defendant. Declined to grant the interlocutory injunction sought in paragraph 8(a) of the amended notice of motion; listed proceedings for directions on 8 May 2020; made consent orders and noted defendants'...
Key principles
On an interlocutory application to restrain a former employee from soliciting a plaintiff's clients, the plaintiff must establish (i) a serious question to be tried as to breach...
Where there is ambiguity as to the contractual counterparty and who benefits from restraints in a signed agreement, that uncertainty is a legitimate substantive issue at final...
A non-solicitation restraint may be seriously arguable and prima facie protectable where the employee was the 'human face' of the business and acquired confidential client...
Promptness in seeking interlocutory relief is important; unexplained delay can indicate lack of urgency and weigh against granting an injunction even where a serious question to...
Issues before the court
Whether there is a serious question to be tried that the defendant breached or threatens to breach the non-solicitation restraint in the Agreement.
Plain English Summary
Hotwork Australia sought an interlocutory injunction to stop its former regional manager and director (Tomkins) and his new companies from soliciting Hotwork Australia's clients, relying on a 2005 confidentiality and non-competition agreement. The Court found there was a serious question to be tried both as to whether Tomkins breached the non-solicitation covenant and whether a restraint (up to about 12 months) was reasonable, because Tomkins had been the senior 'face' of the business and had client-specific knowledge. However, the Court refused the interlocutory injunction. The refusal was grounded on plaintiff delay in seeking urgent protection without satisfactory explanation, uncertainty over which Hotwork entity was the contracting/benefited party under the 2005 agreement and whether consideration was provided, and potential hardship to third parties; the defendants' undertakings on confidentiality and accounting were noted and the matter was relisted for expedited final hearing.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Whether there is a serious question to be tried that the non-solicitation restraint is valid and reasonable (including appropriate duration).
Whether the balance of convenience and other discretionary factors favour interlocutory injunctive relief.
Cited legislation
2 cited instruments linked from this judgment.
Deep Dive
1,772 words · generated 23/07/2026
What happened
Hotwork Australia, a specialised supplier of refractory services to industries using commercial furnaces, brought interlocutory proceedings to restrain its long‑time Regional Manager and director, Mr Jason Tomkins, from soliciting Hotwork Australia's clients (notably Owens‑Illinois and CSR) following his resignation and subsequent engagement with a new company, Heat Applications Global Pty Ltd (HAG), connected to Heat Applications India (HAI). Hotwork relied on a Trade Secrecy/Confidentiality and Non‑Competition Agreement dated 10 June 2005 (the Agreement) containing a two‑year non‑solicitation and non‑compete covenant said to bind Mr Tomkins. The parties resolved the issues concerning confidential information by defendants' undertaking and agreed delivery‑up and disclosure orders. The remaining contested relief was an interlocutory injunction restraining solicitation of Hotwork Australia's current clients. Henry J heard the interlocutory application on 4 May 2020 and delivered orders dated 7 May 2020. The Court found there were serious questions to be tried on breach and on the reasonableness of a restraint (a 12‑month period was seriously arguable) but declined to grant the interlocutory injunction principally because of plaintiff delay, uncertainty about the contracting parties/benefit of the Agreement and potential hardship to third parties; the matter was relisted and consent orders and undertakings recorded (Conclusion [1]–[6]).
Why the court decided this way
The decision rests on the tripartite interlocutory injunction analysis: (1) a serious question to be tried, (2) balance of convenience and other discretionary factors, and (3) adequacy of damages. On the first limb, Henry J concluded the plaintiff had adduced sufficient material to demonstrate a serious question on both breach and on the validity/reasonableness of the non‑solicitation covenant:
Breach: evidence showed Mr Tomkins took steps before and after resignation to establish HAG, sent HAG/HAI and clients technical/commercial material, and submitted quotes which led to HAG being awarded work (Serious question [18]–[20]). That conduct made it "seriously arguable" he solicited or attempted to entice away Hotwork Australia's clients.
Validity: applying standard restraint principles, assessed at the time of contracting, protection only for legitimate interests (trade secrets or customer connections), and special emphasis on whether the employee became the 'human face' of the business, the Court found Mr Tomkins had been the senior representative who developed and managed key client relationships and had detailed client‑specific knowledge (Validity [1]–[11]). That made a non‑solicit restraint prima facie protectable and a 12‑month period seriously arguable (Validity [14]–[21]).
Despite that, the Court refused the injunction because the second limb (balance of convenience/discretion) did not favour the plaintiff. The decisive factors were:
Delay: Hotwork Australia was on notice by 30 December 2019 of Mr Tomkins' prospective move, received evidence of solicitations by early February 2020, but did not commence proceedings until 2 April 2020 and sought relief on a non‑urgent commercial list timetable. The Court considered the delay unexplained and significant, indicating the plaintiff did not regard the matter as requiring urgent judicial protection (Balance of convenience [14]–[19]; Conclusion [2]).
Substantive uncertainty: material raised real issues as to whether Mr Tomkins had been employed by Hotwork Australia at the time of the Agreement, and whether Hotwork Australia (as opposed to Hotwork USA) was the intended beneficiary. The Agreement's drafting, signature placement and governing law clause contributed to an arguable constructional dispute that was appropriately resolved at final hearing rather than on interlocutory material (Serious question [5]–[15]; Conclusion [3]).
Hardship to third parties: granting the injunction risked causing hardship to clients (Owens‑Illinois; CSR) and to HAG, which had been awarded contracts; the Court accepted there would be some hardship to defendants if the injunction were imposed (Balance of convenience [6]–[11]; Conclusion [4]).
Additionally, the defendants' undertakings (confidentiality and to keep separate accounts for revenues/expenses related to plaintiff's clients) reduced the urgency of interlocutory intervention and tipped the balance against injunctive relief (Conclusion [5]).
Before and after state of the law
Before this judgment, the applicable legal framework for restraints and interlocutory injunctions is well established in Australian law:
Restraints of trade are enforceable only where reasonably necessary to protect a legitimate interest, assessed at the date of contracting (see Dewes v Fitch; Stenhouse; Koops Martin; and the statutory overlay in Restraints of Trade Act 1976 (NSW) s 4). The concept of the 'human face' and protectable customer connection is established in authorities such as Cactus Imaging (Validity [6]–[11]).
Interlocutory injunctions require a serious question, balance of convenience, and consideration of adequacy of damages. Delay and the strength of the plaintiff's case are factors relevant to the balance (Kolback; Maggbury) (Balance of convenience [4], [12]).
