Moroney v TM Insight Operations Pty Ltd [2025] FCA 1337

1. On 7 April 2025, Mr Moroney commenced this proceeding, alleging that the respondents had breached various provisions of the Fair Work Act 2009 (Cth) and that the restraints in the employment agreement and the shareholders agreement are either void or invalid at common law or pursuant to s 4(3) of the Restraints of Trade Act 1976 (NSW) (ROT Act), or that they are valid only to the extent determined by the court. It was later clarified that the ROT Act only applied to the employment agreement.
2. On 8 July 2025, Mr Moroney indicated that there was some urgency associated with the aspects of his claim concerning the validity of the restraints because he received a job offer in April 2025 with a commencement date of 1 October 2025, or as soon as possible after that date. It is common ground that this role would require him to perform work in competition with Operations.
3. On 15 July 2025, I ordered for this Court to hear and determine Mr Moroney's claims against Operations and Holdings arising specifically from the restraint of trade clauses. The balance of Mr Moroney's claim will be heard at a later date.
4. At the hearing, Mr Moroney maintained that the restraint clauses in both agreements were invalid at common law and/or the restraint clause in the employment agreement was invalid pursuant to s 4(3) of the ROT Act. He alternatively submitted that the restraint clauses could be read down in a way which permits him to accept the job offer that he received in April 2025. Further details of Mr Moroney's pleaded case and the parties' arguments are set out below, but it is worth noting at this stage that the respondents contended that the restraints were wholly valid and did not advance any real argument for reading down either restraint clause. However, they accepted that this Court had the power to read them down.
5. Ultimately, the dispute is whether the restraints are wholly valid, wholly invalid, or invalid only to some limited degree. The live issue is whether Mr Moroney can accept the job offer made to him, either now or at some future time, depending on the extent to which any restraints are found to be valid. For completeness, I note that Mr Moroney had pleaded that the restraints should not apply to him by reason of repudiation from Operations in respect of the employment agreement and from Holdings in respect of the shareholders agreement. However, that aspect of his case was abandoned at the hearing in relation to both agreements.
6. For the reasons below, I have concluded that the restraints in the shareholders agreement and the employment agreement are valid to an extent, and that the only outstanding operative restraint will apply for six months after IPS ceases to be a shareholder of Holdings.

1. The fundamental statement of principle in relation to restraints of trade was stated by Lord Macnaghten in Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Company Limited [1894] UKLawRpAC 52; [1894] AC 535 at 565:

The public have an interest in every person's carrying on his trade freely: so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule. But there are exceptions: restraints of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case. It is a sufficient justification, and indeed it is the only justification, if the restriction is reasonable - reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public. That, I think, is the fair result of all the authorities.

1. The above passage was cited by the New South Wales Court of Appeal in Isaac v Dargan Financial Pty Ltd [2018] NSWCA 163; 98 NSWLR 343 in its restatement of the fundamental principle at [59] (Gleeson JA, with whom Bathurst CJ and Beazley P agreed), which benefits from the context of the complete quote from Nordenfelt above:

At common law a restraint of trade is contrary to public policy and void unless justified by the special circumstances of the particular case. A restraint may be enforced if the restraint is reasonably necessary for the protection of the parties concerned and reasonable in the interests of the public: Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] UKLawRpAC 52; [1894] AC 535 at 565 (Lord Macnaghten); Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 at 633 (Latham CJ); [1950] HCA 48; Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353 at 376, 379-380; [1971] HCA 71.

1. The validity of a restraint is necessarily dependent upon the context in which it exists, including the form of agreement in which it is found, and the nature of the work being performed by the person bound by it. This point was captured by Latham CJ in Lindner v Murdock's Garage [1950] HCA 48; 83 CLR 628 at 633-634:

It is well established that prima facie all restraints upon trade are invalid, but that they may be upheld if the party seeking to enforce them shows that circumstances exist which make the restraint reasonably necessary for protection of a covenantee's business and that it is not contrary to public interests. A distinction is drawn between a restraint upon trade included in an agreement for the sale of a business and a restraint included in an agreement with an employee. The restraint is more easily upheld in the former than in the latter case.

...

Where an employee has access to trade secrets or other confidential information he may be restrained by agreement from communicating those secrets or such information to other persons, and particularly to competitors in trade with his employer. Again, an employee who is brought into personal contact with the customers of his employer may by agreement effectively bind himself to abstain after his term of service has been completed from soliciting the customers of his former employer. In these cases the covenant in restraint of trade is not a covenant against mere competition but is a covenant directed to securing a reasonable protection of the business interest of the employer, and in the circumstances is not unjust to the employee. The interest which can validly be protected is the trade connection, the goodwill of the business of the employer.

1. The reasonableness of the restraint is judged at the time it is made, although a court may take into account future events that could have been foreseen: Lindner at 653 (Kitto J).
2. Whether a restraint is reasonable as between the parties depends on two related considerations. First, the identification of a legitimate protectable interest, and second, whether the restraint is no more than reasonable for the legitimate protection of that interest: Belflora Pty Ltd v Vinflora Pty Ltd [2021] NSWCA 178; 106 NSWLR 67 at [46] (Brereton JA). As to the identification of a legitimate protectable interest, Brereton JA said at [46] (footnotes omitted):

The identification of a legitimate protectable interest is fundamental; without one, no restraint is reasonable; and where one is established, it informs the extent of what is reasonable to protect it. The legitimate interests which may be the subject of protection by covenant are in the nature of proprietary subject matter, including trade secrets and confidential information, and goodwill including customer connection. It extends to information as to the identity of reliable suppliers, even though not such as to amount to a "trade secret" which would attract equitable protection in the absence of express agreement; and to connection with staff, so that "anti-poaching" covenants prohibiting a former employee from soliciting the employer's staff have been upheld. However, it is well-established that a covenantee is not entitled to protection against mere competition.

1. The word "proprietary" in this context is used in a special sense and includes legitimate commercial interests: Dargan at [65] (Gleeson JA); Stokely-Van Camp Inc v New Generation Beverages Pty Ltd (1998) 44 NSWLR 607 at 612 (Young J). When considering "goodwill", it is more accurate to refer to it as having sources rather than comprising of elements, despite the fact that many of the sources of goodwill are not themselves property: Dargan at [66] (Gleeson JA); Commissioner of Taxation of the Commonwealth of Australia v Murry [1998] HCA 42; 193 CLR 605 at [24]- [25] (Gaudron, McHugh, Gummow and Hayne JJ). In that sense, a source of goodwill can be an agreed absence from competition: Murry at [16].
2. An employer's customer connection is an interest which can support a reasonable restraint of trade in certain circumstances. As Brereton J stated in Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; 71 NSWLR 9 at [25]:

It is plain that an employer's customer connection is an interest which can support a reasonable restraint of trade: Hitchcock v Coker [1837] EngR 482; (1837) 6 Ad& El 438[1835-42] All ER Rep 452 (Tindal CJ); Herbert Morris Ltd v Saxelby (at 709); Dewes v Fitch [1920] 2 Ch 159 at 181; Coote v Sproule (1929) 29 SR (NSW) 57846 WN (NSW) 180 (Harvey CJ in Eq); Lindner v Murdock's Garage (at 633-634) (Latham CJ, Webb J agreeing), (at 650) (Fullagar J), (at 654) (Kitto J); and Koops Martin Financial Services Pty Ltd v Reeves (at [29]-[33]). Such a restraint is legitimate if the employee has become, vis-à-vis the client, the human face of the business, namely the person who represents the business to the customer - or, as it was put by Hoover J in Arthur Murray Dance Studios of Cleveland Inc v Witter (1952) 105 NE(2d) 685 at 706 (Ohio): The personal relation between the employee and the customer [is] such as to enable the employee to control the customer's business. (And see Twenty-First Australia Inc v Shade (Young J, 31 July 1998, unreported) at 12; Koops Martin Financial Services Pty Ltd v Reeves (at [34]).) While the employer is not entitled to be protected against mere competition by a former employee, the employer is entitled to be protected against unfair competition based on the use by the employee after termination of employment of the customer connection which the employee has built up during the employment - which, because the employee has in effect represented the employer from the customer's perspective during the employment, might at least temporarily appear attached to the employee, but in truth belongs to the employer: Koops Martin Financial Services Pty Ltd v Reeves (at [30]).

