Eckett Enterprises Pty Limited v Cosmetic Technical Services Pty Limited

Eckett Enterprises Pty Limited (the applicant) sought leave to appeal against a decision of the Supreme Court of New South Wales, which had dismissed its application for an interlocutory injunction. The dispute concerned alleged breaches of a restraint of trade clause within a contract for the sale of a business. The respondent, Cosmetic Technical Services Pty Limited, was the purchaser of the business, and the applicant was the vendor.

The primary legal issue before the Court of Appeal was whether the primary judge erred in refusing to grant an interlocutory injunction to restrain the respondent from continuing to operate a competing business. This required the court to consider the principles governing the grant of interlocutory injunctions, particularly in the context of restraint of trade clauses, and to assess whether the applicant had established a sufficient likelihood of success on the merits of its claim for a permanent injunction.

The Court of Appeal, in dismissing the application for leave to appeal, found that the primary judge had correctly applied the established principles for interlocutory relief. The court noted that the applicant had not demonstrated a strong prima facie case or a serious question to be tried that was likely to lead to success at a final hearing. The court considered the specific terms of the restraint of trade clause and the circumstances of its application, concluding that the applicant had not shown that the balance of convenience favoured the grant of an injunction. The court affirmed that the onus was on the applicant to establish the necessary grounds for interlocutory relief, and this had not been discharged.