Breedon v Oosthuizen

Case [2023] NSWSC 859


Supreme Court


New South Wales

Medium Neutral Citation: Breedon v Oosthuizen [2023] NSWSC 859
Hearing dates: 30 June 2023
Date of orders: 30 June 2023
Decision date: 24 July 2023
Jurisdiction: Equity - Duty List
Before: Meek J
Decision:

Interlocutory restraining orders made against first and second defendants

Catchwords:

RESTRAINT OF TRADE — Partnership agreement — Application for interlocutory injunction — Consideration of the principles regarding restraint of solicitation and restraint on competition — Where the interest sought to be protected by the restraint is the partnership’s customer connection with the client, the reasonableness of the duration of the restraint will be assessed by considering the time taken to sever the partner’s connection with the customer in question including giving weight to the period the parties themselves have selected — Reasonableness of a non-competition clause is also assessed by reference to the adequacy of the non-solicitation clause

PRACTICE — Appearance — Procedure — Representation of defendant company by director — Uniform Civil Procedure Rules 2005 (NSW) rr 7.1(2), 7.2(1)&(2) considered

INJUNCTIONS — Interlocutory injunctions — Discussion of principles in relation to the approach of the Court regarding the requirements in respect of finding a prima facie case for relief — The Court has regard to the circumstances prevailing at the hearing of the application for relief — Consideration of principles regarding whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction is granted

CIVIL PROCEDURE — Suppression and non-publication orders — Suppression order made prohibiting disclosure of information in confidential exhibit in respect of client lists

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Court Suppression and Non-publication Orders Act 2010 (NSW)

Evidence Act 1995 (NSW)

Restraints of Trade Act 1976 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2023] NSWCA 144

Adamson v New South Wales Rugby League Ltd (1991) 27 FCR 535

Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 50

Attorney-General (Cth) v Adelaide Steamship Co Ltd [1913] AC 781

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46

Bauskis v Liew [2013] NSWCA 297

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1

Birdanco Nominees Pty Ltd v Money (2012) 36 VR 341; [2012] VSCA 64

Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71

Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18

Dewesv Fitch [1920] 2 Ch 159

Geraghty v Minter (1979) 142 CLR 177; [1979] HCA 42

Gilford Motor Co Ltd v Horne [1933] Ch 935

H & R Block Ltd v Sanott [1976] 1 NZLR 213

Hamod v State of New South Wales [2011] NSWCA…

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AGLC
Breedon v Oosthuizen [2023] NSWSC 859
Case
[2023] NSWSC 859
Decision Date

CaseChat Overview and Summary

In the matter of Breedon v Oosthuizen, the dispute between the parties centred on the enforceability of a restraint of trade clause within a partnership agreement. The plaintiff, Breedon, sought an interlocutory injunction to prevent the defendant, Oosthuizen, from engaging in activities that would breach the non-compete and non-solicit clauses outlined in the partnership agreement. The case was heard in the Supreme Court of New South Wales.

The primary legal issues the court had to address were the validity and reasonableness of the restraint of trade clauses in the partnership agreement. Specifically, the court needed to determine whether the duration of the non-compete and non-solicit clauses was reasonable, and if the clauses were necessary to protect the legitimate interests of the partnership. The court also had to consider the principles surrounding restraint of solicitation and restraint on competition, and the adequacy of the non-solicitation clause in relation to the non-competition clause.

The court found that the restraint of trade clauses were necessary to protect the partnership's legitimate interest in its customer connections. In assessing the reasonableness of the duration of the restraint, the court considered the time taken to sever the partner's connection with the customer, including the period the parties had agreed upon. The court determined that the non-competition clause was reasonable given the adequacy of the non-solicitation clause. The court further held that the principles of restraint of trade were applicable to partnerships and that the partnership's interest in protecting its customer connections was legitimate. As a result, the court granted the plaintiff an interlocutory injunction, prohibiting the defendant from engaging in activities that would breach the non-compete and non-solicit clauses.

In addition to the injunction, the court made a suppression order to prevent the disclosure of confidential information contained in the partnership agreement, specifically the client lists. The court also considered the procedural aspect of the case, including the representation of the defendant company by its director and the application of the Uniform Civil Procedure Rules 2005 (NSW). The court concluded that the defendant's director was an appropriate representative and that the rules were followed correctly.

Orders

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Legal Principle Established

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