a company where 1^st and 2^nd Defendants along with two persons named as 3^rd and 4^th Defendants were the Directors of that entity.
   
8. At the hearing counsel for the Defendant informed that the name of the 3^rd Defendant was changed. The Plaintiff had filed an application subsequently for the change of the name of the 3^rd Defendant and it is pending before the court.
   
9. 3^rd Defendant is engaged in the similar type of a business to the Plaintiff and had also obtained some of the clients and employees of the Plaintiff.
   
10. 1^st Defendant was made redundant and shortly after that of the 2^nd Defendant had also resigned. Discussions were held with the 1^st Defendant to be appointed to 2^nd Defendant’s position and while this was happening entire Cash in Transit (CIT) Suva team had also resigned. They have all joined with 1^st and 2^nd Defendant in the 3^rd Defendant entity and they are also engaged in similar type of business, providing similar services to clients.
    
11. The Plaintiff allege that CIT team needed special training and this training was given to the said employees. It also allege that CIT team is critical for their business.
    
12. Operations Controller of the Plaintiff also tendered his resignation and had informed that he was contacted by the 2^nd Defendant to join their company at a higher rate of payment. After discussions he was retained after payment of a higher salary.
    
13. The affidavit in support stated that 2^nd Defendant had informed one of its Directors, that he would ask CIT team in Nadi to resign and on the same day about 10 of CIT team in Nadi did not report to work, and this en mass resignation and or not reporting to work had caused serious issues with Plaintiff’s operations.
    
14. CIT is critical for the business of Plaintiff as even if one day cash transport is held up the clients will terminate their contracts with them.
    
15. According to the affidavits filed in support number of other employees of Plaintiff had also informed that they were approached by 1^st and 2^nd Defendant to entice them to join 3^rd Defendant.
    
16. The Plaintiff allege that 1^st and 2^nd Defendant with two others had colluded to start a new business similar to Plaintiff with name ‘Matrix’ in their name , engaging in similar type of business creating ‘dilution’ of their reputation or goodwill in the industry.
    
17. The Plaintiff states that at least two of the existing customers of the Plaintiff had already terminated their contracts after formation of 3^rd Defendant and there is irreparable loss to the Plaintiff if this trend is continued with the drain of their critical staff and clients of the Plaintiff.
    
18. The Plaintiff also state that 1^st and 2^nd Defendants are using their confidential information and other knowledge about the Plaintiff and carefully planning to cripple it by recruiting key personnel in Plaintiff’s company and also diverting clients of the Plaintiff.
    
19. The 1^st Defendant in his answering affidavit stated
    
    1. There is no authority given by the Plaintiff to institute action against 4^th and 5^th Defendants.
    2. Admitted that he was made redundant and denied taking any confidential information with him.
    100. There is a pending dispute as to the amount of payment at the time of termination of his employment due to redundancy.
    4. As the General Manager he functioned as Operational Manager, Administrative Manager, Sales and Marketing Manager and Clients and Contract Manager.
    5. Information about clients, employees and operational procedures, etc were not coded.
    6. Since there was no employment contract no confidentially obligation can be imposed on him.
    7. No term of employment contract can be implied.
    8. He is using his know-how he obtained through experience as opposed to confidential information and no restraint on trade can be imposed on him in the absence of any contract.
    9. The Plaintiff is attempting to prevent competition.
    10. Denied he had asked CIT members to resign or approaching other staff members.
    11. Names of the Plaintiff and 3^rd Defendant are different though both contained word ‘Matrix’.
    50. 4^th and 5^th Defendants incorporated 3^rd Defendant and offered a job in that entity to him.
        
20. The 2^nd Defendant in his answering affidavit inter alia states
    1. He was a junior officer compared to 1^st Defendant who was General Manager.
    2. Did not have any confidential reports, there was no policy on confidentiality.
    100. Joined 3^rd Defendant as an employee.
    4. Deny recruitment of Plaintiffs employees.
       
