Double T Radio Pty Ltd v Marr and Bishop
[2001] VSC 415
•2 November 2001
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 8029 of 2001
| DOUBLE T RADIO PTY LTD (ACN 003 181 244) | Plaintiff |
| v | |
| VICKI MARR KATHERINE BISHOP | First Defendant Second Defendant |
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JUDGE: | McDonald J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 and 25 October 2001 | |
DATE OF JUDGMENT: | 2 November 2001 | |
CASE MAY BE CITED AS: | Double T Radio Pty Ltd v Marr and Bishop | |
MEDIUM NEUTRAL CITATION: | [2001] VSC 415 | |
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Interlocutory injunction, whether defendant should be restrained from engaging in present employment, serious question to be tried, whether plaintiff a party to the contract sought to be enforced, whether term of contract a restraint of trade, whether term relied on void for uncertainty, balance of convenience, order refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Collison | Holding Redlich |
| For the Defendant | Mr M. McDonald | Mallesons Stephen Jaques |
HIS HONOUR:
The proceedings in this matter were commenced by writ on 19 October 2001. The defendants are Vicki Marr and Katherine Bishop. By the endorsement on the writ it was alleged that the plaintiff was a wholly owned subsidiary of Australian Radio Network Pty Ltd which in the endorsement the plaintiff referred to as “ARN” with the capacity to sue. It was alleged against Ms Marr that on or about 18 December 2000 the plaintiff and she entered into an agreement under which the plaintiff employed her as Production Manager and Assistant Program Director and that by an express term of her agreement, recorded in a letter dated 18 December 2000, she agreed that she would not, without the prior written consent of “ARN” (which was not to be unreasonably withheld), “be directly or indirectly engaged, concerned or interested in any radio licence area in Melbourne or an overlap radio licence area which encompasses a significant portion of Melbourne, for the period of three months after the termination” of her agreement.
It was alleged against Ms Marr that the agreement terminated on 5 October 2001, following her resignation; that the “DMG group of companies” intended to commence operating a commercial FM radio station in the Melbourne radio licence area; that Ms Marr, in October 2001, and “an entity in the DMG group of companies” entered into an agreement under which that entity had employed Ms Marr as a production director of a new commercial radio station that intended to operate in the Melbourne radio licence area; that in making that agreement with the “DMG entity” Ms Marr was in breach of her agreement with the plaintiff and that by reason of that breach the plaintiff will suffer loss and damage. The plaintiff claimed against Ms Marr damages and “such other orders as the court finds appropriate”.
The endorsement also made allegations against the secondnamed defendant but for the reasons hereafter stated it is not necessary to deal with the plaintiff’s claim against the secondnamed defendant.
On 19 October 2001 there was issued on behalf of the plaintiff a summons directed to each defendant. As against Ms Marr the plaintiff sought an order that she not, “without the prior written consent of the plaintiff” (which will not be unreasonably withheld), “be directly or indirectly engaged concerned or interested in any radio licence area in Melbourne or an overlap radio licence area which encompasses a significant proportion of Melbourne prior to 5 January 2002 or the hearing and determination of this proceeding or further order, whichever is earlier”. An interlocutory order in the proceedings was also sought against the secondnamed defendant.
On the return of the summons the Court was informed that an order in the nature of interlocutory relief against the secondnamed defendant, Katherine Bishop, was no longer sought and, accordingly, the proceeding was confined to whether an order should be made against the firstnamed defendant, Ms Marr, by way of interlocutory relief. During the course of the hearing of the application counsel for the plaintiff informed the Court the order sought differed from that in the summons and that the specific order sought against Ms Marr at this time was:
“Until the trial of this proceeding or further order or 5 January 2002 (whichever is earlier) the first defendant be restrained from providing services to DMG (Australia) Pty Ltd or any subsidiary thereof (the ‘DMG Group’) pursuant to her contract of employment with [DMG (Australia) Pty Ltd]”.
Counsel further informed the court that the plaintiff was prepared to give to the court an undertaking as to damages and a further undertaking that in the event of Ms Marr being dismissed from her employment by DMG (Australia) Pty Ltd prior to the hearing and determination of the proceedings it would pay to her amounts corresponding to her current salary with DMG until 5 January 2002 but that in the event of it being successful at trial she was to refund to the plaintiff the moneys paid to her pursuant to such undertaking.
