Merlin Financial Consultants Ltd v Cooper [2014] EWHC 1196 (QB) (16 April 2014)

Merlin Financial Consultants Ltd v Cooper [2014] EWHC 1196 (QB) (16 April 2014)

Clause 7 of the Goodwill Agreement was a reasonable and enforceable restraint, entered into by parties of comparable bargaining power, protecting Merlin's legitimate business interest in the acquired client base. There was no fraudulent misrepresentation, the omission of Schedule 1 did not render the agreement unenforceable, and consideration was present. Damages should be reduced to reflect that not all clients would have stayed with Merlin even if the Defendant had complied with the restrictions.

Citation
[2014] EWHC 1196 (QB)
Parties
Claimant: Merlin Financial Consultants Limited; Defendant/part 20 Claimant: Jonathan Cooper
Jurisdiction
England and Wales
Judgment Date
16 April 2014
Procedural Posture
Civil (contractual Dispute) / High Court Trial Judgment
Outcome
Judgment for the Claimant, with damages to be calculated as per the court's guidance; Defendant's counterclaim succeeds in part and is set off against the Claimant's award.
Legal Topics
Enforceability of Restrictive Covenants, Restraint of Trade, Misrepresentation, Goodwill Agreements, Calculation of Damages, Mitigation of Loss
Contract Law Employment Law Restrictive Covenants Enforceability of Restrictive Covenants Restraint of Trade Misrepresentation Goodwill Agreements Calculation of Damages +1 more

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Parties

Merlin Financial Consultants Limited

Claimant

Jonathan Cooper

Defendant/part 20 Claimant

Procedural Posture

Civil (contractual Dispute) / High Court Trial Judgment

Legal Issues

  1. 1 Whether clause 7 of the Goodwill Agreement is vitiated by fraudulent misrepresentation
  2. 2 Whether the Goodwill Agreement is unenforceable due to omission of Schedule 1 or lack of consideration
  3. 3 Whether clause 7 is an unreasonable restraint of trade

Ratio Decidendi

Clause 7 of the Goodwill Agreement was a reasonable and enforceable restraint, entered into by parties of comparable bargaining power, protecting Merlin's legitimate business interest in the acquired client base. There was no fraudulent misrepresentation, the omission of Schedule 1 did not render the agreement unenforceable, and consideration was present. Damages should be reduced to reflect that not all clients would have stayed with Merlin even if the Defendant had complied with the restrictions.

Court Disposition

Judgment for the Claimant, with damages to be calculated as per the court's guidance; Defendant's counterclaim succeeds in part and is set off against the Claimant's award.

Orders

  • Parties to calculate and agree final damages based on 70% client retention in year 1 and 40% in year 2, starting from £204,849 less expenses.
  • Set-off of £19,788.22 due to Defendant against Claimant's damages award.