Koops Martin v Dean Reeves [2006] NSWSC 449

New South Wales Supreme Court

CITATION : Koops Martin v Dean Reeves [2006] NSWSC 449

HEARING DATE(S) : 04/04/2006, 05/04/2006, 06/04/2006

JUDGMENT DATE : 29 May 2006

JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

DECISION : 1. Order that until 7 November 2006 the defendant be restrained from, within the city of Coffs Harbour on his own account or on behalf of or in association with others, directly or indirectly: (a) approaching or enticing or endeavouring to entice away from Koops Martin Financial Services Pty Limited any persons, firms or companies who were clients of Koops Martin Financial Services Pty Limited listed on Exhibit PX03; (b) accepting any instructions to perform any financial planning or advisory work for any such person. 2. Order that the cross-claim be dismissed. 3. Order that the defendant pay the plaintiff's costs. 4. Order that time within which a notice of appeal or an application for leave to appeal as appropriate may be filed be extended to the 28th day from this date. 5. Order that the exhibits be returned at the expiration of 28 days unless notice of appeal or an application for leave to appeal has been filed within that time.

CATCHWORDS : RESTRAINT OF TRADE – Employer and employee – customer connection – financial planner – construction of restraint – where purpose of restraint stated to be protection of confidentiality of business operations – whether statement of purpose limits plain words of restraint which protect customer connection – held, they do not - Validity – nature of customer connection – significance of some customers being personal relatives or friends of employee - significance of employee's role including building of customer base – whether protectable interest where employer had purchased some clients, paid referral fees for others and received "trail commission" for their managed investments and paid bonus to employee for efforts in developing business – whether protectable interest where employee dealt directly with clients as their financial planning consultant – Reasonableness – whether restraint excessive insofar as it prohibited dealing with customers other than those with whom employee personally dealt – whether restraint excessive insofar as it prohibited dealing with clients of divisions of business group other than the business in which employee was engaged – whether restraint was excessive insofar as it prohibited not only soliciting but accepting instructions from customers of employer - Area – Duration – whether manifest failure to attempt to make restraint a reasonable one