Boswell v Sawadu Pty Ltd

The New South Wales Court of Appeal considered a dispute between the appellant, Boswell, and the respondent, Sawadu Pty Ltd. The case concerned the interpretation and enforceability of a restrictive covenant contained within a deed of lease.

The primary legal issue before the Court was whether the restrictive covenant, which prohibited the lessee from carrying on a business that competed with the lessor's existing business on adjoining premises, was void for uncertainty or as an unreasonable restraint of trade. The Court was required to determine the scope and effect of the covenant and whether it imposed an undue burden on the lessee.

The Court of Appeal, in allowing the appeal, found that the restrictive covenant was not void for uncertainty. It reasoned that the covenant, when read in its context, clearly defined the prohibited activities and was sufficiently certain to be enforceable. Furthermore, the Court held that the covenant did not constitute an unreasonable restraint of trade, as it was reasonably necessary for the protection of the lessor's legitimate business interests and was not wider than required for that purpose. The principles applied included those relating to the construction of contractual terms and the legal tests for determining whether a restraint of trade is valid.

The Court of Appeal ordered that the appeal be allowed, the orders of the primary judge be set aside, and that the respondent be restrained from conducting a business in breach of the restrictive covenant.