Redwood Anti-Ageing Pty Limited v Knowles

Redwood Anti-Ageing Pty Limited, a company engaged in the manufacture and sale of pharmaceutical products, brought an action against Mr Knowles, a former employee, for breach of contract and seeking restitution. The case before the court involved claims that Mr Knowles had breached contractual terms prohibiting him from soliciting employees and inducing them to leave the company, as well as seeking remuneration for services rendered. The court was required to determine whether the contract was void due to its breach of statutory provisions and if a claim for restitution was available in such circumstances. Additionally, the court had to assess whether the reproduced material in the case constituted a "substantial part" of the original work under the Copyright Act 1968.

The court held that the contract was void because it contravened section 25(1) of the Pharmacy Act 1964, rendering it illegal. Despite this, the court acknowledged that a claim for restitution might still be available in some instances. The court reasoned that the principle of restitution, which aims to prevent unjust enrichment, could apply even in the context of void contracts if it was necessary to prevent unjust enrichment. The court found that Mr Knowles had indeed been unjustly enriched, and thus, a restitutionary remedy was appropriate. In terms of the contractual term prohibiting solicitation, the court held that it was enforceable and that Mr Knowles had indeed breached it.

The court ordered that Mr Knowles was to pay Redwood Anti-Ageing Pty Limited the sum of $100,000 by way of restitution, reflecting the value of the services provided during the period of the breach. The court also confirmed the enforceability of the non-solicitation clause in the contract. The decision highlighted the complex interplay between statutory illegality, contract law, and the principles of restitution.