Epichealth Pty Ltd v Yang - [2015] VSC 516

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT

S CI 2015 04838

EPICHEALTH PTY LTD	Plaintiff
v
PENG-KUNG YANG	Defendant

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JUDGE:	JOHN DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	22 SEPTEMBER 2015
DATE OF JUDGMENT:	25 SEPTEMBER 2015
CASE MAY BE CITED AS:	EPICHEALTH PTY LTD v YANG
MEDIUM NEUTRAL CITATION:	[2015] VSC 516

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RESTRAINT OF TRADE — Interlocutory injunction — Former employer seeking to restrain contractor from engaging in rival medical practice within area of alleged restraint — Whether a contract containing the alleged restraint of trade clause was made between the parties — Construction of the restraint clause in alleged contract — Whether serious question to be tried — Whether damages an adequate remedy — Balance of convenience —— Injunction granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	N Harrington	Hall and Wilcox
For the Defendant	CM White	Noh Lawyers

HIS HONOUR:

Introduction and Summary.

The plaintiff operates a medical clinic at 230 Cranbourne-Frankston Road, Langwarrin, (the Langwarrin Clinic). The clinic is staffed by general practitioners employed by the plaintiff as independent contractors. The defendant is a qualified medical practitioner who is employed at the Langwarrin Clinic under a written contract dated 21 January 2013.

On 28 April 2015, the defendant gave, and the plaintiff accepted, six months’ written notice of termination of the contract. The defendant was to cease providing services to the plaintiff at the Langwarrin Clinic on 27 October 2015. On 22 August 2015, the defendant refused to attend at the Langwarrin Clinic and provide any further services under the contract. The contract between the parties includes a restraint clause.

On or about 1 August 2015, a medical clinic commenced operation at 25 McCormicks Road, Carrum Downs (the Carrum Downs clinic). That address is 6 kms from the Langwarren Clinic. The clinic is owned by a company of which the defendant is a director, as trustee of a trust of which the defendant is a beneficiary, and is staffed by one medical practitioner, the defendant. On 14 September 2015, the plaintiff issued this proceeding and a summons seeking an injunction restraining the defendant until 27 January 2016, or further order, or until the conclusion of the trial of the proceeding from providing any services associated with the carrying on of a general medical clinic, including as a medical practitioner, within a 10 kilometre geographical radius of the Langwarrin clinic.

The defendant opposed the relief sought.

Contractual terms

Under the contract between the parties, the defendant was an independent contractor. The contract defined the term ‘services’. After one year he could terminate, under clause 11.2(a), the contract by six months’ written notice. By clause 8, the defendant agreed to indemnify the plaintiff for all costs, expenses, charges, losses and damages suffered by it as a result of his non-performance or breach of his obligations under the contract. By clause 12, he warranted that no conflict of interest, restriction or impediment exists or is likely to…

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.

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Details

Case: [2015] VSC 516
Decision Date: 25 SEPTEMBER 2015

CaseChat Overview and Summary

Epichealth Pty Ltd, a medical practice, sought to restrain Dr Yang, a former contractor, from engaging in a rival medical practice within a specified area. Dr Yang argued that any restraint of trade clause in his contract with Epichealth was unenforceable. The case was heard in the Federal Court of Australia.

The primary legal issues before the court were whether a contract containing a restraint of trade clause existed between the parties, the proper construction of the alleged restraint clause, whether there was a serious question to be tried on the merits of the case, and whether damages would be an adequate remedy. Additionally, the court considered the balance of convenience in deciding whether to grant an interlocutory injunction.

The court found that a contract had indeed been made between the parties and that the restraint of trade clause was clear and unambiguous. It held that there was a serious question to be tried on the merits, particularly regarding the enforceability of the restraint. The court also found that damages would not be an adequate remedy, given the irreparable harm that could result from the breach of the restraint clause. The balance of convenience favoured granting the injunction, as the harm to Epichealth outweighed any potential detriment to Dr Yang. Consequently, the court granted an interlocutory injunction, restraining Dr Yang from engaging in the rival medical practice within the specified area.

The court ordered that Dr Yang refrain from engaging in any medical practice within the defined area until the matter was finally resolved. The injunction was to remain in effect pending the outcome of the proceedings, ensuring that Epichealth could protect its business interests during this interim period.

Orders