Lamberts Brs v Kentish - [2005] SADC 99

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
LAMBERTS BRS v KENTISH
Reasons for Decision of Her Honour Judge Simpson
4 August 2005
CONTRACTS
Restraint of Trade - Contract of Employment - application by employer for interlocutory injunction to prevent former employee from breaching restraint of employment.
Interlocutory injunction - principles applicable when injuction likely to all but dispose of the action - serious question to be tried - balance of convenience favours the defendant - application refused.
American Cyanamid Co v Ethicon Ltd [1975] AC 396; Castlemaine Tooheys Ltd & Ors v The State of South Australia (1986) 161 CLR 148; Cayne v Global Natural Resources Pty Ltd [1984] 1 All ER 225; Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533; Lansing Linde Ltd v Kerr [1991] 1 WLR 251; Lawrence David Ltd v Ashton [1991] 1 All ER 385; NWL Ltd v Woods [1979] 1 WLR 1294, applied.
Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1972-3) 133 CLR 288; Geraghty & Anor v Minter & Anor (1979) 142 CLR 177; Hydron Pty Ltd v Harous [2005] SASC 176; NE Perry Pty Ltd v Judge & Anor (2002) 84 SASR 86; Rentokil Pty Ltd v Lee (1995) 66 SASR 301; Woolworths Ltd v Olson & Anor (2004) 184 FLR 121, considered.

LAMBERTS BRS v KENTISH
[2005] SADC 99

This is an application, filed on 24 June 2005, originally in the Magistrates Court of South Australia, by the plaintiff, Lamberts BRS, for an interlocutory injunction, restraining the defendant, Nathan Kentish, until and including 5 November 2005 from:
1.Either directly or indirectly, whether solely or with any other person, carrying on, or being engaged, concerned or interested in or associated with, any business activity that Indigo Financial Pty Ltd, and/or John Tsoulos, either directly or indirectly, whether solely or with any other person, is or are carrying on, or is or are engaged, concerned or associated with and which is competitive with any business carried on by the plaintiff or any of its related bodies corporate.
2.Endeavouring or attempting directly or indirectly to induce any person or persons or company who shall be known to the defendant to have been at any time during his employment under the said agreement a client or clients of the plaintiff in its said practice or in that of any of its related bodies corporate to cease from dealing with the plaintiff or any of its related bodies corporate in the way of its said practice or business or activity or so to employ or deal with any person or persons or company other than the plaintiff or any of its related bodies corporate.
By its statement of claim, filed with the application for interlocutory relief, the plaintiff seeks orders in the same terms as those sought in the application, together with damages in the sum of $37,500, and compensation, or an indemnity against any capital gains, goods and services or other taxation liability that may be occasioned to the plaintiff in consequence of any judgment, award, determination or compensation awarded to it.
In its statement of claim, the plaintiff is described as a partnership practising as chartered accountants and business development specialists at Marden and Morphett Vale, in South Australia, and in Broken Hill, New South Wales.
Up until 5 May 2005, the defendant was employed by the plaintiff as an accountant.
The application for interlocutory relief is supported by the affidavit of Mr Carlo de Pizzol, sworn on 24 June 2005. In reply, the defendant has filed an affidavit sworn by him on 6 July 2005, and an affidavit of Mr John Tsoulos, a director and shareholder of Indigo Financial Pty Ltd, the current employer of the defendant, also sworn on 6 July 2005, taking issue with matters deposed to by Mr de Pizzol.
The plaintiff filed answering affidavits of Mr Cavaleri and of Mr Ryan, both members of the plaintiff firm, sworn on 13 July 2005. In their respective affidavits, Mr Cavaleri and Mr Ryan in turn take issue with some of the facts deposed to by or on behalf of the defendant. In so far as Mr de Pizzol and Mr Ryan depose to matters of opinion and advance argument in their affidavits, I have not relied on what they have said.
Many facts are in dispute. As Lord Diplock has said, on an application for an interlocutory injunction:
It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at trial. One of the reasons for the introduction of the practice of requiring an undertaking as to damages upon the grant of an interlocutory injunction was that ‘it aided the court in doing that which was its great object, viz, abstaining from expressing any opinion on the merits of the case until the hearing’: Wakefield v Duke of Buddleugh (1865) 12 LT 628, 629.
