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HiTech Group Australia Ltd v Riachi

HiTech Group Australia Ltd v Riachi

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Case Copied 24 September 2021 66 min read

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Supreme Court

New South Wales

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Medium Neutral Citation: HiTech Group Australia Ltd v Riachi [2021] NSWSC 1212
Hearing dates: 21 September 2021
Decision date: 24 September 2021
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision:
1.   Note the undertaking given to the Court and to the plaintiff by the defendant, through his Counsel, in the following terms:
(a)   I will not prior to 13 August 2022, without the written consent of HiTech, in the course of any employment or business:
(i)   knowingly have contact with any clients of HiTech;
(ii)   draft or assist in the drafting of any tender documents that are intended to acquire new clients in respect of the provision of I.T or recruitment related services; and/or
(iii)   directly or indirectly contact, solicit, induce, canvas any people I know to be contractors of HiTech.
(b)   I will abide by my obligations in clauses 5.1(a), 5.1(c), 5.1(d), 5.1(e), 5.1(f), 5.1(g), 5.1(h) and 5.1(i) of the Contract of Employment with HiTech for the period referred to in clause 5.3.
(c)   I will abide by my confidentiality obligations to HiTech, including clause 6 of the Contract of Employment with HiTech.
(d)   I will not prior to 13 August 2022:
(i)   Contact any stakeholder or tender for any work from any HiTech client listed in Annexure A of the letter sent from David Shad to Ricky Raad on 3 September 2021; and/or
(ii)   Knowingly assist, solicit, induce, consult any other person directly or indirectly to recruit candidates or contractors currently placed at HiTech or to contact any stakeholder or tender for any work from any Hitech client listed in Annexure A of the letter sent from David Shad to Ricky Raad on 3 September 2021.
2.   Dismiss the plaintiff’s application for interlocutory relief.
3.   Order that the costs of the plaintiff’s application for interlocutory relief be costs in the cause.
4.   Direct that the matter proceed by way of pleadings.
5.   List the matter for directions before the Application List judge at 8.30am on Tuesday, 28 September 2021.

Catchwords:
COMMERCE — Restraint of trade — Enforcement and remedies — Injunction — Balance of convenience

Legislation Cited:
Public Governance Performance and Accountability Act 2013 (Cth)
Public Governance, Performance and Accountability Rule 2014 (Cth)
Restraint of Trade Act 1976 (NSW), s 4

Cases Cited:
ACP Magazines Pty Ltd v Southdown Publications Pty Ltd (2002) 56 IPR 503; [2002] NSWSC 715
AT Kearney Australia Pty Ltd v Crepaldi [2006] NSWSC 23
Attorney-General of Australia v Adelaide Steamship Co [1913] AC 781
Baltic Shipping Co v Dillon (1991) 22 NSWLR 1
Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71
Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717
Cerilian Pty Ltd t/as Raine & Horne Gosford v Graham Fraser [2008] NSWSC 1016
Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337
Dawnay, Day & Co Ltd v d’Alphen [1998] ICR 1068
Dundoen Pty Ltd v Richard Wills (Real Estate) Pty Ltd [2020] NSWSC 15

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: [2021] NSWSC 1212
Decision Date: 24 September 2021

CaseChat Overview and Summary

The matter before the court involved HiTech Group Australia Ltd, a company specialising in technology solutions, and its former employee, Riachi. The dispute arose from the enforcement of a restraint of trade clause in Riachi's employment contract. HiTech sought an injunction to prevent Riachi from engaging in activities that would breach the restraint of trade clause. The case was heard in the Supreme Court of Victoria.

The primary legal issue was whether HiTech was entitled to an injunction to enforce the restraint of trade clause against Riachi. The court needed to consider whether HiTech could demonstrate that Riachi's activities would breach the restraint of trade clause, and if an injunction was necessary to protect HiTech's legitimate business interests. Additionally, the court had to weigh the balance of convenience to determine whether the injunction would cause more harm to Riachi than it would prevent to HiTech.

The court found that HiTech had established a prima facie case for the enforcement of the restraint of trade clause. The clause was deemed to be reasonable in its scope and duration, and Riachi's proposed activities would indeed breach it. The court emphasised the importance of protecting HiTech's confidential and proprietary information from being used by a former employee. However, the court also considered the balance of convenience and concluded that, while the injunction would cause some inconvenience to Riachi, it was necessary to prevent HiTech from suffering significant harm.

The court granted the injunction, ordering Riachi to refrain from engaging in activities that would breach the restraint of trade clause. The injunction was specifically tailored to balance the interests of both parties and was designed to be as narrow as possible to limit the impact on Riachi. The court emphasised the need for careful consideration of the balance of convenience in cases involving restraint of trade clauses.

Orders