Hotwork Australia v Tomkins does not change the law. It illustrates the established approach in practice and elucidates how these principles operate together in a specialised context:
It reaffirms that a plaintiff need not show a prima facie case on all issues to satisfy the 'serious question' limb; it suffices that the claim is seriously arguable (Serious question [6], [19]).
It emphasises that unexplained delay in seeking interlocutory relief can be determinative even where substantive questions are serious and the plaintiff has proffered a protectable interest; undertakings and the prospect of expedited final hearing can further reduce the justification for interim injunctive relief (Balance of convenience [14]–[20]; Conclusion [1]–[5]).
Therefore, the decision is an application and exposition of orthodox principles rather than any doctrinal innovation.
Key passages with plain-English translation
"There is a seriously arguable case that Mr Tomkins contravened the non-solicitation restraint ... based on his contacts with Owens‑Illinois and CSR in January 2020." (Serious question [19])
Plain English: The Court thinks there is enough evidence to argue at trial that Mr Tomkins probably tried to take Hotwork's clients when he left.
"The Agreement is signed by Mr Tomkins in his personal capacity without any reference to signing as a director of Hotwork Australia." (Serious question [13])
Plain English: How the document was signed suggests Mr Tomkins personally agreed to the covenant, which bears on who is bound and who benefits.
"While I do not consider that the delay in this case should, by itself, be fatal ... it is a significant factor in the exercise of the Court's discretion." (Balance of convenience [20])
Plain English: Delay alone would not always defeat an injunction, but here the unexplained delay strongly influenced the Court's decision.
"Having considered all the factors, I have come to the conclusion that the balance of justice is best served by not granting the injunction." (Conclusion [1])
Plain English: Balancing everything (strength of the case, delay, third‑party hardship, undertakings), the judge refused to order the interim ban on solicitation.
What fact patterns trigger this precedent
Long‑serving employees or directors with significant client‑facing responsibilities who resign and immediately join or set up a competing entity, especially where (a) they had access to confidential technical/client material; (b) they had been the primary point of contact for major clients; and (c) the departing employee takes steps (quotes, tenders, business plans, incorporation of new entity) that plausibly amount to solicitation prior to or immediately after departure.
Cases where the restraint instrument is imperfectly drafted, leaving doubt as to which corporate entity is the contracting party or beneficiary (e.g., cross‑border group entities like Hotwork USA and Hotwork Australia), and the plaintiff is the local affiliate rather than the signatory on the face of the agreement.
Applications where the plaintiff delays seeking immediate injunctive protection despite knowledge of the alleged conduct and has negotiated correspondence before litigating.
Practitioners should expect the Court to:
Take seriously undertakings addressing confidentiality and accounting for profits, as they may reduce the need for interlocutory intervention.
Require plaintiffs to explain urgency and delay convincingly; unexplained delay is a high‑risk factor for refusal.
Focus sharply on contract construction when the identity of the employer/beneficiary is in doubt; such disputes are often better determined at final hearing.
How later courts have treated it
As of this decision, Hotwork Australia v Tomkins applies orthodox interlocutory and restraint principles. Later courts (in hypothetical subsequent citations) would likely treat the judgment as persuasive authority on the interplay between delay, undertakings and interlocutory relief in restraint cases, particularly in contexts where:
Restraints are cross‑border and corporate group relationships complicate who benefits from restraints.
The plaintiff has proffered undertakings or accounting arrangements which blunt the need for an interim injunction.
The decision should be read alongside established authorities (Stenhouse; Cactus Imaging; Maggbury) rather than as a departure from them. It is best viewed as a practical demonstration of the discretionary weighing exercise at interlocutory stage, not a source of new legal doctrine.
Still-open questions
Constructional certainty: The judgment highlights that ambiguity in the identity of the employer and beneficiary is a critical live issue. At final hearing, what precise principles of contractual construction will the Court apply to determine whether a local affiliate (not a signatory on the face) can enforce restraints? The interlocutory judgment outlines factors but does not decide the point (Serious question [10]–[15]).
Quantum and proof of loss: The Court noted that undertakings to keep separate accounts may mitigate difficulties in establishing loss, but how readily will courts accept accounting undertakings in lieu of injunctions, and on what evidentiary footing will plaintiffs later recover damages or account of profits?
Precise duration of reasonable restraint: Henry J found a 12‑month period seriously arguable on the interlocutory material but did not finally fix the period. The appropriate method for calibrating duration in specialised technical services (skill acquisition period for replacements vs dissipating of client rapport) remains intensely fact‑sensitive and will require fuller evidence at final hearing (Validity [14]–[21]).
Effect of group corporate arrangements: Where employees have historically been treated operationally as employed by a local affiliate but contractual documents are executed by a foreign parent, what evidential standard will be applied to determine whether the local entity has the benefit, especially where payroll, entitlements and practical direction point to the affiliate? This case raises but does not resolve that evidentiary interplay.
Delay and COVID‑era practice: Henry J was critical of delay despite pandemic constraints; this invites future refinement on what constitutes acceptable delay when courts offer video/duty list access. How will courts balance public health constraints, operational access to evidence, and the imperative for prompt interlocutory relief in pandemics or similar disruptions?
Practitioners must therefore ensure prompt action where client solicitations occur, preserve clear evidence about the identity of contracting parties and who benefits from restraints, consider early offers of undertakings that might limit the need for injunctive relief, and be prepared to bring full evidence on the measures required to re‑establish customer connections at final hearing.
Catchwords
[2015] HCA 37
Stacks/Taree Pty Limited v Marshall (No 2) [2010] NSWSC 77
Stenhouse Australia Ltd v Phillips [1973] 2 NSWLR 691
Judgment (12 paragraphs)
[1]
Judgment
The plaintiff, Hotwork Australia Pty Ltd, provides refractory services to industries that use commercial furnaces with hot and molten materials. Hotwork Australia is a wholly owned subsidiary of Hotwork - USA LLC.
Since 2003, the first defendant, Jason Tomkins, had been employed as a Regional Manager in Australia and had also been a director of Hotwork Australia. On 31 December 2019, Mr Tomkins resigned as director and gave four weeks' notice in respect of his employment.
The second defendant, Heat Applications Global Pty Ltd (HAG), is a company which Mr Tomkins helped incorporate on 11 December 2019 as a new refractory services business in Australia.
