Woolworths Ltd v Olson

[2004] NSWCA 372

CITATION:	WOOLWORTHS LIMITED v Mark Konrad OLSON [2004] NSWCA 372 revised - 20/10/2004
HEARING DATE(S):	6 October 2004
JUDGMENT DATE:	6 October 2004
JUDGMENT OF:	Mason P at 1; McColl JA at 78; Bryson JA at 79
DECISION:	Appeal upheld.
CATCHWORDS:	Restraint of trade - employment contract - whether restraint contravenes public policy - whether capable of being read down to give reasonable operation - whether void for uncertainty - scope of injunction - restraint payment - Restraints of Trade Act 1976, s4. - (D)
LEGISLATION CITED:	Industrial Relations Act 1996 Jurisdiction of Courts (Cross-Vesting) Act 1987 Restraints of Trade Act 1976
CASES CITED:	J D Heydon, The Restraint of Trade Doctrine 2nd ed, 1999 Buckley v Tutty (1971) 125 CLR 353 Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 Geraghty v Minter (1979) 142 CLR 177 Harper v Candle Australia Ltd [2001] NSWIR Comm 77 ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640 Industrial Rollformers Pty Ltd & Anor v Ingersoll-Rand (Australia) Ltd [2001] NSWCA 111 Knogo Corporation v Halligan (1984) ATPR 40-460 Kone Elevators Pty Ltd v McNay & Anor (1997) ATPR 41-564 Littlewoods Organisation Ltd v Harris [1977] 1 All ER 1472 Nordenfelt v Maxim Nordefelt Guns & Ammunition Co Ltd [1894] AC 535 Orton v Melman [1981] 1 NSWLR 583 Queensland Co-operative Milling Association v Pamag Pty Ltd (1973) 133 CLR 260 Rouen v Ryan [2001] NSWCA 230 Ryan v Rouen [2002] NSWSC 468 Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 Woolworths Limited v Olson & Anor [2004] NSWSC 896 Woolworths Ltd v Mark Konrad Olson & Anor [2004] NSWSC 849 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317
PARTIES :	WOOLWORTHS LIMITED Mark Konrad OLSON
FILE NUMBER(S):	CA 40843/04
COUNSEL:	Appellant: R M Smith SC/ M A Jones Respondent: D Gardner (Solicitor)
SOLICITORS:	Appellant: Clayton Utz Lawyers Respondent: Maddocks Lawyers

LOWER COURTJURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 50116/04
LOWER COURT JUDICIAL OFFICER :	Einstein J

CA 40843/04

MASON P
McCOLL JA
BRYSON JA

Wednesday 6 October 2004

WOOLWORTHS LIMITED v Mark Konrad OLSON

BACKGROUND

The Respondent was employed as an executive with the Appellant having managerial responsibility for a confidential project known as StockSMART. In this capacity he was part of a team developing a software system designed to transform Woolworths’ product supply procedures. On 5 July 2004 he gave notice of resignation to Woolworths and on 7 July signed a contract of employment with Franklins. On 12 July 2004 the Respondent was dismissed by Woolworths for breaching his contractual and fiduciary duties in relation to confidential information. On 2 July 2004 he had sent by email to his wife’s computer documents relating to the software project that were extremely confidential and valuable.

Clause 10 of the Respondent’s Service Agreement contained a restraint which, at Woolworths’ discretion and subject to paying a “restraint payment” equivalent to his contractual pay entitlements for the period…