Allied Express Transport Pty Ltd v Braim

[2022] NSWSC 1298

Supreme Court

New South Wales

Medium Neutral Citation:

Allied Express Transport Pty Ltd v Braim [2022] NSWSC 1298

Hearing dates:

12-14 September 2022

Date of orders:

27 September 2022

Decision date:

27 September 2022

Jurisdiction:

Equity - Expedition List

Before:

Williams J

Decision:

See paragraph [300]

Catchwords:

RESTRAINT OF TRADE – employee – employment contract governed by law of New South Wales – activities of first defendant during and after employment occurred in Victoria – plaintiff sought injunction in terms not limited to alleged offending conduct and not limited to conduct occurring in Victoria – application of Restraints of Trade Act 1976 (NSW) – no actual or apprehended breach of contractual restraint proved

CONTRACT – contractual obligation of confidence – failure to prove that information confidential to the employer was imparted to the employee during the course of employment – failure to prove actual or apprehended breach of contractual obligation of confidence

EQUITY – equitable obligation of confidence – necessary quality of confidence – insufficient identification of all information said to be confidential – failure to prove that information confidential to the employer was imparted to the employee during the course of employment – failure to prove actual or apprehended breach of equitable obligation of confidence

Legislation Cited:

Corporations Act 2001 (Cth), ss 181 to 183

Evidence Act 1995 (NSW), s 128

Interpretation Act 1987 (NSW), s 12(1)(b)

Restraint of Trade Act 1976 (NSW), s 4

Cases Cited:

Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326; [2007] NSWCA 172

Employsure Ltd v McMurchy; Employsure Ltd v Kumaran [2021] NSWSC 1179

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163

John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451

KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702

Kay’s Leasing Corporations Pty Ltd v Fletcher (1964) 116 CLR 124

Label Manufacturers Australia Pty Ltd v Chatzopoulos [2022] NSWSC 1059

Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2001] HCA 70

Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102

Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21

Professional Advantage Pty Ltd v Smart [2008] NSWSC 873

Professional Advantage Pty Ltd v Smart [2008] NSWSC 873

Watson v Foxman (1995) 49 NSWLR 315

Wright v Gasweld (1991) 22 NSWLR 317

Texts Cited:

JD Heydon, MJ Leeming and PG Turner, Meagher Gummow & Lehane’s Equity Doctrines and Remedies (5th ed, 2015)

JD Heydon, The Restraint of Trade Doctrine (14th ed, 2018)

Category:

Principal judgment

Parties:

Allied Express Transport Pty Ltd (Plaintiff)
Aram Braim (First Defendant)
ASOS Express Pty Ltd (Second Defendant)

Representation:

Counsel:
R Kumar (Plaintiff)
P Reynolds (Defendants)

Solicitors:
Pendlebury Workplace Law (Plaintiff)
Asad Lawyers (Defendants)

File Number(s):

2022/47368

Publication restriction:

N/A

Judgment

Introduction

1. These reasons concern an application by the plaintiff, Allied Express Transport Pty Ltd (Allied), for an order against its former employee, Mr Aram Braim, restraining him from engaging in various activities that Allied contends would constitute a breach of restraints contained in Mr Braim’s employment contract that apply for a period of twelve months after the end of his employment with Allied.

2. Mr Braim is the first defendant in these proceedings. He was employed by Allied during the period from 13 July 2020 until 19 January 2022 as its onsite supervisor for one its customers, South Pacific Laundry Pty Ltd (SPL). Allied provided (and continues to provide) certain delivery services for SPL in Melbourne, transporting linen items between SPL’s depot and SPL’s customers. SPL is not a party to these proceedings.

3. Mr Braim is the sole director and sole shareholder of the second defendant, ASOS Express Pty Limited (ASOS), which was incorporated in July 2015.

4. ASOS provided delivery services to SPL prior to Mr Braim’s employment with Allied. By agreement between Allied and Mr Braim, some of those delivery services continued during Mr Braim’s employment with Allied. The extent of that agreement is one of the issues in dispute in these proceedings.

5. In addition to the restraining orders sought against Mr Braim, Allied seeks an order restraining ASOS from engaging Mr Braim “in any activity of a like or similar kind” to that which Mr Braim was providing to Allied’s customers (including SPL) during his employment with SPL, for a period of twelve months after the end of Mr Braim’s employment with Allied.

6. In addition to the orders enforcing the contractual restraints on Mr Braim’s post‑employment activities, Allied seeks an order restraining him from disclosing or using Allied’s confidential information in breach of contractual and equitable obligations of confidence.

7. Allied’s claims for relief in the proceedings also include allegations that Mr Braim breached contractual obligations, fiduciary duties and statutory duties under ss 181 to 183 of the Corporations Act 2001 (Cth) during his employment with Allied, claims for an account of profits or equitable compensation in relation to those alleged breaches and his alleged breaches of the contractual restraint and contractual and equitable obligations of confidence after the end of his employment with Allied.

8. On 7 September 2022, the Court ordered that the question of Allied’s entitlement to the restraints referred to at [1]-[6] above be determined separately from all other issues in the proceedings at a hearing commencing on 12 September 2022. The hearing in relation to that separate question was conducted over three days from 12 to 14 September 2022 (the separate question hearing).

9. For the reasons that follow, Allied’s claims in respect of the restraints have failed. Orders will be made dismissing those aspects of its claims for final relief and discharging the undertakings accepted and the restraint ordered by the Court on an interim basis on 10 March 2022.

Summary of evidence and findings of fact

Observations in relation to witnesses

10. The following witnesses gave evidence for Allied at the separate question hearing:

1. Ms Michelle McDowell, who has been the Managing Director of Allied for approximately 25 years;

2. Mr Colin McDowell, who has been the Chief Executive Officer of Allied for approximately 25 years;

3. Mr Troy Finch, who was Allied’s National General Sales Manager at the time of the events giving rise to these proceedings and is currently employed as Allied’s Queensland State Manager;

4. Mr Adrian Fortuna, who is Allied’s Victorian State Manager; and

5. Ms Felicity Fox, who is Allied’s former Account Manager for SPL.

11. Mr Braim gave evidence at the separate question hearing.

12. The defendants also adduced evidence from:

1. Mr Andrew Robson, who has been the Chief Executive Officer and Managing Director of SPL since 13 February 2020; and

2. Mr Amrit Mangat, a truck driver who has been a contractor to Allied in the past.

13. There is a dispute between Mr McDowell, Mr Fortuna and Mr Finch on the one hand and Mr Braim on the other hand about the precise words that were said during certain conversations that occurred more than two years ago in June 2020 and other conversations that occurred some ten months ago in October and November 2021. In assessing the evidence of each witness in relation to those disputed conversations, I have borne in mind the following well-known observations of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319:

“… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.”

14. The matters referred to by McLelland CJ in Eq require primary emphasis on the objective surrounding facts that are either undisputed or established by contemporaneous documents, and the inherent probabilities and improbabilities: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28]-[31] (Gleeson CJ, Gummow and Kirby JJ), Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102 at [77] (Bell P, Leeming JA, and Emmett AJA agreeing).

15. The following observations of Hammerschlag J (as the Chief Judge in Equity then was) in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94]-[95] (citations omitted) are also relevant in the present case:

“Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. … Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences …

The sensation of feeling an actual persuasion, after a contest, that an event has happened or that something exists is one which is well known and recognised by experienced trial judges for what it is.”

16. Having observed each of the witnesses under cross-examination and considered the parties’ submissions in relation to the credibility of each of the witnesses, I have arrived at the following assessments of the credibility of each witness.

17. Ms McDowell was a most unsatisfactory witness who was prone to giving speeches outlining her beliefs or arguments rather than answering the questions put to her in cross-examination. The evidence that she gave in her affidavits and in cross-examination was pervaded by an attitude that is best captured by the phrase: “If I say it is so, then it is so”. That attitude prevented her from engaging meaningfully with many of the questions asked of her. Much of her evidence consisted of little more than bare assertions, accompanied by argument. Ms McDowell was firm in maintaining assertions that she perceived would assist Allied’s interests in these proceedings, even in relation to matters about which she had little or no direct knowledge. Evidence of that kind has little or no weight. Examples include Ms McDowell’s evidence that there is no relevant distinction between truck delivery services and van delivery services for linen items (contrary to the unchallenged evidence of Mr Robson and also contrary to the evidence of Mr Fortuna, Mr Finch and Mr Braim) ^[1] and Ms McDowell’s evidence that Allied had been engaged by SPL to provide all linen delivery services for SPL in Melbourne (contrary to the terms of the document that she relied on as evidencing the terms of that alleged engagement). ^[2]

    1. See [38]-[49] below.

    2. See [82] below.

18. In some instances, Ms McDowell demonstrated a determination to maintain her stated position if she perceived that it would be detrimental to Allied’s interests to make a concession, even when her stated position was plainly inconsistent with the objective truth. I refer, in particular, to Ms McDowell’s evidence that the letter she caused to be sent to Mr Braim the day after his resignation correctly stated his obligations under his employment contract notwithstanding that it omitted the agreement between Allied and Mr Braim that permitted Mr Braim or his company to provide some services to SPL while Mr Braim was employed by Allied. ^[3] Ms McDowell refused to accept that the omission rendered the letter incorrect.

    3. See [210] – [211] below

19. As counsel for Allied submitted, Ms McDowell did make some concessions that were contrary to Allied’s interests. Those concessions concerned the right of SPL and Allied’s drivers to disclose to third parties information that Allied claims is Allied’s confidential information. ^[4] I accept Ms McDowell’s evidence in relation to those matters. However, for the reasons explained in more detail below, I have rejected the balance of her evidence.

    4. See [164] and [173] below.

20. Mr McDowell was an equally unsatisfactory witness. The inconsistencies within his evidence demonstrated the unreliability of the recollection that he claims to have of the disputed conversations in June 2020. ^[5] He does not claim to have a recollection of relevant later conversations, yet has given evidence about what he would not have said, which is clearly informed principally (if not solely) by his perception of Allied’s interests in these proceedings. ^[6] More importantly, Mr McDowell demonstrated a willingness to change and tailor his evidence according to what he perceived to be in Allied’s interests. ^[7] For those reasons, I do not accept Mr McDowell’s evidence in relation to disputed matters, save where it is corroborated by a contemporaneous document or the evidence of a reliable witness, it is inherently probable and/or it is contrary to the interests of Allied in these proceedings.

    5. See [114]-[115] below.

    6. See [193] below.

    7. See [116]-[117] below.

21. As referred to below, Mr McDowell’s determination to ensure that evidence adduced in the proceedings suited Allied’s interests extended to contacting Mr Finch overnight whilst he (Mr Finch) was under cross-examination (and after Mr McDowell’s own cross-examination had already concluded) and impressing on Mr Finch the need to emphasise certain matters during his cross-examination the following day.

22. At the conclusion of the first day of his cross-examination, I informed Mr Finch that he must not discuss the substance of his evidence with any person whilst still under cross-examination. Mr Finch indicated that he understood that instruction.

23. Counsel for the plaintiff disclosed to the Court on the morning of the second day of Mr Finch’s cross-examination (in the absence of Mr Finch) that Mr Finch had answered questions put to him by Mr McDowell overnight. When Mr Finch’s cross-examination resumed after that disclosure had been made in his absence, he was reminded and acknowledged that he was giving evidence under the same oath that he had sworn the previous day. The following exchange then occurred between Mr Finch and the cross-examiner:

“Q.   Mr Finch, at the end of the hearing yesterday, you recall, don’t you, that her Honour made a direction that you not speak with anyone about your evidence. Do you recall that?

A.   Correct.

Q.   So might I assume you took care not to speak to anyone about your evidence?

A.   That’s correct.

…

Q.   So, all right. But that’s a lie, isn’t it?”

24. Objection was taken to that question. In accordance with s 128 of the Evidence Act 1995 (NSW), I informed Mr Finch of the nature of the objection that had been taken, that he was required to answer the question, that a certificate would be issued to him under s 128 and the effect of that certificate.