(American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 406)
There is nevertheless a number of matters not in dispute. The defendant commenced employment in 1998 as an accountant with a firm, Ronald Norton & Co, in which Mr John Tsoulos was a partner. In July 1999, the firm became Norton Tsoulos. The defendant graduated, Bachelor of Commerce, from the University of Adelaide in November 1999 and qualified in June 2003 as a chartered accountant. In March 2001, Norton Tsoulos merged with the firms, Carvin & Co and Ryan Williams, to form the plaintiff partnership, Lamberts BRS.
On 11 June 2001, the defendant signed an agreement, on the face of it not with the plaintiff partnership, but with a company, Lamberts BRS Pty Ltd. I put to one side the question of the identity of the party executing the agreement, Lamberts BRS Pty Ltd, its relationship to the plaintiff, for whose benefit the agreement was, and the question of the party therefore entitled to enforce the agreement.
The defendant accepted an offer of employment as client services manager with the partnership Lamberts BRS, ‘the Firm’, on the terms set out in the agreement, as from 1 June 2001. The defendant’s salary at the time of entering into the agreement was $40,000 per annum.
By Clause 12 of the agreement, the defendant was required to:
·Keep any confidential information secret and confidential, except to the extent that you may be required by law to disclose;
·Take all reasonable and necessary precautions to maintain the secrecy and prevent the disclosure of any confidential information; and
·Not disclose confidential information to any third party without the written consent of the Firm except in the ordinary and proper course of employment with the firm.
The defendant was further required to acknowledge that:
·He would obtain and have access to confidential information concerning the business and finances of the Firm including trade secrets and industrial processes;
·Disclosure of confidential information could materially harm the Firm;
·The restrictive covenants contained in this clause are reasonable and necessary for the protection of the goodwill of the Firm; and
·The remedy of damages may be inadequate to protect the interests of the Firm and the Firm is entitled to seek and obtain injunctive relief, or any other remedy in any Court.
Clause 13 of the agreement provided:
In consideration of you and the Firm entering into agreement and in order to protect the Firm’s confidential information, its trade secrets and its business connections, you represent and warrant that you will not during the course of employment and for six months after termination of employment for whatever reason either directly or indirectly, whether solely or with any other person carry on, or be engaged, concerned or interested in or associated with, any business or activity which is competitive with any business carried on by the Firm or any of its related bodies corporate.
In paragraph 6 of the Statement of Claim, confirmed by Mr de Pizzol in his affidavit, the plaintiff says that its related bodies corporate are Lamberts BRS Pty Ltd, Lamberts BRS Financial Planning Pty Ltd, Lamberts BRS Information Technology Pty Ltd, and Lamberts BRS Lending Services Pty Ltd. There is no evidence as to the bodies corporate related to the plaintiff as at 11 June 2001 or up to the period to May 2005. There is no evidence of the nature of the relationship of those entities with the plaintiff, and in particular, no evidence as to why the agreement on which the application is founded, appears to have been executed on behalf of one of the related bodies corporate, rather than the plaintiff.
The agreement is apparently a pro forma agreement. According to Mr Tsoulos, the plaintiff required all its employees to sign it. The defendant says that at the time he signed the agreement, he did not consider he had any bargaining power with the plaintiff. He was paid at the market rate at the time for a junior accountant with his level of skill and experience. Other than the consideration expressed in clause 13 of the agreement itself, i.e., entering into the agreement of employment, no consideration was given in respect of his representing and warranting that he would not:
during the course of employment and for six months after termination of employment for whatever reason either directly or indirectly, whether solely or with any other person carry on, or be engaged, concerned or interested in or associated with, any business or activity which is competitive with any business carried on by the Firm or any of its related bodies corporate.
In its statement of claim, the plaintiff’s business of chartered accountants and business development specialists is described as including the provision of financial planning, mortgage broking and information technology sales and services. Other than what might be inferred from the name of the entities, there is no evidence as to the business or businesses carried on by the related bodies corporate.
There is no geographical limit to the restraint on employment the agreement imposes. In order to determine the extent and scope of the restraint imposed on the defendant by the agreement, it will be necessary to identify:
1.the nature of business of the plaintiff, and in addition, the business of its related bodies corporate; and
2.any business or activity which is competitive with any business carried on by the plaintiff and its related bodies corporate.
Mr Tsoulos left the partnership of the plaintiff firm on the 30 June 2004. According to his affidavit, the agreement reached on his departure included a term, amongst other terms, that the remaining partners of Lamberts BRS purchase his interest in the partnership. Mr Tsoulos was subject under the agreement to a provision restraining him from working in competition with the plaintiff for a period of 3 years.
