Allied Express Transport Pty Ltd v Mears - [2010] NSWSC 1112

CITATION: Allied Express Transport Pty Ltd v Mears [2010] NSWSC 1112

HEARING DATE(S): 14 September 2010

JUDGMENT DATE :
17 September 2010

JUDGMENT OF: Bryson AJ at 1

DECISION: 1. I note and accept the undertaking of the defendant to the court set out in para (57) of his affidavit of 7 September 2010 and direct that he produce his record of communications for inspection by the plaintiff if required to do so after 29 January 2011.
2. The plaintiff’s application for an interlocutory injunction is dismissed with costs.

CATCHWORDS: CONTRACT - restraint of trade - contract of employment contained non-recruitment covenant (anti-poaching) restraining engaging or soliciting staff for 12 months after termination of employment - application for interlocutory injunction - enforceability of restraint on engaging or soliciting staff - prima facie case of soliciting one staff member who had made initial approach to defendant - on the evidence there was faint ground for apprehension of future breaches - interlocutory injunction refused.

LEGISLATION CITED: Not applicable

CATEGORY: Procedural and other rulings

CASES CITED: Aussie Home Loans v X Inc Services [2005] NSWSC 285
Brogden v Metropolitan Railway Co (1877) 2 App Cas 666
Cactus Imaging Pty Limited v Peters [2006] NSWSC 717
Empirnall Holdings Pty Limited v Machon Paull Partners Pty Limited (1988) 14 NSWLR 523
John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995
Waldorf Apartment Hotel The Entrance v Owners Corporation Strata Plan 71623 (2010) NSWCA 226

PARTIES: Allied Express Transport Pty Limited
Christopher Mears

FILE NUMBER(S): SC 2010/291323

COUNSEL: Pl: Mr Bors
Def: Mr Moir

SOLICITORS: Pl: Hassett Dixon
Def: Rhodes Legal

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON AJ

Friday 17 September 2010

Christopher MEARS

JUDGMENT

1 HIS HONOUR: The plaintiff claims an interlocutory order restraining the defendant from dealings with any employee or any contract driver of the plaintiff. The plaintiff proffers an undertaking as to damages in support of its application.

2 The defendant was formerly employed by the plaintiff. At one time the defendant was National Operations Manager but he did not find this suitable and continued in employment at a lower classification and salary. He left that employment on 29 January 2010. The plaintiff claims that he is bound by restraints on his activity in his new employment with VIP Transport.

3 The defendant was employed, his classification being radio operator, under a letter of 28 October 2008 which regulated the employment contract and imposed restraints on his activities. The restraint on which this application is based is in these terms:

“(b) 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 the [Company’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 the company any employee of or contractor of the Company.”

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] NSWSC 1112
Decision Date: 17 September 2010

CaseChat Overview and Summary

In the matter of Allied Express Transport Pty Ltd v Mears, the dispute arose from an employment contract containing a non-recruitment covenant, also known as an anti-poaching clause. The employer, Allied Express Transport Pty Ltd, sought an interlocutory injunction to prevent the former employee, Mears, from engaging or soliciting staff for a period of 12 months following his termination of employment. The Federal Circuit Court was tasked with determining the enforceability of the restraint and whether it should be upheld in light of the evidence presented.

The court considered the legal principles surrounding restraints of trade within employment contracts. It examined whether the restraint was reasonable in all circumstances and whether it was necessary to protect the legitimate business interests of the employer. The court also assessed the evidence to determine if there was a real risk of future breaches of the covenant by the former employee. The key issue was whether the covenant was enforceable given the faint ground for apprehension of future breaches, as evidenced by the circumstances of the case.

In delivering its decision, the court found that there was insufficient evidence to support a real risk of future breaches by the former employee. The evidence suggested that the former employee had made an initial approach to one staff member, but the court was not persuaded that there was a substantial likelihood of further breaches occurring. Consequently, the court refused to grant the interlocutory injunction sought by the employer. The court emphasised that the enforceability of such restraints depended on the specific circumstances and the genuine need to protect legitimate business interests.

The court's final orders were to deny the employer's application for an interlocutory injunction, thereby allowing the former employee to continue his employment without the restrictions imposed by the non-recruitment covenant. This decision underscores the importance of a strong evidentiary foundation in establishing the necessity and reasonableness of restraints of trade in employment contracts.

Orders