Spittles v Michael's Appliance Services Pty Ltd & Ors

The dispute in *Spittles v Michael's Appliance Services Pty Ltd & Ors* concerned the enforceability of a restraint of trade clause contained within an employment contract. The applicant, Mr Spittles, sought to be released from the restraint, which prevented him from engaging in a competing business within a specified radius and for a specified period after his employment with Michael's Appliance Services Pty Ltd ceased. The respondents, Michael's Appliance Services Pty Ltd and its directors, sought to uphold the restraint. The matter came before the High Court of Australia.

The central legal issue before the High Court was whether the restraint of trade clause was void as being contrary to public policy, or alternatively, whether it was reasonable and therefore enforceable. This required the Court to consider the scope of the restraint, the nature of the business conducted by the respondents, and the legitimate interests the respondents sought to protect through the clause. The Court also had to assess whether the restraint went beyond what was necessary to protect those interests.

In their joint judgment, Hayne and Heydon JJ found that the restraint of trade clause was unreasonable and therefore void. They applied the established legal principles that restraints of trade are prima facie void unless they can be shown to be reasonable, both in the interests of the parties and in the public interest. The Court considered the geographical scope and duration of the restraint, and concluded that it was wider than necessary to protect the respondents' legitimate business interests, such as their customer connections and confidential information. The Court noted that the nature of the business did not justify such a broad restriction on Mr Spittles' future employment.

Consequently, the High Court ordered that the restraint of trade clause was unenforceable and that Mr Spittles was not bound by its terms.