Dooley v Scotney - [2010] QSC 179

SUPREME COURT OF QUEENSLAND

CITATION:

Dooley & Ors v Scotney & Ors [2010] QSC 179

PARTIES:

DOOLEY, Mark
(first plaintiff)
McKENNA, Darren
(second plaintiff)
CORPORATE DEVELOPMENT GROUP PTY LTD
ACN 085 813 707 AS TRUSTEE FOR THE DOOLEY FAMILY TRUST
(third plaintiff)
PENTIP PTY LTD ACN 096 725 192 AS TRUSTEE FOR THE McKENNA FAMILY TRUST
(fourth plaintiff)
v
SCOTNEY, William Edward
(first defendant)
PAPILLION ENTERPRISES PTY LTD ACN 096 797 787 AS TRUSTEE FOR THE SCOTNEY FAMILY TRUST

(second defendant)

FILE NO/S:

SC No 3498 of 2010

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

5 May 2010

DELIVERED AT:

Brisbane

HEARING DATE:

30 April 2010

JUDGE:

Margaret Wilson J

ORDER:

Upon the Plaintiffs and Clean It NQ Pty Ltd ACN 098 254 865 giving the usual undertaking as to damages;
And upon Clean It NQ Pty Ltd ACN 098 254 865 undertaking that, if requested to do so in writing by Mammoth Townsville Pty Ltd, it will enter into lease agreements with Mammoth Townsville Pty Ltd for the equipment identified in paragraphs 135(a), (b), (c) and (d) of the Affidavit of William Edward Scotney sworn on 29 April 2010 for the remainder of the lease period at the monthly lease payments identified in the table at paragraph 135 and on the same terms as the leases in Exhibit H of the Affidavit of William Edward Scotney sworn on 29 April 2010:

1.   In these orders:

(a)   the “Business of Industrial Cleaning” means the removal of waste and other unwanted substances in mining operations, shopping centres, mechanical workshops, local councils, drilling shipyards, hotels and motels;

(b) the “Area” means the area within a 500 kilometre radius of the city of Townsville, Queensland.

2.   Until 31 August 2011 or further or other order, whichever is the earlier, the first defendant and the second defendant be restrained from doing any of the following, whether by themselves or by Mammoth Townsville Pty Ltd, by Wildam Pty Ltd or by Airconditioning Direct NQ Pty Ltd:

(a)   causing or permitting, for the Business of Industrial Cleaning;

(i)         the use by any person, other than Clean It NQ Pty Ltd, of any of the following equipment at any site within the Area:

(A) the industrial vacuum loader known as a KingVac 11000 with serial number 31024 owned by Mammoth Townsville Pty Ltd;

(B) the 2009 Mercedes Benz Actros 3244/54 and VacJet Typhon 8 x 4 vacuum with chassis number WDB93030626385469 owned by Mammoth Townsville Pty Ltd;

(C) the 4m3 hydrovacuum unit mounted on an Isuzu FRR 500 truck owned by Mammoth Townsville Pty Ltd; or

(ii)       any work or other activity to be undertaken within the Area under the authority of certificate of registration No ENRE00917909 issued by the Environmental Protection Agency to Mammoth Townsville Pty Ltd; or

(iii)      complete Environmental Solutions Pty Ltd to use as a business premises the premises located at 58 or 58A Hughes Street, Hermit Park in Townsville, Queensland, which 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.

Continue reading Dooley v Scotney

Details

AGLC: Dooley v Scotney [2010] QSC 179
Case: [2010] QSC 179
Decision Date: 5 May 2010

CaseChat Overview and Summary

Dooley and others versus Scotney and others was a case before the Queensland Supreme Court regarding an application for an interlocutory injunction to prevent breaches of restrictive covenants and confidentiality obligations following the sale of a business. The plaintiffs, Dooley and another, were the vendors of an industrial cleaning business based in Townsville, and the defendants, Scotney and another, were the purchasers of the business. The sale was completed through two agreements, a share sale contract and a unit sale contract, which contained identical covenants in restraint of trade and confidentiality obligations. The restraint clause limited the defendants' ability to engage in industrial cleaning activities within a 500-kilometre radius of Townsville for five years or the maximum period permitted by law.

The primary legal issues the court had to address were whether there was a sufficiently strong argument that the restraint clause was valid and reasonable, and whether there was a serious question to be tried regarding its breach. The defendants argued that the restraint was invalid due to uncertainty and because it left it to the court to determine the measure of the restraint. They also contended that severance of the offending words was not possible as the clause only contained one concept. The plaintiffs submitted that the validity of the restraint was a facts-sensitive issue that should be determined at trial.

The court found that there was a sufficiently strong argument in favour of the validity of the restraint for there to be a serious question to be tried. The court also found that the restraint was not void due to uncertainty and that the offending words could be severed. The court concluded that damages were not an adequate remedy and that the balance of convenience favoured granting the interlocutory injunction.

The court made orders restraining the defendants from engaging in industrial cleaning activities within the specified area and for the remainder of the lease period for certain equipment. The plaintiffs were required to provide undertakings as to damages, and Clean It NQ Pty Ltd was required to enter into lease agreements with Mammoth Townsville Pty Ltd for the equipment identified in the affidavits. The costs of the application were reserved.

