Dunedin Independent Plc v Welsh [2006] ScotCS CSOH_174 (14 November 2006)

Dunedin Independent Plc v Welsh [2006] ScotCS CSOH_174 (14 November 2006)

Clause 13.2.1 is valid and enforceable but was not breached by the defender, as the evidence did not establish solicitation of clients. Clause 13.2.2 is unenforceable as an unreasonable restraint of trade because it prohibits all business dealings with former clients, extending beyond what is necessary to protect the pursuers' legitimate interests. No damages are due as no actionable breach was proved.

Citation
[2006] ScotCS CSOH_174
Parties
Pursuer: Dunedin Independent Plc; Defender: Kenneth Anderson Welsh
Jurisdiction
Scotland
Judgment Date
14 November 2006
Procedural Posture
Civil (breach of Contract) / Judgment After Proof (trial)
Outcome
Action dismissed
Legal Topics
Enforceability of Restrictive Covenants, Restraint of Trade, Solicitation of Clients, Damages for Breach of Contract
Employment Law Contract Law Restrictive Covenants Enforceability of Restrictive Covenants Restraint of Trade Solicitation of Clients Damages for Breach of Contract

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Parties

Dunedin Independent Plc

Pursuer

Kenneth Anderson Welsh

Defender

Procedural Posture

Civil (breach of Contract) / Judgment After Proof (trial)

Legal Issues

  1. 1 Are clauses 13.2.1 and 13.2.2 of the service agreement enforceable restrictive covenants?
  2. 2 Did the defender breach clause 13.2.1 by soliciting clients?
  3. 3 Is clause 13.2.2 an unreasonable restraint of trade and thus unenforceable?

Ratio Decidendi

Clause 13.2.1 is valid and enforceable but was not breached by the defender, as the evidence did not establish solicitation of clients. Clause 13.2.2 is unenforceable as an unreasonable restraint of trade because it prohibits all business dealings with former clients, extending beyond what is necessary to protect the pursuers' legitimate interests. No damages are due as no actionable breach was proved.

Court Disposition

Action dismissed