Pellet Experts Pty Ltd v Smith [2023] NSWSC 1170

Pellet Experts Pty Ltd v Smith [2023] NSWSC 1170

There is a serious question to be tried that the first defendant breached a valid and reasonable post-employment restraint, and engaged in actual or threatened misuse of the plaintiff's confidential information. The legitimate business interests of the plaintiff justify the restraint sought, and the balance of convenience favours granting interlocutory injunctions as damages would be difficult to quantify and the hardship to the defendant is limited by the short timespan. Orders for interlocutory injunctions restraining competition and use/disclosure of confidential information are justified until 31 December 2023 or further order.

Parties
Plaintiff: Pellet Experts Pty Ltd; First Defendant: Chloe Smith; Second Defendant: Fel Eur Eql Pty Ltd
Jurisdiction
Australia
Judgment Date
28 September 2023
Procedural Posture
Equity Proceeding (injunction Application) / Interlocutory; Orders on Motion for Interlocutory Injunctions
Outcome
Interlocutory injunctions granted in favour of the plaintiff. Costs reserved. Matter listed for directions.
Legal Topics
Injunctive Relief, Post Employment Restraint, Confidential Information, Employment Contracts, Restraint of Trade
Equity Employment Law Injunctive Relief Post Employment Restraint Confidential Information Employment Contracts Restraint of Trade

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Parties

Pellet Experts Pty Ltd

Plaintiff

Chloe Smith

First Defendant

Fel Eur Eql Pty Ltd

Second Defendant

Procedural Posture

Equity Proceeding (injunction Application) / Interlocutory; Orders on Motion for Interlocutory Injunctions

Legal Issues

  1. 1 Whether the first defendant breached the contractual post-employment restraint of trade clause
  2. 2 Whether the first and second defendants have breached or threaten to breach contractual obligations not to disclose or use confidential information of the plaintiff
  3. 3 Whether the restraint clause is valid and enforceable under common law and the Restraints of Trade Act 1976 (NSW)

Ratio Decidendi

There is a serious question to be tried that the first defendant breached a valid and reasonable post-employment restraint, and engaged in actual or threatened misuse of the plaintiff's confidential information. The legitimate business interests of the plaintiff justify the restraint sought, and the balance of convenience favours granting interlocutory injunctions as damages would be difficult to quantify and the hardship to the defendant is limited by the short timespan. Orders for interlocutory injunctions restraining competition and use/disclosure of confidential information are justified until 31 December 2023 or further order.

Court Disposition

Interlocutory injunctions granted in favour of the plaintiff. Costs reserved. Matter listed for directions.

Orders

  • The first defendant is restrained until 5.00pm on 31 December 2023 or further order, from engaging in any wood-based, pellet form, equine bedding business in competition with the plaintiff's business within stated geographical areas (NSW, ACT, and specified locations in VIC, SA, QLD).
  • The first and second defendants are restrained from disclosing or using confidential information of the plaintiff described in Annexure A until further order.