In around November 2004, a dispute arose between Mr Tsoulos and Mr de Pizzol, Mr Cavaleri and Mr Ryan in relation to their purchase of Mr Tsoulos’ share of the plaintiff partnership. In paragraph 16 of his affidavit sworn on 6 July 2005, Mr Tsoulos says that in March 2005, the dispute was resolved, with Mr Tsoulos releasing the remaining partners from certain payment obligations and in turn with his being released from the restraint provision prohibiting him from competing with the plaintiff firm.
I was advised by counsel for the plaintiff that the plaintiff does not agree with the assertions made by Mr Tsoulos. The only reference to the dispute, and its resolution, in the affidavits filed by the plaintiff, is in paragraph 42 of the affidavit of Mr Ryan sworn on 13 July 2005, as follows:
The interpretation of the settlement deposed to in paragraph 16 of the said affidavit is singular to Mr Tsoulos.
However, the conduct of Mr Tsoulos, and of the plaintiff, is consistent with the assertions made by Mr Tsoulos.
The defendant was offered employment by Mr Tsoulos in early April 2005. He resigned from the plaintiff’s employment on 11 April 2005, giving one month’s notice. His last day in employment with the plaintiff was 5 May 2005. By the time he left the employment of the plaintiff, the defendant’s salary was $65,000 per annum, which is his current salary with Indigo Financial.
The plaintiff alleges, and Mr Tsoulos accepts, that he incorporated the company, an accounting firm, Indigo Financial Pty Ltd (‘Indigo Financial’) on 13 April 2005. Mr Tsoulos is its managing director. Between 13 April 2005 and 2 May 2005, seventy seven clients of the plaintiff signed an engagement letter appointing Indigo Financial as their accountant. On 2 May 2005, Mr Tsoulos sent ‘ethical’ letters to the plaintiff, all in similar terms, advising the plaintiff that Indigo Financial had been approached by those clients to attend to their accounting and taxation requirements, and asking the plaintiff to advise Indigo Financial of any professional reason why it should not accept the assignment. As nothing is said in the material before the court to the contrary, I assume the plaintiff did not object to the assignment in each case.
Mr Tsoulos sets out in his affidavit the basis of his professional relationship with the seventy seven clients now using Indigo Financial instead of the plaintiff for their accounting and taxation needs. He says that they are all clients with whom he has longstanding business and personal relationships. Several of them are personal friends or relatives. Some of them are Greek and some of those speak Greek with Mr Tsoulos. Others are former clients of his with whom he has had a longstanding relationship.
The defendant commenced employment with Indigo Financial on 9 May 2005 as a tax manager. On the same day, Indigo Financial purchased another accounting practice, Koutsevelis and Co.
The plaintiff says that the seventy seven clients named in the statement of claim ceased to retain the plaintiff firm as accountant, and subsequently retained the services of Indigo Financial, as a consequence of the defendant’s employment with Indigo Financial. The plaintiff says that the only reason that Indigo Financial has been able to attract the seventy seven clients who have appointed Indigo Financial to handle their tax and accounting requirements is the defendant’s employment with that firm.
In support of that assertion, Mr de Pizzol and Mr Ryan say that Mr Tsoulos does not perform, and does not have the expertise to perform the type of work required by those clients who have appointed Indigo Financial to handle their taxation and accounting needs. Mr Tsoulos disputes that. He says further that although the defendant has some experience in dealing with some of the clients in question, if the defendant was not employed by Indigo Financial, other accountants employed by Indigo Financial could and would handle their work.
The plaintiff’s solicitors wrote to the defendant on 3 June 2005, requiring him to cease his employment with Indigo Financial on account of an asserted breach of the restraint imposed by the agreement of 11 June 2001. In the circumstances, I have not had to consider whether delay on the part of the plaintiff should militate against the grant of an injunction at the interlocutory stage.
The defendant disputes, in paragraphs 54 and 55 of his affidavit, that the clients now using Indigo Financial services in preference to those of the plaintiff transferred their business on account of his employment with Indigo Financial. The defendant says that he has not had a strong relationship with or knowledge of the business of many of the clients referred to by the plaintiff. Some of them, he has not met at all. The defendant says, and it is not disputed by the plaintiff, that he has never suggested to any client of the plaintiff that the client use Indigo Financial in preference to the plaintiff. The defendant says in his affidavit, and it is not asserted otherwise, that he has not used or disclosed any confidential information, trade secrets or business connections of the plaintiff to any person.
