Mowlem v Chisholm

In *Mowlem v Chisholm* [1996] NSWCA 373, the New South Wales Court of Appeal considered a dispute between a former employer, Mowlem, and a former employee, Chisholm. The core of the disagreement concerned the interpretation and enforceability of a restraint of trade clause contained within Chisholm's employment contract. Mowlem sought to prevent Chisholm from engaging in certain activities following the termination of his employment, alleging a breach of this clause.

The primary legal issue before the Court of Appeal was whether the restraint of trade clause in the employment agreement was reasonable and therefore legally enforceable. This involved determining whether the restrictions imposed on Chisholm's future employment were wider than necessary to protect Mowlem's legitimate business interests, such as its trade connections and confidential information. The court had to assess the scope, duration, and geographical reach of the restraint in light of established legal principles governing such clauses.

The Court of Appeal ultimately found that the restraint of trade clause was unreasonable and therefore void. The court reasoned that the restrictions imposed were too broad in their geographical scope and duration, extending beyond what was necessary to protect Mowlem's legitimate business interests. Applying the principles of contract law concerning restraints of trade, the court held that the clause sought to prevent competition rather than protect specific proprietary interests, rendering it unenforceable. Consequently, the Court of Appeal dismissed Mowlem's appeal and upheld the decision of the lower court.