DXC Eclipse Pty Ltd v Wildsmith (No 2) [2022] NSWSC 1330

DXC Eclipse Pty Ltd v Wildsmith (No 2) [2022] NSWSC 1330

The competition restraint did not directly apply to Business Central because, properly construed in context, the defined 'Business' was limited to Microsoft Dynamics 365 products actually sold by Sable37 at completion, namely Finance and Operations and Customer Engagement. Nor was DXC Eclipse shown to face a substantial competitive threat to the Ex Sable37 Business from Will Thirty Three's proposed Business Central business. In any event, a restraint extending to Business Central was unreasonable because it protected DXC Eclipse's pre-existing Business Central business rather than goodwill purchased from Sable37. The supplier and employee solicitation injunctions sought were also not...

Jurisdiction
Australia
Judgment Date
30 September 2022
Procedural Posture
Restraint of Trade and Contract Proceedings Seeking Injunctions / Expedited Final Hearing Confined to Claims for Injunctions Following Interlocutory Injunctions
Outcome
DXC Eclipse's claims for injunctions failed; the Court indicated the claim would be dismissed and interlocutory orders discharged, but deferred final orders and adjourned the proceedings for proposed orders on costs and any stay.
Legal Topics
['vendor Restraint Covenants' 'non Competition Restraint' 'supplier Solicitation Restraint' 'employee Solicitation Restraint' 'construction of Defined Term' 'parol Evidence Rule' 'admissibility of Expert Opinion Evidence' 'reasonableness of Restraints']
['restraint of Trade' 'contract Law' 'equity' 'evidence'] ['vendor Restraint Covenants' 'non Competition Restraint' 'supplier Solicitation Restraint' 'employee Solicitation Restraint' 'construction of Defined Term' 'parol Evidence Rule' 'admissibility of Expert Opinion Evidence' 'reasonableness of Restraints']

Case Brief

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Procedural Posture

Restraint of Trade and Contract Proceedings Seeking Injunctions / Expedited Final Hearing Confined to Claims for Injunctions Following Interlocutory Injunctions

Legal Issues

  1. 1 ['Whether the competition restraint in the Securities Purchase Agreement extended, as a matter of construction, to a business supplying software solutions based on Microsoft Dynamics 365 Business Central.' "Whether Will Thirty Three's proposed Business Central business was competitive with the Ex Sable37 Business based on Finance and Operations." 'Whether a restraint preventing involvement in a Business Central solutions business was reasonable to protect goodwill acquired by DXC Eclipse.' "Whether an injunction restraining dealings with Microsoft as supplier was reasonably necessary to protect DXC Eclipse's legitimate interests." 'Whether an employee solicitation injunction extending to employees who joined after completion, and employees of related companies, was reasonable.' 'Whether opinion evidence from Mr Davis on competition between businesses was admissible and, if admissible, what weight it should receive.']

Ratio Decidendi

The competition restraint did not directly apply to Business Central because, properly construed in context, the defined 'Business' was limited to Microsoft Dynamics 365 products actually sold by Sable37 at completion, namely Finance and Operations and Customer Engagement. Nor was DXC Eclipse shown to face a substantial competitive threat to the Ex Sable37 Business from Will Thirty Three's proposed Business Central business. In any event, a restraint extending to Business Central was unreasonable because it protected DXC Eclipse's pre-existing Business Central business rather than goodwill purchased from Sable37. The supplier and employee solicitation injunctions sought were also not...

Court Disposition

DXC Eclipse's claims for injunctions failed; the Court indicated the claim would be dismissed and interlocutory orders discharged, but deferred final orders and adjourned the proceedings for proposed orders on costs and any stay.

Orders

  • ['Adjourn the proceedings to 9:30 am on 7 October 2022 or such other time as may be arranged with the Associate.' 'Direct that the parties confer on the form of orders to be made to give effect to the judgment and to deal with costs, and no later than 24 hours before the adjourned hearing, submit proposed orders for...