Fadu Pty Ltd (ACN 007 815 090) v ACN 008 112 196 Pty Ltd as Trustee of the “International Linen Service Unit Trust” (No 2) [2007] FCA 2081

Fadu Pty Ltd (ACN 007 815 090) v ACN 008 112 196 Pty Ltd as Trustee of the “International Linen Service Unit Trust” (No 2) [2007] FCA 2081

The application was dismissed because s 4M of the Trade Practices Act 1976 (Cth) meant the common law restraint of trade relief could not operate concurrently with s 87(3) in the circumstances, but the cross-claim succeeded to the extent that clause 2 of the Deed Poll was varied. Because the restraints contravened s 45(2), both sides achieved real but limited success, and the proceeding was best treated as a composite matter rather than divided issue by issue; the first, fourth, seventh and eighth respondents were therefore ordered to pay 50 per cent of the applicants' costs.

Jurisdiction
Australia
Judgment Date
21 December 2007
Procedural Posture
Application and Cross Claim Concerning Restraints of Trade and Variation of Restraints Under the Trade Practices Act 1976 (cth) / Final Orders and Costs Following Reasons for Judgment
Outcome
Application dismissed; cross-claim allowed to the extent of varying clause 2 of the Deed Poll dated 30 September 2005; first, fourth, seventh and eighth respondents ordered to pay 50 per cent of the applicants' costs of the proceedings.
Legal Topics
['trade Practices Act Restraint Contravention' 'variation of Deed Poll Restraints' 'costs Discretion' 'partial Success on Application and Cross Claim']
['competition and Consumer Law' 'civil Procedure' 'costs' 'restraint of Trade'] ['trade Practices Act Restraint Contravention' 'variation of Deed Poll Restraints' 'costs Discretion' 'partial Success on Application and Cross Claim']

Case Brief

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Procedural Posture

Application and Cross Claim Concerning Restraints of Trade and Variation of Restraints Under the Trade Practices Act 1976 (cth) / Final Orders and Costs Following Reasons for Judgment

Legal Issues

  1. 1 ['Whether the Amended Application seeking relief in respect of restraints of trade at common law should be dismissed because s 4M of the Trade Practices Act 1976 (Cth) prevented concurrent operation with s 87(3) in the circumstances.' 'Whether the terms of clause 2 of the Deed Poll dated 30 September 2005 should be varied on the cross-claim.' 'What costs order should be made where both sides enjoyed a measure of success but neither succeeded on its primary case.' 'Whether orders should be made in respect of restraints in the Heads of Agreement dated 5 August 2005 when such relief was not sought in the pleadings.']

Ratio Decidendi

The application was dismissed because s 4M of the Trade Practices Act 1976 (Cth) meant the common law restraint of trade relief could not operate concurrently with s 87(3) in the circumstances, but the cross-claim succeeded to the extent that clause 2 of the Deed Poll was varied. Because the restraints contravened s 45(2), both sides achieved real but limited success, and the proceeding was best treated as a composite matter rather than divided issue by issue; the first, fourth, seventh and eighth respondents were therefore ordered to pay 50 per cent of the applicants' costs.

Court Disposition

Application dismissed; cross-claim allowed to the extent of varying clause 2 of the Deed Poll dated 30 September 2005; first, fourth, seventh and eighth respondents ordered to pay 50 per cent of the applicants' costs of the proceedings.

Orders

  • ['The application be dismissed.' "On the cross-claim, the terms of clause 2 of the Deed Poll dated 30 September 2005 be varied so that the Restraint Givers jointly and severally covenant that they will not, and will procure that their related entities do not, conduct or be involved directly or indirectly in the...