Prophet Plc v Huggett [2014] EWCA Civ 1013

[2014] EWCA Civ 1013Case No A3/2014/0860
IN THE COURT OF APPEAL (CIVIL DIVISION)
[2014] EWHC 615 (Ch)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr David Donaldson QC, sitting as a Deputy High Court Judge
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Tuesday 22 nd July 2014
Before
LORD JUSTICE RIMERLORD JUSTICE LEWISONLORD JUSTICE CHRISTOPHER CLARKE
Between
PROPHET PLCClaimant/ RespondentCHRISTOPHER HUGGETTDefendant/Appellant
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr Andrew Burns (instructed by Archon Solicitors Limited) for AppellantMr James Laddie QC (instructed by Cummins Solicitors Limited) for RespondentHearing Hearing date: 14 July 2014
JudgmentLord Justice Rimer :
[1]This appeal, by Christopher Huggett, the defendant, is against an order made by Mr David Donaldson QC, sitting as a Deputy High Court Judge in the Chancery Division, on 11 March 2014 following an expedited six-day trial at the end of February 2014. The appeal, brought with the permission of Patten LJ, has also been expedited. The reason for the expedition is because the relief sought and obtained against Mr Huggett by the claimant/respondent, Prophet PLC (‘Prophet’), his former employer, included an injunction restraining him from working for his new employer, K3 Business Solutions Ltd (‘K3’), until 3 January 2015. Mr Huggett’s case before the judge and us is that no such injunction should be, or have been, granted and he seeks by his appeal to have it discharged so that he can take up his new employment with the minimum further delay. The issues before the judge were as to the interpretation of the restrictive covenant into which Mr Huggett entered with Prophet, whether the covenant was reasonably necessary to protect Prophet’s commercial interests and whether it was appropriate to protect Prophet’s interests by the imposition of an injunction. Mr Huggett’s primary case on his appeal is that the judge misinterpreted the covenant, but he also argues that the covenant as interpreted by the judge went wider than was reasonably necessary for Prophet’s protection and that there was anyway no basis for the grant of an injunction.