(Emphasis added.)

1. An employer's legitimate protectable interests do not extend to an employee's personal attributes and skills, which remain the property of the employee. As the Privy Council explained in Stenhouse Australia Ltd v Philips [1973] UKPC 1; [1974] AC 391 at 400:

The accepted proposition that an employer is not entitled to protection from mere competition by a former employee means that the employee is entitled to use to the full any personal skill or experience even if this has been acquired in the service of his employer: it is this freedom to use to the full a man's improving ability and talents which lies at the root of the policy of the law regarding this type of restraint. Leaving aside the case of misuse of trade secrets or confidential information (which is separately dealt with by clause 3 of the agreement and which does not arise here), the employer's claim for protection must be based upon the identification of some advantage or asset inherent in the business which can properly be regarded as, in a general sense, his property, and which it would be unjust to allow the employee to appropriate for his own purposes, even though he, the employee, may have contributed to its creation. For while it may be true that an employee is entitled - and is to be encouraged - to build up his own qualities of skill and experience, it is equally his duty to develop and improve his employer's business for the benefit of his employer. These two obligations interlock during his employment: after its termination they diverge and mark the boundary between what the employee may take with him and what he may legitimately be asked to leave behind to his employers.

1. As part of his case, Mr Moroney submits that the restraints are invalid because they seek to restrict the application of his own skills and attributes, which could not be properly regarded as the property of his employer and thus could not be a legitimate protectable interest.
2. Once a legitimate protectable interest has been identified, a restraint clause will be valid as between the parties if it does no more than is reasonably necessary to protect that legitimate interest in its duration or extent. Expressed another way, it "must afford no more than adequate protection to the party in whose favour it is imposed": Amoco Australia Pty Limited v Rocca Bros Motor Engineering Co Pty Limited [1973] HCA 40; 133 CLR 288 at 315 (Gibbs J).
3. Reasoning by analogy to vendor/purchaser contracts, Mr Moroney submits that the key question for assessing the period that is reasonable to protect goodwill is not the period it may take to recover the full investment made, but how long it takes to protect the goodwill from being subtracted from by the vendor or former employee: DXC Eclipse v Wildsmith [2023] NSWCA 98; 324 IR 89 at 121 [157] (Bell CJ, Brereton JA and Simpson AJA agreeing). Mr Moroney did not appear to suggest that this provided a fixed rule for assessing the duration of a restraint. What is reasonable will necessarily depend on the particular circumstances of a case: Just Group Ltd v Peck [2016] VSCA 334; 344 ALR 162 at [32] (Beach and Ferguson JJA and Riordan AJA).
4. A restraint of trade clause should be construed using ordinary rules of construction to ascertain its meaning. A restrictive approach to general words should not be adopted simply to save a covenant from invalidity: Butt v Long [1953] HCA 76; 88 CLR 476 at 487 (Dixon CJ). As well, although the restraints contained in the shareholders agreement and the employment agreement are similar in substance, they should be viewed through different lenses, as a stricter and less favourable view is taken of restraints in employment contexts in comparison to restraints in commercial contexts: Dargan at [67], citing and quoting from Woolworths Ltd v Olson [2004] NSWCA 372 at [38] (Mason P, with whom McColl and Bryson JJA agreed).
5. That said, some caution is needed in applying that distinction too mechanically. The operation of the shareholders agreement expressly covers areas that would ordinarily be expected to be found in an employment agreement and was evidently targeting the activities of shareholders in their capacity as employees. This, to some extent, blurs the distinction between employment contracts and non-employment contracts.
6. At common law, the onus is on the respondents, as the parties seeking to rely upon the restraints, to demonstrate that there was a legitimate protectable interest and that the restraints were reasonable to protect those interests. However, the onus shifts to Mr Moroney if he seeks to establish invalidity on the basis that the restraints are contrary to public policy: Peck at [36] (Beach and Ferguson JJA and Riordan AJA); Liberty Financial Pty Ltd v Jugovic [2021] FCA 607 at [194] (Beach J).

1. I found no reason to doubt the honesty or reliability of any of the witnesses who gave oral evidence, being all of those who furnished affidavits that were read, being Mr Moroney, Mr Erridge, and Mr Andjelkovic. To the extent that they differed in their recollection of particular events, even to the point of firm disagreement, that ended up being largely immaterial due to the abandonment of the repudiation case by Mr Moroney. The parties did not otherwise seek any adverse credit or reliability findings to be made.

1. In 2010, Mr Erridge and Mr Andjelkovic co-founded the TM Insight Pty Ltd business in Victoria. TM Insight originally provided construction project management advice to clients in the industrial real estate sector but expanded in 2014 to also provide supply chain advisory services to those clients. In June 2016, Mr Erridge and Mr Andjelkovic approached Mr Moroney and Mr Nathan Bingham to develop a third arm for the business, being a property services arm aimed at industrial real estate clients, which occurred later that year. As part of his work in this business, from about 2017 to around 1 November 2024, Mr Moroney had access to, and used, a database that had been built with Surga software (referred to in the evidence and in these reasons as the Surga Database).
2. The three arms of the TM Insight business were conducted by separate companies. The property arm was set up using TM Insight Property Pty Ltd (TM Property), as trustee for the TM Insight Property Unit Trust. On 18 July 2016, Mr Moroney registered IPS, which is owned by him. IPS held 49.5% of the units in the TM Insight Property Unit Trust.
3. In February 2019, TM Insight engaged a corporate advisory firm to assess the business and explore interest from any third parties who wanted to invest or purchase its business.
4. On 15 October 2019, a terms sheet was executed, under which Next Capital made a non-binding offer to purchase 51% of the shares in Holdings. The term sheet noted that the transaction would be subject to the negotiation of other associated documents, including a shareholders agreement and founder employment agreements.
5. During cross-examination, Mr Erridge shed light on some of the discussions between Next Capital and TM Insight during this period, noting that Next Capital had contemplated a three-to-five-year growth plan for the business and originally had planned to exit at the end of that period upon achieving a multiple return on investment, identified in planning PowerPoint slides in evidence as six-fold. There was no evidence of any divestiture of Next Capital's shareholding in Holdings as at the time of the hearing and I understand that has not taken place.
6. The Next Capital offer was also made in the context of a contemplated restructure to the TM Insight business, which included the incorporation of Holdings on 18 December 2019 to facilitate the share sale.
7. By late 2019, 12 people (together, the TM Founders), including Mr Moroney, had unit-holdings in a unit trust in respect of the business in different proportions, which also reflected the proportion of their ownership in Holdings. At that time, Mr Moroney and Mr Bingham had the equal third largest unit-holding with 12.77% each, behind Mr Erridge and Mr Andjelkovic who each held 16.7%.
8. On 23 December 2019, a share sale deed (SSD) was executed by Next Capital and the TM Founders. On 16 January 2020, Operations was incorporated. Its principal function was to consolidate and run the three arms of the business that had hitherto been run as the TM Insight business under the ownership of TM Insight, being project management, supply chain, and property services. Holdings is the ultimate holding company of Operations.
9. On 31 January 2020, the shareholders agreement was executed by Holdings, Next Capital and the TM Founders. The completion of the SSD and the execution of the shareholders agreement on this date resulted in Next Capital becoming a 51% shareholder in Holdings and Mr Moroney formally commencing employment with Operations in the role of "Director Property". Mr Moroney, through IPS, was paid just over $5 million pursuant to the SSD, based on his proportionate shareholding in Holdings.
10. Around September 2020, Operations acquired XAct Solutions Pty Ltd and its subsidiaries. On or about 11 September 2020, a deed of amendment and subscription was executed, after which IPS contributed just over $750,000 to the acquisition of XAct. IPS was issued additional fully paid ordinary shares in Holdings. At this point in time, Mr Moroney (among others) became subject to the restraints in the shareholders agreement in his personal capacity.
11. On or about 22 September 2021, the shareholders agreement was further amended.
12. IPS currently holds 18,229 fully paid ordinary shares in Holdings, with a value of about $2.9 million. It has not sought to exercise its rights under the shareholders agreement to transfer or sell the shares.

