I may have been suddenly plus one client, but I was minus a clue.
I was hip-hop without rhythm. I was a rapper without rhymes. I was a break dancer without a juicy track to break to. I was no better off than my client.
Bust-A-Move was a studio missing students; I was a lawyer missing legal advice.
Understandably, I was feeling low on soul. I needed to kick it old school. Specifically, I needed MY old school.
Gold Coast Highway. Rolling hot. Windows down.
I pulled into a familiar parking spot and got real old school.
The sliding doors of the Bond University Law Library opened wide, and I posted up at a cubicle with a nice view. I threw on some headphones and threw on some funky tracks. Feeling groovy, I let my mind roam and put my notebook to good use:
Stuck at a critical step, I took a moment to assess my progress so far. I was definitely better off than before. Yet, everything up to this point was based on what I knew. Unfortunately, my knowledge and opinions, already quite limited in depth, held next to zero legal authority. So, I departed from what I knew and instead looked to what others knew. To find the background knowledge I was missing, I hit the books.
Background Knowledge
Using the book’s index, I searched for ‘INJUNCTION’. I chose this word simply because I believed it was the remedy my client sought. The index brought me to ‘Injunction’ under the chapter, ‘Equitable Remedies’. From there, it was simply a matter of browsing the headings and jotting down the titles that aroused my interest:
‘Injunction to restrain a breach of contract’;
‘A discretionary remedy’; and
‘Performance of personal services may be encouraged by injunction’
It was under the last heading that I first saw mention of Lumley v Wagner. According to the authors, if, for instance, as in this case:
The defendant agreed that she would sing at the plaintiff’s theatre in London for a certain period and would not sing elsewhere during that period, it is obvious that an injunction prohibiting a breach of the negative part of the agreement may provide an incentive to the defendant to fulfil the positive part. The question is whether or not the courts will coerce the defendant in this manner by granting an injunction. They are confronted with a dilemma, for they cannot decree specific performance of a contract for personal services, and they must not encourage a deliberate breach of contract by refusing an injunction in a case that is normally subject to this form of relief.
Suddenly, I was granted a foundation to use in my search for answers; a foundation that gave me a landmark case with analogous issues to those of my client, Bust-A-Move Break Dance Studios. Law of Contract continued:
Since the decision of Lord St Leonards in Lumley v Wagner, it is well settled that the courts have jurisdiction to forbid the infringement of a negative stipulation that is part of a contract for personal services. The inability of the plaintiff to prove that he or she will suffer damage if the negative stipulation is broken is not a bar to the grant of injunction. Thus, injunctions have been issued in the case of agreements not to sing elsewhere than at the plaintiff’s theatre; not, during the period of employment, to engage in any business similar to that carried on by the employer; and not, during the period of employment, to act as a film artist for any motion picture company other than the employer’s.
Like a gift handed down to me from the Library Gods, I was beginning to have more and more to work with. The above excerpt included Hawthorn Football Club Ltd v Harding in its citations. This case would go on to become crucial to my research strategy down the road.
Feeling bold, I decided to dive a little deeper. I returned to the index of Law of Contract. Recalling my client’s predicament, and the specific title of the clause in question, Restraint of Trade, my finger found itself hovering above ‘trade, contracts in restraint of’ and I quickly flipped to the relevant section of the book. As was the case with injunctions, I was instantly enriched with references to statutes, cases, and governing principles; it was like Christmas, but instead of gifts, I was getting primary resources. Complete with references to these primary sources, the chapter explained, among other things, that:
a) at common law, restraint of trade was once prima facie unenforceable as it offended against public policy;
b) doubts arose whether the doctrine in a) applies to all contracts;
c) whether a restraint is reasonable is a question of law, not of fact;
d) ‘reasonable’ means reasonable both in relation to each party and in relation to public interest;
e) The onus is on the restraining party to prove that the restraint is reasonable as between the parties, but the party restrained has the onus of proving that the restraint injures the public interest;
f) A restraint must be no wider than necessary;
g) For a restraint to be considered reasonable the restraining party must identify an interest of the covenantee calling for protection: ‘a bare covenant restrictive of competition even if it is limited in point of time and place cannot be sustained’;
h) recognised interests include the interest of an employer in exclusivity of service during the employment, in the protection of trade secrets, and in preventing solicitation by employees of the employer’s clients or customers;
i) Part IV of the Trade Practices Act 1974 (Cth) also governs restraints of trade.
Armed with this new knowledge, the Trade Practices Act 1974 (Cth) and a slew of cases, I felt more prepared than ever to assist Bust-A-Move Break dance Studios. The main issues in my case had been changed. It seemed clear that my client could seek an injunction, but only if the restraint of trade clause in the employment contract was valid and enforceable. To determine this, I needed to find the governing legislation and the case most on point.
