Canberra Consulting Pty Ltd v Chowindra
[2020] ACTSC 177
•2 July 2020
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Canberra Consulting Pty Ltd v Chowindra |
Citation: | [2020] ACTSC 177 |
Hearing Date: | 2 July 2020 |
DecisionDate: | 2 July 2020 |
ReasonsDate: | 2 July 2020 |
Before: | Robinson AJ |
Decision: | Interlocutory injunction granted |
Catchwords: | Enforcement of contractual restrain upon cessation of employment |
Cases Cited: | Appleton v Tomasetti [1983] 3 NSWLR 208 |
Parties: | Canberra Consulting Pty Ltd (Plaintiff) Donny Chowindra (Respondent) |
Representation: | Counsel J Moffett (Plaintiff) Self-represented (Respondent) |
| Solicitors Bradley Allen Love (Plaintiff) Self-represented (Respondent) | |
File Number: | SC 234 of 2020 |
ROBINSON AJ
Background to the matter
On 30 June 2020, Canberra Consulting Pty Ltd (the applicant) in these proceedings filed an Originating Action in the registry and sought a hearing in the late afternoon on an ex parte basis for an interlocutory injunction to restrain Donny Chowindra (the respondent) from providing services to the Department of Social Services (now “Services Australia”) from 1 July 2020.
Notice of the proposed application was given to the respondent. The respondent did not appear on that occasion.
Notwithstanding Mr Moffett’s submissions to the contrary, I declined to grant an ex parte injunction on that day but made the application returnable at 10 am on 2 July 2020 so that an inter-partes hearing would be possible.
It will be necessary to return to the details of the contractual agreement between the applicant and respondent at a later time, but that contract came to an end by effluxion of time on 30 June 2020. This has prompted the urgency with regard to the proceedings.
The applicant’s business is providing persons, whom they describe as “contractors”, to Federal Government departments. These contractors occupy the position of “Siebel Developers”. The purpose of a Siebel developer is to manage a customer relationship management system with Services Australia.
The Siebel program used by Services Australia stores and manages account details and transactions for the various social service transactions across Australia such as aged pensions, school allowances and like matters. In maintaining that service, Services Australia requires contractor support. A Siebel developer attends to this function.
The applicant places these “Siebel Developers” into the Department of Social Services/Services Australia. The applicant pays them a fee based on hours worked. In return, the Federal Government pays the applicant a fee for services rendered by the “contractor”.
Details of the contractual agreement
The respondent, under a document entitled “Contractor Agreement” dated 21 June 2019, has worked as a Siebel developer and rendered services to Services Australia for the period 1 July 2019 to 30 June 2020. This contract replaced a previous contract in, relevantly, the same terms. The applicant contemplated that the respondent would enter into a further such contract for the current financial year. The respondent did not do so, and the evidence reveals that he has sought to retain his same position in Services Australia but has changed the “agency” for which he is discharging these services. The evidence suggests that Services Australia is content with these proposed new arrangements.
Clause 15 of the “Contractor Agreement” is as follows:
Should the Contractor cease working in the Position for any reason whatsoever the Contractor agrees that they will not, prior to a period of six (six) months after the End Date, without the prior written consent of Canberra Consulting, whether as an employee or on their own account as a contractor, consultant or otherwise, as a partner in any firm or as a director or shareholder in any company:
(a)Provide service in competition to the Services the Contractor was involved in providing to the Customer;
(b)Specifically, work in the same Position through another company:
(c) …
There are a number of defined terms in the above clauses:
4. Customer
Department of Social Services hereinafter referred to as “the Customer”
5. Position
Siebel Developer hereinafter referred to as “the position”
6. Services
Services include buy are not limited to:
a) engaging with the System Analyst/Designers to conceptualise new functional designs
b) undertaking technical analysis of functional designs
c) preparing Technical Detailed Designs
d) undertaking Siebel configuration and scripting
e) preparing and executing unit test cases
f) analysing and resolving defects identified during test execution
g) provision of timely and accurate advice on a range of technical issues
h) peer review of other developers’ deliverables
i) transferring skills and knowledge to departmental officers
j) Unit and WCAG testing
k) participation in Project team
Clause 15 also includes a severance clause. It states in part-
… that if any of the above restrictions go beyond what is reasonable in all the circumstances to protect the legitimate interests of Canberra Consulting, but would be judged reasonable if part or parts of the wording thereof was deleted or amended or qualified or the periods thereof were reduced, then the appropriate amendments shall be made to make the restrictions valid and effective.
