NE Perry Pty Ltd v Judge

In the case of NE Perry Pty Ltd v Judge, the appeal was brought against findings made by Judge, concerning a contract for chiropractic services and a subsequent restraint of trade clause. The Court of Appeal was tasked with reviewing the enforceability of the restraint of trade provisions contained within the contract. The appeal centred on whether the restraint of trade clauses, prohibiting the contractor from practising within a 30km radius of the clinic for two years and from soliciting the clinic’s clients for two years, were reasonable and enforceable.

The Court of Appeal found that the restraint on practice was unenforceable due to its unreasonableness. The Court determined that the period of the restraint was too long, as the connection and influence established by Dr Judge could still impact NE Perry’s interests even after the period of restraint had lapsed. The Court noted that the purpose of a restraint of trade is to protect the proprietary interest of the covenantee, but it cannot be an insurance against competition indefinitely. Additionally, the Court held that the restraint against inducing clients to switch practices was enforceable, as it was reasonable in the circumstances to protect NE Perry’s interests.

The Court of Appeal allowed the appeal, set aside the judgment of the District Court dismissing the plaintiff’s claim, and remitted the matter to the District Court for further consideration. The Court held that NE Perry must prove that it suffered any loss attributable to the proven breach of the restraint on inducement. Furthermore, the Court considered it appropriate for the District Court to decide whether an injunction or a declaration regarding the validity of the restraints should be granted.

In conclusion, the Court of Appeal found the restraint on practice to be unenforceable due to its unreasonableness, while the restraint against inducing clients to switch practices was enforceable. The case was remitted to the District Court for further consideration of the appropriate remedy and the potential for an injunction or declaration.