In an affidavit sworn by Stephen Pead on 19 October 2001 in support of the plaintiff’s claim for relief, he deposed that the plaintiff company is a wholly owned subsidiary of Australian Radio Network Pty Ltd, that he had worked for that company continuously since 1995 and that since 23 July 2001 the plaintiff had employed him as the Melbourne Marketing Manager of the Radio Stations MIX 101.1 and GOLD 104.3. He deposed, further:
That the plaintiff is licensed to operate a commercial radio broadcasting service serving the Melbourne general area, that the Australian Radio Network Group acquired the licence to operate the radio station in May 1995, that between 24 June 1990 and 18 June 2001 it operated under the name ‘101.1 TT FM’ and that since 18 June 2001 the plaintiff in operating the radio commercial service broadcasts from Richmond under the name ‘MIX 101.1 FM’;
that ‘MIX’ generates its revenue almost exclusively from advertising derived from advertising agencies that place radio commercials with MIX and organisations that engage MIX directly;
that ‘MIX’s’ capacity to attract agency advertising depends primarily on its capacity to maximise the number of listeners within its target listener audience which is for women aged between 25 and 44 years and that MIX competes with a number of commercial radio stations for such audience;
that the plaintiff is constantly obtaining information about and conducting or commissioning research into the tastes and preferences of ‘MIX’s’ target listeners and that any decline in its ratings within its target audience is likely to have an immediate and adverse effect on agency advertising placed with it;
that ‘MIX’s’ brand is the product of every aspect of its on-air sound including the music schedule and the way it is programmed, the sweepers or promotional segments between music, the quality of on-air material and production sound and various segments such as competitions and information.
Pead further deposed that the plaintiff had employed Ms Marr between 1 January 2001 and 5 October 2001 in the positions of “MIX’s” Production Manager and Assistant Programme Director and that the written terms and conditions of her employment during that time were recorded in a letter dated 18 December 2000, signed by his predecessor, David McDonald, and Marr on 20 December 2000. A copy of that letter was exhibited to his affidavit. To this I will return.
Pead further deposed that the principal function of Ms Marr during her employment with the plaintiff was to maximise the number of Melbourne females aged between 25 and 44 years who listened to “MIX”. He deposed that during each week of her employment with the plaintiff Ms Marr attended and was actively involved in promotion meetings, program meetings, solution meetings, group marketing meetings and meetings with consultants and that she was also involved in numerous frequent informal discussions with “MIX’s” directors of programming, music and promotions and as such she was involved in the vast majority of significant decisions made by the plaintiff regarding “MIX’s” branding and imaging. He deposed that on his observations and understandings of the role of Ms Marr with “MIX”, from her employment with the plaintiff, she would know every aspect of “MIX’s” target audience including demographic and psychographic features of that listening group, every aspect of how “MIX’s” on-air sound is built, the findings of research commissioned by the Australian Radio Network Group at significant cost to assess the preferences of its target listeners and the planned promotional activities of the plaintiff over the forthcoming three to six months.
Pead deposed that the plaintiff treated this information on a highly confidential basis and it was only disclosed to those persons within the plaintiff who needed to know that information.
Pead further deposed that on or about 5 September 2001 Ms Marr told “MIX’s” Production Manager and him that she intended to resign her employment with the plaintiff, that discussions were had with her and subsequent to the same she informed Pead that she intended to take up employment with DMG (Australia) Pty Ltd.
He further deposed as to discussions that occurred between he and Ms Marr from that time until 5 October 2001 when Ms Marr ceased working for the plaintiff. On that day Pead wrote a letter to Ms Marr drawing her attention to the schedule of her contract of employment and, in particular, to the clause entitled “Future Employment”, which he set out. He informed her that pursuant to that clause she had “agreed that for a period of three months starting from tomorrow you will not be employed or perform work for another radio station in the Melbourne region unless you have the written consent of ARN to do so”. He further stated, “As you have not asked for nor been provided with ARN’s written consent to do so you cannot commence your employment with DMG or any other radio station in the Melbourne region for the period of three months”.
By the letter Pead further informed Ms Marr that should she commence her employment with DMG in the Melbourne region or any other radio station in the Melbourne region then it would be in breach of her contract of employment and, “If so, then ARN will take steps to force you to comply with this provision and or claim damages against you for breach of this provision”.
