Saltec Pty Ltd v Mark Donnelly - [2015] NSWSC 1496

Supreme Court

New South Wales

Medium Neutral Citation: Saltec Pty Ltd v Mark Donnelly [2015] NSWSC 1496
Hearing dates: 30 June 2015
Date of orders: 30 June 2015
Decision date: 30 June 2015
Jurisdiction: Equity - Duty List
Before: Brereton J
Decision:
Application for interim relief declined.

Catchwords: EQUITY – equitable remedies – injunctions – injunction in aid of restraint of trade – whether evidence discloses breach of contractual restraint of trade – whether adverse inference to be drawn from refusal to give undertaking as to compliance with contractual restraint – held, case not sufficiently serious to warrant interim relief.
Category: Procedural and other rulings
Parties: Saltec Pty Ltd (plaintiff)
Mark Donnelly (defendant)
Representation:
Counsel:
D Mahendra (plaintiff)
M Donnelly (in person) (defendant)
Solicitors:
Sparke Helmore Lawyers (plaintiff)

File Number(s): 2015/184355

Judgment (ex tempore)

HIS HONOUR: On 23 June 2015, the Chief Judge in Equity granted the plaintiff Saltec Proprietary Limited leave to file a summons returnable today claiming an injunction restraining the defendant, its former employee Mark Donnelly, from, soliciting clients of Saltec or interfering in Saltec's relationship with its clients within a 50 kilometre, or alternatively 25 kilometre, radius of Saltec's place of business at Bankstown.
The summons returns before the Court today and Mr Donnelly appears at this stage in person. He sought an adjournment for six weeks, which I indicated would not be granted, but as I understand his position, seeks an adjournment for whatever period the Court might be prepared to grant. The plaintiff's response has been to indicate that it would not oppose an adjournment if undertakings in the form previously sought by the plaintiff – to adhere to the contractual restraint – were given; but that in the absence of such undertakings being proffered, the plaintiff seeks an interim injunction in the meantime.
As I regard this purely as an interim hearing, falling short of an interlocutory hearing which may take place on the next occasion, it is best that I say as little as possible in disposing of the application.
On the material presently before the Court, I am not satisfied that there is a sufficiently serious case for final relief to justify the grant of an interim injunction having regard to the balance of convenience.
First, although, as the plaintiff submits, Mr Donnelly is in breach of one of the terms of the contractual restraint by being engaged in a competing business within the prohibited radius, that has to be seen in the context that, on the plaintiff's own evidence, at the time that the contractual restraint was negotiated in September 2014, the plaintiff's managing director said to him, “We won't be automatically enforcing the clause when you leave our employment, only if you interfere with Saltec's business or jeopardise one of our client relationships", and subsequently, even after the allegations of breach had been raised, the plaintiff’s solicitors communicated to the defendant in respect of his present employment noting it to breach the restraint, saying, "we are instructed that this…

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: [2015] NSWSC 1496
Decision Date: 30 June 2015

CaseChat Overview and Summary

Saltec Pty Ltd brought proceedings against Mark Donnelly in the Federal Circuit and Family Court of Australia, seeking relief in the form of an injunction to restrain Donnelly from engaging in activities that were restricted by a contractual non-compete clause. The dispute centred around Donnelly's departure from Saltec and his subsequent employment with a competitor, which Saltec alleged breached the restraint of trade clause in his employment contract.

The court was required to determine whether the evidence demonstrated a breach of the contractual restraint of trade, and if so, whether an adverse inference should be drawn from Donnelly's refusal to provide an undertaking as to his compliance with the restraint. The court also needed to assess whether the circumstances warranted the grant of an interim injunction to prevent Donnelly from engaging in the restricted activities.

The court found that the evidence did not clearly disclose a breach of the restraint of trade, as there was uncertainty about whether Donnelly's new employment involved the restricted activities. Additionally, the court held that it was not appropriate to draw an adverse inference from Donnelly's refusal to provide an undertaking, as the case did not reach the level of seriousness required for such a conclusion. Consequently, the court declined to grant the interim injunction sought by Saltec.

The court ordered that the application for an interim injunction be dismissed and that each party bear their own costs of the application.

Orders