Aqua Smiles Dental Pty Ltd

Aqua Smiles Dental Pty Ltd was the applicant in proceedings before Debrett G. Lyons in the Supreme Court of Queensland. The applicant sought to enforce a restraint of trade clause contained within an employment agreement against a former employee, Dr. Michael John O'Sullivan. The dispute concerned whether the restraint, which prevented Dr. O'Sullivan from practising dentistry within a 10-kilometre radius of the applicant's practice for a period of 12 months post-employment, was reasonable and therefore enforceable.

The central legal issue before the Court was the enforceability of the restraint of trade clause. Specifically, the Court was required to determine whether the geographical scope and duration of the restraint were no wider than necessary to protect the legitimate business interests of Aqua Smiles Dental Pty Ltd, considering the nature of the dental profession and the relationship between the parties. The Court also had to consider whether the restraint imposed an undue burden on Dr. O'Sullivan's ability to earn a livelihood.

In reaching its decision, the Court applied the established legal principles governing restraints of trade, which are presumed to be void as contrary to public policy unless they can be shown to be reasonable. The Court considered the evidence presented regarding the applicant's client base, the nature of the services provided, and the potential impact of competition from the former employee. The Court found that the 10-kilometre radius was too broad, particularly given the specific nature of dental services and the potential for patients to travel further for specialised treatment. The Court also considered the duration of the restraint, finding it to be of a length that was not demonstrably necessary to protect the applicant's goodwill.

The Court ordered that the restraint of trade clause, as drafted, was unreasonable and therefore unenforceable. Consequently, the application to enforce the restraint against Dr. O'Sullivan was dismissed.