25. The cross-examination then continued (on the basis that the certificate would apply to all evidence about Mr Finch having spoken to others about the substance of his evidence under cross-examination):

“Q.   Mr Finch, when you said you hadn’t spoken to anyone about your evidence, that was a lie, wasn’t it?

A.   Yes.

Q.   In fact, it’s true, isn’t it, that Mr Colin McDowell spoke with you yesterday evening about your evidence, right?

A.   Yes.

Q.   And it’s true also that he made comments to you as to things you should say or not say today. Is that right?

A.   Correct.

…

Q.   So what did Mr McDowell tell you, you should not say today?

A.   He never mentioned anything about me not saying anything.

Q.   What did he tell you, you should say today?

A.   He reiterated things that I’d already said in my affidavit.

Q.   Specifically, what did he tell you, you should say today?

A.   It was just talk about the issues that the laundry had had, which was the reasoning for me to meet with them originally in Melbourne to reiterate the dramas and the problems operationally that they had.

Q.   That else did he tell you to say today?

A.   That’s all I can recall.

Q.   He also spoke to you in relation to the Zoom meeting with Mr Braim also, did he not?

A.   I don’t recall that.

Q.   You’re saying you can’t recall your conversation with Mr McDowell from yesterday.

A.   No, I don’t – I don’t recall having any words to him regarding that Zoom meeting at all. It was in relation to, as I stated prior – previously, the issues – reiterating the issues operation that they were asking us to do.”

26. Later during his cross-examination, Mr Finch sought to retract his earlier answer that he had told a lie in saying that he had taken care overnight not to speak to anyone about his evidence while he was under cross-examination. Mr Finch said that he had not lied, but had “answered the question wrongly because … I haven’t spoken or uttered any words regarding the statements and the answers I’ve given yesterday and that was the way I was looking at the question … but in hindsight, the answer was obviously I had”. That evidence is utterly implausible and is, itself, a lie, as the cross-examiner put to Mr Finch. If Mr Finch had been looking at the question asked at the outset of his second day of cross-examination in the way that he later claimed, there is no reason why he would have promptly and without hesitation agreed with the proposition put to him that his answer had been a lie. The evidence given later in his cross-examination was an obvious attempt to minimise the damage to his own credibility and to Allied’s case caused by his earlier lie once he had had an opportunity to think of some alternative account for his initial answer.

27. Mr Finch’s lie when first asked whether he spoken to anyone about the substance of his evidence overnight, and his further lie when he later sought to retract his admission of the first lie, demonstrates his willingness to tell untruths when he perceives that the truth may be damaging either to himself or to Allied. That casts serious doubt on the credibility of all of his evidence. I reject the submission made by counsel for Allied that the Court should accept that Mr Finch did not intend to mislead the Court or to give evidence that was anything other than the truth.

28. Moreover, as referred to at [100] below, the substance of Mr Finch’s evidence about the 10 June 2020 meeting and 11 June 2020 meeting on the second day of his cross-examination was irreconcilably inconsistent with his evidence on the first day of his cross-examination that he had not heard anything about Mr Braim or his company owning a van and that he had no knowledge of any such van prior to these proceedings. I have found that Mr Finch altered his evidence about that issue on the second day of his cross-examination in a manner that he understood, after speaking to Mr McDowell the previous evening, would better suit the interests of Allied in these proceedings.

29. For those reasons, I do not regard Mr Finch as a credible witness. I do not accept his evidence in relation to disputed matters, save where it is corroborated by a contemporaneous document or the evidence of a reliable witness, it is inherently probable and/or it is contrary to the interests of Allied in these proceedings.

30. Taking into account the whole of Mr Fortuna’s evidence, I do not consider that it is necessary to approach his evidence with any degree of caution greater than that described by McLelland CJ in Eq in Watson v Foxman as set out at [13]-[14] above. For the reasons explained below, I have accepted some aspects and rejected other aspects of Mr Fortuna’s evidence.

26. The defendants submitted that Ms Fox gave honest evidence to the best of her recollection in cross-examination and made appropriate concessions concerning some of the very general statements that had been made in her affidavit. I accept that submission, which accords with my own assessment of Ms Fox’s evidence.

27. Counsel for Allied submitted that Mr Braim is not a witness of credit and that his evidence should not be accepted. Two matters were articulated by counsel in support of that submission. First, it was submitted that Mr Braim’s evidence about the 11 June 2020 meeting referred to at [92]-[118] below “doesn’t sit comfortably with” his 18 March 2021 email referred to at [186] below. Second, it was submitted that Mr Braim’s evidence about the contents of his employee application form was evasive and at times unresponsive.

28. I reject those submissions. Unlike the witnesses called by Allied, ^[8] Mr Braim consistently made a genuine to attempt to answer the questions asked of him in cross-examination rather than deflecting or evading the questions by giving a speech about matters peripheral to the substance of the question. As to the specific matters articulated by counsel for Allied, I do not regard the language of Mr Braim’s 18 March 2021 email as determinative of what was said at the 11 June 2020 meeting for the reasons explained at [130] below. Allied’s employee application form required the applicant to name their current employer. Mr Braim named ASOS. The form assumed that the applicant was leaving their current employer and required the applicant to state their “Reason for leaving”. Mr Braim gave evidence in cross-examination that he had stated “New Opportunity” in this section of the form after discussing with Mr Fortuna that the question was not really applicable to his circumstances. His answers to those questions may be disputed by Allied, but they were not unresponsive or evasive in any way.

    8. With the exception of Ms Fox.

29. I have assessed Mr Braim’s evidence bearing in mind the cautionary observations of McLelland CJ in Eq in Watson v Foxman as set out at [13]-[14] above. For the reasons explained below, I have accepted many aspects of Mr Braim’s evidence.

30. For completeness, I note that Allied did not make any adverse submission concerning the credibility of Mr Robson or Mr Mangat.

31. The following summary of evidence addresses relevant undisputed and disputed factual matters. I have identified the matters that are disputed and set out my findings in relation to those matters within the summary, unless otherwise indicated.

Allied and its business

37. Allied is in the business of providing courier and express freight services in various parts of Australia, including in Melbourne, Victoria. Allied has been in operation since 1978 and is Australia’s largest independently owned courier and express freight company. Nationally, it has 447 employees and a fleet of over 800 vehicles. Those vehicles are in fact owned by third party drivers with whom Allied contracts to provide their services and vehicles. There are currently approximately 200 drivers engaged by Allied pursuant to such contracts for the purpose of its courier and freight services operations in Melbourne.

SPL and its business

38. SPL is a national provider of linen services with a broad customer base, ranging from serviced apartments, large hotels, hospitals, aged care facilities and mining camps. SPL contracts with third parties to provide transport services collecting clean linen from SPL’s premises and transporting it to SPL’s customers and delivering soiled linen collected from those customers to SPL’s premises for laundering.

39. Mr Robson gave evidence that SPL engages third parties to provide two different types of transport services for the soiled linen that it collects from, and the clean linen that it delivers to, its customers’ premises. The two different types of services are transport by van and transport by truck.

40. Van deliveries are for linen bags that typically weigh approximately 10kg each, whereas truck deliveries are for loads of linen stored on wheeled trolleys that typically weigh approximately 120kg each.

41. Vans are not used to deliver the wheeled trolleys due to the size and weight of the trolleys and the need for a tailgate lift to move the trolleys in and out of the vehicle due to their weight.

42. Trucks are rarely used to deliver linen bags.

43. Vans and trucks are rarely used for the same customer. In limited situations, an SPL customer who is normally serviced by a truck may be serviced by van. This only occurs when no truck is available to complete a delivery or pick up for that customer. In those instances, the van driver would need to manually load and unload individual linen bags, which is inefficient both for SPL and for the customer.

44. These aspects of Mr Robson’s evidence were not challenged in cross-examination. Moreover, Mr Robson’s evidence is consistent with the objective fact that SPL engaged truck and van transport service providers under separate tender processes, as referred to in more detail below. I reject Ms McDowell’s evidence in her affidavit affirmed on 9 May 2022 in which she asserted that it was not correct that SPL had separate tenders for vans and for trucks.

45. As referred to below, Mr Braim has knowledge and experience of SPL’s systems and practices for truck deliveries and van deliveries through his involvement in ASOS’s provision of both types of services to SPL. Mr Braim gave evidence similar to Mr Robson’s evidence summarised above. Mr Braim also explained that the trolleys (also known as “cages”) that are transported by truck are loaded onto and off the trucks using a tailgate (also called a “tail lift”) that is installed in the truck. A truck generally has the capacity to transport between 13 to 25 cages depending on the size of the truck. The trolleys have a liner that contains loose linen. The linen in the trolleys is not in bags. A van has the capacity to hold up to about 55 bags of linen, which is the equivalent to two or three trolleys’ worth of linen. However, trolleys are not transported in vans because vans are not typically fitted with a tailgate for lifting and lowering trolleys.

46. Mr Braim also gave evidence that SPL undertakes logistics audits for its customers in order to determine whether the linen deliveries and collections for each customer will be undertaken by truck or by van.

47. In cross-examination, Mr Fortuna and Mr Finch each gave evidence to similar effect about the different capacities of trucks and vans and the fact that vans are not typically installed with a tailgate that is required to load and unload trolleys. Mr Finch said that it would not be physically possible to fit one trolley into a van.

48. Ms McDowell gave evidence disputing that there are any relevant distinctions between truck and van delivery services for linen.

49. I reject Ms McDowell’s evidence and accept the unchallenged evidence of Mr Robson and Mr Braim and the evidence of Mr Fortuna and Mr Finch about the differences between truck and van delivery services for SPL. Mr Robson is a witness who is independent of all parties to these proceedings and has direct knowledge of SPL’s business and the nature of the delivery services that it requires in his capacity as Chief Executive Officer of SPL. Mr Braim had direct involvement in the provision of those two different types of delivery services. Mr Finch and Mr Fortuna also had involvement (in a supervisory capacity) in the provision of delivery services by Allied and demonstrated a familiarity with the operational consequences of the different capacities and equipment of vans compared to trucks. Their evidence on this subject is broadly consistent with that of Mr Robson, who I regard as a reliable witness. Ms McDowell’s evidence did not rise above the level of bare assertion and is one example of the attitude that pervaded her evidence as referred to at [17] above.

The relationship between the defendants and SPL from February 2015 to July 2020

50. In about February 2015, Mr Braim was contracted to work as a driver for South Pacific Transport & Distribution Pty Ltd (SPTD), which was in turn contracted to provide transport services for SPL.

51. Mr Braim established ASOS on 15 July 2015. As I have mentioned earlier in these reasons, he is the sole director and shareholder of that company.

52. ASOS purchased a truck, hired a driver for that truck and undertook deliveries for Toll Fast, which was a member of the Toll logistics group of companies. At the same time, Mr Braim continued working as a driver for SPTD, driving a truck owned by SPTD that was providing transport services for SPL.

53. In 2016, Mr Braim was appointed as the transport manager for SPTD, taking on responsibility for managing all of SPTD’s deliveries, fleet and drivers.

54. Mr Braim ceased working for SPTD in 2017 in order to focus on the growing business of ASOS.

55. In February 2018, ASOS was engaged as an independent contractor to SPL to provide operational consultancy services to SPL’s Dispatch Department.

56. SPL conducted a tender process for delivery subcontractors in 2018. The tender documentation required tenderers to submit an operational plan specifying (inter alia) the number and age of trucks proposed to be used to provide the services and the carrying capacity of the trucks (by reference to a number of trolleys).

57. ASOS was one of the successful tenderers. On 1 July 2018, ASOS entered into a contract with SPL for the provision of services delivering and collecting linen and associated items nominated by SPL in metropolitan Melbourne and surrounding areas. ASOS was required to ensure the availability of a suitable vehicle or vehicles to provide the services and those vehicles were required to have a tailgate platform.

