Austress-Freyssinet Pty Limited & Ors v Kowalski [2007] NSWSC 399

Austress-Freyssinet Pty Limited & Ors v Kowalski [2007] NSWSC 399

Restraint of trade clause in the shareholders agreement is enforceable as it is justified to protect the purchasing party's legitimate commercial interests, including the value of the business and investment following exercise of put/call options; restraint period and scope were negotiated and reasonable in these circumstances, subject to reduction of area and exception for publicly listed companies.

Jurisdiction
Australia
Judgment Date
27 April 2007
Procedural Posture
Equity Proceedings / Judgment After Separated Trial on Restraint Claims
Outcome
Injunction granted restraining Kowalski in accordance with modified terms of restraint; plaintiffs to bring in draft order to reflect judgment.
Legal Topics
['restraint of Trade' 'shareholders Agreement' 'injunctions']
['contract Law' 'equity'] ['restraint of Trade' 'shareholders Agreement' 'injunctions']

Case Brief

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Procedural Posture

Equity Proceedings / Judgment After Separated Trial on Restraint Claims

Legal Issues

  1. 1 ['Whether restraint of trade clause in shareholders agreement is enforceable; Whether restraint period and scope are reasonable; Whether restraint is contrary to public policy']

Ratio Decidendi

Restraint of trade clause in the shareholders agreement is enforceable as it is justified to protect the purchasing party's legitimate commercial interests, including the value of the business and investment following exercise of put/call options; restraint period and scope were negotiated and reasonable in these circumstances, subject to reduction of area and exception for publicly listed companies.

Court Disposition

Injunction granted restraining Kowalski in accordance with modified terms of restraint; plaintiffs to bring in draft order to reflect judgment.

Orders

  • ['Order restraining Kowalski from acting in breach of the restraint clause, subject to modifications: geographical scope limited to areas where business operated (Australia, New Zealand, Hong Kong, Indonesia, Malaysia, Vietnam, Philippines), not global; exclusion for shareholdings in publicly listed companies.' 'No...