By a letter dated 5 October 2001, Ms Marr wrote to Pead stating that the future employment provisions, as outlined in her employment contract, purported to restrict her from working anywhere in any capacity within Melbourne for a three month period; that such provision was not a reasonable or lawful provision and that the position she had accepted with “DMG Radio” was a different position to the one she occupied at “ARN”. By that letter she rejected the assertion of Pead that she was in breach of her employment contract.
Pead further deposed in his affidavit that Melbourne Radio Pty Ltd (“Melbourne Radio”) which is a wholly owned subsidiary of “DMG”, purchased a commercial broadcasting licence on 14 December 2000 which licensed the operator to broadcast on 91.5 MHz and that by a submission made by Radio Melbourne to the Australian Broadcasting Authority it had indicated that it wished to operate on 100.3 MHz in order to achieve the same coverage in all of the Melbourne licensed area as MIX and other commercial FM radio stations in Melbourne.
He deposed that on 17 October 2001 he saw a report in the Herald Sun newspaper that “DMG” had appointed Ms Marr as a production director of its new Melbourne radio station and that on 19 October 2001 he searched the “DMG” web site which contained a copy of a press release dated 15 October 2001. That press release contained a statement that Melbourne FM had announced the appointment of Ms Marr as production director of “DMG’s” new Melbourne FM which set out her background including the fact that she had been the Assistant Programme Director/Production Manager for Melbourne’s “MIX 101.1” and a comment purported to be made by Ms Marr which stated, “I am so excited about working with the team to build a new station for Melbourne listeners, it doesn’t get any better than launching a new FM station in Melbourne”.
Pead further deposed in his affidavit that based on his experience, within the industry including his employment since 1995 in the “ARN Group”, that he understood that the role to be occupied by Ms Marr with Melbourne Radio would include the same duties that were summarised in the schedule in her letter of employment and that she would be required in her new employment to carry out many of the same duties and responsibilities that she was required to carry out in her position with “MIX”.
He deposed that if the information she had gained with her employment with the plaintiff was used by her or disclosed by her to representatives of “DMG” or Melbourne Radio then they would obtain a substantial and unfair competitive advantage over “MIX” in establishing its new Melbourne radio station and that “DMG” would have access to the ideas and plans for promotion of “MIX” over the coming summer season and that “MIX” would be required to reassess and redevelop its ideas and plans for promotions over that period. He deposed that the Melbourne licence area is a very competitive area, that if “DMG” or Melbourne Radio, through Ms Marr, were to have access to the type of information she had gained in her employment with the plaintiff it would have “a detrimental impact on MIX which the awarding of damages to MIX could not remedy due to the potential loss of advertising customers in the long term”.
The letter of Ms Marr’s employment referred to and exhibited to the affidavit of Pead sworn on 19 October 2001 is on a letterhead on which is printed “101.1 TT FM”. It was dated 18 December 2000 and signed by “David McDonald General Manager 101.1 TT FM”. The first sentence of that letter stated, “This letter sets out the new terms and conditions of your employment with ARN”.
Under the heading, “Attached Schedule” the letter stated:
“The attached schedule notes the Award relevant to your employment, your position, duties and responsibilities, hours of work, your reporting line and of course details regarding your remuneration. Details specific to your Award or your individual or personal arrangements with ARN may also be noted in this schedule.”
Under the heading, “Location” the letter stated:
“You will work in the Melbourne offices of ARN.
You may be required to perform your duties for one or more radio stations operated by Australian Radio Network Pty Ltd and its related companies, but you will not be required to relocate to another State without your consent.”
Under the heading, “Probationary Period” the letter stated:
“The first three months of your employment is a period of probation. At any time during this period or at the end of the period ARN may terminate your employment by giving you one week’s notice or payment in lieu of one week’s notice. You may also resign your employment during this period by providing one week’s notice. Either party need specify no reason for termination. At the end of your probationary period your suitability for permanent employment will be assessed and at that time ARN may elect to offer you permanent employment.”
Under the heading, “Termination” the letter stated:
“If employment was terminated by ARN then ARN may choose to make payment to you in lieu of notice and that as a general rule ‘ARN’ requires four weeks’ notice of resignation after you become a permanent employee.”