The Search for Statute
Referring back to the Rombauer method, the next step in my quest for answers was the search for primary materials. The decision to begin with either legislation or case was easy to make. Legislation takes precedent over judicial rules, and so, it was with legislation that I would begin.
Law of Contract provided that restraint of trade was governed by the Trade Practices Act 1974 (Cth). This gifted insight gave me a citation to begin my search. According to my ALS textbook, Connecting with Law, the first step was to determine which jurisdiction the legislation is from. I knew from the citation that this was Commonwealth legislation.
Using the Bond Library Electronic Databases tool, I arrived at AustLII, which contains legislation for all jurisdictions on one site, at www.austlii.edu.au. I knew this was a Commonwealth Act, so I went to the relevant link from the list, and clicked on ‘Commonwealth Consolidated Acts’. I chose consolidated acts because they are the current version of each piece of legislation that is in force, including any amendments that have come into effect since it was enacted. Scrolling down an alphabetical list, I clicked on Tr, which expanded the list for all legislation commencing with Tr. To my surprise, there was no Trade Practices Act 1974. It seemed that either my citation was wrong, or the Act was no longer current. Double checking the former, I assumed the latter.
I decided to switch from AustLII and go straight to the source; the ComLaw database at www.comlaw.gov.au. Once on the homepage, I moved my cursor over ‘Acts’ and clicked on ‘As made A-Z’ from the drop down menu. Once again, I clicked on Tr, where I finally found the Trade Practices Act 1974. However, when I clicked on it, I was told underneath the title that the act was superseded. To the right, of the title, I found the link ‘go to latest’. Following this, I was brought to the Competition and Consumer Act 2010, which was labelled current. Just below title, it stated, ‘Act No. 51 of 1974 as amended’. My problem was solved. This Act had replaced the Act I was looking for.
I checked the currency via the Gazette, and found that the Act had been assented, and had not been amended since the last consolidation. Reading through the headings in the Act, I found, under Part I, Section 4:
4M Saving of law relating to restraint of trade and breaches of confidence
This Act does not affect the operation of:
(a) the law relating to restraint of trade in so far as that law is capable of operating concurrently with this Act; or
(b) the law relating to breaches of confidence;
but nothing in the law referred to in paragraph (a) or (b) affects the interpretation of this Act.
Although this was the Commonwealth Act on point with my client’s problem, it did little to provide answers. All it said was that it did not affect the law relating to restraint of trade. To find that law, I decided to shift focus to the state level. I began my search in Lawlex, looking for New South Wales legislation considering restraint of trade.
Using Lawlex at www.research.lawlex.com.au, I began my search by selecting ‘search legislation’ under the Lawlex Legislation tab. In the search engine, I used the search term, ‘restraint of trade’, modifying my search to whole-text, and limiting my jurisdiction to NSW. When I ran my search, I was given 7 results, and the first of them, was the Restraints of Trade Act 1976 No. 67. Using the Lawlex tools, I checked commencement, and found that the Act had commenced on November 15th, 1976, and that the act was still current, and up to date as of March 17th, 2011 (deadline day!). The Act was short, and almost all of its terms were relevant to the outcome of my client. Most relevant, however, was Part 4, Section 3:
(3) Where, on application by a person subject to the restraint, it appears to the Supreme Court that a restraint of trade is, as regards its application to the applicant, against public policy to any extent by reason of, or partly by reason of, a manifest failure by a person who created or joined in creating the restraint to attempt to make the restraint a reasonable restraint, the Court, having regard to the circumstances in which the restraint was created, may, on such terms as the Court thinks fit, order that the restraint be, as regards its application to the applicant, altogether invalid or valid to such extent only (not exceeding the extent to which the restraint is not against public policy) as the Court thinks fit and any such order shall, notwithstanding sub-section (1), have effect on and from such date (not being a date earlier than the date on which the order was made) as is specified in the order.
This Act would play a key role in resolving my client’s problem. Alone, the Act was ambiguous in regards to public policy, but this would guide my search for precedent and my statutory interpretation.
The Search for Precedent
Guided by the Restraints of Trade Act 1976 No. 67, I began a search for precedent that would clear the ambiguity of the law related to my client’s issues. I already had a statute on point, so I endeavoured to find cases that interpreted that statute. To do this, I logged onto CaseBase by LexisNexis. On the home page, there is a field ‘legislation judicially considered’ where I could enter in the legislation to search on. Entering ‘restraints of trade act 1976’ brought the result in Figure 1.
The search produced over 90 results, so to narrow my search, I employed an additional search technique; I searched for cases that apply a particular case. As I mentioned earlier, in my background research I had discovered some cases with analogous issues to those of my client. Among the most analogous was Lindner v Murdock’s Garage. I used this case’s citation in my search. The result was 24 highly relevant cases. However, in the end, it was Linder v Murdock’s Garage that I would revisit in the preparation of my case note.
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