1942 (12) TMI 8

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....ir Donald B. Somervell, K. C. ) and Reginald P. Hills For the Respondent : Cyril King , K. C. and John Charlesworth JUDGMENT Viscount Simon, L.C. My Lords, in this case the Crown contends that a payment of GBP 7,000 to the respondent by the private company named William Mathwin & Son (Newcastle), Ltd., under a written agreement between them, dated October 4, 1937, was a "profit from th....

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....s by the Attorney-General and by Mr. Hills, I am of the opinion that the decision appealed against is right and that the present appeal must be dismissed. The written agreement of October 4, 1937, recites that Robson has for some years served the Company as a director and manager at a fixed salary with bonuses, and that his service is terminable by short notice on either side, but that his serv....

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.... Clauses 7 and 8 of the agreement deal with a different matter. Clause 8 binds Robson if his service in the Company is terminated before April 1, 1942, not be concerned or interested in the business of coal exporter, coal merchant, or ship broker within 50 miles of Newcastle-upon-Tyne until April 1, 1942, is reached. Clause 7 provides that in consideration of this restrictive covenant the Compa....

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....ve under the covenant is to be given not during the period of his employment, but after its termination. He is giving to the company for a sum of GBP 7,000 the benefit of a covenant which will only come into effect when the service is concluded. I agree with the Court of Appeal in the view that to treat this GBP 7,000 as a profit arising from the respondent's office is to ignore the real natur....