Further in the letter under the heading, “Termination for Misconduct” it was stated:
“ARN is entitled to dismiss any employee without any prior notice or any payment in lieu of notice should the employee in the reasonable opinion of ARN be guilty of misconduct.”
Further under the heading, “Inventions, Patents, Designs and Copyright” the letter stated:
“Any inventions, improvement, discovery or design made by Ms Marr, ‘whilst employed by ARN and in connection with the business of ARN will be the property of ARN.’”
Under the heading, “No Competition” the letter stated:
“During the term of your employment you shall not, without the prior written consent of ARN, which will not be unreasonably withheld, undertake any work or be engaged in any way in any business in competition with or of a similar nature of the business of the company. A business of a similar nature to the business of ARN or any group member shall include, without limitation, the businesses of a radio station, television station, pay television operator, creation or participation in radio and/or audio-visual productions and production of voice overs.”
The letter further stated under the heading, “Confidentiality”:
“It is a term and condition of your employment that you shall not without written consent of ARN disclose or use any confidential information of any kind except for the disclosure or use in the proper course of your duties or to the extent you are required to disclose that the information by law or requirements of any regulatory bodies. Failure to comply with this term will be considered a serious act of misconduct and may result in summary dismissal.”
Further by that letter it was drawn to the attention of Ms Marr that by signing the “letter” she acknowledged the conditions, covenants and restrictions, contained in this agreement and in “ARN People” are reasonable in all circumstances. The letter stated, “To accept this offer please sign the original and duplicate copy of this letter in the space provided on the last page” and that the original should be returned. The last sentence stated, “We are pleased to welcome you to the ARN team and we trust that your association will be long and successful”.
Enclosed in that letter was a document headed, “Schedule” which provided for the acceptance by Ms Marr, which she completed, signed and dated 20 December 2000. The acceptance stated, as completed by her:
“I Vicki Marr wish to accept the offer of employment with ARN upon the terms as disclosed in this letter, I acknowledge that I have had the full opportunity to read this letter and ARN people and accept the offer with knowledge and understanding of the terms and conditions specified.”
Within the document headed, “Schedule”, under the heading, “Future Employment” it was stated:
“You shall not, without prior written consent of ARN (which will not be unreasonably withhold), be directly or indirectly engaged, concerned or interested in any radio licence area in Melbourne or an overlap radio licence area which encompasses a significant proportion of Melbourne for the period of three months after the termination of this employment and you acknowledge that this restriction is reasonable in all the circumstances and is not greater than required to ensure the reasonable protection of the business of ARN.”
It was in reliance of this term in the contract of Ms Marr’s employment that the plaintiff relies on in seeking to obtain interlocutory relief in the nature sought by it in this proceeding.
In an affidavit sworn by Ms Marr on 24 October 2001 she deposed that she is presently employed by DMG Radio (Australia) Pty Ltd (which she identified as DMG and which for convenience I shall also refer to as DMG), as a production director for its new Melbourne radio station and that she commenced her employment with DMG on 15 October 2001. She deposed that during December 2000 she was approached by the plaintiff to hold a position of Production Manager and Assistant Program Director and that on or about 18 December 2000 she met with the General Manager of the plaintiff, David McDonald, who provided her with a letter of employment which is that to which I have referred and which is exhibited to the affidavit of Pead. She deposed that she raised with McDonald the clause which is in the schedule signed by her and headed, “Future Employment” and that he told her that she should not worry about that restraint because it was a clause that he hardly ever enforced in any case.
She deposed that reassured by McDonald’s comments, she signed the employment agreement, in part, because of that reassurance. Ms Marr deposed in her affidavit that on 1 January 2001 she commenced employment with the plaintiff in positions of Production Manager and Assistant Program Director. By her affidavit she set out the work that she had performed including attending meetings and other duties undertaken. She deposed that it was an overstatement to say that she knew, by reason of her employment with the plaintiff, its planned promotional activities over the next three to six months. Further, she deposed that it was over statement by Pead to say that a competitor with access to the information he has described would hold a substantial competitive advantage over MIX in the Melbourne radio market, stating that a substantial proportion of the information claimed to be confidential by Pead was, in fact, available in the public domain.
