Prescott v Dunwoody Sports Marketing [2007] EWCA Civ 461 (17 May 2007)

Prescott v Dunwoody Sports Marketing [2007] EWCA Civ 461 (17 May 2007)

The company could not enforce the restrictive covenant in clause 5.1.1 after the partnership's dissolution, as the covenant was limited to protecting the partnership's client relationships, which ceased to exist post-dissolution. The company could enforce clause 5.1.2 regarding enticement of employees. Damages for the period after the business transfer could not automatically be awarded to the company without further enquiry as to entitlement and quantum. Substitution of the company as claimant was procedurally permissible after judgment.

Citation
[2007] EWCA Civ 461
Parties
Appellant/defendant: Mr Nicholas Prescott; Respondent/claimant: Dunwoody Sports Marketing
Jurisdiction
England and Wales
Judgment Date
17 May 2007
Procedural Posture
Civil Appeal / Appeal From Queen's Bench Division to Court of Appeal
Outcome
Appeal allowed in part
Legal Topics
Restrictive Covenants, Partnership Dissolution, Assignment of Contractual Rights, Damages for Breach of Contract, Substitution of Parties, Injunctions
Contract Law Partnership Law Employment Law Restrictive Covenants Partnership Dissolution Assignment of Contractual Rights Damages for Breach of Contract Substitution of Parties +1 more

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Parties

Mr Nicholas Prescott

Appellant/defendant

Dunwoody Sports Marketing

Respondent/claimant

Procedural Posture

Civil Appeal / Appeal From Queen's Bench Division to Court of Appeal

Legal Issues

  1. 1 Whether restrictive covenants in a partnership agreement can be enforced by a company to which the partnership business was transferred
  2. 2 Whether the substitution of the company as claimant after judgment was proper
  3. 3 Whether damages for enticement of an employee post-transfer are recoverable by the company

Ratio Decidendi

The company could not enforce the restrictive covenant in clause 5.1.1 after the partnership's dissolution, as the covenant was limited to protecting the partnership's client relationships, which ceased to exist post-dissolution. The company could enforce clause 5.1.2 regarding enticement of employees. Damages for the period after the business transfer could not automatically be awarded to the company without further enquiry as to entitlement and quantum. Substitution of the company as claimant was procedurally permissible after judgment.

Court Disposition

Appeal allowed in part

Orders

  • Injunction under clause 5.1.1 discharged
  • Judgment for damages after August 1, 2005 (£27,160) discharged