ISS Facility Services Australia Limited v Grounds and Gardens Pty Limited [2008] NSWSC 1406

New South Wales Supreme Court

CITATION : ISS Facility Services Australia Limited v Grounds and Gardens Pty Limited [2008] NSWSC 1406

HEARING DATE(S) : 2/12/08, 3/12/08 JUDGMENT OF : McDougall J at 1

EX TEMPORE JUDGMENT DATE : 3 December 2008

DECISION : See paras [82] to [88].

CATCHWORDS : CONTRACTS - Licence agreement - restraint of trade clause - appeal from arbitration - construction of agreement - whether arbitrator applied incorrect construction of clause - breach - whether two businesses operating in the same market offering similar service to potential customers constitutes 'competition' in breach of clause - whether restraint of trade clause unreasonable.

LEGISLATION CITED : Corporations Act 2001

PARTIES : ISS Facility Services Australia Limited (Plaintiff) Grounds and Gardens Pty Limited (Defendant)

FILE NUMBER(S) : SC 50224/07

COUNSEL : J T Gleeson SC / D F Villa (Plaintiff) A S Bell SC / R C A Higgins (Defendant)

Minter Ellison (Plaintiff) SOLICITORS : Clayton Utz (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

McDOUGALL J

3 December 2008 ex tempore (revised 3 December 2008)

50224/07 ISS FACILITY SERVICES AUSTRALIA LTD v GROUNDS AND GARDENS PTY LIMITED JUDGMENT 1 HIS HONOUR: The question for decision is whether an arbitrator erred in law in concluding that the plaintiff (Tempo) breached what is in terms a restraint of trade clause in a licence agreement made between Tempo and the defendant (Grounds). Background 2 Tempo carries on, and for some years has carried on, the business of provision of cleaning services. Ancillary to that business, Tempo provides grounds maintenance services to some of its customers for whom it provides cleaning services. Tempo does not provide, and has not provided, grounds maintenance services on a "stand-alone" basis. As at October 2003, the revenue from grounds maintenance services was substantially less than one per cent of Tempo's total revenues. 3 Most of the grounds maintenance services that Tempo provided to its cleaning customers were performed by subcontractors. Grounds was one of those subcontractors prior to October 2003.