Supreme Court Rejects Employer's Attempt to Restrict Former Employee

The court dismissed the claimant's application for an injunction against the defendant, a former employee, finding the restraint of trade void for breaching public policy under the Restraints of Trade Act 1976 (NSW).

Supreme Court New South Wales

Medium Neutral Citation: [COMPANY] v [NAME] [2016] NSWSC 37 Hearing dates: 5 – 8 January and 11 January 2016 Decision date: 09 February 2016 Jurisdiction: Equity - Duty List Before: Black J Decision: Order that the Plaintiff's claim for injunctive relief be dismissed. The Plaintiff to pay the Defendant's costs of and incidental to the application. Catchwords: EQUITY – equitable remedies – injunctions – injunctions in aid of restraints of trade – where the Plaintiff sought an injunction restraining former employee from working for a third party within Australia or New Zealand – where the Plaintiff sought an injunction preventing the Defendant from soliciting the Plaintiff's clients and employees – whether restraint is void for breach of public policy – application of Restraints of Trade Act 1976 (NSW) – whether there is a threat of breach of restraints restricting the Defendant from soliciting the Plaintiff's clients and employees. Legislation Cited: - Evidence Act 1995 (Cth) s 136 - Restraints of Trade Act 1976 (NSW) s 4(1) Cases Cited: - Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1973] HCA 40; (1973) 133 CLR 288 - ATF Services Pty Ltd v Chapman [2011] NSWSC 1024 - Brink's Australia Pty Ltd v Kane [2007] NSWSC 62 - Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9 - Crawley v Short [2009] NSWCA 40; (2009) 262 ALR 654 - Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 - [COMPANY] v [COMPANY] (Supreme Court (NSW), [NAME], 14 April 1997, unrep) - Ecolab Pty Ltd v Garland [2011] NSWSC 1095 - Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 - Hannamax Hi-Tech Pty Ltd v O'Donnell [2001] NSWSC 634 - ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640 - Idameneo (No 123) Pty Ltd v Angel-Honnibal [2002] NSWSC 1214 - Jardin v Metcash Ltd [2011] NSWCA 409; (2011) 285 ALR 677 - John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995 - Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 - Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25; (2009) 201 IR 1 - Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 - Orton v Melman [1981] 1 NSWLR 583 - Pearson v HRX Holdings Pty Ltd [2012] FCAFC 111; (2012) 205 FCR 187 - Pet Tech Pty Ltd v Batson [2013] NSWSC 1954 - Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1115 - Provida Pty Ltd v Sharpe [2012] NSWSC 1041 - Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212 - Saltec Pty Ltd v Donnelly [2015] NSWSC 1496 - [COMPANY] v [COMPANY] (Supreme Court (NSW), [NAME], 27 October 1994, unrep) - [COMPANY] v [NAME] (No 2) [2011] NSWSC 386; (2011) 206 IR 450 - [NAME] (No 456) Pty Ltd v Alexander [2011] NSWCA 418 - Tullet Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852; (2008) 175 IR 414 - Vision Eye Institute Ltd v Kitchen [2014] QSC 260 - Willis Australia Group Services Pty Ltd v Griggs [2012] NSWSC 659; (2012) 222 IR 172 - Woolworths Ltd v Olson [2004] NSWCA 372 Texts Cited: - [NAME], The Restraint of Trade Doctrine (3rd ed 2008, LexisNexis Butterworths) Category: Principal judgment Parties: [COMPANY] (Plaintiff) [NAME] (Defendant) Representation: Counsel: [redacted] A [NAME] SC/[NAME] (Defendant)

Solicitors: [redacted] [NAME] (Defendant) File Number(s): 2015/360805

Judgment 1. By Amended Summons filed on 21 December 2015, and heard before me as vacation duty judge in January 2016 over a period of several days, the Plaintiff, [COMPANY] ("[NAME]") seeks several forms of final relief against the Defendant, [NAME] on a final basis. Companies within the [COMPANY] conduct, inter alia, a data analytics business, and [NAME] is a services company within the [COMPANY] and employs Australian-based personnel within that group. [NAME] is a former employee of [NAME] who is now employed by [COMPANY] ("[NAME]").

2. First, [NAME] seeks a declaration that [NAME] has breached a clause entitled "Restraint on your conduct" in the contract of employment dated 18 June 2013 ("Contract") between [NAME] and [NAME] (Ex P12, 94). Broadly, [NAME] also seeks orders restraining [NAME] from working for [COMPANY] ("[NAME]"), [NAME] and their related bodies corporate, in Australia and New Zealand, relying on cl 8.1 of the letter of offer in the Contract, and from taking certain other steps relying on cll 8.3 and 8.5 of the letter of offer in the Contract. [NAME] also seeks damages and costs. However, the hearing before me dealt only with the application for final relief and not with the claim for damages.

3. This paraphrase of the orders sought by [NAME] provides but a pale reflection of their complexity, which reflects the complexity of the relevant contractual restraints and the defined terms set out in the Contract and the Amended Summons. To describe those orders more precisely, [NAME] seeks an order that [NAME] be restrained during the Restraint Period (as defined) from, first, Working (as defined) for the [COMPANY] ("[COMPANY]") within, or in respect of its business within, Australia or New Zealand; or being Involved With (as defined) the [COMPANY]'s business within Australia or New Zealand; from working for a [NAME] (as defined) within, or in respect of its business within, the Restraint Area (as defined); or from being Involved With a [NAME]'s business within the Restraint Area. [NAME] also seeks orders that [NAME] be restrained from soliciting, canvassing, approaching or dealing with a Customer or Supplier (as defined) with a view to obtaining their business for a [NAME] (as defined) where the business or supply is either from the Customer or Supplier's business respectively within the Restraint Area, or for or to the [NAME]'s Business within the Restraint Area. In submissions, [NAME] accepted that the restraint on dealing with a Customer could only apply to [NAME] with which [NAME] had dealt in the last part of his employment by [NAME]. [NAME] also seeks an order that [NAME] be restrained from inducing, assisting in inducing, or assisting in a Group Employee or Contractor (as defined) who is based within the Restraint Area to leave their employment or terminate their engagement with a Group Member (as defined). I will return to these defined terms in dealing with the terms of the Contract.

4. The parties led detailed evidence, undertook lengthy cross-examinations and put detailed submissions and the hearing extended over several days, well beyond the period for which it had been initially listed. I will deal with that evidence, cross-examination and submissions only to the extent necessary to explain the conclusions that I have reached. It is desirable to take that course to facilitate a prompt judgment, where the combination of the date of the commencement of the proceedings, the length of the hearing and any significant delay in delivery of a judgment could otherwise have the result that at least [NAME]'s claim for injunctive relief would become moot.

Affidavit evidence and factual background 1. [NAME] relies on affidavits of [NAME] dated 8 December 2015, 11 December 2015, an affidavit in reply of [NAME] dated 18 December 2015 and a further affidavit dated 6 January 2016. [NAME] is employed by [NAME] in the role of Executive General Manager Sales, although it appears that he has responsibility in that role within the business of [NAME].

2. In his first affidavit dated 8 December 2015, [NAME] sets out the nature of the business conducted by the "[COMPANY]", which is conducted through [COMPANY] ("[NAME]") and its subsidiaries in Australia and through [COMPANY] ("[NAME]") and its subsidiaries in New Zealand. [NAME] recognises that it is generally necessary that services provided by the [COMPANY] to Australian customers be provided by an Australian company within Australia and that services provided to New Zealand customers be provided by a New Zealand company within New Zealand, to comply with relevant legislative requirements ([NAME] [18]). [NAME] sets out the structure of sales teams within [NAME] and refers to several customers that are said to be "trans-Tasman customers" with business operations in both Australia and New Zealand. As the evidence emerged, it appears that reference is generally to a position where separate companies within a corporate group acquire separate services and products in Australia and New Zealand from [NAME] and [COMPANY] respectively. 3. [NAME] also sets out the "business lines" offered by the [COMPANY] and the databases which are maintained to support those business lines, at a relatively high level of generality. [NAME] also deals with the [COMPANY], which he states (in a paragraph admitted with a limiting order under s 136 of the Evidence Act 1995 (Cth) as a submission only) is the "main [NAME]" of the [COMPANY] in Australia. [NAME] also deals with the employment history of [NAME], including his contact with customers and his suggested access to confidential information. That affidavit also refers to aspects of [NAME]'s conduct prior to cessation of employment, including raising significant matters that were not pressed at the hearing.

4. By his second affidavit dated 11 December 2015, [NAME] sets out aspects of the contractual arrangements between [NAME] and [NAME] for which [NAME] had responsibility prior to ceasing employment with [NAME]. By his affidavit in reply dated 18 December 2015, [NAME] responds to [NAME]'s affidavit sworn 15 December 2015, and addresses further aspects of the employment relationship with [NAME], dealings with the [NAME], and products and information of [NAME], and also addresses the circumstances in which [NAME] became aware that [NAME] may be working with [NAME]. A fourth affidavit of [NAME] dated 6 January 2016 expanded on "Interlock" meetings between Australian sales staff conducted on a weekly basis within [NAME], and the information provided to attendees at those meetings, and withdrew allegations made in [NAME]'s previous affidavits that [NAME] had deliberately diverted telephone calls to voicemail or another number and corrected [NAME]'s evidence of a matter that he had previously claimed to have observed at a meeting with [NAME].

