Lanes Motors Pty Ltd v G B Autos Pty Ltd

[2002] VSC 532

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 8258 of 2002

LANES MOTORS PTY LTD	Plaintiff
v
G.B. AUTOS PTY LTD	Defendant

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JUDGE:	BEACH  J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	26 NOVEMBER 2002
DATE OF JUDGMENT:	26 NOVEMBER 2002
CASE MAY BE CITED AS:	LANES MOTORS v. G.B. AUTOS
MEDIUM NEUTRAL CITATION:	[2002] VSC 532

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INTERLOCUTORY INJUNCTION – No serious issue to be tried – Damages adequate remedy.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Judd with Mr D. Crennan	Corrs
For the Defendant	Mr P. Anastassia	Maddocks

HIS HONOUR:

1. For some time prior to 21 August 2002 the first-named defendant, G.B. Autos Pty Ltd, owned and operated new/used car dealerships known as Geoff Brady Motors, Geoff Brady Holden, Geoff Brady Mitsubishi, Geoff Brady European Cars and Geoff Brady Kia at 565 to 577 Springvale Road, Glen Waverley.  By an agreement dated 27 August 2001 made between the plaintiff, Lanes Motors Pty Ltd, the first-named defendant and other parties associated with the defendant, the first-named defendant sold and the plaintiff purchased the said businesses.

1. During the course of the discussions between the parties prior to the conclusion of the sale agreement, the first-named defendant informed the plaintiff that it had firm commitments in place to establish a further business following the sale of the businesses in question, that being a Volkswagon dealership to be established in the suburb of Camberwell, and apparently that fact was accepted by the plaintiff.

1. The sale agreement between the parties provided in clause 21.1 that the defendants would not on their own account or for any person entice from the plaintiff any person who was in the one year period before 1 September 2001 an employee of the businesses the subject of the sale.  I should add that the sale agreement provided that the plaintiff would take over a significant number of employees of the businesses formerly carried on by the first-named defendant.

1. At all events the first-named defendant continued with its preparations to open the new Volkswagon business in Dandenong and in October of this year it inserted advertisements in the press seeking employees for the new business.  Prior to those advertisements being inserted in the press an employee of the businesses, who had transferred his employment to the plaintiff following the sale of the businesses, contacted the proprietor of the first-named defendant and asked him whether it was possible for him to obtain a position in the new business.  When he approached the proprietor of the first-named defendant the proprietor told him that he would need to apply for any such position in the same way as any other candidate when the potential positions were known and advertised.  As I have indicated, in due course the positions were advertised.

1. The former employee, whose name is Di Benedetto, again contacted the proprietor of the first-named defendant and following a number of negotiations between the two men Di Benedetto agreed to accept employment as the sales manager of the Volkswagon business to be established at Camberwell.

1. At about the same time three other former employees in the original businesses who had transferred over to the plaintiff following the sale of the businesses to the plaintiff sought and obtained employment by the first-named defendant in the new business, which to the best of my recollection is to commence operations in about the middle of December next.

1. On 21 November last the plaintiff filed a writ in the court whereby it seeks, amongst other things, injunctions restraining the defendants from making offers of employment to former employees who transferred to the plaintiff following the sale of the business.

1. What the plaintiff alleges, of course, is that in accepting the applications for employment of the four individuals in question as it has, the first-named defendant has breached the covenant in the sale of business agreement that it would not entice any person from the plaintiff who was within the one year period before 1 September 2001 an employee of the original businesses.

1. In my opinion it is not an act of enticement for a person who intends to operate a new business to insert advertisements in the press seeking employees for the new business.

1. Further, if an employee of the former business is aware that his old employer intends to establish a new business and approaches the old employer seeking employment in the new business and ultimately accepts an offer of employment made to him which he finds attractive but which another person may not - he may find it attractive because the terms on which he is to be employed may be more convenient for him in the sense, for example, that the new business may be much closer to his place of residence than the former business - then in such circumstances it cannot be said that the original employer has enticed him away from the old business.

1. A former employee of a business taken over by a new entity cannot be restrained, at least in my opinion, from later seeking employment with the new entity if he is so minded, all the more so if he, because of his own personal situation, considers the position he is able to obtain with the new entity to be more advantageous to him and to his way of life than the position with the old entity.

1. I am not satisfied therefore that there is a serious issue to be determined in this proceeding and on that basis alone I would refuse the application for an interlocutory injunction.

1. There is one other basis upon which I would refuse the application: Contrary to the terms of the agreement entered into between the parties that damages would not be adequate compensation to the plaintiff if ultimately it is entitled to relief, I take the view it is strongly arguable that damages would and that a court properly seized of the proceeding would not have very great difficulty in making an appropriate award.

1. Accordingly, the application for injunctive relief is dismissed.

1. I order that the plaintiff pay the defendants costs of the application.

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