Capital Aircraft Services Pty Ltd v Brolin

Capital Aircraft Services Pty Ltd (CAS) appealed a decision of the Supreme Court of the Australian Capital Territory concerning a restraint of trade clause in a contract with Mr Brolin. Mr Brolin had been engaged by CAS as a part-time contractor and subsequently sought to perform services for a competitor of CAS. CAS sought to enforce a restraint of trade clause that prohibited Mr Brolin from performing any other contract services for competitors during his engagement and for a period thereafter.

The primary legal issue before the Court of Appeal was whether the restraint of trade clause was valid and enforceable. This involved determining whether the clause went beyond what was reasonably necessary to protect CAS's legitimate business interests, such as its trade connections and confidential information, and whether it unduly restricted Mr Brolin's ability to earn a living. The court also considered the procedural question of whether the Supreme Court had correctly determined this question of law at the close of the plaintiff's case under the relevant Court Procedures Rules.

The Court of Appeal upheld the Supreme Court's decision, finding that the restraint of trade clause was unreasonable and therefore void. The court reasoned that the prohibition on performing *any* other contract services for competitors was overly broad. It did not distinguish between services that might genuinely compete with CAS's business and those that might not, nor did it consider the duration or geographical scope of the restriction in a way that was proportionate to CAS's legitimate interests. The court applied established principles of contract law regarding restraints of trade, emphasizing that such clauses must be narrowly construed and must not impose an unreasonable burden on the restricted party.

Consequently, the appeal was dismissed.