1. The last version of the shareholders agreement in evidence is annexed to the deed of amendment dated 22 September 2021 between Holdings, Next Capital, and the entities and individuals listed in Part B of Schedule 1 of the deed of amendment, which relevantly includes IPS and Mr Moroney. Mr Moroney executed this deed both in his capacity as a director of IPS and in his personal capacity. The shareholders agreement does not contain an end date or fix a term for its operation.
2. Mr Moroney challenges the validity of the restraints contained in cl 23.1(a) and (b) of the shareholders agreement, which are framed by reference to several key concepts, including Restricted Party, Restraint Period, Restraint Area, Business Activity and Identified Prospective Client. The definitions for each of these terms are provided as necessary later in these reasons. They are also included in the annexures to these reasons.
3. The restraints in cl 23.1(a) apply to Mr Moroney to restrain him from engaging or preparing to engage in a business or activity that is the same or similar to the business of the companies and related entities in the Group of companies of which Holdings is the ultimate owner, or in competition with that business.
4. The restraints in cl 23.1(b) apply to Mr Moroney to restrain him from, in substance, poaching clients ("induce, solicit, canvass, approach or accept an approach") or Identified Prospective Clients of the Group with a view to obtaining their custom in a business or activity that is the same or similar to the business of the companies and related entities in the Group, or in competition with that business.
5. The duration of the restraints in cll 23.1(a) and (b) is dictated by the Restraint Period, as defined.
6. Having regard to the definition of Restricted Party, Mr Moroney is restrained because he is named as an "Initial Key Person" in Part B of Schedule 1 of the shareholders agreement. Mr Moroney's designation as an Initial Key Person forms part of his argument as to uncertainty as he contends that he will forever remain a key person because he is named as such.
7. The activities that Mr Moroney is restrained from participating in is defined with respect to the business carried on by the Group at either 31 January 2020, or, if IPS disposes its shares in Holdings, at the date that disposal occurs. According to the shareholders agreement, the Group's business as at 31 January 2020 included advisory services in supply chain, property (including industrial and commercial property), hotel and hospitality industries. Mr Moroney contends that the wide ambit of the restrained activities is unreasonable in a context where he only worked in one area of the business, being property services. Although Mr Moroney challenges the validity of the terms of the restraints imposed both as to his own work activities and as to the poaching of clients, his greater concern seemed to be with the duration of the restraints. As such, arguments directed to the content of the restraints were not developed to any significant degree.
8. While not conclusive, a court ordinarily gives considerable weight to the parties' bargain including any agreement they have on the reasonableness of the restraints, as is the case here. Clause 23.4 contains a series of acknowledgments made on behalf of each Restricted Party including that all the restrictions in cl 23 are reasonable in the circumstances and necessary to protect the business.
9. Beyond the restraints, the shareholders agreement confers a bundle of rights and obligations upon the shareholders. Broadly speaking, most shareholders have access to the Group's business plans (cl 7), financial reports (cl 8), and its accounts and records (cl 9), although there are differences in the level of access provided to different categories of shareholders and some provision is made to deal differently with shareholders who leave the business, especially by providing less information. For example, subject to the confidentiality obligations contained in cl 22, all shareholders are entitled to receive copies of the management accounts on a quarterly basis, but such a right for a Management Shareholder will cease from the time that they leave the business (cl 9.3). The respondents contend that the fact that shareholders are given access to confidential information supports the restraint as being valid at any point while a person remains a shareholder.
10. As mentioned above, the parties to the shareholders agreement are bound by confidentiality obligations contained in cl 22.1 and must only use confidential information, as it is defined in the shareholders agreement, for the purposes of the business or to make decisions regarding their investment in Holdings. Such information must remain confidential except in a small number of circumstances, such as where consent has been granted from the Board or where disclosure is required by law. The broad meaning given to confidential information under the shareholders agreement renders the restraint sought to be impugned as being, in effect, directed towards restricting Mr Moroney from providing personal services, given the level of protection already afforded by these clauses. The validity of the confidentiality obligations was not challenged by Mr Moroney.
11. The shareholders agreement provides a regime for the transfer and sale of shares by shareholders through a notice process (cll 12-13). Shareholders also enjoy the benefit of certain protections, such as protection against defaulting shareholders, who can be removed pursuant to cl 14 of the shareholders agreement. There are also "drag along" and "tag along" rights in the shareholders agreement (cll 15 and 16, respectively), which allow for Next Capital, as the majority shareholder, to compel a sale from the other shareholders and for the other shareholders to sell their shares on the same terms as the majority shareholder.
12. Where a shareholder becomes a Leaver (that is, ceases being employed or otherwise engaged by the business), the shareholders agreement allows the Board to compel the sale of their shares (cl 18).
13. Viewed as a whole, the respondents characterise these rights as being benefits associated with the broader transactions (being Next Capital's investment in the business and the subsequent acquisition of Xact) such that they are relevant for the evaluation of the commercial interest created by those transactions, which in turn informs the validity of the restraint.
14. The shareholders agreement is governed by the law of Queensland (cl 28.17) and thus the ROT Act does not apply, given it is New South Wales legislation.

1. The employment agreement, titled "Executive Services Agreement", was executed by Mr Moroney and Operations on 30 and 31 January 2020 respectively. The employment agreement commenced on the completion date of the SSD, which occurred on 31 January 2020. Mr Moroney held the position of Director Property and was assigned to the Property business unit.
2. Mr Moroney was employed on a full-time and ongoing basis as the employment agreement did not contain an end date or set a fixed term for his employment. In the event of termination by either party, a three month notice period applied. Notice of termination was given to Mr Moroney on 13 November 2024 and he was placed on gardening leave until his employment with Operations ended on 13 February 2025.
3. The restraint sought to be impugned is found at cl 24 of the employment agreement and is framed by reference to the defined terms of the Restraint Period, the Restraint Area, and the concept of Identified Prospective Client. The definitions for those terms are contained in Schedule 1 of the employment agreement, and are set out as necessary later in these reasons. Like the shareholders agreement, the restraint in the employment agreement contains an acknowledgment that the restrictions are reasonable in the circumstances and necessary to protect the business (cl 24.4(2)). Such similarities between the two agreements are unsurprising given that, on the evidence of Mr Erridge, unchallenged on this point, the employment agreement was intended to reflect the shareholders agreement.
4. The employment agreement contains extensive confidentiality obligations which are set out in cl 17. In comparison to the definition of confidential information in the shareholders agreement, the equivalent definition in the employment agreement is more explicit in specifying the particular types of documents and materials that are covered and is arguably more extensive given it is linked to the concept of Identified Prospective Client, which relates to contingent future opportunities. The obligations themselves are also expressed in more descriptive and detailed terms. As with the shareholders agreement, Mr Moroney does not challenge the validity of the confidentiality obligations in the employment agreement.
5. The employment agreement is governed by the law in the State or Territory in which the employee primarily works, namely New South Wales in the case of Mr Moroney. The ROT Act thus applies to the employment agreement. I address the ROT Act later in these reasons.

