DXC Eclipse Pty Ltd v Wildsmith [2023] NSWCA 98

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: DXC Eclipse Pty Ltd v Wildsmith [2023] NSWCA 98 Hearing dates: 15 February 2023 Date of orders: 16 May 2023 Decision date: 16 May 2023 Before: Bell CJ at [1]; Brereton JA at [166]; Simpson AJA at [167] Decision: Appeal dismissed with costs. Catchwords: CONTRACTS – construction and interpretation – whether breach of non-competition covenant in Securities Purchase Agreement - meaning of a "Competing Business" – whether Respondents' business "based on Microsoft Dynamics 365 technologies" or a "future, successor, or derivative" product – whether Respondents' business "in competition with" the business purchased by the Appellant pursuant to the Securities Purchase Agreement – where Respondents' business based on the supply of a product not supplied by the business acquired by the Appellant at the time the Securities Purchase Agreement was entered into CONTRACTS – construction and interpretation – parol evidence rule – exceptions – whether "mutual concurrence" established by evidence of prior contractual negotiations COMMERCE – restraint of trade – validity and reasonableness – length and scope of restraints – ladder clauses - whether restraint extending to the Respondents' business based on the supply of a product not supplied by the business acquired by the Appellant was reasonably necessary to protect the Appellant's legitimate interest in the goodwill it purchased when it acquired the business – where minimal level of competition between the product supplied by the Respondents' business and the product supplied by the business purchased by the Appellant - where maximum temporal restraint period of seven years sought – where broad, international geographical restraint area sought COMMERCE – restraint of trade – enforcement and relief – injunction – whether injunctive relief ought to have been awarded Legislation Cited: Restraints of Trade Act 1976 (NSW) s 4 Supreme Court Act 1970 (NSW) s 75A Cases Cited: Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 40 Belflora Pty Ltd v Vinflora Pty Ltd (2021) 106 NSWLR 67; [2021] NSWCA 178 Codelfa Constructions Pty Ltd v State Rail Authority (1982) 149 CLR 337; [1982] HCA 24 DXC Eclipse Pty Ltd ACN 051 758 199 v Wildsmith [2022] NSWSC 512 DXC Eclipse Pty Ltd v Wildsmith (No 2) [2022] NSWSC 1330 DXC Eclipse Pty Ltd v Wildsmith (No 4) [2022] NSWSC 1452 DXC Eclipse Pty Ltd v Wildsmith (No 5) [2022] NSWSC 1710 DXC Eclipse Pty Ltd v Wildsmith [2022] NSWCA 224 Employsure Ltd v McMurchy [2021] NSWSC 1179 Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 Idameneo (No 123) Pty Ltd v Angel-Honnibal [2002] NSWSC 1214; (2003) ATPR 41-918 Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163 News Life Media v Janeke [2016] NSWSC 183 North Western Salt Co Ltd v Electrolytic Co Ltd (1914) AC 461 Pearson v HRX Holdings Pty Ltd (2012) 205 FCR 187; [2012] FCAFC 11 Queensland Co-operative Milling Association v Pamag Pty Ltd (1973) 133 CLR 260 at 268; [1973] HCA 24 Sea Containers Ltd v ICT Pty Ltd (Supreme Court (NSW), O'Keefe J, 27 October 1994, unrep) Sear v Invocare Australia Pty Ltd [2007] WASC 30; [2007] ATPR 42-129 Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWCA 418 Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852; (2008) 175 IR 414 Veda Advantage (Australia) Pty Ltd v de Beer [2016] NSWSC 37 Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd (2017) 94 NSWLR 108; [2017] NSWCA 27 Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12 Woolworths v Olson [2004] NSWCA 372; (2004) 55 AILR 200-133 Texts Cited: JD Heydon, The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Butterworths) Category: Principal judgment Parties: DXC Eclipse Pty Ltd (Appellant) Martin Wildsmith (First Respondent) On-Key Consulting Pty Ltd (Second Respondent) Representation: Counsel: I Neil SC with A Spies (Appellant) R C A Higgins SC with D Mahendra (First and Second Respondents)