IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 1743 OF 2004
Coram: Hon Reyes J in Chambers
Date of Hearing: 20 August 2004
Date of Judgment: 20 August 2004
J U D G M E N T
1. I decline to grant the interlocutory injunction sought. Briefly, my reasons are as set out below.
2. As a matter of initial impression, I have serious doubts as to whether there is an arguable case that the restraint is reasonableto protect the Plaintiff’s legitimate interest. Mr. Shieh SC bases his argument of a legitimate interest on the need to safeguardthe Plaintiff’s goodwill against loss of customers by reason of the influence exerted by a yoga master. I am not satisfied on theevidence that a yoga master exerts such influence over his students in Hong Kong. Lord Hoffmann in Dawney, Day & Co. Ltd. v. D’Alphen has said that it is “common knowledge” that hairdressers command loyalty from an employer’s clients by reason of their skill in cuttingand setting hair. I do not believe that there is any such “common knowledge” in relation to Indian yoga masters in Hong Kong. Inmy view, prima facie, the position of a yoga master cannot be equated to that of a hairdresser.
3. Second, it seems to me that the restrictive clause is greater than is necessary for protecting the interest alleged. I do not thinkthe possibility of the Plaintiff opening more yoga centres during the employment term stipulated in the contract was a fanciful possibilityat the time of contracting. But if more centres were opened, the geographical restriction in cl.5(a) could be extensive in its coverage.
4. Nor do I consider that the possibility of the defendant owning shares in a company (public or private) which directly or indirectlyoperates a yoga centre is fanciful. But I do not see how the proscription against such ownership would protect the Plaintiff’s assertedlegitimate interest.
5. I see no relationship between the 3 mile radius and the legitimate interest claimed by the Plaintiff. It seems to me that the radiusis far too extensive and arbitrary.
6. I also accept Mr Kat’s argument that the 1 year restriction in relation to the total period of the employment term (24 months) seemsexcessive.
7. I do not think that any of the difficulties with the restrictive covenant which I have just highlighted can be dealt with by merelyexcising particular terms from cl.5(a).
8. Accordingly, I dismiss the Plaintiff’s application for an interim injunction.
9. I am conscious that the injunction application before me is an interlocutory hearing. I do not think that it is appropriate for metherefore to deal further with the merits of the case. I should not, however, be taken by my decision today to have conclusivelydetermined the issue of whether a final injunction should or should not be granted at the end of the trial of this action.
10. I shall now hear the parties on costs and consequential orders.
Mr Paul Shieh, SC, instructed by Messrs Minter Ellison, for the Plaintiff
Mr Nigel Kat and Miss Phyllis Loh, instructed by Messrs Herbert Smith, for the Defendant