The HMW Accounting and Financial Group v McPherson

The HMW Accounting and Financial Group sought to enforce restraint and confidentiality provisions in their employment contracts against McPherson. The defendants raised a defence based on an implied term that the contracts should not be used to conduct business unlawfully or contrary to the professional code of ethics. The plaintiffs sought to strike out this defence as disclosing no reasonable cause of action or defence.

The court had to determine whether the defendants' defence, based on the implication of a term not to conduct business unlawfully, was reasonably arguable. The plaintiffs relied on the decision of Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, which held that a term not to conduct business unlawfully is not to be implied into employment contracts. However, the court found that the defendants' argument was not unarguable. The court held that it was not possible to say that a case based on the implication of a term not to conduct business unlawfully was untenable because of the decision in Barker. The court also considered that the pleadings raised a reasonably arguable defence that a term not to conduct business unlawfully is to be implied in fact into the employment contracts.

The court dismissed the application to strike out the defence. The court found that the defendants' argument that a clause requiring them to abide by all policies, including a code of ethics, imposed mutual obligations on the parties to conduct themselves in accordance with the professional code of ethics was not unreasonable. The court held that it was not considered unarguable or something which should not be placed before a court in the ordinary way.

The court ordered that the application for strike out was dismissed and that costs be reserved.