Hentley Garments Ltd. v. J. S. A. Fernando (Ranasinghe, J.)
Weeramantry: Law of Contracts, sec 396, at page 384,summarises the position thus: “therefore all contracts in restraint oftrade are prima facie void, and each case must be examined havingregard to its special circumstances to consider whether or not therestraint is justified. The only ground of justification is that therestraint is reasonable having regard to the interests of bothcontracting parties as well as to the interests of the public”.
The Petitioner has, in the plaint filed before the District Court,averred that:
“(11). (a) The defendant in breach of the contract dated 17.10.77has taken up employment with a garmentmanufacturing business, Aitken Spence GarmentsLimited which is a competitor of the Plaintiff.
The defendant after specialised training and skill in theday to day functioning, production, efficiency,supervision, co-ordination and control of the working ofthe manufacturing of garments left the services of theplaintiff in breach of his said contract with the plaintiffand joined another garment manufacturing business.

14. The Plaintiff further pleads that grave and irreparable loss anddamage will be caused to the Plaintiff unless the defendant isrestricted by an interim injunction from being in breach of the saidcontract dated 17.10.77 marked “D”.
At the hearing before this Court learned Queen’s Counsel on bothsides referred this Court to the evidence placed before the learnedDistrict Judge on behalf of the parties.
The defendant in the course of his evidence stated, inter alia, inexamination-in-chief:-
“a-jS-SgzaaO e5©oa>® Ozn 8®oea8s> eaazstSg ®o®zr©eJ cs®acos® ®o za©gzg edOcs €)ed cti&® zaazn fp«easc3zjf <s6% zaoa gzsfzna® iagO dOoSskaa^zn «f»eacs® d8 eddza 88ea zo8»j3 epOeMzn zacSznOa^ Scao a>co
cs>lS®a. efjg® zs>j8® zsed ®® eznoeS®ecrf seiOcs dQ6 SSs®zrt
ogSzsf ®@ zaegf zagzsf zac5@zrf 83 £>j£) szaD3e3®ca. Saefe®Q

Sri Lanka Law Reports
(1980) 2 Sri L.R.

Hentley Garments Ltd. v. J. S. A. Fernando (Ranasinghe, J.)

On a consideration of the principles set out in the cases dealingwith contracts in restraint of trade referred to above, it would appearthat, although a restrictive covenant in a contract of service would beconsidered to be prima facie void, yet, it is open to the employer toshow that, having regard to the particular facts and circumstances inwhich the said agreement has been entered into, the said agreementis reasonable. The employer would therefore have to place beforecourt all the evidence upon which he relies to establish thereasonableness of the covenants complained against. In such a casethe reasonableness of such a restrictive covenant will have to bedecided by court upon a consideration of not only the entirety of theevidence which the parties desire to and are entitled to place before

Sri Lanka Law Reports
(1980) 2 Sri L.R.
court but also the principles of law relevant to this matter. Such a finaldecision cannot and must not be taken at an inquiry into anapplication for an interim injunction, the nature and the scope ofwhich is, as set out by the principles referred to earlier, very limited.
On a consideration of the averments set out in the plaint and theexhibits annexed to the plaint and those items of oral evidence led atthe inquiry, and referred to earlier, it appears to me that there is aserious question to be tried at the trial and that this is not a case wherethe material available to the learned District Judge, at the time the orderin question was made, showed unmistakably that there was “no casefor an injunction at all” (31 N.L.R. p. 33) or even “that there is probablyno right of the plaintiff which can be violated” (67 N.L.R. p. 448).
The views expressed by the learned District Judge in his orderdated 22.6.78, referred to earlier, show that the learned DistrictJudge has arrived at a finding on the main and the most crucialmatter in which the parties are at variance, viz: whether clause (3) ofthe document “D” referred to earlier, constituted a restraint on therespondent's freedom of employment, and, if so, whether suchrestriction is reasonable. Such a decision, to say the least, is not onlypremature, but also unfair particularly by the employer who would nothave placed at such an inquiry all the evidence which he would haveplaced at the trial itself.
I shall now proceed to consider whether the balance ofconvenience lies in favour of granting or refusing the interiminjunction. This principle has been discussed by Lord Diplock atpage 510 (f to i) in the judgment in the American Cyanamid case(supra). In the local case of Yakkaduwe Sri Pragnarama Thero v.Minister of Education}'® (H.N.G.) Fernando, C.J. too considered thisprinciple. The loss which the respondent would sustain in the eventof his ultimately succeeding at the trial, if he were now restrained byan interim injunction, would, in my opinion, be adequately met by anorder for damages against the Petitioner. The extent of any such losssustained by the respondent is capable of determination with nearprecision. It would, on the other hand, be very difficult to assess thedamages that would and could have been suffered by the Petitioneras a result of the respondent’s continuance of what he is beingsought to be prevented from doing, if the Petitioner was to succeedin establishing its rights at the trial.
According to clause (3) of the document “D” referred to earlier, therespondent has been confirmed in his post as from 1.10.77; andaccordingly the period of three years during which he could, if at all,be restrained in terms of the said clause would expire on 1.10.1980.
Hentley Garments Ltd. w. J. S. A. Fernando (Ranasinghe, J.)
As already stated the Petitioner instituted these proceedings on8.3.1978. The order sought to be revised was made on 22.6.78; andthe present application to this Court was made on 4.7.78. In the caseof Marian White Ltd. v. Francis,'1141 the Court of Appeal in England did,in a similar application, proceed to grant to the petitioner the reliefsought for (which was a declaration) even though by that time theperiod, during which the restrictive clause was to be in operation,had long expired. In these circumstances, even though there nowremains only a period of about three months, it appears to me thatthe Petitioner should not be denied on this ground alone the relief thePetitioner has moved for, as far back as March, 1978.
There is just one other matter I would like to refer to. The facts andcircumstances of this case seem to me to show that this is a casewhere the learned District Judge should have followed theobservations of (H.N.G.) Fernando, C.J. in the Perera case (supra)and dealt with the matter of the application for an injunction and thesubstantive dispute at one and the same time.
For the reasons set out above I make order setting aside the Ordermade by the learned District Judge on 22.6.80 dismissing theapplication for an interim injunction; and I direct that an interiminjunction, as prayed for in paragraph (c) of the plaint, be issued tobe in operation till 1.10.1977 upon the petitioner depositing, assecurity, a sum of Rs. 2,500/- in cash.
The parties are to bear their costs of this application. The costs ofthe inquiry held in the District Court are to abide the final decision ofthe action instituted by the Petitioner (the plaintiff) in the District Court.
RODRIGO, J. -1 agree.Appeal allowed.