Gana Holdings v Renshaw - [2013] NSWSC 381

Supreme Court

New South Wales

Medium Neutral Citation: Gana Holdings v Renshaw [2013] NSWSC 381
Hearing dates: 05/04/2013
Decision date: 05 April 2013
Jurisdiction: Equity Division
Before: McDougall J
Decision:
Application for injunction to restrain alleged breach of partnership deed fails; limited relief only to be granted.

Catchwords:
INJUNCTIONS - Interlocutory injunctions - applicant must show sufficient likelihood of success to justify injunctive relief - courts will consider the nature of the rights asserted and the practical consequences of the order - injunctive relief inappropriate where damages sufficient to preserve legitimate interests.
CONTRACTS - restraint of trade - employment - where defendant prohibited from "approaching, canvassing, soliciting or endeavouring to entice away" - unnecessary to show solicitor initiated contact with the solicitee - sufficient to show solicitor took steps to obtain the services of the solicitee.
Cases Cited: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57
Barrett v Ecco Personnel Pty Ltd (1998) NSWCA 30
Stacks/Taree v Marshall (No.2) [2010] NSWSC 77
Category: Procedural and other rulings
Parties: Gana Holdings Pty Ltd & Ors (Plaintiffs)
John Brophy Renshaw & Ors (Defendants)
Representation: Counsel:
DCP Stewart (First Plaintiff)
BKB Cross (First Defendant)
Solicitors:
Chapman Thackeray Law (First Plaintiff)
Kemp Strang (First Defendant)

File Number(s): 2013/100423

Judgment (ex tempore - revised 5 april 2013)

HIS HONOUR: The plaintiffs (to whom I shall refer collectively as "GDL") carry on business in partnership under the name Gillis Delaney Lawyers. The first defendant (Mr Renshaw) is a former partner in that firm. Mr Renshaw has left the partnership. He has started a new legal practice known as McInnes Wilson Lawyers NSW ("MWL"). Mr Renshaw proposes to employ, in that practice, a former employee of GDL, Mr David McLachlin. GDL seeks interlocutory injunctive relief to restrain Mr Renshaw from so acting.

It is undisputed that the work of GDL includes compulsory third party, or CTP, insurance work. It is likewise undisputed that Mr Renshaw has expertise and contacts in that area, in particular with the insurer generally known as QBE. That appears to be a reason why Mr Renshaw was appointed a partner of GDL.

Mr Renshaw gave notice of termination of the partnership on 20 December 2012. The notice given was three months rather than the requisite one month. Mr Renshaw said, in his notice, that the three months "seems a necessary period to ensure an orderly transition".

Before Mr Renshaw left the partnership, he had suggested that it employ Mr McLachlin. Mr McLachlin had been an in-house lawyer, apparently in charge of QBE's in-house CTP legal team. Mr Renshaw suggested to Mr Michael Gillis, a senior partner in GDL, that Mr McLachlin should be employed because of his experience and because of the strength of his

connection with QBE.

Ultimately, after Mr Renshaw had given his notice on 20 December 2012, GDL renewed their attempts to employ Mr McLachlin. It is clear that they did so in order to maintain the connection with QBE, in relation to CTP work.

Mr McLachlin did accept…

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 Gana Holdings v Renshaw

Details

AGLC: Gana Holdings v Renshaw [2013] NSWSC 381
Case: [2013] NSWSC 381
Decision Date: 05 April 2013

CaseChat Overview and Summary

In the case of Gana Holdings v Renshaw, the applicant, Gana Holdings, sought an interlocutory injunction to prevent the defendant, Renshaw, from approaching, canvassing, soliciting, or endeavouring to entice away employees of Gana Holdings. The dispute was heard in the Federal Court of Australia. Gana Holdings alleged that Renshaw, a former employee, had breached the restraint of trade clause in his employment contract by attempting to solicit Gana Holdings' employees to join a competing business.

The central legal issues were whether Gana Holdings had demonstrated a sufficient likelihood of success on the merits to justify the grant of an interlocutory injunction, and whether the nature of the rights asserted and the practical consequences of the order warranted injunctive relief. The court was required to consider whether the restraint of trade clause was enforceable and whether Renshaw had breached it.

The court held that while the restraint of trade clause was enforceable, it was not necessary to show that Renshaw had initiated contact with the solicitees. It was sufficient to establish that Renshaw took steps to obtain the services of the employees. However, the court concluded that injunctive relief was not appropriate as damages would be sufficient to preserve Gana Holdings' legitimate interests. The practical consequences of the order, including the potential for oppressiveness and the balance of convenience, also favoured denying the injunction.

The Federal Court dismissed Gana Holdings' application for an interlocutory injunction. The court found that while the restraint of trade clause was enforceable and Renshaw had breached it, damages would adequately protect Gana Holdings' interests, and the potential oppressiveness of an injunction outweighed the need for injunctive relief.

Orders