The facts

[2]I take these from the judge’s judgment. Prophet has for many years been engaged in developing, selling and updating computer software for that sector of the fresh produce industry dealing in fruit, vegetables, cut flowers and herbs; but not fresh produce in the nature of dairy products, fish or meat. I add that Mr Laddie QC, for Prophet, submitted that ‘fresh produce’ in fact means, or ordinarily means, only the types of produce with which the sector served by Prophet is concerned, but we were not shown any trade evidence supporting that interpretation of the phrase and I understood Mr Burns, for Mr Huggett, to disagree with it.[3]One of Prophet’s products is Pr3, an update of Pr2, which offers a suite of integrated software applications covering many of the functions of businesses supplying fresh products, such as accounting, purchases and sales, warehousing, packing and transport. Not all modules will be needed by each customer and a sale will be preceded by an in-depth investigation and discussion as to the customer’s requirements, which will be paid for by the customer. Prophet then grants an initial licence for 12 months, renewable yearly for an annual fee, plus the cost of updates.[4]Mr Huggett is not a software engineer or developer but has been involved in the fresh produce industry since 1993. In 2011, Prophet was looking for a new United Kingdom sales manager and it recruited him for the post. He was regarded as having the abilities and experience capable of winning business in the fresh produce sector. On 2 February 2012, Prophet made Mr Huggett a written offer of employment at £50,000 a year, plus commission on sales, and with a notice period of three months. The offer outlined his role, which the judge summarised at [4] of his judgment: see [2014] EWHC 615 (Ch). Prophet and Mr Huggett signed an employment contract on 12 April 2012.[5]The contractual term at the centre of the dispute is the restrictive covenant contained in clause 19 of the contract, which is as follows:
‘The Employee shall not during the continuance of this Agreement, or for a period of twelve months from the determination thereof (for whatever reason or in whatsoever manner), without the consent in writing of the Board of Directors of the Company, either solely or jointly with, or as, a Director, Manager, Agent, Consultant or Employee of any other person, firm or company, directly or indirectly, carry on or be engaged, concerned or interested in any business which is similar to, or competes with, any business of the Company in which the Employee shall have worked whilst employed hereunder (in that they provide computer software systems of whatever kind to any company involved in the fresh produce industry) within the geographical area (namely the United Kingdom), except as a shareholder or debenture holder not having a controlling interest in any Company the shares of which are quoted on a recognised Stock Exchange. Provided that this restriction shall only operate to prevent the Employee from being so engaged, employed, concerned or interested in any area and in connection with any products in, or on, which he/she was involved whilst employed hereunder.’
[6]Both counsel were agreed that, if it stood alone, the first, long sentence of clause 19 would be unenforceable as being in unreasonable restraint of trade. It would be unreasonable to define a prohibited competitor company as one that ‘[provides] computer software systems of whatever kind’ to any company in the fresh produce industry, which would have the potential to bar the employee from working for a company providing software systems unrelated to the types of system with which he might have been involved at Prophet. Mr Burns said that it would also bar the employee from working for a company that supplied software systems to a sector of the fresh produce industry other than that served by Prophet. Counsel were agreed that the whole point of the second sentence of clause 19, the proviso, was to narrow down the nature of the post-employment restriction with the intention of ensuring that the covenant is notin unreasonable restraint of trade and so void. The issue between the parties as to the interpretation of clause 19 turns upon the proviso and its effect upon the general restraint imposed by the prior part of the clause.[7]I should refer also to clause 20, which contained(i) a covenant by Mr Huggett not, during or following termination of the employment contract, to use or disclose confidential information; and(ii) covenants by him for one year after termination not to solicit or procure orders, or deal with or accept orders, from any person who in the previous 12 months had been a customer of Prophet or in the habit of dealing with Prophet and with whom he had dealt, for goods or services the same as, or similar to, those supplied or dealt in by Prophet.[8]In November 2013, Mr Huggett was contacted by a head hunter acting for K3. K3 sells business solutions, known as enterprise resource planning, to customers across a variety of business sectors. Its products include a Microsoft product called Microsoft Dynamics, which it only sells as a whole rather than à la carte. K3 developed this product, in conjunction with Microsoft, for use in various sectors, including the fresh produce sector for which it has developed a product known as Fresh Dynamics. The judge recorded that, to date, K3 had made only four sales of Fresh Dynamics but had resolved to promote the product more actively, to which end it wished to recruit a salesperson with particular experience in the fresh produce industry. K3 regarded Mr Huggett as having the required experience. The job summary of the post prescribed that its occupier was to be responsible for new sales of solutions based on the Microsoft Dynamics software and that his target market would be the fresh produce sector. The remuneration was £75,000 per year, plus commission.[9]On 18 December 2013, Mr Huggett emailed Mr Peachey, Prophet’s managing director, giving him notice that he was resigning from Prophet. When pressed to identify his new employer, he said it was K3, which Mr Peachey knew to be a software supplier operating in part in the fresh produce industry. There followed a conversation in which Mr Peachey told Mr Huggett that if he went to work for K3 he would be in breach of clause 19 of his employment contract. On 20 December 2013, Mr Peachey wrote to Mr Huggett recording his agreement that the latter’s contract should end on 3 January 2014, his understanding being that Mr Huggett was to start with K3 on 6 January. On 23 December 2013, however, there followed Prophet’s solicitors’ letter before action referring to clause 19 and requiring an undertaking from Mr Huggett to refrain from working for K3 until after 12 months from leaving Prophet, in default of which an application for injunctive relief was threatened.[10]That resulted in an agreed deferment until 14 January 2014 of the commencement by Mr Huggett of work with K3, during which time Prophet issued injunction proceedings against him. On 16 January 2014, Mr Huggett gave an undertaking in the terms of clause 19 pending judgment following an expedited trial and on terms that he was in the meantime allowed to stay on K3’s payroll. K3 was not joined as a defendant, but it stood behind Mr Huggett’s defence of the claim. At the trial K3 made clear, upon the judge’s inquiry, that it would, if required, undertake that until 2 January 2015 it would not encourage or permit Mr Hugget to breach the clause 20 covenants against soliciting, dealing and disclosing or using confidential information and would underwrite the satisfaction of any award of damages or costs made against him. Prophet did not regard that as sufficient protection and pressed for an injunction.

