Huws Gray Limited v Daniel Gentleman [2026] EWHC 973 (Comm)

[2026] EWHC 973 (Comm)Case No CC-2026-BRS-000004IN THE HIGH COURT OF JUSTICEVenue BUSINESS AND PROPERTY COURTS IN BRISTOLCIRCUIT COMMERCIAL COURT (KBD)Venue Bristol Civil and Family Justice Centre2 Redcliff StVenue Bristol BS1 6GRDate Wednesday, 25 February 2026
Before
HHJ PAUL MATTHEWS(Sitting as a Judge of the High Court)
Between
HUWS GRAY LIMITEDClaimantDANIEL GENTLEMANDefendant
MR DOUGLAS LEACH (instructed by Blake Morgan LLP) appeared for ClaimantMR DANIEL TATTON-BROWN KC (instructed by Barrass Whiting LLP) appeared for Defendant
JUDGMENT(As Approved)
Digital Transcription by Epiq Europe Ltd,Lower Ground, 46 Chancery Lane, London WC2A 1JEWeb: www.epiqglobal.com/en-gb/Email: civil@epiqglobal.co.uk(Official Shorthand Writers to the Court)This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.WARNING: reporting restrictions may apply to the contents transcribed in this document, particularly if the case concerned a sexual offence or involved a child. Reporting restrictions prohibit the publication of the applicable information to the public or any section of the public, in writing, in a broadcast or by means of the internet, including social media. Anyone who receives a copy of this transcript is responsible in law for making sure that applicable restrictions are not breached. A person who breaches a reporting restriction is liable to a fine and/or imprisonment. For guidance on whether reporting restrictions apply, and to what information, ask at the court office or take legal advice.

JUDGE PAUL MATTHEWS:

[1]This is an application by the claimant by notice dated 18 February 2026 for an interim injunction to restrain the defendant from breaching restrictive covenants in his employment contract after the termination of that employment. It is supported by a witness statement made by Christopher Constable, also dated 18 February 2026, together with one exhibit. Mr Constable was the defendant's former line manager at the claimant company. The application is opposed by a witness statement made by the defendant together with one exhibit, dated 24 February 2026. I have obviously read both those witness statements.[2]The application that is made before me arises in a claim whose claim form was also issued on 18 February 2026, seeking a final injunction in relation to the restrictive covenants, and also the delivery up of confidential information to the claimant. Particulars of the claim were served at the same time as the claim form.[3]A very brief chronology to make my judgment intelligible is as follows. On 16 October 2023, the defendant began his employment with the claimant as an area sales manager. The claimant is a builder's merchant with approximately 250 branches nationwide. The defendant was originally employed for the area covering the Swindon, Cirencester, and Malmsbury branches, although later on this was changed to Swindon, Newbury, and Cirencester branches.[4]On 27 November 2025, so just over two years later, the defendant resigned his position, explaining that he was going to, or was intending to, join a company called MKM, which was another builder's merchant, and which competed with the claimant. He was immediately placed on garden leave for about a month. On 23 December 2025, his employment was terminated.[5]In January 2026, it appears that the defendant joined MKM, but it is not in evidence before me whereabouts in the country that he works. There is currently no office in Swindon for MKM, and Swindon is where the defendant lives. But a branch is due to open, according to publicity which I have seen in the evidence before me, in Swindon next month, March 2026. The claimant said that, on 6 January 2026, it realised that the defendant had been contacting some of the claimant's customers, because they told the claimant so. I should say that those customers have not been identified for the purposes of these proceedings, at any rate so far.[6]On 28 January 2026, the solicitors for the claimant wrote a letter to the defendant complaining of alleged breaches of his restrictive covenants in the employment contract. As I understand the matter, there has never been a response directly from the defendant in relation to that. On 30 January, the solicitors for the claimant also wrote a letter to MKM, the third party if you like, although not formally a party to these proceedings, pointing out what was going on. On 10 February, that is only two weeks ago, MKM sent an email to the claimant's solicitors asking questions about the scope of the restrictive covenants. On 11th, that is the next day, responses were sent by the claimant's solicitors to MKM.