Tyro Payments Ltd v Kounta Pty Ltd (No 2) - [2023] NSWSC 1402

Supreme Court

New South Wales

Medium Neutral Citation: Tyro Payments Ltd v Kounta Pty Ltd (No 2) [2023] NSWSC 1402
Hearing dates: 20 November 2023
Date of orders: 20 November 2023
Decision date: 20 November 2023
Jurisdiction: Equity - Commercial List
Before: Rees J
Decision:
Stay refused.

Catchwords:
STAY – Court grants injunction to enforce 12 month restraint of trade clause – applicant seeks stay of injunction pending filing and determination of appeal – principles at [6] – [9] – injunction interferes with applicant’s business model and systems – preservation of status quo requires preservation of restraint period not applicant’s business model and systems – absent a stay, restraint period will further expire before determination of appeal – subject matter of proceedings will be substantially destroyed – difficulties in assessing damages should fall on unsuccessful party at trial – to early to say whether complying with the injunction is too difficult – stay refused.

Legislation Cited:
Civil Procedure Act 2005 (NSW) s 67

Cases Cited:
Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685
Hickie v Land and Enviro Corp Pty Ltd [2014] NSWSC 472
Kalafair Pty Ltd v Digi-Tech (Aust) Pty Ltd [2002] NSWSCA 383; (2002) 55 NSWLR 737
Mao v AMP Superannuation Limited [2017] NSWCA 296
Penson v Titan (No 2) [2015] NSWCA 403
Tringali v Stewardson Stubbs & Collett Pty Ltd [1966] 1 NSWR 354
UGL Rail Pty Ltd v Wilkinson Murray Pty Ltd (No 2) [2015] NSWSC 23
Yolarno Pty Ltd v Shandong Delisi Food Co Ltd [2022] NSWCA 30

Category: Procedural rulings
Parties: Tyro Payments Ltd (Plaintiff)
Kounta Pty Ltd (Defendant)
Representation:
Counsel:
Mr H Atkin (Plaintiff)
Mr R Dick SC/Ms AE Munro/Ms JT Buncle (Defendant)
Solicitors:
King & Wood Mallesons (Plaintiff)
Corrs Chambers Westgarth (Defendant)

File Number(s): 2023/280832

EX TEMPORE JUDGMENT

HER HONOUR: On 16 November 2023, I held that a restraint of trade clause in a contract between the applicant, Kounta Pty Ltd, and the respondent, Tyro Payments Ltd, was valid and injuncted Kounta from soliciting, inducing or otherwise attempting to persuade any Merchant (as defined in the contract) to become a merchant of any entity providing Acquiring Services (as also there defined) until 6 September 2024: Tyro Payments Ltd v Kounta Pty Ltd [2023] NSWSC 1384.
The applicant now seeks a stay of that order, pending determination of any appeal to be filed within seven days, and offers the usual undertaking as to damages. The applicant relies on the evidence of Assistant General Counsel, Susanna Bull, and solicitor, Michael da Rozario. The respondent tendered some documents.
Ms Bull said that it was not easy for the applicant to identify all Merchants, in the absence of a list from the respondent. After judgment was handed down, the respondent offered to provide such a list. However, the respondent had since declined to do so, where the applicant has advised that it may appeal and now seeks a stay of the injunction.
Ms Bull has made enquiries of relevant stakeholders and conducted “initial…

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 1402
Decision Date: 20 November 2023

CaseChat Overview and Summary

Tyro Payments Ltd sought an injunction to enforce a twelve-month restraint of trade clause against Kounta Pty Ltd. The dispute was heard and determined in the Federal Court of Australia. Tyro sought an injunction enforcing a twelve-month restraint of trade clause against Kounta, following a final judgment in their favour. Kounta opposed the injunction and applied for a stay pending the filing and determination of an appeal against that judgment.

The court considered the principles for granting a stay of an injunction, including whether the applicant had made out a strong case on the merits of the appeal, whether the applicant would suffer irreparable loss if the stay was not granted, and whether the balance of convenience favoured the applicant. The court determined that Kounta had not made out a strong case on the merits of the appeal, and that the balance of convenience did not favour the applicant. The court found that the preservation of the status quo required the preservation of the restraint period, not Kounta’s business model and systems. Absent a stay, the restraint period would further expire before the determination of the appeal, and the subject matter of the proceedings would be substantially destroyed. The difficulties in assessing damages should fall on the unsuccessful party at trial. It was too early to say whether complying with the injunction was too difficult for Kounta.

The court refused Kounta’s application for a stay.

Orders