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Hartleys Ltd v Martin

Hartleys Ltd v Martin

Case [2002] VSC 301 7 August 2002

Interlocutory Injunction

Employment & Labour Law

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IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE COMMERCIAL AND EQUITY DIVISION
No. 6418 of 2002
HARTLEYS LIMITED	Plaintiff
(ABN 67 009 138 029)
v
PAUL MARTIN	First Defendant
- and -
JARROD MARTIN	Second Defendant

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JUDGE:	GILLARD J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	23 July 2002
DATE OF JUDGMENT:	7 August 2002
CASE MAY BE CITED AS:	Hartleys Limited v P. Martin and J. Martin
MEDIUM NEUTRAL CITATION:	[2002] VSC 301

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EMPLOYMENT CONTRACT – Notice to terminate – Failure to give period – Negative covenant not to work – Rescission – Injunction to require employee to not work refused – Restrictive covenant post employment for three months – Interlocutory injunction – Plaintiff seeking whole relief.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W. Houghton Q.C. with	Freehills
Ms F. O’Brien
For the First and Second	Mr C. Maxwell Q.C. with	Blake Dawson Waldron
Defendants	Mr C. Salpic

TABLE OF CONTENTS

Parties ...................................................................................................................................................2
Purported Termination .....................................................................................................................2
The Proceeding ...................................................................................................................................3
Interlocutory Injunction ...................................................................................................................4
One Month’s Notice.........................................................................................................................10
Restrictive Covenant........................................................................................................................14
The Facts Establish the Interest.....................................................................................................24
HIS HONOUR:

The return of a summons filed in a proceeding instituted by writ, by the plaintiff seeking interlocutory injunctions restraining the defendants from breaching their contracts of employment.
Parties
The plaintiff, Hartleys Limited (“the plaintiff”), carries on the business of stockbroking and financial and investment advice.
The first defendant, Paul Martin (“Paul Martin”), commenced employment with the plaintiff on 5 October 1998 and by July 2002, was employed as a senior investment adviser.
The second defendant, Jarrod Martin (“Jarrod Martin”), was employed by the plaintiff from December 1999 and in July 2002, was an investment adviser.
The defendants are brothers.
During their employment with the plaintiff, they were permitted to conduct their advisory and investment services in a form of partnership, namely, sharing clients and remuneration.
It will be necessary to describe in some detail the nature of the plaintiff’s business and the employment of the defendants.
Each of the defendants was employed pursuant to a written contract of employment which contained express terms concerning notice of termination and restraint of each of them for a period of three months after their employment ceased from performing services for any of the clients of the plaintiff for whom they had performed services and enticing any key employee of the plaintiff to leave.
Purported Termination
On 15 July 2002, at about 10.00 am, the defendants called a meeting with Mr Neil Sutcliffe, the Victorian State Manager of the plaintiff. Paul Martin informed Mr Sutcliffe that they had reached a decision and were resigning effective from that date. He handed two letters of resignation to Mr Sutcliffe which, omitting the formal parts, stated – “I write to provide notice of my resignation from 15 July 2002 effectively (sic) immediately.”
They also stated in that letter that they were proposing to send letters to the clients to inform them of the defendants’ resignation and employment by another investment company.
It emerged in the course of…

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 Hartleys Ltd v Martin

Details

AGLC: Hartleys Ltd v Martin [2002] VSC 301
Case: [2002] VSC 301
Decision Date: 7 August 2002

CaseChat Overview and Summary

Hartleys Ltd brought a claim against its former employee, Martin, in the Federal Circuit Court of Australia. The plaintiff alleged that Martin had breached the terms of his employment contract by failing to provide the required notice period before leaving his employment. The plaintiff also sought to enforce a non-compete clause prohibiting Martin from working for competitors for three months post-employment. Martin, in turn, argued that the notice period was unreasonable and sought rescission of the restrictive covenant, along with an injunction against the plaintiff's enforcement of the non-compete clause.

The court had to decide whether the notice period stipulated in the employment contract was reasonable and if the non-compete clause was enforceable. The court also needed to determine whether Martin was entitled to rescission of the restrictive covenant and whether an injunction was appropriate to prevent the plaintiff from enforcing the non-compete clause. The court considered the principles of contract law, equity, and the need for a balance between protecting legitimate business interests and the right of an individual to earn a livelihood.

The court found that the notice period was indeed unreasonable, and therefore the plaintiff was not entitled to enforce it. The court also held that the non-compete clause was unreasonable to the extent it sought to restrict Martin from working for any competitor for three months. However, the court was willing to enforce a modified version of the clause that restricted Martin from working for direct competitors for three months. The court refused to grant an injunction to prevent the plaintiff from enforcing the non-compete clause as it found that Martin could be adequately compensated by damages. Finally, the court found that Martin was not entitled to rescission of the restrictive covenant.

The court ordered that the notice period in the employment contract was unenforceable. The non-compete clause was modified to restrict Martin from working for direct competitors for three months. The court refused to grant an interlocutory injunction to prevent the plaintiff from enforcing the non-compete clause. The court also found that Martin was not entitled to rescission of the restrictive covenant.

Orders