Clause 19

[11]Whilst at the trial Prophet therefore sought an injunction requiring compliance by Mr Huggett with clause 19, Mr Laddie QC, for Prophet, is recorded by the judge as acknowledging that the clause 19 covenant, read literally, gave Prophet no protection. That is because whilst the first sentence, read alone, would provide Prophet with protection (albeit unenforceable protection), a literal reading of the second sentence served wholly to negative it. The second sentence restricts the protection in the first sentence to, in short, a bar on Mr Huggett working for competitors in any area and in connection with the provision by them of ‘… any products in, or on, which [he] was involved whilst employed [by Prophet]’. There is no dispute that the emphasised ‘and’ is a true conjunctive; and on a literal reading of the words that follow it, the only such products with which Mr Huggett was so involved were Pr2 and Pr3, which neither K3 nor any company other than Prophet provides. Therefore the effect of clause 19, if its second sentence is read as referring to Pr2 and Pr3, is to fail to prevent Mr Huggett from working for K3, even though it is a competitor of Prophet in the provision of software systems to the fresh produce industry.[12]The logic of such an interpretation of clause 19 is, on the face of it, compelling. Mr Burns, for Mr Huggett, sought before the judge to breathe some life into the proviso by a submission that there were third party agents who provided services in respect of Pr2 and Pr3 software, and might also introduce customers for such software to Prophet, so that such agents were within the grasp of the businesses referred to in the first sentence of clause 19. If so, the suggested ‘literal’ interpretation of the proviso did not, therefore, render clause 19 pointless. The judge, however, rejected this argument for two reasons:(i) the existence of such agents was not something of which Mr Huggett knew, or could reasonably have been aware, when he signed the employment contract; and(ii) such agents anyway did not ‘provide’ computer software systems within the meaning of the first sentence of clause 19.[13]Mr Laddie’s submission to the judge was that the conclusion that the literal reading of the proviso rendered clause 19 pointless – he would say absurd – indicated that such an interpretation could not be its true meaning. His submission was that ‘any products etc’ in the proviso was capable of meaning, non-exhaustively and with decreasing specificity:(a) Pr2 and Pr3 (the literal meaning);(b) products made by Prophet;(c) business process software designed for the fresh produce industry;(d) business process software for businesses; and(e) software. He submitted to the judge that the correct interpretation was alternative (c), being, he said, an accurate encapsulation of the nature of the Prophet products with which Mr Huggett was involved. So interpreted, the proviso would not prevent Mr Huggett working for K3 in connection with products other than those falling within alternative (c), but would prevent him from working for K3 in connection with products so falling: it would bar him from working for K3 in connection with any business software designed for the fresh produce industry.[14]The judge’s view was that literal interpretation (a) was the ordinary sense of ‘any products’ in the second sentence and did render clause 19 pointless. He concluded that it was clear, therefore, that ‘something had gone wrong’ in the drafting and that the proviso did not give effect to what the parties intended to achieve by it. If it was to be construed in the way they intended, it had to be clear what correction to the proviso was necessary. The exercise was to identify what a reasonable person would have understood the parties to have meant by their chosen language. Mr Laddie had suggested alternative (c) above; Mr Burns was unable to suggest any alternative wording if, as he did, the judge rejected the literal meaning.[15]The judge regarded it as far from clear that what he called Mr Laddie’s ‘wholesale reformulation’ of clause 19 should reasonably be understood as having been agreed. In the end, although neither counsel had advanced it, he held that what was required by way of a curing of the mistake in the drafting of the proviso was the addition to the end of the clause of the words ‘or similar thereto’. He regarded that as the minimum change necessary to produce a commercially sensible result and as ‘the probable formula which parties would employ for this purpose’. He drew support from the fact that the parties had used the phrase ‘similar to’ in each of clauses 20(b) and (c). Having rejected Mr Laddie’s alternative (c) as the correct sense of ‘any products’, he nevertheless held that his alternative (c) class of products fell within a class ‘similar to’ the proviso’s ‘any products’. Having so interpreted clause 19, the judge moved on to consider whether the covenant was enforceable, which involved an inquiry as to whether it was reasonably necessary in order to protect Prophet’s trade secrets or confidential information. The judge held that it was, as he also held that it was appropriate to enforce it by the grant of an injunction.[16]The injunction that

the judge granted is in paragraph 1 of his order and is in the following terms:

‘The Defendant is prohibited, until 3 January 2015 and within the United Kingdom only, from being directly involved in the provision of business process computer software designed for the fresh produce industry, save that the prohibition shall not prevent the Defendant from acting as a minority shareholder or debenture holder or in a business which does not compete with the Claimant.’
[17]The judge therefore fashioned an injunction which includes words of prohibition not to be found in clause 19, but which incorporated Mr Laddie’s alternative (c) as being products ‘similar to’ the proviso’s ‘any products’.

Grounds 1 and 2 of the appeal

[18]I shall take grounds 1 and 2 together, since they both go to the judge’s interpretation of clause 19’s proviso. Mr Huggett’s case is that the judge was wrong in his approach to the interpretation of clause 19. Mr Burns said that Mr Huggett was only ‘involved’ at Prophet with the Pr2 and Pr3 products, not with its other products, ProPack or Prophet QX. Whilst the judge held that something had ‘gone wrong’ with the language of the proviso, he had rejected Prophet’s various reformulations of it and had adopted his own reformulation. Whilst it is common ground that the task was to decide what clause 19 would have been understood to mean by a reasonable person having all the background knowledge available to the parties, the judge had gone astray in his interpretation of it.[19]With regard to the interpretation of restrictive covenants generally, Mr Burns recognised that there may in certain cases be a justification for applying a ‘blue pencil’ to a covenant so as to delete provisions which cause it to offend against public policy and to reflect the parties’ intention to impose a narrower restriction, but it will only be so appropriate if it is not also necessary to add to or modify what then remains. He submitted, however, that a court should not strive to interpret a covenant that is on its face too wide as if it contained an implicit limitation which could justify its imposition: see J.A. Mont (UK) Ltd v. Mills [1993] IRLR 172, at para 28, per Simon Brown LJ. Nor should a court strive to widen a clause that looks too narrow so as to provide what the court regards as effective protection. Mr Burns’s criticism of the judge’s approach is that he wrongly wrote additional words into the covenant so as to give it a wider effect than its apparent ordinary meaning.[20]Mr Burns said further that it was not open to the judge to find that something had ‘gone wrong’ with the language of the proviso to clause 19. He referred us to Chartbrook Ltd and another v. Persimmon Homes Ltd and another [2009] 1 AC 1101, in which Lord Hoffmann, at 1112, recorded that the courts do not ‘easily accept that people have made linguistic mistakes, particularly in formal documents’, and that it ‘clearly requires a strong case to persuade the court that something must have gone wrong with the language….’ Further, not only must there be such a strong case, it must further also ‘be clear what correction ought to be made to cure the mistake’: see Lord Hoffmann, at 1114, drawing on East v. Pantiles (Plant Hire) Ltd (1981) 263 EG 61, per Brightman LJ.[21]More specifically, Mr Burns submitted that the proviso was contained in a formal, lawyer-drawn clause directed at restricting an employee from engaging in the freedom to trade in competition with the employer. A court should be very cautious before finding and correcting supposed mistakes in a restriction so imposed. A restrictive covenant which is apparently drafted so that it applies more narrowly than the employer might be thought to have intended, or more widely than would be reasonable, should only be saved by judicial interpretation so as to benefit the employer in the clearest of cases. The imposition of a restrictive covenant in an employment contract is the paradigm case in which the parties are to be taken to have chosen their words with special care. If the parties’ chosen words result in a restriction of limited, or even no, effect, the explanation may be that, in striving to err on the side of enforceability rather than voidness, the result is that the employer has simply made a bad bargain. The court should be wary about mending such a bargain so as to improve it.[22]Mr Burns submitted that clause 19, interpreted according to its natural meaning, was anyway not pointless. There was no reasonable doubt that ‘any products in, or on, which [Mr Huggett] was involved’ with Prophet were Pr2 and Pr3, and those alone. He was indisputably involved with those two products, and indisputably not involved with Prophet’s other software products. Contrary to the judge’s finding, there were several third party agents which provided services in relation to Pr2 and Pr3, being agents who, according to the evidence, also introduced sales of such products and thus could be said to be involved in ‘providing’ them to their clients within the meaning of the first sentence of clause 19. Moreover, again contrary to the judge’s finding, this was known to the parties at the time of the signing of Mr Huggett’s employment contract. Such agents were listed in an induction programme in evidence, which was available to Mr Huggett before the employment contract was made and gave him actual knowledge of the agents’ existence. The sense of clause 19, and interpreting its second sentence as referring only to Pr2 and Pr3, was to prevent Mr Huggett from working for such third party agents or setting himself up as such an agent. There was no justification for the judge’s re-drafting of the second sentence of clause 19 so as to give a wider meaning to ‘any products’.