58. ASOS provided those services to SPL initially using the one truck that it had purchased in 2015 and later adding a second truck.

59. The provision of the services involved ASOS loading the trucks at SPL’s depot with trolleys containing loose clean linen, unloading those trolleys at the premises of SPL’s customers, collecting trolleys containing soiled linen from SPL’s customers to return to the SPL depot, scanning trolleys collected and delivered and complying with delivery and collection time slots specified by SPL.

60. ASOS was one of five transport companies providing truck services to SPL at that time.

61. SPL conducted a further tender process in 2019 for what it described in the email to prospective tenderers as “van runs”.

62. Again, ASOS was one of the successful tenderers.

63. On or about 15 April 2019, ASOS entered into a contract with SPL for delivery and collection of linen and associated items nominated by SPL in metropolitan Melbourne and surrounding areas using one tonne vans. The contract required ASOS to provide those services to nominated customers of SPL and any future customers that SPL may allocate to ASOS. Mr Braim gave evidence that SPL did in fact allocate additional customers to ASOS from time to time.

64. ASOS initially used a single one tonne van to provide delivery services to SPL under the April 2019 contract. Towards the end of 2019, ASOS acquired a Nissan Navara vehicle that it used to undertake smaller and urgent deliveries required by SPL.

65. Mr Braim gave evidence that the services provided to SPL under the April 2019 contract involved delivery of linen in bags (as opposed to trolleys) to SPL’s smaller customers or customers whose premises could not be serviced by truck due to space and access issues, collection of soiled linen from those customers in bags, delivery of dry cleaning items and uniforms and delivery and collection of various other types of items that were suitable for vans rather than trucks.

66. Mr Braim gave evidence that as a result of his involvement in ASOS’s operational consultancy services to SPL’s Dispatch Department (which came to an end in about October 2018) and ASOS’s truck delivery services provided to SPL under the July 2018 contract and ASOS’s van delivery services provided to SPL under the April 2019 contract, he obtained knowledge of SPL’s business systems and customers in relation to truck and van services.

67. SPL’s volume of linen deliveries was reduced considerably at the end of March 2020 as a result of the COVID-19 pandemic. Mr Braim gave evidence that all of SPL’s reduced truck delivery work was undertaken by ASOS from that time, and ASOS began operating four additional trucks that it did not own in order to meet all of SPL’s requirements.

68. I accept all of Mr Braim’s evidence summarised at [50]-[67] above, which was not successfully challenged in cross-examination.

Allied commences providing services to SPL in March 2020

69. SPL approached Allied about providing delivery services to SPL in Melbourne in or about early November 2019.

70. According to Mr Finch, SPL raised certain operational issues with Allied, which Allied then “spent time and financial cost working through”. Mr Finch described the operational issues raised by SPL as including inefficient truck utilisation with too many vehicles going to the same locations at the same time with half empty trucks, lack of arrangements to establish proof of delivery and time of delivery, and lack of tracking trolleys going out of and returning to SPL which had led to loss of trolleys at a large financial cost to SPL. In cross-examination, Mr Finch maintained that efficiency of truck utilisation was a significant issue for SPL at the time. Save for Mr Finch’s statement that Allied “spent time and financial cost working through the operational issues”, Allied did not adduce evidence of the extent of the work that it claims to have done in relation to those issues or the time and cost expended in doing that work.

71. Mr Braim gave evidence disputing that SPL’s truck utilisation was inefficient at the time that SPL approached Allied concerning delivery services in Melbourne. According to Mr Braim, he understood from statements made to him by SPL representatives at the time that SPL wanted to move to a transport company that had the capacity to service SPL’s needs nationwide and to provide a system and technology to assist SPL track its deliveries, trolleys and linen. Mr Braim explained that SPL lacked a system for contractors to monitor individual trolley movements other than manually through driver run sheets. Mr Braim adhered to this evidence in cross-examination. It was not put to him that the utilisation of trucks for SPL deliveries was inefficient prior to Allied commencing to provide truck delivery services.

72. In December 2019, Allied engaged Mr Douglas Macarthur as a Fleet Manager to work on SPL’s sites. According to Mr Finch, Mr Macarthur’s responsibilities included attending all SPL sites and creating standard operating procedures for the drivers, recruiting contractors for Allied to implement into SPL, implementing operational changes agreed between Allied and SPL and directing operational contact for SPL when Allied commenced the delivery work for SPL.

73. Allied also engaged Ms Felicity Fox in January 2020 as a dedicated Account Manager to act as Allied’s primary contact for SPL in relation to liaising with SPL customers to ensure that the standard operating procedures for the delivery process were being met, conducting site visits to SPL customers to ensure contracted drivers were following instructions and that the customer was happy with the drivers and their delivery procedures, and being the primary contact for any account management issues that may arise.

74. Allied did not adduce any evidence from Mr Macarthur at the separate question hearing.

75. Ms Fox said that it took her and other members of Allied’s team approximately six weeks from late January or early February 2020 to get sufficiently up to speed about SPL’s business and requirements to ensure that Allied could provide the services that SPL required. Mr Finch gave evidence to similar effect. Ms Fox also gave evidence that the information that she and others from Allied gathered in relation to the sites and requirements of SPL’s customers and the linen delivery and collection processes at each site was not new information. It was information that was known to SPL and its customers.

76. Mr Finch gave evidence that SPL signed off on Allied’s rate proposal and Allied then began delivering linen for SPL on 16 March 2020 on delivery runs that SPL allocated to Allied. Mr Braim gave evidence that these deliveries undertaken by Allied in March or April 2020 were a couple of test runs or trial runs that SPL allocated to Allied. ASOS was still performing truck deliveries for SPL at that time. This aspect of Mr Braim’s evidence was not challenged in cross-examination.

77. On 24 January 2020, at a time when Allied was still in the process of familiarising itself with SPL’s requirements as referred to in the evidence summarised above, SPL (as the “Disclosing Party”) and Allied (as the “Receiving Party”) executed a “Non-Disclosure Agreement” (the NDA). The recitals to the NDA recorded that the “Receiving Party has been or will be engaged in the performance of work on ‘logistics and transport services’ and in connection therewith will be given access to certain confidential and proprietary information”. The NDA defined the term “Confidential Information” as meaning information about the Disclosing Party’s (or its suppliers’ and vendors’) business or activities. The operative provisions of the NDA obliged Allied not to disclose or use SPL’s “Confidential Information” except with the written consent of SPL and to take reasonable measures to maintain the confidentiality of SPL’s “Confidential Information” in Allied’s possession or control. Allied agreed that all “Confidential Information” furnished by SPL remained the sole property of SPL.

78. I have referred at [38]-[49] above to the evidence about the differences between linen delivery services by truck and by van and the differentiation within SPL’s business between these two types of delivery services.

79. Each of Mr Fortuna and Mr Finch gave evidence in cross-examination that the delivery services that SPL approached Allied to provide in late 2019 or early 2020 were truck services only. That is consistent with Mr Braim’s evidence referred to at [85] and [89] below that Mr Taylor told him in June 2020 that Allied might take over SPL’s truck deliveries and that Mr Finch told him that Allied was looking for an onsite supervisor to help with scheduling its trucks at SPL.

80. Mr McDowell, Mr Fortuna and Mr Finch did not give any evidence suggesting that Allied were providing van services to SPL from March 2020 or that Allied ever provided van services to SPL.

81. Mr Robson gave evidence that Allied had only ever provided truck services to SPL. Mr Braim gave evidence to the same effect in relation to the period of his employment with Allied (that is, from 13 July 2020 to 19 January 2022). Neither Mr Robson nor Mr Braim were challenged about that aspect of their evidence in cross-examination. On the contrary, counsel for Allied put propositions to both Mr Robson and Mr Braim in cross-examination that were consistent with Allied performing truck services only for SPL.

82. By contrast, Ms McDowell gave evidence describing Allied’s role as the provision of all transport services for delivery of linen items between SPL and its customers in the Melbourne metropolitan area and regional locations. In cross-examination, Ms McDowell steadfastly maintained that the work that SPL approached Allied to perform in late 2019 was for all metropolitan deliveries, with no distinction between truck services and van services. Ms McDowell maintained this contention notwithstanding that Allied charges different rates for trucks compared to vans in its freight work generally and the document that Ms McDowell contends records an agreement for Allied to be the exclusive transport services provider for SPL contains rates and charges for trucks and cages only. I note that SPL disputes the contention that it has entered into any such exclusive agreement with Allied. Ms McDowell gave evidence that Allied’s fleet of subcontracted owner-drivers includes vans and that Allied could have provided vans to SPL if required.

69. I reject Ms McDowell’s evidence that Allied was engaged by SPL to provide all transport services, including van services. Ms McDowell’s evidence is highly improbable in light of the document she relies on as containing the terms of the engagement. That document provides rates for truck services only. Moreover, the overwhelming weight of the evidence referred to above is to the effect that Allied were approached by SPL to provide truck services only. That includes the evidence of Mr Fortuna and Mr Finch, which is corroborated in this instance by the evidence of Mr Robson who is independent of both Allied and the defendants. On the basis of the evidence of Mr Fortuna and Mr Finch, I find that Allied’s relationship with SPL as at June 2020 was limited to truck services and that this was known to the Allied representatives who participated in the 11 June 2020 meeting referred to below. ^[9] I further find that this was known to Mr Braim at that meeting on the basis of his discussions with Mr Taylor and Mr Finch shortly before that meeting. ^[10]

    9. See [92]-[122] below.

    10. See [85]-[91] above.

70. On the basis of the unchallenged evidence of Mr Robson and Mr Braim referred to above, I find that Allied has only ever provided delivery services to SPL in Melbourne by truck and has not provided van delivery services to SPL.

Discussions leading to Allied’s employment of Mr Braim

85. Mr Braim gave evidence that he received a telephone call in about June 2020 from Mr Simon Taylor, who was then SPL’s Plant Manager in Melbourne. According to Mr Braim, Mr Taylor told him:

“Allied Express might soon take over the truck deliveries with SPL. Without having someone experienced, it will be impossible for Allied Express to manage our deliveries. It would like you to meet Troy of Allied Express to discuss and see if you and Allied can work together.”

86. Mr Braim understood that this would mean that SPL would no longer require the services of ASOS for truck deliveries.

87. Mr Braim agreed to the suggested meeting with Allied, which was arranged by Mr Taylor and took place on 10 June 2020 via Zoom video call (the 10 June 2020 meeting).

88. According to Mr Braim, the following conversation took place at the 10 June 2020 meeting:

“Mr Finch:

   ‘Allied Express is looking for an on-site supervisor to

help us with scheduling our trucks at SPL on a daily basis.’

Mr Taylor:   ‘Aram has been a Logistic Contractor, providing transport service for SPL for the last few years through trucks and vans.’

I said:    ‘I have contracts with SPL through my business ASOS Express, and I own a van and two trucks that are currently providing services to SPL. Can I keep my vehicles?’

Mr Finch:    ‘I will discuss with the owner of the company. He would also like to invite you to our Melbourne office in Port Melbourne to meet our State Manager, Adrian Fortuna, to discuss this further.’”

89. In cross-examination, Mr Braim said that he asked, “Can I keep my trucks?” (as opposed to “Can I keep my vehicles?”). He explained that, whilst he disclosed his van as well as his trucks, his question was directed to keeping his trucks because it was the truck contract with ASOS that SPL would be bringing to an end. He understood that ASOS’s separate contract to supply van services to SPL would remain on foot.

90. Mr Finch gave the following evidence about this meeting in cross-examination (emphasis added):

“Q.   So at this meeting you said … ‘Allied is looking for an onsite supervisor to help us with scheduling our trucks at SPL on a daily basis’?

A.   I believe I said something to those effects.

Q.   Then Mr Taylor said something to the effect of, ‘Aram has been a logistics contractor providing transport services for SPL for the last few years through trucks and vans.’

