Urban Shoemakers Pty Ltd v All Podiatry Pty Ltd

Urban Shoemakers Pty Ltd (the applicant) sought an interlocutory injunction against All Podiatry Pty Ltd (the respondent) to restrain alleged breaches of a restraint of trade clause contained within a deed of sale. The dispute concerned the respondent's alleged solicitation of former clients of Urban Shoemakers following the sale of a podiatry business. The application was heard in the Supreme Court of Victoria by Nicholas Smith J.

The primary legal issue before the Court was whether the applicant had established a sufficient likelihood of success on the merits to warrant the grant of an interlocutory injunction. This required the Court to consider the enforceability of the restraint of trade clause, specifically whether it was reasonable in its scope, duration, and geographical area, and whether it went no further than necessary to protect the legitimate business interests of the purchaser. The Court also had to assess whether the applicant would suffer irreparable harm if the injunction were not granted, and whether the balance of convenience favoured the grant of the injunction.

Nicholas Smith J applied the well-established principles governing the grant of interlocutory injunctions, including the two-stage test from *Australian Broadcasting Corporation v O’Neill*. His Honour considered the evidence presented by both parties regarding the nature of the business sold, the client base, and the respondent's post-sale activities. The Court found that the restraint of trade clause, as drafted, was likely to be found unreasonable and therefore unenforceable, particularly concerning its geographical scope. Consequently, the applicant had not demonstrated a sufficient likelihood of success on the merits to justify the grant of an interlocutory injunction.

The application for an interlocutory injunction was dismissed.