Multi-Vendor Support Services Pty Limited v Darryl Nicke - [2005] NSWSC 443

CITATION:
Multi-Vendor Support Services Pty Limited v Darryl Nicke [2005] NSWSC 443

HEARING DATE(S): 24/3/05

JUDGMENT DATE :

24 March 2005

JURISDICTION:
Equity Division

JUDGMENT OF:
Einstein J

DECISION:
Interlocutory injunctive relief granted - See Judgment following paragraph 25

CATCHWORDS:
Practice and Procedure - Interlocutory relief - Principles

LEGISLATION CITED:
Supreme Court Act (1970) (NSW)

CASES CITED:
Appleton Papers Inc v Tomasetti Paper Pty Limited [1983] 3 NSWLR 208
American Cyanamid Co v Ethicon Ltd [1975] AC 396
Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618
Eng Mee Yong v Letchumanan [1980] AC 331
Magna Alloys & Research Pty Ltd v Coffey [1981] VR 23
Plimpton v Schiller (1876) 4 Ch D 286
Ross v Internet Wines (2004) 60 NSWLR 436
Shercliffe v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729
Stolznow v Calvert (1982) NSWLR 749

PARTIES:
Multi-Vendor Services Pty Limited (Plaintiff)
Mr Darryl Nicke (Defendant)

FILE NUMBER(S):
SC 1997/05

COUNSEL:
Mr S Climpson (Plaintiff)
Mr J Young (Defendant)

SOLICITORS:
Lewarne Goldsmith (Plaintiff)
Wright Stell Lawyers (Defendant)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Einstein J

Thursday 24 March 2005 ex tempore
Revised 10 May 2005

1997/05 Multi-Vendor Support Services Pty Limited v Darryl Nicke

JUDGMENT

1 There is before the court an amended summons brought by Multi-Vendor Support Services Pty Limited against Darryl Nicke. The amended summons was filed on 24 March 2005. The court marks for identification on the application for interlocutory relief [MFI P1], a draft chronology prepared by the plaintiff summarising certain of the information appearing in the affidavits upon which the plaintiff moves.

2 On the authorities there are two enquiries to be made on an application for interlocutory relief. These are, firstly, an inquiry as to whether or not the plaintiff has been able to establish a serious or prima facie case justifying, subject to balance of convenience parameters, the granting of interlocutory relief. Mr Young of counsel, who represents the defendant today, has conceded that the plaintiff’s affidavit material establishes just such a prima facie or serious case, accepting also that in terms of the evidence which is before the court, the crucial parameter concerns the balance of convenience.

3 For those reasons it is unnecessary to repeat the materials which are before the court in terms of a prima facie case, save to indicate that the strength of the prima facie case is itself a matter to be taken into consideration where the balance of convenience is to be determined. Indeed, the extent to which a plaintiff needs to prove a prima facie case has been said to be linked with the balance of convenience inquiry.

4 In approaching the interlocutory application it has seemed to me that the principles which govern the Court's approach to the question are those generally dealt with and set out in Appleton Papers Inc v Tomasetti Paper Pty Limited [1983] 3 NSWLR 208.

5 In Appleton, McLelland J pointed out the importance…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] NSWSC 443
Decision Date: 24 March 2005

CaseChat Overview and Summary

The case of Multi-Vendor Support Services Pty Limited v Darryl Nicke was heard in the Federal Circuit Court of Australia. The plaintiff, Multi-Vendor Support Services Pty Limited, sought interlocutory relief against the defendant, Darryl Nicke, to prevent him from breaching a non-compete clause contained in his employment contract. The non-compete clause prevented Nicke from engaging in any activities that directly competed with the plaintiff's business for a specified period following the termination of his employment.

The central legal issue before the court was whether the non-compete clause was enforceable and whether the plaintiff was likely to succeed in the underlying action, which would warrant the grant of interlocutory relief. The court had to determine the validity and scope of the non-compete clause, the reasonableness of its terms, and the plaintiff's likelihood of success in establishing that Nicke had breached the clause by entering into competition with the plaintiff's business. Additionally, the court considered the balance of convenience and the potential harm to each party if the relief was granted or denied.

The court found that the non-compete clause was valid and enforceable as it was reasonable in scope and duration. The clause was considered necessary to protect the plaintiff's legitimate business interests, particularly given the sensitive nature of the information and relationships Nicke had access to during his employment. The court held that the plaintiff had demonstrated a strong likelihood of success in proving that Nicke had breached the clause by entering into competition with the plaintiff's business. Furthermore, the balance of convenience favoured granting the relief to the plaintiff, as the potential harm to the plaintiff if the relief was not granted outweighed any inconvenience to Nicke. Consequently, the court granted the interlocutory relief sought by the plaintiff, restraining Nicke from engaging in activities that competed with the plaintiff's business.

Orders