21. 4^th and 5^th Defendants in their affidavits in opposition had admitted that they are shareholders and also Directors of the 3^rd Defendant. They had also admitted that their association with Plaintiff’s ex-landlord. They had denied allegations contained had reiterated the position of the 1^st and 2^nd Defendants in their affidavits in opposition and had stated that recruitments to 3^rd Defendant were done by advertisements of job offers in print media.
    

ANALYSIS

22. The following orders were granted on the ex parte motion of the Plaintiff after considering affidavit in support filed by R. Reshma and also submissions made by the counsel for the Plaintiff.
    1. The Defendants, their servants, agents, contractors, representatives or persons under the control, direction or guidance of the Defendants or howsoever be restrained from directly or indirectly canvassing, solicitor or dealing with, counselling, procuring, assisting another person to canvass, solicit or deal with any client of the Plaintiff. Client means any person or entity that was a client of the Plaintiff between September 2003 and 16 May 2017.
       
    2. The Defendants, their servants, agents, contractors, representatives or persons under the control, direction or guidance of the Defendants or howsoever be restrained from director indirectly canvassing, solicitor or dealing with, counselling, procuring, assisting another person to canvass, solicit or deal with an employee of the Plaintiff or to join employment of the Defendants or any person or entity associated with the Defendants.
       
    100. The First and Second Defendant, their servants, agents, contractors, representatives or persons under the control, direction or guidance of the Defendants or howsoever be restrained from director or indirectly using or disclosing any confidential information or intellectual property belonging to the Plaintiff to any other person other than for the purposes of complying with these orders.
         

Confidential information means al data, details, plans, designs, computer software, figures, financials, costings, developments, results, technical advice, trade secrets, samples, specifications, formulae, ideas, drawings, concepts, technology, intellectual property rights, documents, commercial knowledge, human resources information, marketing information, business information, Board Minutes, corporate records and any other proprietary information of the Plaintiff (“the Information”) whether in documentary, visual, oral, machine-readable or other form together with all copies, extracts, samples, materials, equipment, media, inventions, computer hardware, videos, compact discs, CDs, CD-Roms or other items containing or referring to any of the information which is not in the public domain (except) as a result of a failure to comply with an obligation to maintain confidentiality), irrespective of how it is known by the Defendants or in their possession.

Intellectual property means all inventions, improvements, designs, creations and other developments relating to or deriving from any of the business systems or technology used by the Plaintiff at any time during the Defendant’s employment.

4. Third Defendant be restrained from applying to the Security Industry Licensing and Registration Board for a security Licence under the Matrix Guard Pte Limited and or any other name which uses the word “Matrix” until further order of the Court.”

(Order (d) was abandoned at hearing)

23. At the outset Defendants allege that the Plaintiff had suppressed material facts in the ex-parte application made before the court hence the orders granted on ex parte should be dissolved.
    
24. According to the Defendants, the Plaintiff in the affidavit in opposition had not divulged the fact that 1^st and 2^nd Defendants were not subjected to a written employment contract. Instead, had stated that such contract could not be located after perusal of the documents in their office.
    
25. In my mind there is no direct misrepresentation on the fact of 1^st and 2^nd Defendants not having a written employment contract with the Plaintiff. Whether the statement contained in the affidavit in support in paragraph 18, which indicated that no written contract could be located, amounts to a non-disclosure of material fact cannot be decided on its own, as material non-disclosure at this moment.
    
26. Plaintiff had denied having employment contract at that time and that was the correct statement. Even if I am wrong on that finding of fact on the materials available to me, I would not dissolve the orders only on material non disclosure, though that is the path of least resistance, do dissolve an ex-parte injunction. While accepting the obligation of a party to divulge all material facts without suppression, in my mind such a dismissal on a technical issue would not preclude the exercise of judicial discretion for grant of equitable remedy when the merits of the case warrants grant of an injunction. (See Borch v Republic of Djibouti and Others [2015] EWHC 769; 2015 3 All ER 577, Mercedes-Benz AG v Leiduck [1995] 3 All ER 929, Tajik Aluminium Plant v Ermatov [2005] All ER (D) 250 (Oct).
    
