The Shoe Studio Group Limited v Wittner's Australia Pty Ltd

The Shoe Studio Group Limited (TSG) sought interlocutory injunctive relief against Wittner's Australia Pty Ltd (Wittner's) to restrain alleged breaches of a restraint of trade clause contained within a deed of assignment. The dispute concerned TSG's acquisition of the Wittner's business, including its intellectual property and goodwill, and Wittner's subsequent commencement of a competing retail shoe business. The application was heard in the Supreme Court of Victoria.

The primary legal issue before the Court was whether the restraint of trade clause, as drafted, was reasonable and therefore enforceable. Specifically, the Court had to consider the scope of the restraint in terms of its geographical reach and the duration for which it applied, and whether these limitations were no wider than necessary to protect the legitimate business interests of TSG, namely the goodwill and intellectual property it had acquired.

In determining the enforceability of the restraint, the Court applied the established legal principles governing restraints of trade, which are presumed to be void unless they can be shown to be reasonable. The Court considered the nature of the business, the bargaining power of the parties at the time the deed was executed, and the public interest. The Court found that the restraint, as currently drafted, was too broad in its geographical scope and duration, and therefore went beyond what was reasonably necessary to protect TSG's legitimate interests. Consequently, the Court declined to grant the interlocutory injunction.