Saltec Pty Ltd v Mark Donnelly

[2015] NSWSC 1496

Supreme Court

New South Wales

Medium Neutral Citation:	Saltec Pty Ltd v Mark Donnelly [2015] NSWSC 1496
Hearing dates:	30 June 2015
Date of orders:	30 June 2015
Decision date:	30 June 2015
Jurisdiction:	Equity - Duty List
Before:	Brereton J
Decision:	Application for interim relief declined.
Catchwords:	EQUITY – equitable remedies – injunctions – injunction in aid of restraint of trade – whether evidence discloses breach of contractual restraint of trade – whether adverse inference to be drawn from refusal to give undertaking as to compliance with contractual restraint – held, case not sufficiently serious to warrant interim relief.
Category:	Procedural and other rulings
Parties:	Saltec Pty Ltd (plaintiff) Mark Donnelly (defendant)
Representation:	Counsel: D Mahendra (plaintiff) M Donnelly (in person) (defendant)   Solicitors: Sparke Helmore Lawyers (plaintiff)
File Number(s):	2015/184355

Judgment (ex tempore)

1. HIS HONOUR: On 23 June 2015, the Chief Judge in Equity granted the plaintiff Saltec Proprietary Limited leave to file a summons returnable today claiming an injunction restraining the defendant, its former employee Mark Donnelly, from, soliciting clients of Saltec or interfering in Saltec's relationship with its clients within a 50 kilometre, or alternatively 25 kilometre, radius of Saltec's place of business at Bankstown.

2. The summons returns before the Court today and Mr Donnelly appears at this stage in person. He sought an adjournment for six weeks, which I indicated would not be granted, but as I understand his position, seeks an adjournment for whatever period the Court might be prepared to grant. The plaintiff's response has been to indicate that it would not oppose an adjournment if undertakings in the form previously sought by the plaintiff – to adhere to the contractual restraint – were given; but that in the absence of such undertakings being proffered, the plaintiff seeks an interim injunction in the meantime.

3. As I regard this purely as an interim hearing, falling short of an interlocutory hearing which may take place on the next occasion, it is best that I say as little as possible in disposing of the application.

4. On the material presently before the Court, I am not satisfied that there is a sufficiently serious case for final relief to justify the grant of an interim injunction having regard to the balance of convenience.

5. First, although, as the plaintiff submits, Mr Donnelly is in breach of one of the terms of the contractual restraint by being engaged in a competing business within the prohibited radius, that has to be seen in the context that, on the plaintiff's own evidence, at the time that the contractual restraint was negotiated in September 2014, the plaintiff's managing director said to him, “We won't be automatically enforcing the clause when you leave our employment, only if you interfere with Saltec's business or jeopardise one of our client relationships", and subsequently, even after the allegations of breach had been raised, the plaintiff’s solicitors communicated to the defendant in respect of his present employment noting it to breach the restraint, saying, "we are instructed that this breach is not pressed in the event that you do not breach the restraint deed in relation to Saltec's client, the Star Casino.”

6. The real question then concerns the Star Casino. There is evidence that Mr Donnelly was present at the casino on 14 May 2014 in a restricted area talking to two significant employees of the casino with whom Saltec commonly deal. Saltec is concerned that Mr Donnelly may be trying to solicit the casino as a client. But beyond his presence at the premises, speaking to persons whom the evidence shows he would in any event have known over a long period, the evidence discloses no conduct on his part that amounts to, or could amount to, an attempt to breach the restraint. It is not possible to infer from his mere presence and conversation with senior employees that such conversation and presence was sinister. That is all the more so when Mr Donnelly has provided to Saltec an explanation for his presence – namely, that he was aware that the installation for which he had been responsible for delivering to the casino while at Saltec was to be commissioned on 14 May, and he attended to view the outcome of his work. I do not think the evidence permits an inference that more probably than not Mr Donnelly was up to no good while he was at the casino.

7. It should be added that Mr Donnelly has repeatedly refused to give undertakings demanded of him by Saltec to comply with his contractual restraint. The undertakings demanded have been comprehensive, and at least on occasion have exceeded the scope of the contractual restraint. Mr Donnelly has however stated in correspondence with Saltec that he has not breached, and does not intend to breach, the restraint of trade or confidentiality obligations outlined in his contract.

8. In those circumstances, I do not see how an adverse inference flows from the failure to give undertakings when demanded by Saltec. A case for an injunction cannot be made simply by demanding undertakings from the opposing party, and then arguing that there is a reasonable apprehension of a breach when those undertakings are not given.

9. The application for interim relief today is declined.

10. The Court orders that:

1. The defendant serve any affidavit evidence upon which he proposes to rely on the interlocutory application by 7 July 2015; and

2. The plaintiff serve any affidavit evidence in reply by 14 July 2015.

3. The proceedings be adjourned to 21 July 2015 at 10am before the duty judge for interlocutory hearing.

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