Dr Angel-Honnibal v Idameneo (No 123) Pty Ltd (A.C.N. 002 968 185)

The appeal concerned a dispute between Dr Angel-Honnibal (the appellant) and Idameneo (No 123) Pty Ltd (the respondent) regarding a restrictive covenant contained within a contract for the sale of the appellant's medical practice. The respondent had purchased the practice and required the appellant to continue practising from the respondent's centre, subject to a covenant preventing the appellant from rendering medical services at a rival centre for five years. The case was heard by McColl JA, Young CJ in Eq, and Foster AJA.

The central legal issues before the court were whether the restrictive covenant was reasonably necessary to protect the respondent's goodwill, whether a variation to the sale contract was unconscionable given the appellant's specific disabilities at the time of negotiation, and whether the restraint was void as a penalty.

The court's reasoning, as reflected in the dismissal of the appeal, indicated that it found the restrictive covenant to be reasonably necessary for the protection of the respondent's legitimate business interests. Furthermore, the court was not persuaded that the variation of the sale contract was unconscionable, nor that the restraint constituted an unenforceable penalty.

The appeal was dismissed with costs. However, the court noted that some alteration to the orders might be necessary if the appellant were to continue practising at Concord Medical Centre. The final form of the order was referred to Palmer J for consideration, and a stay of the order was granted until midnight on Friday, 12 September 2003.