Industrial Rollformers Pty Ltd & Anor v Ingersoll-Rand (Australia) Ltd [2001] NSWCA 111

Reported Decision : [2001] Aust Contract R 90-129 [2001] ACL Rep 110 NSW 25

New South Wales Court of Appeal

CITATION : Industrial Rollformers Pty Ltd & Anor v Ingersoll-Rand (Australia) Ltd [2001] NSWCA 111 FILE NUMBER(S) : CA 40653/00 HEARING DATE(S) : 7 & 8 December 2000 JUDGMENT DATE : 24 April 2001

Industrial Rollformers Pty Ltd - First Appellant PARTIES : Strata Control Pty Ltd - Second Appellant Ingersoll-Rand (Australia) Ltd - Respondent JUDGMENT OF : Priestley JA at 1; Meagher JA at 3; Giles JA at 4

LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT ED 4997/99 FILE NUMBER(S) : LOWER COURT Bergin J JUDICIAL OFFICER :

COUNSEL : D E Grieve QC & M P Sindone - Appellant F M Douglas QC, D T Kell & G Rich - Respondent SOLICITORS : John Spence & Associates, Bankstown - Appellant Baker & McKenzie - Respondent CATCHWORDS : CONTRACT - non-exclusive supply agreement - manufacturer using purchaser's patent rights and other information - whether the specifications and tolerances for the product were confidential information - whether lost the quality of confidence because the product could be reverse engineered - clause of agreement restraining use of confidential information by the manufacturer for five years after the termination - whether valid - another clause of the agreement by which manufacturer could not make similar product for five years after termination - whether could be read down under Restraints of Trade Act 1976 - whether properly read down to lesser restraint on "springboard" reasoning - associated company of manufacturer made and supplied products - whether by course of conduct a contract containing the same clauses restraining the associated company. D. Ackroyds (London) Ltd v Islington Plastics (1962) RPC 97; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; Amway Corporation v Eurway International Ltd (1974) RPC 82; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd (1967) VR 37; Brambles Holdings Ltd v Bathurst City Council (2001) NSWCA 61; Buckley v Tutty (1971) 125 CLR 353; Computer Edge Pty Ltd v Apple Computer Inc (1986) 161 CLR 171; Dart Industries Inc v David Bryar & Associates Pty Ltd (1997) 38 IPR 389; Douglass Automated Laboratories & Allied Services Pty Ltd v Sonic Technology Australia Ltd (194) ATPR (Digest) 46-129; Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523; Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd (1968) AC 269; Greenhalgh v Composite Buyers Ltd (1995) ATPR (Digest) 46-148; Herbert Morris Ltd v Saxelby (1916) 1 AC 688; ICI Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640; Ingersoll-Rand Co v Ciavatta 509 A.2d 21 (1986); 8 USPQ 2d 1537 (1988); CASES CITED: Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97326; Knogo Corporation v Halligan (1984) ATPR 40-460; Kone Elevators Pty Ltd v McNay (1997) ATPR 41-564; Ladbroke (Football) Ltd v William Hill (Football) Ltd (1964) 1 WLR 273; McEllistrim v Ballymacelligot Co-operative (1919) AC 548; Nordenfeldt v Maxim Nordenfeldt Guns and Ammunition Co Ltd (1894) AC 535; O'Brien v Komesaroff (1982) 150 CLR 310; Orton v Melman (1981) 1 NSWLR 583; Peters American Delicacy Co Ltd v Patricia's Chocolates and Candies Pty Ltd (1947) 77 CLR 574; Queensland Co-operative Milling Association v Pamag Pty Ltd (1973) 133 CLR 260; Regina Glass Fibre Limited v Schuller 89 RPC 229 Saltman Engineering Co Ltd v Campbell Engineering Co (1948) 65 RPC 203; Stokely-Van Camp Inc v New Generation Beverages Pty Ltd (1998) 44 NSWLR 607; Terrapin Ltd v Builders' Supply Co (Hayes) Ltd (1967) RPC 375; United States Surgical Corporation v Hospital Products International Pty Ltd (1983) 2 NSWLR 157; University of London Press Ltd v University tutorial Press Ltd (1916) 2 Ch 601; Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317. DECISION : 1. Appeal allowed in part. 2. Set aside the declarations and orders made by Bergin J to the extent of - (a) deleting subparagraph (a) from each of declarations 12 and 14; (b) deleting the references to the second appellant from each of orders 18 and 19; (c) making consequential grammatical and punctuation alterations. 3. Order the appellants to pay the respondent's costs of the appeal. 4. Liberty to apply on two days notice.