Hermescec v Carcagni

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.