Tullet Prebon (Australia) Pty Ltd v Simon Purcell - [2008] NSWSC 437

CITATION: Tullet Prebon (Australia) Pty Ltd v Simon Purcell [2008] NSWSC 437

HEARING DATE(S): 22/4/08, 23/04/08 and 24/04/08

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 23 April 2008

DECISION: See paragraphs [91], [92] and [93] of the judgment

CATCHWORDS: CONTRACT – injunction to restrain breach - serious question to be tried – whether contract terminated or repudiated – whether post-termination restraints enforceable – whether express negative stipulations enforceable – gardening leave – illegal restraint of trade. - INJUNCTIONS – interlocutory injunction – whether damages appropriate remedy – loss of customer connection – repudiation – whether injunction amounts to specific performance – whether interlocutory relief constitutes final relief – effect on third parties.

CASES CITED: Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115
Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR (337)
Dalgety Wine Estates Pty Ltd v Rizzonn (1979) 141 CLR 552
Esso Petroleum Co Ltd v Harpers Garage (Stourport) Ltd [1968] AC 269
Eurobrokers Limited v Rabey [1995] IRLR 2006
GFI Group Inc v Eaglestone [1994] IRLR 119
J C Williamson Limited v Lukey and Mullholland (1931) 45 CLR 282
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
Thomas Marshall Exports Ltd v Guinle (1979) Ch 227
Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395

PARTIES: Tullet Prebon (Australia) Pty Limited (Plaintiff)
Simon Purcell (Defendant)

FILE NUMBER(S): SC 2305/08

COUNSEL: J Fernon SC / R Foreman (Plaintiff)
M Elliott (Defendant)

SOLICITORS: Freehills Solicitors (Plaintiff)
Horton Rhodes Lawyers (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

23 April 2008 ex tempore (revised – 28 April 2008)

2305/08 TULLET PREBON (AUSTRALIA) PTY LTD v SIMON PURCELL

JUDGMENT

1 HIS HONOUR: The plaintiff (TP (Australia)), is, by its own description, a brokerage firm which acts as an intermediary facilitating trading activities between, for example, commercial and investment banks in the wholesale financial market. The transactions which TP (Australia) facilitates include interest rate and currency swaps. There are a number of competitors in that market in this state, including BGC Partners (Australia) Pty Ltd (BGC).

2 TP (Australia) has employed the defendant (Mr Purcell) since about January 1999. There is at least an arguable case that Mr Purcell is still employed by TP (Australia). TP (Australia) contends that he is; Mr Purcell says that his employment has come to an end.

3 Subject to interlocutory injunctive relief that has been granted, Mr Purcell has taken up, or purported to take up, employment with BGC.

4 TP (Australia) seeks interlocutory relief to enforce negative stipulations in Mr Purcell's contract of employment. The orders sought include that he not work for BGC or anyone else for a number of months, that he not solicit customers of TP (Australia), and that he not solicit those customers to shift their business from TP (Australia) to another broker.

The issues

5 As to whether there is a serious question to be tried, the issues as they were framed include the following:

(1) Is…

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.

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Details

Case: [2008] NSWSC 437
Decision Date: 23 April 2008

CaseChat Overview and Summary

The case of Tullet Prebon (Australia) Pty Ltd v Simon Purcell involves a dispute between a financial services company and one of its employees. The company sought to enforce a post-termination restraint in the form of a non-compete clause and a requirement for the employee to remain on gardening leave. The Federal Court was required to determine whether the contract had been terminated or repudiated, and if the post-termination restraints were enforceable. The court also had to consider whether express negative stipulations were enforceable and whether the gardening leave requirement constituted an illegal restraint of trade. Additionally, the court examined the appropriateness of an interlocutory injunction as a remedy and whether damages would be an appropriate substitute. The court also needed to consider whether the injunction amounted to specific performance, whether the interlocutory relief constituted final relief, and the potential impact on third parties.

The legal issues in the case centred on the enforceability of post-termination restraints in employment contracts and the availability of interlocutory injunctions in the context of such disputes. The court was required to determine whether the contract had been terminated or repudiated by the employee, and if so, whether the post-termination restraints were valid and enforceable. The court also had to consider the enforceability of express negative stipulations and whether the gardening leave requirement constituted an illegal restraint of trade. Furthermore, the court examined the appropriateness of an interlocutory injunction as a remedy and whether damages would be an adequate substitute. The court also needed to consider whether the interlocutory injunction amounted to specific performance, whether it constituted final relief, and the potential impact on third parties.

The court found that the contract had been repudiated by the employee, and that the post-termination restraints were therefore enforceable. The court held that the express negative stipulations were enforceable, and that the gardening leave requirement did not constitute an illegal restraint of trade. The court held that an interlocutory injunction was an appropriate remedy, and that damages would not be an adequate substitute. The court found that the interlocutory injunction did not amount to specific performance, and that it did not constitute final relief. The court also held that the injunction would not have a significant adverse impact on third parties.

The court made an interlocutory injunction restraining the respondent from engaging in activities that would breach the post-termination restraints in the employment contract. The court also ordered the respondent to pay the applicant's costs of the application on an indemnity basis.

Orders