A.   No. Trucks.

Q.   Just trucks, you say?

A.   I – I – I believe so. I’m just trying to remember what I – I wrote in my affidavit. That’s all.

Q.   Leave your affidavit alone for the time being. I’m just asking you about your memory here.

A.   Yeah. Well, my memory was he was – it was to do with his truck – trucks. He was – he had a truck involved in the laundry. They – they liked him as a – they felt he was very knowledgeable about the laundry …

Q.   That wasn’t really my question to you. I’m suggesting to you that Mr Taylor said at this meeting, ‘Aram has been a logistics contractor providing transport services for SPL for the last few years through trucks and van.’ Do you agree or disagree with that?

A.   I don’t remember the van comment but, yes, the rest of the comment I believe was correct.

Q.   You say you don’t remember but it’s a long time ago. You would accept that it’s possible that it was said and you just can’t recall. Right?

A.   No, because at no stage at the time was I aware that he had a van? So at the time I would have – no, I don’t believe it was said.

Q.   At the time you say you weren’t aware he had a van. Are you talking about at the zoom meeting or when do you say you first became aware he had a van?

A.   It wasn’t until this whole proceeding started.

Q.   I suggest to you that Mr Braim said to you at this meeting, ‘I have contracts with SPL through my business Asos Express and I own a van and two trucks that are currently providing services to SPL. Can I keep my vehicles?’ He said that, didn’t he?

A.   I don’t recall that.

Q.   You’d accept that he could have said that?

A.   No, I don’t. I – I – we – can I just clarify because I had a – a meeting and greet zoom meeting with Aram and Simon Taylor. Is that the – is that the meeting you’re talking about?

Q.   Correct, yes. That’s what I’m asking you about?

A.   Then, no, that wasn’t said to me in that meeting.”

…

A.    … The van I never knew anything about. It was the truck …”

91. On the second day of his cross-examination, after speaking with Mr McDowell about his evidence overnight, Mr Finch gave evidence that he learned at the 11 June 2020 meeting referred to below that Mr Braim was providing services to SPL using two trucks and a van. I address that aspect of Mr Finch’s evidence at [100] below.

92. Mr Braim attended a meeting at Allied’s Port Melbourne office on 11 June 2020. Mr Fortuna, Ms Fox and Mr Macarthur were present at that meeting in person. Mr McDowell and Mr Finch joined the meeting from Sydney via Zoom video call platform (the 11 June 2020 meeting).

93. According to Mr Braim, the 11 June 2020 meeting lasted approximately 30 to 45 minutes.

94. There is no dispute that the matters discussed at the meeting included Mr Braim’s employment background and experience with SPL and SPL’s transport requirements.

95. Mr Braim gave evidence that the 11 June 2020 meeting included a conversation to the following effect:

“I said:    ‘I provide transport services through my company to SPL by van and by truck to their customers in Melbourne Metropolitan and regional areas. I would not be interested in a position if I could not continue to do this’.

Mr McDowell:   ‘I do not care about the vans, but you cannot have your trucks providing services to SPL while you work for Allied Express as this has caused issues in the past. You cannot be assigning work to trucks owned by yourself as well as other drivers. That is a conflict. We only hire owner drivers. You can take your trucks elsewhere or sell them. Tell me how much you want per year? It will need to take into account the net income of your two trucks….’

…

I also said:    ‘I will receive phone calls as I will be managing ASOS Express. This will not affect my duties at Allied Express; however, I will need to attend to those phone calls.’

Mr Fortuna said:    ‘That is ok no issue with that.’”

96. In their affidavits affirmed on 24 February 2022 and 25 February 2022 (respectively), Mr McDowell and Mr Fortuna each deposed that they recall Mr Braim saying during the meeting words to the effect that: “I already supply one van and some trucks to SPL”. ^[11]

    11. The affidavits of Mr McDowell, Mr Fortuna and Mr Finch responded to an earlier affidavit of Mr Braim sworn on 21 February 2022 for the purpose of the interlocutory hearing in these proceedings which set out his account of the conversation at the 11 June 2020 meeting in the same terms as his 21 July 2022 affidavit extracted at [95] above. Following the interlocutory hearing, directions were made for both parties to serve supplementary evidence. Mr Braim’s evidence was consolidated into one affidavit, being his affidavit sworn on 21 July 2022 that was read at the separate question hearing. Mr Braim’s earlier affidavit was tendered at the separate question hearing to enable the evidence of the defendants’ witnesses responding to it to be understood.

97. Mr McDowell and Mr Fortuna deposed that he responded to that statement by Mr Braim, saying: “You can continue to supply the one van only to SPL, but you need to sell the trucks to be able to work for Allied Express, otherwise it’s a conflict of interest”. According to Mr McDowell, Mr Braim responded: “Okay, I will sell my trucks”.

98. In cross-examination, Mr Fortuna denied that Mr McDowell said “I don’t care about the vans”. Mr McDowell’s evidence in cross-examination was that he told Mr Braim, “I do not care about the van”. He denied referring to “vans” in the plural.

99. In his affidavit affirmed on 25 February 2022, Mr Finch identified those parts of Mr Braim’s account of the 11 June 2020 meeting that he disputed. Mr Finch did not raise any dispute with Mr Braim’s evidence that he said words to the effect: “I provide transport services through my company to SPL by van and by truck to their customers in Melbourne Metropolitan and regional areas. I would not be interested in a position if I could not continue to do this.” Nor did Mr Finch dispute Mr Braim’s evidence that Mr McDowell replied with words to the effect that: “I do not care about the vans.”

100. As referred to above, Mr Finch gave evidence on the first day of his cross-examination that he did not know that Mr Braim had a van until after these proceedings had commenced. However, after speaking with Mr McDowell overnight, Mr Finch gave evidence on the second day of his cross-examination that he knew at the 11 June 2020 meeting that Mr Braim worked through a company and would be continuing to provide services to SPL using a van. Mr Finch said: “That was the agreement, one van, no trucks”. Mr Finch also said that, during the 11 June 2020 meeting, “he [referring to Mr Braim] made it clear he had trucks and a van” and that “Allied Express did allow him to maintain the van, one van as we were explained very clearly in that meeting”. It was then put to Mr Finch that this was inconsistent with his evidence given on the first day of his cross-examination that he had not known about any van prior to the commencement of these proceedings. Mr Finch said that he could not recall having given that evidence. However, he had given that evidence in very clear terms as set out at [90] above. Mr Finch attempted to explain away that evidence by distinguishing between the 10 June 2020 meeting and the 11 June 2020 meeting and reiterating the new version of his evidence that it was at the 11 June 2020 meeting that he had first heard about a van. I found that wholly unconvincing. Mr Finch’s evidence on the previous day had been that he did not hear about a van at any meeting in June 2020 and that he had heard about it for the first time after the commencement of these proceedings in February 2022. I do not accept Mr Finch’s evidence about the “one van, no trucks” issue given on his second day of cross-examination. That evidence is irreconcilably inconsistent with his evidence on the first day and, conveniently for Allied, aligns with the evidence of Mr McDowell and Mr Fortuna about what was said at the 11 June 2020 meeting. Contrary to Mr Finch’s denials, I infer that Mr Finch changed the substance of his evidence because he realised after speaking with Mr McDowell after the first day of his cross-examination that it would be more helpful to Allied for him to say that “one van” was mentioned at the 11 June 2020 meeting and that Allied permitted Mr Braim to continue providing services to SPL using “one van, no trucks”.

101. In reply to the affidavits of Mr McDowell and Mr Fortuna, Mr Braim denied that the discussion at the 11 June 2020 meeting was limited to “one van”. Mr Braim deposed that: “I would never have agreed to an employment position in exchange for burying the business that I spent day and night building up across 5 years, especially when Allied Express did not do any van work for SPL. Had he said this, I would have regarded it as unfair and arbitrary, and would not have accepted the employment position.”

102. Mr Braim also deposed that a limitation to the effect that he and ASOS could only use one van when providing van services to SPL would have potentially put ASOS in breach of its contract with SPL. Under that contract, ASOS was obliged to service the requirements of the SPL customers allocated to it. If the customers’ volumes increased so that more than one van was required to service them, ASOS would be required to come up with more vans. Mr Braim gave similar evidence in cross-examination, explaining that his discussions with Allied representatives about his van or about vans in June and July 2020 were about the van contract and the van service that ASOS provided to SPL, which was to continue after Allied took over the truck deliveries for SPL. The van contract between ASOS and SPL was not limited to a single van.

103. In his affidavit, Mr McDowell denied telling Mr Braim that his trucks could work elsewhere and deposed that he told Mr Braim that he would need to sell the trucks if he were to work with Allied. Mr McDowell deposed that: “I offered no exception to this requirement. I did not consider the van to be an exception, because the van could not be used to provide services to SPL that were directly in competition with Allied”.

104. Each of Mr Finch and Mr Fortuna gave evidence that Mr McDowell told Mr Braim that he would need to sell his trucks in order to work for Allied. However, in cross-examination, Mr Fortuna gave evidence that Mr McDowell had told Mr Braim that he would have to either take his trucks elsewhere or sell them.

105. Mr McDowell denied that Mr Braim had said during the 11 June 2020 meeting words to the effect that he would need to attend to phone calls that he would receive as managing director of ASOS but that this would not affect his duties at Allied. Mr McDowell deposed that: “Under no circumstances would I allow an employee to run another business, or their own business, during working hours for Allied. Not only would this be a distraction and interruption to the work he needed to be doing, but he was being paid for work for Allied, not for himself or someone else.” Mr McDowell also deposed that he did not recall discussing ASOS at the 11 June 2020 meeting and that he did not believe that Mr Braim had mentioned ASOS or even said that he had been providing services to SPL through a company during the 11 June 2020 meeting.

106. Mr McDowell also deposed that:

“I was under the understanding from Mr Braim that he had one van working at SPL only, and that this would take no involvement or management from him to remain there. Had I understood the position to be otherwise, I would not have agreed to let him retain the vehicle whilst employed by Allied.”

107. In his affidavit affirmed on 25 February 2022, Mr Finch denied that Mr Braim said words to the effect that he would need to attend to phone calls that he would receive as managing director of ASOS but that this would not affect his duties at Allied. Mr Finch deposed that: “Under no circumstances would I have agreed to hire anyone to Allied while they were running their own business during their working hours with Allied.” Mr Finch also deposed Mr Braim did not mention ASOS during the 11 June 2020 meeting or any subsequent discussion and that the first time Mr Finch had heard of the existence of ASOS was when he read an affidavit sworn by Mr Braim on 21 February 2022 in these proceedings. However, as referred to at [100] above, Mr Finch gave evidence on the second day of his cross-examination that he knew at the meeting that Mr Braim worked through a company.

108. In his affidavit affirmed on 25 February 2022, Mr Fortuna also denied that Mr Braim said words to the effect that he would need to attend to phone calls that he would receive as managing director of ASOS but that this would not affect his duties at Allied. Mr Fortuna denied that Mr Braim had referred to ASOS at all during the 11 June 2020 meeting. Mr Fortuna maintained that denial in cross-examination, but accepted that it would make no difference to Allied whether Mr Braim provided the van services to SPL that were discussed at the 11 June 2020 meeting personally or through a company.

109. Ms Fox gave evidence that she was present at the 11 June 2020 meeting but does not recall the conversation that took place at that meeting.

110. Allied did not adduce any evidence from Mr Macarthur.

111. There is no evidence of any note or other contemporaneous record of the meeting.

112. Ms McDowell, who was not present at the 11 June 2020 meeting, gave the following evidence in her first affidavit affirmed on 16 February 2020:

“I am told by Colin McDowell, and believe, that during the hiring process and before Mr Braim commenced employment with Allied, Mr Braim had a meeting with Adrian Fortuna, Troy Finch and Colin McDowell in which Mr Braim was informed by Mr Fortuna that he needed to cease running his own trucks and performing or providing delivery services whilst employed by Allied, save for one van, which Allied would permit him to continue using to provide services to SPL.

