The appeal of the judgment against me and Duncan Ross in the restraint of trade case brought by IceTV (IceTV vs Ross) was heard on the 22-23 July 2010 before Justices Sackville, MacFarlan and McColl.
We submitted that Rein J erred when he found that “I think it is clear that Mr Ross and Mr Vogel’s work in preparing the Clever Networks grant application was work that they were doing because of their technical and industry knowledge, which IceTV could have replicated had it been given the opportunity.” We said that the law is clear that it is illegal to restrain application of “technical and industry knowledge”. It was up to the Plaintiff (IceTV), we said, to prove special circumstances that would make such a restraint enforceable, an onus which we say they failed to discharge.
Several other key questions about restraints of trade were debated, including our position that you can’t restrain against soliciting merely prospective customers.
Another proposition I put to the Court of Appeal was that the restraints were void for uncertainty because the contracts said the restraints were to operate for 12 months “or such other lesser period as may be judged by a court of competent jurisdiction on being reasonable in the circumstances”. The authorities make it clear, I said, that if the restraints leave it to the Court to decide what is reasonable, there has been a “mainfest failure to to attempt to make the restraint a reasonable restraint” (quoting from the Restraints of Trade Act) and that the Court should find the restraints void. IceTV’s Queen’s Counsel, John Ireland, argued the second part of the definition of the restrain period was severable, removing any indeterminacy.
Coincidentally, a week after the appeal hearing, Prof. Joellen Riley University of Sydney – Faculty of Law, published a paper “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants” which said in relation to IceTV v Ross “The sheer injustice of enforcing a restraint when the employer had no use for the labour itself is breathtaking.” Dr Riley’s full article is available here.
The appeal judgment is likely to take some time, but we hope it will go some way to advancing Prof Riley’s call that “the law on restrictive covenants in employment contracts in Australia should be reviewed, to re-enliven the ancient common law doctrine making illegal restraints of trade that are contrary to the public interest in free movement of workers, and free development of innovative ideas and practices.”
Watch this space.