Louvain Nominees Pty Ltd v Cesure Pty Ltd

The Supreme Court of Western Australia was asked to decide whether an interlocutory injunction should be granted to Louvain Nominees Pty Ltd against Cesure Pty Ltd and Christopher Fabiano Candeloro to prevent them from opening a new clothing store in Albany, in breach of a non-competition clause in a sale agreement. The plaintiff, Louvain Nominees, had purchased the Mad Marty's surf and leisurewear business from Cesure in August 1998, subject to a condition that the vendor would not carry on a similar business within a 20-kilometre radius for seven years. The defendants proposed to open a new store nearby, selling DVD materials, music, an associated internet cafe, and clothing, which the plaintiff claimed would breach the restraint of trade. The court had to decide whether the restraint of trade was valid, enforceable, and if the balance of convenience favoured granting the injunction.

The court found that there was a serious question to be tried regarding whether the restraint of trade was valid and enforceable. It was clear that there was likely to be substantial overlap between the businesses, and the restraint was reasonable in scope, duration, and area. However, these issues would ultimately be resolved by examining all the evidence at the trial. The court also considered the balance of convenience and concluded that it favoured prohibiting the defendants from opening the new store, as allowing them to do so might cause irreparable damage to the plaintiff's business. The court accepted the plaintiff's undertaking as to damages but reserved the liberty to apply for supplementary undertaking or alternative security if needed.

The court granted an interlocutory injunction in the terms sought by the plaintiff but directed the parties to confer over a period of 7 days to attempt to reach agreement upon the terms of the injunction. The court reserved the liberty to apply to settle the terms of the order in the event that no agreement was reached.