FLETCHER & JONES

The parties to this proceeding were Fletcher & Jones Pty Ltd (the applicant) and Jones (the respondent). The dispute concerned the respondent's alleged breach of a restraint of trade clause contained within an employment agreement. The matter came before Stevenson J of the Supreme Court of Victoria.

The central legal issue before the court was whether the restraint of trade clause, which sought to prevent the respondent from engaging in a competing business within a specified geographical area and for a defined period after the termination of his employment, was reasonable and therefore enforceable. The court was required to consider the scope and duration of the restraint in light of the legitimate business interests of the applicant.

Stevenson J applied the established legal principles governing restraints of trade, which are presumed to be void as contrary to public policy unless the party seeking to enforce them can demonstrate their reasonableness. The court considered the nature of the applicant's business, the respondent's role within that business, and the potential harm that the respondent's competition could cause. The assessment of reasonableness involved balancing the applicant's proprietary interests against the respondent's right to earn a livelihood. The court found that the restraint, as drafted, was wider than necessary to protect the applicant's legitimate interests and was therefore unreasonable.

Consequently, Stevenson J ordered that the restraint of trade clause was void and unenforceable, and the application for an injunction was dismissed.