Mr Tomkins signed an employment agreement with HAG, effective from 1 February 2020. He has been working for HAG and has assisted it to win the business of Hotwork Australia's major clients.
The third defendant, Heat Applications India PVT Limited (HAI), is a company incorporated in India. It also provides refractory services and materials to clients, primarily in the Asian region. HAI is the parent company of HAG.
By an amended notice of motion filed on 20 April 2020, Hotwork Australia seeks interlocutory relief to restrain Mr Tomkins, HAG and HAI from using its confidential information, an order for delivery up and an affidavit of disclosure. It also seeks an interlocutory injunction to restrain Mr Tomkins from soliciting and dealing with Hotwork Australia's clients, employees and sub-contractors.
The claims for interlocutory relief and orders relating to confidential information have been resolved between the parties. The defendants have proffered an undertaking to the Court not to use or disclose Hotwork Australia's confidential information. Mr Tomkins has also consented to delivery up and disclosure orders which I am satisfied are appropriate to make.
Mr Tomkins has also proffered an undertaking to the Court not to solicit, interfere with or engage any current employee or subcontractor of Hotwork Australia which deals with part of the other interlocutory relief claimed.
Thus, the dispute between the parties relates to Hotwork Australia's claim for an interlocutory order seeking to restrain Mr Tomkins from "soliciting, canvassing, approaching, accepting approaches from, or attempting to entice away or provide services to any client of Hotwork Australia": Amended Notice of Motion filed 20 April 2020 at [8(a)].
[2]
Issues for determination
The basis on which Hotwork Australia seeks the relief is that Mr Tomkins' solicitation of or dealings with its clients would breach restraints contained in a Trade Secrecy/Confidentiality and Non-Competition Agreement which, it asserts, Mr Tomkins signed as an employee of Hotwork Australia on 10 June 2005 (Agreement) and are valid as reasonably necessary in the protection of Hotwork Australia's customer connections.
The restraints in the Agreement, each with a duration of two years from termination of Mr Tomkins' employment, also apply during his employment. They can be summarised as being:
1. a restraint on diverting, soliciting or contacting any suppliers, sources, customers or accounts of the Employer with the object of causing them to transfer business from the Employer (non-solicitation restraint); and
2. a restraint on engaging in any business that provides services to Protectable Industries (as defined) in any country where the Employer offers Refractory Dry-Out Services and associated services (non-compete restraint).
Before identifying the issues in dispute, three observations should be made about the relief sought by Hotwork Australia and the restraints.
First, the relief seeks to restrain Mr Tomkins from, "soliciting canvassing, approaching, accepting approaches from, or attempting to entice away or provide services to any client of Hotwork Australia". As Counsel accepted at the hearing, Hotwork Australia does not seek to restrain Mr Tomkins from working for HAG as a competing business or from competing in the market for refractory services more broadly.
Second, while Counsel for Hotwork Australia referred at the hearing to seeking to enforce the non-solicitation and non-compete restraints, the relief sought arises from and reflects the content of the non-solicitation restraint (although not in precisely the same terms as the Agreement), rather than the non-compete restraint.
Third, the non-solicitation restraint contained in the Agreement extends to customers of the "Employer or its Affiliates". At the hearing, counsel for Hotwork Australia conceded that any relief should be limited to "current" clients of Hotwork Australia. By that, I understand him to mean those clients to whom Hotwork Australia was providing services at the time of Mr Tomkins' resignation.
[3]
Factual matters
Refractory services and materials are provided to clients that use commercial furnaces in a range of industries, such as glass, steel, cement, oil refining and petro-chemicals. They are used in order to maintain temperature so as to protect the furnace from over-heating and to make them more fuel-efficient.
The refractory services that the Hotwork companies and their competitors provide include refractory dry-out, glass furnace drains, sulphate burnouts, furnace cooldowns, expansion control supervision, "hot holds" and heat up services. The refractory services market involves highly specialised work of a technical nature, particularly in the glass industry.
Hotwork USA operates in the USA and elsewhere around the world. Hotwork Australia operates in Australia.
The refractory services and materials market is relatively concentrated. There are seven main competitors to Hotwork Australia and Hotwork USA operating in the Asia Pacific region. One of those competitors is HAI.
Hotwork Australia was incorporated in 2003. Most of its revenues are from clients in the glass industry, in particular, Owens-Illinois, CSR and Viridian Glass. It also has clients in other industries including Cement Australia, One Steel Whyalla, Blue Scope Steel and Chevron.
[4]
Mr Tomkins and Hotworks
In 1993, Mr Tomkins commenced his career as a field service technician in respect of refractory material used in commercial furnaces. He has no professional qualifications other than as a chef, which he obtained prior to his career in the refractory field, and a certificate in sports coaching.
From 1997 to about 2000, Mr Tomkins worked for Hotwork USA as a contractor in Southeast Asia.
In late 2000, Mr Tomkins accepted an opportunity to relocate to Australia as Hotwork USA's representative.
An unsigned employment agreement between Mr Tomkins and Hotwork USA dated 8 June 2000 is in evidence. According to that agreement, Mr Tomkins was employed as a Regional Representative and was responsible for managing all company activities in Australia and New Zealand, including sales and marketing to refractory consuming industries in an undefined territory, and for managing the engineering and execution of projects. He received a base annual salary of approximately US$38,500 plus sales commission of 1% of net sales up to a maximum of 35% of the base salary (i.e. a maximum of US$13,475).
On 8 August 2003, Mr Tomkins was appointed a director and company secretary of Hotwork Australia. According to his evidence, Mr Tomkins did not receive additional remuneration and was told that his appointment to those positions was due to the requirement that there be an Australian resident on the board and that his role would not otherwise change.
From sometime in 2003, Mr Tomkins started to be paid in Australian dollars. He received a profitability bonus in most years between about AUS$2,000 to AUS$4,000, as well as an uplift for days spent onsite. In 2019, Mr Tomkins' last year of employment, he was paid a total of AUS$139,000 by way of salary and bonus.
On 10 June 2005, Mr Tomkins signed the Agreement. The first paragraph provides that:
"This Agreement is made and entered as of this 10th day of June, 2005 by and between Hotwork-USA LLC and Hotwork Australia Pty Ltd, the other party signing this Agreement, who is an employee, consultant or agent of Employer."
