Brilliant Lighting (Aust) Pty Ltd v Baillieu - [2004] VSC 248

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
PRACTICE COURT

No. 6658 of 2004

Brilliant Lighting (Aust) Pty Ltd	Plaintiff
v
Simon Baillieu	Defendant

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JUDGE:	Hollingworth J
WHERE HELD:	Melbourne
DATES OF HEARING:	24 and 25 June 2004
DATE OF JUDGMENT:	25 June 2004
CASE MAY BE CITED AS:	Brilliant Lighting (Aust) Pty Ltd v Baillieu
MEDIUM NEUTRAL CITATION:	[2004] VSC 248

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Procedure - interlocutory injunction- application will effectively determine the proceeding - higher test than "serious question to be tried" - plaintiff did not satisfactorily establish likelihood of succeeding in the proceeding.

Hartleys Limited v Martin [2002] VSC 301, applied.

Employment contract - restraint of trade clause - enforcement - discussion of relevant considerations.

Nordenfelt v Maxim Nordenfelt Guns & Ammunitions Co Ltd [1894] AC 535, considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R. Millar	Nathan Kuperholz Lawyers
For the Defendant	Mr M. Bevan-John	Russell Kennedy Solicitors

HER HONOUR:

This is an application for interlocutory injunctive relief, brought by summons dated 23 June 2004. The plaintiff is the former employer of the defendant and seeks to enforce a restraint of trade clause against the defendant, who is now employed by a competitor of the plaintiff.

By the summons, the plaintiff seeks to restrain the defendant from engaging either directly or indirectly in any of the following conduct anywhere in Australia.

"(a)carry on, advise or be engaged or interested in or associated with any business or activity which is directly or indirectly competitive with the plaintiff;
(b)establish any business or organisation in competition with the plaintiff;
(c)employ any employee who is involved in the immediate business of the plaintiff;
(d)entice, solicit or endeavour to entice or solicit any employee, contractor or consultant of the plaintiff or of any related corporation away from their employment or engagement with the plaintiff or with such related corporation respectively;
(e)solicit business from any customer or client of the plaintiff;
(f)be employed by any business or organisation which is directly or indirectly competitive with the plaintiff; or
(g)whether as principal, representative, agent, consultant, employee or otherwise, use the name of the plaintiff or any related corporation in connection with his own or any other name calculated to suggest that he is connected with the plaintiff's business or the business of any related corporation nor in any way hold himself out as having such connections."

There is no evidence whatsoever of proposed conduct in breach of paragraphs 1(b), (c), (d) or (g) of the summons. There is some evidence, however, in relation to paragraphs 1(a), (e) and (f).

The defendant is a former lighting sales representative of the plaintiff. He was employed by the plaintiff for some 15 months, ceasing in May of this year. Prior to taking up his employment with the plaintiff, he worked for about nine years for First Lighting in Springvale as its national sales manager, as State manager for another company for one year and sales consultant for two years with another lighting…

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] VSC 248
Decision Date: 25 June 2004

CaseChat Overview and Summary

Brilliant Lighting (Aust) Pty Ltd, a company in the lighting industry, brought an action against one of its former employees, Baillieu, over an alleged breach of a restraint of trade clause in his employment contract. The case came before the court on an application by the plaintiff for an interlocutory injunction to prevent the defendant from engaging in business activities that would compete with the plaintiff's business. The plaintiff sought an order that would effectively determine the proceeding, arguing that the application would determine the enforceability of the restraint of trade clause.

The court was required to consider the standard of proof necessary for the plaintiff to succeed in an application for an interlocutory injunction that effectively determines the proceeding. The court also needed to determine the relevant considerations in assessing whether the restraint of trade clause was enforceable. The court considered the authorities in relation to the standard of proof required for such an application, and the relevant considerations in assessing the enforceability of a restraint of trade clause.

The court found that an interlocutory application that effectively determines the proceeding requires a higher standard of proof than the "serious question to be tried" test. The plaintiff must establish a likelihood of success on the merits of the case, and the court must be satisfied that there is no real prospect of the defendant succeeding on the merits. The court also found that the restraint of trade clause was not enforceable, as it was not reasonably necessary to protect the plaintiff's legitimate business interests. The court noted that the clause was overly broad and would prevent the defendant from carrying on a lawful profession, trade or business.

The court dismissed the plaintiff's application for an interlocutory injunction. The court found that the plaintiff had not satisfactorily established a likelihood of success on the merits of the case, and that the defendant had a real prospect of succeeding on the merits. The court also found that the restraint of trade clause was not enforceable, and that the plaintiff's application for an interlocutory injunction that effectively determined the proceeding was therefore dismissed.

Orders