Mystic Crystals v Vynotas Pty Ltd

Mystic Crystals Pty Ltd (the applicant) sought an interlocutory injunction against Vynotas Pty Ltd (the respondent) to restrain alleged breaches of a restraint of trade clause contained within a franchise agreement. The application was heard in the Supreme Court of New South Wales.

The primary legal issue before Gummow J was whether the applicant had established a sufficient likelihood of success on the merits to warrant the grant of an interlocutory injunction. This required the court to consider the enforceability of the restraint of trade clause, specifically whether it was reasonable in scope and duration, and whether it went no further than was necessary to protect the legitimate business interests of the applicant.

Gummow J applied the established principles governing the grant of interlocutory injunctions, including the need to demonstrate a serious question to be tried and that the balance of convenience favoured the granting of the injunction. His Honour considered the nature of the business, the geographical area covered by the restraint, and the period for which it was intended to operate. The court also had regard to the potential for irreparable harm to the applicant if the injunction were not granted, weighed against the potential prejudice to the respondent if the injunction were granted but the applicant ultimately failed in its claim.

The application for an interlocutory injunction was dismissed.