The relevant legal principles to be applied to an application for an interlocutory injunction, and in particular, an application for an interlocutory injunction where the action is unlikely to be tried before the period of restraint has expired, are well settled. (Interlocutory Injunctions Having Final Effect, W Sofranoff, (1987) 61 ALJ 341; Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533; Lawrence David Ltd v Ashton [1991] 1 All ER 385; Lansing Linde Ltd v Kerr [1991] 1 All ER 418, [1991] 1 WLR 251)
First, the court is required to decide whether there is a serious question to be tried.
Unless the plaintiff can show that there is at least a serious question to be tried which if resolved in its favour would entitle it to final relief, then the requirements of justice as between the parties will dictate that an interlocutory injunction should be refused: (Australian Course Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 57 ALJR 425; 46 ALR 398; Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 58 ALJR 283; 52 ALR 651; AV Hayden (No. 1); Castlemaine Tooheys Ltd v State ofSouth Australia (1986) 60 ALJR 679; 67 ALR 553 and Cohen v Peko Wallsend Ltd (1986) 61 ALJR 57: 68 ALR 394)
(Kolback Securities v Epoch Mining NL (1987) 8 NSWLR 533, 535)
If there is found to be a serious question to be tried:
(i)     The court is to consider whether, if the plaintiff were to succeed at the trial, it would be adequately compensated by an award of damages for the loss it would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined, between the time of the application and the time of trial.
(ii)    If damages in the measure recoverable at common law would be an adequate remedy, and the defendant would be in a financial position to pay them, no injunction ought normally be granted however strong the plaintiff’s claim appeared to be at that stage.
(iii)   If damages are not likely to be an adequate remedy for the plaintiff, then the court is to consider whether, if the defendant were to succeed at the trial in establishing his right to continue in his employment against which the injunction is sought, he would adequately be compensated under the plaintiff’s undertaking. If damages would be an adequate remedy for the defendant and the plaintiff can pay them, there is no reason on that ground to refuse an interlocutory injunction.
If there is a doubt as to the adequacy of the respective remedies in damages available to either party, it is then that the question of the balance of convenience arises. Where other factors appear to be evenly balanced, the counsel of prudence is to preserve the status quo. (American Cyanamid v Ethicon Ltd [1975] AC 396 at 406-409; Castlemaine Tooheys Ltd & Others v The State of South Australia (1986) 161 CLR 148 at 153)
In considering the balance of convenience, the court ought to give full weight to the practical realities of the situation to which the injunction will apply. It is often likely that there will be some disadvantage caused to the unsuccessful party which it will be impossible fully to compensate. The extent to which the disadvantage would be incapable of being compensated is a factor in assessing where the balance of convenience lies. (American Cyanamid, above at 409)
Where the realities of the case are that:
the grant or refusal of the interlocutory injunction will have the practical effect of putting an end to the action because the harm that will have been already caused to the losing party by its grant or its refusal is complete and of a kind for which money cannot constitute any worthwhile recompense the degree of likelihood that the plaintiff would have succeeded in establishing his right to an injunction if the action had gone to trial is a factor to be brought into the balance by the judge in weighing the risks that injustice may result from his deciding the application one way rather than the other. (NWL Ltd v Woods [1979] 1 WLR 1294 at 1306-1307)

Where the grant of an injunction in effect means giving judgment to the plaintiff because a trial of the matter is unlikely to be heard before the term over which the injunction is to operate expires, the question is:
Should the court exercise its discretion, bearing in mind all the circumstances of the case, when to decide in favour of the plaintiff would mean giving it judgment in the case against the defendant, without permitting the defendant the right of trial?
