Russ Australia v Benny [2006] NSWSC 1118

Russ Australia v Benny [2006] NSWSC 1118

The plaintiff failed to show that the broader client solicitation, acceptance of client approaches and employee solicitation covenants should be enforced because they extended beyond what was needed to protect legitimate interests and no particular threatened breach was shown for the Restraints of Trade Act 1976 to operate upon. However, there was a strong case that clause 14.1(d), restraining the first defendant from employment in a competing business dealing in similar products in the relevant territory for six months, reasonably protected the plaintiff's legitimate interests in customer connection, confidential information and its workforce. There was a serious question to be tried,...

Jurisdiction
Australia
Judgment Date
19 October 2006
Procedural Posture
Equity Application Concerning Alleged Breach of Post Employment Restraints and Interference With Contractual Relations / Interlocutory Application for Injunction
Outcome
One restraint was prima facie valid and an interlocutory injunction was granted against the first defendant; the claim for interlocutory relief against the second defendant failed.
Legal Topics
['post Employment Restrictive Covenants' 'interlocutory Injunctions' 'confidential Information' 'customer Connection' 'non Solicitation of Employees' 'interference With Contractual Relations' 'balance of Convenience' 'restraints of Trade Act 1976']
['restraint of Trade' 'employment Law' 'equity' 'torts'] ['post Employment Restrictive Covenants' 'interlocutory Injunctions' 'confidential Information' 'customer Connection' 'non Solicitation of Employees' 'interference With Contractual Relations' 'balance of Convenience' 'restraints of Trade Act 1976']

Case Brief

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Procedural Posture

Equity Application Concerning Alleged Breach of Post Employment Restraints and Interference With Contractual Relations / Interlocutory Application for Injunction

Legal Issues

  1. 1 ['Whether clauses restraining the first defendant from soliciting or accepting work from clients were valid and enforceable on an interlocutory basis.' 'Whether the covenant restraining the first defendant from working for a competing business, clause 14.1(d), was valid and enforceable.' 'Whether there was a serious question to be tried that the first defendant breached clause 14.1(d).' 'Whether the balance of convenience favoured granting an interlocutory injunction.' 'Whether there was a serious question to be tried that the second defendant committed the tort of interference with contractual relations.' 'Whether further injunctive relief was required to protect confidential information or restrain solicitation of employees.']

Ratio Decidendi

The plaintiff failed to show that the broader client solicitation, acceptance of client approaches and employee solicitation covenants should be enforced because they extended beyond what was needed to protect legitimate interests and no particular threatened breach was shown for the Restraints of Trade Act 1976 to operate upon. However, there was a strong case that clause 14.1(d), restraining the first defendant from employment in a competing business dealing in similar products in the relevant territory for six months, reasonably protected the plaintiff's legitimate interests in customer connection, confidential information and its workforce. There was a serious question to be tried,...

Court Disposition

One restraint was prima facie valid and an interlocutory injunction was granted against the first defendant; the claim for interlocutory relief against the second defendant failed.

Orders

  • ['The undertakings proffered by the first defendant were accepted.' 'Until 6 January 2007 or until determination of the proceedings, whichever comes first, the first defendant was ordered not to act as an employee of the second defendant in Australia.' 'The operation of the injunction against acting as an employee...