Presfire Pty Ltd v Rezk - [1999] NSWSC 161

CITATION: Presfire Pty Ltd v Rezk [1999] NSWSC 161

CURRENT JURISDICTION: Equity

FILE NUMBER(S): 5095/98

HEARING DATE(S): 2; 3 March 1999

JUDGMENT DATE:
3 March 1999

PARTIES :

Presfire Pty Limited (Plaintiff)
Manal Rezk (Defendant)

JUDGMENT OF: Young J

COUNSEL : Plaintiff: Marcus S Jacobs QC
Defendant: A R Moses

SOLICITORS: Plaintiff: Rita Hanna & Associates
Defendant: Tress Cocks & Maddox

CATCHWORDS: Contracts [6]; Uncertain promises; Restrictive covenant; Verbal contract; Covenant never precisely formulated; Not a term of the contract; Trade & Commerce [22]; Restraint of trade; Medical centre and doctor; No contract of employment; Good restriction to protect centre's goodwill; Whillans v Ashcoast Pty Ltd (Q'ld C/A 6.3.1998) followed

DECISION: Proceedings dismissed

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
YOUNG, J
WEDNESDAY 3 MARCH 1999
5095/98 - PRESFIRE PTY LTD V MANAL REZK
JUDGMENT
1 HIS HONOUR : These proceedings were listed as an application for interlocutory injunction before the Duty Judge yesterday. As a result of the settlement of the case in my list, when the proceedings were transferred to me, with the consent of both parties, the claim for injunction was heard on a final basis.
2 The plaintiff is the service company of a medical centre at Mount Druitt. The defendant is a registered medical practitioner.
3 The arrangement between the plaintiff and the defendant is not one which can easily be classified within traditional categories. The evidence shows that the plaintiff is a company whose sole shareholders and directors are Dr Nihal Hanna and her husband Mr Nabil (Bill) Hanna. They service a medical centre which at all material times is the workplace for four doctors. However, there is no evidence that there is any contractual or other relationship between those doctors inter se. The doctors are not employees of the plaintiff, in the sense that none of them receive wages, but the overall centre is organised by the plaintiff, without, it would seem, any control by those doctors. There is at least consensus amongst the officers of the plaintiff and the doctors as to the hours the doctors will work and the amount of annual leave received.
4 The evidence shows that the area in question, which is centred in Mount Druitt, is attractive as a place of residence to people who are of Egyptian or Sudanese background and particularly members of the Coptic Church. Dr Hanna, Mr Hanna and the defendant, Dr Rezk, are people who are in the former category.
5 Dr Hanna recruited Dr Rezk when the latter had just finished her training. Dr Hanna said that she asked Dr Rezk whether she would be interested in coming to work for the plaintiff's medical centre. She says that she told Dr Rezk:
"Your income will be in accordance with the number of patients you see. You will be paid 45 percent of your gross income every two weeks. The Centre takes the other 55 percent and in return it provides you with all of your facilities, such as advertising,…

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: [1999] NSWSC 161
Decision Date: 3 March 1999

CaseChat Overview and Summary

In the case of Presfire Pty Ltd v Rezk, the dispute arose between the plaintiff, a medical centre, and the defendant, a doctor who had previously worked for the plaintiff. The case was heard in the Supreme Court of Queensland. The primary issue before the court was whether the defendant was bound by a restrictive covenant preventing him from competing with the plaintiff in the vicinity of the medical centre.

The court had to determine whether a verbal agreement made between the parties during the defendant's employment constituted a binding restrictive covenant. The plaintiff argued that the defendant had agreed not to compete with the plaintiff for a specified period and within a defined area. The defendant, on the other hand, contended that any such agreement was uncertain and had never been precisely formulated, and therefore could not be enforced.

The court found that the agreement between the parties was indeed verbal and lacked precision, and thus could not be considered a term of the contract. The court followed the precedent set in Whillans v Ashcoast Pty Ltd, where it was held that a vague and imprecise promise could not be enforced as a restrictive covenant. The court further held that there was no contract of employment between the parties, which would have made the restrictive covenant more likely to be enforceable. However, the court did acknowledge that a well-formulated restrictive covenant could be valid if it was necessary to protect the plaintiff's goodwill. In this case, however, the court found that the restriction was not sufficiently precise to be enforceable. The court therefore dismissed the plaintiff's claim.

Orders