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Berry v Wong

Berry v Wong

Case [2000] NSWSC 1002 16 October 2000

Restraint of Trade

Unconscionable Conduct

Estoppel

Contract Law

Commercial Law

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CITATION: Berry v Wong [2000] NSWSC 1002

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 3893/2000

HEARING DATE(S): 06/10/2000

JUDGMENT DATE: 16 October 2000

PARTIES :

Ashley Berry (P)
Mark Hwee Ming Wong (D)

JUDGMENT OF: Young J

COUNSEL : A J McQuillen (P)
I M Jackman and M Tyson (D)

SOLICITORS: Colin Daley Quinn (P)
Blake Dawson Waldron (D)

CATCHWORDS: TRADE & COMMERCE [15]- Restraint- Goodwill owned by company which plaintiff controlled- Covenant taken by plaintiff personally- Ineffective - ESTOPPEL [28]- Estoppel by deed- Recital- Untrue- Whether binding- Whether allowed to affect covenant in restraint of trade.

CASES CITED: Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (No 2) (1975) 133 CLR 331
Ashcoast Pty Ltd v Whillans [2000] 2 Qd R 1
Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432
Caboche & Bond v Ramsay (1993) 119 ALR 215
Carpenter v Buller (1841) 8 M & W 209; 151 ER 1013
Corbin v Stewart (1911) 28 TLR 98
Dalysmith Corporation (Aust) Pty Ltd v Cray Personnel Pty Ltd (Young J 14.4.1997)
Greer v Kettle [1938] AC 156
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110
IRC v Muller & Co's Margarine Ltd [1901] AC 217
Lindner v Murdock's Garage (1950) 83 CLR 268
Lu v Lim (1993) 30 NSWLR 332
Matthew v Osborne (1853) 13 CB 919; 138 ER 1465
Trego v Hunt [1896] AC 7
Whiteman Smith Motor Co Ltd v Chaplin [1934] 2 KB 35

DECISION: Proceedings dismissed with no order as to costs.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
YOUNG J
MONDAY 16 OCTOBER 2000
3893/2000 - BERRY v WONG
JUDGMENT
1 HIS HONOUR: The parties are both duly qualified medical practitioners. By agreement which took the form of a deed called “Associate Contract”, the plaintiff agreed to employ the defendant as an associate at a practice at 1020 Forest Road, Lugarno. That agreement was for three years, with a provision for holding over by agreement. The agreement, so far as is relevant, is as follows:

"THIS DEED made the 19th day of August 1996, BETWEEN HERBERT ASHLEY BERRY of 1020 Forest Road, Lugarno, Medical Practitioner (the Proprietor) of the first part AND MARK HWEE MING WONG of 11 Tunbridge Place, Jannali 2226, Medical Practitioner (the Associate) of the second part WHEREAS the Proprietor is a Medical Practitioner conducting a medical practice at 1020 Forest Road, Lugarno (the Practice) AND WHEREAS the Proprietor proposes to employ the Associate as an Associate Medical Practitioner within the Practice on terms and conditions agreed upon by them and hereafter appearing NOW THIS DEED WITNESSETH ...

(6) The Associate will not during the course of this Contract or any Holding Over Period or at any time after the termination hereof solicit, interfere with or endeavour to entice away from the practice any patient who was during the term hereof or any Holding Over Period a patient treated by either of the…

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.

Continue reading Berry v Wong

Details

AGLC: Berry v Wong [2000] NSWSC 1002
Case: [2000] NSWSC 1002
Decision Date: 16 October 2000

CaseChat Overview and Summary

The case of Berry v Wong involves a dispute between the plaintiff, Berry, and the defendant, Wong, who was employed by a company controlled by Berry. The primary issue at hand was the validity of a covenant in restraint of trade, which was taken personally by Berry from Wong. The matter was heard in the Supreme Court of New South Wales. The court was required to determine whether the covenant was effective, and if not, whether estoppel by deed could be invoked to enforce it despite an untrue recital within the deed.

The central legal issues revolved around the enforceability of the restraint of trade covenant and the applicability of estoppel by deed to enforce it despite the presence of an incorrect recital in the deed. The court needed to ascertain whether the covenant, which restricted Wong from competing with the company controlled by Berry, was valid. Additionally, the court had to consider whether the estoppel by deed could be applied to uphold the covenant, despite the fact that the recital within the deed contained an untrue statement.

In determining these issues, the court found that the covenant in restraint of trade was ineffective because it was taken by Berry personally, rather than by the company he controlled. The court held that the covenant was not a genuine restraint of trade, as it was intended to protect the company's goodwill rather than Berry's personal interests. Furthermore, the court concluded that estoppel by deed could not be invoked to enforce the covenant due to the presence of the untrue recital within the deed. The court held that the estoppel by deed did not apply in these circumstances, as the recital was a material term of the agreement, and its inaccuracy rendered the estoppel inoperative.

Consequently, the court ruled in favour of Wong, finding that the covenant in restraint of trade was ineffective and that estoppel by deed could not be applied to enforce it. The court declared the covenant null and void, and Wong was free to engage in activities that were previously restricted by the covenant. The court's decision was based on the principle that the covenant was not a genuine restraint of trade, and the estoppel by deed could not be invoked to enforce an agreement with an untrue recital.

Orders