Lydia Brichta on Behalf of the Pet Vet Woodpark Animal Hospital v Torrag Pty Ltd

The Supreme Court of New South Wales heard an application by Lydia Brichta, on behalf of the Pet Vet Woodpark Animal Hospital, seeking to restrain Torrag Pty Ltd from continuing to operate a veterinary hospital at a particular premises. The dispute concerned the interpretation of a restrictive covenant within a deed of sale for the premises, which prohibited the vendor from carrying on a veterinary practice within a five-mile radius of the purchased property.

The central legal issue before the Court was whether Torrag Pty Ltd, by operating a veterinary hospital at the subject premises, was in breach of the restrictive covenant. This required the Court to determine the scope and enforceability of the covenant, particularly in light of the fact that Torrag Pty Ltd was the purchaser of the premises and the covenant was intended to protect the purchaser's business interests. The Court also considered whether the covenant was void for uncertainty or as an unreasonable restraint of trade.

Justice Ian Forno found that the restrictive covenant was not void for uncertainty and was enforceable. His Honour reasoned that the covenant was designed to protect the goodwill of the business sold by the vendor, and that the vendor's subsequent operation of a veterinary hospital at the same premises, albeit under a different company name, constituted a breach of the covenant. The Court applied principles of contract interpretation and the law relating to restraints of trade, concluding that the covenant was reasonable in its scope and necessary to protect the legitimate interests of the purchaser.

The Court ordered that Torrag Pty Ltd be restrained from carrying on a veterinary practice at the premises.