GBAR (Australia) Pty Ltd v Brown - [2016] QSC 234

SUPREME COURT OF QUEENSLAND

CITATION:

GBAR (Australia) Pty Ltd & Ors v Brown & Ors [2016] QSC 234

PARTIES:

GBAR (AUSTRALIA) PTY LTD ACN 166 408 635

(first applicant)

AND

BAREND JACOBUS STOLTZ

(second applicant)

AND

DANIEL PETRUS UYS

(third applicant)

AND

VINCENT CHARLES MANNING

(fourth applicant)

AND

STOLTZ SUPERANNUATION PTY LTD ACN 141 083 052

(fifth applicant)

AND

D.P. UYS SUPERANNUATION PTY LTD ACN 162 567 848

(sixth applicant)

AND

MACROCOMM (AUSTRALIA) PTY LTD ACN 166 317 764

(seventh applicant)

v

GREGORY JOHN BROWN

(first respondent)

AND

BROWN & CREMIN PTY LTD ACN 128 512 961

(second respondent)

AND

TANYA RENEE CREMIN

(third respondent)

FILE NO/S:

No 9209 of 2016

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

14 October 2016

DELIVERED AT:

Brisbane

HEARING DATE:

14 September 2016

JUDGE:

Peter Lyons J

ORDER:

The application is dismissed.

CATCHWORDS:

TRADE AND COMMERCE – OTHER REGULATION OF TRADE OR COMMERCE – RESTRAINTS OF TRADE – VALIDITY AND REASONABLENESS – GENERALLY – where second respondent sold asbestos removal business to first applicant – where second respondent was allotted 20% of the shares in the first applicant – where first applicant employed first respondent as General Manager under an Employment Agreement – where applicants and respondents entered into a Settlement Agreement for the sale of the 20% of shares in the first applicant to the applicants – where Settlement Agreement contained a restraint of trade clause purporting to restrain the first respondent – whether the restraint of trade clause in the Settlement Agreement sought to protect employer’s interests or goodwill of business sold

TRADE AND COMMERCE – OTHER REGULATION OF TRADE OR COMMERCE – RESTRAINTS OF TRADE – VALIDITY AND REASONABLENESS – PARTICULAR CASES – EMPLOYMENT – where second respondent sold asbestos removal business to first applicant – where second respondent was allotted 20% of the shares in the first applicant – where first applicant employed first respondent as General Manager under an Employment Agreement – where applicants and respondents entered into a Settlement Agreement for the sale of the 20% of shares in the first applicant to the applicants – where Settlement Agreement contained a restraint of trade clause purporting to restrain the first respondent – whether, assuming the restraint of trade clause in the Settlement Agreement sought to protect employer’s interests, the clause goes beyond what is reasonable to protect that interest

TRADE AND COMMERCE – OTHER REGULATION OF TRADE OR COMMERCE – RESTRAINTS OF TRADE – VALIDITY AND REASONABLENESS – PARTICULAR CASES – VENDOR OF BUSINESS – where second respondent sold asbestos removal business to first applicant – where second respondent was allotted 20% of the shares in the first applicant – where first applicant employed first respondent as General Manager under an Employment Agreement – where applicants and respondents entered into a Settlement Agreement for the sale of the 20% of shares in the first applicant to the applicants – where Settlement Agreement contained a restraint of trade clause purporting to restrain the…

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: [2016] QSC 234
Decision Date: 14 October 2016

CaseChat Overview and Summary

GBAR (Australia) Pty Ltd and others sought an injunction and damages against the Brown respondents in the Supreme Court of New South Wales. The applicants, who had purchased an asbestos removal business from the second respondent, sought to enforce a restraint of trade clause contained in a Settlement Agreement and an Employment Agreement. They argued the clause was necessary to protect their business interests and goodwill. The Browns resisted the application, claiming the restraint was unreasonable and sought to protect the applicants' business interests beyond what was necessary.

The court was required to decide whether the restraint of trade clauses sought to protect the employer's interests or the goodwill of the business sold. If they were to protect the employer's interests, the court had to determine whether the restraint went beyond what was reasonable. The court also had to consider if the restraint extended to potential future expansion of the business. Furthermore, the court had to assess whether the restraint in the Employment Agreement was reasonable.