The impugned restraint clauses, including defined terms

1. The restraint clauses and the relevant definitions in both the shareholders agreement and the employment agreement are contained in the annexures to this judgment. However, it is helpful at this point to explain the operation of the restraint periods in both agreements in more detail.

1. The definition of Restraint Period (5 years), which applies to Mr Moroney as a Related Manager of a Level 1 Shareholder as those terms are defined in the shareholders agreement, encompasses three distinct categories of restraints that each separately cascade from five years to six months.
2. For Mr Moroney, the duration of the first category of restraints in paragraphs (a)-(h) only starts to run when IPS ceases to be a shareholder of Holdings. Because IPS has maintained its shareholding in Holdings after Mr Moroney ceased to be an employee of Operations, the duration specified for each of those restraints has not yet commenced to run. The second category of restraints in paragraphs (i)-(p) began to run when Mr Moroney became a Leaver and ceased to be employed by Operations on 13 February 2025. The third category of restraints in paragraphs (q)-(x) began running from the commencement date of the shareholders agreement on 31 January 2020 and thus have all lapsed since 31 January 2025 (when the restraint with the longest time of 5 years expired).
3. Therefore, in summary:

(a) the time for the first category of restraint periods (paragraphs (a)-(h)) has not begun to run for Mr Moroney;

(b) the second category of restraint periods (paragraphs (i)-(p)) is currently running; and

(c) the third category of restraint periods (paragraphs (q)-(x)) has already lapsed.

1. The operation of these three categories of restraint periods is illustrated by the table below:

five years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

IPS is still a Shareholder, so time has not started to run

four years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

three years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

30 months after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

two years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

18 months after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

one year after the date when the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

six months after the date when the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder

five years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

four years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

three years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

30 months after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

two years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

18 months after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

one year after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

six months after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver

five years after the Shareholder's Commencement Date

four years after the Shareholder's Commencement Date

three years after the Shareholder's Commencement Date

30 months after the Shareholder's Commencement Date

two years after the Shareholder's Commencement Date

18 months after the Shareholder's Commencement Date

six months after the Shareholder's Commencement Date

1. As confirmed by Mr Erridge in cross-examination, the impugned clauses (and associated definitions) in the shareholders agreement are in substance, but not entirely in form, mirrored in the employment agreement. However, there are some material differences in their details, especially, as presently relevant, in relation to the restraints.
2. The restraint periods contained in the employment agreement are framed by reference to the end date of Mr Moroney's employment with Operations. No issue was taken with the restraint in (a) that existed while that employment continued. Given this coincides with him becoming a Leaver for the purposes of the shareholders agreement, these restraints began running at the same time as the second category of restraint periods in the shareholders agreement (paragraphs (i)-(p)). The exact dates on which they end are set out in the table below.

"Restraint Period" defined in cl 4 of Schedule 1

during your Employment (including any Notice Period)

the period starting when your Employment ends and ending 5 years after the date your Employment ends

the period starting when your Employment ends and ending 4 years after the date your Employment ends

the period starting when your Employment ends and ending 3 years after the date your Employment ends

the period starting when your Employment ends and ending 30 months after the date your Employment ends

the period starting when your Employment ends and ending 24 months after the date your Employment ends

the period starting when your Employment ends and ending 18 months after the date your Employment ends

the period starting when your Employment ends and ending 12 months after the date your Employment ends

the period starting when your Employment ends and ending 6 months after the date your Employment ends

the period starting when your Employment ends and ending 3 months after the date your Employment ends

1. It is convenient to reproduce the parts of the applicant's statement of claim (SOC) that contain the allegations said to give rise to invalidity, originally cast as an alternative to the alleged repudiation case which is no longer pressed:

[134] Alternatively, the Employment Agreement Restraints and the Shareholders Agreement Restraints are void for uncertainty and contrary to public policy because;

1. there are more than 800 combinations of restraints formulated from the Employment Agreement Restraints;

2. there are more than 800 combinations of restraints formulated from the Shareholders Agreement Restraints;

3. the applicant is unable to determine which combination of the restraints in the Employment Agreement Restraints and in the Shareholders Agreement Restraints apply to his circumstances;

4. the Employment Agreement Restraints are unreasonable to protect the interests of the first respondent and the interests of the fifth respondent; and

5. the Shareholders Agreement Restraints are unreasonable to protect the interests of the first respondent and the interests of the fifth respondent.

[135] Alternatively, the Employment Agreement Restraints and the Shareholders Agreement Restraints prevent the applicant from working in a business that competes with the business of the first respondent (Non-Compete Restraints).

Particulars

Clause 24.1(1) 24.1(2) of the Employment Agreement and clause 23.1(a) and 23.1(b) of the Shareholders Agreement.

[136] In the circumstances, the Non-Compete Restraints:

1. prevent the applicant from working in the industrial real estate industry or, more broadly, in the real estate industry;
2. prevent the applicant from exercising skills and experience possessed by the applicant before being employed by the first respondent;
3. are unreasonable considering that the applicant's skills are primarily associated with industrial real estate;
4. will prevent the applicant from being able to earn a living and support his family if he cannot work in that industry;
5. are unreasonable and not necessary to protect the interests of the first respondent and/or the fifth respondent; and

[137] Further and in the alternative, the applicant relies on section 4(3) of the Restraints of Trade Act 1976 (NSW) in seeking that the Court order that the Employment Agreement Restraints and the Shareholders Agreement Restraints are altogether invalid or valid to such an extent as the Court thinks fit.

1. Operations and Holdings both deny SOC [134] to [136] and plead in their defence as follows in relation to SOC [137]:

[137] In response to paragraph 137 of the SOC, the First [and Fifth] Respondent:

1. admits that section 4(3) of the ROT Act can be applied by the Court to the restraints of trade contained in the Employment Agreement (as that defined term are used in the SOC); and
2. otherwise denies that the Applicant is entitled to the relief sought in this paragraph.

1. The remaining natural person respondents all plead, in respect of SOC [134] to [137], that those paragraphs do not plead material facts against them and that they otherwise do not know and therefore cannot admit each paragraph, which is taken to be a denial to the extent that is material: r 16.07(4), Federal Court Rules 2011 (Cth).
2. By paragraph (p) of SOC [193], Mr Moroney seeks declarations of the following kind, noting that if any such declarations are to be made, their final form will turn on the reasoning and conclusions in favour of that taking place and may require input from the parties:
   1. A declaration that the Employment Agreement Restraints and the Shareholder Agreement restraints:

i. are at common law void or invalid; or

1. are, pursuant to section 4(3) of the Restraints of Trade Act 1976 (NSW), altogether invalid; or
2. in the alternative, pursuant to section 4(3) of the Restraints of Trade Act 1976 (NSW), the Employment Agreement Restraints and the Shareholders Agreement Restraints are valid only to the extent determined by the Court;

1. Mr Moroney later clarified during oral submissions that the declaration sought at (p)(i) of SOC [193] should apply to both the employment agreement and the shareholders agreement, but that the declarations sought at (p)(ii) and (p)(iii) of SOC [193] should only refer to the employment agreement and not to the shareholders agreement.
2. The allegations made by Mr Moroney about the restraints have been isolated from the SOC for preliminary determination because of his desire to accept the job offer made to him. Therefore, what presently requires adjudication are his allegations that the restraints in both agreements are void for uncertainty, drawing upon general contracts law insofar as it concerns such terms, and also that they are unreasonable and contrary to public policy, invoking the restraint of trade doctrine at common law.
3. Mr Moroney's first alternative case to his claim that the restraints are invalid in their entirety focusses more narrowly on the component of the restraints that directly prevent him from working for a competitor of Operations and the Group, being:

(a) cl 23.1(a) of the shareholders agreement, along with cl 23.1(b), which restrains contact with clients or Identified Prospective Clients of the Group; and

(b) the parallel provisions in cl 24.1(1) of the employment agreement, along with cl 24.1(2), which restrains contact with clients or Identified Prospective Clients of the Group.

