Austal Ships Pty Ltd v Clay

The case involved Austal Ships Pty Ltd, a shipbuilding company, and an ex-employee, Mr Clay. Mr Clay sought to join a competitor of Austal, and Austal applied for an interlocutory injunction to prevent him from doing so, arguing that his employment contract contained a restraint of trade clause prohibiting him from working for a competitor for a specified period. The court had to determine whether the clause was enforceable and if the balance of convenience favoured granting the injunction.

The primary legal issue before the court was whether the restraint of trade clause in Mr Clay's employment contract was reasonable and enforceable, and if so, whether the balance of convenience favoured granting the interlocutory injunction. The court also needed to consider whether Mr Clay's employment with the competitor would seriously injure Austal's business by causing it to lose confidential information and competitive advantage.

The court found that the restraint of trade clause was reasonable and enforceable to protect Austal's confidential information and competitive advantage. The clause was not overly broad, as it was limited in duration and geographical scope, and it protected legitimate business interests. The court also found that Mr Clay's employment with the competitor would seriously injure Austal's business by causing it to lose confidential information and competitive advantage. The balance of convenience favoured granting the interlocutory injunction, as the potential harm to Austal outweighed any inconvenience to Mr Clay.

The court granted the interlocutory injunction, preventing Mr Clay from working for the competitor until the final determination of the case. The court emphasised that the injunction was not a final determination of the merits of the case, and that Mr Clay would have the opportunity to challenge the enforceability of the restraint of trade clause at the final hearing.