…

I am told by Colin, and believe, that the reason he agreed to permit Mr Braim to retain one van and continue using that to provide services to SPL was that the van was performing specialised work and was not in competition with the fleets that Allied was supplying to SPL.”

113. In cross-examination, Mr Fortuna gave evidence that Mr McDowell had conveyed at the 11 June 2020 meeting that he did not regard Mr Braim’s provision of services to SPL by a single van as being in competition with Allied. It was put to Mr Fortuna that, in circumstances where Allied was only providing truck services to SPL and vans were unable to convey the trolleys that Allied had undertaken to transport for SPL in its trucks, Mr Braim’s provision of van services to SPL using more than one van would not involve competing with Allied. Mr Fortuna did not agree with that proposition. As the cross-examiner put to him, Mr Fortuna’s evidence on that subject made no sense.

114. The very poor state of Mr McDowell’s recollection of the conversation at the 11 June 2020 meeting concerning van services became apparent during cross-examination when Mr McDowell stated that he had not even been told at that meeting that the van that he understood was owned by Mr Braim was providing services to SPL. That is inconsistent with all of Mr McDowell’s affidavit evidence referred to above. When reminded of that evidence in cross-examination, Mr McDowell accepted that he had in fact been told at the meeting that the van served SPL and withdrew the contrary statement that he had made in cross-examination. Mr McDowell angrily denied that this cast doubt on the accuracy of his recollection that he had agreed that Mr Braim could provide services to SPL using one van only.

115. Mr McDowell also appeared to be confused about other aspects of the 11 June 2020 meeting and the circumstances in which Mr Braim was employed. For example, at one point during his cross-examination, Mr McDowell said: “I trusted Mr Braim to supply me with one vehicle that wouldn’t contravene his work contract with us.” However, there is no evidence that Mr Braim was supplying or even contemplating supplying any vehicles to Allied.

116. When Mr McDowell was asked in cross-examination about his evidence referred to at [103] above that he “did not consider the van to be an exception, because the van could not be used to provide services to SPL that were directly in competition with Allied”, the following exchange occurred:

“Q.   … the reason you say that you’re happy for Mr Braim to provide services to SPL using a van is because they’re not in competition, right?

A.   No, that’s not correct.

Q.   Well, let’s have a look at paragraph 23 of your affidavit, all right? You say, ‘I did not consider the van to be an exception - -

A.   23 - -

Q.   - - because the van could not be used to provide services to SPL that were directly in competition with Allied’.

A.   Sorry, my 23?

Q.   Yes.

A.   Is that Mr Braim’s affidavit?

Q.   No, it’s yours. Page 14 on the top right.

A.   That could also mean that I didn’t understand at the time that his van was at SPL and, yes, you’ve already told me that it was, so I have accept that it was at SPL. Do I think it was in competition? One goes to nursing homes and one goes to hotels, so how do you want me to answer? Could a truck go to a nursing home? Yes, it could. Could a van go to a hotel? Yes, it could, so that’s your answer. That’s the best I can answer for you.

Q.   Well, I suggest to you that what you swore at paragraph 23 is correct, right?

A.   It should have read, ‘Provide services to trucks of SPL’ but it’s correct, okay?

Q.   Well, it’s the case isn’t it? I put to you that vans could not be used to provide services to SPL that were directly in competition with Allied?

A.   I think I’ve answered that, sir. Cans could be. You go into hotels to pick up laundry, you go into nursing homes to pick up laundry. A van could be used to go into a hotel.

Q.   So you say that your sworn evidence is incorrect now, do you?

A.   Now that I look at it, I think it could be incorrect.

Q.   Aren’t you just changing the evidence because you think it … doesn’t help your case?

A.   No, no. I just swore on an oath. I swore on an oath, thank you.

Q.   Well, you swore an oath when you gave this affidavit, too, didn’t you?

A.   Yes.

Q.   Presumably you read it before you signed it, right?

A.   Yes.

Q.   And whether it was one van or ten vans, the same would hold true, I suggest?

A.   No, it wouldn’t.”

117. According to my observation at the time, Mr McDowell was doing precisely what the cross-examiner put to him: endeavouring to change his evidence because he began to perceive that it may not be in Allied’s interests to accept that the provision of services to SPL using one van would not compete with the services that Allied was providing to SPL by truck. I formed that impression from Mr McDowell’s immediate realisation that the evidence did not assist Allied (asking when paragraph 23 was read to him, “Is that Mr Braim’s affidavit?”) and the process that he then went through of first trying to interpret the paragraph in a way that might assist Allied’s case (by reading words into it that were not there and would make no sense in any event) before ultimately abandoning his own affidavit evidence on the subject.

118. According to Mr Braim’s evidence, Mr McDowell asked him during the 11 June 2020 meeting whether he was sure that he would be able manage 15 to 20 trucks providing Allied’s delivery services for SPL. Mr Braim responded: “This will not be an issue as I have been doing this for the last few years already”. In cross-examination, Mr Braim clarified that he was managing six trucks at the time of this conversation and had last managed 15 to 20 trucks in 2016. Mr Braim maintained that his answer to Mr McDowell was truthful because “experience is experience”.

119. On 2 July 2020, Mr Fortuna sent an email to Mr Braim attaching what he described as “the basic job / task position” for the SPL onsite supervisor position for which Allied sought to employ Mr Braim. The description stated:

“Allied Express Transport requires an experienced Onsite Supervisor to manage the day to day distribution for one of our major clients in Broadmeadows.

This is a critical role and you will be the face, eyes and ears as the Onsite Supervisor for an exciting new customer. This is a full-time position and will provide exciting challenges. This is an intricate and diverse logistics operation of which you will be an essential part.

…

Requirements:

-   Direct supervision of drivers.

-   Leadership of small on-site team.

-   Strong attention to detail.

-   Strong COR and OHS background.

-   Good communication skills.

-   Intermediate computer skills for reporting and emails.

-   Ability to work under pressure.

-   Time management and problem-solving skills.”

120. Mr Fortuna’s email requested Mr Braim’s decision to accept the role by midday the following day (3 July 2020). Mr Fortuna also requested that Mr Braim make himself available for a Zoom video conference or telephone conference the following day.

121. Mr Braim gave evidence that he did have further telephone conversations with Mr Fortuna. I do not find it necessary to refer to the details of those conversations as they are not relevant to the factual or legal matters that must now be determined.

122. It is relevant to note that the onsite supervisor role that the Allied representatives discussed with Mr Braim at the 10 June 2020 meeting and 11 June 2020 meeting involved the supervision and scheduling of Allied’s trucks performing SPL deliveries. As I have found at [83] above, the relationship between Allied and SPL at the time of the 11 June 2020 meeting involved Allied providing truck delivery services to SPL. As I have found at [84] above, the transport services that Allied has provided to SPL in Melbourne since March 2020 have been truck delivery services only.

123. It is common ground between all of the witnesses who participated in the 11 June 2020 meeting that it was agreed between Mr McDowell (on behalf of Allied) and Mr Braim that Allied would permit Mr Braim to continue to provide van services to SPL at the same time as being employed as an onsite supervisor with Allied. It is common ground between the parties that the written terms of the employment contract that Allied and Mr Braim subsequently entered into were subject to that permission. The matters in dispute are whether that permission was limited to the provision of van services by Mr Braim personally (as opposed to a company owned by Mr Braim) and/or the provision of services using one van only.

124. For the reasons explained at [100] above, I do not accept Mr Finch’s evidence about what was said concerning a van or vans at the 11 June 2020 meeting. All of the other witnesses have given evidence of their recollections of the precise words said. Their recollections are fallible for the reasons identified by McLelland CJ in Eq in Watson v Foxman. ^[12] Mr McDowell’s recollection of the meeting is demonstrably poor, as referred to at [114]-[115] above. There is no contemporaneous record of the meeting.

     12. See [13]-[14] above.

125. The evidence does not provide a sufficient basis for the Court to make a positive finding on the balance of probabilities about the exact words spoken by Mr McDowell and Mr Braim. I do not feel actual persuasion that Mr Braim said, “I provide services … to SPL by van and by truck” rather than “I already supply one van and some trucks”. Nor do I feel actual persuasion that the second phrase was spoken by Mr Braim rather than the first phrase. Similarly, I do not feel actual persuasion that Mr McDowell replied, “I do not care about the vans” rather than, “I do not care about the van”. Nor do I feel actual persuasion that Mr McDowell gave the second reply rather than the first.

126. However, I am satisfied on the balance of probabilities that neither Mr McDowell nor any other representative of Allied at the 11 June 2020 meeting limited the scope of the permission for Mr Braim to provide services to SPL to one van only. It is inherently improbable that such a limitation was expressed for the following reasons.

127. First, as I have found at [83] above, it was known to all participants at the 11 June 2020 meeting that SPL had engaged Allied to provide truck services only. According to Mr McDowell’s affidavit evidence, one van could not be used to provide services to SPL in competition with Allied. ^[13] For the reasons already explained, I reject Mr McDowell’s attempt to change that aspect of his evidence. ^[14] The evidence establishes the differences between the truck services and van services utilised by SPL. ^[15] The evidence does not establish any rational reason why Allied would have regarded the provision of van services to SPL using more than one van as being in competition with the truck delivery services that were provided by Allied.

     13. See [103] above.

     14. See [116]-[117] above.

     15. See [38]-[49] above.

128. Second, I accept Mr Braim’s evidence referred to at [101]-[102] above that he would not have accepted employment with Allied if he had been limited to providing van services to SPL using one van only, potentially putting ASOS in breach of its van services contract with SPL. That evidence is both inherently plausible and consistent with the terms of the van services contract. There is no evidence that those matters weighing on Mr Braim’s mind were known to SPL at the time of the 11 June 2020 meeting. However, the fact that Mr Braim did accept employment with Allied shortly after that meeting renders it improbable that any words spoken by Mr McDowell at the meeting conveyed that Allied’s agreement to Mr Braim providing van services to SPL was limited to one van only.

129. I am also satisfied on the balance of probabilities that Mr McDowell did not say words at the 11 June 2020 meeting that conveyed that Allied’s agreement to Mr Braim providing van services to SPL was limited to van services provided by Mr Braim personally and did not extend to the provision of van services by a company owned by Mr Braim. There is no rational reason why Allied would have sought to impose such a limitation. As Mr Fortuna said in cross-examination, it would make no difference to Allied whether the van services were provided to SPL by Mr Braim personally or by his company. ^[16] For the reasons referred to at [20] above, I do not accept Mr McDowell’s assertions in cross-examination that he would not have employed Mr Braim if he had known that it was Mr Braim’s company rather than Mr Braim personally who was and would continue to provide van services to SPL. Mr McDowell’s evidence about this issue made no sense. He said that he had a rule against employing transport companies. The defendants do not contend that there was any discussion about Allied employing or engaging ASOS. The discussion at the 11 June 2020 meeting concerned the employment of Mr Braim personally as an onsite supervisor for Allied, as subsequently occurred.

     16. See [108] above.

130. Contrary to Allied’s submissions, I do not regard the email sent by Mr Braim to Mr Fortuna on 18 March 2021 referring to “[t]he tender for a van work at SPL” as warranting a finding that Allied agreed at the 11 June 2020 meeting for Mr Braim to provide services to SPL limited to a single van. That email is referred to at [185] below. The phrase “[t]he tender for a van work at SPL” is plainly grammatically erroneous. A reasonable person reading the email with a rudimentary understanding of the process of tendering for the provision of services would have understood that it was highly unlikely that SPL would be issuing a tender for the provision of services which stipulated that those services be provided by a single van. More importantly, the email was sent some nine months after the 11 June 2020 meeting.

131. For all of those reasons, I find that it was agreed at the 11 June 2020 meeting that, if Mr Braim accepted employment with Allied, Allied would permit him to continue providing van services (whether personally or through a company) to SPL. It is convenient to refer to this as the SPL exception.