5. There were difficulties with some aspects of [NAME]'s evidence, although I accept that it is possible that [NAME] was genuinely mistaken as to those aspects of his evidence. In particular, [NAME] was mistaken in his claim that he requested [NAME] to sign "this statutory declaration" in a conversation on 18 September 2015, although he had set out his recollection of that conversation in direct speech ([NAME] [154]). [NAME] also gave evidence, which was not read, that he had observed that [NAME] had a second mobile phone in his bag, when contemporaneous correspondence recorded that he had not observed that matter ([NAME] [155]). [NAME] did not correct that evidence in his third affidavit, notwithstanding that he referred, in that affidavit, to the contemporaneous email that was inconsistent with that evidence ([NAME] 18.12.15 [83]). I recognise that his evidence in cross-examination, which seemed to me to be plausible, was that he had not properly read that email and had not then recognised his error. [NAME] then corrected that evidence in his further affidavit dated 6 January 2016. In his first affidavit, [NAME] also set out concerns that [NAME] was seeking to encourage an ex-employee of [NAME] to breach a restrictive covenant in his employment contract, although that allegation was also not pressed ([NAME] [171]). It ultimately does not seem to me be necessary to form a concluded view as to these matters, given the conclusions that I have reached on other grounds. 6. [NAME] also relies on the affidavits of [NAME] dated 4 December 2015, 21 December 2015 and 5 January 2016. [NAME] is the Managing Director of [NAME] and previously worked as General Manager, Commercial & Property Solutions at [NAME] from December 2011 to June 2015. She sets out her roles at [NAME] and [NAME] and describes the business conducted by [NAME], including reference to the sale of two [NAME] products by [NAME] in New Zealand, the provision of service functions by [NAME] to [NAME] and the servicing of "trans-Tasman" clients, as to which she leads evidence to similar effect to [NAME]. [NAME] also refers to several matters relating to [NAME]'s involvement with [NAME] after he ceased employment with [NAME]. [NAME]'s affidavit in reply dated 21 December 2015 responds to [NAME]'s affidavit sworn 15 December 2015, particularly in respect of information said to have been provided to [NAME] in respect of two [NAME] products and in respect of pricing information. [NAME]'s further affidavit dated 5 January 2016 provides further explanation as to the [NAME] business and as to suggested similarities between [NAME] and [NAME]; her evidence as to the latter was largely admitted with a limiting order under s 136 of the Evidence Act as submission only. 7. [NAME] accepted in cross-examination that [NAME] and [NAME] have separate sales staff under separate heads of sales, that [NAME] has its own budget and separate reporting and has separate databases in order to comply with New Zealand regulatory requirements, which are separate to the Australian databases (T77). With the exception of a customer service function in Australia that supports both the Australian and New Zealand databases, which has secure access to the New Zealand databases, staff of [NAME] do not have access to the [NAME] databases without special permission (T78). [NAME] also accepted in cross-examination that [NAME] offered different products based on New Zealand datasets to [NAME], with different pricing, and that pricing for particular customers was also often separately negotiated, although she also observed that the business function and outcome of such products was the same, although the datasets and products could be labelled differently (T83). She accepted that, prior to 2013, no products of [NAME] were sold into the New Zealand market although two such products have been sold into that market since 2014 ([NAME] T85). [NAME] accepted that staff of the [COMPANY] regularly distinguished between the Australian business and the New Zealand business (T87). [NAME] had referred in her affidavit to corporate groups that are customers of both [NAME] and [NAME], she accepted that two of those corporate groups have separate contracts with [NAME] and [NAME], and a third had a contract with [NAME] and she did not know whether it had a contract with [NAME] (T87–88). 8. [NAME] also relies on an affidavit of [NAME] dated 2 December 2015, dealing with products offered by the Commercial Risk and Information Services Division of [NAME], the relationship between that Division and client executives and information as to product development and business practices said to have been available to [NAME]. 9. [NAME] in turn relies on his affidavits sworn 15 December 2015, 4 January 2016 and 7 January 2016. [NAME]'s first affidavit provides a detailed account of his employment by [NAME] and the nature of his dealings with the [NAME] in that role, identifies matters which he contends are differences between the business of [NAME] and [NAME], refers to the circumstances of his resignation from [NAME] and to the handover of his role to [NAME], a colleague at [NAME]. [NAME] also refers to the nature of his role with [NAME], and sets out his position as to his previous knowledge and dealings with [NAME], [COMPANY] products and [COMPANY] customers and also responds to several matters raised in [NAME]'s affidavit, which are largely no longer pressed by [NAME], and to [NAME]'s and [NAME]'s affidavits. 10. [NAME]'s affidavit dated 4 January 2016 deals with the remuneration payable to him in his current employment with [NAME], his financial commitments and the financial detriment that he claims would follow from the grant of injunctive relief. His further affidavit dated 7 January 2016 deals with the position as to incentive arrangements with [NAME], takes issue with the evidence given by [NAME] as to the quantum of his remuneration while he was employed by [NAME], and responds to [NAME]'s claims that he had access to confidential information at "Cadence" meetings and "Interlock" meetings and also responds to [NAME]'s expressed concern that the [NAME] might move to a new provider by pointing to the practical difficulties in their doing so.

11. Aspects of [NAME]'s evidence in cross-examination were unclear, including his evidence as to the circumstances in which he commenced work with [NAME] before the terms of his contract had been agreed, which he characterised as "unpaid employment" (T231–236), and he was by no means forthcoming in addressing the question of a sign-on bonus that he had negotiated in connection with the commencement of his employment with [NAME] in cross-examination. There is force in [NAME]'s submission that [NAME] had a somewhat surprising lack of recollection of some relatively recent events in cross-examination, as well as frequently seeking clarification of, or indicating difficulty in answering, what would ordinarily be thought to be relatively straightforward questions. However, as matters have developed, it seems to me that little turns on the credit of [NAME], so far as the issues in the proceedings are primarily matters of contractual construction and of the reasonableness or otherwise of the relevant restraint. I do not consider that I should reach wider findings of credit in respect of [NAME] where it is not necessary to do so.

[NAME]'s employment history 1. [NAME] was initially employed by [COMPANY], an entity in the [COMPANY], in 2008 and was employed by [NAME] or other entities within the [COMPANY] until 1 October 2015 ([NAME] [114], [164]; [NAME] 18.12.15 [16]–[17]; [NAME] 15.12.15 [6]). 2. [NAME] was initially employed as a Business Development Manager responsible for managing a larger number of accounts and, following a promotion, as a Key Account Manager in the "Majors" team, responsible for a smaller number of customers. It appears that, in his position as a Key Account Manager in the "Majors" team, [NAME] provided services to one client which conducted a trans-Tasman business ([NAME] 18.12.15 [20]). [NAME] was subsequently appointed as a Key Account Manager in the "International/Regional" team at an increased salary ([NAME] 18.12.15 [14]–[15], [18]). [NAME]'s evidence, which did not seem to me to have been controverted, was that he was responsible for the Queensland-based components of the accounts allocated to him ([NAME] 15.12.15 [18]) and [NAME]'s affidavit evidence did not suggest that [NAME] was responsible for New Zealand sales to the one client which [NAME] identifies as having trans-Tasman operations. On 1 July 2014, [NAME] was appointed as a Client Executive in the "International/Regional" team ([NAME] [116], 18.12.15 [18]) and, in that role, [NAME] was responsible for managing and developing relationships with four banking customers of [NAME] with primary operations in Queensland, namely [COMPANY] ("[COMPANY]"), Bank of Queensland, [COMPANY] and [COMPANY] ([NAME] [116], [118]–[119]). 3. [NAME] was provided with a signed offer of employment by [NAME] on about 2 September 2015 contemplating his employment as Sales Director, Financial Institutions (Confidential Ex P1, 548–564). On 3 September 2015, [NAME] resigned his employment with [NAME] ([NAME] [140]). He was subsequently offered a promotion to stay with [NAME], and was sent a "letter of intent" setting out a possible new role within [NAME] at a higher remuneration, although that role appeared to depend on implementation of a management reorganisation in Queensland ([NAME] [146]–[150]). 4. [NAME] subsequently signed a contract of employment with [NAME] as Sales Director, Financial Institutions commencing from 12 October 2015, in mid-September 2015 (Confidential Ex P1, 565–607), which describes his proposed role as being to "drive growth across both the consumer and commercial businesses." At about the same time, he confirmed his resignation with [NAME] on 17 September 2015 ([NAME] [153]; Ex P12, 601). [NAME]'s last day of employment with [NAME] was 1 October 2015 ([NAME] [164]).

5. It appears that [NAME] commenced work with [NAME], although he was not then being paid, from 3 October 2015 ([NAME] T231–232). On 19 October 2015, he commenced paid employment with [NAME] in the role of Sales Director, Financial Institutions ([NAME] 15.12.15 [100]). He was subsequently appointed as Managing Director of [NAME] on 23 November 2015 ([NAME] 15.12.15 [102]) and [NAME] issued documents relating to his employment in that capacity to him about that time (Ex P13).

Whether there was consideration for the restraints 1. I should address a preliminary point raised by [NAME], who appears with [NAME] for [NAME], that the restraints contained in the Contract are not enforceable because they are not supported by consideration. That submission appears to turn on the proposition that [NAME] was already employed by another company within the [COMPANY] when he was asked to sign the Contract and received no payment beyond his existing remuneration in respect of entry into the Contract. I do not accept that submission because, as [NAME] points out, [NAME]'s right to receive further remuneration under his prior employment contract would not extend beyond the period of notice which would need to be given to terminate that employment, and the mutual promises as to the provision of services by [NAME] and the payment of remuneration by [NAME] continued under the Contract, once the previous contract was replaced by the Contract. I do not, however, accept [NAME]'s further submission that [NAME] received consideration for the entry into the Contract by reason of his eligibility to receive discretionary commission payments for the 2013 financial year, where it seems to me that [NAME] was already eligible to receive such discretionary payments in any event, and the same applies to the actual payment of $46,000 being a discretionary component of [NAME]'s remuneration to him.