The court found that the restraint of trade clauses in both agreements sought to protect the goodwill of the business sold. The court concluded that the restraint went beyond what was reasonable to protect that interest, as it extended to potential future expansion of the business. The restraint in the Employment Agreement was also found to be unreasonable. Additionally, the court considered the applicants' delay in bringing the proceedings and the respondents' offer of an account of profits. The balance of convenience did not favour granting interlocutory relief.

The application for an injunction and damages was dismissed. The court found the restraint of trade clauses unreasonable and not in line with the principles of equity and good conscience. The court also took into account the applicants' delay in bringing the proceedings and the respondents' offer to account for profits. The court concluded that the balance of convenience did not favour the granting of interlocutory relief.

Orders

Orders of the court

The application is dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I also consider that the applicants’ delay in bringing these proceedings, notwithstanding the letters from the solicitors for the respondents, is an additional reason to refuse relief.Conclusion I propose to dismiss the application.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	GBAR (Australia) Pty Ltd & Ors v Brown & Ors [2016] QSC 234
PARTIES:	GBAR (AUSTRALIA) PTY LTD ACN 166 408 635 (first applicant) AND BAREND JACOBUS STOLTZ (second applicant) AND DANIEL PETRUS UYS (third applicant) AND VINCENT CHARLES MANNING (fourth applicant) AND STOLTZ SUPERANNUATION PTY LTD ACN 141 083 052 (fifth applicant) AND D.P. UYS SUPERANNUATION PTY LTD ACN 162 567 848 (sixth applicant) AND MACROCOMM (AUSTRALIA) PTY LTD ACN 166 317 764 (seventh applicant) v GREGORY JOHN BROWN (first respondent) AND BROWN & CREMIN PTY LTD ACN 128 512 961 (second respondent) AND TANYA RENEE CREMIN (third respondent)
FILE NO/S:	No 9209 of 2016
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	14 October 2016
DELIVERED AT:	Brisbane
HEARING DATE:	14 September 2016
JUDGE:	Peter Lyons J
ORDER:	The application is dismissed.
CATCHWORDS:	TRADE AND COMMERCE – OTHER REGULATION OF TRADE OR COMMERCE – RESTRAINTS OF TRADE – VALIDITY AND REASONABLENESS – GENERALLY – where second respondent sold asbestos removal business to first applicant – where second respondent was allotted 20% of the shares in the first applicant – where first applicant employed first respondent as General Manager under an Employment Agreement – where applicants and respondents entered into a Settlement Agreement for the sale of the 20% of shares in the first applicant to the applicants – where Settlement Agreement contained a restraint of trade clause purporting to restrain the first respondent – whether the restraint of trade clause in the Settlement Agreement sought to protect employer’s interests or goodwill of business sold TRADE AND COMMERCE – OTHER REGULATION OF TRADE OR COMMERCE – RESTRAINTS OF TRADE – VALIDITY AND REASONABLENESS – PARTICULAR CASES – EMPLOYMENT – where second respondent sold asbestos removal business to first applicant – where second respondent was allotted 20% of the shares in the first applicant – where first applicant employed first respondent as General Manager under an Employment Agreement – where applicants and respondents entered into a Settlement Agreement for the sale of the 20% of shares in the first applicant to the applicants – where Settlement Agreement contained a restraint of trade clause purporting to restrain the first respondent – whether, assuming the restraint of trade clause in the Settlement Agreement sought to protect employer’s interests, the clause goes beyond what is reasonable to protect that interest TRADE AND COMMERCE – OTHER REGULATION OF TRADE OR COMMERCE – RESTRAINTS OF TRADE – VALIDITY AND REASONABLENESS – PARTICULAR CASES – VENDOR OF BUSINESS – where second respondent sold asbestos removal business to first applicant – where second respondent was allotted 20% of the shares in the first applicant – where first applicant employed first respondent as General Manager under an Employment Agreement – where applicants and respondents entered into a Settlement Agreement for the sale of the 20% of shares in the first applicant to the applicants – where Settlement Agreement contained a restraint of trade clause purporting to restrain the…