Kaufman v McGillicuddy

The case of *Kaufman and Another (trading as The Metropolitan Dental Company) v McGillicuddy* involved an appeal to the High Court of Australia from a decision of the Supreme Court of Western Australia. The dispute concerned a contract of service between a dental firm, the Metropolitan Dental Company (represented by partners Kaufman and Ford), and a dentist, Mr. McGillicuddy. The core of the disagreement lay in a restraint of trade clause within the employment agreement, which prohibited McGillicuddy from practising dentistry within a specified area for a period after the termination of his employment.

The legal issues before the court were whether the restraint of trade clause remained enforceable against McGillicuddy. This question arose in the context of McGillicuddy's purported termination of the agreement following an alleged assault by one of the partners, the subsequent dissolution of the partnership, and McGillicuddy's commencement of practice in conjunction with a former partner. The court was required to determine if McGillicuddy was still bound by the restrictive covenant, particularly in light of the changes to the partnership and the circumstances surrounding his departure from the firm.

The High Court held that the restraint of trade clause was not enforceable. The reasoning applied was that McGillicuddy was no longer bound by the agreement. This conclusion was reached on two alternative grounds. Firstly, the contract could be considered rescinded due to the plaintiffs' conduct, either by their assent to McGillicuddy's termination of the agreement following the assault, or by their own actions in dissolving the partnership. Secondly, the dissolution of the partnership rendered the plaintiffs unable to specifically perform their obligations under the contract, which in turn meant they could not enforce the restrictive covenant. The court applied principles from cases such as *General Billposting Co. Ltd. v. Atkinson* and *Measures Brothers Ltd. v. Measures*, which establish that a party seeking to enforce a restrictive covenant cannot do so if they have themselves breached the fundamental terms of the employment contract or rendered themselves unable to fulfil their reciprocal obligations.

Consequently, the appeal was dismissed. The plaintiffs were not entitled to an injunction to restrain McGillicuddy from practising his profession, as the restrictive covenant was deemed unenforceable against him.