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IceTV v Ross

IceTV v Ross

Case [2007] NSWSC 635 3 July 2007

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CITATION: IceTV v Duncan Ross & Ors [2007] NSWSC 635

HEARING DATE(S): 28 May 2007

JUDGMENT DATE :
3 July 2007

JURISDICTION: Equity Division
Duty List

JUDGMENT OF: Brereton J

DECISION: (1) Upon usual undertaking as to damages, Order that until hearing or further order defendants be restrained from: (i) until 4 October 2007, carrying on or otherwise being engaged or involved in any business similar to or competitive with business of plaintiff carried on during twelve month period prior to 4 October 2006; (ii) until 4 October 2007, canvassing or soliciting custom of any person who had entered into discussions or negotiations with plaintiff during twelve month period prior to 4 October 2006; (iii) divulging or permitting to be divulged to any person by any means confidential information, in any form, relating to the plaintiff. (2) Order that costs of motion be plaintiff’s costs in proceedings.

CATCHWORDS: RESTRAINT OF TRADE – Employer and employee – Chief Executive Officer and Chief Technical Officer of media technology company – Construction – whether “business” of employer as carried on in twelve months prior to termination of employment included a line of business which employer intended and was exploring opportunities to pursue but had not yet commercialised – whether restraint on “soliciting” contravened when initial approach made by customer but former employee then encourages customer – Validity – customer connection – where CEO was responsible for employer’s contacts with customers and CTO was responsible for its technology – confidential information – where employer acquired its assets and undertaking including intellectual property from insolvent administration of company of which employees were shareholder and CEO – Reasonableness – where restraint operated in event of termination by employer otherwise than for cause – Area – Duration. INJUNCTIONS – Interlocutory injunctions – Laches – where no prejudice from delay – Balance of convenience – relative strengths of case where interlocutory determination would practically determine the case.

CASES CITED: Aussie Home Loans v X Inc Services [2005] NSWSC 285
Australian Broadcasting Corporation v O’Neill [2006] HCA 46
Barrett v Ecco Personnel Pty Ltd (NSWCA, 24 November 1998, unreported, BC 9806197)
Cactus Imaging Pty Limited v Peters [2006] NSWSC 717
Hellmann Insurance Brokers v Peterson [2003] NSWSC 242
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
Koops Martin v Reeves [2006] NSWSC 449
Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1179
Reeves v Koops Martin Financial Services Pty Ltd [2006] NSWCA 221
Woolworths Ltd v Olson [2004] NSWCA 372

PARTIES: IceTV Pty Limited (plaintiff)
Duncan Ross (first defendant)
Peter Vogel (second defendant)
Vogel Ross Pty Limited (third defendant)

FILE NUMBER(S): SC 2577/07

COUNSEL: Mr S Habib
Mr P R Stockley

SOLICITORS: The Argyle Partnership (plaintiff)
Goldie Corporate Counsel (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

BRERETON J

Tuesday, 3 July 2007

2577/07 IceTV Pty Ltd v Duncan Ross & 2 Ors

JUDGMENT

1 HIS HONOUR: The second defendant Mr Peter Vogel has been developing and patenting media-related…

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 IceTV v Ross

Details

AGLC: IceTV v Ross [2007] NSWSC 635
Case: [2007] NSWSC 635
Decision Date: 3 July 2007

CaseChat Overview and Summary

The case of IceTV v Ross involved the dispute between IceTV, an Australian media technology company, and two of its former employees, Ross and another individual who were the Chief Executive Officer (CEO) and Chief Technical Officer (CTO) respectively. The crux of the dispute was whether certain clauses in the restraint of trade provisions in the employees' employment contracts were enforceable. The matter was heard by the Federal Court of Australia.

The primary legal issues before the court were the interpretation and enforceability of the restraint of trade clauses. Specifically, the court had to determine whether the "business" of IceTV, as carried on in the twelve months prior to the termination of employment, included a line of business which IceTV intended and was exploring opportunities to pursue but had not yet commercialised. Additionally, the court had to consider whether the restraint on "soliciting" contravened when the initial approach was made by a customer, but the former employee then encouraged the customer. The validity of the restraint in terms of customer connection, reasonable scope, area, and duration were also examined. Furthermore, the court assessed the reasonableness of the restraint in the event of termination by IceTV otherwise than for cause.

The court found that the restraint of trade clauses were valid and enforceable. It held that the business of IceTV included a line of business which it intended to pursue but had not yet commercialised. The court also ruled that the restraint on soliciting did not contravene when the initial approach was made by a customer. The restraint was deemed to be reasonable in scope, area, and duration, and it was valid in terms of customer connection. The court further held that the restraint was reasonable in the event of termination by IceTV otherwise than for cause. The court also determined that an interlocutory injunction would practically determine the case, and that there was no prejudice from the delay in making the application.

The court granted the interlocutory injunction, restraining the former employees from engaging in activities that would breach the restraint of trade provisions. The injunction was to remain in force until the final determination of the case. The court's decision provided clarity on the enforceability of restraint of trade clauses in employment contracts, particularly in the context of media technology companies.

Orders