National Office Products Ltd v Bourke
[2002] VSCA 129
•2 August 2002
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 5468 of 2002
| NATIONAL OFFICE PRODUCTS LTD. | |
| Appellant (Applicant) | |
| v. | |
| KRISTIN BOURKE | Respondent |
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APPLICATION ON SUMMONS
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JUDGES: | WINNEKE, P. and EAMES, J.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 2 August 2002 | |
DATE OF JUDGMENT: | 2 August 2002 | |
MEDIUM NEUTRAL CITATION: | [2002] VSCA 129 | |
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Application for expedited appeal - Injunction sought to restrain former employee from employment by competitor and enticement of customers - Relevant principles for order of expedition - Appellant seeking to make new case on appeal - Application refused.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr P.N. Vickery, Q.C. and Mr M. Pearce | Norton Gledhill |
| For the Respondent | Mr J. Kennan, S.C. and Mr A. McDonald | McDonald Murholme |
WINNEKE, P.:
Eames, J.A. will give the first judgment in this application.
EAMES, J.A.
By its amended summons dated 3 July 2002 the appellant National Office Products Limited (trading as Boise Cascade Office Products) makes application for the hearing of this appeal, which it commenced by notice of appeal filed 25 June 2002, to be expedited, and that the appeal be heard instanter. By its interlocutory proceedings the appellant had sought to enforce restrictive covenants in an agreement, titled "Confidentiality and Restraint Undertaking Policy", which had been signed by the respondent, its former employee, on 23 January 2002. Covenants in the agreement purported to restrain the respondent from working for a competitor of the appellant or from soliciting or attempting to solicit or entice customers, suppliers or employees, away from the appellant.
The appellant is a company which sells office products and in October 2000 it took over the business of Blue Star Office with which the respondent was employed as an IT sales specialist. Upon the takeover the respondent was re-employed by the appellant on the same terms and conditions by which she had been employed with Blue Star Office. In January 2002 the respondent was asked to re-sign the appellant's confidentiality document, she having previously signed such a document at the request of the appellant but having crossed out those clauses which the appellant now seeks to enforce. After first resisting the request that she do so the respondent eventually signed the document, without deleting any clauses from it. She contends that she only signed the document upon being pressured by her new manager to do so and after the manager had also made representations to the effect that the agreement was unenforceable.
On 14 March 2002 the respondent entered a contract of employment with National 1 Ltd., a competitor of the appellant, and the following day, 15 March 2002, she resigned from the appellant, effective immediately.
There followed correspondence between the appellant's solicitors and both the respondent and the solicitors for her new employer, whereupon the respondent's new employer advised that it would direct the respondent not to entice from the appellant any of its customers, suppliers or employees, which undertaking failed to placate the appellant. On 8 May 2002 the appellant commenced proceedings by summons seeking interlocutory relief by way of an interim injunction restraining the respondent, until 15 September 2002, from being employed by a competitor of the appellant or attempting to induce or entice customers or suppliers away from the appellant. That summons was returnable on 10 May 2002 in the Practice Court but was unable to be reached and an expedited hearing was ordered. The summons came on for hearing on 7 June, before a judge who heard oral evidence in addition to evidence by affidavit. On 11 June the judge announced his decision, dismissing the application for relief sought by the appellant and giving brief oral reasons. Revised reasons for judgment were provided on 19 June. On 25 June the appellant filed notice of appeal and on the same day filed an application for expedited hearing of the appeal.
The maximum period specified by the confidentiality document for the restraints was six months from the date of termination of employment with the appellant, and that period will expire on 15 September 2002. Having regard to that date, the appellant contended in its initial submissions that without an expedited hearing of the appeal being ordered its attempts to enforce the covenants would be rendered ineffective by the effluxion of time. That contention has now been supplemented by later submissions, which have been presented to this Court in the further outline of argument presented today, and I will deal with those shortly. Before turning to the modified approach as to the relief sought by the appellant, as emerged in its latest outline of argument, I shall deal with the relief sought initially in the Notice of Appeal.
By Rule 64.27(1)(c) two judges may hear an appeal from a judgment or orders in interlocutory applications, which these proceedings were. In any event, by s.11(1A) of the Supreme Court Act 1986, the President may constitute the Court to comprise two judges only. Counsel for the appellant urged us to therefore hear the appeal, initially the application seeking that that be done instanter. That would not be a convenient course and would be adopted only if it was necessary in the interests of justice to do so. Pressure of Court business suggests that it would be difficult to arrange for the hearing of this appeal (whether by a court of two or three judges) on a date prior to 15 September 2002, and the shift in the approach (or the adoption of an alternative approach) which is now evident in the application made to the Court, is probably a recognition of that fact on the part of the appellant's advisers. It is clear that the hearing of the appeal might occupy as much time as it did before the judge, which was in the order of a day. Given that the allocation of an urgent hearing date would inevitably impact to the disadvantage of other litigants, whose own hearing dates might be affected, the appellant carries a significant burden in persuading us that such an order for expedited hearing should be made.