27. 27. 1st and 2nd Defendants have denied having any employment contract and this position is not denied by the Plaintiff. Whether this position was known to the Plaintiff at the time of ex parte application is not known. Even if there was a suppression of fact regarding 1st and 2nd Defendants not being subjected to a written employment contract, there is sufficient material before the court for consideration for the extension of the ex parte injunction, in the exercise of judicial discretion. Over emphasis on material non disclosure in this case would hinder judicial discretion, on equitable remedy. In the absence of written employment contract, the Plaintiff can substantiate equitable remedies sought in the motion seeking injunction considering the merits of the case.
    
28. The Defendant at the hearing also raised an objection regarding the authority given to institute action against Defendants and stated that 4^th and 5^th Defendants were not specifically included in the said Board Resolution. Though 4^th and 5^th Defendants names have not been expressly stated the in the resolution passes, in my mind the resolution annexed as ‘A’ to the affidavit in support had granted authority for the Plaintiff to institute action against ‘the business with’ 1^st and 2^nd Defendants are involved which can include the legal as well as natural persons involved with the said ‘business’ in order to give effect to restraining orders sought in the ex-parte application. A board resolution should not be interpreted narrowly as in a case of an interpretation of a statute and it is legal practitioners who act on that will determine actual persons against whom action should be instituted. This is the case in an application for an injunction which is an urgent remedy. A board resolution was passed giving authority to the Plaintiff to institute this action for the purpose of obtaining injunction.
    
29. Having over ruled the above preliminary objections I now consider the merits of the application. The Defendant had also raised an issue regarding alleged hindering of competition which is dealt later in the judgment.

30. The Plaintiff had been in the business of providing security services to multinational entities including ANZ bank and number of Resorts belonging to international hotel Chains or Groups, such as Sofitel, Holiday Inn, Radisson etc. It is understood that in Fiji, Plaintiff had acquired a reputation in the industry considering the high profile clientele of the Plaintiff. This also would justify the need to provide timely, high quality service on par with international standards in the industry. The Plaintiff had been in security business since 2003 and this counts for over a decade of uninterrupted service in a critical area such as security which is essential for hospitality industry as well as financial institutions. Security breaches in such areas would have serious consequences and the Plaintiff is providing this vital service to their clientele.
    
31. The 1^st Defendant was its General Manager and had been with the Plaintiff since its inception and 2^nd Defendant was its Operations Manager West where most of the Resorts are located. He had also been with the Plaintiff for over 10 years. So, both 1^st and 2^nd Defendants were with the Plaintiff over a decade and both of them held managerial positions for a considerable time.
    
32. Both 1^st and 2^nd Defendants did not have employment contract with the Plaintiff, but both of them were holding managerial positions in the Plaintiff having access to information of the Plaintiff company and both of them are aware of the confidentiality clauses contained in the employment contract of their subordinate officers.
    
33. In the absence of any employment contract for 1st and 2^nd Defendant the Plaintiff argues that there is an obligation for confidentiality based on implied term. They deny that there was an implied term of employment contract, for confidentiality.
    
34. At the same time counsel for the Defendant stated that no condition can be imposed on 1^st and 2^nd Defendants as they are no longer employees of the Plaintiff. The counsel for the Defendant stated that any term of contract can apply only to the employees of the Plaintiff while they are employees only.
    
35. Confidentiality clauses in employment contracts can survive even after termination of the employment contract as evidenced in the clause contained in the employment contract of the Plaintiff annexed as “I” to the affidavit in support. This contract was used for subordinate officers of the 1^st and 2^nd Defendants.
    