[7]On 13 February, the defendant's solicitors came on the scene, and wrote an email to the claimant's solicitors, and then there was a correspondence on 16 February. It appeared to the claimant that matters were not going to be resolved, and so, on 18 February, these proceedings were issued. I assume that they were prepared a day or two before that.[8]I bear in mind, of course, that this is not the trial of the claim. This is simply an application for an interim injunction. The test that should normally be applied in such a case is that laid down by the House of Lords in American Cyanamid Co v Ethicon Ltd [1975] AC 396. The test, as set out by Lord Diplock and refined in subsequent cases, runs like this: first of all, is there a serious issue to be tried? It is not necessary to show any greater degree of likelihood of success at this point than a serious issue to be tried.[9]Then the second stage is this: if there is a serious issue to be tried, would damages be an adequate remedy for the claimant if the claimant won at trial but had not had an interim injunction in the meantime? And, if they would, then there is no need to grant an injunction. If, on the other hand, they would not be adequate, then ask: would damages be an adequate compensation for the defendant if injunction were granted, and yet at trial it was held that the claimant was not entitled to the injunction.[10]And then lastly, if damages would be an inadequate remedy on both sides, where does the balance of convenience lie as between the parties? And it is clear, and I think accepted on both sides, that the court should not, in an application like this attempt to resolve complex issues of fact or law, although to some extent at least, relative strengths of the parties' cases can be taken into account, and I was referred in particular to the judgment of Laddie J in Series 5 Software Ltd v Clarke [1996] 1 All ER 853.[11]But it is also clear that the principles which I have just set out will be modified if either the relief which is sought on the interim application will in effect dispose of the whole claim, or if, in a case of a restrictive covenant, the period for which restraint is claimed has already expired, or substantially expired. And that is clear from the judgment of Staughton LJ in Lansing Linde Ltd v Kerr [1991] 1 WLR 251, 258. In the present case, it appears that a speedy trial could be listed in this case for late to end April. The covenant itself would expire on 27 May.[12]Now I turn to the question of the covenant in this case. The covenant is set out at some length in Clause 33 of the defendant's contract of employment. It is divided into a number of different sections, and it begins with some general words in which the parties agree that all of this is reasonable and necessary for the protection of the claimant's interests. The sections into which it is then divided are:(i) the non-solicitation of other employees,(ii) non-competition with the claimant's business,(iii) non-solicitation of, and not dealing with, the claimant's customers,(iv) non-interference with suppliers,(v) certain requirements about notification,(vi) the removal of social media contacts, and then(vii) some general provisions at the end.[13]The part that is relevant to this application is the part dealing with non-competition. I will read this out. It falls into two parts. The first part, which is the longer part, is the general prohibition, and the second part, which is shorter, is what everyone today has called the "carve-out". We need to consider both of them:
"You undertake that during the period of your employment with the Company and for six (6) months from the termination of your employment with the Company (however that comes about) you will not, without prior written consent of the Company, engage or be concerned or interested, whether directly or indirectly, and whether as principal, partner, employee, advisor, agent, consultant, or otherwise, in any trade or business that competes or is preparing to compete with any business carried on by the Company or any Group Company, including (but not limited to) builders merchants supplies, or such other future projects or activities of the Company as the Company, acting reasonably, considers from time to time to be a material part of the Company's or any Group Company's business (“Competing Business”), where such Competing Business is located within 20 miles of the Company's branch or branches for which you had responsibility in the six (6) months prior to the termination of your employment."
That is the prohibition.[14]The carve-out reads as follows:
"You shall be free to engage in any business so far as your duties and work shall relate exclusively to work of a kind which is not related to any area in which the Company has developed Confidential Information and in which you have not been involved during your employment by the Company."
