CREAM -v- BUSHCOLT PTY LTD [2004] WASCA 82
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 82 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:84/2002 | 19 FEBRUARY & 13 NOVEMBER 2003 | |
| Coram: | MALCOLM CJ MILLER J MCKECHNIE J | 22/04/04 | |
| 51 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed, Relevant provisions in contract in restraint of trade held void and , unenforceable, Cross-appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | CLAYTON GEORGE TIMOTHY CREAM BUSHCOLT PTY LTD |
Catchwords: | Contracts Illegal and void contracts Contract in restraint of trade Whether covenant in restraint of trade for 10 years unreasonable Whether statewide covenant restraint of trade on sale of livestock transport business reasonable Business based in Geraldton and operated mainly in the Mid-West, Gascoyne and Murchison areas with some business in the Lower West of the State Statewide covenant unreasonable Restraint clauses not to be concerned in any way directly or indirectly in the livestock transport industry unreasonable Cumulative effect of restraints unreasonable so that covenant contract in restraint of trade void Appellant not precluded from involvement in livestock transport industry by the doctrine of promissory estoppel Statement by appellant in negotiations that he intended to leave the livestock transport industry permanently was honest and based on reasonable grounds |
Legislation: | Fair Trading Act 1987 (WA), ss 9, 77 Trade Practices Act 1974 (Cth), s 51A |
Case References: | Adelaide Petroleum NL v Poseidon Ltd (1988) ATPR 40-901 Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 Brendon Pty Ltd v Russell (1994) 11 WAR 280 British Reinforced Concrete Engineering Co Ltd v Schelff [1921] 2 Ch 563 Britten v Bishop, unreported; SCt of WA; Library No 960560S; 25 September 1996 Brown v Brown [1980] 1 NZLR 484 Buckley v Tutty (1971) 125 CLR 353 Butt v Long (1953) 88 CLR 476 Cummings v Lewis (1993) ATPR (Digest) 46-103 Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269 Fleming Brothers (Monaro Agencies ) Pty Ltd v Smith (1983) ATPR 40-389 Hawkesbury Bakery Pty Ltd v Moses [1965] NSWR 1242 Herbert Morris Ltd v Saxelby [1916] 1 AC 688 IRAF Pty Ltd v Graham [1982] 1 NSWLR 419 Jaques v Cut Price Deli Pty Ltd (1993) ATPR (Digest) 46-120 Lindner v Murdock's Garage (1950) 83 CLR 628 Lloyds Ships Holdings Pty Ltd v Davros Pty Ltd (1987) 17 FCR 505 Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 Miba Ltd v Nescor Industries Group Ltd (1996) 141 ALR 525 Peters (WA) Ltd v Petersville Ltd (1999) ATPR 41–714 Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 Pioneer Concrete Services Ltd v Galli [1985] VR 675 Stenhouse Australia Ltd v Phillips [1974] AC 391 Thomson v Thomson (1802) 2 VSC 470 Ting v Blanche (1993) 118 ALR 543 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Whitmore v Farley [1881] 29 WR 825 Windhill Local Board… |
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Details
- Case
- [2004] WASCA 82
- Decision Date
CaseChat Overview and Summary
The case of Cream v Bushcolt Pty Ltd involved a dispute between the plaintiff, Cream, and the defendant, Bushcolt Pty Ltd, regarding the enforceability of certain restrictive covenants in a contract. The case was heard in the Supreme Court of Western Australia. The primary issue before the court was whether the restrictive covenants in the contract, which sought to restrain the plaintiff from engaging in the livestock transport industry for a period of ten years and from operating anywhere in the state, were reasonable and enforceable.
The court examined the nature of the business, which was based in Geraldton and primarily operated in the Mid-West, Gascoyne, and Murchison areas, with some business extending to the Lower West of the State. The court held that the statewide restraint was unreasonable, as it exceeded the geographical scope necessary to protect the legitimate business interests of the defendant. Furthermore, the court found that the restraint clauses prohibiting the plaintiff from being involved in any way, directly or indirectly, in the livestock transport industry were also unreasonable. The cumulative effect of these restraints rendered the covenant in restraint of trade void.
In reaching its decision, the court considered the appellant's statement during negotiations that he intended to leave the livestock transport industry permanently. The court found this statement to be honest and based on reasonable grounds, and thus the appellant was not precluded from involvement in the livestock transport industry by the doctrine of promissory estoppel. Consequently, the appeal was allowed, the relevant provisions in the contract in restraint of trade were held void and unenforceable, and the cross-appeal was dismissed.
The court examined the nature of the business, which was based in Geraldton and primarily operated in the Mid-West, Gascoyne, and Murchison areas, with some business extending to the Lower West of the State. The court held that the statewide restraint was unreasonable, as it exceeded the geographical scope necessary to protect the legitimate business interests of the defendant. Furthermore, the court found that the restraint clauses prohibiting the plaintiff from being involved in any way, directly or indirectly, in the livestock transport industry were also unreasonable. The cumulative effect of these restraints rendered the covenant in restraint of trade void.
In reaching its decision, the court considered the appellant's statement during negotiations that he intended to leave the livestock transport industry permanently. The court found this statement to be honest and based on reasonable grounds, and thus the appellant was not precluded from involvement in the livestock transport industry by the doctrine of promissory estoppel. Consequently, the appeal was allowed, the relevant provisions in the contract in restraint of trade were held void and unenforceable, and the cross-appeal was dismissed.
Orders
Orders of the court
Appeal allowed, Relevant provisions in contract in restraint of trade held void and , unenforceable, Cross-appeal dismissed
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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