Jaddcal Pty Ltd v Minson

Case [2011] WASC 28

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   JADDCAL PTY LTD -v- MINSON [2011] WASC 28

CORAM:   LE MIERE J

HEARD:   8 NOVEMBER & 7 DECEMBER 2010

DELIVERED          :   8 FEBRUARY 2011

FILE NO/S:   CIV 2730 of 2010

BETWEEN:   JADDCAL PTY LTD

First Plaintiff

ALEXANDER ANURIW
Second Plaintiff

DONNA MAREE ANURIW
Third Plaintiff

AND

DAVID SHANE MINSON
First Defendant

LOUISE ANNE MINSON
Second Defendant

JOHN ROBERT BRUSKE
Third Defendant

CHERYL BRUSKE
Fourth Defendant

ROSELINK ENTERPRISES PTY LTD
Fifth Defendant

DWIGHT ALEXANDER WILLIAMS
Sixth Defendant

BRENDAN JOHN LOWICK
Seventh Defendant

CASEY SHANE MINSON
Eighth Defendant

DONALD ALEXANDER McLELLAN
Ninth Defendant

ANDREW CHRISTOPHER BRUSKE
Tenth Defendant

Catchwords:

Practice and procedure - Interlocutory injunction - Restraint of trade - Tortious interference with contractual relations - Serious question to be tried - Balance of convenience - Lack of evidence - Delay - Turns on own facts

Legislation:

Property Law Act 1969 (WA), s 11(2)
Supreme Court Act 1935 (WA), s 25

Result:

Application dismissed

Category:    B

Representation:

Counsel:

First Plaintiff                :     Mr J A Davies & Mr M N Caratti

Second Plaintiff            :     Mr J A Davies & Mr M N Caratti

Third Plaintiff               :     Mr J A Davies & Mr M N Caratti

First Defendant             :     Mr D A Lenhoff

Second Defendant         :     Mr D A Lenhoff

Third Defendant           :     Mr D A Lenhoff

Fourth Defendant          :     Mr D A Lenhoff

Fifth Defendant            :     Mr M H Zilko SC & Mr M Curwood

Sixth Defendant            :     Mr M H Zilko SC & Mr M Curwood

Seventh Defendant        :     Mr M H Zilko SC & Mr M Curwood

Eighth Defendant          :     Mr M H Zilko SC & Mr M Curwood

Ninth Defendant           :     Mr M H Zilko SC & Mr M Curwood

Tenth Defendant           :     Mr M H Zilko SC & Mr M Curwood

Solicitors:

First Plaintiff                :     Gary Rodgers

Second Plaintiff            :     Gary Rodgers

Third Plaintiff               :     Gary Rodgers

First Defendant             :     Holborn Lenhoff Massey

Second Defendant         :     Holborn Lenhoff Massey

Third Defendant           :     Holborn Lenhoff Massey

Fourth Defendant          :     Holborn Lenhoff Massey

Fifth Defendant            :     Curwood & Co Pty Ltd

Sixth Defendant            :     Curwood & Co Pty Ltd

Seventh Defendant        :     Curwood & Co Pty Ltd

Eighth Defendant          :     Curwood & Co Pty Ltd

Ninth Defendant           :     Curwood & Co Pty Ltd

Tenth Defendant           :     Curwood & Co Pty Ltd

Case(s) referred to in judgment(s):

Allstate Life Insurance Co v ANZ Banking Group Ltd (1995) 58 FCR 26

American Cyanamid v Ethicon Ltd (1975) 2 WLR 316

Australian Broadcasting Corporation v O'Neil [2006] HCA 46; (2006) 227 CLR 57

Australian Electrical Electronics Foundry & Engineering Union (WA Branch) v Hamersley Iron Pty Ltd (1998) 19 WAR 145

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618

Boase v Seven Network (Operations) Ltd [2005] WASC 269

Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633

Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR…

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Jaddcal Pty Ltd v Minson [2011] WASC 28
Case
[2011] WASC 28
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CaseChat Overview and Summary

In the case of Jaddcal Pty Ltd v Minson, the dispute involved an application for an interlocutory injunction to restrain certain parties from breaching a restraint clause and interfering with contractual relations. The matter was heard in the Supreme Court of Western Australia. The primary issue before the court was whether the plaintiff had demonstrated a serious question to be tried and whether the balance of convenience favoured the granting of the injunction. The court also needed to consider the evidence presented and the potential for delay in resolving the matter.