[15]Turning then to the position of the defendant, the defendant says that this covenant, or that part of this covenant, is plainly unenforceable because it is not reasonably be necessary for the protection of the defendant's interests. And there are two main points, with a third subsidiary point. The two main points are these: first of all, the prohibition part of the clause is far too wide, and the carve-out provision in the other part of the clause does not save it, because it does not restrict it sufficiently. The second point which the defendant puts forward is based on the decision of Calver J in Quilter Private Client Advisers Ltd v Falconer [2022] EWHC 177 (QB), [2022] IRLR 227. It is that it is not reasonably necessary to provide, as this clause does, that a person who might be dismissed after only two weeks with one week's notice should be restrained for 6 months. Those are the two main points which the defendant relies on to show that the covenant is plainly unenforceable.[16]There is a third point which concerns the area to which the effect of the prohibition is connected. In the present case, there is a restriction for a radius of 20 miles around the branches for which the defendant had responsibility. What the defendant says here is that it is the claimant that has the burden of proof to show that this area restriction is reasonably necessary, but, unfortunately for the claimant, it has not adduced any evidence to show that it is, and therefore that part of the claim must fail. And, as a kind of underlining of the point being made about the prohibition, it is submitted by the defendant that a non-dealing covenant, such as in fact we have, although we did not have any submissions particularly about its scope, would be a sufficient protection in a case like this.[17]So, the first point is that it is plainly unenforceable. The second point is that, even if it is not plainly unenforceable, it is a case that for falls within the Lansing Linde criteria, which I referred to earlier, where the court will take into account the weakness of the claim to show that there really is not anything to argue for, and will therefore refuse the injunction.[18]I will deal with those points in turn. The first point that I am going to deal with is the question of the construction of the clause. And, in looking at this, I bear in mind what Foskett J said in Tradition Financial Services Ltd v Gamberoni & Ors [2017] EWHC 768 (QB), [2017] IRLR 698, at [24]. In summary, he said that every case is fact-specific, and so citing other cases to show what is acceptable cannot be determinative, because the facts of each case are different.[19]What I add to that is that construction is an exercise which is affected very much by the context in which the words are to be found, and the context will not only require looking at other parts of the contract or other contractual or other documents, but in many cases will also require evidence, and evidence is of course best dealt with at trial, where it can be tested and witnesses cross-examined.[20]In my judgement, I should determine the construction of a document like this on an interim application only where I am satisfied that the construction would not be affected by whatever came out at the trial. I also was referred to a passage from the judgment of Lady Wolffe in the Court of Session in Scotland in a case called Apex Resources Ltd v McDougall [2021] SLT 781, where she said that Quilter was decided on its own facts. And I also bear in mind what she did not say, that it was also a case where the decision was rendered after a trial, and not after an interlocutory application.[21]On the construction of this clause, the defendant says there are two particular problems with the “non-compete” part of Clause 33. The first point is that the words which are italicised in the skeleton, but which are the words from "including but not limited to" through to "Group Company's business", expand the scope of the prohibition to an unreasonably wide extent. That, I think, is the weaker of the problems.[22]The stronger one, or the one on which most reliance is placed by the defendant, is that the covenant prevents, or in its current form would prevent, the defendant working in a completely new role for a competitor, one he had not done before and which did not do any harm, could not do any harm to the claimant, and that the carve-out does not work and does not in particular restrain or restrict the prohibition sufficiently to what is reasonably necessary to protect the claimant's interests.[23]As to the first point about the words in italics which are said to expand the scope of the prohibition, I disagree. In my judgment, those italicised words are controlled by the words which come before that, that is, "trade or business that competes or is preparing to compete with any business carried on by the claimant or any claimant group company". In my judgment, the words following those words can extend only to competing businesses, not to any business. So, I disagree with the first proposition put forward by the defendant.[24]On the second one, on which, as I say, the defendant relied more strongly, the matter is, I think, rather more difficult. The carve-out I have divided in my mind into four parts for easier analysis. The first part is the opening words:
"You shall be free to engage in any business so far as your duties and work shall relate exclusively to work of a kind"
. That is the first part. The second part is the words:
"which is not related to any area in which the company has developed confidential information"
. The third part is the word "and". And the fourth part is the remainder, the words:
"in which you have not been involved during your employment by the company."
