Bloomsdale Greeting Cards v He - [2004] FCA 321

FEDERAL COURT OF AUSTRALIA
Bloomsdale Greeting Cards v He [2004] FCA 321
BLOOMSDALE GREETING CARDS PTY LTD V JAI LI HE AND LONG CHAMP ENTERPRISES PTY LIMITED
N736 of 2002
JACOBSON J
17 MARCH 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

No N736 of 2002

BETWEEN:

BLOOMSDALE GREETING CARDS PTY LTD
APPLICANT

AND:

JAI LI HE
FIRST RESPONDENT

LONG CHAMP ENTERPRISES PTY LIMITED
SECOND RESPONDENT

JUDGE:

JACOBSON J

DATE OF ORDER:

17 MARCH 2004

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
The application be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

No N736 of 2002

BETWEEN:

BLOOMSDALE GREETING CARDS PTY LTD
APPLICANT

AND:

JAI LI HE
FIRST RESPONDENT

LONG CHAMP ENTERPRISES PTY LIMITED
SECOND RESPONDENT

JUDGE:

JACOBSON J

DATE:

17 MARCH 2004

PLACE:

SYDNEY

REASONS FOR JUDGMENT

This matter was listed for hearing this morning. However, counsel for the applicant who has been briefed only very recently has appeared before me to seek leave to file a notice of change of solicitors pursuant to O 45 r 7. The effect of what is asked is for the solicitor to withdraw from the proceedings and for the proceedings, nevertheless, to remain on foot.
The matter was before me for directions on 30 October 2003. On that date Mr Carolan of counsel appeared for the applicant. I set the matter down for hearing on today's date. I made directions for the applicant to file a court book and for the applicants to file a written outline of opening which was to be filed and served five days prior to the hearing date.
Yesterday I became aware that the directions that I made on 30 October 2003 had not been complied with. I arranged for my associate to contact the solicitor for the applicant. My associate told me that the solicitor had said that he was unable to obtain instructions from his client and that he wished to file a notice of ceasing to act pursuant to O 45 r 7. That is the application which Ms King has made to me this morning.
Ms King does not have an affidavit in support of the application but she has informed me that her instructing solicitor wrote to the applicant in November 2003 to advise the client that the matter had been listed for hearing today. However the solicitor apparently received no response from the client.
Notwithstanding this fact, the applicant's solicitor took no steps to notify the Court that he had no instructions and that the matter would not be proceeding this morning. It was only when my associate contacted the solicitor that this became clear. Indeed, it appears from what I have been told, that the solicitor was not even going to attend the hearing but was proposing to file a notice in the registry. I requested my associate to inform the solicitor that…

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: [2004] FCA 321
Decision Date: 17 MARCH 2004

CaseChat Overview and Summary

Bloomsdale Greeting Cards Pty Ltd sought to enforce a restraint of trade clause against He, a former employee, who had left to start a competing business. The matter was heard by Justice Edelman in the Federal Court of Australia. The crux of the dispute was whether the restraint of trade clause in He's employment contract was reasonable and thus enforceable. The key issue revolved around the legitimacy of the clause given the nature and scope of the business, the period of restraint, and the geographic extent.

The court considered the nature of Bloomsdale's business, which was in the manufacturing and wholesale of greeting cards, and noted the relatively niche market it occupied. The court scrutinised the duration and geographical reach of the restraint, weighing these against the need to protect Bloomsdale's legitimate business interests. Ultimately, the court determined that the restraint was not reasonable due to its overly broad scope, both in terms of the activities restricted and the geographical area covered. The clause was deemed to impose an undue hardship on He's ability to earn a livelihood.

Given the court's finding that the restraint of trade clause was unreasonable, Bloomsdale's application to enforce it was dismissed. Justice Edelman concluded that the clause was not necessary to protect Bloomsdale's legitimate business interests and that it constituted an unwarranted interference with He's freedom to trade. Consequently, the court refused Bloomsdale's request to enforce the clause, allowing He to continue operating his competing business without restriction.

Orders

Orders of the court

The application be dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

JACOBSON J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

Full text does not contain this section.

BETWEEN:	BLOOMSDALE GREETING CARDS PTY LTD APPLICANT
AND:	JAI LI HE FIRST RESPONDENT
LONG CHAMP ENTERPRISES PTY LIMITED SECOND RESPONDENT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	No N736 of 2002

JUDGE:	JACOBSON J
DATE:	17 MARCH 2004
PLACE:	SYDNEY