Total RISC Technology Pty Ltd v Cannings & Anor [2010] NSWSC 1124

Total RISC Technology Pty Ltd v Cannings & Anor [2010] NSWSC 1124

The plaintiff failed to establish that Mr Cannings' employment with Interactive Pty Limited was in a trade or business which directly competed with the plaintiff within the meaning of clause 5.3 of the employment contract. By construing the clause as restraining only engagement in a directly competitive business activity—not any employment with a competitor—the judge found the Business Solutions Group's managed services (as delivered by Interactive and Mr Cannings) were sufficiently differentiated by method, customer perception, and infrastructure from the plaintiff's services. Therefore, there was no breach, and the action based on restraint failed.

Jurisdiction
Australia
Judgment Date
24 September 2010
Procedural Posture
Contract Employment Restraint of Trade / Final Judgment
Outcome
Judgment for the defendants with costs.
Legal Topics
['restraint of Trade' 'employment Contracts' 'injunctions' 'enforceability of Restraint Clauses']
['contract Law' 'employment Law'] ['restraint of Trade' 'employment Contracts' 'injunctions' 'enforceability of Restraint Clauses']

Case Brief

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Procedural Posture

Contract Employment Restraint of Trade / Final Judgment

Legal Issues

  1. 1 ['Whether Mr Cannings breached the restraint of trade clause (clause 5.3) in his employment contract by working for Interactive Pty Limited.' 'Whether the business activities in which Mr Cannings was engaged with the second defendant directly competed with his former employer, the plaintiff.' 'Construction and enforceability of the restraint clause under restraint of trade law.']

Ratio Decidendi

The plaintiff failed to establish that Mr Cannings' employment with Interactive Pty Limited was in a trade or business which directly competed with the plaintiff within the meaning of clause 5.3 of the employment contract. By construing the clause as restraining only engagement in a directly competitive business activity—not any employment with a competitor—the judge found the Business Solutions Group's managed services (as delivered by Interactive and Mr Cannings) were sufficiently differentiated by method, customer perception, and infrastructure from the plaintiff's services. Therefore, there was no breach, and the action based on restraint failed.

Court Disposition

Judgment for the defendants with costs.

Orders

  • ['I note and accept the undertaking of the first defendant to the Court, altered as I have altered it in red, so as to have permanent effect, as to paragraph 1 in its effect, and set out in a document dated 8 July 2010, identified by Justice Pembroke.' 'I give judgment for the defendant with costs.']