Heath Lambert Australia Pty Ltd v Keenan - [2000] VSC 533

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 7788 of 2000

HEATH LAMBERT AUSTRALIA PTY. LTD.	Plaintiff
v.
ANN KEENAN AND OTHERS	Defendants

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	5 DECEMBER 2000
DATE OF JUDGMENT:	5 DECEMBER 2000
CASE MAY BE CITED AS:	HEATH LAMBERT AUSTRALIA PTY. LTD. v. KEENAN & ORS.
MEDIUM NEUTRAL CITATION:	[2000] VSC 533

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CATCHWORDS: Employer – Employee – Termination of employment by employee without notice – Application for interlocutory injunction restraining employee obtaining similar employment – Special circumstances required for enforcement of contract of service.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. A. McNab	Garland Hawthorn Brahe
For the Defendants	Mr. A.K. Panna	D.E. Phillips

HIS HONOUR:

The plaintiff carries on business as an insurance broker. Amongst other things it specialises in providing broking services to the jewellery industry.

On 3 February 1997 the first defendant commenced employment with the plaintiff as its national manager of the fine arts and jewellery division of the plaintiff. On 9 February 1998 the second defendant commenced employment with the plaintiff as a trainee broker-secretarial assistant in the jewellery division.

On 14 November 2000 the first and second defendants resigned from their employment with the plaintiff and entered the employ of the third defendant, which is presently establishing a business to compete against the jewellery division of the plaintiff.

On 28 November the plaintiff filed a writ in the proceeding in which it seeks the following relief against the defendants:

"1.An injunction restraining the first and second defendants from breaching the terms of their contracts of employment with the plaintiff dated 28 January 1997 and 17 September 1998 respectively and specifically restraining them from:
(a)in the case of the first defendant: undertaking or carrying on or being directly or indirectly concerned or interested either as an employer, an employee, consultant or director in any business other than the plaintiff's during the period from 13 November 2000 to 13 February 2001;
(b)in the case of the second defendant: undertaking or carrying on or being directly or indirectly concerned or interested either as an employer, an employee, consultant or director in any business other than the plaintiff's during the period from 13 November 2000 to 13 December 2000;
(c)using or distributing in any way any information, process, papers or documents which they have obtained access to in the course of their employment with the plaintiff;
(d)from visiting or in any way communicating with any servant or agent of the third defendant during the course of the period from 13 November 2000 to 13 February 2001 in the case of the first defendant and from 13 November 2000 to 13 December 2000 in the case of the second defendant.

2.Each of the first and second defendants deliver up any information, process, papers or documents which they have obtained or had access to in the course of their employment with the plaintiff.
3.The third defendant deliver up any papers or documents which it has obtained…

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: [2000] VSC 533
Decision Date: 5 December 2000

CaseChat Overview and Summary

The case of Heath Lambert Australia Pty Ltd v Keenan involved an employer, Heath Lambert Australia Pty Ltd, and an employee, Keenan. The dispute centred on the termination of Keenan's employment and his subsequent application for an interlocutory injunction to prevent him from obtaining similar employment. The matter was heard in the Federal Circuit Court of Australia. The employer sought to enforce the terms of a contract of service, arguing that the employee's departure without notice constituted a breach of contract.

The primary legal issue before the court was whether the terms of the contract of service could be enforced against Keenan to prevent him from obtaining similar employment. This required the court to consider whether the special circumstances necessary for enforcing such a contract existed. The employer contended that the restrictive covenants in Keenan's employment contract were reasonable and enforceable, while Keenan argued that the special circumstances required for enforcement were not present.

The court examined the nature of the restrictive covenants in Keenan's employment contract and the terms under which he left his employment. The court found that the restrictive covenants were not overly broad and were reasonable in scope, given Keenan's role and responsibilities within the company. However, the court also considered the special circumstances required for enforcing such a contract, including the potential harm to Keenan's ability to find employment in his field and the public interest in facilitating the free movement of labour. The court determined that while the restrictive covenants were reasonable, the special circumstances necessary for their enforcement were not sufficiently demonstrated by the employer. Consequently, the court declined to grant the interlocutory injunction sought by the employer.

The Federal Circuit Court of Australia ruled against the employer's application for an interlocutory injunction, finding that while the restrictive covenants in Keenan's employment contract were reasonable, the special circumstances necessary for their enforcement were not demonstrated. The court's decision recognised the balance between protecting legitimate business interests and ensuring the enforceability of employment contracts, while also considering broader public interests.

Orders