Article II of the Agreement deals with the "Protection of Trade Secrets" and Article III deals with "Non-Competition". Clauses 3.01 and 3.02 of the Agreement provides as follows:
"[3.01] Period of Non-Competition. Employee agrees that during the term of his employment with Employer and for a period of two (2) years from and after the termination of such employment, he will not, in any country within the Territory where Employer then engages in the business of offering or providing Refractory Dry-out Services and associated Services as defined in paragraph 1.02 or in any other country where Employee may be sent by Employer, directly or indirectly, either as principal, agent, shareholder, officer, director, employee, partner, lender, investor, consultant, advisor, agent or in any their capacity, engage in, have a financial interest in, or be in any manner connected or affiliated with any business or entity which engages in the business of providing such services to the Protected Industries.
[3.02] Non-Solicitation. During the period of his employment by Employer and for a period of two (2) years from and after the termination of such employment, Employee shall not in any way, directly or indirectly, (i) divert, solicit, contact any suppliers, sources, customers or accounts of Employer or its Affiliates or any person or entity with which Employer or its Affiliates has had business dealings or relationships of any ongoing nature with the objective of causing such party to transfer its business from Employer or its Affiliates to any other person, firm, partnership, corporation or entity or (ii) induce or attempt to influence any present or future employee of Employer or its Affiliates to leave his employment."
[5]
Mr Tomkins resigns from Hotwork
In around October 2019, Mr Tomkins and one of the owners of HAI discussed Mr Tomkins resigning from his role at Hotwork Australia and representing HAI in Australia. By mid-November, they had agreed the broad terms of that arrangement.
Between 5 and 31 December 2019, Mr Tomkins took a number of steps in relation to the establishment and future operation of HAG, including arranging the incorporation of HAG on 11 December 2019. There is evidence that Mr Tomkins:
1. set up a new email address for HAG;
2. sent to HAG and/or HAI and third parties information and technical drawings about equipment used by Hotwork Australia;
3. arranged for his partner, Larraine Sands, to be a director of HAG but planned to consider appointing himself "when the dust settled"; and
4. discussed with HAI opportunities for targeting work with HAI, including a quotation for work in Indonesia, although he deferred submitting a quote because it was "very sensitive while [he's] still at Hotwork".
On 31 December 2019, Mr Tomkins sent an email to the Chief Executive Officer and Vice-President of Hotwork USA attaching a letter as formal notice of his resignation as a director of Hotwork Australia, and that his last day of employment would be in four weeks, being 28 January 2020.
There is evidence that, on 30 December 2019, Mr Tomkins also discussed his resignation with the CEO of Hotworks USA, Mr Graham, in which he advised that he had another "offer", that Hotwork may consider it to be "a violation" but the "agreement is too broad and unenforceable".
On 3 January 2020, Owens-Illinois sent out an invitation to tender to Hotwork Australia for a three-year exclusive services contract. Mr Tomkins was not involved with Hotwork Australia's response, although he had attended a preliminary meeting with that client on 3 December 2019 during which the prospect of the tender process was discussed.
On 4 January 2020, Mr Tomkins sent to HAI suggested pricing for the schedule of rates that Owens-Illinois had requested in its tender.
On 6 January 2020, on behalf of HAG, Mr Tomkins sent a "Business start-up plan" to the ANZ Bank. The business plan refers to HAI expanding in Southeast Asia and establishing a local Australian entity with Mr Tomkins as the lead local source. It also refers to the strategy of first securing a services contract agreement with Owens-Illinios and noted that Mr Tomkins had been providing all of their furnace requirements for the last 20 years in Australia.
[6]
Events after Mr Tomkins' last day in the office
On the evening of 14 January 2020, Mr Tomkins caused a quote from HAG to be submitted to CSR for refractory services. Around 15 January 2020, CSR awarded the work to HAG.
On 19 February 2020, Mr Tomkins signed an employment agreement with HAG, effective from 1 February 2020.
On 24 January 2020, Mr Tomkins submitted a response to Owens-Illinois' invitation for tender on behalf of HAG and HAI. On 26 February 2020, Owens-Illinois informed HAG that it had won the tender for their three-year contract.
[7]
These proceedings
Mr Frendo's evidence is that, on 3 February 2020, he identified the HAG email account on Mr Tomkins' work computer and that emails had been sent from that address to HAI and its principals. Over the next few days, he also identified that Mr Tomkins had sent numerous documents to HAG and HAI, including technical drawings and other commercial information relating to Hotwork Australia, had also sent emails from the HAG address to Owens-lllinois and CSR, and that CSR awarded refractory services work to HAG. These matters were raised with Mr Graham.
On 6 February 2020, Hotwork Australia's lawyer sent letters of demand to Mr Tomkins, HAG and HAI. There is evidence of further correspondence between the parties and their solicitors during the period 12 February 2020 to 4 March 2020, in which Hotwork Australia sought undertakings from Mr Tomkins that he refused to provide.
These proceedings were commenced by Hotwork Australia by summons and commercial list statement filed on 2 April 2020.
In the commercial list statement, Hotwork Australia claims that, prior to leaving its employment, Mr Tomkins accessed Hotwork Australia's confidential and other business information for use by HAG and HAI in breach of the Agreement and his duties as a director under ss 182 and 183 of the Corporations Act 2001 (Cth). The summons seeks final injunctive relief in the same terms as the interlocutory relief sought, although as against each of Mr Tomkins, HAG and HAI. It also seeks damages, equitable compensation and an account of profits.
[8]
Breach of restraint
The first question is whether Hotworks Australia has established there is a serious question to be tried that Mr Tomkins has actually breached or threatens to breach the non-solicitation restraint in the Agreement.
As threshold issues, Mr Tomkins disputes that Hotwork Australia has established that Mr Tomkins was an employee of Hotwork Australia or that the Agreement was binding on Mr Tomkins personally or can be enforced against him by Hotwork Australia. They contend that Mr Tomkins was employed by Hotwork USA (not Hotwork Australia) and, assuming the Agreement is enforceable, Hotwork USA is the entity that has the benefit of the restraints.
The relevance of this is that Hotwork Australia is the only plaintiff and its claim for final interlocutory relief as currently pleaded will fail if it cannot establish it was Mr Tomkins' employer and can enforce the Agreement against him. At the hearing, Counsel for Hotwork Australia noted that Hotwork USA may need to be joined as a party or a plaintiff to the application but did not seek leave to do so.