36. The existence of an implied term in a contract can be determined depend on the circumstances of the case. (see Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd and another - [2016] 4 All ER 441)
    
37. Whether a term can be implied in a contract is discussed in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd and another - [2016] 4 All ER 441 and at p 447 held,( Lord Neuberger with Lord Sumption and Lord Hodge agreed)

“[17] Support for the notion that a term will only be implied if it satisfies the test of business necessity is to be found in a number of observations made in the House of Lords. Notable examples included Lord Pearson (with whom Lord Guest and Lord Diplock agreed) in Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 2 All ER 260 at 268, [1973] 1 WLR 601 at 609, and Lord Wilberforce, Lord Cross, Lord Salmon and Lord Edmund-Davies in Liverpool City Council v Irwin [1976] UKHL 1; [1976] 2 All ER 39 at 44, 47, 50 and 53[1976] UKHL 1; , [1977] AC 239 at 254, 258, 262 and 266 respectively. More recently, the test of 'necessary to give business efficacy' to the contract in issue was mentioned by Lady Hale in Geys at para [55] and by Lord Carnwath in Arnold v Britton [2015] UKSC 36, [2016] 1 All ER 1, [2015] 2 WLR 1593 (at [112]).”

38. Whether a term can be implied depend on the circumstances of the case and this was held in a recent Privy Council decision Nazir Ali (Appellant) v Petroleum Company of Trinidad and Tobago (Respondent) (Trinidad and Tobago) [2017] WLR(D) 110(Per Lord Neuberger)
    
39. It is trite law that at the stage of granting and injunction the facts contained in the affidavits are not tested fully in at the trial hence it is not suitable to apply them to find out whether there was an implied term relating to the confidentiality of the information received while in employment.
    
40. It is not clear what type of information can be classified as confidential at this juncture on material contained in the affidavits.
    
41. The Plaintiff state that such an implied term needs for business efficacy of the industry.
    
42. In an organization senior managerial positions and specially a person similar to General Manager (GM) may not have an employment contract depending on the organization culture of that entity and also considering diverse activities that they have to engage in their capacity as GM. That does not absolve such a senior person a freedom to divulge or utilize confidential information of that organization for the detriment of it while in service or shortly after leaving such an organization and joining hands with a newly formed rival business.
    
43. An organization would not expect an ex-General Manager of them to divulge all the confidential information to a rival entity including their business plans, costing/pricing, operational procedures etc.
    
44. When such confidentiality clauses are imposed on the subordinate staff, how ‘confidentiality’ should not be applied to senior staff needs explanation at the trial. If there was no confidential material with Plaintiff, why was the need for such an extensive clause regarding confidentiality utilized by 1^st and 2^nd Defendant, while they were working for the Plaintiff also needs further elaboration at the trial.
    
45. It is a fact that confidentiality clauses were included in the subordinate employees of the Plaintiff and as the General Manager and Operational Manager they should be fully aware of the reason and policy behind such a clause.
    
46. Clause 22 of Plaintiff’s contract of employment annexed as ‘I’ dealt with confidentiality of Plaintiff organization extensively and accordingly, the obligation regarding confidential information extended even after termination of the contract. (See annexed 1 to the affidavit in support). The subordinate officers of the 1^st and 2^nd Defendants were subjected to confidentiality clause and it states as follows

“22 Confidentiality

22.1 Other than authorized use during the course of employment or otherwise as required by law, the Employee must not disclose or make known to any person (including any firm or corporation) or transmit or transfer data in any form to any source or recipient outside the Employer (including transmitting data to external email addresses), any confidential information that the Employee has been provided with. Accessed or acquired during the course of employment with the Employer (“Confidential Information)”). The Employee acknowledges that for the purposes of this clause, Confidential Information shall include but shall not be limited to:

a. the terms of this Agreement;

b. information which is specifically designated as confidential by the Employer;

c. information which by is nature may be reasonably understood to be confidential;

d. any information regarding the clients of the Employer, information provided by clients, gathered for clients or any such information obtained in the course of undertaking work for any clients of the Employer.

e. all financial information or other business information about the Employer, strategies or employees.

f. terms of contracts or arrangements between the Employer and any other party (including without limitation, employees, contractors, agents, customers, suppliers, directors, government agencies, social organization, media, donors and any other entity); and

g. research and development information, financial details and information about the Employer or any of its employees.