The restraint of trade under cl 8.1 of the Contract 1. As I noted above, [NAME] seeks orders restraining [NAME] from working for [NAME] and their related bodies corporate, in Australia and New Zealand, relying on cl 8.1 of the letter of offer in the Contract. That clause relevantly provided that: "During the Restraint Period, you must not Work for a [NAME] within, or in respect of its business within, the Restraint Area." That clause in turn depends on an elaborate definitional structure. The term "Restraint Period" is defined, relevantly, as the period from the date of termination of the employee's employment for 6 months, 5 months or 3 months. The term "Work" is defined to include working as an employee. The term "[NAME]" is defined as "a [NAME] of a Business; any business that is the same as, or substantially similar to, a Business; or a prospective [NAME] of a Business." That definition in turn depends on the defined term "Business", which is defined as "any business carried on by any Group Member in which [the employee] worked at any time during the Relevant Time." That definition in turn depends on further defined terms, namely "Group Member" which is defined as "any member of the [COMPANY], provided it was a member of the [COMPANY] at any time during the Relevant Time" and "Relevant Time", which is defined as the period of 12 months prior to, relevantly, the date of termination of the employee's employment. The term "Restraint Area" is defined as Australia and New Zealand, Australia or Queensland.

1. Clause 8.7 of the letter of offer in the Contract provides that [NAME] holds the benefit of cl 8 on trust for the other members of the [COMPANY]. That clause has the consequence that [NAME] could, potentially, bring a claim on behalf of another group member but does not expand the scope of the restraint.

2. There was little dispute between the parties as to the applicable legal principles. [NAME] draws attention to well-established principles of the construction of commercial contracts, including employment contracts, which require that they be construed objectively, by reference to a reasonable business person's understanding of the relevant terms, and permit the Court to have regard to the surrounding circumstances known to the parties and the commercial purposes or objects to be secured by the contract: Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at [35]. There is, of course, also a public interest in contractual performance, although a restraint on an employee's trade will not be enforced if it is not necessary for the reasonable protection of the employer's legitimate interests and the Court retains a discretion to withhold or limit injunctive relief if a proper basis is established at a hearing: Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 344; Tullett Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852; (2008) 175 IR 414 at [88], [91]; [COMPANY] v [NAME] (No 2) [2011] NSWSC 386; (2011) 206 IR 450 at [4]. [NAME] also points out, and I accept that, damages will rarely be considered an adequate alternative remedy in cases where a negative covenant is sought to be enforced: Willis Australia Group Services Pty Ltd v Griggs [2012] NSWSC 659; (2012) 222 IR 172 at [129]–[130]. 3. [NAME] also submits, and I accept, that the question whether a restraint of trade is valid involves determining three issues, whether the alleged breach (independently of public policy considerations) infringes the terms of the restraint properly construed; whether the restraint in its application to that breach is against public policy; and that, if it is not, then in its application to the alleged infringing conduct, the restraint is valid unless the Court makes an order under s 4(3) of the Restraints of Trade Act (1976) NSW: Orton v Melman [1981] 1 NSWLR 583 at 587F; Woolworths Ltd v Olson [2004] NSWCA 372 at [42] ([NAME]; [NAME] agreeing).

Whether cl 8.1 of the Contract was or is breached 1. The first question is whether cl 8.1 of the Contract was or is breached by [NAME]'s working for [NAME], independently of public policy considerations. The arguments put by the parties were complex and involved several overlapping threads, which is perhaps unsurprising given the complexity of the definitional structure adopted in cl 8 of the Contract. I will seek to identify and address the major arguments below, although that will involve a degree of repetition and overlap, as did the parties' submissions.

2. The definition of "[NAME]" in cl 8 of the Contract comprises three alternate limbs, each of which operates by reference to the defined term "Business", to which I have referred above. The first limb of the definition of "[NAME]" is "a [NAME] of a Business", and "Business" is, as I noted above, defined as "any business carried on by any Group Member in which [the employee] worked at any time during the Relevant Time."

3. The uncapitalised term "[NAME]", used in the definition of "[NAME]", is not itself defined. [NAME] submits, and I accept, that that term should be understood in the sense indicated in [COMPANY] v [COMPANY] (Supreme Court (NSW), [NAME], 27 October 1994, unrep), where [NAME], observed that '[i]n ordinary use the verb "to compete" [involves] the notion of seeking or striving for something in opposition to others and the word [NAME] conveys the notion of a rival, including a rival in trade.' I accept that a "[NAME]", in ordinary usage, may also include an entity that sells similar products to a second entity so as to compete with it seriously ([NAME], The Restraint of Trade Doctrine, 3rd ed 2008, LexisNexis Butterworths at 305) or which is operating or about to operate a business in competition with a second entity (ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640 at 661) or which might pose a real commercial threat to the first entity (Pearson v HRX Holdings Pty Ltd [2012] FCAFC 111; (2012) 205 FCR 187 at [32], [44]) or where there is 'substitution between the products and sources of supply' of the two entities (John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995 at [18]).

1. Turning now to the definition of the term "Business" used in the first limb of the definition of "[NAME]", [NAME]'s primary submission is that the business in which [NAME] worked was that of providing credit bureau services to [NAME]'s Queensland regional banking clients. [NAME] responds that that the term "Business" is not limited to servicing the four banks in Queensland for which [NAME] had responsibility at the time he ceased employment. It seems to me that this concept is not limited to the particular work undertaken by [NAME] in dealing with the four banks with which [NAME] personally dealt, since the definition of "Business" turns, for reasons that I will explain below, upon the business conducted by the Group Member in which the employee worked, not the business conducted by the particular employee. It seems to me that the concept of business should also be read as having a reasonable degree of generality, across the whole of the activities of the relevant entity, and not fragmented to deal with particular clients, groups of clients or industry segments. It could fairly be said, as a matter of fact, that [NAME] worked in [NAME]'s data analytics business, not in a business of dealing with [NAME], and that would have remained the case even if one or more of those four banks had ceased to be a client of [NAME]. I therefore do not accept [NAME]'s narrower reading of the clause. 2. [NAME] recognised that a broader view of the concept of "Business" was available, as being the business of [NAME], but submitted that the "Business" of [NAME] was not in competition with that of [NAME] (T374). By contrast, [NAME] submits that the term "Business" means any business in which [NAME] worked which was carried on by any Group Member during the Relevant Time. [NAME] also submits that the phrase "in which you worked" indicates that the restraint is intended to operate by reference to the business in which [NAME] worked rather than by reference to any Group Member for which [NAME] worked. [NAME] submits that, at the time the Contract was entered, the relevant business in which [NAME] worked, and which was carried on by the "[COMPANY]" and its members, was, in effect, the data analytics business, including trans-Tasman activities and containing the business lines described in the evidence. The reference to the "[COMPANY]" in that submission focusses, not accidentally, upon the business of [NAME] and [NAME] collectively rather than the business carried on by [NAME] as distinct from other entities within the [COMPANY]. The reading which [NAME] seeks to give to the concept of "Business" is wider than that which [NAME] gives to it, so far as it treats the relevant "Business" as any business conducted by any company or companies within the [COMPANY] that is similar to the business of [NAME], in which [NAME] worked, and the relevant "[NAME]" as any [NAME] of any such business (as [NAME] would put it) or any such company or companies. 3. [NAME] submits that the wider reading for which he contends gives cl 8.7 of the Contract a "sensible" operation so far as it extends the benefit of the restraints to Group Members within the [COMPANY]. [NAME] submits that it: "does this because [NAME] worked in a business that was carried on by more than one [COMPANY] member and it would be that member that would suffer loss if [NAME] worked for a [NAME] or solicited customers." I do not consider that cl 8.7 of the Contract supports the wider reading of the term "Business" for which [NAME] contends. That clause operates sensibly, for example, where an employee works in the "business carried on by [a] Group Member" (here, [NAME]) other than [NAME], by applying to employment of that employee by a [NAME] to the business of that Group Member (here, [NAME]).

1. In support of the wider reading of the clause, [NAME] also submits that, as part of his role, [NAME] was given access to confidential and commercially sensitive information of [NAME], which relates to all of the [COMPANY]'s product lines which are sold in Australia and New Zealand. The evidence as to confidential information provided to [NAME] ultimately fell somewhat short of that proposition, as I will note below. [NAME] also relies on the fact that the Restraint Area includes both Australia and New Zealand (cl 8.10 (g)) to support a wider reading of the clause. That extension also does not seem to me to support that wider reading, since, on a narrower construction of the clause, that extension has work to do if, for example, an employee of [NAME] in fact worked in the business carried on by a Group Member, [NAME], in New Zealand in the Relevant Period, as defined. [NAME] did not in fact work in that business. [NAME] also submits that the terms of the Contract and the nature of [NAME]'s employment indicate that [NAME]'s responsibilities encompassed selling [COMPANY] products and services in other Australian states and in New Zealand. I do not understand either the nature of [NAME]'s role under the Contract or the evidence of what he did in fact to support the extension of that submission to New Zealand, as distinct from Australia. 2. [NAME] also submits, in closing submissions, that the restraint in cl 8.1 focused on a "business" irrespective of corporate identity or form. I do not accept that submission, which does not seem to me to reflect the language of the definition of "Business", which expressly refers to the business carried on by a "Group Member", where the latter concept is defined in a way that is only consistent with it being a corporate entity. In closing submissions, [NAME] also submits that the term "[NAME]" is to be read in a way that would achieve its commercial purpose, which, he submits, would not be achieved by "artificial or narrow division of businesses into component parts". That submission has a fundamental difficulty, not avoided by its heightened rhetoric, that the term "[NAME]" is to be judged by reference to a business of a "Group Member" in which [NAME] worked which, given the nature of an employment relationship and the legal structure of corporate groups, will almost inevitably be, and in this case was, a business conducted by a single corporate entity.

3. It seems to me that the reference to "Business" in the first limb of the definition of "[NAME]" in cl 8 of the Contract adopts a composite phrase, "business carried on by any Group Member" in which the employee worked, which should be understood as the business carried on by the relevant Group Member in which [NAME] worked. The language "any Group Member" there recognises the fact that, because [NAME] is an employing rather than an operating entity, an employee will very likely work in the business of an entity other than [NAME], and applies the restraint by reference to the business carried on by that other entity, being the entity in which [NAME] worked. This reading is narrower than [NAME]'s reading of the definition of "Business", since it focusses on [NAME] as the entity that carried on the business in which [NAME] worked, rather than extending to any company or companies within the [COMPANY] that carried on the same or a similar business.