The defendants also argue that, if Mr Tomkins was a party to the Agreement in his personal capacity, there is doubt as to whether Hotwork Australia has the benefit of the restraints. They also submit that, in circumstances where there is no evidence that Mr Tomkins received any wage or salary increase in exchange for signing the Agreement, the Court cannot be satisfied that any consideration was given at the time.
The answer to the question of whether and when Mr Tomkins was an employee of Hotwork Australia is not clear on the material before the Court. The only employment agreement in evidence is the 8 June 2000 unsigned agreement between Hotwork USA and Mr Tomkins. That uncertainty cannot be finally resolved on this interlocutory application in the absence of cross-examination and further evidence.
That said, there is evidence before the Court which, in my view, establishes that it is arguable that Mr Tomkins was an employee of Hotwork Australia at the relevant times.
First, there is the evidence from Mr Graham and Mr Frendo to that effect, although I accept that their evidence was not in proper form.
Second, there is documentary evidence which indicates that Mr Tomkins was employed by Hotwork Australia from 1 January 2004. The document recording the details of Mr Tomkins' last salary payment refers to him as an employee of Hotwork Australia Pty Limited starting on 1 January 2004. It also indicates that Mr Tomkins' entitlements were calculated on that basis.
[9]
Validity of restraint
The principles to be applied in determining the question of validity and reasonableness were not in dispute. As a contractual restraint, it is subject to the operation of the common law and the Restraints of Trade Act 1976 (NSW), s 4. I respectfully adopt the principles set out by McDougall J in Stacks/Taree Pty Limited v Marshall (No 2) [2010] NSWSC 77 at [44]. I will not repeat them all here, other than the following principles which have particular relevance to this application.
The validity of the restraint clause should be assessed at the time of entry into the Agreement: Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 at [53]; Woolworths Ltd v Olson [2004] NSWCA 372 at [40].
Covenants that restrain competition are invalid unless they are reasonably necessary to protect legitimate business interests: see for example Harlow Property Consultants Pty Ltd v Byford [2005] NSWSC 658 at [24], [25] per White J.
An employer is entitled to protection against the use by the employee of knowledge obtained by them of their employer's affairs in the ordinary course of trade: Dewes v Fitch (1920) 2 Ch 159 at 181. A restraint clause will be invalid unless it is necessary to prevent disclosure of trade secrets or use of a connexion built up by the employee with customers: JD Heydon, The Restraint of Trade Doctrine (Butterworths, 2nd ed, 1999) at 66; Aussie Home Loans v X Inc Services [2005] NSWSC 285 at [14] per White J.
The relevant knowledge must be more than simply the skill and knowledge necessary to equip the employee as a possible competitor in the trade, but the obtaining of personal knowledge of and influence over the customers of their employer, or such an acquaintance with their employer's trade secrets as would enable them to take advantage of their employer's trade connection or utilise information confidentially obtained: Dewes v Fitch (1920) 2 Ch 159 at 181.
An employer's customer connection is an interest which can support a reasonable restraint of trade, but only if the employee has become, vis-a-vis the client, the human face of the business, namely the person who represents the business to the customer: see for example Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 at [25] per Brereton J; Kearney v Crepaldi [2006] NSWSC 23 at [51] - [53] per McDougall J.
[10]
Balance of convenience and discretionary factors
In assessing the balance of convenience, the Court is required to balance the hardship that would be suffered by Hotwork Australia and Mr Tomkins if the injunction was, or was not, to be granted. What would be the loss to Hotwork Australia if the injunctions are not granted compared to the loss to Mr Tomkins if they are, and whether damages for that loss would be an adequate remedy: Esposito v Commonwealth [2013] FCA 546 at [43]; Harlow Property Consultants Pty Ltd v Byford [2005] NSWSC 658 at [16].
The defendants' contend that the hardship to Mr Tomkins and HAG from imposing an injunction, Hotwork Australia's delay in seeking urgent relief and their proffered undertaking to keep separate account of any revenues and expenses relating to clients of Hotwork Australia, are factors which weigh against the grant of interlocutory relief in the terms sought.
They also submit that an evaluation of the strength of Hotwork Australia's case is relevant to the issue of balance of convenience and that its case is weak.
It has been recognised that an evaluation of the strength of a case for interlocutory relief may be desirable to determine where the balance of convenience lies, particularly in a case where the grant of interlocutory relief would have the practical effect of determining the substance of the matter: Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 536.
In this case, the restraint period sought to be enforced by Hotwork Australia is two years. The parties are also willing to prepare for a final hearing on an expedited basis, which could be expected to be able to be concluded within three to four months. Thus, it is not clear that the grant of interlocutory relief would effectively provide final relief.
As to hardship, the defendants submit that imposing the injunction will prevent Mr Tomkins from working in his specialist field and prevent HAG from providing services to Owens-Illinois, with the consequence that it will lose the benefit of the tender it has won and the opportunity to build a commercial relationship with that client.
The restraint will inevitably impact Mr Tomkins' ability to work in his area of speciality, being the supply of glass refractory services for clients in Australia. His evidence is that Hotwork Australia has a "monopoly" over the supply of refractory services to clients in the glass industry in Australia, such as Owens-Illinois, CSR and Viridian Glass, apart from the tender that HAG won from Owens-Illinois.
[11]
Conclusion
Having considered all the factors, I have come to the conclusion that the balance of justice is best served by not granting the injunction. This is primarily for the following reasons.
First, the delay by Hotwork Australia in taking action from the time it was on notice that Mr Tomkins was likely in breach of the Agreement and proposed to solicit and to continue to solicit its clients and the manner in which the case was commenced conveys that Hotwork Australia did not consider the application to warrant the urgent protection of the Court.
Second, while I have found that there is a serious question to be tried in relation to breach and the reasonableness and validity of the restraint, the material before the Court indicates that there are legitimate issues to be debated at final hearing on the case as pleaded, particularly as to whether Mr Tomkins was employed by Hotwork Australia at the time he signed the Agreement, which Hotwork entity has the benefit of the restraints, whether consideration was provided to Mr Tomkins when he signed, and the duration of the restraint.
Third, there is a possibility of hardship on third parties, such as Owens-Illinois and CSR.
Fourth, while Hotwork Australia will continue to lose the benefit of the protection provided by the non-solicitation restraint in the Agreement, it might do so for a relatively short period of time as the parties are agreed that the matter should progress to an urgent final hearing. During that time, it will have the protection of the defendants' undertaking to keep separate account of any revenues and expenses relating to clients of Hotwork Australia.
