Idameneo (No.123) Pty Ltd v Deady - [2013] VSC 740

Revised
IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 6202 of 2013

IDAMENEO (No.123) PTY LTD (ACN 002 968 185)	Plaintiff
v
JOHN DEADY	Defendant

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JUDGE:	T FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 December 2013
DATE OF RULING:	11 December 2013
CASE MAY BE CITED AS:	Idameneo (No.123) Pty Ltd v Deady
MEDIUM NEUTRAL CITATION:	[2013] VSC 740

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INJUNCTIONS – Application for an injunction enforcing restraint of trade – Clause restrained the defendant Doctor from providing medical services within 10 km of the plaintiff’s medical practice – Doctor provided medical services 800m from the plaintiff’s medical practice – Strong claim for injunctive relief – Balance of convenience – Whether damages an adequate remedy – Likely plaintiff would suffer financial harm that would be difficult to quantify – Balance of convenience favoured granting of interlocutory injunction – application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr PJ Jopling QC with Mr DJ Fahey	Herbert Smith Freehills
For the Defendant	Mr J Tsalanidis	Moraw & Agnew

HIS HONOUR:

The plaintiff carries on a business operating and managing medical services throughout the country. One such centre is the Epping Plaza Medical & Dental Centre in Epping Victoria. The defendant is a general practitioner who, until recently, practised at the Epping Plaza centre.

The plaintiff has issued a writ dated 28 November 2013 complaining, inter alia, that the defendant has breached the restraint clause contained within a contract known as the 'Sale Deed' executed by the plaintiff and the defendant on 2 October 2007.

In substance, the defendant alleges that it paid the plaintiff the sum of $650,000 in 2007 for his existing medical practice. This assertion is not in dispute.

The defendant agreed, in a separate but related contract (the Practitioner Contract) to commence work with the plaintiff rendering medical services from the plaintiff's new premises at the Epping Plaza Centre. The defendant was to pay to the plaintiff 50 per cent of all moneys received by the defendant for the provision of medical services during the term of this separate contract.

Thus, in return for a lump sum in 2007, the defendant sold his practice and tied himself to the plaintiff's new Epping Plaza business. A term of the Sale Deed is the restraint clause. It reads as follows.

RESTRAINT

5.1 Given that:

(a) the Purchaser is acquiring the goodwill of the practice; and

(b) the Doctor is to render medical services from the New Premises,

The parties agree that as a reasonable protection for the business of the Purchaser, the Doctor must not during the restraint period:

(i) render medical services at any place within a radius of 10 kilometres of the Old Premises; or

(ii) render medical services at any place within a radius of 10 kilometres of the New Premises.

Note 1: In this Clause “render medical services” is not restricted to setting up, or being part of, a medical practice, and includes rendering a medical service to…

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: [2013] VSC 740
Decision Date: 11 December 2013

CaseChat Overview and Summary

In the case of Idameneo (No.123) Pty Ltd v Deady, the plaintiff, a medical practice, sought an injunction against the defendant, a former employee doctor, to enforce a restraint of trade clause. The clause restricted the doctor from providing medical services within 10 kilometres of the plaintiff’s practice. The defendant, however, began offering medical services just 800 metres away, prompting the plaintiff to apply for an interlocutory injunction. The court had to determine whether the plaintiff had a strong claim for injunctive relief and whether the balance of convenience favoured granting the injunction. Additionally, the court assessed whether damages would be an adequate remedy and whether the plaintiff would likely suffer financial harm that would be difficult to quantify.

The legal issues centred on the enforceability of the restraint of trade clause and the appropriate remedy in the event of its breach. The court needed to consider the strength of the plaintiff’s claim, the balance of convenience, and the adequacy of damages as a remedy. Given the doctor’s proximity to the plaintiff’s practice and the potential for significant financial harm to the plaintiff, the court examined whether an interlocutory injunction was necessary to protect the plaintiff’s business interests pending a final determination of the case.

The court found that the plaintiff had a strong claim for injunctive relief due to the significant risk of financial harm and the ease with which the doctor could continue to breach the restraint clause. The balance of convenience clearly favoured the plaintiff, as the potential harm to the plaintiff’s business outweighed any inconvenience to the defendant. Furthermore, the court concluded that damages would not be an adequate remedy because the financial harm would be difficult to quantify and the plaintiff’s loss could be irreparable. Based on these considerations, the court granted the application for an interlocutory injunction to prevent the doctor from providing medical services within 10 kilometres of the plaintiff’s practice.

Orders