Wallis Nominees (Computing) Pty Ltd v Pickett

Case [2013] VSCA 24


SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2012 0079

WALLIS NOMINEES (COMPUTING) PTY LTD Appellant

v

MATTHEW WILLIAM PICKETT Respondent

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JUDGES WARREN CJ, REDLICH JA and DAVIES AJA
WHERE HELD MELBOURNE
DATE OF HEARING 18 October 2012
DATE OF JUDGMENT 20 February 2013
MEDIUM NEUTRAL CITATION [2013] VSCA 24
JUDGMENT APPEALED FROM [2012] VSC 82 (Sifris J)

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CONTRACT — Restraint of trade — Employer and Employee — Employer a consulting firm and the employee an IT consultant — Legitimate interest — Reasonableness of restraint — Duration — Scope — Severance — Clause unreasonable and void.

APPEAL — Ground of appeal contained an argument expressly not run at trial —Whether argument not run at trial permitted to be run on appeal — Interests of justice — University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481; Trans Petroleum (Australia) Pty Ltd v White Gum Petroleum Pty Ltd [2012] WASCA 165; Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 applied.

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Appearances: Counsel Solicitors
For the Appellant Mr R D Strong Gadens Lawyers
For the Respondent Mr R H M Attiwill with Ms C Currie Holding Redlich Lawyers

WARREN CJ

DAVIES AJA:

  1. The respondent, Mr Pickett, worked for the appellant, Wallis Nominees (Computing) Pty Ltd (‘DWS’) as a consultant from July 2007 until February 2012.  As a consultant Mr Pickett would be assigned to work with companies who had contracted with DWS and to supply them with services on DWS’ behalf.  In February 2011 Mr Pickett was assigned to work with Grocon Pty Ltd (‘Grocon’).  After working there for about 11 months, Grocon told Mr Pickett they were restructuring their IT department and offered him a job as the IT operations manager.  Mr Pickett accepted the position at Grocon and resigned from DWS.

  1. DWS sought to invoke the restraint of trade clause in Mr Pickett’s contract to prevent him from supplying services to Grocon, their now-former client.  Ultimately, DWS brought proceedings against Mr Pickett.  The learned trial judge found that if the restraint clause was valid, Mr Pickett would be in breach of it because of an overlap between the services being provided by Mr Pickett while employed at DWS and deployed at Grocon, and while employed by Grocon.

  1. However, the learned trial judge held that the relevant restraint of trade clause in Mr Pickett’s employment contract was invalid and against public policy as DWS had failed to demonstrate that it had a legitimate interest in restraining Mr Pickett.  His Honour also held that even if DWS did have such a legitimate interest, the restraint of trade clause would still be invalid because it did more than what was reasonably necessary to protect that legitimate interest.  The clause was not reasonable in either its extent (extending as it did to clients with whom Mr Pickett had merely had a certain type of limited contact) or its duration.  DWS now appeals the decision.

Background

  1. The background to DWS’ business, Mr Pickett’s…

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Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24
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[2013] VSCA 24
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CaseChat Overview and Summary

Wallis Nominees (Computing) Pty Ltd sought relief against Pickett, an IT consultant who had breached a restraint of trade clause in his employment contract. The case was heard in the Supreme Court of South Australia. The primary issue was the enforceability of a restraint of trade clause in Pickett's employment contract with Wallis Nominees. This included the legitimacy of the employer's interest, the reasonableness of the restraint in terms of duration and scope, and the adequacy of the severance payment.

The court examined whether the restraint of trade clause was reasonable and enforceable, considering the employer's legitimate interest in protecting its business. The court found the clause to be unreasonable due to its broad scope and excessive duration, rendering it void. Additionally, the court addressed the issue of an argument presented on appeal that was not raised during the trial. The court considered whether such an argument could be entertained on appeal, applying principles from University of Wollongong v Metwally, Trans Petroleum (Australia) Pty Ltd v White Gum Petroleum Pty Ltd, and Banque Commerciale SA En Liquidation v Akhil Holdings Ltd. The court concluded that the argument could not be entertained as it was not raised at trial and would not serve the interests of justice.

The Supreme Court of South Australia found the restraint of trade clause to be unreasonable and void. The court also ruled that the argument raised on appeal, which was not presented at trial, could not be considered. The decision highlights the importance of raising all relevant arguments at trial and the court's adherence to the principle that arguments not run at trial will not be entertained on appeal unless exceptional circumstances apply.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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