Case: SST Consulting Services Pty Ltd v Rieson [2006] HCA 31 ; (2006) 225 CLR 516
Outcome: cited
I would preface my reasons by noting, first the provisions of s 4L, s 4M, s 51(2)(e) and s 87(3) of the TP Act. Section 4L provides: "If the making of a contract after the commencement of this section contravenes this Act by reason of the inclusion of a particular provision in the contract, then, subject to any order made under section 87 or 87A, nothing in this Act affects the validity or enforceability of the contract otherwise than in relation to that provision in so far as that provision is severable." Because of what I say below, I would emphasise that this provision on its proper construction requires severance of offending provisions: see SST Consulting Services Pty Ltd v Rieson [2006] HCA 31 ; (2006) 225 CLR 516 at [51] ; but that it operates subject to any order made under s 87 and it is upon s 87(3) that the respondents rely in particular. 12 Section 4M, a companion provision, provides, insofar as presently relevant, that: "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; ... but nothing in the law referred to in paragraph (a) ... affects the interpretation of this Act." 18 In this matter the respondents seek to do no more than to put that matter in issue, albeit contingently because their primary position is that the restraints are inoffensive at common law in any event. But if they are incorrect in that, and if the restraints are exclusionary provisions the applicants frankly concede they are and contravene s 45(2)(a) , the respondents, as of course, are entitled to apply for an order under s 87(3) to have the restraints varied. They equally are entitled, subject to any order made under s 87 , to have the issue of severance under s 4L determined: see SST Consulting Services Pty Ltd v Rieson . 19 By relying simply upon a common law claim in the present factual setting, the applicants have perforce exposed themselves to the defensive use the respondents seek to make of the TP Act. 20 I grant the leave to amend that has been sought. 120 The respondents have not made submissions to the effect that the offensive parts of the restraints could be severed: cf SST Consulting Services Pty Ltd v Rieson [2006] HCA 31 ; (2006) 225 CLR 516 at [46] ; or that the "reading down" provision of the deed poll would permit the court to make an inoffensive agreement for the parties which they did not make themselves. The obvious reason for their not taking either of these course lies in their TP Act claims to which I now turn. 121 There are four tiers of questions which possibly arise in relation to the respondents' claim. The first is whether as exclusionary provisions, the Deed Poll restraints contravene s 45(2)(a) of the TP Act. The second is whether, on the application of the respondents, the Court should grant relief under s 87(3) of the Act so as to vary the contract in a manner it considers just and equitable. The third is whether, again on the respondents' application, the Court should grant relief under s 87(1) favourable to the applicants by way of varying the Deed Poll's restraints so as to prevent or reduce loss or damage to the applicants. The fourth is whether the offending restraints ought be severed under s 4L of the TP Act. 122 For reasons I later give it is only necessary to deal with the second of these in any detail. 134 I need not repeat here the terms of s 4L save to note that the severance requirement imposed by the section: see SST Consulting Services Pty Ltd v Rieson , at [52]; is expressly made "subject to any order under section 87". I propose to make such an order and that order will render severance under s 4L unnecessary. 135 I will direct the parties to bring in short minutes of order to give effect to my findings and conclusions. Additionally, I would note that while it is provided expressly in the Deed Poll of Restraint that it does not supersede the Heads of Agreement (see cl 7), no relief has been sought in this proceeding in relation to that agreement. 136 I will also direct the parties to file and serve written submissions on costs within seven days of the handing down of these reasons. I certify that the preceding one hundred and thirty-six (136) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. Associate: Dated: 11 December 2007 Counsel for the Applicants: Mr R Whitington QC with Mr N Rochow Solicitor for the Applicants: Cowell Clarke Counsel for the 1 st , 4 th , 7 th &amp; 8 th Respondents: Mr W Wells QC with Mr T Duggan Solicitor for the 1 st , 4 th , 7 th &amp; 8 th Respondents: Kelly &amp; Co Counsel for the 2 nd , 3 rd , 5 th &amp; 6 th Respondents: Mr M Evans Solicitor for the 2 nd , 3 rd , 5 th &amp; 6 th Respondents: Iles Selley Date of Hearing: 22, 23, 24 and 30 October 2007 Date of Judgment: 11 December 2007 Appendix A Appendix B AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1965.html