Investment Managers Pty Ltd v Cullen [2006] NSWSC 452

New South Wales Supreme Court

CITATION : Investment Managers Pty Ltd v Cullen [2006] NSWSC 452

HEARING DATE(S) : 26/04/06 JUDGMENT OF : Gzell J

EX TEMPORE JUDGMENT DATE : 04/26/2006

DECISION : Notice of Motion for injunctive relief dismissed with costs.

CATCHWORDS : EMPLOYMENT LAW - The contract of service and rights, duties and liabilities as between employer and employee - Restrictive covenance - 12 month restriction on obtaining customers past, current, or propspective of the employer - Whether unreasonable - Effect of Restraints of Trade Act 1976, s 4(1) - Whether should be determined at interlocutory stage - 9 of in excess of 1,400 customers obtained - Whether damages as sufficient remedy

LEGISLATION CITED : Restraints of Trade Act 1976

CASES CITED : The Restraint of Trade Doctrine, 2nd ed, Butterworths, Sydney, 1999

PARTIES : Investment Managers Pty Ltd - Plaintiff Craig Cullen - Defendant

FILE NUMBER(S) : SC 2371/06

COUNSEL : Mr D Allen - Plaintiff Mr A Casselden - Defendent

SOLICITORS : Catalyst Legal Rutter Morgan

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

WEDNESDAY 26 APRIL 2006

2371/06 INVESTMENT MANAGERS PTY LTD v CRAIG CULLEN EX TEMPORE JUDGMENT 1 Craig Cullen, the defendant, was employed by Investment Managers Pty Limited, the plaintiff, until a date in January 2006. He is now the authorised dealer for AAA Shares Pty Ltd. 2 Shane Allan Rose, the sole director and shareholder of Investment Managers, alleges that from conversations he has had with representatives of various clients of Investment Managers, they are now served by Mr Cullen, in his new position. Mr Cullen says much the same. He lists those customers of Investment Managers whom he now serves, those customers being nine in number, the commissions from which, thus far, total some $14,000.00. 3 In 2005, during the time that Mr Cullen was employed by Investment Managers, a business investigation established that it had in excess of 1,400 clients. The business in which Investment Managers and Mr Cullen are involved is financial planning services. 4 In his contract of employment with Investment Managers, there was a restrictive covenant, the material parts of which are as follows: "(a) The Employee warrants that he will not at any time during the employment or for a period of 12 months after termination of employment, personally or by advertisements or letters or otherwise, obtain customers, whether past, current, or prospective (but in relation to prospective customers only those which have been contacted by the Company prior to the termination of this agreement) of the Company within for any person, firm or other company or organization carrying on the business of providing financial planning services.