Orders

Orders of the court

Upon the Plaintiffs and Clean It NQ Pty Ltd ACN 098 254 865 giving the usual undertaking as to damages;

And upon Clean It NQ Pty Ltd ACN 098 254 865 undertaking that, if requested to do so in writing by Mammoth Townsville Pty Ltd, it will enter into lease agreements with Mammoth Townsville Pty Ltd for the equipment identified in paragraphs 135(a), (b), (c) and (d) of the Affidavit of William Edward Scotney sworn on 29 April 2010 for the remainder of the lease period at the monthly lease payments identified in the table at paragraph 135 and on the same terms as the leases in Exhibit H of the Affidavit of William Edward Scotney sworn on 29 April 2010:

1. In these orders:

(a) the “Business of Industrial Cleaning” means the removal of waste and other unwanted substances in mining operations, shopping centres, mechanical workshops, local councils, drilling shipyards, hotels and motels;

(b) the “Area” means the area within a 500 kilometre radius of the city of Townsville, Queensland.

2. Until 31 August 2011 or further or other order, whichever is the earlier, the first defendant and the second defendant be restrained from doing any of the following, whether by themselves or by Mammoth Townsville Pty Ltd, by Wildam Pty Ltd or by Airconditioning Direct NQ Pty Ltd:

(a) causing or permitting, for the Business of Industrial Cleaning;

(i) the use by any person, other than Clean It NQ Pty Ltd, of any of the following equipment at any site within the Area:

(A) the industrial vacuum loader known as a KingVac 11000 with serial number 31024 owned by Mammoth Townsville Pty Ltd;

(B) the 2009 Mercedes Benz Actros 3244/54 and VacJet Typhon 8 x 4 vacuum with chassis number WDB93030626385469 owned by Mammoth Townsville Pty Ltd;

(ii) any work or other activity to be undertaken within the Area under the authority of certificate of registration No ENRE00917909 issued by the Environmental Protection Agency to Mammoth Townsville Pty Ltd; or

(iii) complete Environmental Solutions Pty Ltd to use as a business premises the premises located at 58 or 58A Hughes Street, Hermit Park in Townsville, Queensland, which is otherwise described as part of Lot 2 on Registered Plan 713229, County of Elphinstone, Parish of Coonambelah, Local Government: Townsville; or

(b) Engaging in, participating, assisting or otherwise being directly or indirectly involved in the Business of Industrial Cleaning within the Area.

3. The costs of the application filed 6 April 2010 are reserved.

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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CITATION:	Dooley & Ors v Scotney & Ors [2010] QSC 179
PARTIES:	DOOLEY, Mark (first plaintiff) McKENNA, Darren (second plaintiff) CORPORATE DEVELOPMENT GROUP PTY LTD ACN 085 813 707 AS TRUSTEE FOR THE DOOLEY FAMILY TRUST (third plaintiff) PENTIP PTY LTD ACN 096 725 192 AS TRUSTEE FOR THE McKENNA FAMILY TRUST (fourth plaintiff) v SCOTNEY, William Edward (first defendant) PAPILLION ENTERPRISES PTY LTD ACN 096 797 787 AS TRUSTEE FOR THE SCOTNEY FAMILY TRUST (second defendant)
FILE NO/S:	SC No 3498 of 2010
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	5 May 2010
DELIVERED AT:	Brisbane
HEARING DATE:	30 April 2010
JUDGE:	Margaret Wilson J
ORDER:	Upon the Plaintiffs and Clean It NQ Pty Ltd ACN 098 254 865 giving the usual undertaking as to damages; And upon Clean It NQ Pty Ltd ACN 098 254 865 undertaking that, if requested to do so in writing by Mammoth Townsville Pty Ltd, it will enter into lease agreements with Mammoth Townsville Pty Ltd for the equipment identified in paragraphs 135(a), (b), (c) and (d) of the Affidavit of William Edward Scotney sworn on 29 April 2010 for the remainder of the lease period at the monthly lease payments identified in the table at paragraph 135 and on the same terms as the leases in Exhibit H of the Affidavit of William Edward Scotney sworn on 29 April 2010: 1. In these orders: (a) the “Business of Industrial Cleaning” means the removal of waste and other unwanted substances in mining operations, shopping centres, mechanical workshops, local councils, drilling shipyards, hotels and motels; *(b) the “Area” means the area within a 500 kilometre radius of the city of Townsville, Queensland.* 2. Until 31 August 2011 or further or other order, whichever is the earlier, the first defendant and the second defendant be restrained from doing any of the following, whether by themselves or by Mammoth Townsville Pty Ltd, by Wildam Pty Ltd or by Airconditioning Direct NQ Pty Ltd: (a) causing or permitting, for the Business of Industrial Cleaning; (i) the use by any person, other than Clean It NQ Pty Ltd, of any of the following equipment at any site within the Area: (A) the industrial vacuum loader known as a KingVac 11000 with serial number 31024 owned by Mammoth Townsville Pty Ltd; (B) the 2009 Mercedes Benz Actros 3244/54 and VacJet Typhon 8 x 4 vacuum with chassis number WDB93030626385469 owned by Mammoth Townsville Pty Ltd; (C) the 4m3 hydrovacuum unit mounted on an Isuzu FRR 500 truck owned by Mammoth Townsville Pty Ltd; or (ii) any work or other activity to be undertaken within the Area under the authority of certificate of registration No ENRE00917909 issued by the Environmental Protection Agency to Mammoth Townsville Pty Ltd; or (iii) complete Environmental Solutions Pty Ltd to use as a business premises the premises located at 58 or 58A Hughes Street, Hermit Park in Townsville, Queensland, which is…