She deposed that she resigned her employment on 7 September 2001 and did not attend any meeting thereafter in which confidential information was likely to be discussed. To her affidavit Ms Marr exhibited a map which demonstrates that that which is referred to as the Melbourne licence area encompasses an area commencing in the south/west - north of Lara, in the west – the west of Bacchus March, in the north – south of Seymour, in the east – Healesville, to the west side of Westernport and extending through the Nepean Peninsular to Point Nepean. She has deposed that it is her understanding that the new Melbourne station will commence broadcasting before the end of this year.
She has deposed that in the event of the injunction, now sought, being granted, an injunction which prevents her working in the radio industry for a period of three months will have a detrimental effect on her financial situation and future employment prospects; that being unemployed without income for a period three months will be extremely damaging to her financial status and personal circumstances; that with her partner she is due to settle on the purchase of a house in three weeks’ time and that the monthly mortgage repayments required to be met will be unable to be met by the resources of her partner. She has further deposed that she and her partner have mortgage commitments with respect to an investment property and that in the event of her not having any income the future with respect to that property will be jeopardised.
Further, Ms Marr has deposed that an injunction which prevents her from continuing employment with DMG will jeopardise her employment with DMG because whilst being employed as the new Production Director of DMG it is necessary for her to be involved in all aspects of the radio stations launch and its on-going development.
She has further deposed that she has been informed by the General Manager of the new Melbourne station that if she is unable to fulfil the duties of Production Manager over the next three months there is a real risk that her employment with DMG would not be resumed subsequently on 5 January 2002.
She has further deposed that in the event of the order now sought being made it is highly likely that she would be required to move Interstate to find other employment as employment opportunities at the level of seniority that she has with DMG are very limited and, further, that she would expect that in her search for further employment the short period of employment with DMG would significantly and adversely affect her ability to obtain new employment.
In an affidavit sworn by Pead on 24 October 2001 he joined issue with the facts deposed to by Ms Marr in her affidavit and in parts detailing the nature of the information confidential to the plaintiff which Ms Marr knew and had access.
During the course of the hearing of the application the question was raised as to whether the contract sought to be relied on as alleged to have been entered into between the plaintiff and Ms Marr was in fact entered into by the plaintiff with Ms Marr and whether or not the contract sought to be relied on by the plaintiff was entered into between Ms Marr and Australian Radio Network Pty Ltd.
On 25 October 2001 Pead swore a further affidavit. In that affidavit Pead deposed that whereas he had previously sworn that “ARN” had acquired the licence to operate the radio station under the name of “101.1 TT FM” in May 1995, what, in fact, had occurred was that “ARN”, in May 1995, acquired all of the issued shares in the plaintiff and that the plaintiff operated a radio station in the name “101.1 TT FM”. He deposed that from May 1995 until 18 June 2001 the plaintiff operated a radio station under the name “101.1 TT FM”.
Further, Pead has deposed that the plaintiff was also the owner of the business name, “MIX 101.1” and commenced to operate a radio station under that name on 18 June 2001.
In this further affidavit of Pead he has deposed that Australian Radio Network Pty Ltd is a holding company which owns a number of subsidiary companies which themselves own radio licences. To his affidavit he has exhibited a diagram headed “Corporate Structure June 2001” illustrating the subsidiary companies owned by Australian Radio Network Pty Ltd. There are 11 companies the shareholding of which is owned 100 percent by it. One such company is the plaintiff.
Pead further deposed that at the time of the execution of Ms Marr’s letter of employment, that is, 20 December 2000, the plaintiff owned and operated the radio station broadcasting under the name “101.1 TT FM”. He has further deposed that at that time David McDonald, the person who signed the letter dated 18 December 2000 directed to Ms Marr, was employed as the General Manager of the plaintiff and also the General Manager of a further company, “ARN Broadcasting Pty Ltd”, but that at no time was he the General Manager of Australian Radio Network Pty Ltd. Further, there was exhibited to this affidavit of Pead a “Group Certificate” of Ms Marr for the 2000/2001 financial year. By reference to that certificate it appears that the plaintiff made payments to Ms Marr during the period 4 August 2000 to 8 December 2000 from which tax was withheld. It was subsequent to 8 December 2000 that Ms Marr signed the letter of acceptance of the offer of employment constituting the agreement which is the subject of these proceedings. In such circumstances it is difficult to see what part the Group Certificate can play in these proceedings. The matter was not able to be explored further in these proceedings.
