In Epichealth Pty Ltd v Peng-Kung Yang [2015] VSC 516,
an interlocutory injunction was granted by the Supreme Court of
Victoria restraining the defendant (a medical practitioner) from
providing any services associated with carrying on a general
medical clinic within a 10-kilometre exclusion zone.
Factual Background. The contract, by which the
defendant was engaged as an independent contractor, required that
the defendant provide six months' notice of termination and
included a restraint of trade clause that applied a standard
cascading definition of the restricted geographical area and
restraint period. The defendant provided the plaintiff with notice
of termination; however, prior to the expiry of the six-month
notice period, the defendant ceased providing services to the
plaintiff, and, in breach of the restraint clause, the defendant
commenced operation as a sole medical practitioner and sole
director of a medical clinic six kilometres from the
plaintiff's clinic.
Decision. In determining whether to grant the
injunction, Justice Dixon applied the relevant principles
articulated by the High Court in Australian Broadcasting
Corporation v O'Neill. Firstly, his honour held that the
plaintiff had prima facie demonstrated the defendant was in breach
of the termination and restraint clauses of the contract. Secondly,
in the circumstances, his honour determined damages would be an
inadequate remedy given the complexity involved in assessing loss
attributed to customer loyalty to a medical business. Finally, his
honour held that the balance of convenience weighed in favour of
the plaintiff, noting that the likelihood of the defendant facing
financial hardship was a commercial risk accepted by the defendant
which did not justify permanently depriving the plaintiff of the
protection the restraint clause provided to its business.
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