[23]If, contrary to that submission, the judge was right to find that something had ‘gone wrong’ with the drafting of clause 19, Mr Burns submitted that, as Chartbrook showed, it also needed to be clear what correction was required in order to cure the mistake. The judge’s decision that the words ‘or similar thereto’ implemented the necessary correction reflected neither side’s submission and was wrong. Mr Burns said that such a correction made no commercial sense and ran directly contrary to the apparent intent of the preceding words.[24]In developing that, Mr Burns submitted that all software products produced by Prophet are broadly similar inasmuch as they are all business software packages designed for part of the fresh produce industry. Pr2 and Pr3, in which Mr Huggett was ‘involved’, are plainly ‘similar to’ other Prophet products in which he was not ‘involved’. The apparent sense of the proviso was, however, to permit him to be involved with a competitor in Prophet products in which he was notinvolved. Were it otherwise, the proviso would not have used the specific language it did linking Mr Huggett to particular products. The judge’s amendment achieved exactly the opposite result.[25]Moreover, so to widen the language of the second sentence can hardly be ‘clearly’ what was intended when its direct effect would be to purport to prevent Mr Huggett from working in a competing firm in connection with products of a type in which he had no prior involvement. That would be to widen the clause so as to offend public policy since it would give Prophet wider protection than was reasonably necessary. In addition, the judge’s reliance on the fact that the words ‘similar to’ appeared in clause 20 was flawed. Of equal, or more, significance was the fact that, whilst familiar with the phrase, the parties had chosen notto use it in clause 19.[26]Mr Laddie’s responsive submission was that to construe ‘any products’ in the second sentence of clause 19 as confined to Pr2 and Pr3 reduced clause 19 to an absurdity. The only company that ‘provides’ Pr2 and Pr3 software is Prophet so that Mr Huggett’s construction of clause 19 means that all it does is to prevent him working for Prophet, which ex hypothesi he will not be doing. Mr Burns’s reliance on the existence of the third party agents provided no escape from this. These are companies that maintain and provide training on Prophet software and occasionally introduce existing Prophet clients to new Prophet products, or refer new clients to Prophet. They do not, however, ‘provide computer software systems’, nor was it contemplated or foreseen that they would, and so they are not within the grasp of the first sentence of clause 19. It follows that Mr Huggett is free to work for them. More fundamentally, Prophet’s business interests would not be damaged by Mr Huggett working for the agents; if anything, it would benefit them. Prophet cannot sensibly be regarded as having intended to prevent Mr Huggett from working with their allies.[27]Mr Laddie submitted that the purpose of clause 19 was clear: it was directed at protecting Prophet’s legitimate interests by restricting Mr Huggett’s post-employment competitive activities. Any reasonable person would understand ‘any products’ in the second sentence as capable of bearing one of several different meanings. Its correct interpretation requires the selection of the meaning which most specifically describes those products without stripping the clause of all utility. In a case in which one meaning leads to an absurdity and another to a reasonable meaning, the latter should be favoured. Mr Laddie submitted that the correct meaning is his alternative (c), namely ‘business process computer software designed for the fresh produce industry’. This encapsulates the true nature of the products in connection with which Mr Huggett worked; and the purpose of the proviso is to prevent him from working for a competitor that provides such software to companies involved in the fresh produce industry.[28]Mr Laddie also submitted that the judge was wrong to conclude that something had gone wrong with the drafting of clause 19. The only problem was that there was an ambiguity or imprecision in the phrase ‘any products’ in its second sentence. No correction to it was required. All that was required was its interpretation in the context. If, however, this was a case in which there was an apparent mistake in the drafting, Prophet was content to adopt the judge’s approach to its correction.