For the plaintiff to obtain the interlocutory relief of the nature sought by it in these proceedings it is necessary for it to satisfy the Court that in the proceedings there is a serious question to be tried and that the balance of convenience favours the grant of the injunction sought by it: Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland[1]; Tableland Peanuts Pty Ltd v Peanut Marketing Board[2]; Castlemaine Tooheys Ltd v South Australia[3].
[1](1982) 57 ALJR 425.
[2](1984) 58 ALJR 283 at 284.
[3](1986) 161 CLR 184.
On behalf of the plaintiff it was submitted that the serious question to be tried in these proceedings is whether the clause in Ms Marr’s contract of employment (which for convenience sake I shall refer to as the “Future Employment” clause) is a valid term of her contract of employment and is enforceable, it not being void as constituting a restraint of trade and consequently not enforceable.
It was submitted on behalf of the plaintiff that to the extent that an issue arose in these proceedings whether the contract of employment entered into by Ms Marr was a contract entered into between the plaintiff and Ms Marr and was enforceable by the plaintiff that gave rise to a further serious question to be determined in the proceedings but when regard was had to the balance of convenience the Court should determine that the balance was in favour of the plaintiff and that the interlocutory injunctive relief sought by the plaintiff should be granted.
On behalf of Ms Marr it was submitted that when regard was had to the written contract of employment entered into by Ms Marr and constituted by her acceptance on 20 December 2000 of the offer made to her it should be concluded at this time that the contract entered into was not between her and the plaintiff but it was a contract between her and “ARN”, Australian Radio Network Pty Ltd, and, therefore, was not enforceable by the plaintiff. It was further submitted on behalf of Ms Marr the “Future Employment” clause was uncertain and without meaning, such as it should be held that it was void and therefore not able to be enforced in the manner sought by the plaintiff on this application. It was submitted that on both grounds, at this point, the Court should not grant the interlocutory relief sought by the plaintiff but in the event of the Court not upholding those submissions that the balance of convenience weighed in favour of the order, now sought by the plaintiff, not being made.
It is convenient to deal first with the issue as to whether there is a serious question to be tried, that the contract of employment was not entered into by Ms Marr with the plaintiff but rather it was entered into between her and another, namely, Australian Radio Network Pty Ltd.
A convenient starting point when considering this matter is the first affidavit of Pead sworn on 19 October 2001 where he deposes that the plaintiff, “is a wholly owned subsidiary of Australian Radio Network Pty Ltd (ARN)”. “I have worked for the ARN Group continuously since 1995” by that statement Pead distinguishes between Australian Radio Network Pty Ltd (ARN) and that which he refers to as the ARN Group. On behalf of the plaintiff it was submitted that relevant to this issue was the fact that the letterhead on the letter addressed to Ms Marr dated 18 December 2000 was, “101.1 TT FM”, that at the date of the letter David McDonald, who signed the same as General Manager 101.1 TT FM, was the General Manager of 101.1 TT FM which was the business name of the plaintiff and that he was not employed as a General Manager of Australian Radio Network Pty Ltd. It was submitted, further, that in her affidavit sworn on 24 October 2001 Ms Marr raised no question that she was not employed by the plaintiff and that, in fact, she had deposed that in December 2000 she was approached by “Double T” to hold the position of Production Manager and Assistant Program Director and that David McDonald provided her with a letter of employment and, further, that on 1 January 2001 she commenced employment with “Double T”.
It was submitted on behalf of the plaintiff that, having regard to these matters, it should be concluded that at the relevant time Ms Marr was employed by the plaintiff. When regard is had to the terms of the contract of employment there would appear to be a question that will arise to be determined in these proceedings as to who it was that Ms Marr was employed with immediately prior to her terminating her employment and who, pursuant to the terms of contract entered into by Ms Marr by acceptance of the written offer, is able to enforce the terms of such contract. It was further submitted on behalf of the plaintiff that the letters “ARN” in the Employment Agreement, as constituted by Ms Marr, accepting the written offer, should be understood to mean the ARN Group rather than Australian Radio Network Pty Ltd and that any issue relevant to this matter gave rise to a further serious question to be tried in these proceedings.
