IF Asia Pacific Pty Ltd v Galbally

The case of IF Asia Pacific Pty Ltd v Galbally was heard in the Supreme Court of Victoria. The plaintiff, IF Asia Pacific, sought relief against its former employee, the defendant, alleging breach of contract and misuse of confidential information. The primary dispute centred around the enforceability of certain clauses in the employment contract, particularly those concerning the use of confidential information and non-solicitation of clients. The court had to determine whether these clauses constituted an unreasonable restraint of trade and if the defendant had breached any covenants.

The legal issues before the court involved interpreting and enforcing the confidentiality and non-solicitation clauses in the employment contract. The court needed to ascertain whether these clauses were certain, reasonable, and not overly restrictive. Additionally, the court had to decide if the defendant had breached the terms of the contract by using confidential information to solicit clients, and if the information in question could be considered part of the defendant's own skill and knowledge.

The court found that the non-solicitation clause extended to the employer's former clients, including those with whom the defendant had no direct contact and clients of related companies. This clause was deemed too wide and an unreasonable restraint of trade, making it void. The court held that the covenant could not be "read down" to apply only to a business "same as or similar to" that of the employer. Furthermore, the court ruled that the defendant's business was not "same as or similar to" that of the employer, thus justifying the severance of the clause. The plaintiff also failed to establish that the defendant had breached the covenants prohibiting the unauthorised use of confidential information, as the information regarding client contact details was part of the defendant's general knowledge, skill, and experience.

The court ordered that the non-solicitation clause was void and unenforceable as it constituted an unreasonable restraint of trade. The case highlighted the importance of carefully drafting restrictive covenants to ensure they are enforceable and not overly broad.