Ecolab Pty Limited v Stephen Garland [2011] NSWSC 1095

Supreme Court New South Wales

Medium Neutral Citation: Ecolab Pty Limited v Stephen Garland [2011] NSWSC 1095 Hearing dates: 9 September 2011 Decision date: 14 September 2011 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Defendant restrained until final hearing from breaching non-solicitation restraint. Catchwords: RESTRAINT OF TRADE - Employment contracts - Employer seeks enforcement of post-employment non-compete and non-solicitation restraints - application for interlocutory injunction - test whether plaintiff has a sufficiently serious arguable case for a final injunction having regard to balance of convenience - strength of plaintiff's case especially significant where outcome of interlocutory application will effectively determine claim for final relief - seriously arguable that defendant is or will be in breach of non-compete and non-solicitation restraints - validity of restraints - legitimate interest of employer and reasonableness of restraint - employer has legitimate interest in relation to non-compete and non-solicitation restraints - reasonableness adjudged at time of entrance into contract - restraint reasonable in geographical and temporal scope when contract entered into - discretionary considerations - negative contractual stipulations like restraints may be reasonable at date of contract but court may nonetheless decline to grant injunctive relief - employee made redundant and not author of his own misfortune - pre-contractual representations made to employee by employer that employment would be continuing subsequently falsified - representation that restraints would apply only to senior managers in cases of redundancy - significance of customer connection reduced by restructuring of employer's business - employee could have obtained employment in another industry that would not involve breach of restraint - balance of convenience really a question of balance of injustice - grant of injunction in relation to non-compete restraint will put employee out of current employment - grant of injunction in relation to non-solicit restraint will not have adverse consequences on employee. Legislation Cited: (NSW) Restraints of Trade Act 1976, s 4 Cases Cited: Aussie Home Loans Ltd v X Inc Services Pty Ltd [2005] NSWSC 285 Australian Broadcasting Corporation v O'Neil (2006) 227 CLR 57 Cactus Imaging Pty Limited v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9 John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 Kone Elevators Pty Ltd v McNay (NSWSC, Young J, 14 April 1997, unreported) Otis Elevator Company Pty Limited v John Nolan [2007] NSWSC 593 RBM Plastic Extrusions Pty Ltd v Diaz [2006] NSWSC 1332 Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386 Woolworths Ltd v Olson [2004] NSWCA 372 Category: Interlocutory applications Parties: Ecolab Pty Limited (plaintiff) Stephen Garland (defendant) Representation: Counsel: J. Fernon SC and M. White (plaintiff) S. White SC with J. McLeod (defendant) Solicitors: Freehills (plaintiff) Aitken Wilson Lawyers (defendant) File Number(s): 2011/00256201