On behalf of Ms Marr it was submitted that when one had regard to the terms of the letter constituting the offer of employment made to Ms Marr and dated 18 December 2000 which was accepted by her in writing on 20 December 2000 that the contract thereby entered into by Ms Marr was a contract with Australian Radio Network Pty Ltd and not the plaintiff. It was submitted that this was the case notwithstanding that the person who signed the offer was the General Manager of “101.1 TT FM” and that the letterhead bore such symbol. It was submitted that when one construed the offer, as constituted by the letter dated 18 December 2000 and the acceptance, the letters “ARN”, in the letter and the acceptance, could only reasonably be read to be referring to a body, to a corporation, and not to a group of bodies or corporations.
Specific attention was drawn to clauses in the offer including:
¨ the clause headed, “Probationary Period” which provided that during this period or at the end of the period “ARN” may terminate your employment;
¨ the clause headed, “Termination” which provides that if the employment, “is terminated by ARN then ARN may choose to make payment to you in lieu of notice”;
¨ the clause headed, “Termination for Misconduct” which provides, “ARN is entitled to dismiss any employee without any prior notice or any payment in lieu of notice should the employee in the reasonable opinion of ARN be guilty of misconduct”;
¨ the clause headed, “Inventions, Patents, Designs and Copyright” which provides that, “Any invention, improvement, discovery or design made by you whilst employed at ARN and in connection with the business of ARN will be the property of ARN”;
¨ the clause headed, “No Competition” which provides, “During the term of your employment you shall not, without the prior written consent of ARN which will not be unreasonably withheld, undertake any work or be engaged in any way in any business in competition with, or of a similar nature to, the business of the company. A business of a similar nature to the business of ARN or any group member shall include….”
Further attention was drawn to the clause in the letter of offer headed, “Location” which provided:
“You will work in the Melbourne offices of ARN.
You may be required to perform your duties for one or more radio stations operated by Australian Radio Network Pty Ltd and its related companies but you will not be required to relocate to another State without your consent.”
Attention was drawn also to the acceptance signed by Ms Marr which as completed by her read, in part, “I Vicki Marr wish to accept the offer of employment with ARN upon the terms and conditions disclosed in this letter”.
It was submitted on behalf of Ms Marr that the offer of employment made to her was made by a corporation and not a group of bodies or corporations, that it should be concluded that such corporation was not the plaintiff but rather it was the Australian Radio Network Pty Ltd identified in the document as “ARN”. It was submitted on behalf of Mrs Marr that by her acceptance of the offer she entered into a contract with Australian Radio Network Pty Ltd and not the plaintiff and that, accordingly, the plaintiff could not in these proceedings seek to enforce the terms of the contract as it was not a party to the same. It was submitted further on behalf of Ms Marr, that it should be concluded that pursuant to the contract that she had entered into with Australian Radio Network Pty Ltd she had been required to perform duties with the radio operated by the plaintiff under the name of “101.1 TT FM”.
Having regard to these submissions, in these proceedings there is not only a serious question to be tried as to whether the term of the contract, now sought to be enforced, is a valid term and can be enforced but also whether the contract entered into by Ms Marr, by her acceptance of the offer was a contract with the plaintiff. When regard is had to the contents of the written offer and the acceptance of the same by Ms Marr it is my view that there is considerable weight to the argument expressed on behalf of Ms Marr that she did not enter into a contract with the plaintiff. This is a matter which I consider should be properly taken into account when determining the issue as to where the balance of convenience lies.
As to the “Future Employment” clause contained in the contract which is relied on by the plaintiff as the provision in the contract which provides the foundation for the order now sought, it was submitted on behalf of the plaintiff with reference to a number of authorities that when determining the issue as to whether the clause is enforceable or whether it was void as constituting a restraint of trade the Court should interpret or “read down” such a clause which is wide in expression so as to give it meaning and application to the work or activity engaged in by the employee before such employment was terminated. In particular counsel referred to Marion White Ltd v Francis[4]; Home Counties Dairies Ltd v Skilton[5]; Rentokil Pty Ltd v Leigh[6]. Counsel for the plaintiff contended that the “Future Employment” clause in the contract was directed at and ought to be understood as preventing Ms Marr from being engaged in a position that is directly connected with the production and programming of a radio station operating in the geographical area of the Melbourne radio licence area. It is pertinent to this submission to compare the terms of the order sought by the summons with that articulated and pursued by counsel on behalf of the plaintiff during the hearing of this application.
