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Tyro Payments Ltd v Kounta Pty Ltd

Tyro Payments Ltd v Kounta Pty Ltd

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Case Copied 16 November 2023 67 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Tyro Payments Ltd v Kounta Pty Ltd [2023] NSWSC 1384
Hearing dates: 1, 2 November 2023
Date of orders: 16 November 2023
Decision date: 16 November 2023
Jurisdiction: Equity - Commercial List
Before: Rees J
Decision:
Injunction granted.

Catchwords:
RESTRAINT OF TRADE — commercial contract — plaintiff provides merchants with EFTPOS facility to accept payments by card — defendant provides merchants with point of sale (POS) terminals and software — plaintiff appoints defendant as agent — defendant keen to develop and provide similar services to merchants — 3 year contract includes 6 month exclusive dealing period in respect of defendant’s pursuit of those ambitions — restraint of trade clause prevented defendant from soliciting plaintiff’s merchants for 12 months — exclusive dealing period expires — defendant becomes a ‘payment facilitator’ and solicits plaintiff’s merchants — whether defendant’s services fall within restraint clause — Restraint of Trade Act 1976 (NSW) section 4 considered — principles at [116]-[119] — onus of proving restraint is reasonable or against public policy — restraint of trade valid – injunction granted.

Legislation Cited:
Corporations Act 2001 (Cth) s 766B(4)
Restraints of Trade Act 1976 (NSW) s 4

Cases Cited:
Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1973] HCA 40; (1973) 133 CLR 288
Attorney-General (Cth) v Adelaide Steamship Co Ltd [1913] AC 781
Belflora Pty Ltd v Vinflora Pty Ltd (2021) 106 NSWLR 67; [2021] NSWCA 178
Blatch v Archer (1774) 1 Cowp 63
Cherry v Steele-Park [2017] NSWCA 295; (2017) 96 NSWLR 548
Creak v Ford Motor Company of Australia Ltd [2023] NSWCA 217
Dr Angel-Honnibal v Idameneo (No 123) Pty Ltd [2003] NSWCA 263
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
HiTech Group Australia Ltd v Riachi [2021] NSWSC 1212
Hospital Products v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343
Kingdom Animalia LLC v Mecca Brands Pty Ltd [2023] VSCA 55; (2023) 170 IPR 399
Koops Martin v Dean [2006] NSWSC 449
Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd [2023] HCA 6
Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181
Orleans Investment Pty Ltd v Mindshare Communications Ltd [2009] NSWCA 40
Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287
Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359
Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWCA 418

Category: Principal judgment
Parties: Tyro Payments Ltd (Plaintiff)
Kounta Pty Ltd (Defendant)
Representation:
Counsel:
Mr D Thomas SC / Mr H Atkin (Plaintiff)
Mr JC Giles SC / Ms AE Munro / Ms JT Buncle (Defendant)
Solicitors:
King & Wood Mallesons (Plaintiff)
Corrs Chambers Westgarth (Defendant)

File Number(s): 2023/280832

JUDGMENT

HER HONOUR: This is a restraint of trade case between large corporations. The plaintiff, Tyro Payments Ltd, provides payment…

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: [2023] NSWSC 1384
Decision Date: 16 November 2023

CaseChat Overview and Summary

In the matter of Tyro Payments Ltd v Kounta Pty Ltd, the dispute revolved around the enforceability of a restraint of trade clause in a commercial contract. Tyro Payments Ltd, a provider of electronic funds transfer at point of sale (EFPOS) services, appointed Kounta Pty Ltd, a supplier of point of sale (POS) terminals and software, as its agent. The contract included a clause restricting Kounta from soliciting Tyro's merchants for a period of 12 months, which was intended to cover a six-month exclusive dealing period. After the exclusive dealing period ended, Kounta transitioned to becoming a payment facilitator and began soliciting Tyro's merchants, leading Tyro to seek an injunction to enforce the restraint of trade clause. The court was tasked with determining whether Kounta's activities fell within the scope of the restraint clause and whether the clause was valid under the Restraint of Trade Act 1976 (NSW).

The central legal issues before the court were whether Kounta's new services as a payment facilitator constituted a breach of the restraint clause and whether the restraint was enforceable under the principles outlined in the Act. The court considered whether the restraint was reasonable in all the circumstances and not against public policy. In assessing the reasonableness of the restraint, the court examined the nature of the services provided by Kounta, the duration and scope of the restraint, and the interests of both parties and the public. The court also evaluated the onus of proof on Tyro to demonstrate that the restraint was reasonable and not contrary to public policy.

The court found that the restraint of trade clause was valid and enforceable. It concluded that Kounta's activities as a payment facilitator were sufficiently similar to the services it had provided under the agency agreement with Tyro, thus falling within the scope of the restraint clause. The court held that the duration and scope of the restraint were reasonable, taking into account the interests of both parties and the public. Given the findings, the court granted Tyro an injunction to prevent Kounta from soliciting its merchants, thereby enforcing the restraint of trade clause.

The final orders of the court included an injunction restraining Kounta from soliciting Tyro's merchants for the period specified in the restraint clause. This decision reinforces the enforceability of restraint of trade clauses in commercial contracts, provided they are reasonable and do not contravene public policy. The court's analysis emphasized the need for a careful assessment of the terms and implications of such clauses in the context of evolving business practices.

Orders