Huhtamaki Australia Ltd v Botha [2004] NSWSC 386

Huhtamaki Australia Ltd v Botha [2004] NSWSC 386

There is an arguable case that a restraint of trade (non-solicitation) covenant applied to the defendant's new employment, and that the restraint—if read down under s 4(1) of the Restraints of Trade Act 1976 (NSW)—may be enforced only in relation to the specific customer, Woolworths, with whom the defendant had especially close dealings; the balance of convenience supports granting an interlocutory injunction limited to that customer, as damages would be inadequate and such targeted restraint least prejudices the defendant's current employment.

Parties
Plaintiff: Huhtamaki Australia Limited; Plaintiff: Huhtamaki (CP) Pty Limited; Defendant: Chris Botha
Jurisdiction
Australia
Judgment Date
06 May 2004
Procedural Posture
Equity Interlocutory Application / Interlocutory (application for Injunction)
Outcome
Interlocutory injunction granted restraining the defendant from soliciting Woolworths for six months; costs up to and including 14 April 2004 ordered against the plaintiffs on an indemnity basis; other costs reserved.
Legal Topics
Restraint of Trade, Non Solicitation Covenants, Interlocutory Injunctions, Enforcement of Employment Covenants
Equity Employment Law Trade and Commerce Restraint of Trade Non Solicitation Covenants Interlocutory Injunctions Enforcement of Employment Covenants

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Parties

Huhtamaki Australia Limited

Plaintiff

Huhtamaki (CP) Pty Limited

Plaintiff

Chris Botha

Defendant

Procedural Posture

Equity Interlocutory Application / Interlocutory (application for Injunction)

Legal Issues

  1. 1 Whether a restraint of trade covenant applies from the secrecy deed to new employment with plaintiff
  2. 2 Whether there is evidence of breach of the non-solicitation clause
  3. 3 Whether the restraint is valid and can be read down under s 4(1) of the Restraint of Trade Act 1976 (NSW)

Ratio Decidendi

There is an arguable case that a restraint of trade (non-solicitation) covenant applied to the defendant's new employment, and that the restraint—if read down under s 4(1) of the Restraints of Trade Act 1976 (NSW)—may be enforced only in relation to the specific customer, Woolworths, with whom the defendant had especially close dealings; the balance of convenience supports granting an interlocutory injunction limited to that customer, as damages would be inadequate and such targeted restraint least prejudices the defendant's current employment.

Court Disposition

Interlocutory injunction granted restraining the defendant from soliciting Woolworths for six months; costs up to and including 14 April 2004 ordered against the plaintiffs on an indemnity basis; other costs reserved.

Orders

  • Defendant restrained on interim basis from enticing Woolworths as a customer of the plaintiffs for six months.
  • Plaintiffs to pay the defendant's costs up to and including 14 April 2004 on the indemnity basis.