Gough & Anor & Kaur

The proceeding concerned an application by the plaintiffs, Gough & Anor, for an interlocutory injunction to restrain the defendant, Kaur, from continuing to operate a business in alleged breach of a restraint of trade clause contained within a contract for the sale of a business. The application was heard by Macmillan J in the Supreme Court of Victoria.

The central legal issue before the court was whether the restraint of trade clause, which prohibited the defendant from engaging in a similar business within a 5-kilometre radius of the purchased business for a period of two years, was reasonable and therefore enforceable. The court was required to consider the scope of the restraint in terms of geographical area and duration, and whether it went beyond what was necessary to protect the legitimate interests of the purchasers of the business.

Macmillan J applied the established legal principles governing restraints of trade, which are presumed to be void unless they can be shown to be reasonable and in the public interest. The court considered the nature of the business sold, the activities of the defendant, and the potential impact of the defendant's continued operation on the goodwill and custom acquired by the plaintiffs. His Honour found that the restraint, as drafted, was wider than necessary to protect the plaintiffs' legitimate business interests and was therefore void and unenforceable.

Consequently, the application for an interlocutory injunction was dismissed.