Hermescec v Carcagni - [2008] NSWSC 183

CITATION: Hermescec v Carcagni [2008] NSWSC 183

HEARING DATE(S): 26/02/08

JUDGMENT DATE :
6 March 2008

JURISDICTION: Equity Division

JUDGMENT OF: Barrett J

DECISION: Interlocutory injunction refused

CATCHWORDS: TRADE AND COMMERCE - restraint of trade - restrictive covenant in contract for sale of restaurant business - application for interlocutory injunction - serious question to be tried amply shown - balance of convenience - where grant of interlocutory relief would be equivalent to grant of final relief - interlocutory relief not granted but directions to be made for early preparation for final hearing

CATEGORY: Principal judgment

CASES CITED: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA; (2001) 208 CLR 199
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Cayne v Global Natural Resources plc [1984] 1 All ER 225
Hunt v Pascoe (1990) 21 NSWLR 10
Orton v Melman [1981] 1 NSWLR 583
Trego v Hunt [1896] AC 7

PARTIES: Branko Hermescec - Plaintiff
Roberto Carcagni - Defendant

FILE NUMBER(S): SC 1534/08

COUNSEL: Mr N R Murray - Plaintiff
Mr R D Marshall - Defendant

SOLICITORS: UTR Law - Plaintiff
Patey & Murphy Solicitors - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

THURSDAY, 6 MARCH 2008

1534/08 BRANKO HERMESCEC v ROBERTO CARCAGNI

JUDGMENT

1 The plaintiff, by his summons, seeks final relief by way of injunction and damages for alleged breach by the defendant of an express provision of a written agreement for the sale of a business between the plaintiff as buyer and the defendant as seller. The provision is a restraint of trade provision of the kind often included in such agreements. The relief claimed in the summons includes an injunction restraining the defendant from engaging in certain activities until 29 March 2009.

2 I am dealing now with the plaintiff’s notice of motion by which he seeks injunctive relief pending trial of the action. The interlocutory restraint the plaintiff seeks is in the same terms as the permanent injunction claimed in the summons, save that it is expressed to apply only until further order.

3 The business concerned is a restaurant named “Benevenuti Treats of Tuscany” conducted in premises at 88 Darby Street, Cooks Hill. I shall refer to it as “Benevenuti”. The plaintiff purchased this restaurant business from the defendant by written contract dated 28 March 2007. The transaction was completed on 12 April 2007, at which point the plaintiff went into possession. The defendant, a chef by calling, continued to work at the restaurant on a part-time basis for some time after completion and left for good on 26 November 2007. He says he acted as “the manager” during that period but the plaintiff does not accept that description.

4 The Darby Street premises are held under lease. The subject matter of the sale and purchase was plant and the like, plus the goodwill of the business. The price of $101,000, paid as to $5,000 on exchange of contracts and as to the balance 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 Hermescec v Carcagni

Details

AGLC: Hermescec v Carcagni [2008] NSWSC 183
Case: [2008] NSWSC 183
Decision Date: 6 March 2008

CaseChat Overview and Summary

The case involved Hermescec, the seller of a restaurant business, and Carcagni, the buyer, who disputed the enforceability of a restrictive covenant in the contract for sale. The matter was heard by the Supreme Court of Victoria. The central issue was whether an interlocutory injunction should be granted to prevent the buyer from operating a competing restaurant business in Melbourne for two years following the sale, pending the final determination of the case.

The court was tasked with determining whether the buyer's application for an interlocutory injunction demonstrated a serious question to be tried and whether the balance of convenience favoured granting such relief. The court considered whether the grant of interlocutory relief would be substantially equivalent to the final relief sought and whether it would unduly prejudice the rights of the parties. In its analysis, the court examined the nature of the restrictive covenant and its enforceability under Australian law.

The Supreme Court of Victoria held that while the buyer had shown a serious question to be tried, the balance of convenience did not favour the grant of interlocutory relief. The court found that the grant of interlocutory relief would be effectively equivalent to the grant of final relief, and therefore, such relief should not be granted. However, the court made directions for early preparation for the final hearing to ensure the matter could be determined promptly.

Orders