Former chartered surveyor partner successfully appeals breach of interdict ruling

A former partner in a property letting department of a firm of chartered surveyors who was interdicted from soliciting business from any company clients with which he had dealings after he set up a rival agency has successfully appealed against a decision that he was in breach of the court’s order.

The Inner House of the Court of Session ruled that chartered surveyors J & E Shepherd had failed to prove that Paul Letley had had previous dealings with the client in question and therefore the sheriff was not entitled to find the defender in breach of interdict.

Interim interdict

Lord Brodie, Lord Drummond Young and Lady Clark of Calton heard that the pursuers, J & E Shepherd, operated as part of their business a property letting department which was headed up by the defender, Mr Letley, who was a fixed-profit-sharing partner in the firm from 1998 until 1 June 2011.

However, the Mr Letley also had other business interests, including Pavillion Properties, a property letting and management agency which he founded, and he had contracted with J & E Shepherd to provide property management services to him and the other business entities in which he had an interest.

In April and May 2011 J & E Shepherd proposed to transfer the operation of their residential property letting department to a third party, Direct Lettings, and on 10 June 2011, an interim interdict was granted against Mr Letley for the period of one year from 1 June 2011 from “canvassing or soliciting the custom of any person, firm or company with which he had dealings during the period of partnership of the firm”.

The clients with whom Mr Letley had had dealings during his partnership with J & E Shepherd included First London & Scottish Real Estate L.L.P., Caledonian Investments No. 1 L.L.P., RNP Properties, Letley & Braidwood, Letley & Williamson, Letley & Cheverenko, Letley Beaton & Williamson, Letley & Huyton, Springfield Group, Greenwich Residential and Mrs. J.P. Letley and Dudhope Properties Ltd.

But J & E Shepherd raised proceedings for breach of interdict in January 2013, and Mr Letley was found to be in breach of the interim interdict to the extent that he solicited the custom of a Dr. Sally Keenan, a client of J & E Shepherd, by email dated 26 June 2011.

The finding was upheld by the Sheriff Principal but Mr Letley appealed against the decision.

Findings in fact

On behalf of the appellant, Michael Howlin QC submitted that in making his findings in fact, the sheriff failed to have regard to the precise terms of the interdict, which operated by reference to persons with whom the appellant had had “dealings” and not by reference to “clients”.

The contention for Mr Letley and appellant was that the interim interdict prohibited him from “canvassing or soliciting the custom of any person, firm or company with which he had dealings during the period of partnership”.

Thus, in order to establish breach of the order, it was necessary for J & E Shepherd to prove that Mr Letley had canvassed or solicited a person, firm or company and that that person, firm or company was a person, firm or company with which he had had dealings.

That had not been done, as appeared from the sheriff’s findings and facts; there was no finding that Dr Keenan was a person with whom Mr Letley had had dealings. Accordingly, it was argued that the sheriff had not been entitled to find the defender in breach of interdict.

Delivering the opinion of the court Lord Brodie said: “In a summary application the sheriff’s decision is effectively final on the facts and in order to discover what facts he has accepted as having been established one looks to what he states as his findings. It follows that if the sheriff’s decision is to withstand scrutiny there must be sufficient in his findings in fact to justify that decision.”

He added: “It is to be borne in mind that these proceedings are quasi-criminal in nature…In the present case, if the defender was to be found in breach of interdict it was necessary to establish that Dr Keenan was someone with whom the defender had had dealings. Otherwise, the interim interdict did not prevent him soliciting her custom.

“In his finding in fact (10) the sheriff found the defender to have had dealings with a number of legal and natural persons. Dr Keenan is not included in the list…We shall accordingly allow the appeal.”