Wallis Nominees (Computing) Pty Ltd v Matthew William Pickett - [2012] VSC 82

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT

LIST E

No. of S CI 2012 00518

BETWEEN

WALLIS NOMINEES (COMPUTING) PTY LTD	Plaintiff
v
MATTHEW WILLIAM PICKETT	Defendant

---

JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	27, 28 February 2012
DATE OF JUDGMENT:	14 March 2012
CASE MAY BE CITED AS:	Wallis Nominees (Computing) Pty Ltd v Matthew William Pickett
MEDIUM NEUTRAL CITATION:	[2012] VSC 82

---

CONTRACT – Restraint of trade – Construction of restraint clause.

CONTRACT – Restraint of trade – Employer and employee – Protection of customer connection and staff stability – Whether amenable to protection by restraint clause – Clause void.

RESTRAINT OF TRADE – Whether clause exceeds what is reasonable for protection of plaintiff’s legitimate interests – Restriction excessive both in scope and duration.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Strong	Gadens Lawyers
For the Defendant	Ms C Currie	Holding Redlich

HIS HONOUR:

A. Introduction

The plaintiff, Wallis Nominees (Computing) Pty Ltd (‘DWS’), seeks a permanent injunction against the defendant, Matthew William Pickett, a former employee of DWS, restraining Pickett from working at DWS’ former client, Grocon Pty Ltd (‘Grocon’).

DWS’ application is based on clause 24(b) of an Employment Agreement between DWS and Pickett dated 29 May 2007 (the ‘Employment Agreement’), which provides that Pickett may not provide certain services to certain clients of DWS within a period of 12 months after he leaves DWS. The scope of both the services and clients covered by the clause is subject to dispute.

Counsel for Pickett contended that clause 24(b) is void and unenforceable as it is a covenant in restraint of trade that does more than is reasonably necessary to protect a legitimate interest of DWS and that DWS has not demonstrated that there was a legitimate interest being protected by the clause. In the alternative, counsel submitted that if the clause was valid, the services Pickett proposes to provide to Grocon are sufficiently different to those covered by the clause and accordingly there is no breach.

Counsel for DWS contended that there is a legitimate interest being protected by the clause, namely, customer connection, that the clause does no more than is reasonably necessary to protect that interest and that by providing certain services to Grocon, Pickett was in breach of the clause.

For the reasons set out below, I find that DWS has not rebutted the presumption that clause 24(b), as a covenant in restraint of trade, is void. DWS has not identified a legitimate interest that requires protection by the clause, and in any event the clause goes further than is reasonably necessary to protect any such interest.

B. Background

DWS is the subsidiary of a public company, DWS Ltd, and is engaged in the business of providing software consultancy services including, among other services, business analytics and information management consultancy services, managed services, software application systems development and on-going support and maintenance of software. DWS typically provides these…

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.

Keep reading for free

Create a free CaseChat account to read Wallis Nominees (Computing) Pty Ltd v Matthew William Picket... and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2012] VSC 82
Decision Date: 14 March 2012

CaseChat Overview and Summary

The dispute in Wallis Nominees (Computing) Pty Ltd v Matthew William Pickett involved the employer, Wallis Nominees, and its former employee, Matthew William Pickett. The crux of the disagreement was the enforceability of a restraint of trade clause in Pickett's employment contract, which aimed to restrict him from working for competitors or starting a competing business for a period of two years post-termination. Wallis Nominees sought to enforce the clause to protect its business interests, including customer connections and staff stability. The matter was brought before the court to determine whether the restraint clause was valid and enforceable.

The primary legal issues revolved around the enforceability of the restraint of trade clause under Australian law. The court had to assess whether the clause was reasonable in scope and duration to protect Wallis Nominees' legitimate business interests, such as customer connections and staff stability, and whether it exceeded what was necessary for such protection. The court also needed to consider if the clause was necessary to protect Wallis Nominees' confidential information and goodwill.

The court concluded that the restraint of trade clause was excessively broad in scope and duration, rendering it unenforceable. The clause not only aimed to protect customer connections and staff stability but also imposed a broad restriction on Pickett's ability to work in the industry for two years. This was deemed to be more than what was necessary to protect Wallis Nominees' legitimate interests. The court found that the clause went beyond what was reasonable and, therefore, could not be enforced. The court’s reasoning emphasised that a restraint of trade clause must be necessary to protect the employer’s legitimate interests and must not impose a greater restriction on the employee than is necessary.

As a result of the court's decision, the restraint of trade clause was declared void. The court ruled that it could not be enforced against Matthew William Pickett. This decision ensures that employers cannot impose overly restrictive restraints on their former employees beyond what is reasonably necessary to protect their legitimate business interests.

Orders