132. Given Mr McDowell’s poor recollection of the 11 June 2020 meeting and the fallibility of the recollections of the other witnesses, I do not consider that the evidence is sufficient to support a finding about whether Mr McDowell told Mr Braim that he would have to sell his trucks or whether he told him that he could either sell his trucks or take them elsewhere. If Mr McDowell stated that the requirement for Mr Braim to cease providing truck services to SPL applied while Mr Braim was working for Allied, this would not have been understood by a reasonable businessperson in the parties’ position at the time the employment contract was entered into as meaning that Mr Braim was entitled to provide any and all truck services to SPL immediately after his employment with Allied ended even if, in the circumstances existing at that time, the provision of those truck services would contravene the “Restriction on Activities” clause in Mr Braim’s employment contract referred to below.

133. The other factual disputes that emerged from the evidence about the 11 June 2020 meeting summarised above are not relevant to Allied’s claims for restraining orders that are the subject of these reasons. It is therefore not necessary to make any findings in relation to those disputed matters.

Mr Braim’s employment contract

134. On 9 July 2020, Allied sent a letter to Mr Braim offering him the position of “On Site Supervisor” commencing from 13 July 2020 and enclosing a document entitled “Remuneration Details” and a further document entitled “Terms and Conditions of Employment”. It is convenient to refer to those documents, together with the SPL exception referred to above, as the employment contract.

135. The employment contract provided for a total remuneration package of $100,000 per annum, including superannuation.

136. The employment contract stated that Mr Braim’s duties would be “as previously outlined in discussions and also in accordance with the position description attached” and may be varied by Allied from time to time. The copy of the employment agreement tendered in evidence does not include any “position description”.

137. The employment agreement contained the following terms under the heading “Confidential Information”:

“It is a condition of this agreement that you will keep confidential and not disclose to any person without the written consent of Allied Express, any confidential information of Allied Express, including:

-   Any matter concerning the business of Allied Express not generally known outside Allied Express

-   Any developments relating to existing or future products and services

-   Any information relating to the general business operations of Allied Express and any of its related bodies corporate including:

-   financial information

-   client, driver and / or staff lists

-   personal or business details relating to clients, drivers and / or staff

-    costing and sell price information

-    trade secrets

-   technical design or specifications

-   business and marketing plans and strategies

-   current activities and future plans relating to all matters of development

-   sales, agreements and arrangements with third parties

-   other matters relating to the affiars of Allied Express obtained or to which you are exposed during the course of your employment

-    procedures and practices of the business

-   Subcontractor Driver payment information

which are not public information or publicly distributed otherwise than in breach of this Agreement.

On termination, you are required to return to Allied Express all such confidential information which you may have in your possession or control. Where such information is recorded in the form of computer information or software, then Allied Express may, on request, agree that such information will instead be deleted or erased in such manner that it cannot be retrieved.

This obligation extends beyond your employment with Allied Express.”

138. The employment contract obliged Mr Braim, upon termination of his employment or at Allied’s request at any time during his employment, to immediately return to Allied all property in his possession or control that relates in any way to the business or affairs of Allied, including customer records and driver contact lists.

139. The employment contract contained the following terms under the heading “Restriction of Activities”:

“In consideration of your employment by Allied Express, and the salary and benefits specified in this Agreement, you agree that:

-   At any time after the date of termination of your employment for whatever cause you shall not represent yourself as still being in any way connected with or interested in the business of Allied Express

-   During the term of the employment and for a period of twelve (12) months from the date of termination of your employment, you must not, without Allied Express’s prior written authorisation, either on your own account or for any other person, firm or company, engage, solicit, interfere with or endeavour to entice away from Allied Express any employee of or contractor of Allied Express.

-   For a period of twelve (12) months after the date of termination of your employment, you must not solicit or endeavour to entice away from Allied Express any customer or client of Allied Express or any of its related bodies corporate. You acknowledge that as an employee, you will gain access to Allied Express’s confidential information including its price lists, methods of operation and terms of dealing with its Customers, and you hereby undertake not to make use of this information to solicit Allied Express’s Customers’ business either for yourself or on behalf of a new employer or other person for the said period of twelve (12) months. A Customer of Allied Express shall be defined as a Customer of Allied Express who was in the habit of regularly dealing with Allied Express at the time of your termination of employment.

-   In order to protect the confidential information and the goodwill of the business of Allied Express, you hereby covenant that you will not without the prior written consent of Allied Express for a period of twelve (12) months following the termination of ths Agreement for any reason:

-   directly or indirectly canvas, solicit or endeavour to entice away from Allied Express any Customer to any transport company or freight broker/consultant in competition with Allied Express.

-   directly or indirectly assist any transport company or freight broker/consultant in competition with Allied Express, to gain business from Allied Express or to assist such companies to transition Allied Customers to them.

-   provide technical, commercial or operational information regarding Allied Express or its Customer to third parties or others, nor to use this Confidential Information for commercial advantage

-   directly or indirectly (including by becoming an employee of a transport company or freight broker/consultant in competition with Allied Express) provide the same or largely the same services to any Customer as were provided by you to that Customer during your employment with Allied Express

-   approach any Customer or employee or agent of any Customer for the purposes set out above.

You agree that it is reasonable and necessary for Allied Express to have the benefit of the restrictions in this clause.”

140. The employment contract contained the following term under the heading “Conflict of Interest”:

“You must not for the duration of your employment by Allied Express compete with or be involved with or interested in businesses, enterprises, firms or companies competing with Allied Express. You will arrange your affairs so that there is no conflict between Allied Express’s interest and yours, and so that it could not be reasonable alleged that there is such a conflict.”

141. The employment contract provided that it was governed by and construed in accordance with “the laws of New South Wales and that of Australia”.

142. Mr Braim signed the employment contract at Allied’s offices in Port Melbourne on 13 July 2020.

Sale of ASOS trucks and continued use of ASOS van

143. After Mr Braim commenced work with Allied, ASOS’s two trucks were parked and sat idle at SPL’s depot for some months before being sold to drivers who then joined Allied as contractors to do SPL delivery work. One of those drivers was Mr Armit Mangat who was known to Mr Braim as a driver who had worked for SPL since about 2016. In cross-examination, Mr Braim described Mr Mangat as his friend.

251. Categories four, seven and eight are described in such broad terms that it is not possible to assess whether the wide range of information that would fall with those categories is confidential. The meaning of “costing and sell price information” is unclear and Allied did not adduce any evidence identifying the information falling within that category. The manuals and databases referred to are unidentified and that description is capable of capturing a very wide range of business records, none of which were identified in the evidence. The same may be said of “sales agreements and arrangements” between Allied and third parties. The only document falling within this last mentioned category identified in the evidence is the document referred to at [178]-[181] above, which Allied has failed to prove evidences a binding agreement between Allied and SPL. In any event, if Mr Braim had knowledge of that document prior to these proceedings and if he owed any contractual or equitable obligation of confidence to Allied in respect of that document (and I make no such findings), Allied has impliedly released Mr Braim from that obligation by tendering the document in these proceedings without seeking any suppression or non-publication order.

252. For those reasons, Allied has failed to establish that the information in the eight pleaded categories was confidential information of Allied.

253. Moreover, with the exception of Allied’s hourly rate paid to its truck drivers, the evidence referred to at [163]-[177] above does not establish that information in the eight pleaded categories was imparted to Mr Braim by Allied during the course of his employment. The mere fact that information may have been stored in Allied’s “central IT system” or available in hard copy at unidentified locations with Allied’s offices does not establish that the information was provided to or accessed by Mr Braim. There is no evidence that he accessed the relevant information in Allied’s “central IT system”. Ms McDowell gave evidence that the information stored on that system was accessed so frequently by so many employees that it was either not possible or not practicable to interrogate the system to determine whether or when Mr Braim had accessed information on that system. That is a further matter that tells against the information being confidential.

254. The reasons above are sufficient to dispose of Allied’s claim for relief in terms of prayer 3A of the Amended Statement of Claim to the extent that it seeks to restrain disclosure or use of confidential information in breach of the confidentiality clause in the employment contract. However, even if Allied had established that confidential information had been imparted to Mr Braim in the course of his employment, it would have failed in its claim for an injunction in terms of prayer 3A because it failed to establish any actual or threatened breach of the confidentiality clause.

255. By the end of the separate question hearing, the only alleged breach of the pleaded obligations of confidence pressed by Allied was that Mr Braim “has knowingly offered Mr Mangat a rate of pay that is higher than he knew was being offered by Allied Express”. The evidence about the basis on which Mr Braim calculated the rate of pay that ASOS offered to Mr Mangat in February 2022 is set out at [221] above. Mr Braim’s answer to the one and only question put to him about that subject matter does not establish that he used his knowledge of Allied’s hourly rate to formulate the offer to Mr Mangat. For the reasons explained above, Allied’s hourly rate is not confidential in any event.

256. Allied’s claim for an injunction restraining use or disclosure of the eight categories of information in breach of an equitable obligation of confidence fails for essentially the same reasons. Allied has failed to identify the allegedly confidential information with specificity, has failed to establish that the eight categories of information have the necessary quality of confidence, has failed to establish that the information (other than the drivers’ hourly rate) was imparted to Mr Braim during the course of his employment in circumstances importing an obligation of confidence and has failed to establish actual or threated use of the information: see Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21 at [39]; JD Heydon, MJ Leeming and PG Turner, Meagher Gummow & Lehane’s Equity Doctrines and Remedies (5^th ed, 2015) at [42-100].

257. For all of those reasons, there will be an order dismissing Allied’s claim for relief in prayer 3A of the Amended Statement of Claim.

Prayer 2 of the Amended Statement of Claim

262. The terms of the injunction sought in prayer 2 of the Amended Statement of Claim are not limited to Mr Braim’s conduct that Allied claims has breached the “Restriction on Activities” clause of his employment contract, or apprehended future conduct of the same kind. The terms of the proposed injunction are as broad as the provisions of the “Restriction on Activities” clause of the employment contract. The chapeau to prayer 2 captures any conduct in contravention of that clause and paragraphs (a) to (f) of prayer 2 are merely an inclusive list. Subject to the addition of specific references to SPL and ASOS as a “Customer” and “transport company” (respectively) in respect of which the proposed injunction would apply, paragraphs (a) to (e) of prayer 2 are in the same terms as the sub-clauses of the “Restriction on Activities” clause that were referred to in Allied’s submissions as the covenant against poaching (paragraph (a)), the covenant against solicitation (paragraph (b)), the covenant against assistance (paragraph (c)), the covenant against disclosure and use of information (paragraph (d)) and the covenant against competition (paragraph (e)). Paragraph (f) of prayer 2 is also in the same terms of one of the sub-clauses in the “Restriction on Activities” clause in the employment contract and would restrain Mr Braim from approaching any “Customer” of Allied (including SPL) or any employee or agent of any such “Customer” for a purpose described in paragraphs (a) to (e). The terms of prayer 2 contain no geographical limitation.

263. Allied alleges that, by “carrying on the business of ASOS Express and providing services to SPL beyond the use of a single van” in the period between the end of his employment on 19 January 2022 and the grant of the interim injunction in these proceedings on 10 March 2022, Mr Braim breached the following aspects of the “Restriction on Activities” clause: ^[26]

1. the covenant against competition, by Mr Braim providing to SPL the same services as he provided to SPL during his employment with Allied;

2. the covenant against assistance, by Mr Braim assisting ASOS, which Allied contends is a transport company in competition with Allied, to gain business from Allied; and

3. the covenant against solicitation, by Mr Braim soliciting the custom of SPL away from Allied to ASOS, which Allied contends is a transport company in competition with Allied.

   26. Amended Statement of Claim, paragraphs 21-23, as refined in paragraphs 47-50 of the Plaintiff’s Outline of Submissions dated 9 September 2022.

