Tavener v Sheridan [2000] FCA 219

FEDERAL COURT OF AUSTRALIA

Tavener v Sheridan [2000] FCA 219 RESTRAINT OF TRADE – agreement for sale of business containing covenant in restraint of trade – whether covenant enforceable – whether restraint unreasonable - whether period of restraint unreasonable – whether breach of covenant – whether vendors' business of "a similar kind" to business sold WORDS & PHRASES –"similar kind" Biogen Inc v Medeva Plc [1997] 1 RPC 1, referred to Warren v Coombes (1979) 142 CLR 531, referred to JAMES MAURICE TAVENER & ALEXIS LOUISE TAVENER v ROBERT IAN SHERIDAN & TRACEY ANN SHERIDAN N1297 of 1999 WILCOX, EMMETT & GYLES JJ SYDNEY 7 MARCH 2000

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1297 of 1999

ON APPEAL FROM THE SUPREME COURT OF NORFOLK ISLAND

BETWEEN: JAMES MAURICE TAVENER

ALEXIS LOUISE TAVENER

Appellants

AND: ROBERT IAN SHERIDAN

TRACEY ANN SHERIDAN

Respondents

JUDGES: WILCOX, EMMETT & GYLES JJ

DATE OF ORDER: 7 MARCH 2000

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The orders made by Beaumont CJ in the Supreme Court of Norfolk Island on 2 November 1999 be set aside and, in lieu thereof, it be ordered that: (a) it be declared that clause 6 of the Agreement for Sale between the defendants as vendors and the plaintiffs as purchasers, dated 8 January 1999, is valid and enforceable to restrain the defendants for a period of five years from 8 January 1999 from owning, participating or being employed in, operating in, engaging in (directly or indirectly, whether on the defendants' own account or in partnership or as shareholders in a company or by joint venture) a four-wheel drive tour business in Norfolk Island or a business of a kind similar to that owned and carried on by the defendants immediately prior to 8 January 1999; (b) otherwise, the Originating Application be dismissed; and (c) the plaintiffs, Robert Ian Sheridan and Tracey Ann Sheridan, pay to the defendants, James Maurice Tavener and Alexis Louise Tavener, 90% of their costs of the proceeding. 3. The cross-appeal be dismissed. 4. The respondents, Robert Ian Sheridan and Tracey Ann Sheridan, pay to the appellants, James Maurice Tavener and Alexis Louise Tavener, 90% of their costs of the appeal and cross-appeal, such costs not to include costs incurred in relation to the application for stay of the injunctions heard by Wilcox J on 13 December 1999. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.