Nevertheless, the restraints contained in this contract of engagement shall be regarded as separate, distinctive and severable.
When the hearing of this application resumed on 2 July 2020, the respondent appeared in person. On this occasion, Mr Moffett for the applicant, read a further affidavit going to the substance of the dispute from Mr Pepper supplementing his previous affidavit.
I was conscious that the respondent was not represented and that it was his livelihood which was in question. It is clear enough, as was confirmed by the respondent from the bar table, that he has attempted to negotiate better conditions for himself as part of a renewed contractual arrangement with the applicant for the period commencing from 1 July 2020 onwards. These negotiations were not brought to fruition and instead, the respondent has accepted employment from another agency but is discharging exactly the same functions for Services Australia as he had on behalf of the applicant.
Findings
The test to be applied on an application for an interlocutory injunction is clear enough, at least in the abstract. There must be an arguable case and the balance of convenience must be assessed. The two components are interrelated. The strength of one component may make up for a weakness in the other. I need not, in this case, delve into the jurisprudence. The purpose of an interlocutory injunction can be taken from Appleton v Tomasetti [1983] 3 NSWLR 208 at 216 B to G.
On an interlocutory basis, and on the evidence as at this stage, I make the following findings.
I find that the respondent is in breach of clause 15 of the contract in that he is working in the same Position (as defined above) through another company.
I find that the only tenable defence which so far arises on the current evidence is that clause 15 is void as being in restraint of trade.
I find that the balance of convenience narrowly favours an injunctive remedy as opposed to leaving the matter to an assessment of damages at a later time. I find this because there are not only issues to be determined between the applicant and the respondent but also issues to be determined between the applicant and the Department of Social Services.
There is an argument that clause 15, or some part of it, is void as being in restraint of trade. Clause 15(a) is at least open to more than one interpretation. On one of those interpretations it may well be found at the final hearing that the clause is too wide to protect the legitimate interests of the applicant.
However, I regard clause 15(b) as going no further than is reasonably necessary to protect the legitimate interests of the applicant. As a matter of construction, I regard clause 15(b) to be a subset of clause 15(a) beginning as it does with the word “specifically”.
In my view, there is a reasonable prospect that at final hearing it will be found that clause 15(b) will be held to be valid and enforceable according to its terms.
There is also the prospect, at the final hearing, that clause 15, if found to be in restraint of trade, can have the blue pencil taken to it so that clause 15(b) would survive.
For these reasons I propose to make the following orders and directions.
Order
Upon the Applicant, by its Counsel, undertaking to the Court to submit to any order that the Court may consider to be just and reasonable for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the injunction or any continuation (with or without variation) thereof and to pay the compensation so assessed:
(a) Order until 4 pm on 10 July 2020, the Respondent be restrained, whether as an employee or on his own account as a contractor, consultant or otherwise, a partner in any firm or as a director or shareholder in any company, from providing services in the position of a Siebel Developer (whether titled as such or otherwise) to the Services Australia department of the Commonwealth of Australia;
(b) Direct that the proceeding be listed for further hearing on Friday 10 July 2020 at 10:0am before Associate Justice McWilliam;
(c) Note that the current practice of the Associate Justice into whose list this matter will be placed, is that the associate will telephone parties prior to 10 July 2020 to inform them when their case will be listed before the court to the intent that persons will comply with COVID-19 procedures.
(d) Order that the costs of and incidental to this hearing of the Interlocutory Application be reserved.
(e) Direct the applicant to file and serve a statement of claim within seven days.
(f) Direct that any evidence, in opposition to the continuation of the injunction, be served by the respondent prior to noon on 9 July 2020.
| I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Robinson. Associate: Philippa Swayn Date: 6 July 2020 |
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