1. Mr Moroney's second alternative case relied upon s 4(3) of the ROT Act, seeking an order that both agreements are altogether invalid or valid to such an extent as the Court thinks fit, relying upon the period since Mr Moroney ceased employment with Operations on 13 February 2025, being almost eight months as at the time of the hearing, as being more than a reasonable time (nominated for this purpose as six months) for them to operate even if, contrary to his primary position, they are valid to some extent. However, Mr Moroney accepted in oral submissions, as noted above at [72], that contrary to his pleading, the ROT Act does not apply to the shareholders agreement.
2. The respondents contend that the restraints in both agreements are sufficiently certain and no more than reasonably necessary:

(a) in the case of the shareholders agreement, to protect the interests arising out of transactions by which the incoming investor, Next Capital, purchased a majority interest in, and then expanded Operations, and are therefore valid at common law.

(b) in the case of the employment agreement, to protect Operations' goodwill, confidential information and customer connections, and are therefore valid at common law and pursuant to the ROT Act.

1. The respondents also contend that the restraints are not contrary to public policy, an issue that Mr Moroney only touched upon fleetingly in submissions, with the greater part of his case turning on unreasonableness.
2. The decision principally turns on the dual determination as to the two set of restraints being both sufficiently certain and affording no more protection to legitimate interests than is reasonably required. As public policy only really arises if the respondents establish reasonableness, this only needs to be considered if that endeavour succeeds, although as also noted below, public policy considerations are not confined to considerations that existed at the time that the restraints were agreed upon, and may be affected by later events. Thus, reliance on public policy grounds to deny the operation of an otherwise valid restraint may take place at a future time by reason of future events or circumstances.
3. It was not in dispute that:

(a) the onus of establishing the validity of a restraint of trade is on the party relying upon it, which is all of the respondents, although principally Operations and Holdings; and

(b) for Mr Moroney to be able to take up the employment offer, the conclusion reached must be that both restraints are either wholly invalid, or invalid to a sufficient degree to enable that to take place (or a valid restraint has expired).

Sufficient certainty of the restraints in both agreements

1. Mr Moroney's case for uncertainty relies upon the observations of Allsop P (with whom Hodgson JA and Handley AJA agreed) in Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267; 202 IR 420 at [13], in the context of the restraints in issue in that case reproduced at [3] and the reasoning from [7] to [12]. The observation at [13] was obiter in nature rather than determinative, in that Allsop P said, by a comparison with the nine cascading restraints in that case which were found not to be uncertain as alleged, that it may be that a complex and difficult restraint clause with multiple permutations and combinations would be so impenetrable as to lack coherent meaning and be uncertain. Mr Moroney contends that this threshold is reached in this case because the definitions of Restraint Period and Restraint Area, both individually, and when combined or interacting, by reason of their complexity and multifaceted cascading provisions, produce the requisite uncertainty. The restraint clauses with those (and other) defined terms as annexed to the SOC, along with further relevant clauses, are reproduced as annexures to these reasons.
2. Mr Moroney contrasts the restraints in Hanna v OAMPS with those in this case by pointing out that, rather than the cascading provisions simply reducing the duration and geographic restrictions, the shareholders agreement introduces multiple measuring points for how those features are to be understood. This accords with the analysis above in relation to the Restraint Period (5 years) in the shareholders agreement.
3. It is worth summarising the key features of the shareholders agreement and the points that Mr Moroney made about them, mostly by way of identification or explanation:

(a) In relation to the defined concepts of Shareholder, Key Person, Initial Shareholder, and Initial Key Person, Mr Moroney's company, IPS, is an Initial Management Shareholder and he is an Initial Key Person, per Schedule 1, Part B of the shareholders agreement, columns 1 and 2. This makes Mr Moroney a Key Person as defined as well.

(b) In relation to the defined concept of a Restricted Party, Mr Moroney falls within this definition as an Initial Key Person.

(c) The defined concept of Business Activity is used to define the scope of the restraints. In this regard, Business Activity is defined effectively to be the business of the Group (by reference to another defined term, Business), or the business of the Group as at the date the Restricted Party ceased to be a Shareholder or Key Person, if that occurs. As Mr Moroney is a Key Person by virtue of his designation as an Initial Key Person and there is no provision for this designation to expire, the Business Activity definition also specifies:

For clarity, a Shareholder and its Related Manager stop being a Shareholder or Key Person (as applicable) when the relevant Shareholder ceases to hold or Own Shares.

This clarification serves to ensure that paragraph (b) of the definition of Business Activity operates to fix the scope of the restraint against an Initial Key Person such as Mr Moroney as the business engaged in by the Group when the shares held on their behalf are sold. On this point, it was contended by Mr Moroney that this clarification did not operate outside of the definition of Business Activity, to affect whether he would remain a Key Person for the purpose of the remainder of the agreement. This contention bears upon the interpretation of the restraint in cl 23.1(b), which broadly prohibits a Restricted Party from poaching people who are clients of Operations at any time during the 18 months ending on the date when the Restricted Party ceases being a Key Person. This interpretation would have the result that the scope of cl 23.1(b) would always remain open and be uncertain in its operation, because he would always be an Initial Key Person. I am unable to accept that argument. I consider that the clarification included as part of the definition of Business Activity expressly provides for the contrary. While oddly placed, the clarification clearly enough operates more widely than that, especially in the case of cl 23.1(b) where the substance of that restraint is also defined by reference to Business Activity, producing a degree of symmetry between clients and business activities as defined. It follows that Mr Moroney ceases to be a Key Person if and when his company, IPS, sells or otherwise disposes of its shares in Holdings, for the purpose of the entire agreement.

(d) In relation to the defined concepts of Leaver, bifurcated into Good Leaver and Bad Leaver (anyone who is not a Good Leaver by definition or determination is a Bad Leaver), Mr Moroney is a Bad Leaver because his employment was terminated other than by death, illness etc, redundancy, or retirement after 65, and there is no evidence that he had been determined to be a Good Leaver by a Super-Majority Resolution.

(e) In relation to the defined concepts of Commencement Date of the shareholders agreement, being 31 January 2020, and Shareholder's Commencement Date, being either the Commencement Date or the later date of when a person becomes a shareholder or, in the case of a Key Person, when the shareholder of which they are the Related Manager becomes a shareholder, the 31 January 2020 Commencement Date applies to Mr Moroney as he is the Related Manager of IPS, an Initial Management Shareholder.

(f) In relation to the three different aspects of the definition of Restraint Area, it is at its broadest where the Group's business is conducted, then narrows into regions, then countries, then states or territories of Australia (including New South Wales and Queensland, which is where Mr Moroney worked for Operations), with his proposed primary place of work contemplated by the job offer being in the Sydney CBD. The Restraint Area is then defined by narrower geographic locations where the Group's business is conducted (which would include the Operations offices from which Mr Moroney worked), then cascading distances from each premises from which the Group's business is conducted (defined as Property).

