WPS Enterprises Pty Ltd v Radford (No 2)

[2009] VSCA 49

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 3744 of 2007

WPS ENTERPRISES PTY LTD (ACN 100 839 325)	Appellant
	v
PETER FREDERICK RADFORD	Respondent

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JUDGES:	BUCHANAN and NEAVE JJA and ROBSON AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	25 November 2008
DATE OF JUDGMENT:	27 February 2009
DATE OF COSTS HEARING AND ORDER:	3 March 2009
MEDIUM NEUTRAL CITATION:	[2009] VSCA 49

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Contract - Restraint of trade - Covenant in restraint of trade - Construction - Whether covenant breached - Lease of premises - Loan of monies by wife of covenantor - Delivery and collection of articles of trade by covenantor - Meaning of 'interested in' and 'financially or otherwise engaged in' a business - Cumulative effect of severed actions - Covenant not breached.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr P G Cawthorn SC with Mr H P Bokelund	Creelman Lawyers
For the Respondent	Mr M Stirling	Richmond and Bennison

BUCHANAN JA:

ON FRIDAY 27 FEBRUARY 2009:

1. In my opinion the appeal should be dismissed.  I publish my reasons.

1. I am authorised by Neave JA to say that she agrees.  I publish her Honour's reasons.

ROBSON AJA:

1. I also agree that the appeal should be dismissed.  I publish my reasons.

(Discussion ensued concerning costs.)

BUCHANAN JA:

1. In this case we think it might be to the benefit of the parties if they were to first read the judgment, particularly the judgment of Justice Robson, before the question of costs is agitated.  What I propose to do, subject to what the parties have to say, is to formally order that the appeal be dismissed and adjourn it to a date that is convenient to everybody to have the argument about costs. 

1. We will adjourn the matter until 9.30 on Tuesday 3 March.

ON TUESDAY 3 MARCH 2009:

(Submissions were made concerning costs.)

BUCHANAN JA:

1. On 27 February 2009, this Court dismissed the appeal.  It held that the respondent's conduct was not caught by the restraint of trade clause relied upon by the appellant.  We adjourned the question of costs of the appeal.

1. The appellant now contends that there ought to be no order as to costs of the trial or the appeal. 

1. As to the costs below, it has not been demonstrated that any error was made by the trial judge in the exercise of his discretion.  I note that no submission was made to the trial judge that the respondent should be deprived of an order for his costs. 

1. As to the costs of the appeal, counsel for the appellant relied upon the decision of the Court of Appeal in Smith v Hancock.[1]  The facts of that case appear in the judgment of Robson AJA.  The Court dismissed the appeal from the judge in the Chancery Division, but not with costs.  The order made with costs below stood. 

   [1][1894] 2 Ch 377.

1. In the present case I consider that the failure of the appeal should be attended by the usual order for costs to be paid by the appellant.  In Smith v Hancock, the restraint of trade clause was expressed somewhat narrowly.  The covenantor undertook 'not to carry on the interest in business' of a grocer.  The case turned largely on the question whether being married to a woman who carried on business as a grocer and assisting her in the conduct of the business constituted a breach of the covenant.  The defendant had no pecuniary interest in his wife's business.  Lindley LJ said that the defendant's conduct was 'calculated to injure the plaintiffs' and that, in helping his wife, the defendant had done 'what no honourable man would have done'.  Smith LJ described the defendant's conduct as 'reprehensible'.

1. In my opinion, the present case is different.  The restraint clause was expressed more widely, but it has been held not to cover the respondent's conduct.  It is not a case in which the respondent can be said to have acted reprehensibly by taking advantage of a narrowly expressed restraint.  The respondent has acted in accordance with the law.  Nor can it be said, as it was said of the defendant in Smith v Hancock, that the respondent's acts were calculated to or did injure the covenantee.  The acts of the respondent were entirely peripheral and did not cause loss to the appellant.  The acts of the respondent's wife were not critical to the success of the rival business.  Finance and alternative premises were readily available to the respondent's son and his partner. 

1. It should not be forgotten that an important plank in the appellant's case on appeal was that it should be inferred that the respondent did a great deal more than was disclosed by the evidence.  That case did not succeed.  We held that the trial judge's findings of fact should stand, and there was no evidence from which the inferences advanced by the appellant could be drawn. 

1. Put simply, the appellant did not prove a case which fell within the restraint clause.  I would order that the respondent's costs of the appeal be paid by the appellant.

NEAVE JA:

1. I agree.

ROBSON AJA:

1. I also agree.  I would add that in this case the main basis for the seeking of costs was really one of degree, that is, that the conduct of Mr Radford was not sufficiently repetitive to constitute a breach.  In my opinion, that is not sufficient to cause the Court to exercise the discretion in favour of the appellant.  The appellant did not put to us any other conduct of Mr Radford which was alleged to constitute the breach of the covenant which induced the plaintiff to sue.  In those circumstances I would also agree with the orders put forward by Buchanan JA.

BUCHANAN JA:

1. The order of the Court is that the appeal is dismissed with costs.

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