From Star Limited's perspective, the central issue is whether it can enforce the restraint of trade clause against Ramon notwithstanding the fact that he is using his company Equip Limited to solicit Star Limited's customers. Before considering whether the clause can be enforced against Ramon personally, it will be necessary to firstly determine if the clause itself is valid. With regard to Helga, it will be necessary to consider her rights under the pre-existing agreement with Ramon to sell the property to her, and whether this can be enforced against him personally or alternatively Equip Limited due to the circumstances of the transfer of the property to Equip Limited to prevent sale. I shall address the legal position of each party respectively and conclude with a summary of the legal position.
[...] to consider her rights under the pre-existing agreement with Ramon to sell the property to her, and whether this can be enforced against him personally or alternatively Equip Limited due to the circumstances of the transfer of the property to Equip Limited to prevent sale. I shall address the legal position of each party respectively and conclude with a summary of the legal position. Star Limited With regard to Star Limited, in addition to being a director, Ramon was an employee with a service contract and the initial point to determine is whether the restrictive covenant preventing him from soliciting their customers Star Limited's customers is valid per se. [...]
[...] This principle was developed further in the case of Stenhouse Australia Limited v Phillips[10] where Lord Wilberforce asserted that: employer's claim for protection must be based on the identification of some advantage or asset inherent in the business which can be properly regarded as, in a generally sense, his property, and which it would be unjust to allow the employee to appropriate for his own purposes, even though the employee may have contributed to its creation.”[11] The business interests recognised by law include customer connections[12] and the rationale of the Stenhouse decision was based on the fact that an employee should not be able to take unfair advantage of confidential information and business connections to which they had access during employment. [...]
[...] Farrar's Company Law. 4th Edition Butterworths. Brenda Hannigan (2003). Company law. 5th Revised Edition. Oxford University Press Keenan (2005). Company Law. Pearson. L.Sealey., & S.Worthington., (2007). Cases and Materials in Company Law. 8th Edition Oxford University Press. Farrar (1999). Farrar's Company Law. 4th Edition Butterworths. [...]
[...] The factual scenario was similar in that the employee was bound by a valid restraint of trade clause, however set up a company in direct competition with his previous employer Gilford Motors. It was held that the incorporation of the company itself was specifically utilised as a device to evade contractual obligations under the valid restraint of trade clause and as such, was a sham. Accordingly, this prevented the defendant from soliciting trade from Gilford Motors and the court insisted this was necessary to ensure the defendant complied with his contractual obligations. [...]
[...] [1894] AC 535. Dignam & Lowry (2006). Company Law.4th Edition Oxford University Press. Ibid. L.Sealey., & S.Worthington., (2007). Cases and Materials in Company Law. 8th Edition Oxford University Press. Ibid. ibid. [1913] AC 724 [...]
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