(Cayne v Global Natural Resources Pty Ltd [1984] 1 All ER 225 at 231)
In such a case generally an injunction ought not be granted if the consequence is to deny the defendant an effective right to a trial, if the defendant has put forward a fully arguable case raising a triable issue and if the plaintiff’s case is not overwhelming. Unless the plaintiff can demonstrate a factor clearly pointing in favour of the grant of an injunction, notwithstanding the effective loss by the defendant of his right to a trial, for example, if the risk of injury to the plaintiff is grave, then an injunction ought not to be granted at an interlocutory stage. (Cayne at 233 per Eveleigh LJ; at 236 per Kerr LJ; at 238 per May LJ)
Where an assessment of the prospects of the success or otherwise of the plaintiff’s claim ultimately is required, it is for the court to control the extent of that assessment on the application for an interlocutory injunction. (Lansing Linde Ltd v Kerr [1991] 1 WLR 251 at 258, 270)
Serious Question to be Tried
In my opinion, the plaintiff has established that there is a serious question to be tried regarding the enforceability of the restraint imposed on the defendant by the contract entered into between the defendant and Lambert BRS Pty Ltd on the 11 June 2001.
The Balance of Convenience
Are damages adequate compensation for the plaintiff?
It is necessary to consider whether if the plaintiff were to succeed at the trial in establishing its right to a permanent injunction, there would be adequate compensation by an award of damages for the loss sustained as a result of the defendant continuing in the employment with Indigo Financial between now and early November 2005. On the assumption that the business of Indigo Financial is competitive with that conducted by the plaintiff and its related bodies corporate, and assuming that the plaintiff can establish that the defendant wrongfully commenced employment with Indigo Financial, the plaintiff alleges in its statement of claim, that in consequence of the defendant’s employment with Indigo Financial, the plaintiff has lost the custom of the seventy seven named clients and as a result has sustained damages in the sum of $37,500. That sum is I understand the annual fees expected to be generated by the work performed by the plaintiff for those clients.
Although there was a suggestion in submissions on the application, and by way of speculation in the affidavits of Mr de Pizzol and Mr Ryan, there is no evidence that the plaintiff is continuing to experience the loss of clients as a consequence of the defendant’s continued employment with Indigo Financial. The only evidence is of the proper transfer of seventy seven clients, on notice to the plaintiff and apparently without objection by it, although invited to make objection by Mr Tsoulos.
There is no allegation that the defendant has disclosed any confidential information concerning the business and finances of the plaintiff. There is no allegation that the defendant is likely to have confidential information concerning the business and finances of the firm which if disclosed by him between now and the 5 November 2005, the plaintiff will be harmed in a way in which damages could not compensate.
While it is true that the defendant appears on the evidence to be a young professional person with limited assets, taking into account the quantum of damages sought and the assets the defendant discloses, there can, in my opinion, be no real risk that he would not be in a financial position to pay damages, should the plaintiff succeed at trial. In my opinion, all the evidence suggests that damages in the measure the plaintiff seeks to recover will be an adequate remedy.
In accordance with principle, a finding that an award of damages will adequately compensate the plaintiff if successful at trial, is sufficient to dispose of the application. However, if I am wrong about that, I go on to consider whether, if damages are not an adequate remedy, whether an injunction should be granted.
Are damages adequate compensation for the defendant?
The plaintiff seeks an order preventing the defendant from continuing in his employment with Indigo Financial. The defendant commenced his employment with Indigo Financial on the 9 May 2005. One consideration may be, and is in this case, whether the defendant is temporarily to be restrained from embarking on a new course of action, where the effect of the injunction will postpone the date at which he is able to undertake that action, or whether the injunction will interrupt him in the course of an established enterprise. (American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 406-409) If an injunction were granted, the defendant’s employment with Indigo Financial, where he has been since 9 May 2005, will be disrupted, possibly permanently. However, balanced against the possible permanent loss of employment with Indigo Financial is the fact that the limit of any injunction preventing the defendant from working with Indigo Financial is 5 November 2005.
The defendant says he has no desire to leave the employment of Indigo Financial and seek employment with another firm. He says that he is not in a position to remain without income until 5 November 2005. Mr Tsoulos says that while the defendant’s skill and experience are valued, if the defendant is prevented from working with Indigo Financial until after 5 November 2005, Indigo Financial cannot guarantee to hold the position for him.
The defendant has a relationship with the managing director of his employer, Mr Tsoulos, which extends back to the time when the defendant was only 18 years old. The defendant says that Mr Tsoulos has had a great influence on his career. If he is unable to continue with his employment at Indigo Financial, the defendant says that he would have to seek new employment through advertisements or recruitment agencies, a process he expects would take some weeks. He has previously worked for the one firm for the whole of his career and therefore has limited experience in job interviews. The defendant says he is relatively young for a tax manager and while he does expect that he would ultimately find employment with another firm, he considers that he may not be able to find a position as a manager, and may have to accept a position at a lower level and a lower salary.