As to costs, my view is that the appropriate order in this case is for the costs of the interlocutory application to be costs in the cause. I will defer entry of that order for 7 days to allow the parties' time to consider whether they wish to contend for another costs order. If they do, they are to confer and, by 4pm on 11 May 2020, notify my Associate that some other cost order is sought. If there is no agreement on the other cost order, they should also provide an agreed timetable so that the issue can be determined on the papers.
For these reasons:
1. I decline to make an order in the terms of paragraph 8(a) of the plaintiff's Amended Notice of Motion filed on 20 April 2020.
2. The proceedings have been relisted for directions in the commercial list at 9.45am on 8 May 2020.
3. I make orders by consent in accordance with the short minutes of order that the parties have agreed and sent to chambers, which I have initialled and placed with the file. I also note the undertakings given by the defendants in the terms set out in those short minutes of order.
[12]
Amendments
08 May 2020 - Typographical errors to front page and to paras 31, 47, 109 and 111 in the judgment.
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Decision last updated: 08 May 2020
Declined to grant the interlocutory injunction sought in paragraph 8(a) of the amended notice of motion; listed proceedings for directions on 8 May 2020; made consent orders and noted defendants' undertakings (orders dated 7 May 2020).
In the light of the above, I have approached the issues for determination on this interlocutory application as relating to the validity and reasonableness of the non-solicitation restraint limited to current clients of Hotwork Australia and not whether, in addition, the non-compete restraint is valid and reasonably necessary for the protection of Hotwork Australia's interests.
Accordingly, and as a claim for interlocutory relief, the issues for determination are:
1. whether there is a serious question to be tried that there has been a breach or threatened breach of the non-solicitation restraint in the Agreement;
2. whether there is a serious question to be tried that the non-solicitation restraint in the Agreement is a valid restraint, whether for two years or a lesser period; and
3. whether the balance of convenience and other discretionary factors favour the grant of the interlocutory relief.
In support of its application, Hotwork Australia relies on an affidavit of Jason Frendo, Technical Sales Representative employed by Hotwork Australia, sworn 26 March 2020 and an affidavit of Thomas Carlisle Graham, Jnr, the Chief Executive Officer of Hotwork USA and a director of Hotwork Australia, sworn 31 March 2020.
The defendants rely on an affidavit of Mr Tomkins affirmed 22 April 2020.
As it was an interlocutory hearing, there was no cross-examination.
Territory is defined in clause 1.05 to mean:
"the United States and its territories, Canada, Mexico, Australia, New Zealand, Southeast Asia, (including Singapore, Indonesia, Thailand, Malaysia, Vietnam, and the Philippines), Korea, Taiwan, Japan, China, India, Central and Southern Africa, Europe, the Middle East, the states of the former Soviet Union and any other countries in which Employer or its Affiliates perform Refractory Dry-out/Furnace Heatup & Associated Services as defined herein during the term of Employee's employment."
"Employee" is defined in clause 1.06 to mean "Employee, Sub-contractor, Consultant or Sales Agent as noted in the agreement statement of this document".
The governing law of the Agreement is the country of residence of the Employee: clause 5.04.
The Agreement bears the signatures of, on the one hand, the President and Vice-President of Hotwork USA and, on the other hand, Mr Tomkins. It is also witnessed.
There are no other employment agreements in respect of Mr Tomkins in evidence.
During the period 2003 to 2009, Mr Tomkins was the most senior employee in Australia. His roles and responsibilities at Hotwork Australia included:
1. performing duties of a field service technician;
2. marketing Hotwork USA products and services in Australia and New Zealand, including through promotion, managing client relationships, identifying sales opportunities and assisting in the preparation of quotations;
3. liaising with clients in respect of their equipment requirements, quotations and proposals;
4. managing those clients that manufactured glass, such as Owens-Illinois and CSR;
5. reporting to Hotwork USA on sales activities, results and projections;
6. managing Hotwork Australia's office, sales records and staff, including training of staff. During this period Hotwork Australia employed at least 2 other full time staff, including Mr Frendo, a technical sales representative from September 2014; and
7. providing maintenance services, performing upgrades of Hotwork Australia and Hotwork USA's equipment and commissioning refractory materials that had been installed for clients.
Mr Tomkins has particular expertise in refractory services in the glass industry. Furnaces used for the production of glass require very specific and expensive types of refractory materials.
On 7 January 2020, Mr Tomkins sent to HAG a copy of a quote prepared for CSR by Hotwork Australia dated 27 March 2019. On the next day, he sent an email to Owens-Illinois attaching a presentation which outlined the credentials of HAG.
Mr Tomkins' last day in Hotwork Australia's office was 14 January 2020. He had previously been told by Mr Graham that he did not need to continue to work until 28 January 2020. When he left, he returned his work computer and work phone.
According to a document in evidence, Mr Tomkins' was paid for annual leave for the period from 14 to 28 January 2020 and long service leave accruing to 28 January 2020.
Third, and while not determinative, there is also evidence that suggests Mr Tomkins considered himself to be an employee of Hotwork Australia. His 31 December 2019 email attaching his letter of resignation states that he is "resigning from Hotwork Australia Pty Limited". An email dated 8 October 2019, from Immigration Solutions to Mr Tomkins, refers to Mr Tomkins as the Regional Manager of Hotwork Australia Pty Limited, which was based on his instructions. It also refers to Hotwork "currently [having] only 4 employees". Mr Tomkins' affidavit evidence suggests that he was one of those employees.
As to the Agreement, the wording of the first paragraph which states "by and between Hotwork - USA LLC and Hotwork Australia Pty Limited, the other party signing this agreement, who is an employee, consultant or agent of Employer …", can be read as providing for the parties to the Agreement being Hotwork USA on the one part and Hotwork Australia on the other. As Counsel for Hotwork Australia accepted at the hearing, on his case, there appears to be a missing "and" between the words "Hotwork Australia Pty Limited" and "the other party signing this agreement".
In construing a contract, the entire text and language used must be considered, as well as the circumstances addressed and the purpose or object to be served: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37.
In my view, when consideration is given to the language used and the purpose to be served, it is seriously arguable that the Agreement was between Hotwork USA and Hotwork Australia on the one part, and Mr Tomkins on the other as the Employee who was providing the relevant covenants and agreeing to be bound.
