Figjam Pty Ltd v Pedrini - [2005] NSWSC 221

Reported Decision:
(2007) Aust Contract Reports 90-259

New South Wales

Supreme Court

CITATION:
Figjam Pty Ltd trading as LJ Hooker Casino v Pedrini [2005] NSWSC 221

HEARING DATE(S): 7 & 9 March 2005

JUDGMENT DATE :

17 March 2005

JUDGMENT OF:
Burchett AJ

DECISION:
Injunction to be granted with costs restraining Defendant for 9 months from engaging in certain activities within a radius of 25 kms from an office at Casino.

CATCHWORDS:
Restraint of trade - contract of employment - whether there was consideration for a restraint clause in a written contract entered into after many months of employment pursuant to an oral contract - discussion of problems of consideration where an oral contract of employment is replaced by a written one introducing a new term - relevance of Award requiring writing - whether consideration was provided by the avoidance of a "practical disbenefit" of possible invalidity of the existing contract.

LEGISLATION CITED:
Property, Stock and Business Agents Act 2002 (NSW) s.10
Real Estate Industry (State) Award 2003

CASES CITED:
Beaches & Bush Properties v Jennings [2003] NSWSC 798
Electroboard Administration Pty Limited v O'Brien (unreported, 13 March 1998)
Wigan v Edwards (1973) 47 ALJR 586 at 594-595
Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723

PARTIES:
Figjam Pty Limited trading as L J Hooker Casino v Jennifer Mary Pedrini

FILE NUMBER(S):
SC 1072/05

COUNSEL:
Mr R Walker for the Plaintiff
Mr S Brennan for the Defendant

SOLICITORS:
David M Imlah - Plaintiff
Hannigans - Defendant

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Burchett AJ

17 March 2005

1072/2005 FIGJAM PTY LTD trading as LJ HOOKER CASINO V JENNIFER MARY PEDRINI

JUDGMENT

1 On 13th January 2005, the Plaintiff obtained an interlocutory injunction to restrain the Defendant (inter alia) from being employed or involved "within an area of 25 kilometres from L J Hooker at Casino" in the provision of the services of a real estate agency. The foundation of the Plaintiffs claim, in respect of which final relief is now sought, is a term contained in a form of contract of employment of the Defendant as a real estate "Salesperson", signed for the Plaintiff and by the Defendant. The document commences:

" L. J. HOOKER CASINO

EMPLOYMENT AGREEMENT

REAL ESTATE SALESPERSON

It refers to the Plaintiff (subject to an apparent mistake in the name about which no point was taken) as "the Employer' and the Defendant as "you". It contains a number of standard terms together with some additional pages clearly intended to form part of the agreement. It has been signed "for and on behalf of L J Hooker Casino" by the Plaintiff's director Mr Harvey, who has added in ink the date "19.11.03", and by…

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.

Continue reading Figjam Pty Ltd v Pedrini

Details

AGLC: Figjam Pty Ltd trading as LJ Hooker Casino v Pedrini [2005] NSWSC 221
Case: [2005] NSWSC 221
Decision Date: 17 March 2005

CaseChat Overview and Summary

Figjam Pty Ltd initiated legal proceedings against Pedrini in relation to a restraint of trade clause contained in a written contract of employment. The primary issue before the court was whether there was adequate consideration for the restraint clause, given that the clause was introduced in a written contract that replaced an earlier oral agreement. The court had to determine if the transition from an oral to a written contract, in light of the requirement to have a written contract under an Award, constituted valid consideration for the new restraint term.

The court delved into the complexities of establishing consideration when a written contract is introduced to replace an oral one, which already established terms of employment. The central question was whether the mere avoidance of the "practical disbenefit" of the oral contract possibly being invalid due to the requirement for a written form could be deemed as sufficient consideration for the new restraint clause. The court scrutinised whether such avoidance constituted a tangible benefit to the employer sufficient to uphold the enforceability of the restraint clause.

In its reasoning, the court concluded that the avoidance of the potential invalidity of the oral contract could indeed be regarded as a form of consideration. The necessity to comply with the Award's requirement for a written contract provided a practical benefit to the employer, which was sufficient to validate the inclusion of the restraint clause. As a result, the court found that there was adequate consideration for the clause, and it was therefore enforceable.

The court ordered that the restraint of trade clause was valid and enforceable, thereby allowing Figjam Pty Ltd to pursue the terms of the clause against Pedrini. This decision underscored the importance of compliance with statutory requirements and the potential implications of such compliance on the enforceability of contractual terms.

Orders