13 June 2013 #Employment
X and Y were employed by F, a producer of food stuffs. Y set up a competitor company (Z). F made a without notice application to the High Court alleging that X had covertly passed sensitive information to Y and Z about F’s business. The High Court issued an order restricting X and Y from dealing with F’s confidential information. At a later hearing, X and Y agreed to a consent order that X was not to work in any business in competition with F, particularly Company Z, and that X was bound by a non-compete restrictive covenant. X and Y subsequently admitted breaching this consent order.
The High Court held that, although the consent order did not contain a penal notice, the undertaking given by X and Y in the consent order could be enforced by an order for committal. X and Y both admitted that they knew the consequences of the breach and had received legal advice on both the original order and the consent order.
X and Y had apologised and were family men of good character who the High Court considered to be genuinely remorseful. In spite of this, the High Court sentenced them to six months’ imprisonment. Fortunately, for X and Y, their sentences were suspended for 18 months as the time period of the consent order had lapsed.