Network Ten Pty Limited v Seven Network (Operations) Limited - [2014] NSWSC 274

Supreme Court

New South Wales

Medium Neutral Citation: Network Ten Pty Limited v Seven Network (Operations) Limited [2014] NSWSC 274
Hearing dates: 17 March 2014
Decision date: 17 March 2014
Jurisdiction: Equity Division - Duty List
Before: Brereton J
Decision:
Application for interlocutory relief dismissed with costs.

Catchwords: EQUITY - equitable remedies - injunctions - application for interlocutory injunction - where principal issue is whether injunctive relief would be declined on discretionary or non-discretionary grounds at a final hearing - where granting an injunction against the second defendant would effectively reduce him to the alternative of working for the plaintiff or being idle - where the practical effect of granting an injunction against the first defendant (or any alternative employer with whom the second defendant might seek to take up employment) would be the same as granting an injunction against second defendant directly and thus amount to specific enforcement of contract of personal service - where neither side will suffer significant prejudice whether injunction is or is not granted - where the application thus largely hinges on the strength of the case for final relief -interlocutory relief refused
Cases Cited: Astor Electronics Pty Ltd v Japan Electron Optis Laboratory Co Ltd [1966] 2 NSWR 419
Atlas Steels (Australia) Pty Ltd v Atlas Steels Limited (1948) 49 SR (NSW) 157
Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337
Davies v Nyland (1975) Ten SASR 76
Hill v C A Parsons & Co Limited [1972] Ch 305
Lumley v Wagner (1852) 64 ER 1209
Page One Records Limited v Britton [1967] 3 All ER 822
Rely-A-Bell Burglar & Fire Alarm Company Limited v Eisler [1926] Ch 609
Seven Network (Operations) Ltd v Brown [2013] NSWSC 372
Warren v Mendy [1989] 3 All ER 103
Texts Cited: Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (4th Edition)
Category: Interlocutory applications
Parties: Network Ten Pty Limited (plaintiff)
Seven Network (Operations) Limited (first defendant)
John Stephens (second defendant)
Representation: Counsel:
D B Studdy SC w Ms S Mirzabegian (Plaintiff)
Dr A S Bell SC (Defendants)
Solicitors:
Baker & McKenzie (Plaintiff)
Johnson Winter and Slattery (Defendants)

File Number(s): 2014/78504

Judgment- EX TEMPORE

HIS HONOUR: By summons filed by leave of Darke J as duty judge, on 14 March 2014, the plaintiff Network Ten Pty Limited seeks an order restraining the second defendant John Stephens from soliciting, encouraging or accepting offers of employment or offers to provide services to any person or entity other than Network Ten in respect of the period 9 June 2014 to 8 June 2016 without Network Ten's consent, and an order restraining the second defendant Seven Network Operations Limited from assisting, inducing or otherwise procuring Mr Stephens to not perform his obligations to Network Ten, as provided for in an employment agreement between Mr Stephens and Network Ten, dated 6 March 2014. Other relief is sought, and other defendants are joined, but for present purposes what is before the Court is an application for an interlocutory injunction to the general…

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: [2014] NSWSC 274
Decision Date: 17 March 2014

CaseChat Overview and Summary

Network Ten Pty Limited applied for an interlocutory injunction against Seven Network (Operations) Limited and one of its employees. The dispute arose from a restrictive covenant in the employee's contract, which limited his ability to work for competing media companies for a specified period after his employment ended. The court had to determine whether the application for an interlocutory injunction should proceed on discretionary or non-discretionary grounds. Additionally, the court had to consider whether granting an injunction against the employee or the company would effectively force the employee to either work for the plaintiff or remain idle, and whether such an injunction would amount to specific enforcement of a contract of personal service.

The court noted that if the application hinged on the strength of the case for final relief, the applicant must demonstrate a strong likelihood of success at a final hearing. The court also considered the practical effect of granting the injunction against either party. It found that granting an injunction against the employee would essentially force him to either work for the plaintiff or be unemployed, which would amount to specific enforcement of a personal service contract. Similarly, granting an injunction against the company would have the same practical effect as doing so against the employee. The court concluded that neither party would suffer significant prejudice whether the injunction was granted or not, and that the application thus largely hinged on the strength of the case for final relief.

Accordingly, the court declined to grant the interlocutory injunction, stating that the application largely depended on the merits of the case for final relief. The court found that the applicant had not demonstrated a strong likelihood of success at a final hearing, and that the practical effect of granting the injunction would amount to specific enforcement of a personal service contract. As such, the application for interlocutory relief was refused.

Orders