Isaac v Dargan Financial Pty Ltd ATF the Dargan Financial Discretionary Trust (ABN 68 702 047 521) (trading under the name of Home Loan Experts)

The appeal concerned the enforceability of covenants in restraint of trade contained within an independent contractor agreement between the appellant, Isaac, and the respondent, Dargan Financial Pty Ltd (trading as Home Loan Experts). The dispute arose following the termination of the appellant's independent contractor relationship with the respondent, with the respondent alleging the appellant had breached a non-interference covenant by contacting and interfering with the respondent's clients. The matter was heard by the Court of Appeal of New South Wales.

The Court of Appeal was required to determine whether the appellant had breached the non-interference covenant, and critically, whether the non-solicitation covenant within the agreement was reasonable and therefore enforceable. This involved considering whether the respondent possessed legitimate commercial interests in protecting its client connections and confidential information, and whether the scope of the non-solicitation covenant was appropriately tailored to protect those interests. Furthermore, the Court had to consider the construction of the term "confidential information" within the contract and whether the respondent's client lists qualified as such, particularly in light of the appellant's possession of client contact details and their publication on a public Facebook page. The Court also examined the appropriateness of the injunctive relief granted by the primary judge, including whether the client information had entered the public domain and thus rendered the injunction futile.

The Court of Appeal reasoned that while the respondent had a legitimate interest in protecting its client connections and confidential information, the non-solicitation covenant was too broad in its geographical and temporal scope to be considered reasonable. The Court found that the client lists, containing contact details, had largely entered the public domain due to their accessibility on the appellant's phone, computer, and public Facebook page, diminishing the respondent's claim to exclusive confidential information. Consequently, the Court concluded that the injunction restraining the appellant from using or disclosing these client details lacked utility.

The Court of Appeal allowed the appeal in part, setting aside the primary judge's first order. The Court also discharged the stay on certain orders and directed the parties to file written submissions on the question of costs, which would be determined on the papers.