THE CURRENT IMPORTANCE OF PLEADINGS 4: A FAILURE BY A CLAIMANT TO ADEQUATELY PARTICULARISE ITS CASE
When you start looking for cases about pleadings it is surprising how issues in relation to statements of case keep popping up. We see it in the judgment of Jeremy Hyam KC in Kau Media Group Limited v Thomas Hart [2025] EWHC 553 (KB). The claimant had failed to adequately particularise its case.
“… the Defendant argued that that trade connections ground was never properly pleaded and had it been so different evidence may have been adduced to meet it…. In my judgment and having regard to the nature of the PTRs there is force in this objection.”
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THE CASE
The claimant brought an action against its former employee. It was alleged that the defendant was in breach of various post-termination restrictions (PTRs). There was an order for a split trial. At the trial the claimant’s case failed.
THE JUDGE’S OBSERVATIONS ABOUT THE PLEADINGS
The defence argued that the claimant’s case was not adequately pleaded. The judge held that this view was, to some extent, justified.
32. The Particulars of Claim did not identify or plead any breach of the terms of the PTRs (or any other breach of contract) but rather pleaded particulars of ‘anticipated breach’ of the PTRs. This led to the Defendant to invite the Court to strike out certain matters in the witness statement of Mr Khokhar dated 21st February 2025 at §36 onwards where he appears to make allegations that (i) the Defendant, in breach of contract, was working for MML while still employed by the Claimant, (ii) began employment with MML in or around November 2024 and (iii) breached his undertakings.
33. At the hearing Mr Johns on behalf of the Claimant was invited by the Court to decide whether he wished to apply to amend his pleadings in relation to these additional matters but confirmed he did not seek to do so.
Analysis of pleaded case
34. By reference to its pleaded case KMG is seeking to restrain Mr Hart from working in what KMG say is “direct competition” with its business. KMG claims it has a proprietary interest in “information”– obtained by Mr Hart in the course of his employment as to KMG’s customer lists, pricing and KMG’s business model which, KMG say, expose KMG to the risk of Mr Hart in a new employment at MML – which the Claimant says occupies the same or a very similar business space (digital marketing in the dental sector). The particulars of claim also raise “poaching of target customers” or “solicitation of current customers” as a relevant concern justifying injunctive relief. I should say immediately that point “poaching of target customers” is unlikely to be a ground for injunctive relief unless it can be established that the prospective customer is one with whom the employer has been negotiating and can thus be identified: see International Consulting Services(UK)Ltd v. Hart [2000] IRLR 227. As to “solicitation of current customers” that is a well-recognised ground covered by post termination restrictions and may, see for example, Plowman v. Ash [1964] 1 WLR 568 extend to ex-customers who ceased to be customers during the period of employment but may yet come back to the employer. But as the authorities make clear an employer cannot impose a restrictive covenant to prevent an employee soliciting its customers if the employee had no significant contact with those customers – see Herbert Morris v. Saxelby [1916] 1 AC 688. Thus it would be necessary for the Claimant to plead and prove that there were specific current (or recently departed) customers with whom the Defendant had established contact (e.g. accounts managed by Mr Hart) that were liable to be solicited by him in his new post.
35.At the close of the case Mr Wibberley for the Defendant argued that that trade connections ground was never properly pleaded and had it been so different evidence may have been adduced to meet it, including the offer of undertakings not to approach particular clients or customers of the Claimant (indeed such offer is made in the pre-action correspondence recited above).
36. In my judgment and having regard to the nature of the PTRs there is force in this objection. Given the previous offer of undertakings not to approach specific customers in pre-action correspondence, I consider it was incumbent on the Claimant to identify (whether by a confidential list at least some further particularity) those customers in respect of whom the “customer connection” ground was relied on as a legitimate proprietary interest deserving of protection. That said, the nature of the non-solicitation/non-deal PTR and its specific wording is such that it is tolerably clear that that PTR (2.2(a) and (d)) relates to those previous customers (relevant persons during the protected period) with whom Mr Hart had material dealings while Account Manager.
37.In my analysis I consider that the Claimant on the pleadings:
(i) Is basing the claim for injunctive relief on the allegation that MML is in direct competition with KMG a provider of digital marketing services;
(ii) Is alleging that Mr Hart, by dint of his position of Account Director at KMG has acquired knowledge of objective information worthy of protection such as lists of customers, costings and strategy for those clients he has worked with which might be used to the Company’s detriment;
(iii) Is arguing that Mr Hart is subject to a ‘non-compete’ PTR on the basis that MML is a direct competitor of KMG occupying the same space in the relevant market place;
(iv) Is arguing that Mr Hart is subject to a “non-deal/non-solicitation” PTR with respect to relevant persons – customers/clients of KMG during the period of 12 months prior to termination (including MNL) with whom the Defendant had material dealings.
THE JUDGMENT
The judge dismissed the claimant’s application on several grounds. The judge also found that the claimant had not adequately particularised its case.
“My decision above is sufficient to determine the issue, but for completeness I should add that I do not find that the Claimant has established a legitimate business interest requiring protection. The primary relevant interest relied on by the Claimant is ‘confidential information’. I agree with the Defendant that it is settled law that this category of legitimate interest does not cover “the skill, experience, know-how, and general knowledge” acquired by an employee. It only protects ‘objective’ knowledge – see Mummery LJ in FSS Travel supra. I have already indicated that there is force in the Defendant’s submission that the confidential information must be particularised sufficiently to enable the court to be satisfied that the Claimant has a legitimate interest to protect. Given that the identified competitor MML will already possess the MNL data and information by dint of being an associated company under the same ownership I do not consider that there is any legitimate proprietary interest here to protect. MNL by bringing the work in house to MML and employing Mr Hart is not thereby giving to MML confidential information which is the property of KMG. I have already concluded above that the confidential information if it is such in relation to other dental businesses apart from MNL is not sufficient to amount to a legitimate proprietary interest deserving of protection by injunctive relief.”