Appeal Outcome: Special leave dismissed with costs by the High Court, 31 July 2009 s69/2009
New South Wales
Court of Appeal
CITATION: Miles v Genesys Wealth Advisers Limited [2009] NSWCA 25 HEARING DATE(S): 10 December 2008, 11 December 2008
JUDGMENT DATE:
24 February 2009JUDGMENT OF: Hodgson JA at 1; Basten JA at 54; Handley AJA at 55 DECISION: (1) Order 1 below varied by substituting for par a(ii) thereof the following:
(ii) in any capacity or role, a business conducted or carried on or to be conducted or carried on within Australia which is competitive with the business of the Plaintiff and which involves the provision of financial products or services to retail clients by the agency of financial planning firms or practices.
(2) Notes 4 and 5 below deleted.
(3) Appeal otherwise dismissed.
(4) Appellant to pay respondent’s costs of the appeal.CATCHWORDS: CONTRACTS – Employment – Equity – Restraint of Trade – Covenant by employee on termination not to engage in identified business and not to deal with clients for 30 months – Proscribed business identified by reference to potentiality for use of confidential information to employer’s detriment – Whether confidential information needed to be identified with precision – Whether “clients” included certain agents of the employer – Whether period of restraints excessive. LEGISLATION CITED: Restraints of Trade Act 1976 s 4 CATEGORY: Principal judgment CASES CITED: Australian Retail Wholesalers v Stafford [2007] NSWSC 572; (2007) ATPR 42-168
Beak v Robson [1943] AC 352
Connors Bros Ltd v Connors [1940] 4 All ER 179 PC
DalySmith Corporation (Australia) Pty Limited v Cray Personnel Pty Limited (Supreme Court of New South Wales, Young J, 14 April 1997, unreported)
Del Casale v Artedomus (Australia) Pty Limited [2007] NSWCA 172; (2007) 73 IPR 326
DTR Nominees Pty Limited v Mona Homes Pty Limited (1978) 138 CLR 423
GlaxoSmithKline Australia Pty Ltd (GSK) v Ritchie [2008] VSC 164; (2008) 77 IPR 306
Haynes v Doman [1899] 2 Ch 13 at 25-26
Herbert Morris Limited v Saxelby [1916] 1 AC 688
Higgs v Olivier [1952] Ch 311 CA
John Fairfax Publications v Birt [2006] NSWSC 995
Kone Elevators Pty Limited v McNay (No 2) (1997) Aust Contract R 90-080
Koops Martin v Dean Reeves [2006] NSWSC 449
Littlewoods Organisation Limited v Harris [1977] 1 WLR 1472
Mason v Provident Clothing and Supply Co Limited [1913] AC 724
O’Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310
Peppers Hotel Management Pty Limited v Hotel Capital Partners Limited [2004] NSWCA 114
Pioneer Concrete Services Limited v Galli [1985] VR 675
Portal Software v Bodsworth [2005] NSWSC 1179
Sir W C Leng & Co v Andrews [1909] 1 Ch 763
Stenhouse Ltd v Phillips [1974] AC 391
Woolworths Limited v Olson [2004] NSWCA 372
Wright v Gasweld Pty Limited (1991) 22 NSWLR 317TEXTS CITED: J D Heydon The Restraint of Trade Doctrine, 3rd ed, (2008) PARTIES: Raymond John MILES (Appellant)
GENESYS WEALTH ADVISERS LIMITED (Respondent)FILE NUMBER(S):
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Details
- Case
- [2009] NSWCA 25
- Decision Date
CaseChat Overview and Summary
The dispute in *Miles v Genesys Wealth Advisers Ltd* concerned the enforceability of post-employment restraints of trade. The appellant, Mr Miles, was an employee of the respondent, Genesys Wealth Advisers Ltd, a financial planning firm. Upon termination of his employment, Mr Miles was subject to covenants preventing him from engaging in a competitive business and dealing with certain clients for a period of 30 months. Mr Miles challenged the validity of these covenants. The matter was heard in the Court of Appeal of New South Wales.
The Court of Appeal was required to determine whether the restraint of trade clauses were valid and enforceable. Specifically, the court considered whether the proscribed business was sufficiently defined, whether the term "clients" included certain agents of the employer, and whether the 30-month restraint period was excessive. The court also had to consider whether the confidential information relied upon by the employer needed to be identified with precision for the restraint to be valid.
The Court of Appeal reasoned that the restraint was designed to protect Genesys' legitimate business interests, namely its confidential information and client relationships. While the precise identification of all confidential information was not required, the description of the proscribed business needed to be sufficiently clear to inform the employee of the scope of the restriction. The court found that the definition of "clients" was broad enough to encompass certain agents, and that the 30-month period was not inherently excessive given the nature of the financial planning industry. However, the court did vary one of the restraint clauses to clarify the scope of the prohibited business.
Consequently, the appeal was largely dismissed, with the court varying the original order by substituting a more precise definition for the proscribed business. The appellant was ordered to pay the respondent's costs of the appeal.
The Court of Appeal was required to determine whether the restraint of trade clauses were valid and enforceable. Specifically, the court considered whether the proscribed business was sufficiently defined, whether the term "clients" included certain agents of the employer, and whether the 30-month restraint period was excessive. The court also had to consider whether the confidential information relied upon by the employer needed to be identified with precision for the restraint to be valid.
The Court of Appeal reasoned that the restraint was designed to protect Genesys' legitimate business interests, namely its confidential information and client relationships. While the precise identification of all confidential information was not required, the description of the proscribed business needed to be sufficiently clear to inform the employee of the scope of the restriction. The court found that the definition of "clients" was broad enough to encompass certain agents, and that the 30-month period was not inherently excessive given the nature of the financial planning industry. However, the court did vary one of the restraint clauses to clarify the scope of the prohibited business.
Consequently, the appeal was largely dismissed, with the court varying the original order by substituting a more precise definition for the proscribed business. The appellant was ordered to pay the respondent's costs of the appeal.
Orders
Orders of the court
(1) Order 1 below varied by substituting for par a(ii) thereof the following: (ii) in any capacity or role, a business conducted or carried on or to be conducted or carried on within Australia which is competitive with the business of the Plaintiff and which involves the provision of financial products or services to retail clients by the agency of financial planning firms or practices. (2) Notes 4 and 5 below deleted. (3) Appeal otherwise dismissed. (4) Appellant to pay respondent's costs of the appeal.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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