Webster Signs Pty Ltd v Nicolaou & Ors (No 2) [2007] NSWSC 705

New South Wales Supreme Court

CITATION : Webster Signs Pty Ltd v Nicolaou & Ors (No 2) [2007] NSWSC 705

HEARING DATE(S) : 28 June 2007

JUDGMENT DATE : 28 June 2007

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 28 June 2007

DECISION : Interlocutory injunctions dissolved.

CATCHWORDS : INTERLOCUTORY INJUNCTION – Whether evidence demonstrates serious question to be tried – balance of convenience.

Webster Signs Pty Ltd – Plaintiff PARTIES : Anthony Nicolaou – First Defendant Van International Pty Ltd – Second Defendant Tanvic Group Pty Ltd – Third Defendant

FILE NUMBER(S) : SC 3307/07

COUNSEL : Ms L. McCallum SC, Ms K. Richardson – Plaintiff J.P. Mrsic – Defendants

SOLICITORS : Henry Davis York – Plaintiff E.H. Tebbutt & Sons – Defendants

3307/07 Webster Signs Pty Ltd v Nicolaou & Ors (No 2)

JUDGMENT – Ex tempore 28 June, 2007

1 On 22 June 2007, the Plaintiff obtained an order for short service of a Summons in these proceedings, seeking various orders against Mr Nicolaou and two companies controlled by him. The matter was brought back to Court on 25 and 27 June and, by consent, interlocutory orders were made restraining the Defendants from doing certain things until further order. 2 However, it was the intention of the parties that there should be a contested interlocutory hearing as soon as practicable. That hearing has come on before me this afternoon. 3 The Plaintiff says, and it is not in dispute, that for some three years or so, Mr Nicolaou's company, Van International Pty Ltd, has been providing Mr Nicolaou's services to it pursuant to a consultancy agreement. The Plaintiff says that, in the course of performing those consultancy services on behalf of Van International Pty Ltd, Mr Nicolaou has become aware of confidential information of the Plaintiff as to its pricing for various customers and the pricing policies generally. 4 The consultancy agreement was terminated on 16 March 2007. A relatively short time after that date, Mr Nicolaou went to work for a competitor of the Plaintiff. The Plaintiff now seeks to continue injunctions restraining Mr Nicolaou and two companies controlled by him, namely, Van International Pty Ltd and Tanvic Group Pty Ltd, from continuing to provide any services to the competitor until final resolution of the proceedings. 5 The basis of the application, shortly stated, is that Mr Nicolaou has in his head confidential information concerning pricing of the Plaintiff which he will, or must inevitably use, in providing services to the Plaintiff's competitor, so that the only effective way of preventing abuse of that confidential information is to restrain Mr Nicolaou and his companies from working for the competitor. 6 There are a number of difficulties in the Plaintiff's case. In summary, I am not satisfied that there is a sufficiently strong arguable case demonstrated to sustain an injunction, as the evidence presently stands. If there is such an arguable case, then it is of such weakness as to cause grave pause when it comes to deciding that the balance of convenience requires an order restraining Mr Nicolaou from being employed in an industry in which he has been engaged for some years. 7 I may briefly refer to the difficulties in the Plaintiff's path. They are discussed in some length in my interchanges with Ms McCallum SC, who appears with Ms Richardson of Counsel for the Plaintiff. They will appear in the transcript, so that I do not think I need to elaborate on them in any great detail. 8 The first difficulty is that there is no contractual non competition clause as between the Plaintiff and Mr Nicolaou or as between the Plaintiff and Tanvic. There is a consultancy agreement between the Plaintiff and Van International Pty Ltd dated 3 July 2006. In that agreement there is a clause in the following terms: " NON-COMPETITION: Van International understands that during the period of this Agreement, and two years subsequent to this Agreement, it shall not be permitted to engage in any activity of a private nature that may be in conflict – directly or indirectly – with Webster Signs Pty Ltd, Grass Signage Group Pty Ltd and/or Out & About Marketing & Media Pty Ltd."