Jun 5, 2022 | Employment Law, Litigation and Court
Restraint of trade clauses are often found in employment or shareholder agreements. Their purpose is to protect business interests such as client information, intellectual property, employees and trade secrets, by restricting the behavior of previous employees or shareholders. However, the extent to which a business can restrict an employee’s or a former director’s activities through such a clause is often contentious and can result in disputes.
What is a Restraint of Trade?
A restraint of trade clause in an employment contract comes into effect when an employee leaves the business. It may involve terms that limit where the employee may work, what clients they can work with, or what types of work they may do.
Such restraint clauses can be enforced by courts, but only to the extent that is ‘reasonably necessary’ to protect the legitimate interests of the business. Whether a provision is enforceable will therefore depend on the wording of the clause and the context of each case.
Restraint of trade clauses can be characterised as any of the following:
- Non-competition: to prevent a former employee from competing against the company.
- Non-solicitation: to prevent the employee from approaching the employer’s clients.
- Non recruitment: to prevent the employee from recruiting other employees from the company.
- Confidentiality: to protect confidential information and trade secrets.
What is Reasonable Between the Parties?
If a restraint of trade clause is contentious, a court must determine what is reasonable in the context of the facts of your particular case. If the restraint clause goes beyond protecting the business’ legitimate interests to the former employee’s detriment, then a court will not enforce the clause. However, if the clause is reasonable to both parties, it is likely to be enforced.
What will a Court Consider when resolving a dispute?
In NSW, the Restraints of Trade Act 1976 governs the law surrounding restraints of trade. A court will consider a variety of factors in its determination of whether the restraint of trade clause is reasonable. Some of these factors include the:
- Negotiation and whether parties were able to negotiate any terms.
- Respective bargaining position of parties and whether parties were able to obtain legal advice.
- Nature of the business and the characteristics of the role of the employee.
- Remuneration and compensation for the restraint of trade.
- Duration and geographical area of the restraint.
For example, a restraint of trade clause that only lasts for 1 year may be seen as more reasonable than a restraint of trade clause that is indefinite. Similarly, enforcing a substantial restraint of trade clause on a low-level employee of the business may seem much less reasonable than enforcing one onto a high-level employee, such as a previous CEO or COO.
If you are an employer, what can you do to protect your business?
To ensure that your business’ interests are protected in the event that one of your employees leaves, it is vital that the restraint of trade clause in their employment contract is enforceable. Employment contracts should be reviewed regularly to ensure the changing nature of the employee’s current role and the changing nature of the business is reflected in the terms. The time period of the restraint, as well as the geographical area, must be reasonable in relation to the employee’s position. The clauses must be drafted properly and carefully, so that in the event that certain parts of the clause are found to be unenforceable, the clause may be severed and still remain partially enforceable. If you believe that your employment agreement does not adequately cover your legitimate business interests, you should seek legal advice from a competent employment lawyer.
Contact Us
An employer can only enforce a restraint of trade clause to the extent that it is reasonably necessary to protect their business interests. However, whether a clause is reasonably necessary will depend on the particular facts of the case, and in any dispute, it is best to seek professional legal advice. If you would like to discuss your employment law matter with a legal professional please contact us on (02) 9963 9800 or via our contact form.
Jun 3, 2022 | General Advice, Litigation and Court
What Is the Difference Between a Barrister and a Solicitor?
Barristers and solicitors are legal professionals who may assist you with legal matters. The difference between a barrister and a solicitor is the type of legal work they do. In general, a barrister specialises in making court appearances and speaking on your behalf. By contrast, a solicitor often does the preparation work before your court appearance and liaises with your barrister to prepare your case. Barristers are formally trained in court advocacy and cross-examining witnesses.
In most cases, a solicitor will look after your case initially. They will then engage a barrister for court advice and appearances. Barristers typically do not liaise directly with clients.
When to Involve a Barrister in Your Matter
Clients often ask at what stage we will involve barristers in their matter. A good way to think about it is that solicitors are like general practitioners and barristers are like specialists. Barristers work in particular areas of law and often speak at court.
Sometimes solicitors will discuss your case with a barrister and ask them to provide a written opinion on the prospects of your case. They might also ask their opinion on a specific issue. If a matter is complex or unusual, barristers might also be involved in the drafting of court documents.
Barrister Costs
Barristers are required to provide you with an estimate of their costs. Their costs agreement and disclosure documents are issued to your solicitor.