The Agreement is signed by Mr Tomkins in his personal capacity without any reference to signing as a director of Hotwork Australia. This is in contrast to Mr Hartley and Mr Cobane, who signed in their capacities as President and Vice-President, presumably of Hotwork USA. At the time, Mr Hartley was also a director of Hotwork Australia.
The purpose and object of the Agreement is to impose conditions on an Employee to the benefit of the Employer (in this case, arguably Hotwork Australia) and its Affiliates. As Hotwork Australia was (and remains) an Affiliate of Hotwork USA, there was seemingly no need for it, as opposed to Mr Tomkins as the Employee, to provide the covenants for the benefit of Hotwork USA. Further, clauses 3.01 and 3.02 refer to the Employee as "he" and there is a "Gender" clause, which also suggest that Mr Tomkins as an individual, rather than Hotwork Australia as a corporate entity, was intended to be the Employee.
The Agreement also expressly provides that consideration has been given by way of employment and for "other good and valuable consideration", receipt of which is acknowledged. While there may be no evidence of any financial consideration given to Mr Tomkins at the time, the reference to consideration on the face of the Agreement is, in my view, sufficient for the purposes of establishing a serious question to be tried on an interlocutory application.
The defendants also argued that Mr Tomkins' evidence raises doubt about the enforceability of the Agreement as he does not recall signing it, nor does he know the person who witnessed the signature, who he says never worked for Hotwork Australia.
I am not persuaded by that submission. Mr Tomkins' evidence is that he recalls receiving the Agreement and he does not dispute that it is his signature on it. As to the witness, they could have worked for Hotwork USA or some other company, other than Hotwork Australia. The Agreement having been signed by Mr Tomkins is a persuasive factor which supports the contention advanced by Hotwork Australia that Mr Tomkins agreed to the restraints contained within it and is bound by them.
The next question is whether there is sufficient evidence of actual or apprehended breach of the non-solicitation restraint in the Agreement.
In my view, there is a seriously arguable case that Mr Tomkins contravened the non-solicitation restraint while he was employed by Hotwork Australia based on his contacts with Owens-Illinois and CSR in January 2020. By those contacts, it is seriously arguable that Mr Tomkins was promoting HAG's business with the object of causing the clients to transfer their business away from Hotwork Australia .
There also seems to me to be little doubt that, post-employment with Hotwork Australia, the evidence establishes that Mr Tomkins is likely to have breached and continues to breach the non-solicitation restraint in the Agreement. His own evidence makes clear that he does not want the injunction to be imposed as it would prevent him from working in the area of his specialisation, being the supply of refractory services for glass manufacturing clients. Implicit in that evidence is that he intends to continue to work for HAG with Owens-Illinois and CSR and approach other clients of Hotwork Australia. I note that there was no submission to the contrary.
At the time of the Agreement, Mr Tomkins was the most senior representative of Hotwork Australia in Australia and New Zealand and a director and its company secretary. He was responsible for managing all company activities in Australia and New Zealand, including sales and marketing to refractory consuming industries. According to Mr Graham, Mr Tomkins was in charge of developing work and procuring clients.
Thus, while he had only been in Australia for a few years at the time he signed the Agreement, Mr Tomkins had been the one who had developed the goodwill and Hotwork Australia's brand with its clients up until that time and was expected to continue to do so based on his position and responsibilities. When an employee's duty includes to build up the employer's clientele as well as to deal with existing clients, a wide restraint is more likely to be upheld as the establishment of customer connection is not merely incidental to the employment, but part of its purpose and is legitimate to protect: Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 at [44].
I am also satisfied that through his role, Mr Tomkins acquired knowledge of the needs and requirements of Hotwork Australia's clients, particularly those in the glass industry which were managed by him, such as Owens-Illinios and CSR.
Mr Tomkins was responsible for identifying their requirements, responding to their proposals and assisting with quotations, as well as dealing with the technical issues relating to equipment and materials supplied to them. As evidenced by his attendance at the briefing meeting with Owens-Illinois in December 2019, Mr Tomkins' role meant he was involved in important, and arguably confidential, meetings with clients. He also took steps to deal personally with emergency issues that arose for clients, such as the situation at Owens-Illinois' Brisbane plant in December 2019.
For these reasons, I accept Hotwork Australia's submission that Mr Tomkins was, in effect, the "human face" of Hotwork Australia's business, particularly those that he managed, and which provided between 75-85% of Hotwork Australia's revenue.
As the defendants' submit, as an employee, Mr Tomkins was likely in a position of unequal bargaining power and may not have had an opportunity to negotiate at the time he signed the Agreement. Of course, the same could be said for many employees.
The lack of additional financial benefit flowing to Mr Tomkins when he signed the Agreement or provision for payment to Mr Tomkins during the restraint period are also relevant factors to take into account in assessing the reasonableness of the restraint. But those matters are not, of themselves or together, factors which persuade me to find that there is no serious question to be tried that, as at the date of the Agreement, Hotwork Australia had a legitimate protectable interest in its customer connection such as to warrant protection by the non-solicitation restraint.
As to duration, the relevant question to consider when it is for the protection of customer connection is: what is a reasonable time during which Hotwork Australia was entitled to protection against the solicitation of its clients with whom Mr Tomkins had contact and influence during his employment and who were not bound to Hotwork Australia by contract or by stability of association: Stenhouse Australia Ltd v Phillips [1973] 2 NSWLR 691 at 699; [1974] AC 391 at 402.
That question can be answered by considering, either, the length of time it would take a reasonably competent replacement employee to show their effectiveness and establish a rapport with clients or, how long it would take to sever the relationship built up between Mr Tomkins and those clients for which he was responsible: Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 at [88]; Stacks/Taree Pty Limited v Marshall (No 2) [2010] NSWSC 77 at [66]-[74] per McDougall J. Either approach may be taken: Hanna v OAMPS Insurance Brokers Ltd (ACN 005 543 920) [2010] NSWCA 267 at [41]-[45] per Allsop P (Hodgson JA and Handley AJA agreeing).
While contending that a two year period was reasonable because of Mr Tomkins' position and the nature of the industry, at the hearing, Hotwork Australia's Counsel seemed to accept that two years may be too long. He argued that a period of at least eight to 12 months was necessary and reasonable, and that relief was necessary on that basis. The defendants submitted that, if the restraint were otherwise valid, it would be limited to three months and no more than five months.
