Provida Pty Limited v Sharpe [2012] NSWSC 1041

Provida Pty Limited v Sharpe [2012] NSWSC 1041

The employment contract's restraint provisions were valid to the extent they protected Provida Pty Limited's legitimate interests in confidential information and client connections. The phrase 'directly or indirectly' trading in competition included providing services through Magni Pty Ltd, given the circumstances. However, the contract's geographic and temporal scope was too wide; so, the restraint was limited to New South Wales, Victoria, and Queensland, and the post-employment restraint period was reduced to ten months. The non-solicitation restraint was also narrowed to apply only to clients to whom the first defendant had provided services. Section 51(2)(b) of the Competition and...

Parties
Plaintiff: Provida Pty Limited; First Defendant: Ashley Sharpe; Second Defendant: ITW Australis Pty Limited; Third Defendant: CFCL Australia Pty Limited; Fourth Defendant: Magni Pty Limited
Jurisdiction
Australia
Judgment Date
29 August 2012
Procedural Posture
Separate Question / Decision on Separate Issues Prior to Further Hearing
Outcome
Partly in favour of plaintiff, partly in favour of first defendant
Legal Topics
Restraint of Trade, Confidential Information, Proper Law of Contract, Cartel Provisions, Restraint Validity
Contract Employment Equity Conflict of Laws Statutory Interpretation Restraint of Trade Confidential Information Proper Law of Contract +2 more

Case Brief

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Parties

Provida Pty Limited

Plaintiff

Ashley Sharpe

First Defendant

ITW Australis Pty Limited

Second Defendant

CFCL Australia Pty Limited

Third Defendant

Magni Pty Limited

Fourth Defendant

Procedural Posture

Separate Question / Decision on Separate Issues Prior to Further Hearing

Legal Issues

  1. 1 Whether 'directly or indirectly' trading in competition covers providing services through a new company
  2. 2 Whether employer has a legitimate protectable interest to justify the restraint
  3. 3 Whether the Restraints of Trade Act 1976 (NSW) applies

Ratio Decidendi

The employment contract's restraint provisions were valid to the extent they protected Provida Pty Limited's legitimate interests in confidential information and client connections. The phrase 'directly or indirectly' trading in competition included providing services through Magni Pty Ltd, given the circumstances. However, the contract's geographic and temporal scope was too wide; so, the restraint was limited to New South Wales, Victoria, and Queensland, and the post-employment restraint period was reduced to ten months. The non-solicitation restraint was also narrowed to apply only to clients to whom the first defendant had provided services. Section 51(2)(b) of the Competition and...

Court Disposition

Partly in favour of plaintiff, partly in favour of first defendant

Orders

  • Draft orders to reflect decision to be provided by parties
  • Orders to be made under section 4 of the Restraints of Trade Act