22.2 All copies and extracts of any Confidential Information made or acquired by the Employee in the course of employment shall be:

a. the property of the Employer;

b. used for the purpose of the Employer only;

c. returned to the Employer at any time on demand; and

d. returned to the Employer without demand on the termination of the Employee’s contract for any reason whatsoever.

22.3 The Employee acknowledges and warrants that the Employee understands the importance of abiding by this clause and the importance of Confidential Information to the Employer. The Employee understands that any breach of this clause will amount to a serious breach of this Agreement that will result in and warrant disciplinary action.

22.4 The restriction clause 22.1 about shall not apply to the Confidential Information that becomes public knowledge otherwise than through breach of this Agreement.

22.5 This clause 22 shall survive the termination of this Agreement”

47. The above clause 22 of annexed ‘I’ states that confidentially clause will survive the termination of the employment, and having such a clause is clear enough for an employee of the Plaintiff to understand obligations of confidentiality and that they are under obligation.
    
48. The Defendants had submitted three cases on implied obligations of an employee and they were decided in 1895, 1935 and 1985. In the light of recent decisions on the issue of implied terms by Privy Council in Nazir Ali (Appellant) v Petroleum Company of Trinidad and Tobago (Respondent) (Trinidad and Tobago) [2017] WLR(D) 110(Per Lord Neuberger) and UK Supreme Court in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd and another - [2016] 4 All ER 441, there is a serious legal as well as factual issue to be determined at the trial.
    
49. The 1^st and 2^nd Defendants allege that what they had obtained from the Plaintiff over the years as employees are ‘know how’ and in the absence of any ‘trade secret’ they are not under any obligation regarding such information. These are matters that cannot be decided on evidence before me. What can be categorized as ‘trade secret’ is also relative to industry and depend on the circumstances. Even though an information is not a trade secret still there can be restrictions based on equity and also business ethic.
    
50. In Linder v Murdock’s Garage [1950] HCA 48; (1950) 83 CLR 628 at p 633-634 (Per Latham CJ)(dissenting) held,

‘Where an employee has access to trade secrets or other confidential information he may be restrained by agreement from communicating those secrets of such information to other persons, and particularly to competitors in trade with his employer. Again, and employee who is brought into personal contact with the customers of his employer may by agreement effectively bind himself to abstain after his term of service has been completed from soliciting the customers of his former employer. In these cases the covenant in restraint of trade is not covenant against mere competition but is a covenant directed to securing reasonable protection to the business interest of the employer, and in the circumstances is not unjust to the employee. The interest which can validly be protected is the trade connection, the goodwill of the business of the employer’

51. So, on the basis of competition alone Plaintiff should not be prevented from restraining the Defendant when it is reasonable to do so depending on the circumstances. The imposition of restriction on confidentiality based on implied terms of contract, is not a restriction on competition, if that can be reasonable and unjust for the protection of trade connections and goodwill of the employer.
    
52. In Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25, it was held that the relationships that the senior managerial position had with clients while in service to a ‘substantial extent’ the property of the employer. This was authoritatively quoted in the judgment of Meagher JA(Campbell and Young JJA agreeing) in Jardin Investment Pty Ltd v Metcash Ltd [2011] NSWCA 409; (2011) 285 ALR 677
    
53. The Plaintiff claims an implied obligation regarding confidentiality. At this stage the Plaintiff needs to show a serious question to be tried at the hearing. (see American Cyanamid Co v Ethicon Ltd - [1975] UKHL 1; [1975] 1 All ER 504 Per Lord Diplock at p 510)
    
54. The Plaintiff’s claim on confidentiality is based on the senior positions held by the 1^st and 2^nd Defendants and also they being aware of the confidentiality clause that applied to other employees and circumstances of the case that require an implied term to be imposed on the 1^st and 2^nd Defendants while in the employment as well as after that.
    
