Dental Corporation Pty Ltd v Hungki (Mathew) Lee and Anor [2016] NSWSC 1859

Supreme Court New South Wales

Medium Neutral Citation: Dental Corporation Pty Ltd v Hungki (Mathew) Lee and Anor [2016] NSWSC 1859 Hearing dates: 29 November 2016 & 1 December 2016 Date of orders: 14 December 2016 Decision date: 14 December 2016 Jurisdiction: Equity Before: Rein J Decision: See [72] Catchwords: CONTRACT- The plaintiff purchased assets of dental practice from defendants, then licensed continuation of practice by 1st defendant at premises owned by 2nd defendant and leased to purchaser. 1st defendant terminated license, purchaser terminated lease of premises. Plaintiff claims 1st defendant in breach of purchase agreement by being employed by third party at the premises (and by soliciting business), and 2nd defendant in breach by leasing premises to the third party- issue of whether practice conducted under license closed or moved- issue of whether restraint has any operation after termination of plaintiff's lease and or closure of the licensed practice- the nature of the goodwill the subject of protection by the restraint clauses considered. CONTRACT- Observations (obiter) on proof of damage where breach of restraint clauses alleged. EQUITY – equitable remedies – injunctions – injunction in aid of restraint of trade- where plaintiff seeks injunction to prevent 1st defendant from continuing current employment or practicing within a certain radius for a period and soliciting business - where plaintiff seeks to injunct 2nd defendant from leasing out premises to 3rd party as a dental practice; HELD- Restraint of trade clauses have not been breached -to infringe the restraint clauses the 1st defendant would have had to have been employed by a practice in competition with the practice purchased by the plaintiff- the practice purchased by the plaintiff had ceased to exist and therefore there was no competing practice-restraint of trade clauses not intended to protect plaintiff's other businesses or interests. Cases Cited: Airservices Australia (formerly Civil Aviation Authority) v Monarch Airlines Ltd (1998) 152 ALR 656 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 Caltex Australia Petroleum Pty Ltd v Commissioner of Taxation (2008) 173 FCR 359; [2008] FCA 1951 Commissioner of Taxation (Cth) v Murry (1998) 193 CLR 605 De Marco v Chief Commissioner of State Revenue (2013) 83 NSWLR 445 Electricity Generation Corp v Woodside Energy Ltd; Woodside Energy Ltd v Electricity Generation Corp (2014) 251 CLR 640; [2014] HCA 7 Howe v Teefy (1927) 27 SR (NSW) 301 Idameneo (No 123) Pty Ltd v Dr Teresa Angel-Honnibal [2002] NSWSC 1214; (2003) ATPR 41-918 John Alexander Clubs v White City (2010) 241 CLR 1; [2010] HCA 19 Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 Malabar RSL Sub-Branch Club Pty Ltd v RSL Custodians Pty Ltd [2014] NSWSC 1016 NCON Australia Limited v Spotlight Pty Ltd [2012] VSC 604 Taormina v Culicchia 355 SW 2d 569 at 573 (Texas Civ App 1962) Traders Prudent Insurance Co Ltd v The Registrar of the Workers' Compensation Commission of New South Wales [1971] 2 NSWLR 513 Victims Compensation Fund Corp v Brown (2003) 201 ALR 260 Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852 Texts Cited: Heydon's The Restraint of Trade Doctrine (3rd ed 2008, LexisNexis Butterworths) Pearce and Geddes' Statutory Interpretation in Australia (8th ed 2014, LexisNexis Butterworths) I. Tregoning, "The meaning and nature of goodwill in the tax context" (2010) 29 AT Rev 123 Category: Principal judgment Parties: Dental Corporation Pty Ltd (Plaintiff) Hungki (Mathew) Lee (1st Defendant) Yein Pty Ltd (2nd Defendant) Representation: Counsel: C. Cochrane, D. Harris, L. McGovern (Plaintiff) D. O'Connor, F. Bustos- McNeil (Defendants) Solicitors: Minter Ellison (Plaintiff) HIS Lawyers (Defendants) File Number(s): 2015/368727 Publication restriction: Nil