Discussion and conclusion on the question of interpretation

[29]In my judgment, the natural meaning of the words ‘any products’ in their context in the clause 19 proviso is that they are referring simply to those products with which Mr Huggett was involved whilst employed at Prophet, namely Pr2 and Pr3. I do not regard that conclusion as being capable of much elaboration. Whilst he was at Prophet he was involved with those products and they are therefore the products referred to. No doubt the proviso did not refer to them in terms as Pr2 and Pr3 because, at the time of the signing of the contract, Prophet did not know with which of its products Mr Huggett would have been involved by the time he came to leave Prophet and go elsewhere. For that reason, the proviso was necessarily expressed in relatively general terms. But Mr Huggett has now left Prophet and we know that the only Prophet products with which he was involved were Pr2 and Pr3. They are the ones to which the proviso refers.[30]The question that then arises is, if so, what does the proviso achieve? Its evident purpose is to impose a limit on the unreasonably wide terms of the preceding sentence so as to achieve overall a restrictive covenant that is no wider than is reasonably necessary for the protection of Prophet’s commercial interests. If, however, the only bar that the proviso imposes is to prevent Mr Huggett from working for a competitor who provides Pr2 and/or Pr3 software systems to the fresh produce industry, I would agree with the judge and Mr Laddie that the result is an apparent absurdity, since no Prophet competitor provides Pr2 or Pr3 software to anyone. On that construction, Mr Huggett is free to work for K3. The covenant would be likely only to serve to prevent Mr Huggett from setting up his own business for the selling of Pr2 and Pr3.[31]With a view to avoiding the absurdity conclusion, Mr Burns invoked the existence of the third party agents; and he said that gives the proviso at least some real life and purpose, even if not life and purpose that will be of practical use to Prophet. In my judgment, the existence of the third party agents does not help Mr Burns’s argument. They do not ‘provide’ Pr2 or Pr3 systems and so do not fulfil the criterion imposed by the parenthetical words in the first sentence of clause 19; in any event, it is improbable that future employment with such agents was on anyone’s radar when clause 19 was created.[32]I therefore agree with the judge, as urged by Mr Laddie, that the ‘literal’ interpretation of the proviso results in its having no relevant teeth and as imposing no material restraint upon Mr Huggett. That conclusion lends force to Mr Laddie’s submission that it is therefore necessary to attach some wider meaning to the phrase ‘any products’ since the parties are not likely to have intended its language to achieve no practical commercial effect. If there is a clear choice between an interpretation of the proviso that gives rise to an apparent absurdity and one that achieves a commercially common sense result, a court will ordinarily favour the latter interpretation. And Mr Laddie urged upon us that a rational, available and sensible interpretation of ‘any products’ is his alternative (c). That is because the parties were plainly not directing their efforts in the proviso at simply identifying the products with which Mr Huggett had been involved at Prophet. What they were really doing was identifying the essential characteristics of those products, with the intention of preventing Mr Huggett working for a competitor on products with those characteristics. As for what the characteristics are, Mr Laddie said that ‘any products’ was intended to mean ‘business process software designed for the fresh produce industry’, with the qualification that by the ‘fresh produce industry’ he means only that sector of the industry dealing with fresh fruit, vegetables and cut flowers.[33]Attractive though that approach might be thought to be, and cogently though Mr Laddie advanced it, it is one that I would unhesitatingly decline to embrace. If faced with a contractual provision that can be seen to be ambiguous in meaning, with one interpretation leading to an apparent absurdity and the other to a commercially sensible solution, the court is likely to favour of the latter. Such an approach can, however, only be adopted in a case in which the language of the provision is truly ambiguous and admits of clear alternatives as to the sense the parties intended to achieve.