Dunning v Slimtone Spa International SR Pty Ltd No. Scgrg-00-1031

[2001] SASC 12

DUNNING v SLIMTONE SPA INTERNATIONAL SR PTY LTD
[2001] SASC 12

1. WILLIAMS J         This application filed on 3 January 2001 is for leave to appeal to the Full Court against my decision given on 21 December 2000.  The application by the defendant is made ex parte in accordance with Supreme Court Rules (SA) (“SCR”) r 94.01.

2. A District Court judge dismissed the defendant’s application for summary judgment upon one aspect of the plaintiff’s claim but granted a certificate under SCR r 96A.02 to enable the matter to be brought before a single judge of this Court.  That matter then came before me and led to my decision of 21 December 2001.

3. The defendant is seeking to rely upon the alleged invalidity of a so-called restraint of trade clause in an agreement as a complete answer to one aspect of the plaintiff’s claim for breach of that agreement.

4. In par 12 of my earlier reasons for judgment, I identified some of the questions which stand in the defendant’s path for determination before it could be asserted that the claim cannot succeed on any possible view of the facts and law.

5. The principles upon which leave will be granted to go to the Full Court are well-established, although the court does retain a discretion to grant leave outside the usual criteria.  In the application of these principles, it is relevant to note three points:

   1.     My order of 21 December 2000 is of an interlocutory nature.

   2.I have indicated in par 15 of my reasons why, for discretionary reasons, I would have reservations as to the appropriateness of the order sought, even if other hurdles were surmounted.

   3.I have indicated that it is not realistic to try and make a decision in a vacuum on a point of law where evidence may be relevant (see par 4 of my reasons).

6. The defendant argues that the so-called restraint of trade clause in this instance is wide, in terms of geographic area of operation and time of operation. Counsel argues upon this basis that the clause will not be enforceable.  However, the restraint is not with respect to customers but with respect to a class of goods, the extent of which is unknown without taking evidence.

7. The defendant, as applicant, argues that there is a general question of principle and importance which deserves to be recognised, namely that a clause in this form will not be enforced.  Counsel argues that this is not a case of production of goodwill but one involving a restraint upon a former company director who has been removed from her position and has then made this agreement in restriction of her future activities.  Counsel for the applicant argues that the point is so clear that it should be disposed of summarily.

8. In my view, the applicant has misconceived the purpose of an application for summary judgment by a defendant under rule 25.04 which is, effectively, confined to a case where there is no real question to be tried, so that the plaintiff’s claim cannot succeed on any possible view of the facts or the law.  This procedure is to be distinguished from proceedings in lieu of demurrer which enable a point of law to be raised and determined upon the pleadings.  I discussed this principle in Catto & Ors v Hampton Australia Ltd (in Liquidation) and Anor, [2000] SASC 104 delivered on 26 April 2000 in relation to alternative procedures which are sometimes adopted. When a point of law is so raised under rule 46.10, the court may then decide under rule 75.02 whether the point ought to be disposed of before trial.

9. It is apparent, upon counsel’s argument before me upon the leave application, that there is room for debate as to the interpretation and enforceability of the clause of the contract, and that the point, in any event, should not be resolved without taking evidence.  That was the view which I formed during the hearing of the appeal when I had before me the opposing argument presented on behalf of the respondent plaintiff.

10. Upon the leave application, contrary to the applicant’s submission, the immediate question is not one as to the interpretation of the contract and as to the importance of the point in question (although these points may not be irrelevant).  The question is whether, in my approach to rule 25.04, I have acted on a wrong principle, have allowed extraneous or irrelevant matters to affect me, have mistaken the facts or have failed to take into account some material considerations.  (It may also be relevant to consider the possible injustice to the appellant).  The only question I have decided is that there is an arguable point upon which evidence is required to enable it to be determined otherwise than in a vacuum.  I have decided that the point is not so clearly to be determined in the defendant’s favour that I should be prepared now to deny the plaintiff a trial. I have also doubted whether, as a matter of discretion, the point should be separated from related issues.  These are not questions which ought now to be brought before the Full Court.

11. In my view, the argument which the defendant has addressed before me upon this leave application is not one which would justify the granting of leave to appeal.  Despite the certificate given in the District Court (to which I have referred), I do not consider that this matter is suitable for resolution under rule 25.04, and proceedings by way of further appeal in respect of the claim for summary.