264. As I understood the closing submissions made on behalf of Allied, an allegation that Mr Braim breached the covenant against poaching by enticing Mr Mangat away from Allied or causing ASOS to engage Mr Mangat whilst he was still an employee of Allied was ultimately not pressed. ^[27] If it had been pressed, that allegation would have failed because Mr Mangat was not an employee of Allied at the time that he was engaged by ASOS. ^[28]

     27. T257.

     28. See [223]-[230] above.

265. However, Allied did press an allegation that Mr Braim breached the covenant against disclosure and use of information by offering Mr Mangat a rate of pay to work for ASOS that was higher than the rate Mr Braim knew was being offered by Allied. ^[29]

     29. T251; Plaintiff’s Outline of Submissions dated 9 September 2022, paragraph 50.

266. Notwithstanding that the alleged breaches referred to at [263] and [265] above are significantly narrower in scope that the terms of the “Restriction on Activities” clause, Allied did not make an alternative claim for injunctive relief directed to the alleged offending conduct. Allied’s only claim for relief was in the very wide terms of prayer 2 of the Amended Statement of Claim.

267. The applicable principles are well known and were summarised recently Gleeson JA (Bathurst CJ and Beazley P agreeing) in Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163. It is convenient to set that summary out in full insofar as it concerns restraints in employment contracts:

“58.

   At common law a restraint of trade is contrary to public policy and void

unless justified by the special circumstances of the particular case. A restraint may be enforced if the restraint is reasonably necessary for the protection of the parties concerned and reasonable in the interests of the public: Nordenfelt v The Maxim Nordenfelt Guns & Ammunition Co Ltd [1894] AC 535 at 565 (Lord Macnaghten); Lindner v Murdock’s Garage (1950) 83 CLR 628; [1950] HCA 48 at 633 (Latham CJ); Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71 at 376, 379-380.

59. In New South Wales, it is necessary to have regard to the Restraints of Trade Act 1976 (NSW) which relevantly provides in s 4:

4 Extent to which restraint of trade valid

(1) A restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not.

(2) Subsection (1) does not affect the invalidity of a restraint of trade by reason of any matter other than public policy.

(3) Where, on application by a person subject to the restraint, it appears to the Supreme Court that a restraint of trade is, as regards its application to the applicant, against public policy to any extent by reason of, or partly by reason of, a manifest failure by a person who created or joined in creating the restraint to attempt to make the restraint a reasonable restraint, the Court, having regard to the circumstances in which the restraint was created, may, on such terms as the Court thinks fit, order that the restraint be, as regards its application to the applicant, altogether invalid or valid to such extent only (not exceeding the extent to which the restraint is not against public policy) as the Court thinks fit and any such order shall, notwithstanding sub-section (1), have effect on and from such date (not being a date earlier than the date on which the order was made) as is specified in the order.

…

61. The correct approach to the application of s 4(1) of the Restraints of Trade Act is well settled. In Orton v Melman [1981] 1 NSWLR 583 at 587 McLelland J (as his Honour then was) explained that first, the Court determines whether the alleged breach (independently of public policy considerations) does or will infringe the terms of the restraint properly construed. Next, the Court determines whether the restraint, so far as it applies to that breach, is contrary to public policy. If it is not, the restraint is valid, subject to any order which may be made under s 4(3). These principles have been approved in later cases including in this Court: Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 328; Woolworths Limited v Olson [2004] NSWCA 372 at [42]–[44]; Jardin and Jardin Investments Pty Ltd v Metcash Ltd and Metcash Trading Ltd [2011] NSWCA 409 at [87].

62. The effect of s 4(1) of the Restraints of Trade Act is to require, for the purpose of determining the validity of a restraint, that attention be focussed on the actual or apprehended breach, rather than on imaginary or potential breaches: Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 at [10] (Brereton J).

63.   The validity of a covenant in restraint of trade is to be judged at the date of its creation: Lindner v Murdock’s Garage at 653 (Kitto J); Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 40 at 318 (Gibbs J); Geraghty v Minter (1979) 142 CLR 177; [1979] HCA 42 at 181 (Barwick CJ). Nonetheless, the Court may take into account future events that could have been foreseen: Lindner v Murdock’s Garage at 653. Hence, when exercising its discretion whether or not to grant relief, the Court considers matters as at the date of the hearing: Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWCA 418 at [70] (Young JA, Beazley and Basten JJA agreeing); Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 at [88]; (2008) 175 IR 414 at 440 (Brereton J).

64.   The nature of the interest meriting protection under a covenant in restraint of trade will differ according to the type of restraint under consideration. In Tullett Prebon (Australia) Pty Ltd v Purcell, a case involving restraints in an employment case, Brereton J said at [47]:

Whether a restraint is reasonable having regard to the interests of the parties depends on two, albeit related, considerations: first, whether the covenantee has a legitimate protectable interest, and secondly, whether the restraint is no more than reasonable for the legitimate protection of that interest. A covenantee is not entitled to be protected against mere competition; the legitimate interests which may be the subject of protection by covenant are in the nature of proprietary subject matter [Vandervell Products Ltd v McLeod [1957] RPC 185; Tank Lining Corporation v Dunlop Industries Ltd (1982) 40 OR (2d) 219; 140 DLR (3d) 659 at 664], including trade secrets and confidential information, and goodwill including customer connection.

65.   However as Young JA explained in Sidameneo (No 456) Pty Ltd v Alexander at [31]-[32], the word “proprietary” is used in a special sense and will include legitimate commercial interests. In this regard, his Honour referred to the view he had expressed in Twenty-First Australia Inc v Shade (Supreme Court (NSW), Young J, 31 July 1998, unrep) and Stokely-Van Camp Inc v New Generation Beverages Pty Ltd (1998) 44 NSWLR 607 at 612-613.

66. “Goodwill” has been described as a rather elusive concept: Sidameneo (No 456) Pty Ltd v Alexander at [54]. Goodwill has been referred to as the product of combining and using the tangible, intangible and human assets of a business for such purposes and in such ways that custom is drawn to it: Federal Commissioner of Taxation v Murry (1998) 193 CLR 605; [1998] HCA 42 at [24]. It has been said that it is more accurate to refer to goodwill as having sources than being composed of elements, given that goodwill is to be seen as adding value to a business “by reason of” situation, name and reputation, and other matters, not because goodwill is composed of such elements: Federal Commissioner of Taxation v Murry at [24], citing Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217 at 235 (Lord Lindley). It has also been recognised that many of the sources of goodwill are not themselves property, nor assets for accounting purposes: Federal Commissioner of Taxation v Murry at [25].

67.   Generally, a stricter and less favourable view is taken of covenants in restraint of trade between employer and employee than in commercial agreements. As Mason P explained in Woolworths Limited v Olson at [38]:

The courts in general take a stricter and less favourable view of covenants in restraint of trade entered into between employer and employee than of similar covenants in commercial agreements (Geraghty v Minter (1979) 142 CLR 177 at 185). The reasons are explained in J D Heydon, The Restraint of Trade Doctrine (2nd ed., 1999) at pp 68-69. It is nevertheless well established that an employer may have interests capable of protection by a restraint covenant. These interests go beyond protection of goodwill and retention of customers and extend to trade secrets …

68.   The same point is made by JD Heydon in the most recent edition of The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Butterworths) at 96-97, where four main reasons are given for the Court’s approach in employment cases. First, the inequality of bargaining power between the parties. Second, the employee may be giving up that employee’s only asset, which depends on specialised training and which may not be at all negotiable. Third, when labour is hired it remains valuable whether or not the employee later competes. Fourth, once the employee accepts the post-employment restraints, the employer’s power during the contract is much increased by reason of the inhibition on the employee’s ability to threaten to leave and seek work elsewhere.”

268. There is a dispute between the parties about whether s 4 of the Restraint of Trade Act 1976 (NSW) (the ROT Act) applies in the present case. Counsel for Allied submitted that s 4 does apply because the employment contract expressly provides that it is governed by the law of New South Wales. Counsel for the defendants submitted that s 4 does not apply because, by reason of s 12(1)(b) of the Interpretation Act 1987 (NSW), s 4 of the ROT Act applies to a restraint of trade “in and of New South Wales”. Counsel for the defendants further submitted that the “Restriction on Activities” clause (if enforced) would operate on conduct of the defendants in Victoria where they reside and carry on business. Citing the recent judgment of Parker J in Label Manufacturers Australia Pty Ltd v Chatzopoulos [2022] NSWSC 1059 (Chatzopoulos), counsel for the defendants submitted that it would therefore be appropriate for this Court to consider the validity of the restraint as if that question had arisen in the Supreme Court of Victoria. There is no equivalent to s 4 of the ROT Act in Victoria. Counsel for the defendants submitted that it follows that, if the “Restriction on Activities” clause is contrary to public policy because it is not reasonably necessary for the parties’ protection and not reasonable in the interests of the public, then the clause will be void and s 4 of the ROT Act will not apply to render the clause be enforceable to a limited extent.

269. Those submissions raise an interesting issue about which different opinions have been expressed in several cases: see JD Heydon, The Restraint of Trade Doctrine (14^th ed, 2018), pp 47-48; KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702; Professional Advantage Pty Ltd v Smart [2008] NSWSC 873, Chatzopolous.

270. Parker J did not find it necessary to resolve the issue in Chatzopolous. His Honour described that case (at [152]) as involving “the enforcement in Victoria, against a Victorian resident, of a restraint which (it is assumed for the sake of argument) was found in a contract governed by the law of New South Wales.” His Honour stated (at [152]) that this Court had cross-vested jurisdiction from the Supreme Court of Victoria and expressed the view that in circumstances where “restraint in Victoria was in question, it may well have been appropriate to look at the question as if it had arisen in that Court”. His Honour considered that there was “room for argument” about whether the application of the ROT Act was determined by the proper law of the contract in which the restraint is found, stating (at [153]): “The restraint of trade doctrine exists, not in the interests of a party who agrees to an onerous restraint, but in the public interest in free trade. In the present case, the question is whether public policy in Victoria permits the enforcement of the restraint in that State. To my mind that appears to make Kitto J’s reasoning in Kay’s Leasing applicable”.

271. Parker J was referring to the following passage from the judgment of Kitto J in Kay’s Leasing Corporations Pty Ltd v Fletcher (1964) 116 CLR 124 at 143:

“Where a provision renders an agreement void for non-compliance by the parties or one of them with statutory requirements, especially where the requirements can be seen to embody a specific policy directed against practices which the legislature has deemed oppressive or unjust, a presumption that the agreements in contemplation are only those of which the law of the country is the proper law according to the rules of private international law has no apparent appropriateness to recommend it, and indeed, for a reason of special relevance here, it would produce a result which the legislature is not in the least likely to have intended. It would mean that provisions enacted as salutary reforms might be set at nought by the simple expedient adopted in the present case of inserting in an agreement a stipulation that validity should be a matter for the law of some other country.”

272. I also do not find it necessary to resolve the issue in the present case. That is because, for the reasons explained below, Allied has failed to prove any of the alleged breaches of the “Restriction on Activities” clause. There is no breach or apprehended breach that would warrant injunctive relief in any terms, let alone the very wide terms of prayer 2 of the Amended Statement of Claim. It is therefore unnecessary to decide whether s 4 of the ROT Act applies to permit enforcement of the “Restriction on Activities” clause to the extent of the alleged offending conduct.