[34]In my view, however, this is manifestly not such a case. There is, I consider, no doubt what the words of the proviso mean, namely that ‘any products’ refers only to Pr2 and Pr3. None of Mr Laddie’s alternative suggestions as to the meaning of that phrase is, in my judgment, a real runner. They amount to no more than alternative suggestions as to how the language might be read so as to give differing degrees of commercial effect to it. They are nothing other than suggested re-writings of the proviso on the basis that something has ‘gone wrong’ with its drafting and it is therefore appropriate to re-cast the parties’ chosen language with a view to giving effect to what is said to have been their likely commercial intention. Mr Laddie’s approach is thus akin to that which the judge favoured, although the judge came up with a fifth alternative meaning in addition to the mere four that Mr Laddie had suggested.[35]In my judgment the approach adopted by the judge and submitted by Mr Laddie is wrong. I regard the drafting of the proviso as unambiguously clear and I have said what its sense is. I also agree that it is likely to have little or no commercial effect, and thus to leave Prophet with, for all practical purposes, a toothless restrictive covenant. I am not, however, persuaded that this is a case in which it is clear that something has ‘gone wrong’ with the drafting of the proviso. A vital part of the context in which it falls to be construed is that it was drafted by someone who was plainly sensitive to the likely voidness of the first sentence of clause 19 if it stood alone; and sensitive, therefore, to the need for the proviso to be drawn very tightly with a view to ensuring that no wider post-employment restriction was imposed on Mr Huggett than was reasonably necessary. I would therefore approach the proviso on the basis that it was a carefully drawn piece of legal prose in which the draftsman chose his words with deliberate and specific care. That is exactly what one would expect in the drafting of a restrictive covenant; and the fact that the proviso was tacked on to clause 19 with the plain intention of saving the validity of the clause as a whole merely serves to underline that.[36]I do not, therefore, accept that this is a case in which the court can be confident that something has ‘gone wrong’ with the drafting. On the contrary, I regard the words of the proviso as reflecting exactly what the draftsman intended. Where, I accept, something probably did go wrong is that the draftsman did not think through to what extent his chosen restriction would be likely to achieve any practical benefit to Prophet upon Mr Huggett’s departure to a competitor. In other words, he did not think through the concept underlying his chosen words. If he had done so, and had realised the potential practical futility of those words, I apprehend that he would have started again. As it is, I consider that it is not possible to read the proviso and conclude from it that, although it actually achieved result A, it is clear from its language as a whole, read in its context, that the draftsman really intended to achieve different result B – or, for that matter, C, D or E.[37]I can therefore identify no basis upon which the judge was entitled to re-cast the parties’ bargain in the way he did. Mr Laddie’s submissions to us amounted to no more than a plea to the effect that, as the proviso as drafted provided no practical benefit to Prophet, the court should instead attribute to it one of four alternative meanings, preferably alternative (c). Those alternatives, viewed with a judicial eye on the enforceability of the resulting covenant, covered a spectrum ranging from that impaled on the Scylla of futility (products made by Prophet) to that engulfed in the whirlpool of Charybdis, namely, a bid for ‘any products’ as simply meaning ‘software’, which, in considering the validity of the resultant covenant, would be unlikely to pass muster for validity purposes.[38]It was not for the judge nor is it for this court to re-make the parties’ clause 19 bargain. Prophet made its clause 19 bed and it must now lie upon it. The meaning of the proviso is clear, there is no basis for interpreting it differently and it follows that Mr Huggett’s proposed activities with K3, which does not provide either Pr2 or Pr3, will involve no breach of clause 19.[39]I would allow the appeal, set aside paragraph 1 of the judge’s order and discharge the injunction. In the circumstances, I regard it as unnecessary to consider the arguments deployed before us on the other issues.

Lord Justice Lewison :

[40]I agree.

Lord Justice Christopher Clarke :

[41]I also agree.

Cited in 10 later judgments

and 1 more case