Cadgroup Australia Pty Ltd v Snowball - [2016] NSWSC 22

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Cadgroup Australia Pty Ltd v Snowball [2016] NSWSC 22
Hearing dates: 12, 13 and 15 January 2016
Decision date: 04 February 2016
Jurisdiction: Equity - Duty List
Before: Black J
Decision:
Parties to bring in orders to give effect to judgment – interlocutory relief declined - certain undertakings accepted.

Catchwords: EQUITY – equitable remedies – injunctions – injunction in aid of restraint of trade – whether serious questions to be tried are established – whether restraints likely to be void for breach of public policy – application of Restraints of Trade Act 1976 (NSW)
Legislation Cited: - Restraints of Trade Act 1976 (NSW)
Cases Cited: - ATF Services Pty Ltd v Chapman [2011] NSWSC 1024
- Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57
- Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9
- Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434
- Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337
- Dalysmith Corp (Aust) Pty Ltd v Cray Personnel Pty Ltd (Supreme Court (NSW), Young J, 14 April 1997, unrep)
- Ecolab Pty Ltd v Garland [2011] NSWSC 1095
- Hannamax Hi-Tech Pty Ltd v O’Donnell [2001] NSWSC 634
- John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995
- Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
- Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449
- Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25; (2009) 201 IR 1
- Pet Tech Pty Ltd v Batson [2013] NSWSC 1954
- Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 631
- Provida Pty Ltd v Sharpe [2012] NSWSC 1041
- Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212
- Rosewood Advertising Pty Ltd v Hannah Marketing Pty Ltd [2000] NSWSC 1034
- Seven Network (Operations) Ltd v Warburton (No 2) [2011] NSWSC 386; (2011) 206 IR 450
- Tullett Prebon (Aust) Pty Ltd v Purcell [2008] NSWSC 852; (2008) 175 IR 414
- Woolworths Ltd v Olson [2004] NSWCA 372
- Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317
Texts Cited: - J D Heydon, The Restraint of Trade Doctrine, (3rd ed, 2008 LexisNexis Butterworths)
Category: Procedural and other rulings
Parties: Cadgroup Australia Pty Ltd (Plaintiff)
Lisa Snowball (Defendant)
Representation:
Counsel:
G Boyce (Plaintiff)
N Read (Defendant)
Solicitors:
Neca Legal Pty Ltd (Plaintiff)
Eakin McCaffery Cox (Defendant)

File Number(s): 2015/374198

Judgment

By Summons filed on 21 December 2015, the Plaintiff, Cadgroup Australia Pty Ltd (“Cadgroup”) seeks interlocutory and final relief against the Defendant, Ms Lisa Snowball. Ms Snowball gave several undertakings to the Court, without admission, when the matter was initially listed before the Duty Judge in late December 2015 which continued to the date of this judgment. Ms Snowball also offered, without admission, further undertakings at the hearing of this…

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: [2016] NSWSC 22
Decision Date: 04 February 2016

CaseChat Overview and Summary

In the case of Cadgroup Australia Pty Ltd v Snowball, Cadgroup sought an injunction to enforce a restraint of trade clause in an employment contract with Snowball. The matter was heard in the Supreme Court of New South Wales. The central dispute was whether the court should grant an injunction to prevent Snowball from working for a competitor for a specified period after leaving Cadgroup, and whether the restraint was valid and enforceable.

The legal issues the court had to decide included whether serious questions were being tried, a threshold requirement for granting an interlocutory injunction. Additionally, the court needed to determine whether the restraint of trade was likely to be void for being contrary to public policy. This involved applying the Restraints of Trade Act 1976 (NSW) to assess the reasonableness of the restraint in relation to the interests of the parties involved and the public interest.

The court found that serious questions were being tried, as there was a genuine dispute over the enforceability of the restraint of trade clause. However, the court held that the restraint was likely to be void for being contrary to public policy. It concluded that the restraint was broader than necessary to protect Cadgroup's legitimate business interests and was therefore unenforceable. The court considered the public interest in facilitating employment and the potential harm to Snowball's livelihood, leading to the conclusion that the restraint was excessive.

The court refused the injunction sought by Cadgroup, holding that the restraint of trade clause in Snowball's employment contract was unenforceable. This decision protected Snowball's right to seek alternative employment without undue restriction.

Orders