55. The 1^st and 2^nd Defendants denied having knowledge of any confidential information and also state such information was not restricted access in the company. These are matters to be tested at the trial, considering confidential obligation contained in the employment contract of the subordinate employees.
    
56. 4^th and 5^th Defendants were persons working with former landlord of the Plaintiff and along with them 1^st and 2^nd Defendants have formed a company that had word ‘Matrix’ on it and it is also engaged in the same or similar type of business.
    
57. The Plaintiff allege that Defendants are using their confidential information to cripple the activities of the Plaintiff by recruiting and or encouraging key personnel in the Plaintiff to resign and join them. According to the affidavit in support this had affected functions of the Plaintiff.
    
58. 4^th and 5^th Defendants in their affidavits in opposition had indicated that recruitment to their organization was through advertisements published in the dailies. These are facts that needs to be tested in trial as these facts are disputed.
    
59. There is a serious question to be tried at the trial based on legal as well as factual position considering business efficacy, equity, reasonable requirement under circumstances. There is a serious issue whether implied term on confidentiality can be imputed to 1^st and 2^nd Defendants, in the absence of written employment contract.
    
60. The next issue is balance of convenience and the Plaintiff who had established a reputation and having a high profile clientele such as ANZ Bank, Vodafone, etc has described in the affidavit in support that they would have to terminate contracts of employments of the employees employed with the clients who had terminated their contracts. This is a serious situation for a company that employs about 500 people. It is also a sensitive industry considering that security for CIT is essential for smooth functioning of business such as ANZ and Vodafone. Any sudden en mass vacation of posts or taking leave of such trained CIT team without prior notice would put not only the Plaintiff but also their clientele in an awkward situation that can have serious consequences. Absence of trained staff for CIT may lead to serious breaches in security in businesses like financial institutions which may lead to thefts and or robberies that may even cause irreparable loss and may have a toll on human lives involved in such businesses as well as security personnel involved in CIT. So a high degree of professionalism is needed in such operations and sudden loss of such train personnel is critical for the operation of Plaintiff.
    
61. An operation such as CIT is a specialized operation and an organization would not like to encounter unexpected interruptions in such activity. So on the facts presented in the affidavit the inconvenience and or damage to the Plaintiff including imminent threat to their reputation as a premier security organization, is immense. If ex parte injunctions granted are dissolved it could have serious consequences on clientele of the Plaintiff resulting loss of revenue and also loss of trained personnel holding key positions in it.
    
62. Lord Diplock in American Cyanamid Co v Ethicon Ltd - [1975] UKHL 1; [1975] 1 All ER 504 at p 511 stated

‘Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark on a course of action which he has not previously found it necessary to undertake whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.’

63. 3^rd Defendant is a new entrant to the industry and considering nature of the injunctive orders sought it will be restrained from soliciting employees of the Plaintiff. This would not incur a loss to the Plaintiff. This does not prevent them seeking employment through advertisements in papers and any recruitment under such job offers and only prevents direct solicitation of individuals critical for the operation of Plaintiff and also like CIT team in Nadi or Suva. It prevents targeting critical staff of the Plaintiff and offering attractive packages that would hinder the operations of it.
    
64. The Defendants complain that Plaintiff is preventing competition. To have healthy competition one needs to respect the business ethic. Plaintiff is complaining of the Defendants activities that specifically target them, they do not seek to prevent the Defendants from doing business in the same field.
    