Barristers usually charge an hourly rate. They can also charge a daily rate, especially for court attendances or mediation sessions. Some barristers will charge a cancellation fee if a hearing settles or is adjourned.
Choosing a Barrister
You solicitor will choose a barrister based on factors including:
- Your financial circumstances;
- The type of matter; and
- Which barrister they believe is most suitable.
A barrister can be perfectly suited to one type of case but not another.
If you need any legal advice or assistance we are here to help. If you would like to discuss the involvement of a barrister in your legal matter contact us today.
May 3, 2022 | Business Law, Litigation and Court
If you are owed money for goods or services, the first step in attempting to recover it is generally to send a letter of demand to the other party. This letter should set out the amount of money outstanding, a cut-off time to respond by, and notice that if no response is received by you that you will take legal action.
Letter of Demand
The letter of demand is sent by you or your lawyer if you (the creditor) are owed money, and it warns the person owing the money (the debtor) that if they don’t pay the debt within a certain time period they will be sued in court to recover the debt.
A letter of demand should be the last letter a creditor sends before issuing court proceedings. While letters of demand are not court documents they are often an effective means of forcing the debtor to take action.
It is a good idea to contact us first to ascertain whether it is prudent to proceed with court proceedings and this will usually depend on the size of the debt. Naturally, if the sum owed is small it may not be economically viable to pursue the debt by engaging a lawyer. You must ensure however that, in enforcing your rights to recover the debt, you act within the law.
Limitations on Debt Collection
Fairness: When sending a letter of demand, you should be careful not to harass the debtor or send a letter which is designed to look like a court document. You must not pursue a person for a debt unless you have reasonable grounds for believing the person is liable for the debt.
Time Limits: A creditor has a limited period of time to sue for a debt. In most instances, for debts owed, this will be 6 years. If the debtor has made no payments towards the debt or has not acknowledged in writing that they owe the debt for a period of 6 years from when the debt arose, then the debt may no longer be recoverable.
Disputed Debts
The debtor has the right to dispute a debt and may do so on a number of different grounds:
- It is not their debt;
- They have already paid the money;
- They disagree with the amount of the debt; or
- It is an old debt and they haven’t made a payment for at least 6 years, no court judgment has been entered against them and they haven’t admitted in writing that they owe the debt in that time.
If the debt is disputed, then you, as the creditor, may have no alternative but to commence legal proceedings or to seek to negotiate a compromise with the debtor.
When Your Lawyer Becomes Involved
If you, as the creditor, are not willing to negotiate or wait for payment, you may wish to contact us to assist with pursuing the debt. If you know the debt is due and payable, and you want to commence legal proceedings, it is prudent to have a lawyer assist you and represent you in court to recover the debt. If your lawyer advises that the size of the debt makes a court process not economically viable, then we may still be able to help you to negotiate a payment plan that is manageable to the debtor and acceptable to you.
It is not in the debtor’s interest to ignore your claim and risk the additional costs of the legal fees and interest on top of the original debt. By following the correct process we can help obtain a satisfactory result for you.
New Customer – Credit Application Process
Before you take on a new customer, you should have the correct systems in place to ensure that you are able to assess the customer’s credit position.
Your terms of trade should provide you with security over the goods which you have sold to the customer. You must, however, ensure that you register any security over goods on the Personal Property Securities Register and we recommend that you speak with a lawyer to assist you with this process to ensure that the registration is not void.
If you do not have a system in place, contact us and we will help you put a system in place to protect you and provide you with security for money owed to you.
Download “Your Guide to Debt Recovery”
Conclusion
You should contact us to discuss your legal rights and obligations if you are owed money or if you owe money to someone else who is threatening court action.
If you would like more information or require assistance or advice on how to proceed in debt recovery matters please contact us on (02) 9963 9800 or via our contact form.
Apr 30, 2022 | Family Law, Litigation and Court
When a relationship or marriage ends, people often fear that they will need to go to court to deal with the separation of joint assets and liabilities, and arrangements for their children. This can be extremely stressful for those involved.
Do I need to go to Court?
It is not the case that people automatically need to go to court when their marriage or de facto relationship ends. If the parties to a separation can agree on how they separate jointly-owned assets and liabilities and also have an agreed co-parenting arrangement for any children there is no need to go to court at all.
However, if parties cannot agree on the separation of assets, how children will be cared for, or various other aspects of their separation, legal processes may be necessary. In relation to childcare arrangements, the Family Law Act 1975 s 60I states that before a party makes an application to the Court for Parenting Orders, genuine attempts at resolving the dispute through mediation (or other forms of alternate dispute resolution) must be made.
