Pellet Experts Pty Ltd v Smith

Pellet Experts Pty Ltd sought injunctive relief against the first and second defendants, who were former employees, restraining them from engaging in business that was in competition with the plaintiff as well as from disclosing or using confidential information of the plaintiff. The primary judge heard the matter on an interlocutory basis. The central legal issues were whether there was a reasonable question to be tried on the merits of the case and if the balance of convenience lay in favour of the plaintiff.

The court considered the nature and content of the restrictive covenants in the employment contracts, the legitimate business interests of the plaintiff, and the likely prejudice to the plaintiff if the injunctions were not granted. The court found that the restrictive covenants were reasonable and necessary to protect the plaintiff’s legitimate business interests. The court was satisfied that the balance of convenience favoured the grant of the injunctions. The court concluded that there was a reasonable question to be tried on the merits and that the plaintiff had made out a prima facie case for the grant of the injunctions.

The court granted the injunctions sought by the plaintiff. The first and second defendants were restrained from engaging in any business that was in competition with the plaintiff for a period of twelve months. They were also restrained from disclosing or using any confidential information of the plaintiff. The plaintiff was ordered to provide security for the costs of the second and third defendants.