Having regard to the volume of business of this Court there must inevitably be delays in processing appeals, notwithstanding the substantial efforts made to minimise delay. There are bound to be cases where there is particular urgency for the disposition of the appeal, but even within that category of urgent cases not all requests for expedition could possibly be accommodated. In 1995, in Elders Rural Finance Ltd v. Smith[1], the Court of Appeal in New South Wales generally adopted the guidelines which the English Court of Appeal had itself adopted[2] for determining whether expedition of an appeal should be granted. This Court has not adopted those guidelines, but they do provide guidance as to the considerations which bear upon decisions as to expedition.
[1](1995) 38 NSWLR 395.
[2]Unilever Plc c Chefaro Properties Ltd [1995] 1 W.L.R. 243, at 246.
The issues raised by the present appeal and the nature of the relief sought are not expressly identified as bringing this case within the category of cases which the English Court of Appeal accepted as being so urgent that justice could only be done if the appeal was heard immediately or within days, although it might be, faintly, contended that the appeal was of a kind where "a decision is about to be taken or implemented which will be irrevocable or confer rights on third parties" (Category 6 in the English Court of Appeal guidelines) or else, possibly, it might be said that this is an instance where "publication of allegedly unlawful material is imminent" (Category 7).
The English Court of Appeal said that the Court would try to arrange expedition where a party otherwise would suffer one or more of a listed series of disadvantages, one such disadvantage being that "the appeal would become futile". Whilst it was said in the present case that this is an instance where such futility would arise, the appellant would not be left without its remedy in damages, although I accept that it would be difficult for the appellant to prove that any lost business (if indeed there had been any such loss of business) occurred by reason of any breach of the agreement by the respondent. Furthermore, any award of damages might, in any event, be unsatisfied.
Although the amended summons before us seeks, in its terms, hearing of the appeal instanter, it was accepted in argument that it is simply not possible for that to occur. In the first place, and understandably, the appeal book was only filed yesterday and has not been considered by this Court. The appellant would wish to have the appeal listed and concluded prior to 15 September 2002, but failing that would generally seek expedition. The question, therefore, is whether the Court should make an order granting such expedition of the hearing of the appeal as it is possible for the Registrar to provide.
In considering that application I will assume, without deciding, that the appellant will be able to establish that in reaching his conclusion as to the balance of convenience the decision of the judge was tainted by error. However, even if that were to be the conclusion reached by the Court of Appeal, I am by no means persuaded that in exercising its own discretion in determining the balance of convenience the Court would conclude that the balance of convenience favours the granting of the relief sought by the appellant, either in the terms of relief sought initially or as today proposed.
In the hearing below counsel for the appellant announced what was said to be an open offer, whereby it waived its claim to have six months' restraint on employment with a competitor imposed, and said the appellant would accept as an outcome of the hearing a restraint in that regard of only three months (which period of restraint would terminate only a mere four working days after the hearing before his Honour). The appellant continued to seek a six months restraint with respect to the solicitation covenant.
Having regard to the fact that the appellant was willing to accept a restraint of only three months as to the respondent's right to obtain or hold employment with a competitor (that period expiring only a week after the hearing), the Court would be entitled to conclude that there is and was no demonstrated necessity for the enforcement of that restraint for any longer period. Given that the respondent has now been in employment with her new employer for nearly four months, the inconvenience to her of now being required to terminate her employment would be exacerbated even beyond that which pertained when his Honour made his decision in her favour.
As to the restraint until 15 September 2002 on enticement of customers, suppliers and employees of the appellant (which remains the relief sought, in terms, by the Notice of Appeal but which has been overtaken by the terms of the injunction which has been sought in argument) I am not persuaded that any such order, if now made, would have utility. There was some evidence before his Honour that soon after commencing her new employment the respondent had contact with three former clients of the appellant, and that, as at 6 June 2002, one of those clients had not placed an order with the appellant since late February 2002. We were informed today, however, that in fact that client had placed its orders with another company, not with the company with which the respondent is now employed. There does not appear, therefore, to be any direct evidence that the respondent had acted in breach of the terms of the confidentiality agreement with the appellant, nor is there evidence of any apparent continuing, or threatened, breach. Counsel for the appellant contend that it may be inferred from the respondent's refusal to give a personal undertaking (rather than rely on the undertaking given by her new employer) that she will breach her obligations of confidentiality to the appellant. As I have noted, the undertaking was offered by her employer, but it was announced by her counsel that she abided by and accepted that undertaking which the firm had given.
