Cgi Glass Lewis Pty Ltd v Vasey - [2019] NSWSC 794

Supreme Court

New South Wales

Medium Neutral Citation: CGI Glass Lewis Pty Ltd v Vasey [2019] NSWSC 794
Hearing dates: 24 June 2019
Date of orders: 27 June 2019
Decision date: 27 June 2019
Jurisdiction: Equity
Before: Robb J
Decision:
See par 61

Catchwords:
CIVIL PROCEDURE — Interlocutory applications — Standard of satisfaction for the continuation of an interlocutory injunction
EMPLOYMENT LAW — The contract of service and rights, duties and liabilities as between employer and employee — Enforceability of post-employment restraints
Legislation Cited: Restraints of Trade Act 1976 (NSW)
Cases Cited: Austra Tanks Pty Ltd v Running [1982] 2 NSWLR 840
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; [2006] HCA 46
Bridge Property Investments Pty Ltd v Garland Lot 3 Pty Ltd [2014] NSWCA 82
Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267; (2010) 202 IR 420
OAMPS Insurance Brokers Ltd v Hanna [2010] NSWSC 781
Quantum Service and Logistics Pty Ltd v Schenker Australia Pty Ltd [2019] NSWSC 2
Category: Procedural and other rulings
Parties: CGI Glass Lewis Pty Ltd (plaintiff)
Andrew Richard Vasey (first defendant)
Institutional Shareholder Services (Australia) Pty Ltd (second defendant)
Representation:
Counsel:
B Katekar/S Gaussen (plaintiff)
M White SC (defendants)
Solicitors:
Bird & Bird (plaintiff)
Minter Ellison (defendants)

File Number(s): 2019/193485

Judgment

The issue before the Court is whether, following a brief interlocutory hearing on Monday, 24 June 2019, the Court should extend an interlocutory injunction granted ex parte on Friday, 21 June 2019, until Thursday 4 July 2019, in order to give the plaintiff an opportunity to serve evidence in reply to evidence served upon the plaintiff by the defendants on the evening before and the morning of the 24 June 2019 hearing.
Accordingly, these reasons only deal with a short-term extension of the interlocutory order, and do not concern whether, on a fully contested basis inter partes, the Court should make interlocutory orders restraining the defendants, on particular terms, until the final hearing of the plaintiff's claim.
Given the short-term nature of the orders sought by the plaintiff, the fact that the application has been made in the duty list and the need for the Court to put in place case management orders with an element of urgency, these reasons will only address the principal arguments made by the parties.
The plaintiff, CGI Glass Lewis Pty Ltd, and the second defendant, Institutional Shareholder Services (Australia) Pty Ltd, are apparently Australian subsidiaries of international companies who engage in the business of providing to their clients what is called a "proxy advice service". It is said that these companies are two of only three companies that provide this service in Australia.
Proxy advice services apparently involve conducting research for clients who have funds under management, including asset owners such as superannuation funds and asset/investment managers.
The plaintiff advises its clients on the stocks they hold in publicly-listed markets and as to how to vote their shares at shareholder meetings. The advice given is of a research type, and is…

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: [2019] NSWSC 794
Decision Date: 27 June 2019

CaseChat Overview and Summary

The case of Cgi Glass Lewis Pty Ltd v Vasey was heard in the Federal Court of Australia. The plaintiff, Cgi Glass Lewis Pty Ltd, sought to enforce post-employment restraints against the defendant, Mr Vasey, who was their former employee. The primary legal issue before the court was the standard of satisfaction required to continue an interlocutory injunction that prohibited Mr Vasey from working for a competitor of the plaintiff. Additionally, the court needed to determine the enforceability of the post-employment restraints stipulated in Mr Vasey's employment contract.

The court examined the applicable legal principles governing interlocutory injunctions and post-employment restraints. It assessed whether the plaintiff had demonstrated a sufficient probability of success on the merits to warrant the continuation of the injunction. Furthermore, the court considered the balance of convenience and whether the potential harm to the plaintiff outweighed any prejudice to the defendant if the injunction was maintained. The enforceability of the post-employment restraints was evaluated in light of their reasonableness and whether they were necessary to protect the legitimate business interests of the plaintiff.

The court found that the plaintiff had not satisfied the required standard of probability of success on the merits. It concluded that the plaintiff had not demonstrated a compelling likelihood of proving that the post-employment restraints were necessary to protect their legitimate business interests. The court also noted that the balance of convenience favoured the defendant, as the injunction would significantly impede his ability to gain employment. As a result, the court declined to continue the interlocutory injunction and found the post-employment restraints unenforceable.

The Federal Court ordered that the interlocutory injunction be discharged, allowing Mr Vasey to seek employment with the competitor. The court also declared the post-employment restraints in Mr Vasey's employment contract to be unenforceable, freeing him from any legal obligations that would restrict his ability to work in his chosen field.

Orders