Tighe Newton Trucking Pty Ltd v NT Hauliers Pty Ltd

Tighe Newton Trucking Pty Ltd (the applicant) sought an interlocutory injunction against NT Hauliers Pty Ltd (the respondent) to restrain the respondent from continuing to operate a trucking business in contravention of a restraint of trade clause contained within a contract for the sale of a business. The application was heard in the Supreme Court of the Northern Territory by Judge Driver.

The central legal issue before the Court was whether the restraint of trade clause in the contract was reasonable and therefore enforceable. Specifically, the Court had to consider the scope of the restraint, including its geographical reach and duration, and whether it went beyond what was necessary to protect the legitimate business interests of the applicant. The Court also had to assess whether the applicant had established a strong enough prima facie case to warrant the grant of an interlocutory injunction.

Judge Driver found that the restraint of trade clause, as drafted, was too broad in its geographical scope and duration to be considered reasonable. The Court applied the established legal principles governing restraints of trade, which require such clauses to be no wider than necessary to protect the legitimate interests of the party seeking to enforce them. His Honour noted that while the applicant had a legitimate interest in protecting the goodwill of the business it had purchased, the restraint extended to areas and a period that were not demonstrably necessary for that protection. Consequently, the applicant had not established a strong enough prima facie case for the injunction to be granted.

The application for an interlocutory injunction was dismissed.