4. It seems to me that this reading of the term "Business" gives a sensible operation to that term, the definition of "[NAME]" and cl 8.1 of the Contract, in its commercial context, which does not require that the definition of "[NAME]" extend to, for example, the local competitors of the Saudi Arabian, Cambodian businesses of the [COMPANY] with which [NAME] had no connection, merely because they conduct the same business as [NAME], if they are not in fact competitors of [NAME]. That conclusion is reinforced by the fact that restraint in cl 8.1 of the Contract extends, at its widest, to Australia and New Zealand. On that construction, [NAME] would be a [NAME] of [NAME] if the latter conducted a New Zealand business, or the former conducted an Australian business, which were in competition, but not if [NAME] conducted an Australian business and [NAME] conducted a New Zealand business which were not in fact in competition by reason of the nature of the two markets.

5. It follows that the first limb of the definition of "[NAME]" requires determination of the question whether [NAME] is in fact a [NAME] of [NAME] in any of the senses noted above. [NAME] submits that the "[COMPANY]" is the principal [NAME] of the "[COMPANY]" in both Australia and New Zealand and that the "[COMPANY]" and the "[COMPANY]" provide similar products and services to similar target customers in the same market, namely the trans-Tasman market for data analytic products and services. That formulation seems to me to disregard the legal and factual distinction between [NAME] and [NAME], and to obscure the question whether [NAME], by which [NAME] is now employed, is properly characterised as a [NAME] of [NAME]. [NAME] responds that the businesses of [NAME] and [NAME] do not compete and are of a different orientation and character so that the restraint in cl 8.1 of the contract does not apply on its proper construction.

6. It seems to me that the evidence of [NAME] (and particularly her cross-examination to which I referred above) and [NAME] establishes that the businesses of [NAME] and [NAME] do not operate, in fact, as a single business or in the same market or in competition with each other. As [NAME] points out, the business of [NAME] and [NAME] are carried out by separate legal entities which operate under different budgets and report separate financial results ([NAME] 4.12.15 [24]) and use separate databases to support the business and product lines offered ([NAME] 15.12.15 [125]–[126], [146]–[150]). The sales teams of [NAME] and [NAME] report to separate executive general managers, and [NAME] generally does not provide services to customers in Australia ([NAME] 15.12.15 [57]–[58], [104]–[106]). That reflects the fact that, while [NAME] and [NAME] sell similar "product lines", the actual products sold in Australia differ, by reason of the different databases that support them and differences in the applicable legislation ([NAME] 15.12.15 [107], [117]). 7. [NAME] fairly recognises the evidence that, from a sales and marketing perspective, [NAME] and [NAME] service the trans-Tasman market individually, although, he submits that, in some cases, they do so together ([NAME] [17]; [NAME] [16]–[18]). He submits that [NAME] markets and sells products to several trans-Tasman customers with business operations in both Australia and New Zealand, that [NAME] also deals with several customers operating in Australia and New Zealand, and that [NAME] and [NAME] are actively pursuing other potential customers with operations in Australia and New Zealand and, at an operational level, a number of business functions are based in Australia ([NAME] [28]–[62], [NAME] 4.12.15 [26]–[34]). However, the bulk of that evidence indicates that [NAME] and [NAME] conduct parallel but separate businesses, dealing with separate Australian and New Zealand entities and largely separate products. 8. [NAME] also submits that, first, the majority of the data analytics products sold by the [COMPANY] are similar to the data analytics products and services sold by [COMPANY] members ([NAME] [25]; [NAME] 4.12.15 [36]–[40]). However, it does not follow that if, for example, the [COMPANY] sells similar products in Saudi Arabia (or Australia) to the products which [NAME] sells in New Zealand, those entities are competitors, where they trade in different and non-competitive markets. Second, [NAME] submits the [COMPANY] operates a data analytics business in competition with the data analytics business operated by members of the [COMPANY]. However, as I have noted above, the evidence does not seem to me to support the proposition that [NAME] is, in any substantial way, conducting a business in competition with the business carried on by [NAME] in which [NAME] worked. Third, [NAME] points to circumstances in which customers of the "[COMPANY]" were previously customers of the "[COMPANY]", again phrasing that submission so as avoid reference to the different entities conducting business in different countries. There is evidence that customers of [NAME] become customers of [NAME] and vice versa from time to time. However, the evidence does not indicate that customers of [NAME] become customers of the business carried on by [NAME] in which [NAME] worked, or vice versa.

9. Fourth, [NAME] submits that the data analytics products and services sold by the "[COMPANY]" can be substituted for the products and services sold by the "[COMPANY]" and vice versa, and he submits that proposition follows from the other matters to which he refers. I do not accept that proposition where I have generally not accepted those matters, and that proposition is also inconsistent with the evidence that products sold by [NAME] to comply with New Zealand legal requirements are not generally substitutable for products sold by [NAME] to comply with different Australian legal requirements. Fifth, [NAME] relies on the fact that, at all material times between September 2012 and 1 October 2015, a document available to all [COMPANY] personnel on the [COMPANY] intranet nominated the [COMPANY] as a [NAME] for the purpose of cl 8.1 of the Contract. That does not seem to me to take matters further, since it simply reflects [NAME]'s subjective understanding of the Contract, presumably read in the wider manner which it advanced in submissions.

10. In closing submissions, [NAME] also submits that [NAME] and [NAME] conducted a single business in Australia and New Zealand, and points to several factors which are said to support that matter. Many of those factors, such as the existence of a Group Chief Executive and a common name, are equally consistent with [NAME] and [NAME] being separate corporate entities with substantially separate businesses serving substantially separate markets, within a single corporate group. [NAME] also points to the fact of overlap of customers between Australia and New Zealand and to the fact that Australian product sales specialists provide some assistance in respect of the sale of some Australian products into the New Zealand market by [NAME]. Again, it seems to me that these factors are consistent with commonplace cooperative conduct within a corporate group and do not indicate that a single business is conducted, whether by [NAME] or by [NAME], in Australia and New Zealand, given the other evidence which indicates their separate business structures, and particularly the use of separate corporate entities, separate sales teams and distinct datasets subject to distinct legislative structures. 11. [NAME] submits that, by reason of the matters that I have addressed above, the definition of "[NAME]" in cl 8.1 of the Contract is satisfied and that is sufficient to engage the restraint, where the time period and geographic area of the restraint are satisfied. I do not accept that submission for the reasons noted above.

12. The second limb of the definition of "[NAME]" extends the restraint in cl 8.1 to a "business that is the same as, or substantially similar to, a Business". The parties did not address substantive submissions to the concept of "substantially similar", although that concept is used in many areas of the law, and the question whether a business is substantially similar to another business may ultimately be one of fact. [NAME] submits that the business of the [COMPANY] (including [NAME]) is substantially similar to the business of the [COMPANY], and the business carried out in New Zealand by [NAME] is substantially similar to the business of [NAME] so far as Trans-Tasman customers are concerned, because the two businesses provide the same or similar products to the same group of businesses and compete for the custom of Trans-Tasman businesses. I do not accept that submission, by reason of the lack of evidence of any real overlap between the business of [NAME] and the business carried on by [NAME] in which [NAME] worked in the relevant period. 13. [NAME] responds that the business of [NAME] is not the same or substantially that of [NAME], because [NAME] focuses on the sale of debt management solutions and services in New Zealand, whereas [NAME] does not sell products in the New Zealand market, and the focus of [NAME]'s business in the Australian market is data analytics and not debt management services. It appears that the primary business of [NAME] is providing debt management solutions and services, although it also provides data analytics of the kind that are sold by [NAME] and [NAME], and [NAME] does not provide debt management services ([NAME] 15.12.15 [60], [64], [120]). I accept that those are real differences between the businesses.

14. It nonetheless seems to me that the existence of a data analytics business in each of those companies is such that [NAME] can be said to carry on a business which is substantially similar to that of [NAME], albeit in different markets. Contrary to [NAME]'s submission, it does not seem to me that the fact that two businesses sell products in two different markets deprives them of "substantial similarity", in the sense that a service station business in Australia and a service station business in New Zealand could properly be said to be substantially similar although they may sell different brands of petrol to different customers. It seems to me that the fact that a significant data analytics business is carried on by [NAME] in Australia and by [NAME] in New Zealand is sufficient to satisfy a requirement for "substantial similarity" in the two businesses, although the businesses have some distinguishing features and are not directly competitive. It also does not seem to me that the fact that [NAME] conducts a significant additional business alters that result, because the element of "substantial similarity" can be established by the business that the two entities have in common. It follows that [NAME], in commencing employment with [NAME] would have breached cl 8.1 of the Contract, disregarding any question of whether it is against public policy.

15. For completeness, I note that the third limb of the definition of "[NAME]" extends the restraint in cl 8.1 to a prospective [NAME] of a Business. [NAME] submits that, if the [COMPANY] and [NAME] is not a [NAME] of the Business, then it is prospectively competitive with the Business, and that prospect is increased by the fact of [NAME]'s engagement as Managing Director of [NAME]. It does not seem to me that proposition has been established by the evidence, and the manner in which the entities conduct their businesses and the significant differences between the Australian and New Zealand legislative regimes suggests there is little prospect that [NAME], as distinct from [NAME], is a prospective [NAME] of [NAME].

