Aussie Home Loans v X Inc Services [2005] NSWSC 285

Aussie Home Loans v X Inc Services [2005] NSWSC 285

The restraint of trade clause prohibiting solicitation or enticement of employees or contractors for twelve months was too wide in scope and too long in duration, and not justified by confidential information or legitimate business interest; post-contractual restraints were not proven to have been incorporated into new employment contracts with the second plaintiff; accordingly, the restraints were unenforceable at common law and the claims for relief must be dismissed.

Parties
Plaintiff: Aussie Home Loans Ltd; Plaintiff: AHL Investments Pty Ltd; Defendant: X Inc Services Pty Ltd; Third Defendant: Mr Kolenda; Defendant Solicitor: Bartier Perry Solicitors; Plaintiff Solicitor: Gadens Lawyers
Jurisdiction
Australia
Judgment Date
07 April 2005
Procedural Posture
Equity / Final Judgment
Outcome
Plaintiffs' claims dismissed
Legal Topics
Restraint of Trade, Restrictive Covenant, Employment Contracts, Enforceability of Post Employment Restraints
Contract Law Employment Law Restraint of Trade Restrictive Covenant Employment Contracts Enforceability of Post Employment Restraints

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Parties

Aussie Home Loans Ltd

Plaintiff

AHL Investments Pty Ltd

Plaintiff

X Inc Services Pty Ltd

Defendant

Mr Kolenda

Third Defendant

Bartier Perry Solicitors

Defendant Solicitor

Gadens Lawyers

Plaintiff Solicitor

Procedural Posture

Equity / Final Judgment

Legal Issues

  1. 1 Whether restraint of trade clauses prohibiting solicitation or enticement of employees/contractors after employment are enforceable
  2. 2 Whether post-contractual restraints were incorporated into new employment contracts
  3. 3 Whether restraint was reasonable in scope and duration

Ratio Decidendi

The restraint of trade clause prohibiting solicitation or enticement of employees or contractors for twelve months was too wide in scope and too long in duration, and not justified by confidential information or legitimate business interest; post-contractual restraints were not proven to have been incorporated into new employment contracts with the second plaintiff; accordingly, the restraints were unenforceable at common law and the claims for relief must be dismissed.

Court Disposition

Plaintiffs' claims dismissed

Orders

  • Plaintiffs' claims for relief in the amended statement of claim dismissed.
  • Plaintiffs to pay defendants' costs.