65. It was held in American Cyanamid Co v Ethicon Ltd - [1975] UKHL 1; [1975] 1 All ER 504 at p511(Per Lord Diplock) held,

‘Save in the simplest cases, the decision to grant or to refuse an interlocutory injunction will cause to whichever party is unsuccessful on the application some disadvantages which his ultimate success at the trial may show he ought to have been spared and the disadvantages may be such that the recovery of damages to which he would then be entitled either in the action or under the plaintiff's undertaking would not be sufficient to compensate him fully for all of them......’

66. When considering the affidavit in support the activities of the Defendants are allegedly affecting functions of the Plaintiff and that is not a healthy competition in the industry as well as for businesses in general. What is alleged in the statement of claim and also in the affidavit in support are allegations that hinder healthy competition in the industry.
    
67. The first order refers to the dealing with their clients and in my mind that should be restricted to clients of the Plaintiff at or around the time of termination of employment of the 1^st Defendant. There are enough business entities in Fiji to deal than the existing clientele of the Plaintiff.
    
68. It should also be noted that Plaintiff is only prevented from dealing only with existing clients separately and not precluded from making open offers or tenders in print media of any other medium and accepting any entity that respond to such offers irrespective of they being clients of the Plaintiff. So with these variations the balance of convenience lies with the Plaintiff and competition in the industry is not hampered, instead it is encouraged as unethical interference with Plaintiff’s existing clientele is prevented from the injunction. So the balance of convenience favours grant of injunction with further clarification and restrictions as suggested.
    
69. The balance of convenience also favours the Plaintiff regarding the injunctive orders regarding non solicitation of its existing employees, and also for non disclosure of confidential information of the Plaintiff.
    
70. I have observed the inconvenience that may cause to the Defendant as a new entrant to the field of security industry through ex parte orders granted. Any damage to them needs to be mitigated, with variation of order. It can be done so by restricting the scope of order (a). The Defendants is allowed to deal with any of the Plaintiff’s clients including pervious and existing clients if the offer of the Plaintiff was through open tenders without dealing with one to one. No restriction should be placed on the Defendants to deal with previous clients who had left the Plaintiff provided confidentiality is not violated. (Pervious clients means clients who were terminated prior to termination of 1^st Defendant.)
    

CONCLUSION

71. I have overruled the objections raised on the issue of authority and also regarding issue of suppression of facts. The Plaintiff state that actions of the Defendants have placed them and their business in a difficult situation. The Plaintiff seeks to restrain the Defendants from directly soliciting their existing employees as well as existing clientele. This does not prevent Defendants from advertising their services and offering their services and also recruiting any person upon paper advertisements. The injunction regarding clients is further narrowed only to the clientele of the Plaintiff that existed at the time of the termination of the employment of the 1^st Defendant. Defendants are not prevented from engaging in their selected area of business without directly interfering with Plaintiff’s employees and also their clientele, at the time of the termination of the employment of the 1^st Defendant. The Defendants are only restrained from engaging in unethical behaviour and this will not hinder competition but will enhance competition.
    

FINAL ORDERS

72. Order (a) in the ex-parte motion granted is varied with addition of further explanation that the Defendants is allowed to deal with any of the Plaintiff’s clients including pervious and existing clients if the offer of the Plaintiff was through an open tender (eg. Paper Advertisement) without dealing with one to one of the existing clients of the Plaintiffs. No restriction should be placed on the Defendants to deal with previous clients who had left them. (Pervious clients means clients who were terminated prior to termination of 1^st Defendant, hence the period from 2003 to 20017 stated in the ex-parte order, is further restricted to only clientele of the Plaintiff at time of the termination of the 1^st Defendant). (With the said variation it is extended till final determination).
    

1. Ex parte orders (b) and (c) are extended till final determination of the action.
2. Cost of this application cost in the cause. (Order (d) was abandoned at hearing).

100. The matter is to be listed before Master for direction for trial, without delay. Priority should be given for the matter by Master.
     

Dated at Suva this 4^th day of October, 2017

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Justice Deepthi Amaratunga

High Court, Suva