Whilst accepting, without deciding, that evidence that there has been such enticement by the former employee is not necessary in order that such a covenant might be enforced, the absence of such evidence remains a relevant consideration when considering whether, in the exercise of its discretion, the Court should grant the indulgence of an expedited hearing. Indeed, the written submission of the appellant, as at first filed, acknowledged that there would be limited benefit to the appellant in the making of an order which was limited to the restraint of enticement, and which did not extend, also, to a restraint on employment until 15 September 2002.
The appellant contends that unless an order restraining the respondent in accordance with either or both covenants is made before 15 September then its proceedings have been rendered nugatory, notwithstanding their legal merits. In my view, notwithstanding the arguments advanced before us on behalf of the appellant, his Honour was quite right to conclude that the legal merits of the respondent's claim were not unarguable. In those circumstances the making of an order of restraint would, in turn, equally render nugatory any defence to the proceedings which the respondent might have, and the disadvantage to the respondent, thereby, might not be entirely met by virtue of the appellant's undertaking as to damages.
In the hearing before us today a further written outline was filed and counsel advised that an order is now sought for the grant of an interlocutory injunction in these terms:
"Upon the usual undertaking of the plaintiff until the trial of the proceeding or further order, the defendant by her servants and agents be restrained -
(a)from using any of the confidential information of the plaintiff for the purpose of attempting to induce or entice any customer or supplier away from the plaintiff or for any other purpose in the course of business;
(b)from disclosing to her present employer, National 1 Ltd, or to any of its agents or employees whether directly or indirectly any of the confidential information of the plaintiff."
The terms of those orders which are now sought may be contrasted with the four alternative forms of injunction which were set out in the summons which initiated these proceedings. It is clear that not merely has there been a shift in position, an entirely new case is now sought to be advanced before this Court, on appeal, one which it seems to me was not advanced, at all, before the judge below. It is, indeed, conceded by counsel for the appellant that before the judge no order was sought in the terms which are now sought. The application for relief is now based on the equitable rights of confidentiality, and the terms of the written document, as signed by the plaintiff, seem to be almost an irrelevancy to the claim for relief. Whereas the claim for relief had been based on the specified periods of time to which the respondent had agreed to be restrained by virtue of the covenants, it is now put before this Court that an order should be made which has no limitation of time but enforces a common law right to confidentiality which is ongoing. In my view, an attempt to create on appeal an entirely new case to that which had been presented to the court below should be resisted.
In all the circumstances, I am not persuaded that this is an appropriate case to grant the indulgence which the appellant seeks for an order as to the urgent disposition of the appeal. In my view, in so far as the application for expedition seeks a hearing date before 15 September - if indeed it is still pressed - then that application should be rejected. Whilst I respectfully agree with the suggestion made by the learned President during argument that the Registrar of the Court of Appeal might be urged to give such expedition as may, in his judgment, be reasonably achievable for the disposition of this appeal (having regard to the state of the list), in my view it would not be appropriate to impose any obligation on the Registrar to ensure that this appeal be listed before 15 September 2002, or to impose any obligation otherwise as to time, save to request that the Registrar use his best endeavours to expedite the case to the extent that, in his view, it is reasonable to do so.
In my view, therefore, the application which has been brought before this Court for expedition, in so far as it seeks orders from this Court, should be rejected, and the application brought by summons should be dismissed.
WINNEKE, P.:
I agree, for the reasons given by Eames, J.A., that the orders which he proposes ought to be made.
On the amended summons it is ordered that the orders sought in paragraphs 1 and 2 - that is, that the hearing of the notice of appeal filed 25 June 2002 be expedited and that the appeal be heard instanter - are refused.
The order sought in paragraph 3, namely, that the appeal be allowed, is, for the reasons already stated, unable to be granted.
I simply note, as Eames, J.A. has pointed out, and as I said earlier, although this Court cannot promise expedition to enable the appeal to be heard before 15 September this year, we will be prepared to give such expedition as the Registrar can give to the hearing and disposition of this appeal. Whether that occurs before or after 15 September we cannot say.
(Discussion ensued as to costs.)
WINNEKE, P.:
The respondent's costs of this application should be paid by the appellant.
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