Woolworths Ltd v Olson

Woolworths Ltd appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court which had refused to grant an injunction to restrain Mr. Olson from acting in breach of a restraint of trade clause in his employment contract. The dispute concerned the enforceability of this clause, which sought to prevent Mr. Olson from engaging in competitive activities after his employment with Woolworths ceased.

The Court of Appeal was required to determine whether the restraint of trade clause was void for uncertainty, whether it contravened public policy, and if so, whether it was capable of being read down to give it a reasonable operation pursuant to section 4 of the *Restraints of Trade Act 1976* (NSW). The court also considered the scope of any injunction that might be granted and the implications of a restraint payment stipulated in the contract.

The Court of Appeal found that the restraint clause was void for uncertainty and, therefore, could not be enforced. Their Honours reasoned that the language used in the clause was too broad and imprecise to define the scope of the prohibited activities with sufficient clarity. Consequently, the court held that the clause was not capable of being read down under section 4 of the *Restraints of Trade Act 1976* to give it a reasonable operation. The appeal was upheld, and the orders of the Supreme Court were set aside.