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I C Frith (NZ) Ltd v Young
24 Oct 2006, Y Oldfield, AA 325/06, (5 pages)
DISPUTE - Restraint of trade - Application for declaration restraint of trade enforceable - Alternatively, asked Authority to modify restraint as deemed fair and reasonable - Respondent worked for company ("T") when T sold to applicant's parent company - No written employment agreement with T - Respondent agreed to start work with applicant in expectation previous oral terms with T would continue - Applicant began paying respondent's wages before sale and purchase completed - Respondent received draft agreement containing restraint of trade clause - Agreement stated restraint was for period specified in "Schedule" to agreement, but no period specified in Schedule - Parties agreed restraints common in brokerage industry - Respondent claimed aware of clause but ignored it thinking did not apply as not in Schedule nor part of oral terms - Although parties' discussed other issues, did not discuss restraint - Clause not specifically drafted for employment agreement - Rather, clause appeared to have been included almost by default - No increase in respondent's remuneration, and employed almost four months when clause introduced - Not satisfied parties turned their minds to restraint at time agreement entered - Applicant claimed agreement contained express or implied restraint - Authority did not accept absence of specified period meant restraint of indefinite duration - Nothing specified, so period specified must be nil and restraint of nil duration - Agreement did not contain express restraint provision - Cases in which restraints implied distinguished - In present case negotiation and consideration for restraint absent - Unconvinced restraint could be implied - Whether Authority should modify duration of restraint did not fall to be determined - Insurance broker
Result: Application dismissed ; Costs reserved
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