To read more details on alternate dispute resolution and how this could be helpful in settling disputes without going to court, see our earlier blog post on the topic here.
Do I need a Lawyer?
You will most likely need a legal document to be drafted to ensure that the agreement between the separated persons is clear, defined and legally binding. This is when a family law solicitor can assist you. Your family law solicitor will be able to explain to you the different types of documents that are available to set out the separation of assets and liabilities. You can also obtain such documentation to set out childcare arrangements. The Family Law Act 1975 (Cth) sets out how these different agreements function.
There are different types of documents available to you, and your solicitor can assist you to decide what will work best for your circumstances. Once you have decided on the type of document you need, your solicitor will be able to draft the document to reflect what you and your ex-partner have agreed, to ensure that it is clear and binding.
Why Should I get Legal Representation?
Each party will need their own legal representation before signing any documentation to ensure that they obtain independent advice.
Clients often find that once they have entered into binding documents drafted by their lawyer, there are fewer arguments between them and they can move on with their lives with certainty following their separation or divorce.
Contact us
The team at Etheringtons Solicitors are skilled at handling all matters relating to Family Law, and are able to assist with complex cases. If you need assistance with any area of Family Law, do not hesitate to contact us on 9963 9800 or enter your details in the form here and we will contact you.
Mar 25, 2022 | Litigation and Court
Divorce or separation has a significant impact on all members of the family, including our beloved pets. Approximately 61% of Australian households have at least one pet and, in the event of a divorce or separation, pet custody can be a significant issue in the dispute.
How are pets classified in custody disputes after a separation?
Pets are considered a personal property asset under NSW Law. The Family Law Act 1975 (Cth) provides no specific provisions on how pet custody or ownership should be determined in the event of separation. Property settlement principles are applied instead and while we all value our pets emotionally, they are typically not considered to be significant assets in a property settlement. This is unless they have significant monetary value, such as pedigree pets, or are income generating, such as competition/show animals or livestock. Pets that do not fit into these categories are attributed their nominal market value within a property settlement.
Keep in mind that property settlement proceedings in the Federal Circuit Court or Family Court must be commenced within two years from the date of separation for de facto relationships, or one year from the date of divorce for married couples. However, parties can still settle matters by entering into Binding Financial Agreements beyond that time frame.
How would a court handle a pet custody dispute?
The courts always prefer separating couples to make their own arrangements concerning pet custody. However, when they are asked to make this discretionary decision, the court will take into account any of the following factual considerations:
- Who purchased the pet and what was the purpose of that purchase?
- Whose name is the pet registered under?
- Who has current possession of the pet (including who it resided with before, during and following the separation)?
- Is the pet a service animal which one party relies on or will rely on in the future?
- Who made financial contributions towards the pet – including food or veterinary payments, pet insurance and grooming fees?
If your child or children have an attachment to the pet, a court may prefer to assign the pet to the primary residence of those children or to move the pet between residences with the children, as it is in their best interest.
The Court aims to resolve disputes in a manner that will avoid further proceedings. A court may make appropriate orders, which could include selling the pet, to distribute its nominal value in the same manner as any other asset, such as a house or furniture.
Davenport & Davenport (No 2) [2020] FCCA 2766
In this recent case, the husband applied for interim orders for shared custody of the dog which had remained with the wife following their separation, as he was “suffering pain and separation anxiety by not being allowed to have time” with the dog. The husband had attempted to create a ‘pet custody agreement’ and to visit the dog numerous times since separation, but the wife had refused access. The wife was the registered owner and
purchaser, but the husband claimed he had spent $1,633 in financial contributions towards the dog, including food, vet visits and other supplies. The wife sought orders to instead adjust the parties’ property interests and to keep the dog as part of the final property settlement. The Federal Circuit Court of Australia found that the issue was merely the alteration of property interests on an interim basis. The Court held that it did not have the jurisdiction to make the shared custody order requested, as the Family Law Act 1975 (Cth) provides no basis for the shared custody of property, including pets, after separation. The husband’s application was accordingly dismissed.
What options can Etheringtons Solicitors provide?
Etheringtons Solicitors can assist you with negotiations or mediation regarding the ownership or living arrangements (including time allocations, residence and expense payments) of a pet with a former partner.
