Merlin Financial Consultants Ltd v Cooper

Merlin Financial Consultants Ltd v Cooper

Clause 7 of the Goodwill Agreement was enforceable as a reasonable restraint of trade, entered into by parties of comparable bargaining power, with Merlin having a legitimate interest to protect. No fraudulent misrepresentation occurred, the absence of Schedule 1 did not render the agreement unenforceable, and consideration was provided. Merlin suffered loss, but the quantum must be reduced to reflect likely client retention rates. Mr Cooper's counterclaim for further remuneration failed except for the agreed sum, which should be set off against Merlin's claim.

Parties
Claimant: Merlin Financial Consultants Limited; Defendant: Jonathan Cooper
Jurisdiction
England and Wales
Judgment Date
16 April 2014
Procedural Posture
Civil / Final Judgment
Outcome
Judgment for the Claimant, subject to quantum adjustment and set-off.
Legal Topics
Restrictive Covenants, Restraint of Trade, Misrepresentation, Goodwill Agreements, Damages, Mitigation of Loss
Contract Law Employment Law Restrictive Covenants Restraint of Trade Misrepresentation Goodwill Agreements Damages Mitigation of Loss

Case Brief

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Parties

Merlin Financial Consultants Limited

Claimant

Jonathan Cooper

Defendant

Procedural Posture

Civil / Final 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 absence of Schedule 1 or lack of consideration
  3. 3 Whether clause 7 constitutes an unreasonable restraint of trade

Ratio Decidendi

Clause 7 of the Goodwill Agreement was enforceable as a reasonable restraint of trade, entered into by parties of comparable bargaining power, with Merlin having a legitimate interest to protect. No fraudulent misrepresentation occurred, the absence of Schedule 1 did not render the agreement unenforceable, and consideration was provided. Merlin suffered loss, but the quantum must be reduced to reflect likely client retention rates. Mr Cooper's counterclaim for further remuneration failed except for the agreed sum, which should be set off against Merlin's claim.

Court Disposition

Judgment for the Claimant, subject to quantum adjustment and set-off.

Orders

  • Counsel to agree adjusted figures for damages based on 70% client retention in year 1 and 40% in year 2.
  • Set-off of £19,788.22 due to Mr Cooper against Merlin's claim.