Whether the restraint in cl 8.1 is contrary to public policy 1. [NAME] rightly recognises that, at common law a restraint of trade is prima facie contrary to public policy and void, unless it can be shown that the restraint is, in the circumstances of the particular case, reasonable: Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 at 565; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1973] HCA 40; (1973) 133 CLR 288 at 315. He also rightly points out that, in New South Wales, a restraint is valid to the extent to which it is not against public policy, even if not in severable terms: Restraints of Trade Act s 4(1); Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 at [26]–[27]. In [COMPANY] v [NAME] above at [47], Brereton J, after referring to the application of the Restraints of Trade Act s 4, summarised the applicable principles as follows: "In New South Wales, a restraint of trade is valid to the extent that it is not against public policy [Restraints of Trade Act 1976 (NSW), s 4(1); …]. A restraint of trade is not contrary to public policy if it is reasonable as between the parties, and not unreasonable in the public interest, so that while affording adequate protection to the party in whose favour it is imposed, it is not injurious to the public … Whether a restraint is reasonable having regard to the interests of the parties depends on two, albeit related, considerations: first, whether the covenantee has a legitimate protectable interest, and secondly, whether the restraint is no more than reasonable for the legitimate protection of that interest. A covenantee is not entitled to be protected against mere competition; the legitimate interests which may be the subject of protection by covenant are in the nature of proprietary subject matter …, including trade secrets and confidential information, and goodwill including customer connection. The validity of a restraint is to be judged at the time at which the contract is made, by reference to what the restraint entitles or requires the party to do, rather than what they intend to do or have actually done … [citations omitted] His Honour also observed (at [55]) that: "[A] prohibition on being employed by [NAME] is a restraint …; it is therefore valid to the extent that it is not contrary to public policy, but no further. The mere circumstance that the parties have agreed to it cannot of itself provide the requisite justification, else every contractual restraint would be justified; the question must be whether the restraints are more extensive in scope, area or duration than necessary for the reasonable protection of the employer's legitimate interests." 1. [NAME] submits that a restraint may be valid if it is supported by a protectable interest, which may include trade secrets, confidential information, and goodwill including customer connection, although those categories are not closed: Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9 at [11]; [NAME], The Restraint of Trade Doctrine, (3rd ed 2008, LexisNexis Butterworths p 133). [NAME] also points out that the validity and reasonableness of the restraint is to be determined as at the time it is entered into and, in determining whether a restraint is reasonable, the Court may take into account prospective future developments, including the prospect of promotion as an ordinary incident of employment: [COMPANY] v [NAME] above at [40]; [COMPANY] v [NAME] above at [37]. [NAME] also fairly recognises that, when exercising its discretion whether or not to grant relief, the court considers matters as at the date of hearing: [COMPANY] v [NAME] above. [NAME] also points out that the party asserting the restraint bears the onus of establishing that it is reasonable between the parties, and the party seeking to impugn the restraint bears the onus of establishing that it is against public policy, and that remains the position in New South Wales under the Restraints of Trade Act: [NAME] (No 456) Pty Ltd v Alexander [2011] NSWCA 418 at [82]. [NAME] in turn points out, and I accept, that the Courts generally take a stricter view of covenants in restraint of trade between employer and employee than similar covenants between, for example, the vendor and purchaser of a business: [COMPANY] v [NAME] above at [38]; [COMPANY] v [NAME] above at [11].

2. As [NAME] points out, an employer may protect its confidential information by a restraint of trade, including by a covenant restraining an employee from working for a trade rival or restraining the employee from soliciting the employer's customer: [COMPANY] v [NAME] above at [38], [67]; [COMPANY] v [NAME] above at [12], [22]–[23]. [NAME] also points out that pricing information, including the basis on which prices are calculated, and information as to the level of a profit which a business requires may be confidential and may support a restraint: Brink's Australia Pty Ltd v Kane [2007] NSWSC 62 at [45]–[48]; [COMPANY] v [NAME] above at [17], [20]. It will generally be necessary for a plaintiff to identify the relevant confidential information with precision and not merely in global terms in order to support a restraint on this basis: Hannamax Hi-Tech Pty Ltd v O'Donnell [2001] NSWSC 634 at [20]–[26]; [COMPANY] v [NAME] above at [14]; Ecolab Pty Ltd v Garland [2011] NSWSC 1095; Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212 at [20]–[21]; Pet Tech Pty Ltd v Batson [2013] NSWSC 1954 at [31]. 3. [NAME] identified a wide range of confidential information which [NAME] was said to possess, which I will seek to organise by categories. The first category is product and pricing information. [NAME] initially submitted that, during the course of [NAME]'s employment with [NAME], he had access to confidential information of the [COMPANY] including the pricing structure, cost, profit margin, and operation, of all of the [COMPANY]'s product lines, being products which were sold in Australia and New Zealand and which [NAME] marketed to the [NAME]. However, that submission substantially depended on conclusory assertions of confidentiality in the affidavits of [NAME] and [NAME] that were not admissible and were not admitted in evidence or not read.

4. It does not appear that [NAME] has knowledge of the technical details of products developed by [NAME], other than at the general level of a salesperson's knowledge, and [NAME]'s practice was that product specialists would deal with clients in respect of such information. I have had regard to, but do not need to set out, the comprehensive review of the nature of such information contained in the parties' respective submissions. I am not satisfied that the confidentiality of more general product and pricing information has been established, since product presentations, in hard copy form, were often left by [NAME] with its clients, which described the functionality and specifications of those products, and they were not subject to confidentiality agreements ([NAME] T94–97). [NAME] would also communicate its pricing tiers to persons who made an inquiry about the cost of products ([NAME] T107). 5. [NAME] placed particular emphasis on the pricing of versions 2 and 3 of a 'Decision Point' software product, which is sold by the [COMPANY] in both Australia and New Zealand, and which [NAME] marketed at least to [COMPANY] Bank and to Bank of Queensland in early 2014 ([NAME] 18.12.15, [36]-[40]). However, the conclusory statements in [NAME]'s affidavit that the Decision Point software product sold in Australia was identical in functionality and cost to the products sold in New Zealand ([NAME] 18.12.15, [34]) were also not admissible and were not admitted in evidence. [NAME] also contends that [NAME] had access to information as to the operation of a new product, Commercial AML (an abbreviation for Commercial Anti-Money Laundering) which was sold in Australia and which [NAME] was also marketing to the [NAME] ([NAME] [99]–[102]). [NAME] also contended that [NAME] was provided with the confidential information in relation to the products of the Commercial Risk and Information Services Division of [COMPANY], namely general product information, product development information and business practices information described in [NAME]'s affidavit affirmed on 2 December 2015 and product, pricing, cost, and sales strategy information on the [NAME] product ([NAME] 4.12.15 [8]-[9]; [NAME] 21.12.15 [7]), including through [NAME]'s participation in "Interlock" meetings, although parts of the evidence relied on to support that contention were also not admitted. However, there is evidence that [NAME] also had access to, and was expected as part of his job to be familiar with [COMPANY]'s contracting policy including its 'walkaway positions' ([NAME] [103]–[104]; [NAME] 18.12.15 [46]–[47]).

6. I accept that there would be a degree of confidentiality in information concerning some of the products to which [NAME] referred, although, as I have noted above, it appears that much of that information would become available to customers as [NAME] marketed those products to them, notwithstanding that [NAME] made some attempt to maintain confidentiality in materials which it provided to customers by marking them "commercial in confidence", although customers were not bound by the implied request in that marking to maintain the confidentiality of that information. The evidence that [NAME] had access to [NAME]'s contracting and pricing policy, including walk-away prices, seems to me to be of greater weight, and to provide real support for a restraint of trade for an appropriate period extending throughout Australia. However, the claim for a restraint extending beyond Australia to New Zealand is substantially weakened by the evidence of different product and pricing structures in Australia and New Zealand, and the fact that [NAME] had no need to have, and does not appear to have had, access to New Zealand products and pricing. 7. [NAME] also submits that [NAME] had access to the completeness, currency, and accuracy of the data contained in the [COMPANY]'s consumer, commercial, insurance and fraud databases ([NAME] 18.12.15 [73]). However, any suggestion that [NAME] might retain, by memory, and duplicate the content of extensive consumer, commercial, insurance and fraud databases is highly implausible. In fairness to [NAME], I should also record that, although [NAME] had retained a forensic expert to examine [NAME]'s laptop and served expert evidence of that examination, it did not read that evidence and did not pursue any allegation that [NAME] had downloaded or otherwise taken any confidential information from his computer or otherwise.

8. A second category of information is said to be that obtained by [NAME] from participation in internal [NAME] meetings. [NAME] submits that [NAME] had access to key sales opportunities in the pipeline across the entire Australian business of the [COMPANY] through his participation in "Cadence" meetings" and there is evidence that [NAME] attended Cadence meetings at least in November and December 2014 and July 2015 ([NAME] 18.12.15 [26]–[30]). [NAME] also submits that [NAME] had access to confidential information by his participation in "Commercial Review Panel" meetings ([NAME] 18.12.15 [35]–[43]). [NAME] also received, in July 2015, an update relating to "Sales Cadence" (Ex P1, 375–421) which recorded actions to be taken in relation to particular clients and contained an outline of opportunities, issues and key future activities for [NAME], as well as a sales forecast for the first quarter of 2016, including by reference to contract value for particular clients. Even assuming, as is likely, that [NAME] may not now recall the detail of that material, which was not shown to him by his legal representatives in preparation for the proceedings, it seems to me that a recollection of its broad character would still allow him a detailed understanding of the likely present state of [NAME]'s business, which is sufficiently current to be of significant value to a [NAME] of [NAME] in the Australian market, and also supports a restraint of trade for an appropriate period extending throughout Australia.

9. A third category of information relates to [NAME]'s dealings with particular clients. [NAME] submitted that [NAME] knew information about its customer relationships that were confidential to it, including that [name redacted] had expressed a degree of dissatisfaction with an aspect of the services provided by [NAME]. However, I am not persuaded that that information is confidential, where [name redacted] would be entitled to disclose it to anyone it wished. I do accept that, as [NAME] submits, it is likely that [NAME] has a range of other confidential information concerning the details of the relationship between [NAME] and the [NAME] and he has not suggested to the contrary. 10. [NAME] initially submitted that, if a member of the [COMPANY], or an officer or employee of that entity, has access to that confidential information, it would provide that entity with a significant competitive advantage that it could use to increase its share of the trans-Tasman market for data analytic products and services, and reduce [COMPANY]'s share of that market, although conclusory statements to that effect in [NAME]'s and [NAME]'s evidence were again not admissible and not admitted in evidence ([NAME] [123], [126], [128]; [NAME] 18.12.15 [66]; [NAME] 4.12.15, [71] – [72]). [NAME] submits that: "[Mr] [NAME]'s knowledge of the functions of the [COMPANY] products, and their efficiencies and advantages, and knowledge of the [COMPANY]'s pricing parameters, marketing strategy, marketing opportunities and walkaway negotiating positions would provide the [COMPANY] with a significant advantage in winning work from the [COMPANY]. [NAME]'s knowledge extends to all products sold to all of the [COMPANY]'s customers in the trans-Tasman market.

