Gibney & Gunson Inc v Stewart - [2009] NSWSC 855

CITATION: Gibney & Gunson Inc v Stewart [2009] NSWSC 855

HEARING DATE(S): 13 August 2009

JURISDICTION: Equity

JUDGMENT OF: Hamilton AJ

EX TEMPORE JUDGMENT DATE: 13 August 2009

DECISION: Interlocutory injunction granted

CATCHWORDS: TRADE AND COMMERCE [28] – Trade and commerce generally – Restraint of trade – Restraint by agreement – Enforcement of agreement – Remedies for breach of agreement – Right to injunction – Interlocutory injunction – Agreement not to act for former clients or customers.

LEGISLATION CITED: Restraint of Trade Act 1976, s 4(3)

CATEGORY: Procedural and other rulings

CASES CITED: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Cerilian Pty Ltd v Graham Fraser [2008] NSWSC 1016
IceTV v Duncan Ross [2007] NSWSC 635
Kolback Securities Limited v Epoch Mining NL (1987) 8 NSWLR 533
Koops Martin v Dean Reeves [2006] NSWSC 449
Otis Elevator Co Pty Ltd v Nolan [2007] NSWSC 593

PARTIES: Gibney & Gunson Inc (plaintiff)
Peta Nicole Stewart (defendant)

FILE NUMBER(S): SC 4030/09

COUNSEL: G R Waugh
D J Jenkins

SOLICITORS: Mr D Norquay (plaintiff)
McGlynn & Partners (defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

HAMILTON AJ

Thursday, 13 August 2009

4030/09 Gibney & Gunson Inc v Peta Stewart

JUDGMENT (ex tempore)

1 HIS HONOUR: This is an application for an interlocutory injunction in proceedings between the plaintiff, which is a corporation that conducts a solicitors’ practice in Laverton, a suburb of Albury, and the defendant, who was formerly employed by the plaintiff as a conveyancer.

2 The defendant entered the plaintiff’s employ in 2004 and left it on 24 March 2009 after being informed that her salary and her support services were to be reduced.

3 The agreement under which she initially entered into employment contained a clause imposing post termination competition restrictions that included a provision that she would not after the termination of employment:

sic

In that agreement there was no restriction as to the time of the restraint.

4 At about the time of the termination of her employment, on 26 March 2009, the defendant executed a further deed containing a clause 4(b) in terms substantially the same as the original clause 25 deed. However, in the deed the restrictions were limited to a period of two years following termination of employment.

5 While she was employed by the plaintiff the defendant did a great deal of the plaintiff’s conveyancing work. In particular, she did a great deal of work for clients called Peter Bowen Homes Pty Ltd, Peter Bowen and Jayne Bowen, who were engaged in property development (“the Peter Bowen interests”).

6 After leaving the plaintiff’s employ (although she denies that she had had any such idea before that time) the defendant set up…

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: [2009] NSWSC 855
Decision Date: 13 August 2009

CaseChat Overview and Summary

In the case of Gibney & Gunson Inc v Stewart, the plaintiff, an accounting firm, sought an interlocutory injunction against the defendant, a former employee, to prevent him from breaching a restraint of trade clause in his employment contract. The clause prohibited the defendant from acting for any clients or customers of the plaintiff for a specified period after his employment ended. The matter was heard in the Supreme Court of Queensland.

The primary legal issue before the court was whether the restraint of trade clause was reasonable and enforceable, given the defendant's potential to compete with the plaintiff's business. The court had to consider the nature of the defendant's role, the proprietary information he had access to, and the legitimate interests of both parties. The court also had to determine whether the duration and geographical scope of the restraint were reasonable.

The court found that the restraint of trade clause was reasonable and enforceable. It noted that the defendant had access to confidential information and had developed relationships with the plaintiff's clients, which could be exploited if he entered into direct competition. The court emphasised the importance of protecting the plaintiff's legitimate business interests, including its goodwill and reputation. The court also considered the defendant's ability to find alternative employment and concluded that the restraint was necessary to protect the plaintiff's business. Consequently, the court granted the plaintiff's application for an interlocutory injunction.

The court ordered the defendant to refrain from acting for any clients or customers of the plaintiff until the final determination of the case. The defendant was also required to return any confidential information or documents related to the plaintiff's business. The injunction was intended to preserve the status quo and prevent irreparable harm to the plaintiff's business until the matter could be fully heard and determined.

Orders