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SAI Global Property Division Pty Ltd v Jones

SAI Global Property Division Pty Ltd v Jones

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Case Copied 13 April 2018 73 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: SAI Global Property Division Pty Ltd (ACN 089 586 872) v Jones & Ors [2018] NSWSC 438
Hearing dates: 9 & 12 March 2018
Date of orders: 11 April 2018
Decision date: 13 April 2018
Jurisdiction: Equity - Duty List
Before: Slattery J
Decision:
See paragraph 157; application dismissed.

Catchwords: EMPLOYMENT – Interlocutory injunction – the first defendant/employee leaves his employment with the plaintiff – the plaintiff and the second and third defendants are companies all operating in the IT industry – the first defendant initially proposes to work for the second defendant, a direct competitor of the plaintiff – the first defendant then changes course and signs an employment agreement with third defendant – the employment agreement between the plaintiff and the first defendant contains a restraint on a former employee working for “a competitor” for up to 12 months after the termination of his employment – an issue for final hearing is whether the first defendant’s proposed employment with the third defendant is employment with a “competitor” of the plaintiff within the meaning of the employment contract – whether there is a serious question to be tried – what is the balance of convenience in the circumstances.
Legislation Cited: Supreme Court Act 1970 (NSW), s 66(4)
Restraints of Trade Act 1976 (NSW), s 4
Cases Cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Beese v Woodhouse [1970] 1 All ER 769; [1970] 1 WLR 586
Buckley v Tutty (1971) 125 CLR 353; [1971] HCA 71
DP World Sydney Limited v Guy [2016] NSWSC 1072
Francome v Mirror Group Newspapers Ltd [1984] 2 All ER 408; [1984] 1 WLR 892
John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995
Kearney v Crepaldi & Ors [2006] NSWSC 23
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
McCarty v Council of the Municipality of North Sydney (1918) 18 SR (NSW) 210
Metcash Ltd v Joao Lewis Jardin [No 3] 2010 NSWSC 1096
Stacks/Taree Pty Ltd v Marshall (No 2) [2010] NSWSC 77
Veda Advantage (Australia) Pty Ltd v de Beer [2016] NSWSC 37
Woolworths Limited v Mark Konrad Olson (2004) NSWCA 372
Texts Cited: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed 2014, LexisNexis Butterworths) at [21–350]
Category: Procedural and other rulings
Parties: Plaintiff: SAI Global Property Division Pty Ltd (ACN 089 586 872)
First Defendant: Richard Jones
Second Defendant: InfoTrack Pty Ltd (ACN 092 724 251)
Third Defendant: Perfect Portal (Australia) Pty Ltd (ACN 105 662 557)
Representation:
Counsel:

Plaintiff: J. Hennessy SC; C. McMeniman
First to Third Defendants: A. Moses SC, Y. Shariff; V. Bulut

Solicitors:
Plaintiff: Michael Williams, Gilbert + Tobin
First to Third Defendants: Abraham Leon Ash, Clayton…

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: [2018] NSWSC 438
Decision Date: 13 April 2018

CaseChat Overview and Summary

SAI Global Property Division Pty Ltd sought an interlocutory injunction against Jones, its former employee, as well as against two companies operating in the IT industry. The dispute arose after Jones left his employment with SAI Global. Initially, Jones proposed to work for a direct competitor of SAI Global, but subsequently changed course and signed an employment agreement with a third company. The employment contract between SAI Global and Jones contained a clause prohibiting a former employee from working for a competitor for up to 12 months after the termination of their employment. The primary legal issue was whether the third company was a competitor of SAI Global, thereby rendering Jones's employment with it in breach of the restraint clause. The court also had to determine whether there was a serious question to be tried and assess the balance of convenience.

The court examined the nature of the third company’s operations and whether it was sufficiently similar to SAI Global’s to be considered a competitor. It considered the broader context of the IT industry, the specific services provided by each company, and the competitive dynamics between them. The court evaluated the likelihood of success on the merits and the potential for prejudice to the parties involved. It found that there was a serious question to be tried regarding the competitor status of the third company, and that the balance of convenience favoured granting the interlocutory injunction. The court was concerned that without an injunction, SAI Global could suffer irreparable harm due to the loss of confidential information and competitive advantage.

Following its analysis, the court determined that there was a sufficient likelihood that the third company was a competitor, warranting the grant of the interlocutory injunction. The court also found that the balance of convenience favoured SAI Global, as the potential harm to it outweighed any prejudice to Jones or the third company. The court issued an injunction, restraining Jones from working for the third company for a period of 12 months after his employment with SAI Global ended, pending a final determination of the matter. The injunction was intended to protect SAI Global’s interests and maintain the integrity of the restraint clause in the employment contract.

Orders