Accordingly, this advantage would be enjoyed both in respect of the [[NAME]], and the other customers of the [COMPANY] in the trans-Tasman market for data analytics services." [NAME] also submits that the Court should infer from [NAME]'s position as the Managing Director of [NAME] that he is in a position to utilise that information to undermine [COMPANY]'s relationship with its customers both in New Zealand and in Australia. 1. [NAME] extended that submission to New Zealand, it seems to me that [NAME]'s treatment of confidential information paid little attention to the relevance of the information that [NAME] has to the role for which he has been employed in [NAME], either in respect of the larger part of [NAME]'s business, relating to debt collection management, or that part of its business that involved data analytics, given the differences between New Zealand and Australian products, customers and markets to which I have referred above. [NAME]'s evidence was that he had had no dealings with customers or confidential information relating to [NAME]'s business, or access to any databases of [NAME], or any dealings with sales employees of [NAME], during his employment with [NAME] ([NAME] 15.12.15 [59], [105], [125]) and my attention has not been drawn to any evidence to the contrary. It is difficult to see that [NAME]'s possession of confidential information relating to the Australian market can support a restraint extending to the New Zealand market, given the lack of persuasive evidence that that information is relevant to the New Zealand market. 2. [NAME] submits that an employer is also entitled to protection against the use of 'personal knowledge of and influence over' its customers, which the employee might acquire in the course of his employment, so as to undermine its customer connections, and this protection can take the form of a covenant restraining an employee from working for a trade rival or restraining the employee from soliciting the employer's customers: Jardin v Metcash Ltd [2011] NSWCA 409; (2011) 285 ALR 677 at [97]; [NAME] v [COMPANY] above at [51]–[55]; [COMPANY] v [NAME] above at [25]. [NAME] also points out, that it will not generally be reasonable to restrain an employee from working in the whole of the geographical area in which the former employer's business was conducted, if the former employee was engaged in, and serviced clients in, a narrower geographical area: [NAME], The Restraint of Trade Doctrine, (3rd ed 2008, LexisNexis Butterworths), 156–157; Vision Eye Institute Ltd v Kitchen [2014] QSC 260 at [345]. 3. [NAME] submits that [NAME] was a senior employee of [NAME]. [NAME] responds that [NAME] was not a senior employee of [NAME] but was a middle manager with responsibility for a small number of accounts, and that neither he nor his immediate supervisor was a member of the executive leadership team. I am not satisfied that [NAME] was properly characterised as a senior employee of [NAME], although he is of course now a senior employee of [NAME]. [NAME] seems to have been at all relevant times several levels below the Chief Executive Officer within [NAME]'s corporate hierarchy ([NAME] 15.12.15 [18], [NAME] T181). From July 2014, [NAME] seems to have been one step higher in [NAME]'s hierarchy, but was then still three steps below the Chief Executive Officer, and reported in that capacity to a general manager who was not part of [NAME]'s executive team. [NAME] also submits that the Court should infer [NAME]'s seniority from the fact that, very shortly after leaving his employment with [NAME] was appointed to the role of Managing Director of [NAME]. I do not draw that inference, because the status of a new position does not seem to me to indicate anything as to the status of a prior position, and in any event [NAME] was initially appointed to a less senior role within [NAME] and then promoted when the managing director of [NAME] resigned. 4. [NAME] also submits that, prior to the time the Contract was made, [NAME] was responsible for managing [NAME]'s relationship with up to 75 clients ([NAME] [118]) and, at the time the Contract was made, [NAME] was responsible for ten 'top end' customers of [NAME] ([NAME] 18.12.15 [17]) and he also refers to the level of [NAME]'s remuneration. [NAME] points to the fact that [NAME] was subsequently given responsibility for [NAME]'s relationship with the [NAME] ([NAME] [118]–[119]) and had contact with his superiors in [NAME]'s senior leadership team in performing his role ([NAME] 18.12.15 [22]). It appears to be common ground that the [NAME] for which [NAME] was responsible, from July 2014, did not have operations outside Australia. 5. [NAME] also submits that [NAME]'s relationship with the [NAME] is particularly vulnerable to attack from a [NAME] such as the [COMPANY], although that submission would obviously have had less weight had it referred to [NAME]'s employer, [NAME]. [NAME] identifies reasons for that vulnerability as that [NAME]'s contracts with the [NAME] are non-exclusive, and are subject to frequent renegotiation and renewal and [COMPANY]'s contract with [COMPANY] (for most services) and some of its contracts with [COMPANY] are renewed on a month-to-month basis ([NAME] 11.12.15 [6]–[12], T196). Both Bank of [COMPANY] have contracts with [NAME] which run up to or beyond the expiry of [NAME]'s restraint of trade, although the process for renewal of Bank of Queensland's contract would commence while he is under that restraint. The evidence, as elicited in cross-examination, suggests that the risk of any movement by the [NAME] to a new provider would be significantly reduced by the extent of information technology, risk and integration work which would be necessary to bring about such a change, where those banks have already taken steps to ensure compatibility of their systems with that of [NAME]. 6. [NAME] submits that [NAME], the client executive who is now responsible for managing the relationship with the [NAME] had "limited contact" with these clients before assuming this responsibility ([NAME] 11.12.15 [10]–[11]). [NAME]'s evidence, which I accept, is that [NAME] had been working with the [NAME] for more than a year, at the time [NAME] handed over responsibility for those banks to him, during his notice period in September 2015 ([NAME] 15.12.15 [178]–[179]; Ex P12, 605–606). Where [NAME] had already been working as part of the team providing services to the [NAME] for a significant period, it seems to me that [NAME]'s submission as to his lack of connection with them was, at best, overstated. Several other executives of [NAME] were also involved in providing services to the [NAME], including several executives senior to [NAME] and products specialists ([NAME] T192). 7. [NAME] submits that the scope of the restraint in cl 8.1 is reasonable in its geographic scope where, at the time the Contract was made, [NAME] was responsible for ten 'top end' customers ([NAME] 18.12.15 [17]) which included one entity, Transpacific, which conducted a trans-Tasman business ([NAME] 18.12.15, [20]). [NAME] also submits that, at the time the Contract was made, the [COMPANY] was conducting a trans-Tasman business, with which a [NAME] based in either Australia or New Zealand could compete because of the proximity of the two countries, historical connections, their commercial and cultural similarities, and the ease of communication using modern information technology. That proposition has the difficulty, however, that [NAME] was not, to any substantial extent, conducting a business in New Zealand and the applicable legislative structure in the two countries would have been a significant barrier to its doing so. [NAME] responds that, where [NAME] worked only on the accounts of the [NAME] for the 14 months prior to his resignation, a restraint that extends beyond Australia to New Zealand is not necessary for the reasonable protection of any customer connection. 8. [NAME] submits that the duration of the restraint in cl 8.1 is reasonable, on the basis that there is no reason to doubt that the confidential information in [NAME]'s possession will remain current until at least April 2016, being 6 months from the date of termination of his employment with [NAME]; [NAME]'s relationships with the [NAME] are particularly vulnerable to attack from a [NAME] such as the [COMPANY] (but, I interpolate, less likely [NAME]) in the period up to at least April 2016; and [NAME]'s replacement, had limited contact with the [NAME] before assuming this responsibility (a submission that I have addressed above) and it can be expected that it will take [NAME] at least until April 2016 to establish a rapport with those banks. It seems to me that [NAME]'s submission as to confidential information has substantial weight, at least in respect of the detailed information as to contracting policy, customers and sales projections that was made available to [NAME], although I would give lesser weight to the other factors to which [NAME] refers for the reasons noted above. 9. [NAME] also points out that cl 8.8 of the Contract provides that the employee acknowledges that: "(a) each restriction specified in clauses 8.1, 8.2, 8.3, 8.4 and 8.5 is in the circumstances reasonable and necessary to protect the Company's legitimate business interests, including, but not limited to, the Company's interest in protecting: (i) confidential information; (ii) its relationships with Customers, Suppliers, Group Employees and Contractors; and (iii) the goodwill of the Company's business; and (b) damages are not an adequate remedy for a breach of this clause." I recognise that, where the parties have equal bargaining power, it will often be reasonable to regard them as the best judges of the length of period that is reasonable for a restraint; however, as Brereton J noted in [COMPANY] v [NAME] above at [41], that consideration is not conclusive. That proposition also seems to me to have less weight where an employee is offered a contract of employment in standard form, specifying a lengthy restraint, and has little real prospect of negotiating that contract. 1. [NAME] also points out that, by cl 9 of the letter forming part of the Contract, [NAME] acknowledged that he had taken, or had the opportunity to take, legal advice on the Contract. There was in issue between the parties as to whether, notwithstanding that clause, [NAME] had been afforded an adequate opportunity to consider and take legal advice as to the restraints before signing the Contract. [NAME] signed a letter acknowledging a transfer of his employing entity on 6 November 2012, recording the transfer of his employment to [NAME] (Ex P18). His manager followed up his not having signed his new contract of employment in early June 2013 (Ex P17) and he signed that contract on or about 19 June 2013. [NAME]'s evidence in cross-examination was that he understood his manager's reference to the need to sign the new contract to involve a suggestion that [NAME] would withhold a commission payment which was then due, amounting to approximately $30,000, unless he signed the Contract ([NAME] 15.12.15 [12]). It should be recognised that nothing that [NAME] or [NAME]'s manager had said involved any express threat of that kind, and it is not easy to see where [NAME] had derived that understanding. It seems to me that [NAME] had sufficient time to consider the restraints where there is evidence of earlier notification to employees of the new contracts (Ex P12, 70–71), although [NAME] had not in fact taken legal advice as to the contract and had recorded that matter in an email at the time he signed it, at his manager's suggestion.