273. If it had been necessary to resolve that issue, I would have held that s 4 of the ROT Act does apply in the circumstances of the present case, contrary to the submissions of the defendants. Unlike in Chatzopoulos, the question in the present case is not “restraint in Victoria”. There is no geographical limitation in the very wide terms of the injunction sought by Allied in prayer 2 of the Amended Statement of Claim. Nor are the terms of the injunction sought confined to the alleged offending conduct that has occurred in Victoria. The parties expressly stipulated that the employment contract was governed by the law of New South Wales. Section 4 of the ROT Act operates on the validity of a restraint. In my opinion, a restraint created by a contract governed by the law of New South Wales is a “matter or thing in and of New South Wales” within the meaning of ss 2(2) and 4(1) of the ROT Act (read in accordance with s 12(1)(b) of the Interpretation Act) even if the terms of the restraint have the capacity to operate outside New South Wales. Allied properly invoked the jurisdiction of this Court to determine the parties’ dispute arising under the employment contract that is governed by New South Wales law. I do not consider that there are any policy reasons that would warrant this Court declining to give effect to the parties’ choice of governing law for the employment contract or otherwise approaching this case exercising cross-vested jurisdiction and determining the matter as if it had arisen in the Supreme Court of Victoria. The considerations that govern whether a restraint of trade is contrary to public policy and void at common law are the same throughout Australia: see Isaac at [59], extracted above at [267], and the authorities there referred to. The effect of s 4 of the ROT Act is to facilitate enforcement of restraints of trade only to the extent that they are not contrary to that public policy. If the enforcement of a restraint to that extent by this Court applying s 4 of the ROT Act would operate on conduct occurring outside New South Wales, it does not seem to me that this is contrary to the public interest in free trade in aid of which the restraint of trade doctrine exists. Nor would the enforcement of the restraint to that limited extent in other Australian jurisdictions seem to me to be contrary to public policy in those jurisdictions such that this Court should decline to determine the enforceability of the restraint in accordance with the law of New South Wales that the parties selected as the governing law of their contract. In my opinion, Kitto J’s remarks in Kay’s Leasing Corporation Pty Ltd v Fletcher (1964) 116 CLR 124 at 143 were directed to statutory provisions rendering an agreement void so as to give effect to a particular policy adopted by the legislature in one jurisdiction. To my mind, His Honour’s remarks are not directly applicable to restraints of trade in respect of which there is one public policy to which both the common law of Australia and s 4 of the ROT Act give effect by different means.

274. As I have already stated, it has not ultimately been necessary to determine the issue in the present case. I respectfully agree with Parker J in Chatzopoulos that there is room for argument about the issue. I recognise the argument that the relevant public policy in Victoria is against giving any operation to a restraint that is drafted in terms that go beyond what is reasonably necessary for the parties’ protection and that are not reasonable in the public interest. However, any such policy is not absolute but is subject to the common law doctrine of severance. To my mind, the preferable argument is that set out at [273] above.

275. As noted above, I have concluded that Allied has failed to prove its allegations that Mr Braim breached the “Restrictions on Activities” clause of the employment contract. My reasons for this conclusion may be summarised as follows.

276. The covenant against competition relevantly provides that, for a period of 12 months after the end of his employment with Allied, Mr Braim will not directly or indirectly (including by becoming an employee of a transport company in competition with Allied) provide the same or largely the same services to any customer as Mr Braim provided to that customer during his employment with Allied. ^[30]

     30. See [139] above.

277. Allied has failed to prove its allegation that Mr Braim breached the covenant against competition during the period from 19 January 2022 to 10 March 2022 by providing to SPL the same services that he provided to SPL during his employment with Allied. ^[31]

     31. See [263(1)] above.

278. First, the evidence does not establish that ASOS is in competition with Allied. The chapeau to the covenants in the “Restriction on Activities” clause in the employment contract expressly states that the purpose of the covenants is to protect the confidential information and goodwill of Allied. In my opinion, a reasonable business person in the position of the parties would understand the words “in competition with” in that context to mean a state of commercial rivalry in which the other transport company is offering services that were substitutable for or at least comparable to the services offered by Allied, is striving for business in opposition to Allied and which might pose a real threat to Allied: see Employsure Ltd v McMurchy; Employsure Ltd v Kumaran [2021] NSWSC 1179 at [105]-[108].

279. As referred to at [37] above, Allied is a national freight services business with a fleet of 800 vehicles nationally and 200 vehicles (including trucks and vans) in Melbourne. By contrast, ASOS is a transport company that presently operates a handful of vans. No evidence was adduced in these proceedings that would support a finding that, notwithstanding the markedly different scale of the operations of each company, ASOS was “in competition with” Allied in the sense described above. The written submissions of counsel for Allied asserted that ASOS sells similar services to Allied, that ASOS poses a real commercial threat to Allied and that there is a degree of substitutability between the services provided by Allied and the services provided by ASOS. There was no evidence to support the assertion that ASOS posed a real commercial threat to Allied. It became apparent during oral closing submissions that Allied’s ability to provide van services was the sole matter relied on in support of the assertions that ASOS and Allied sell similar services and that there is a degree of substitutability between them. The fact that both companies are capable of providing van services does not, by itself, establish that the companies’ services are similar or substitutable to some degree, particularly in the context of SPL’s business. The very different scale (including in terms of volume and geographical coverage) of the services that Allied provides and is capable of providing compared to ASOS strongly suggests that their services are not similar or substitutable in any meaningful sense and that ASOS is more accurately characterised as a potential subcontractor to Allied rather than as a competitor of Allied. There was no evidence to the contrary.

280. Second, the services that Mr Braim provided to SPL during his employment with Allied were the onsite supervision of Allied’s truck delivery services for SPL. Mr Braim has not provided those same services to SPL (indirectly through ASOS) during the period after the termination of his employment with Allied on 19 January 2022 until 10 March 2022 or subsequently. The services provided by ASOS to SPL are van delivery services. As explained at [38]-[49] above, truck delivery services and van delivery services are distinct lines of service that SPL procures separately through independent tender processes, with each line of service meeting the needs of different SPL customers with different requirements and logistical considerations. Allied has provided truck delivery services to SPL but has never provided van delivery services to SPL.

281. Third, the provision of the van services by ASOS to SPL in the period after the termination of Mr Braim’s employment is within the scope of the SPL exception. ^[32]

     32. See [125]-[131] above.

282. The covenant against assistance relevantly provides that, for a period of 12 months after the end of his employment with Allied, Mr Braim will not directly or indirectly assist any transport company in competition with Allied to gain business from Allied or to transition Allied customers to that transport company. ^[33]

     33. See [139] above.

283. Allied has failed to prove its allegation that Mr Braim breached the covenant against assistance in the period 19 January 2022 and 10 March 2022 by assisting ASOS to gain business from Allied or to transition Allied customers to ASOS. ^[34]

     34. See [263(2)] above.

284. First, ASOS is not in competition with Allied for the reasons explained above.

285. Second, there is no evidence that Mr Braim or ASOS have been in contact with any customer of Allied after Mr Braim’s employment came to an end, with the exception of SPL. ^[35]

     35. See [217] above.

286. Third, ASOS did not gain any SPL business from Allied. Rather, ASOS continued to provide the van services to SPL for which it had successfully tendered in 2021. ^[36] SPL treats van services as a distinct line of services that it procures separately from truck services. Allied has never provided van services to SPL and there is no evidence that it has sought to do so. ^[37] Contrary to the submissions made by counsel for Allied, it is irrelevant that Allied would be capable of providing van services to SPL and may seek to do so in the future. That future possibility does not mean that ASOS’s continued provision of the van services awarded to it by SPL in the 2021 tender involved ASOS gaining SPL’s business from Allied.

     36. See [182]-[202] above.

     37. See [38]-[49] and [81]-[84] above.

287. ASOS also provided some limited truck services to SPL in February 2022 in circumstances where neither Allied nor any of SPL’s other truck service providers were able to provide those services to SPL. ^[38] Given Allied’s inability to provide the services, this did not involve Mr Braim assisting ASOS to gain business from Allied.

     38. See [232] above.

288. Fourth, the provision of the van services by ASOS to SPL in the period after the termination of Mr Braim’s employment is within the scope of the SPL exception. ^[39]

     39. See [125]-[131] above.

289. For the same reasons as set out above in relation to the covenant against assistance, Allied has failed to prove its allegation that Mr Braim breached the covenant against solicitation in the period 19 January 2022 and 10 March 2022 by soliciting the custom of SPL away from Allied to ASOS. ^[40]

     40. See [263(3)] above.

290. Allied alleged that Mr Braim breached the covenant against disclosure and use of information by offering Mr Mangat a rate of pay to work for ASOS that was higher than the rate Mr Braim knew was being offered by Allied. ^[41] Allied has failed to prove that allegation for the reasons explained at [253] and [259] above.

     41. See [265] above.

291. For all of those reasons, Allied has failed to prove any breach or apprehended breach of the “Restriction on Activities” clause (read subject to the SPL exception). Thus, independently of public policy considerations, Allied has failed to establish a case for an injunction on any terms, let alone on the wide terms of prayer 2 of the Amended Statement of Claim. There is therefore no occasion for the application of s 4 of the ROT Act and it is not necessary to determine whether the clause as drafted is contrary to public policy and void at common law.

292. Had it been necessary to do so, I would have held that the “Restriction on Activities” clause, in the very wide terms in which it has been drafted and is now sought to be enforced in prayer 2 of the Amended Statement of Claim, is contrary to public policy for reasons that including the following.

293. Mr Braim’s position of onsite supervisor was not a senior position within Allied. There is no evidence to suggest that it was anticipated at the time the employment contract was entered into that he would have access to confidential information of Allied as opposed to confidential information of SPL or general information about SPL’s transport operations that Mr Braim applied in his day-to-day work for Allied. Much of that information was acquired by Mr Braim in his previous roles for SPL prior to his employment with Allied. Mr Braim did not deal with senior personnel at SPL who were responsible for making decisions affecting Allied’s commercial relationship with SPL. Allied employed an Account Manager and Fleet Manager with responsibility for that relationship. Mr Braim’s dealings with SPL were with SPL personnel within its Dispatch and Customer Service Departments. He appears to have had very limited dealings with any other customer of Allied. Allied was able to fill Mr Braim’s position with another Allied employee immediately at the end of Mr Braim’s employment.

294. In those circumstances, I would have held that it was not reasonably necessary for the protection of Allied’s legitimate commercial interests, including its customer connection, to restrain Mr Braim from directly or indirectly soliciting business from any customer of Allied (irrespective of whether he had any dealings with that customer during his employment) for a period of 12 months after the end of his employment.

295. I would have held that the other provisions in the “Restraint on Activities” clause as drafted and as incorporated into prayer 2 of the Amended Statement of Claim went well beyond what might be reasonably necessary for the protection of Allied’s legitimate commercial interests. Those other provisions also apply to all customers who dealt with Allied regularly, irrespective of whether Mr Braim had any dealings with those customers during the course of his employment and in circumstances where he was employed to supervise the work of Allied’s contracted drivers for one customer only, being SPL. Those provisions apply in respect of all employees and contractors of Allied, irrespective of whether Mr Braim had any dealings with them during his employment and irrespective of whether the contractors were engaged in providing services to Allied on a full time, longstanding basis or on an infrequent, ad hoc basis.

296. All provisions of the clause apply for a period of 12 months after Mr Braim’s employment ended, notwithstanding that Allied was able to protect its commercial interest in its relationship with SPL through (at least) its Account Manager and the employee who filled Mr Braim’s onsite supervisor role immediately after the end of Mr Braim’s employment.

297. However, as I have said, it is not strictly necessary to determine those issues because Allied has failed to prove any actual or apprehended breach of the “Restriction on Activities” clause. There will be an order dismissing prayer 2 of the Amended Statement of Claim for the reasons at [291] above.

Prayer 3 of the Amended Statement of Claim

298. Allied sought the relief in prayer 3 of the Amended Statement of Claim on the basis that ASOS intentionally induced Mr Braim to breach the covenants referred to above. In circumstances where those breaches have not been provided, there will be an order dismissing prayer 3 of the Amended Statement of Claim.

Other issues

299. My conclusions above render it unnecessary to address the defences of estoppel by representation and conventional estoppel.

Conclusion and orders

300. For all of the foregoing reasons, the orders of the Court are:

1. Order that the plaintiff’s claims for relief in prayers 2, 3 and 3A of the Amended Statement of Claim are dismissed.

2. Order that (a) the undertakings of the defendants given to the Court and noted on 10 March 2022; and (b) order 1(a) made on 10 March 2022

are discharged forthwith.

301. I will hear the parties in relation to costs.

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Endnotes

Decision last updated: 27 September 2022