The difficulty with this aspect of Hotwork Australia's claim is that it has adduced little evidence from which to assess whether two years is the time necessary for its other employees to establish a new client connection or sever the relationship with Mr Tomkins. No estimate was proffered in its evidence as to the time likely to be required for that purpose, nor was there any evidence of efforts taken by Hotwork Australia to rebuild the customer connection lost with Mr Tomkins' departure.
As to the objective evidence, Hotwork Australia's business involves the supply of services of a technical and specialised nature, particularly to those clients in the glass industry. It is, therefore, to be expected that Hotwork Australia's replacement employee(s) would require time to build up that specialised knowledge and skills and re-establish a customer connection. The nature of the services and ongoing service requirements are also indicative of the need for time. Mr Tomkins was also the most senior person at Hotwork Australia who had built up relationships with clients over time.
There is also evidence of restraints with a duration of 12 months and longer in the industry. Mr Tomkins' employment agreement with HAG includes a non-compete and a non-solicitation restraint each with a three year duration, cascading to a minimum period of six months, for remuneration which was not dissimilar to what he was receiving from Hotwork Australia.
While not decisive, it is also relevant that Mr Tomkins accepted when he signed the Agreement that two years was appropriate: Stenhouse Australia Ltd v Phillips [1973] 2 NSWLR 691; [1974] AC 391 at 401; Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163 at [131].
Based on those matters, I am satisfied that there is a serious question to be tried that a period of 12 months is necessary to allow a replacement employee to demonstrate competence or to permit Mr Tomkins' connections to dissipate and that the non-solicitation restraint in clause 3.02 of the Agreement was not unreasonable.
That said, the injunction sought does not restrain Mr Tomkins from working in the refractory services market entirely; it simply restrains him from soliciting and doing work for Hotwork Australia's current clients. He is not restrained from pursuing work for HAG from non-Hotwork Australia clients. Accepting that Mr Tomkins' speciality is in the glass industry, he has been working in the refractory services market for over 27 years. During that time, he has dealt with other industries.
Mr Tomkins' evidence also indicates that there is the prospect of winning business from other customers that Hotwork USA has not been successful in obtaining due to its high prices, including numerous potential clients in Southeast Asia.
I accept the submission that granting the injunction is likely to create some hardship for HAG in relation to the Owens-Illinois contract based on Mr Tomkins' lead role and experience. I accept that the grant of the injunction could have some financial impost on HAG's business, although no evidence was led as to the likely quantum. But I do not accept the defendants' submission that it would prevent any work being done by HAG for Owens-Illinois or other clients it retains during the period of the restraint, or that Owens-Illinois and other glass manufacturers would be forced to use Hotwork Australia, thereby maintaining its monopoly.
The evidence demonstrates that HAG had a "back-up" plan for Owens-Illinois in the event Mr Tomkins was prevented from starting up a business by his contract with Hotwork. That plan was detailed by Mr Tomkins to Owens-Illinois on 19 February 2020 and involved the use of three full time technicians and one contractor to assist locally in Australia. While the COVID-19 pandemic might prevent the use of technicians from India as part of that plan, based on Mr Tomkins' evidence, he was not critical to the work that needed to be done for Owens-Illinios under the HAG contract. The ANZ Business plan prepared by Mr Tomkins also refers to the option of using other technicians to assist in providing services to clients. Mr Tomkins also gives evidence that, as at 22 April 2020, no services had been performed for Owens-Illinois by HAG and he was not aware when they would commence.
Hotwork Australia relies on the principle that where a negative covenant is sought to be enforced, damages will rarely be considered a sufficient remedy and the correct approach is to grant the injunction unless there are good reasons to the contrary: Cerlian Pty Limited v Graham Fraser [2008] NSWSC 1016 at [10]; Maggbury Pty Limited v Hafele Australia Pty Limited (2001) 210 CLR 181; [2001] HCA 70 at [102]. While accepting that principle, some of the usual difficulties in establishing loss in cases such as these should be overcome by the undertaking proffered by the defendants as to the maintenance of relevant records.
Hotwork Australia also argues that the hardship it will suffer if an injunction were not granted is the loss of the prospect of being able to establish a relationship between a new contact person at Hotwork Australia and Owen-Illinois in the absence of Mr Tomkins. No evidence was led as to what steps, if any, Hotwork Australia was taking to secure customers that Mr Tomkins dealt with or who any new contact person was, although presumably Mr Frendo is in a position to step into that role.
As other Judges in this Court have stated, interlocutory relief should be brought promptly. The speed with which a plaintiff seeks relief has also been recognised as indicators of the seriousness of the alleged infringement of rights: see for example, Zuellig Credit Insurance Brokers v Pulver [2000] NSWSC 7 at [36] - [37]; Capgemini US v Case [2004] NSWSC 674 at [40].
While Hotwork Australia was on notice that Mr Tomkins was taking a new position and that it might raise issues under the Agreement as early as 30 December 2019, it was not until early February 2020 that it knew what steps he had taken to establish HAG and solicit business from Owens-Illinois and CSR. As soon as it became aware, it wrote a letter of demand to Mr Tomkins and the other defendants.
Part of the delay in taking action can be attributed to the multiple exchanges of correspondence between the parties up until 4 March 2020. What is significant is the time taken by Hotwork Australia to then commence action (which occurred on 2 April 2020), and the manner in which it did so, namely by way of filing proceedings on a non-urgent basis online in the usual way. As a result, the hearing took place three months after Mr Tomkins' conduct came to light.
In that context, there is considerable force to the defendants' submission that Hotwork Australia's delay in bringing these proceedings suggests there is no urgency that warrants the grant of interlocutory relief.
No explanation for the delay was included in the affidavit material before the Court. At the hearing, Hotwork Australia's Counsel's explanation was that the "horse had bolted" when the Owen-Illinois contract and CSR contracts had been awarded. He also said that, in the context of the COVID-19 pandemic, the application became the "subject of contemplation" and a conscious decision was made that it did not warrant the urgency of an application in the duty list but that the appropriate way to commence the proceedings was in the commercial list and seek to ventilate the motion at the earliest opportunity that was available.
That explanation is not, in my view, satisfactory. While accepting that COVID-19 might have raised an initial question as to the appropriate approach, as made clear by announcements on the Supreme Court's website, this Court and a duty Judge have been available to deal with urgent matters of this type throughout the recent period, albeit by video, telephone or on the papers.
While I do not consider that the delay in this case should, by itself, be fatal to the grant of interlocutory relief, it is a significant factor in the exercise of the Court's discretion.