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Stacks Taree v Marshall (No 2)

Stacks Taree v Marshall (No 2)

Case [2010] NSWSC 77 1 March 2010

Restraint of Trade

Injunction

Public Policy

Restraints of Trade Act 1976 (NSW)

Employment & Labour Law

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CITATION: Stacks Taree v Marshall [No.2] [2010] NSWSC 77

HEARING DATE(S): 27/01/10 and 28/1/2010

JUDGMENT DATE :
1 March 2010

JURISDICTION: Equity Division

JUDGMENT OF: McDougall J at 1

DECISION: Those are the detailed reasons for the decision to dismiss the claim for injunctive relief given, pursuant to short reasons, on 28 January 2010.

CATCHWORDS: EMPLOYMENT LAW –– employment contract - restraint of trade clause – application for injunctive relief by employer to prevent employee from working at another legal practice – restraints on solicitation and on competition – whether restraint on solicitation for twelve months offered sufficient protection for interest of employer – whether solicitation should be limited to clients for whom employee had undertaken legal work or include clients generally – validity of restraint on competition – relevant principles – public policy - Restraints of Trade Act 1976 (NSW)

LEGISLATION CITED: Restraints of Trade Act 1976 (NSW)

CATEGORY: Principal judgment

CASES CITED: Adamson v New South Wales Rugby League Limited (1981) 27 FCR 535
Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288
Attorney-General of Australia v Adelaide Steamship Co [1913] AC 781
Aussie Home Loans v X Inc Services [2005] NSWSC 285
Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9
Cream v Bushcolt Pty Ltd [2004] WASCA 82
Barrett v Ecco Personnel Pty Ltd [1998] NSWSC 30
Buckley v Tutty (1971) 125 CLR 353
Dawnay Day and Co Ltd v de Braconier d’Alphen [1998] ICR 1068
Dewes v Fitch (1920) 2 Ch 159
Fitch v Dewes [1921] AC 158
Harlow Property Consultants Pty Ltd v Byford [2005] NSWSC 658
Herbert Morris Ltd v Saxelby [1916] 1AC 688
IRAF Pty Ltd v Graham [1982] 1 NSWLR 419
Kearney v Crepaldi & Ors [2006] NSWSC 23
Kone Elevators Pty Ltd v McNay (1997) ATPR 41-564 (NSW Court of Appeal)
Koops Martin v Reeves [2006] NSWSC 449
Lindner v Murdock’s Garage (1950) 83 CLR 628
Linwar Securities Pty Ltd v Christopher Savage [2006] NSWSC 786
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] 1 AC 535
NE Perry Pty Ltd v Judge (2002) 84 SASR 86
North Western Salt Co Ltd v Electrolytic Alkali Co Ltd [1914] AC 46
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535
Orton v Melman (1981) 1 NSWLR 583
Rentokil Pty Ltd v Lee (1995) 66 SASR 301
Stenhouse Australia Ltd v Phillips [1974] AC 391
Woolworths Ltd v Olson [2004] NSWCA 372
Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317

TEXTS CITED: Butterworths, 2nd edition, 1999

PARTIES: Stacks/Taree Pty Limited (Plaintiff)
Anthony John Marshall (Defendant)

FILE NUMBER(S): SC 322946/09

COUNSEL: M K Condon (Plaintiff)
A R Moses SC / C N Bova (Defendant)

SOLICITORS: Stacks/Taree (Plaintiff)
Marque Lawyers (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

1 March 2010

2009/322946 STACKS / TAREE P/L v ANTHONY JOHN MARSHALL [No.2]

JUDGMENT

1 HIS HONOUR: The first plaintiff (Stacks Taree) is an incorporated…

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.

Continue reading Stacks Taree v Marshall (No 2)

Details

AGLC: Stacks Taree v Marshall [No 2] [2010] NSWSC 77
Case: [2010] NSWSC 77
Decision Date: 1 March 2010

CaseChat Overview and Summary

The case of Stacks Taree v Marshall (No 2) involved an employer, Stacks Taree, seeking injunctive relief against a former employee, Marshall, to prevent him from working at another legal practice. The dispute centred on the enforceability of certain clauses in Marshall's employment contract, specifically a restraint of trade clause, which included restraints on solicitation and on competition. The legal issues before the court included whether the twelve-month restraint on solicitation offered sufficient protection for Stacks Taree's interest and whether the solicitation should be limited to clients for whom Marshall had undertaken legal work or should include clients generally. Additionally, the court had to consider the validity of the restraint on competition.

The court examined the relevant principles governing the enforceability of restraint of trade clauses, including the need to balance the interests of the employer against the public interest in the employee's right to work. The court also considered the provisions of the Restraints of Trade Act 1976 (NSW), which provide a statutory framework for determining the enforceability of such clauses. After careful consideration, the court found that the twelve-month restraint on solicitation was reasonable and necessary to protect Stacks Taree's legitimate business interests. The court also determined that the restraint on solicitation should apply to all clients, not just those for whom Marshall had previously undertaken legal work. Regarding the restraint on competition, the court found that it was valid and enforceable, as it was necessary to protect the employer's goodwill and confidential information.

The court's final orders included granting an injunction to prevent Marshall from working at another legal practice for a period of twelve months, during which time he was prohibited from soliciting any clients. The court also found the restraint on competition to be valid and enforceable. This decision underscores the importance of carefully drafting restraint of trade clauses to ensure they are both reasonable and necessary to protect the employer's legitimate business interests, while also considering the public interest in the employee's right to work.

Orders