The court examined the strength of the plaintiff's case, focusing on the likelihood of success in proving the allegations of breach of the restraint clause and the complicity of other parties in tortious interference with contractual relations. The court noted that the plaintiff must show a sufficient likelihood of success to justify preserving the status quo pending the trial. The court applied the test from Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd, which states that restraints of trade are generally void unless they are reasonable in the interests of both parties and the public. The court assessed the reasonableness of the restraint clause, which was contained in Clause 8 of the Deed, and considered whether it went beyond what was necessary to protect the legitimate interests of the parties.

The court concluded that the plaintiff had not demonstrated a serious question to be tried or that the balance of convenience favoured the granting of the injunction. The court found that the plaintiff's case was weakened by a lack of evidence and the potential for delay in resolving the matter. The court also noted that the restraint clause in Clause 8 of the Deed was not unreasonable on its face, but the plaintiff had not provided sufficient evidence to establish a likelihood of success on the merits. Therefore, the court declined to grant the interlocutory injunction.

The court's final orders were that the application for an interlocutory injunction be dismissed, with no order as to costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The court must be satisfied that the plaintiffs have made out a prima facie case. In doing so the court must consider the strength of the plaintiffs' case having regard to the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory orders sought: Australian Broadcasting Corporation v O'Neil [2006] HCA 46; (2006) 227 CLR 57 [71]. That does not mean that the court is to conduct any form of preliminary trial. It is sufficient that the plaintiffs show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending trial. The current case concerns two allegations, firstly, whether there has been a breach of the Restraint Clause by the Restrained Parties as alleged by the plaintiff above and secondly, whether the Roselink Parties were knowingly complicit in a breach that amounts to tortiously interfering with contractual relations. The test to be applied in determining the validity of a restraint clause was stated by Lord Macnaughten in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535:All interference with individual liberty of action in trading, and all restrains of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule. But there are exceptions: restraints of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case. It is a sufficient justification, and indeed it is the only justification, if the restriction is reasonable ‑ reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public. The general rule is that a restrictive covenant is prima facie void and can achieve validity only if it is reasonable in the interests of the parties and in the public interest. In assessing the reasonableness of the restraint clause the restraining party must show that the restraint clause goes no further than is reasonable to protect its legitimate interests. Clause 8 of the Deed contains the Restraint Clause which reads as follows:8.RESTRAINT8.1The Vendors covenant and agree that they shall not, whether for themselves or on behalf of any other person, during the period of 3 years from the Settlement Date, entice or attempt to entice any present officer, employee, agent or consultant of or to the Company from continuing to be employed or engaged by the Company.8.2The Vendors covenant and agree with the Purchaser that they shall not, without the Purchaser's prior written consent, be directly or indirectly engaged, concerned or interested in the capacity specified in clause 8.3 in the trade or business specified in clause 8.4 within the area specified in clause 8.5 within the period specified in clause 8.68.3As:(a)Member;(b)Shareholder;(c)Debenture holder or holder of any other security;(d)Director;(e)Beneficiary;(f)Unit holder;(g)Employee;(h)Consultant or advisor;(i)Contractor;(j)Agent; or(k)Otherwise8.4In any:(a)Corporation;(b)Firm; or(c)Business,That is engaged in or carries on, or has an interest in, an ice rink business.8.5Within the following radius of the Perth GPO:(a)50 kilometres;(b)35 kilometres;(c)20 kilometres; or(d)10 kilometres.8.6For a period of(a)3 years;(b)2 years;(c)18 months;(d)1 year; or(e)6 months;After the Settlement Date.8.7The Vendors separately enter with the Purchasers into each of the covenants resulting from the combination of each of the capacities in clause 8.3, with each trade or business in clause 8.4, each separate geographical area in clause 8.5, and each separate period in clause 8.6.8.8Each of those covenants constitutes a separate restraint of trade imposed on the Vendors under this Deed.8.9If any of those covenants is or becomes unenforceable that does not affect the validity or enforceability of the other covenants that remain binding on the Vendors.8.10The Purchasers and the Vendors acknowledge that all the prohibitions and restrictions contained in this clause 8 are reasonable in the circumstances and necessary to protect the goodwill of the Company.8.11Nothing in this clause 8 shall be construed to prevent David from working as an electrical contractor at Cockburn Ice Arena.