2. I have also had regard to the fact that it appears that [NAME] at one point sought a restraint from [NAME], in respect of his new employment, that was of similar length and geographical scope to that required by [NAME]. That restraint has not been finalised, a matter which is perhaps not surprising where these proceedings are on foot. I give little weight to that matter, since, if the restraint obtained by [NAME] is too wide against public policy, it will be no less so because another industry participant also seeks restraints that are of the same character. Whether any restraint ultimately sought by [NAME] is valid may well also be a matter of New Zealand law, which may or may not be similar to Australian law in this respect. 3. [NAME] submits that, if a restraint was legitimately required, a restraint of no more than three months was reasonable. [NAME] also points out that the restraints applicable to the [COMPANY]'s most senior executives is only a period of six months. [NAME] points out, and I accept, that the length of restraints imposed by [NAME] on other employees is potentially relevant to determining the reasonableness of the restraint imposed on [NAME]: Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1115 at [37]; [COMPANY] v [NAME] above at [56]–[58]. However, I am not persuaded that such a comparison indicates that the restraint applicable to successful salespersons should necessarily be less that that applicable to the [COMPANY]'s senior executives, where the risks involved in the departure from employment of a senior executive and a successful salesperson are of a somewhat different character and, on one view, the loss of a successful salesperson could potentially create a greater risk of loss of key customers to a company than loss of a senior executive who had less direct customer connections.

4. I am satisfied that it was in the parties' reasonable contemplation, when the Contract was made, that [NAME] would develop customer connections and have access to confidential information sufficient to warrant a restraint extending to a period of six months, but only in Australia and not in the New Zealand market. I have regard to the fact that the information as to [NAME]'s contracting policy, sales and financial projections that was likely to be made available to [NAME] has a high degree of confidentiality in the Australian market and not only in Queensland, although I am doubtful that much of the other information on which [NAME] relied had that character. It seems to me that the fact that that information related to the Australian market and not only the [NAME] or the Queensland market supports the application of a restraint in Australia and not only in Queensland. However, these matters do not support the extension of the restraint to New Zealand, and I am satisfied that restraint is against public policy so far as it extends to New Zealand.

5. The time period that is reasonable for a restraint will depend upon the circumstances and views may differ. In [COMPANY] v [COMPANY] (Supreme Court (NSW), [NAME], 14 April 197, unrep), [NAME] observed that: "[A] restraint that enures after the time taken for a reasonably competent new employee to master the job and be able to demonstrate to customers that he or she is effective and efficient, will be too long." In Miles v Genesys Wealth Advisers Ltd [2009] NSWCA 25; (2009) 201 IR 1 at [36], Hodgson JA qualified that observation by noting that there is no precise rule on the basis of which the period for which an employer is legitimately entitled to protection can be determined, and observed that some cases may justify a restraint longer than that contemplated by [NAME] in [COMPANY] v [COMPANY]. In [COMPANY] v [NAME] above at [53], in a case involving the employee of a brokerage firm in the wholesale market, Brereton J expressed the view that a three month period was reasonable in circumstances that it had been negotiated between the parties, but observed more generally that: "In my opinion, the contractual post-employment restraints for a period of three months are reasonable. In a relatively small industry such as this, in which the various players are well known to each other (so that clients might well seek out the former employee in his new employment even in the absence of active solicitation), a restraint on accepting employment with a [NAME] within the territory, as well as on solicitation of clients and recruitment of staff, is reasonable, at least for the stipulated period of three months following termination of employment, to permit the employer to replace the employee, establish a relationship between the replacement and the clients, and prove the replacement's competence." On the other hand, restraints of longer periods have been upheld in other sales relationships, although each case must turn on its own facts: for example, ATF Services Pty Ltd v Chapman [2011] NSWSC 1024; [COMPANY] v [NAME] above; [COMPANY] v [NAME] above; Provida Pty Ltd v Sharpe [2012] NSWSC 1041. It seems to me that, as [NAME] points out, the relatively long lead times involved in the production of products, and the likelihood that [NAME]'s contracting policy and sales projections will remain useful to a [NAME] for several months provides support for a longer restraint. 1. [NAME] submits that if, contrary to his submissions, the restraints apply (at least to a limited extent) to [NAME]'s employment with [NAME], they are against public policy and invalid under the Restraints of Trade Act and should be read down to apply only to employment in Queensland, or alternatively in Australia, and only for a period of three months after termination of [NAME]'s employment with [NAME]. Applying the Restraints of Trade Act, or alternatively relying on cl 8.9 of the Contract which allows the restraints to operate separately, it seems to me that cl 8.1 of the Contract should properly be read down to a restraint of six months applying in Australia. However, there is no evidence of a threatened breach of that clause by [NAME], when read down in that way, since there is no evidence to suggest that [NAME] will be employed within Australia within the Restraint Period. No injunctive relief should now be granted in that respect. 2. [NAME] also points out that, as I noted above, even if the restraint is reasonable when considered as at the date of the Contract, the Court has a discretion to withhold or limit injunctive relief if a proper basis to do so is established at the hearing. I would not, in the exercise of discretion, have granted the injunction sought by [NAME], so far as the restraint of [NAME]'s employment by [NAME] seems to me to extend beyond what would be necessary to avoid any misuse of his connection to or knowledge about the [NAME] or the access to any relevant confidential information concerning [NAME]'s Australian business to which I have referred above.

3. I note, for completeness, that [NAME] had offered an open undertaking, which was not accepted by [NAME], that he would not Work (as defined in cl 8.10 of the letter of offer in the Contract) for a [NAME] (as defined in that undertaking) within or in respect of its business within Queensland, or be Involved With (also as defined in cl 8.10 of the letter of offer in the Contract) a [NAME]'s business in Queensland until 2 February 2016, for a period of four months after the termination of his employment by [NAME]. That open undertaking would not have avoided the need for any relief to which [NAME] was otherwise entitled, where I have held that the restraint can be read down to a period of six months throughout Australia. No question of the Court accepting that undertaking now arises where the period for which it was offered has now expired.

4. By that open undertaking, [NAME] also acknowledged and agreed that he would keep confidential all Confidential Information (as defined in cl 30.4 of the terms sheet in the Contract) and he acknowledged and agreed that he had returned all Company Property (as defined in cl 30.3 of the terms sheet in the Contract) to [NAME]. Those acknowledgements and agreements were also not accepted by [NAME] and are coincident with [NAME]'s existing contractual obligations, and no submission was put by [NAME] that the Court should accept those undertakings in circumstances that it had established no other right to relief.

Solicitation of customers and employees 1. As I noted above, [NAME] narrowed its position in the course of submissions to seek injunctions preventing [NAME] for six months after the end of his employment from soliciting any of the [NAME]. This relief relies on cl 8.3 of the letter of offer in the Contract which provides that: "During the Restraint Period, you must not solicit, canvass, approach or deal with any Customer with a view to obtaining their business for a [NAME], where the business is either: (a) from the Customer's business within the Restraint Area; or (b) for the [NAME]'s business within the Restraint Area."

1. That clause depends on several of the definitions to which I have referred above and also on the definition of "Customer" which is defined as part of a wider phrase as follows: "Customer, Supplier, Group Employee and Contractor means any customer, supplier, employee or contractor (as the case may be) of any Group Member in any Business with whom you worked or had dealings at any time during the Relevant Time."

1. A breach or threatened breach of that prohibition is not established by the evidence on which [NAME] relies, namely that [NAME] has approached, or attempted to approach, current customers of [NAME], including [COMPANY], [NAME] and [COMPANY] ([NAME] 4.12.15 [61]–[69]). [NAME] fairly acknowledged in cross-examination the absence of evidence of any approach by [NAME] to any of the [NAME] (T199) and there is no evidence that [NAME] has made any contact with any of the [NAME] during the period of the restraint. 2. [NAME] relies on the fact that, by open letter dated 10 December 2015 from his solicitors ([NAME] 11.12.15 [21], Annexure "C"), [NAME] offered an undertaking (to which I will refer further below) in terms that reflected 8.3 of the Contract until 2 February 2016, two months less than the contractual period. [NAME] submits that it follows that [NAME] does not consider himself bound not to solicit the business of those entities from his current role in New Zealand for the benefit of the [COMPANY]. As [NAME] points out, a threat of breach would not be established had [NAME] declined to give an undertaking that he was not bound to give, so far as the Contract already imposed obligations on him: Saltec Pty Ltd v Donnelly [2015] NSWSC 1496 at [8]. The position seems to me to be no different where [NAME] offered an undertaking that he was not bound to give and remains bound to comply with relevant obligations under the Contract.

3. Clause 8.5 of the letter of offer in the Contract in turn provides that: "During the Restraint Period, you must not induce, assist in inducing or assist any Group Employee or Contractor who is based within the Restraint Area to leave their employment or terminate their engagement with a Group Member." 1. [NAME] initially submitted that it had "reason to believe" that [NAME] has attempted to induce [NAME], an ex-employee of the [COMPANY], to breach the restraint provisions in his contract ([NAME] [171]–[180]. That submission was ultimately not pressed. It is common ground that [NAME] contacted two former employees of the [COMPANY], after their employment with the [COMPANY] had ceased, but that conduct would not amount to a breach of cl 8.5 of the Contract. 2. [NAME] submits, and I accept, that an explicit threat to breach a restraint is not required to support an injunction, and that an injunction may be granted, for example, if there is evidence of an actual breach of another part of a restraint, combined with opposition to that part of the restraint in respect of which the injunction is sought: [COMPANY] v [NAME] above at [60]. However, no breach is established in respect of cl 8.1 of the Contract, given the findings which I have reached above as to its proper scope, and no conduct of [NAME] indicates any present intention to breach cl 8.3 or 8.5 of the Contract. No doubt, [NAME] can take steps to enforce those restraints, if and when any issue as to a potential or actual breach of them arises. It does not seem to me that the Court should exercise a discretion to grant such relief now, where that issue has not now arisen, and where [NAME] has not established that other bases on which relief was sought.

