Pearson v Arcadia Stores Guyra Limited No 1 [1935] HCA 41

Pearson v Arcadia Stores Guyra Limited No 1 [1935] HCA 41

The respondent, as assignee of the benefit of the restrictive covenant, had a prima facie right to injunction and this was not displaced by any conduct amounting to laches, acquiescence, permission, or by reason of failure to pay salary in full under the collateral service agreement; thus, the injunction restraining the appellant from breaching the covenant is affirmed.

Parties
Appellant: Oscar Randolph Pearson; Respondent: Arcadia Stores, Guyra, Ltd.
Jurisdiction
Australia
Procedural Posture
Appeal / Final Judgment (high Court of Australia), Appeal From Supreme Court of New South Wales
Outcome
Appeal dismissed with costs.
Legal Topics
Restraint of Trade, Covenant Not to Compete, Sale of Business, Injunction, Laches, Acquiescence, Employment Agreement, Collateral Contracts
Equity Contracts Commercial Law Restraint of Trade Covenant Not to Compete Sale of Business Injunction Laches +3 more

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Parties

Oscar Randolph Pearson

Appellant

Arcadia Stores, Guyra, Ltd.

Respondent

Procedural Posture

Appeal / Final Judgment (high Court of Australia), Appeal From Supreme Court of New South Wales

Legal Issues

  1. 1 Whether a covenant not to compete can be enforced when there has been partial non-payment of salary under a collateral employment contract
  2. 2 Whether conduct by the covenantee or its predecessors (including permission or acquiescence) bars enforcement of the covenant by injunction
  3. 3 Whether laches, acquiescence, or permission amount to a defensive equity preventing the grant of an injunction

Ratio Decidendi

The respondent, as assignee of the benefit of the restrictive covenant, had a prima facie right to injunction and this was not displaced by any conduct amounting to laches, acquiescence, permission, or by reason of failure to pay salary in full under the collateral service agreement; thus, the injunction restraining the appellant from breaching the covenant is affirmed.

Court Disposition

Appeal dismissed with costs.

Orders

  • Judgment of Supreme Court of New South Wales affirmed.
  • Appellant restrained by injunction from acting in contravention of the restrictive covenant.