| Restrictions | Includes non-publication order |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 386/08 |
| Hearing date | 7 Nov 2008 |
| Determination date | 11 November 2008 |
| Member | L Robinson |
| Representation | D Hood ; D Alderslade |
| Location | Auckland |
| Parties | Canon New Zealand Ltd v Allright |
| Summary | INTERIM INJUNCTION – Restraint of trade – Applicant sought urgent orders preventing respondent from acting contrary to restraint of trade provisions in employment agreement (“EA”) - Respondent gave notice of resignation and advised commencing employment with competitor (“F”) – Applicant provided undertaking to abide by any order Authority made as to damages sustained by respondent by reason of orders sought – Respondent argued restraint provision in EA unreasonable and unenforceable – Respondent argued undertaking to honour confidentiality provision in EA adequate to protect any proprietary interests claimed by applicant – Argued injunctive restraint unnecessary – Authority found restraints of trade prima facie contrary to public policy and therefore void – Applicant argued respondent had extensive knowledge of applicant’s confidential information and trade secrets – Respondent argued applicant exaggerated respondent’s role and sensitivity of information – Authority found respondent by nature of senior role intimately acquainted with applicant’s confidential information and trade secrets – Found matters constituted interest worthy of protection – Authority did not disagree with principle in Littlewoods line of cases, however, not persuaded approach to be adopted to present case – Found too absolute to say mere existence of concurrent contractual term sufficient on its own to place in doubt legitimacy of contractual restraint, when obligations of confidence subsist in absence of express contractual stipulation – Found wrong to classify proprietary interests to be protected as only ever “confidential information” – Authority found fact parties bound to act in good faith material difference between other cases cited – Found sanctity of contract and good faith duty to prevail over applicant’s right to earn living and public policy considerations – Authority found three month period of restraint just and reasonable – Found balance of convenience lay with applicant – Found overall justice favoured applicant – Authority made preliminary injunction restraining respondent from operating in competition with applicant and from offering product or service in competition with applicant to third party who had been customer of applicant during relevant period – Chief financial officer |
| Result | Orders accordingly ; Costs reserved |
| Main Category | Restraint of Trade |
| Cases Cited | Brown v Brown [1980] 1 NZLR 484;American Cyanamid Co v Ethicon [1975] AC 396; [1975] 1 All ER 504;Harvest Bakeries Ltd v Klissers Farmhouse Bakeries Ltd [1985] 2 NZLR 140 (CA);Bates v Gates (1987) 1 NZELC 95,269;Gallagher Group Ltd v Walley [1999] 1 ERNZ 490;H&R Block Ltd v Sanott [1976] 1 NZLR 213;Credit Consultants Debt Services NZ Ltd v Wilson (No 3) [2007] 1 ERNZ 252 |
| Number of Pages | 12 |
| PDF File Link: | aa 386_08.pdf [pdf 44 KB] |