Jordan & Callaghan & Ors

The parties to this proceeding were Jordan & Callaghan Pty Ltd and its directors, Mr. Jordan and Mr. Callaghan, who sought to restrain the respondent, Mr. Smith, from continuing to operate a business that allegedly breached a restraint of trade clause in an employment agreement. The application was heard by Cleary J in the Supreme Court of New South Wales.

The central legal issue before the Court was whether the restraint of trade clause in the employment agreement was reasonable and therefore enforceable. Specifically, the Court had to consider the scope of the restraint, its duration, and the geographical area it covered, in light of the legitimate business interests the applicants sought to protect.

Cleary J found that the restraint of trade clause was too broad in its geographical scope and duration to be considered reasonable. The Court applied the established legal principles governing restraints of trade, which require such clauses to be no wider than is reasonably necessary to protect the employer's legitimate business interests, such as confidential information or customer connections. His Honour reasoned that the breadth of the restraint extended beyond what was necessary to protect the applicants' business and therefore offended public policy.

Consequently, the Court dismissed the application for an injunction to restrain Mr. Smith's business activities.