Perry v Judge No. DCCIV-01-1698 - [2002] SADC 39

N E PERRY PTY LTD –v- ALLAN JUDGE & ORS.
[2001] SADC 1698/01
Judge Robertson
Civil
Introduction

The plaintiff has for many years operated a chiropractic clinic under the name of “Whyalla Better Back” (“Whyalla Clinic”) in the township of Whyalla. From November 1998 until the end of October 2001 the first defendant (“Dr Judge”) worked as the sole chiropractor in the Whyalla Clinic. Dr Judge’s presence at the Whyalla Clinic during that period arose out of a written agreement entitled “Agreement for Services” dated 22 July 1998 (“the Contract”). I have used the word “presence” deliberately as it will be seen shortly that one of the issues in the Trial was whether the Contract to provide chiropractic services at the Whyalla Clinic was entered into by Dr Judge personally or by the second defendant AMJ Chiropractors Pty Ltd (sometimes called “AMJ Chiropractors”).
AMJ Chiropractors is and at the time the Contract was entered into, a company operated by Dr Judge and his wife Malina Judge, who is also a chiropractor. The other party to the Contract is the plaintiff.
The Contract was for a period of three years with a right of renewal for two years. Dr Judge commenced practice at the Whyalla Clinic on 1 November 1998 and ceased practice on 31 October 2001. On 1 November 2001 he commenced to practise as a chiropractor in Whyalla at a clinic conducted under the name of “Access Chiropractors”. That clinic is operated by the company AMJ Chiropractors. Dr Malina Judge, was at that time already practising as a chiropractor at Access Chiropractors. It was Dr Judge’s commencement to practice as a chiropractor at the Access Chiropractors Clinic, which was the genesis of these proceedings.
Nature of the Proceedings.
Clause 10 of the Contract provides as follows:-
“10. NON COMPETITION
The Contractor acknowledges that he/she will be introduced to the client list relating to the Clinic. The contractor agrees that in consideration of this Agreement they will not use the information contained therein for their own benefit and will not seek to induce any client of the Clinic to become a client of the Contractor for a period of 2 years following the termination of this Agreement. The Contractor agrees that they will not practice for 2 years within the township of Whyalla, or within a 30 km radius of the said practice in Schedule 4 (the clinic).”
The Plaintiff relies upon the terms of the non-competition covenant contained in the last sentence of that Clause in seeking an injunction restraining Dr Judge from continuing to practise as a chiropractor in Whyalla.
The Plaintiff also claims that Dr Judge has induced some of the patients of the Whyalla Clinic to consult with him at Access Chiropractor Clinic. Relying upon the non-inducement provision contained in the second sentence in Clause 10, the Plaintiff also seeks injunctive relief restraining Dr Judge from seeking to induce any client of the Plaintiff to consult with him.
I mentioned earlier that one of…

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: [2002] SADC 39
Decision Date: 23 April 2002

CaseChat Overview and Summary

The plaintiff, NE Perry Pty Ltd, sought to enforce the terms of a non-competition and non-inducement clause in a written contract against Dr Allan Judge and AMJ Chiropractors Pty Ltd. The contract was for Dr Judge to provide chiropractic services at the Whyalla Clinic for a period of three years. After the contract ended, Dr Judge commenced practice at a new clinic, Access Chiropractors, in Whyalla, which was operated by AMJ Chiropractors, a company he co-owned with his wife. The plaintiff sought an injunction against Dr Judge and AMJ Chiropractors for breach of the non-competition and non-inducement clauses in the contract. The court found that AMJ Chiropractors, not Dr Judge personally, was the contracting party. It held that the two-year non-competition and non-inducement clauses were unreasonable restraints of trade and thus unenforceable. The court also found that AMJ Chiropractors had not breached the non-inducement clause through Dr Judge's conversations with patients or through advertising the new clinic. The plaintiff's claims were dismissed, and judgment was entered for the defendants.

The court will hear the parties on what further orders are required and on the question of costs.

Orders