3. I do not accept [NAME]'s further submission that the Court should more readily grant an injunction to restrain a breach (which, I again note, is not presently threatened) because [NAME] was not transparent in dealing with [NAME] at the time he ceased employment or was not transparent in responding to inquiries as to the circumstances in which he had commenced work with [NAME]. I also do not accept [NAME]'s further submission that an injunction to restrain a breach of cl 8.3 of the Contract should be granted because, [NAME] suggests, other persons in [NAME] might assist with the solicitation of the [NAME] if [NAME] ignores the restraint upon him. There is no more evidence that such other persons would knowingly assist any breach by [NAME] of cl 8.3 of the Contract than that [NAME] would breach that clause. 4. [NAME] also submits that the Court should more readily grant an injunction where [NAME] has targeted customers of [NAME] in New Zealand including, it is suggested, some customers that are also part of Australian corporate groups. That submission does not have regard to whether those customers are separate corporate entities in New Zealand but, quite apart from that matter, it seems to me that the fact that [NAME] may have done what he is entitled to do on behalf of [NAME], in respect of customers in New Zealand, provides no reason to grant an injunction to which [NAME] is not otherwise entitled.

5. No breach or threat of breach of cll 8.3 or 8.5 of the Contract and no basis for injunctive relief is established. No claim for damages can arise from conduct in soliciting custom from the [NAME] or soliciting employees which [NAME] has not been shown to have undertaken. The question whether these clauses are wider than could be supported as a matter of public policy or could be saved by the operation of the Restraints of Trade Act therefore does not arise.

6. As I noted above, [NAME] had offered open undertakings by his solicitor's letter dated 10 December 2015, which were not accepted by [NAME], including that he would not, until 2 February 2016 (that is, for a period of four months after the termination of his employment) solicit, canvass, approach or deal with the [NAME] or induce, assist in inducing or assist in any Group Employee or Group Contractor (as defined in cl 8.10 of the letter of offer in the Contract) who is based within Australia leaving their employment or terminating their engagement with a Group Member (as defined in cl 8.10 of the letter of offer in the Contract). Those undertakings were directed to the matters addressed by cll 8.3 and 8.5 of the Contract, although they took a view as to the proper scope and length of the restraint, the correctness of which I have not needed to determine. The period offered in those undertakings has now expired and it is not necessary to address them further, given the findings that I have reached above.

Hardship 1. [NAME] also submitted that the injunction would cause [NAME] hardship, so far as he would be without income, or at least his income would be reduced, for the period of the restraint. [NAME] in turn offered an undertaking to pay [NAME] his base salary from the period of any final relief made by the Court, in accordance with paragraphs 8(a)–(d) of the Amended Summons, if [NAME] would not then remunerate [NAME], up to and including 1 April 2016 (MFI 1). It is not necessary to address this matter given the findings that I have reached on other grounds.

Delay 1. As I noted above, [NAME] commenced paid employment with [NAME] from 19 October 2015. These proceedings were not commenced until 8 December 2015. [NAME] submits that [NAME] unreasonably delayed in commencing these proceedings and that injunctive relief should not be granted for that reason. [NAME] responds that, for much of the period to 8 December 2015, [NAME] was unaware of the detail of conduct of [NAME] that it now contends amounted to a breach of the restraints. 2. [NAME] relies on [NAME]'s evidence that, on 18 September 2015, he asked [NAME] whether he intended to commence employment with the [COMPANY] and [NAME] denied that intention ([NAME] [154]). [NAME] acknowledges that, between 20 September 2015 and 3 November 2015, several of its, or [NAME]'s, executives heard rumours that [NAME] proposed to work, or was working, with the [COMPANY], and contends that it commenced an investigation in an attempt to obtain evidence of that fact ([NAME] [156]; [NAME] 18.12.15, [82]-[91]; [NAME] 4.12.15 [53].) [NAME]'s evidence is that he was concerned about this information but took [NAME] at his word that he was not going to work for the [COMPANY] ([NAME] [157]).

3. At least by 20 September 2015, [NAME]'s Chief Executive Officer sent an email to other executives stating that "we think [[NAME]] is going to head to [NAME] but we can't be sure" (Ex P8, tab 11). By 12 October 2015, [NAME] had reported to the Chief Executive Officer of [NAME] that it was disappointing to hear that [NAME] had been appointed as [NAME]'s sales manager in New Zealand ([NAME] 4.12.15, annexure "E"). On 14 October 2015, [NAME] reported to [NAME] that it had been confirmed that [NAME] would be based in New Zealand "for the short term to work out his non-compete clause" ([NAME] 4.12.15, annexure "F") and [NAME] responded that that was "no surprise". [NAME] acknowledged in cross-examination that she knew by about mid-October 2015 that [NAME] had taken up a role in [NAME] and had communicated the information to her executive colleagues ([NAME] T121). 4. [NAME] submits that it first became aware of credible evidence that [NAME] was connected with the [COMPANY] in New Zealand on or about 3 November 2015, when [NAME] became aware that [NAME] was corresponding using an email address at [NAME] ([NAME], [165]). [NAME]'s evidence is that he did not know anything else about the nature of the connection, such as whether he had started work, or in what capacity until, on 19 November 2015, he received copies of two articles that described [NAME] as "Director of [NAME]'s Consumer and Commercial Bureau" ([NAME] [166]). 5. [NAME] also submits that, from 19 November 2015, it sought to clarify [NAME]'s position and assert its perceived rights by correspondence. By letter dated 23 November 2015, the solicitors for [NAME] wrote to [NAME] putting him on notice of its concern that [NAME] was in breach of his obligations and duties and requesting further information and undertakings ([NAME] [185]). By a further letter dated 25 November 2015, the solicitors for [NAME] wrote to [NAME], putting it on notice of its position as to [NAME]'s contractual obligations and seeking certain information concerning [NAME]'s activities ([NAME] 11.12.15 [16]). The solicitor who delivered that letter to [NAME]'s Auckland offices was advised by the receptionist that [NAME] had been appointed as managing director after his predecessor left the company and [NAME] thereby became aware of that matter. While the nature of [NAME]'s employment by [NAME] was not necessarily relevant to the fact of any breach of the restraints, it may well have been relevant, in practical terms, to a decision whether to commence proceedings in respect of that breach.

6. By letter dated 26 November 2015, [NAME] responded to the letter from [NAME]'s solicitors, but that letter was not particularly transparent as to his then role ([NAME] [186]) and [NAME]'s letter dated 2 December 2015 was also not particularly transparent as to that matter ([NAME] 11.12.15 [17]). Further correspondence and unsuccessful attempts to negotiate a resolution of the matter followed, before proceedings were commenced. [NAME] also points out that the first time [NAME] expressly informed it that he had commenced employment with [NAME] was on 10 December 2015, in a letter from his solicitors bearing that date, two days after the Summons was filed ([NAME] 11.12.15 [21]) and he first indicated, by his Counsel, that he was working as Managing Director of [NAME] on the first return date of the proceedings on 14 December 2015. 7. [NAME] fairly pointed, in cross-examination, to the difference between [NAME] suspecting that [NAME] was working for [NAME], in a role that it perceived as inconsistent with the restraints, and its having sufficient proof of that matter to bring Court proceedings (T163). It seems to me that that difference is real, and that [NAME] cannot fairly be criticised for not commencing proceedings prematurely or on the basis of an incomplete understanding of the relevant facts. [NAME] also submits that it acted as expeditiously as the circumstances permitted, in circumstances that it also is the subject of an ongoing takeover bid, although I would give rather less weight to that matter. 8. [NAME] submits that, in order to establish a defence based on delay by [NAME] must prove that that delay would make it unjust to grant injunctive relief in the circumstances, and that mere delay does not found a defence of laches: Crawley v Short [2009] NSWCA 40; (2009) 262 ALR 654 at [163]–[164]. On the other hand, [NAME] relies on [NAME]'s delay in bringing proceedings not only as a matter relevant to the exercise of the Court's discretion, but also as indicating that it attached a lack of importance to the restraints applicable to [NAME]. I do not draw the inference that that delay indicated any lack of perceived importance of those restraints, given the limits on the information available to [NAME] as to [NAME]'s role for much of the period and, in particular, the fact that [NAME] did not know the position to which [NAME] had been appointed until late November 2015.

9. It is not strictly necessary to reach a determination as to the question of delay given the views that I have reached on other grounds. I should indicate, however, that I would not have withheld injunctive relief on that basis, had it otherwise been appropriate to grant it, where the cause of that delay appears to have involved, at least in substantial part, limits to the information available to [NAME] as to [NAME]'s intentions and the circumstances in which [NAME] commenced employment with [NAME]. It seems to me that, generally speaking, an employee who is less transparent as to his intentions or the circumstances which may amount to a breach of restraint, also has less basis for complaint as to delay in the commencement of proceedings by a former employer which is left to undertake inquiries as to those matters, and can reasonably defer the commencement of proceedings until it has sufficient information to make an informed assessment of their prospects.

Orders and costs 1.

Accordingly, [NAME]'s claim for injunctive relief should be dismissed and [NAME] should pay [NAME]'s costs of and incidental to this application. The findings that I have reached may also have the result that [NAME] cannot succeed in any claim for damages against [NAME], at least on the evidence that is presently before the Court, although I will hear the parties as to that matter.

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Amendments 18 February 2016 - Para 1 - change "January 2015" to "January 2016". Para 47 - in first quote change "Restraint of Trade Act" to "Restraints of Trade Act". Para 59 - line 11 - change "former employee's business" to "former employer's business". Para 60 - line 7 - change "[NAME]" to "[NAME]". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 February 2016