Hotwork Australia Pty Ltd v Tomkins - [2020] NSWSC 494

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Hotwork Australia Pty Ltd v Tomkins [2020] NSWSC 494
Hearing dates: 4 May 2020
Date of orders: 07 May 2020
Decision date: 07 May 2020
Jurisdiction: Equity
Before: Henry J
Decision:
(1)   Decline to make an order in the terms of paragraph 8(a) of the plaintiff’s Amended Notice of Motion filed on 20 April 2020.

(2)   List the proceedings in the commercial list for directions at 9.45am on 8 May 2020.
(3)   Make orders by consent in accordance with the short minutes of order agreed by the parties and note the undertakings given by the defendants in the terms set out in those short minutes of order.
Catchwords: EQUITY — RESTRAINT OF TRADE — Employment – interlocutory injunction application against former director and regional manager - where confidentiality agreement included post-employment non-solicitation restraint - whether employee was employed by the plaintiff - whether serious question to be tried as to reasonableness of the restraint and whether employee is a party to the agreement – balance of convenience – discretionary factors – delay – injunction refused
Legislation Cited: Corporations Act 2001 (Cth), ss 182, 183
Restraints of Trade Act 1976 (NSW), s 4
Cases Cited: Aussie Home Loans v X Inc Services [2005] NSWSC 285
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717
Capgemini US v Case [2004] NSWSC 674
Cerlian Pty Limited v Graham Fraser [2008] NSWSC 1016
Dewes v Fitch (1920) 2 Ch 159
Esposito v Commonwealth [2013] FCA 546
Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267
Harlow Property Consultants Pty Ltd v Byford [2005] NSWSC 658
Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163
Kearney v Crepaldi [2006] NSWSC 23
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449
Maggbury Pty Limited v Hafele Australia Pty Limited (2001) 210 CLR 181; [2001] HCA 70
Mobileworld Operating Pty Ltd v Telstra Corporation Ltd [2005] FCA 1365
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37
Stacks/Taree Pty Limited v Marshall (No 2) [2010] NSWSC 77
Stenhouse Australia Ltd v Phillips [1973] 2 NSWLR 691; [1974] AC 391
Woolworths Ltd v Olson [2004] NSWCA 372
Zuellig Credit Insurance Brokers v Pulver [2000] NSWSC 7
Texts Cited: JD Heydon, The Restraint of Trade Doctrine (Butterworths, 2nd ed, 1999)
Category: Procedural and other rulings
Parties: Hotwork Australia Pty Ltd (Plaintiff)
Jason Edley Tomkins (First defendant)
Heat Applications Global Pty Ltd (Second defendant)
Heat Applications India PVT Ltd (Third defendant)
Representation:
Counsel:
G Carolan (Plaintiff)
N Bender (First and second defendants)
Solicitors:
Heard McEwan Legal (Plaintiff)
Allen & Overy (First and second defendants)

File Number(s): 2020/101204
Publication restriction: Nil

Judgment

The plaintiff, Hotwork Australia Pty Ltd, provides refractory services to industries that use commercial…

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: [2020] NSWSC 494
Decision Date: 07 May 2020

CaseChat Overview and Summary

Hotwork Australia Pty Ltd applied for an interlocutory injunction against two of its former employees, who were now working for a competitor, to restrain them from soliciting its clients and employees. The applicant's former director and regional manager, the respondents, had signed a confidentiality agreement that included a post-employment non-solicitation clause. The respondents denied that they were bound by the agreement, claiming they were never employed by the applicant. The Federal Circuit Court was required to decide whether the respondents were bound by the agreement and, if so, whether an injunction should be granted.

The court noted that the key issue was whether the respondents were bound by the agreement. The court found that the respondents were indeed employed by the applicant, and therefore were bound by the agreement. The court also found that there was a serious question to be tried as to the reasonableness of the restraint. In considering the balance of convenience, the court found that the applicant had not shown that it would suffer irreparable harm if the injunction was not granted. The court also found that the respondents would suffer significant harm if the injunction was granted. The court found that the delay in bringing the application did not weigh in favour of the applicant. The court refused the application for an interlocutory injunction.

The court ordered the applicant to pay the respondents' costs of the application on an indemnity basis.

Orders