We understand that your pets represent more than the asset-based approach the Court has to adopt. We suggest negotiation and mediation whenever possible, as both options are more time-and-cost efficient than court proceedings and allow for greater flexibility in the solution developed for your particular circumstances. These negotiations would need to cover who will care for the pet on which days, how handovers will be dealt with, who will meet ongoing and future expenses, who will be responsible for vet checks and who will make major health decisions – these are considerations not dissimilar to parenting orders.
Once parties reach agreement, they can be formalised by way of consent orders with the Court, along with any parenting or property orders as needed.
If you need further advice or assistance with a pet custody dispute or other Family Law matters please contact one of our experienced solicitors on (02) 9963 9800 or via our contact page.
Mar 6, 2022 | Litigation and Court
Makaroff v Nepean Blue Mountains Local Health District [2021] NSWCA 107
A former patient has recently succeeded in a medical negligence action against the Nepean District Hospital (“the Hospital”) for the improper diagnosis of a shoulder injury. Ms Makaroff (“the Plaintiff”) was awarded a sum of $276,319.95 in damages on appeal. This case highlights the importance of seeking legal advice if you or your loved ones have experienced unsatisfactory care or poor health outcomes as a result of receiving medical treatment.
Establishing medical negligence
A party (the defendant) can be found to be negligent if they fail to take reasonable care to avoid causing damage to another person (the plaintiff). In order to establish a claim for negligence, a plaintiff must address the following elements under the Civil Liability Act 2002 (NSW):
- That a duty of care (to exercise due care and skill) between the plaintiff and the defendant existed;
- That this duty of care was breached by the defendant;
- That this breach caused the plaintiff (causation) to suffer injury or loss (damage); and
- That this damage suffered was not too far-removed (remoteness) from the consequence of the
Each of these factors has been considered in greater detail in our previous article. The law of negligence is not straightforward, and highly dependent on the specific circumstances of the case.
There are also numerous defences which a defendant may establish in order to defer liability. For example, we have considered the dangerous recreational activity defence in a previous article regarding a case where a jockey was injured during a horse race. The Court in Makaroff v Nepean Blue Mountains Local Health District [2021] NSWCA 107 considered this defence in the context of assessing the standard of care expected of medical professionals.
Case Study: Makaroff v Nepean Blue Mountains Local Health District
The Plaintiff was injured on 19 September 2010, when one of her horses bit her on her right forearm, which led to the dislocation of her right shoulder. An X-ray conducted at the hospital indicated that she had “moderate reduction in the right humero-acromial distance, suggesting rotator cuff insufficiency”. No ultrasounds or MRIs were conducted, and she did not receive an orthopedic review, prior to being discharged two days later. Neither the hospital or her GP advised the Plaintiff that she required an urgent radiological examination or orthopedic review. Based on this advice, the Plaintiff did not obtain an ultrasound until 3 February 2011, by which time it was too late for surgery to be effective.
In this case, the Plaintiff claimed that had she been properly diagnosed in a timely fashion, she would have undergone surgery and would have properly recovered the function in her arm. She alleged that the hospital and her GP breached their duty of care by their negligent treatment and sought damages for her pain, further injury and loss.
Decision in this case – considering duty of care and causation
The Primary Judge at first instance rejected the claim that the Hospital and her GP had breached their duty of care, as the Civil Liability Act 2002 (NSW) s 5O precludes liability of both parties as they acted in a manner that was ‘widely accepted in Australia by peer professional opinion as competent medical practice’ at the time it was provided. Additionally, the Primary Judge held that even if a breach could be established, there was no ‘causal link’ between the alleged breach and her subsequent injuries.
However, on appeal, the Court found that the hospital had in fact breached its duty of care to the Plaintiff. Experts claimed that a competent professional medical practice required the patient to be advised of the urgency of seeking an orthopedic consultation within 2-3 weeks of the injury. Judge Simpson also found that the hospital breached its duty of care by failing to refer the Plaintiff for radiological investigations when she presented symptoms which suggested the need for further investigation. The Court held that, but for the hospital’s breach, the Plaintiff would have undergone surgery by mid-November 2010 and there would have been a “very high degree of probability that she would have had a better outcome”.
As such, the hospital was held liable on appeal, and ordered to award the Plaintiff with $276,319.95 in damages. The appeal against the Plaintiff’s GP, however, was dismissed as the Court found that there was no breach of duty.
How Etheringtons Solicitors Can Help
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. Furthermore, Etheringtons Solicitors can assist with a variety of negligence matters, whether you are the injured party or a professional.
If you need further advice or assistance, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.
