COURT IN THE IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA DOYLE CJ(1), MATHESON(2) AND DEBELLE(3) JJ
CWDS Contracts - general contractual principles - illegal and void contracts - contracts contrary to public policy - Deed restraining employee's involvement in certain businesses - restraint reasonable as to duration and area - restraint on involvement in 'any capacity' - particular capacities also stated - wide definition including particular capacities cannot be read down by reference to events not within contemplation of parties - definition unreasonably wide - severance - severance a question of parties' intention - particular capacities severed from definition of capacity. Brooks v Burns Philp Trustee Co Ltd (1969)121 CLR 432; Attwood v Lamont (1920) 3 KB 571, applied. Home Counties Dairies Ltd v Skilton (1970) 1 All ER 1227, distinguished.
HRNG ADELAIDE, 18 August 1995 #DATE 2:11:1995 #ADD 12:12:1995
Counsel for appellant: Mr M Frayne
Solicitors for appellant: Fisher Jeffries
Counsel for respondent: Mr F Difazio
Solicitors for respondent: White Berman
ORDER Appeal allowed.
JUDGE1 DOYLE CJ This is an appeal from a decision of a District Court Judge holding that a provision contained in a "Non-Competition Deed" made between the appellant as employer and the respondent as employee was not enforceable as against the employee. The relevant provision restrained the employee, after termination of the employment, from involvement in certain types of business. The Judge found that the restraint was not enforceable because although it was reasonable as to area and duration, it was unreasonable in relation to the range of activities restricted by the provision. Accordingly, the restraint afforded more than reasonable or adequate protection to the party in whose favour it was imposed, and so applying common law principles relating to restraint of trade clauses it was unenforceable.
2. I have read in draft the judgments of Matheson J and Debelle J. I agree with them that the employer's appeal should be allowed, the Notice of Contention filed by the employee that the restraint was unreasonable both as to area and duration notwithstanding. The matter should be remitted to the District Court for assessment of damages.
3. However, because I have reached that conclusion by an approach which differs in some respects from the approach taken in those judgments, it is necessary for me to set out my reasons for agreeing with them in the ultimate conclusion. I will do so briefly.
4. I do not propose to repeat the facts. They are to be found in the judgments of Matheson J and Debelle J.
5. I agree with most of what is to be found in those judgments. In particular, I agree with their conclusion that the District Court Judge erred in his approach to the interpretation of the restraint, and that the restraint in cl 2.2(a)(ii) is intended to limit the employee only from involvement in a business which is competitive with the business divisions of the employer in which the employee was employed. I agree that…
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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AGLC
Rentokil Pty Ltd v Lee [1995] SASC 5318
Case
[1995] SASC 5318
Decision Date
CaseChat Overview and Summary
Rentokil Pty Ltd, an employer, appealed against a decision of the District Court that a provision in a "Non-Competition Deed" made between Rentokil and its former employee, Ms Lee, was unenforceable. The relevant provision restrained Ms Lee, after termination of her employment, from involvement in certain types of business. The District Court Judge found that the restraint was not enforceable because although it was reasonable as to area and duration, it was unreasonable in relation to the range of activities restricted by the provision. The appeal was allowed and the matter was remitted to the District Court for assessment of damages. The Full Court found that the District Court Judge erred in his approach to the interpretation of the restraint and that the restraint in cl 2.2(a)(ii) was intended to limit the employee only from involvement in a business which was competitive with the business divisions of the employer in which the employee was employed. In principle such a restraint was reasonable and therefore enforceable. The restraint was also reasonable as to area and duration. However, the restraint was shown to be no more than is reasonable in the interests of the parties and in the interests of the public notwithstanding the operation given to it by the definition of "capacity" in cl 1.1 of the Deed. The expressions which provided protection to the employer which was more than reasonable could be severed from the meaning given to "capacity" without altering the underlying scope or intention of the Deed.