The dangers of relying on breach of the implied duty of trust and confidence to bolster a claim of fundamental breach are underlined in the high profile case of RDF Media Group v Clements. Mr Clements, husband of newsreader Kirsty Wark and a successful media executive, was bound by extensive notice and restrictive covenant provisions in the share and purchase agreement transferring his company IWC to RDF. Some months after the sale Clements gave notice and signalled his intent to join a rival company. In the course of the negotiations, the relationship between Clements and RDF catastrophically broke down with each side briefing the press in terms unflattering to the other. Clements attempted to argue that the statements being made about him were defamatory, in breach of the implied term of trust and confidence and sufficient to constitute a fundamental breach of contract such that he need no longer observe the restrictive covenants in his contract. The High Court ruled that the implied term of trust and confidence is a mutual obligation and a balance must be struck between the interests of the employer and those of the employee. In such a case, the state of the relationship at the time the breach is alleged to have taken place is relevant. Here, Mr Clements had already resigned and was on garden leave but this did not necessarily entitle RDF to embark on ‘a campaign of vilification’. However where Clements was himself in repudiatory breach by his own conduct he could not then accept any repudiation by RDF.
The High Court also ruled that the Board of RDF were entitled to discuss Clements in somewhat derogatory terms without being in breach of the implied term of trust and confidence as it is merely the brain of the company ‘thinking aloud’.