[4][1972] 3 All ER 857, Buckley L.J. at p 863.
[5][1970] 1All ER 1227, per Harmon L.J., at p 1231.
[6](1995) 66 SASR 301, Matheson J at p 326.
On behalf of Ms Marr issue was joined as to this matter. It was submitted that when regard was had to the “Future Employment” clause it was so uncertain and so ambiguous that it ought to be struck down as being void for uncertainty. He submitted, in substance, that the words that Ms Marr “shall not …. be directly or indirectly engaged, concerned or interested in any radio licence area in Melbourne or an overlap radio licence area”(emphasis added) were meaningless and not directed to any employment at all in the geographical area described.
There is a serious question to be tried in these proceedings whether the “Future Employment” clause is able to be enforced as contended for by the plaintiff, but further there is a serious question to be tried whether the clause can be given any meaning or whether it ought to be struck down for uncertainty and therefore not enforceable. I am of the view, at this time, that there is considerable force in the argument addressed by counsel for Ms Marr that in its terms the clause is meaningless and that the Court should not in some way give meaning to it when the contracting party, in making the offer to Ms Marr, did not define in any meaningful way the restriction sought to be imposed on her for a period of three months following the termination of her employment. Again I have regard to this matter when considering the issue of the balance of convenience.
I turn to consider the question of the balance of convenience. It is the plaintiff’s case that Ms Marr’s employment terminated on 5 October 2001. Accordingly, any order made of the nature sought against Ms Marr that she be restrained from providing services to DMG (Australia) Pty Ltd or any subsidiary of that company must expire on 5 January 2002. Having regard to the lists of cases fixed for trial by the Court it is not likely that the trial of this proceeding, if pursued by the plaintiff, would take place before that date. Regard must be had to such matter when considering where the balance of convenience lies. Regard must be had to that matter as effectively, that now being sought by way of interlocutory relief is, in effect, a claim for final relief. That this is so is to be seen from the further submission made on behalf of the plaintiff, which was that one of the matters that the Court should take into account when assessing where the balance of convenience lies, is the fact that in this case, that it will be difficult for the plaintiff to prove that it has suffered damage if Ms Marr was to continue in her present employment. By the general endorsement on the writ in this proceeding the plaintiff has claimed damages against Ms Marr. The effect of the submission made on the question of damages is, in effect, that in this case the plaintiff will have difficulty, in establishing that it has suffered damages if an order is not made now. Such being the case, in my view, this fact should not weigh in favour of the plaintiff as, in effect, the plaintiff is accepting or conceding that if Ms Marr continues in her present employment and is not restrained by order of the Court, as now sought the plaintiff, it will have difficulty in being able to establish that her present employment caused it to suffer loss and damage.
It was further submitted on behalf of the plaintiff, in substance, that having regard to the nature of the undertaking that the plaintiff is prepared to give, in addition to an undertaking as to damages, it will ensure that Ms Marr will receive an income during the period of the restraint. Be that as it may it is significant in my view that it has been deposed by Ms Marr that if an injunctive order is made it will jeopardise her employment with her present employer for she has been told by her superior that if she is unable to fulfil the duties of Production Manager over the next three months there is a risk that her employment with DMG will not be resumed subsequent to 5 January 2002. It is not surprising that in such circumstances there is a real basis for concern by Ms Marr as to her future employment. She has sworn that in the event of her being unable to continue in her present employment it may be necessary for her to move interstate to find employment of the nature in which she is presently engaged and, even so, she is concerned that she may have difficulty in obtaining such employment interstate.
On this issue I have taken into account the matters previously referred to that in my view the submissions made on behalf of Ms Marr, relevant to whether the contract was entered into by the plaintiff and whether the “Future Employment” clause is so vague and ambiguous to be not able to be enforced and, having regard to the other matters which I have dealt with, the conclusion that I have reached is the balance of convenience is against making the order now sought by the plaintiff against Ms Marr. The deleterious effect that such an order may have on Ms Marr in my view outweighs the claim of the plaintiff when it is accepted that if Ms Marr continues in her present employment then at trial the plaintiff is likely to experience difficulty in establishing that it has suffered damage in consequence of Ms Marr continuing in her employment.
For these reasons the summons of the plaintiff against Ms Marr must be dismissed.
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