Modilon Automotive Pty Ltd trading as Modilon Construction v Kevin Southcomb, Delta Corporation Pty Ltd and Ted Kennedy [1997] PNGLR 158

• Jurisdiction: Papua New Guinea
• Judge: Injia J
• Judgment Date: 11 March 1996
• Court: National Court
• Citation: [1997] PNGLR 158
• Year: 1997
• Judgement Number: N1479

Full Title: Modilon Automotive Pty Ltd trading as Modilon Construction v Kevin Southcomb, Delta Corporation Pty Ltd and Ted Kennedy [1997] PNGLR 158

National Court: Injia J

Judgment Delivered: 11 March 1996

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS NO 165 OF 1996

BETWEEN

MODILON AUTOMOTIVE PTY LTD trading as MODILON CONSTRUCTION — Plaintiff

And

KEVIN SOUTHCOMB — First Defendant

And

DELTA CORPORATION PTY LTD — Second Defendant

And

TED KENNEDY — Third Defendant

Mount Hagen

Injia J

23 February 1996

4 March 1996

8 MArch 1996

11 March 1996

INJUNCTION — Interim injunction — Contract of employment between Expatriate Quarry Master and local company — Negative covenant — Covenant not to perform for others during contractual term — Breach of negative covenant by employee — Employee entered into new contract of employment to perform work similar to the type he performed for the Plaintiff.

Held:

1. Because damages were not an appropriate alternative remedy, an interim injunction should be granted against the First Defendant restraining him from engaging any employment and performing any work of the type he performed for the Plaintiff.

2. However, the interim injunction must be restricted to apply within three kilometres of the Plaintiff's business premises in order to enable the First Defendant to engage himself in alternative employment with or without his new employer whilst he awaits the finalization of the proceedings.

Cases Cited:

Doherty v Allman [1878] 3 AC 709

Ehrman v Bartholomew [1885] Ch 671

William Robinson & Co Ltd v Hever [1898] 2 Ch 451

Warner Brothers Pictures Inc v Nelson [1936] 1 KB 209

Employers Federation of PNG v PNG Waterside Workers' Union & Others N 393 [1982]

Counsel:

J Kil for the Plaintiff/Respondent

J Steel for the Defendant/Respondent

INTERLOCUTORY RULING

11 March 1996

INJIA J: By motion on notice, the Plaintiff seeks interim injunctions in the following terms:

1. The First Defendant be temporarily restrained, until further orders, from entering solely or jointly with any other person or persons or company and entering on his own behalf or on behalf of any other person or persons or company or competing directly or in directly, carrying on or assisting in carrying on either as principal or as manager, agent or servant or assistant or in any other capacity whatsoever or be in anyway engaged or concerned or interested in the business of provision of Plant Hire, Equipment lease, Provision of Crushed Aggregates, Ready Mix Concrete, Concrete Blocks and General Civil Construction within Mount Hagen area and especially within 3 kilometres of the Plaintiff's premises at Section 45 Allotment 25 Warakum, Mount Hagen and at Portion zone Section 1004, Wara Komun, Western Highlands Province.

2. The First Defendant be temporarily restrained from endeavouring or attempting directly or indirectly to induce any person or persons, or company who shall be known to the First Defendant to have been at any time during his employment under the said agreement, a customer or customers, employee or lessor or lease of the Plaintiff company in the said business to cease from employing or dealing with the Plaintiff company in the way of their said business or so to employ or deal with any person or persons or company other than the Plaintiff.

3. The Second and Third Defendants be restrained from employing the First Defendant until further order, for the purposes of engaging him employment or otherwise in relation to the provision of the services in crushed aggregates, ready mix concrete, concrete blocks, plant hire etc. and pricing of per cubic metre of crushed aggregates, customer basis tender procedures conspired and endeavoured together with the Second and Third Defendants to supply the same goods and services by setting up a crusher on the same river basin, not more one (1) kilometre from the Plaintiff's crusher site at Wara Komun, Mount Hagen.

At the hearing, only paragraph (1) of the motion was contested and argued. The First Defendant filed an undertaking in terms of paragraph (2) of the motion. The Plaintiff did not pursue paragraph (3) of the motion.

The short uncontested facts are that the First Defendant is a New Zealand citizen. Between 1990 and up to June 1993, he was employed by various local construction and heavy equipment companies in the highlands region. Between June 1993 up to 25th July 1995, he was employed by the Plaintiff as its Quarry Master and based at the Plaintiff's Quarry site situated at Portion 1004, Wara Komun, under an oral agreement. On 25 July 1995, the Plaintiff and the First Defendant formalised their arrangement by entering into a written agreement in which the First Defendant agreed to work for the Plaintiff for a period of three (3) years at a remuneration of K42,716.96 per annum. also included in the contract were two important covenants. Clause 15 provided that the "employee shall not divulge to any person information concerning the business of finances of the company". Clause 16 provided that the "employee shall devote himself exclusively to the said company business at all times during the usual business hours". Te contract also provided for termination of the contract by either party on 3 months notice. To coincide with the contract, the Plaintiff applied for and obtained a new Work permit under provisions of the Employment of Non-Citizens Act Ch. 374 commencing on 22 November 1995. Prior to this, he possessed a Work Permit obtained by the Plaintiff for him which was due to expire on 22 November 1995.

On 12 November 1995, the Third Defendant offered new employment to the First Defendant which he accepted. On 16 November 1995, (2nd November according to the First Defendant), the First Defendant verbally informed the Plaintiff of his intention to quit employment and left the company. The First Defendant says he verbally notified the Plaintiff's Managing Director, Mr Kagul Koroka, on 2nd November 1995 of his intention to quit the job and stayed on for another 8 days to help out the Plaintiff. This is denied by Mr Koroka. When the First Defendant left, he admits he only took with him some blank forms from the Plaintiff's office which he says are commonly used in any business. The Plaintiff says they were important business documents. The Plaintiff also says he also took other important business documents such as the land "lease" documents which is denied by the First Defendant. He is now employed as a Crusher/Quarry Manager by the Third Defendant at its Quarry Site "situated on Portion 1004, Wara Komun" The First Defendant says the Third Defendant "has now taken a lease over the entire area known as Portion 1004, Wara Komun from Michael and Paul Poiya who are the traditional land-owners of that land". There is evidence to show that on 7th December 1995, Michael and Paul Poiya, through their lawyers Simon Norum Lawyers, by letter, terminated their "lease" arrangement with the Plaintiff over Portion 1004, Wara Komun, due to non-payment of rent. The Third Defendant has set up a new Quarry/Crusher site near the Plaintiff's site and the First Defendant is employed as a Quarry Master and based there. The First Defendant says the Third Defendant obtained a new Work Permit for him which entitles him to reside in Papua New Guinea and work up to 6th November 1998. Of the earlier Work Permit obtained by the Plaintiff, the First Defendant says:

"The Contract dated 21st July 1995, which was executed by the Plaintiff's company and myself, was to be for a term of three (3) years from the date of commencement. However, I says that the contract as entered into was required for the purposes of my obtaining a new Work Permit for continued employment with the Plaintiff's company providing for commencement on 22nd November 1995, upon expiration of my previous Work Permit on 22 November 1995. I had hardly terminated any contractual relations with the Plaintiff by mutual agreement between Mr Koroka and myself." (paragraph 19 of First Defendant's affidavit)

The First Defendant says the Work Permit obtained by the Plaintiff was cancelled (paragraph 8 of his affidavit).

In the Writ of Summons, the Plaintiff claimed three principal relief. The first and second relief are permanent...