(g) In relation to the defined concept of Restraint Period, that refers to a further defined concept of Restraint Period (5 years), which contains three categories, each with their own cascading time periods from ceasing to be a Shareholder or Key Person, becoming a Leaver, or from the 31 January 2020 Commencement Date, each referring to five years, four years and so on, down to six months. All three categories apply to Mr Moroney, although the restraint periods have not started to run for one of the categories, as explained above at [64].

1. There is no doubt that the restraints in the shareholders agreement, when read with the definitions of Restraint Period and Restraint Area, are complicated. They appear to have been drafted with a view to making the restraints as tight and as all-encompassing as possible. That may have some bearing on its reasonableness, but without more it does not necessarily result in uncertainty.
2. Mr Moroney also relies upon the observation by Wootten J in Austra Tanks Pty Ltd v Running [1982] 2 NSWLR 840 at 843F-G in relation to the contract there under consideration, which was characterised by his Honour as seeking to define the obligation imposed through a series of inquiries as to what is enforceable. Mr Moroney seeks to apply that reasoning to the restraint of trade clause in cl 23.1, despite the existence of cl 23.2. Clause 23.2 provides that the restraints in cl 23.1 are separate restraints for each restraint period stipulated (being, in Mr Moroney's case, each of the periods defined by each of the paragraphs of the Restraint Period (5 years) definition outlined above at [64]). The restraints in cl 23.1(a) and (b) are also separate restraints for each restraint area stipulated. Each undertaking in cl 23.1 (with respect to each of these restraint periods) is independent from the remaining restraints and applies to Mr Moroney cumulatively with the remaining restraints: cl 23.2(b). If any of the several restraints are invalid or unenforceable, cl 23.2(c) provides that they may be severed without affecting the validity and enforceability of what remains.
3. Given the operation of cl 23.2, the restraint clause in cl 23.1 does not seem to me to be the type of clause that Wootten J was referring to in Austra Tanks. His Honour was dealing with a single covenant, rather than multiple separate and severable covenants, and thus with how the different restraints stipulated would interact in conflict with one another, in places pulling in different directions: see Austra Tanks at 845E.
4. In my view, the only concept which could be found to be uncertain is the definition of "Identified Prospective Client", which is deployed in cl 23.1(b) and (e), and defined as:

... any person identified by a Group Company as an opportunity for obtaining future business (whether directly or through referral of other business).

1. The scope of the definition of "Identified Prospective Client" is thus identified subjectively by a Group company, without any stated objective criteria, and in a way that provides no means or mechanism for ascertainment by Mr Moroney. That is uncertain, because it is impossible for Mr Moroney to know who is covered and who is not, especially after he was placed on gardening leave on 13 November 2024 and after he left the employment of Operations on 13 February 2025. I have therefore decided to sever the term Identified Prospective Client in the only two places where it seems to appear, in cl 23.1(b) and (e), by declaring that definition void for uncertainty. Despite this, I do not consider that this poorly drafted and rather obvious overreach contaminates the entire restraint clause, let alone the entire agreement, given how easily it is cured. It was so unworkable from an enforcement perspective in any event that discarding it is not likely to make any difference to the respondents.
2. In responding to Mr Moroney's reliance upon Hanna v OAMPS, senior counsel for the respondents did not focus in great detail upon the drafting of the definitions of Restraint Period or Restraint Area in either agreement, either in written or oral submissions. That observation is not a criticism per se as this reflects the higher level of argument advanced by the respondents that complexity alone does not establish uncertainty. The respondents make the following cogent points cast at that higher level of argument:

(a) For a contractual term to be void for uncertainty, stringent thresholds must be surmounted, citing Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; 118 CLR 429 in which Barwick CJ said at 437 (McTiernan, Kitto and Windeyer JJ each agreeing):

So long as the language employed by the parties, to use Lord Wright's words in Scammell (G.) &; Nephew Ltd. v. Ouston [[1941] AC 251 at 268] is not "so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention", the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.

(b) Uncertainty is not to be found lightly, citing Hammond v Vam Ltd [1972] 2 NSWLR 16, in which Sugerman P said at 17 (Holmes and Mason JJA agreeing; footnotes omitted):

The courts are always loath to hold a clause invalid for uncertainty if a reasonable meaning can be given to it. Their duty is to put a fair meaning upon it, unless this is utterly impossible, and not, as has been said "to repose on the easy pillow of saying that the whole is void for uncertainty". See the cases collected in the recent judgment of Megarry J. in Brown v. Gould (1), where his Lordship points out, citing from Lord Keith of Avonholm in Fawcett Properties Ltd. v. Buckinghamshire County Council (2), that "the point is one of uncertainty of concept. If it is impossible, on construction of the condition, to reach a conclusion as to what was in the draftsman's mind, the condition is meaningless and must be read as pro non scripto". Megarry J., put the question in another way, namely as "one of linguistic or semantic uncertainty, and not of difficulty of ascertainment" (see per Lord Wilberforce in McPhail v. Doulton (3),); earlier he had referred to "uncertainty of concept as contracted with mere difficulty of application" (p. 57).

1. To the above reasoning may be added the observations by Keane CJ, when Chief Justice of this Court, in Australian Securities and Investments Commission v Fortescue Metals Group Ltd [2011] FCAFC 19; 190 FCR 364 at [122] (with whom Emmett and Finkelstein JJ agreed):

It is well established that the courts strive to uphold bargains: Hillas & Company Ltd v Arcos Ltd (No 2) [1932] UKHL 2; [1932] All ER Rep 494. To that end, the courts will construe the terms of an agreement with an inclination to give effect to the intention of the parties, even if that intention has been obscurely expressed: Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98, esp at [6]-[8]. Further, the courts may, where circumstances permit, apply objective standards of reasonableness to prevent the intention of the parties being defeated. And where the want of an express provision in an agreement can be supplied by implying a term in order to give efficacy to the bargain, the courts will make the necessary implication: Electricity Corporation of New Zealand Ltd v Fletcher Challenge Energy Ltd [2001] NZCA 289; [2002] 2 NZLR 433 at [64]- [67]; Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd [2009] QCA 60.

The above passage was not affected by the result being overturned by Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486.

1. The question of uncertainty is focused on the contractual bargain, not the public interest considerations forming an indispensable part of the application of the restraint of trade doctrine. That question of unreasonableness, to use an umbrella term, is dealt with in the next section of these reasons.
2. On the question of certainty, more is needed than complexity and even difficulty in interpretation and application. Mr Moroney clearly enough contends that line has been crossed, while the respondents contend that it has not. On this point, Mr Moroney's argument largely relies upon the denseness and thoroughness of the sprawling web of restraints.
3. The purpose and intent of the restraints is clear enough: to limit substantially, at its most far-reaching by extensive proscription, what shareholders and the key natural persons associated with the corporate shareholders can do to compete with and thereby weaken the position of the Group companies. That conclusion is reached by reading the shareholders agreement as a whole and is not something that the respondents shy away from. They do not seek to read down the wide scope of what is sought to be achieved, but rather wholeheartedly defend it. The respondents went through the details of the agreement, going well beyond the restraints, to portray those rights and obligations as being part of a larger transaction that was directed to bringing in a major private equity investor as a 51% shareholder of Holdings with express ambitions to increase the size and value of the business six-fold before potentially selling out in an anticipated three-to-five-year period. To that end, the respondents contextualise the restraints by reference to features such as clauses dealing with business plans, financial and other reporting, dealings with equity securities and their transfer, consequences of default by a shareholder, "drag along" and "tag along" provisions to facilitate the coordinated purchase or sale of shares in Holdings, and management equity.
4. The respondents describe the drafting technique deployed for drawing up the restraint provisions as being well-known, as indeed it is: cascading restraint provisions of progressively lesser reach are part and parcel of many restraint of trade provisions in contracts of various kinds, reflecting the tension and interaction between contract law and the restraint of trade doctrine. The respondents contend that complexity (and thereby any difficulty in application) is not the same as uncertainty, which accords with the passage from Hammond v Vam Ltd reproduced above. The operation of the restraint provisions is plain enough once the concept of Identified Prospective Client is removed, especially when applied to Mr Moroney's current circumstances in wanting to take up the offer of employment. Even though his subjective position is to the effect that he does not understand their entire metes and bounds, that remains no more than a complexity in application and understanding, not uncertainty.
5. After carefully considering the competing arguments, I am not satisfied that the restraints in the shareholders agreement, with the benefit of a minor degree of severance of the concept of an Identified Prospective Client, are uncertain when that term is properly understood in line with the authorities cited and quoted above. This conclusion equally applies to the employment agreement, which is considerably less complicated.
6. It is an entirely different question as to whether such restraints are reasonable for either agreement, having regard to the important difference between employment and other restraints, to which I now turn.

