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
• Court: National Court
• Citation: [1997] PNGLR 158
• Date: 11 March 1996
• Year: 1997

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

1 Injunction—Interim injunction—Contract of employment between Expatriate Quarry Master and local company—Negative covenant—Covenant not to perform work 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

2 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 and Employers Federation of Papua New Guinea v Papua New Guinea Waterside Workers and Seamen's Union (1982) N393 referred to

Held:

(1) Because damages were not an appropriate alternative remedy, an interim injunction should be granted against the First Defendant restraining him from engaging in 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 in alternative employment with or without his new employer whilst he awaits the finalization of the proceedings

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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...