PROVING THINGS 127: WRITTEN CONTRACT – WHAT WRITTEN CONTRACT? APPLICATION FOR AN INJUNCTION FAILS WHEN CLAIMANT CANNOT PROVE A CONTRACT WAS EVER SIGNED

The judgment of HHJ Neil Bidder QC in Tenon FM Ltd v Cawley & Ors [2018] EWHC 1972 (QB) shows a failure by a claimant to prove the most basic of issues.  The claimant could not establish that a defendant had signed, and agreed to, the contracts upon which it was seeking to rely.

THE CASE

The claimant sought an injunction against a former employee and her current employers. It was alleged that the former employee was in breach of restrictive covenants in her written contract of employment.

THE MAJOR GAP IN THE EVIDENCE – NO WRITTEN CONTRACT

One difficulty the claimant had was that it could not produce a copy of the contract of employment that it asserted the defendant employee had signed.  Nor was there any evidence of any consideration for the claimant agreeing to restrictive covenants that the defendant asserted were incorporated into later contracts.

The judge considered the history of the contracts the claimant had with the employee defendant.

    1. Again, this contract, which the claimants contend was substituted by agreement for the 2011 Contract, is said to be effective from signature. It bears the date 4 December 2012. It is an attachment to an email of 5 December 2012 from Joanne Henderson, the then HR Manager of the claimant company to the first defendant, which reads:
You need to sign your contract! Attached is a new one. Please print off two copies and sign both“.
  1. No response to that has been, apparently, found. The contract was attached. It was not on Miss Cawley’s personnel file, unlike, I infer, the other contracts. Neither party has obtained a statement from Joanne Henderson, who has now left the claimant company. She left last year. She appears to have been an experienced HR manager. Presumably she must have gained some pension rights with the claimant company. It is, I have to say, a matter of surprise that with the substantial resources available to the claimant company and the large solicitors firm instructed by them that I have had no explanation of why she has not been traced, if it is the case that she has not been traced, or indeed what efforts have been made to trace her
THE ABSENCE OF EVIDENCE
  1. Having summarised the evidence I now turn to the issues before me. First, has the claimant established that there is a serious question to be tried and that it will be likely to establish at trial that the restrictive covenants actually applied to the first defendant, to Miss Cawley? If it has not then the application for further injunctive relief against all defendants fails because the case against D2 to 4 is parasitic on the establishment of restrictive covenants binding D1.
  2. In my judgment, the claimant fails on this fundamental issue as a result of a combination of factors, namely the absence of a signed contract and the absence of any evidence – that there was any valuable consideration, let alone adequate consideration, given for Miss Cawley entering into either the 2011 or 2012 Contracts containing more onerous restrictive covenants than were present even in the 2008 Contract.
  3. It is, in my judgment, quite remarkable that a substantial undertaking such as the claimant company, with an HR department and an experienced HR manager in Joanne Henderson with personnel files are unable to locate even one signed copy of the employment contract with Miss Cawley, who started at a salary of £45,000 and ended with a salary of £90,000. The very obvious conclusion, namely that she refused to sign contracts containing onerous and adverse terms, is her positive evidence in her statement of 28 June 2018 at paragraphs 11(a) and (b), 16, 18, 19 and 20. I accept, of course, that she now may have a lively interest in making those statements, and in her careful and accurate submissions to me Miss Gupta, (learned counsel for the claimant) rightly points out that there are reasons to doubt, at least in part, Miss Cawley’s credibility.
  4. For example, it is unlikely, as Miss Cawley says in her witness statement, that when she handed her resignation letter to Mr King (the CEO) that she had told him that her reason for leaving was because of his arrogant attitude and approach. First, that simply does not chime with the tone of the letter. Second, it seems to me to be inconceivable that Mr King would not have put her on garden leave then instead of, as he says, believing that she would amicably work through her notice period and also would have asked her to attend SLT meetings.
  5. Second, Miss Gupta suggests that Miss Cawley’s email response at page 351 to Miss Freitas informing her that she was not taking up a job offer with B38 — in which Miss Freitas informs her that she was not taking up a job offer with B38 is inconsistent with her evidence that she had had a phone call with Miss Freitas in which Miss Freitas had told her that she had sent her an email which Miss Cawley said that she had not received, to be informed by Miss Freitas that she had sent it to the B38 email address. Miss Cawley’s evidence was that it was only after this that she asked Mr Phillips of B38 to activate the email address. Her email response is clearly to the email she said she had not got because the account had not been the activated. Again, arguably as Miss Gupta properly submits, this affects her credibility.
  6. However, even bearing those caveats in mind, her positive evidence that she had refused to sign the contracts containing restrictive covenants is only met by inference from various items of evidence, none of which I consider is remotely likely to persuade a court that she was content to work on the basis of the 2011 or 2012 Contracts despite not signing them nor that the claimant company, if it really insisted on having the protection of the restrictive covenants would not have explicitly warned her that if she did not sign there would be sanctions. I do not consider it is a persuasive inference that she had agreed to the 2012 Contract, complete with restrictive covenants, merely because she asked Joanne Henderson to remove from it a clause allowing the claimant to terminate her contract for eight consecutive weeks of sick absence. She did not sign the amended contract. Neither do I consider her request for a copy of her contract from the head of payroll on or about 19 March 2018 to bear the heavy inference that Miss Gupta invites me to infer that it bears and which undoubtedly she would invite a trial judge to find as well.
  7. There are certainly emails from Joanne Henderson asking her to sign her contract. What is absent in the trawl of emails conducted by the claimant is any significant response by Miss Cawley. It is in that context that it is particularly odd that there is not from the claimant either a statement of rebuttal from Miss Henderson or any memo or aide memoire from her from the first defendant’s personnel file contradicting the first defendant’s account, or at the very least some explanation of why it has not proved possible to contact her. If anyone has contact details for her it will surely be the claimant company. I do not draw any strong inference from the absence of a statement – that would be speculating – but merely note the weakness of the claimant’s case on the contractual incorporation of the restrictive covenants by means of a signed contract as opposed to the very definite evidence of Miss Cawley.

THE RESULT

The judge refused the claimant’s application for an injunction.

  1. The primary reasons for my refusal are, however, the issues of the inability of the claimant to establish the contractual applicability to the first defendant of the 2012 restrictive covenants, and first and foremost in the absence of any evidence that consideration was given referable to the variation of the employment contract either in 2011 or 2012 and the incorporation into that contract of onerous restrictive covenants.