Reasonable protection of legitimate interests of Holdings in the shareholders agreement; and Operations in the employment agreement

1. The greater focus of Mr Moroney's case is upon the shareholders agreement. He raises a number of issues for the respondents to meet in discharging their onus to establish a legitimate interest to be protected by reasonable means. His central point, after uncertainty, is that there is no legitimate interest to be protected by cl 23, the centrepiece of which is the restraints themselves set out in cl 23.1. He characterises the shareholders agreement as doing no more than regulating the arrangement, rights and obligations of the parties to that agreement, asserting that this does not constitute interests of a proprietary nature capable of being protected, such as goodwill, customer connection or confidential information. He also relies upon not being a restricted party at the outset and being added later, but I do not accept that this point goes anywhere as he is a restricted party under the relevant last iteration of the shareholders agreement.
2. In the alternative, Mr Moroney argues that even if there was a legitimate interest to be protected, the restraints are more than is reasonably necessary, pointing out that he has had no relevant involvement with Operations (and thus, presumably, with any company in the Group) since he was placed on gardening leave on 13 November 2024 ahead of the end of his employment three months later on 13 February 2025. In particular, he:

(a) points to there being no identifiable end date for the restraints, which instead run from when his company ceases to be a shareholder;

(b) characterises the restraints as malevolent by reason of, he asserts, failing to make a genuine attempt to define a real need for protection; and

(c) specifically relies upon the breadth of the concepts of Restricted Party and Business Activity (and especially their breadth as going beyond the more limited area in which he worked, being property services) and the applicable duration of the definition of Restraint Period (5 years), to assert that there is no apparent justification for any of the extensive varieties of the periods described, whether they run from when someone no longer holds shares in Holdings or when they become a Leaver.

1. I will deal in turn with the respondents' answer to Mr Moroney's assertion of a lack of any legitimate interest to protect, and his alternative argument as to the unreasonableness of the restraints in any event.
2. As to the legitimate interests point, the respondents rely upon the acknowledgments in cl 23.4. In particular, they emphasise the acknowledgment by the parties in cl 23.4(b), which, while not conclusive, states:

Each Restricted Party acknowledges that:

...

(b) all the prohibitions and restrictions in this clause 23 are reasonable in the circumstances and necessary to protect the business, financial and proprietary interests and goodwill of the Business and the value of the Shares and are given in consideration of the benefits to be derived by the Shareholders pursuant to this document;

1. The basis for this acknowledgement was not left to that bare assertion, but rather sought to be made good by referring in some detail in both written and oral submissions to various features of the agreement and other aspects of the evidence. The respondents characterise the protection of an investment made by the private equity investor, Next Capital, and by the other investors as being a legitimate commercial interest that can justify the restrictions, placing reliance on statements to that effect by trial judges in Seven Network (Operations) Limited v James Warburton (No 2) [2011] NSWSC 386; 206 IR 450 at [2], [65]-[68] (Pembroke J); and Austress-Freyssinet Pty Ltd v Kowalski [2007] NSWSC 399 at [14]- [15] (Windeyer J), cited in Warburton at [67] as follows:

Other judges of this division of the court have adopted a broad approach to the identification of the legitimate interest supporting a restraint of trade. In Austress-Freyssinet Pty Ltd v Kowalski [2007] NSWSC 399 at [14]- [15], Windeyer J held that there was a legitimate interest supporting restraints arising in a shareholders agreement. And in Corporate Express Australia Ltd v Swift-McNair, Young J (as he then was) had no difficulty in principle with a restraint imposed by a company in the Macquarie Group on selected executive employees who accepted an invitation to subscribe for shares in the plaintiff on a favourable basis.