Taking the defendant’s circumstances into account, and taking into account whether if he were to succeed at trial in establishing his right to employment with Indigo Financial, in my opinion damages are unlikely to be an adequate remedy for the consequences to the defendant of an injunction being granted at this stage. The defendant faces significant disruption to his career path. He is a young man to whom advancement in his career may depend on the firm with whom he is employed and on the advice and encouragement he receives from senior members of the firm, including Mr Tsoulos. I accept that the defendant has the skill, experience and personal resources to allow him to find another position within a relatively short space of time. His prospects in that regard however must remain speculative.
The interruption to his employment with Indigo Financial to which the plaintiff, if successful, would be entitled, is in any event now a matter of only 3 months. Balancing that against the possible harm to the defendant, if it is ultimately demonstrated that the plaintiff had no right to the injunction at this stage, in my opinion, the injunction sought by the plaintiff should be refused on that ground.
The degree of likelihood that the plaintiff would have succeeded in establishing his right to an injunction if the action had gone to trial
If the question of the convenience, or relative inconvenience or harm, as between the parties were evenly balanced, which in my opinion, it is not, it would be appropriate to go on to consider the relative strength of each party’s case.
In my opinion there are a number of matters, raised on the material presently before the court, which suggest that the plaintiff may have difficulty in establishing its right to relief at trial. In my opinion, which is necessarily limited on account of the very early stage of the litigation, on the material presently before the court, it cannot be said that the plaintiff’s case is overwhelming:
1.The contracting party to the agreement is not the plaintiff, but an apparently related body corporate. The relationship between that company and the plaintiff is not known and its effect on the enforceability of the agreement is uncertain.
2.The terms of the restraint in the agreement with the plaintiff are uncertain. The business activities prohibited to the defendant are, on the face of it, both wide ranging and uncertain. It is likely to be difficult ultimately to frame an injunction with sufficient precision so as to enable the defendant to know what he is, or was, prevented from doing (Lawrence David Ltd v Ashton [1991] 1 All ER 385 at 393):
3.The terms of the restraint in the agreement, in particular, the description of the activity proscribed, the circumstances of its execution by the defendant, and in fact the order sought, limited to restraining the defendant:
until and including 5 November 2005 from either directly or indirectly, either solely or with any other person carrying on, or being engaged, concerned or interested in, or associated with, any business or activity that Indigo Financial Pty Ltd and/or John Tsoulos, either directly or indirectly, whether solely or with any other person is or are carrying on, or is or are engaged, concerned or interested in or associated with and which is competitive with any business carried on by the plaintiff or any of its related bodies corporate,
may suggest that the restraint in the agreement goes beyond what can be considered reasonable for the protection of the interests of the plaintiff, and in my view at this preliminary stage, is unlikely to be capable of interpretation in a way which makes the restraint reasonable. (Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1972-3) 133 CLR 288 at 306-307, 315-318; Geraghty & Another v Minter & Another (1979) 142 CLR 177 at 184, 198; Hydron Pty Ltd v Harous SCSA per Bleby J unreported 17 May 2005 [2005] SASC 176 at [77]-[86]; NE Perry Pty Ltd v Judge & Another (2002) 84 SASR 86 at 89-90, 103-104; Rentokil Pty Ltd v Lee (1995) 66 SASR 301 at 305-306, 319-326, 338-340; Woolworths Ltd v Olson & Another (2004) 184 FLR 121 at 209-212)
4.The plaintiff may have difficulty establishing that it has sustained any harm as a consequence of a breach of the agreement by the defendant. The evidence may show that the loss of seventy seven clients to Indigo Financial had little or nothing to do with the defendant’s conduct.
5.If the plaintiff has sustained loss as a result of the defendant’s conduct, there is no convincing evidence that the loss is ongoing, nor that the grant of an injunction in any event will prevent further harm to it.
In my opinion, the plaintiff has established that there is a serious question to be tried. A trial of the action will almost certainly be listed for hearing well after the period for which the injunction is sought. If the plaintiff is successful at trial, an award of damages will be an adequate remedy for any loss associated with breach by the defendant of the restraining covenant in the agreement of 11 June 2001. The plaintiff has not demonstrated any factor clearly pointing in favour of the grant of an injunction. The balance of convenience favours the defendant. The interests of justice as between the parties require that the application for an interlocutory injunction be refused. The application is dismissed.