In Prophet v Huggett  ECWA Civ 1013, the Court of Appeal has overturned a recent decision of the High Court in which it had re-written a non-compete covenant to give it commercial effect. You may recall that we reported on the High Court's decision in April 2014.
As a brief reminder, the case concerned a software developer who had resigned to work for a competitor. His employer sought an injunction to restrain him from doing so by relying on a non-compete covenant in his employment contract which, on a literal reading, was ineffective. The High Court had added words to the covenant to reflect the intention of the parties. This had rendered the covenant commercially effective and had been used as basis for granting the injunction. The Court of Appeal has now held that his approach was wrong. While a court could seek to reflect the intention of the parties where a covenant was clearly ambiguous, it could not do so where the clause was simply badly drafted. The employer had given careful thought to the covenant and its meaning was "unambiguously clear". As such, it was not open to the court to "re-write the bargain" between the parties by re-drafting the covenant to make it commercially effective. The employer had drafted an unenforceable covenant and was stuck with it.
As we had reported in April 2014, the High Court's decision was very unusual and the Court of Appeal has now reaffirmed a more traditional approach to interpreting covenants. This case demonstrates how crucial it is to ensure post-termination covenants are well drafted from the outset.