[25]The question of construction, as it seems to me, is this: does this carve-out confer two freedoms to engage in business, or only one? Is it freedom to engage in any business which satisfies both Part 2 and Part 4 cumulatively? Or is it(i) freedom to engage in any business satisfying Part 2, and(ii) freedom to engage in any business satisfying Part 4? To put it another way, does the word "and" in Part 3 mean "or"?[26]This is obviously a question of construction, and there have been many cases in which the court has been faced with exactly this issue. None of them, of course, can be determinative because the facts are always different. One that I remember, simply because I learned it many years ago as a student, is Chichester Diocesan Board of Finance (Incorporated) v Simpson [1944] AC 341, HL. This was a case about the failure of certain charitable trusts, in which the will said "charitable or benevolent" rather than "charitable and benevolent", and the question was whether "and" meant "or", or "or" meant "and".[27]Now, I have no doubt that this carve-out, indeed the whole clause, could have been better and more clearly drafted than it has been. But the fact that it has not been drafted more clearly does not absolve me from considering the question. And, as I understand the law, if the context and so on in which I find these words shows that the meaning of these words is ambiguous, then the court may choose the meaning which gives validity to the clause rather than the meaning which avoids it. We see that indeed from Calver J himself in Quilter at [170]. We also see it, as it happens, at page 367 in the Chichester Board of Finance case as well, but that, I think, is irrelevant to the case before us.[28]On the documents alone before me, I think there is an ambiguity. Certainly, I do not consider that it is clear enough to say we do not need a trial to give us evidence of the context, and so on. So, in my judgment, I cannot say at this stage that the clause is not reasonably necessary because it goes too wide. In other words, I cannot stop the case now on that basis.[29]The second point made by the defendant is the Quilter point, that it is not reasonably necessary to provide, as this clause does, that a person who might be sacked after only two weeks with one week's notice should be restrained for the whole 6 months. I accept that, on the facts of Quilter, that was, or generally it may have been so, I think the result may have been different, but it does not matter. But as Lady Wolffe said in the Apex case, Quilter was a case decided on its particular facts. And of course, as Foskett J said in Gamberoni, all these cases are fact sensitive.[30]In the present case, the fact is that the defendant had access to the claimant's confidential information from day one. I cannot say now that it is unreasonable for the claimant to seek to protect that information for 6 months. I accept, of course, that the claimant is not at the top of the tree, but he is not at the bottom of it either, and he has, or has had, information that could be misused if he chose to do so. I am not, of course, suggesting that he would or has. We need evidence and cross-examination as well as disclosure at trial, to know whether this is unreasonably wide in all the circumstances.[31]So, I am not impressed by the Quilter point in the present case. The third point, which I have left rather to the end because it is less important, is the area restriction point. I do accept, of course, that the claimant has not yet put forward very much, if any, evidence to justify a restraint on an area covering 20 miles around the branches. But this is not absurdly wide. This is not the whole of the world, or the whole of Europe, or even the whole of the United Kingdom. It is obviously a matter, as it seems to me, for evidence at the trial to see what is reasonably necessary. It is not appropriate to hold now that this must be more than reasonably necessary to protect the interests of the claimant. So, for all those reasons, I think that there is a serious issue to be tried, subject to the Lansing Linde point.[32]So far as that point is concerned, it seems to be plain that the new branch of the third party, MKM, will not be open until next month, and the restraint will run out at the end of May. That is a maximum of about three months of the opening, the first three months of the opening of that branch. And a speedy trial, if it is resolved by the end of April, will still result in a significant part of the five-month period of restraint being there to be fought over. (I say five months because it was reduced from six to five because of the garden leave.) I do not accept that this hearing either disposes of the claim or means that there is substantially no point in it. In my judgment, there is a substantial point to the litigation.[33]So, I return to the American Cyanamid test. There is a serious issue to be tried. In my judgment, damages would be inadequate for the claimant because it would be impossible to ascertain what the loss was. I am not sure whether damages would be inadequate for the defendant. I do accept that, if he has a longer commute, that is disadvantageous, but on the other hand, he did go into this with his eyes open, and the claimant's solicitors did write him a letter pointing out the effect of the clause. So, as I say, I am not sure whether damages would be inadequate for the defendant, but to my mind, it is clear that the balance of convenience lies here in keeping the status quo, and so therefore I will grant the injunction. Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof. Lower Ground, 46 Chancery Lane, London WC2A 1JE Email: civil@epiqglobal.co.uk