1. Importantly, Mr Moroney was a real and substantial beneficiary of the overall share sale transaction and the significant investment by Next Capital, of which the shareholders agreement formed part. As an illustration of the benefits that are bestowed upon the parties to the shareholders agreement, Mr Moroney received a substantial payment for his previous shareholding in the business that became Operations - a sum in excess of $5 million - and his company IPS which was issued shares in Holdings will receive a further substantial payment in the event that those shares are sold, in the order of just under $3 million. Other shareholders received corresponding benefits.
2. All of the founding Shareholders had both an individual and collective interest in securing the benefits which would flow from the growth in the size and value of the business, principally to be conducted by Operations but also by other subsidiary companies. All those objectives would be undermined by permitting any shareholder to act against the overall scheme of which the shareholders agreement was an important part, and which they all had voluntarily entered into for substantial and immediate consideration.
3. There is plainly a public interest in businesses being able to grow and develop for the benefit of the wider economy. It is not to the point that the interests relied upon as being legitimate do not neatly fit into the particular categories that Mr Moroney relies upon of goodwill, customer connection or confidential information. It is not a sale of business restraint, but rather an arrangement directed to the growth and development of an existing business, using in part a degree of innovation, by being a first mover in combining three hitherto disparate areas of business. This point was explained by Mr Erridge, who noted that the point of difference of Operations was its integrated business model, which could align with clients' transformation processes and changing needs with its three core areas of business. In that way, Mr Erridge deposed that although individuals like Mr Moroney could work primarily in one area of the business, opportunities and projects were fluid and not compartmentalised because clients from one area of the business could be referred to another, depending on what they needed at that particular time.
4. I am satisfied that there is a legitimate interest, commercial in nature, but more broadly legitimate in the sense contemplated for the purposes of assessing restraints of trade, in providing a sense of common purpose and investment protection for all concerned when a business seeks to expand its operations, including by way of securing a major investor, and then, so long as they remain a shareholder, or a person controlling a shareholder, benefiting from what flows from such a business. It follows that I am satisfied of the existence of a legitimate interest which was protected by the restraints contained in the shareholders agreement. That is particularly so in light of Mr Moroney's acknowledgement to that effect at cl 23.4(b), and consistent with this acknowledgment, the benefits which he has derived from the agreement to date.
5. The next and related concern, developed in the alternative by Mr Moroney as summarised above, is whether the restraints imposed are more than is reasonably necessary to protect those legitimate interests.
6. The respondents contend that as the restraints are to be assessed when they were agreed upon, Mr Moroney's lack of involvement in the business since leaving the employment of Operations is not to the point. That argument is only itself correct to a point, because such a situation could readily have been envisaged at the point of entry, as contemplated by Kitto J in Lindner at 653. Indeed, the restraints themselves contemplate the departure from the company of those being bound by the restraints, both in their capacity as employees (including executives) and as shareholders, and indeed that those departures may be either amicable or not, as evident in the inclusion of the concepts of Good and Bad Leavers. What happened to Mr Moroney's employment as a factual matter is perhaps technically irrelevant, but as a practical matter gives content to what has been agreed upon and reflects what must, or at least should, have been in contemplation at the time the restraints were agreed.
7. A more telling point made by the respondents is that Mr Moroney's company, IPS, remains a shareholder of Holdings. This point can be made in a more evocative way than was advanced by the respondents: the situation of Mr Moroney's company remaining a shareholder, yet him being free to act against Holdings' interests, and thereby against the interests of other shareholder and other Key Persons, is somewhat akin to a person still being an employee of a business, but remaining free to act against that business's interests. It is a measure of reasonableness that this is not permitted by the agreement of all of the parties to the shareholders agreement, including Mr Moroney.
8. It is not this Court's role to address the reasonableness of restraints at large and therefore in a hypothetical way, but rather to do so in a way that is tied to the facts and circumstances in which they were agreed upon. So long as IPS remains a shareholder of Holdings, and correspondingly, Mr Moroney remains a Key Person by reason of that shareholding, I consider he is reasonably restrained by the bargain that he freely entered into. There is nothing akin to a contract of adhesion, or any suggestion of unequal bargaining power, in this business agreement in which Mr Moroney gained much from what he agreed to. It is not unreasonable for him to be required to take the burden with the benefit so long as he remains a participant in the business, whether as an employee or as a Key Person by reason of his company's shareholding in Holdings. That was the context in which, and I infer part of the basis for which, Next Capital made such a substantial investment for a substantial period of time.
9. On this point, it should be noted that I have reached this conclusion in the context that Mr Moroney has not, at this stage, attempted to sell his shares by invoking the mechanisms for doing so which are set out in the shareholders' agreement. Although these mechanisms were not addressed by either party in any detail, it seems that any such process requires the consent of other shareholders, in particular Next Capital. If this consent were to be refused (setting aside whether or not an unreasonable refusal would breach an implied term of the contract), it may have the practical effect of preventing Mr Moroney from being able to free himself of the restraints by selling the shares held by IPS. Regardless of my conclusion above as to reasonableness, it is quite likely that such a state of affairs would be contrary to public policy, and provide a compelling reason for a Court to exercise its discretion to prevent the enforcement of the restraints against Mr Moroney after consent has been withheld. However, it is not appropriate for me to consider this question further at this stage, given such a predicament is presently hypothetical, and based on the submissions of senior counsel for the respondent, unlikely. Questions of estoppel preventing a situation in which Mr Moroney is denied the capacity to sell the shares held by IPS in Holdings may also arise from the way in which the respondents defended the restraints at the hearing, especially as to reasonableness and perhaps as to certainty as well.
10. Having made these observations regarding the legitimacy of the restraints as against a person who remains a shareholder (whether in their own right or in effect as a Key Person), I now turn to their operation against such a person when that is no longer the case. In the present case, if and when IPS ceases to be a shareholder and Mr Moroney thereby ceases to be a Key Person, the nature of the restraints imposed upon him crystalise and it is part of the bargain that they then have a limited period of operation. In relation to that aspect of the bargain, all the parties contemplated that the valid duration might be contestable and agreed to conventional cascading durations. Importantly, each of the three categories of restraint periods (running from the Commencement Date, the date a person becomes a Leaver or the end of their shareholding) were capable of being the dominant source of restriction, depending upon when the issue arose for consideration.
11. Mr Moroney complains that the restraints imposed upon him go beyond the property work that he was engaged in, because the concept of Business Activity as defined in the shareholders agreement extends to all the business carried on by the Group (with Operations at its core), apart from project management. He also complains that the restricted area is wider than the areas in which he had any involvement, raises the point already addressed in his favour about the concept of the Identified Prospective Client, and asserts that there is no justification for the wide scope of the restraint period running from when IPS ceases to be a shareholder, from when he became a Leaver or from the date of the commencement of the shareholders agreement on 31 January 2020.
12. While, perhaps unsurprisingly, the respondents did not concede that any duration (or other dimension) of the restraints was other than reasonable, the core of the respondents' defence of the reasonableness of the restraints, directly addressing Mr Moroney's points summarised above, may be shortly stated.
13. The restraint extending to the entirety of the business of the Group is justified by any valuation of the shares in Holdings being based on that entire business, not just the part in which Mr Moroney worked, with him having access to confidential information as defined across all divisions of that business, all of which are characterised as being vulnerable to him working for a competitor. Noting the integrated nature of Operations' business, I consider this reasoning to be sound, and the suggestion that it should be limited to the areas in which Mr Moroney worked at the time that the shareholders agreement was entered into to be being inflexible and potentially entirely unworkable. I do not consider that dimension to be unreasonable.
14. The respondents also rely upon the access that Mr Moroney had to the Surga Database and to the customer relationship management database, a Salesforce platform (CRM Database). However, I do not consider that this assists the respondents to any marked degree, even if it might have been of greater value when Mr Moroney went on gardening leave on 13 November 2024, or even, perhaps, when he ceased being employed by Operations on 13 February 2025. That information would have been fresher in his memory at those times and might be considered to be information, in the form that it was organised and supplemented, that belonged to Operations. However, those databases contained information in relation to 20,000 properties on the respondents' account and around 5,000-7,000 properties on Mr Moroney's account and there was no evidence that Mr Moroney had taken or accessed any copy of that substantial volume of information. Not much of the detail of that volume of information could realistically have been remembered by Mr Moroney for any substantial period. Moreover, the evidence satisfies me that at least substantial parts of that information came from publicly available sources. Much of it would be too granular to be remembered at all, and in any event was susceptible to becoming, or being at risk of being, out of date, so as to be of doubtful reliability with the passage of time, now more than 12 months since last able to be accessed by Mr Moroney, with his access having been turned off around 1 November 2024.
15. The respondents also place weight on the confidential information that Mr Moroney had access to while employed, and point to his at least implicit assertion that he should be free not just to compete with Operations, but also to poach and accept work from its clients that he had worked with. Again, this is a feature which is likely to degrade with time, but does go some way to justifying a measure of protection as this goes well beyond Mr Moroney's personal skills and attributes. However, the substance of the work done by Mr Moroney, while undoubtedly of at least collateral value to the rest of the business, was, by the description he gave in the witness box, in the area of commercial property leases as, effectively, a real estate agent. Although the use of a central marketplace data repository might have made Mr Moroney's work more targeted or efficient, my strong impression from the evidence is that the bulk of his work at Operations was very much in the nature of personal services in real estate transactions concerning commercial leases. On balance, this consideration does not have very much weight in support of the respondents' position.
16. What is at issue is the reasonableness of the restraints as they applied to Mr Moroney, viewed at the time they were entered into, but assisted in the understanding of their operation by evidence of subsequent events. For a period of time, he would have had the means to bring information obtained during the course of his employment by Operations to bear in a way that gave him an edge and to that extent disadvantaged Operations and through it the Group in general and Holdings in particular. But those features do not by their very nature have a substantial shelf life. Any advantage able to be leveraged by Mr Moroney because of what he got by way of or by reason of access to confidential information would, by its very nature, rapidly deteriorate. Unsurprisingly, the respondents adduced no evidence to support any contrary conclusion.
17. I have reached the conclusion that the real bite of the restraints is their duration, which draws upon the shelf-life reasoning above. That is especially so as many of the geographical constraints do not arise for consideration, because Mr Moroney is only seeking to be able to work in the same general locations that he previously did for Operations: Queensland and New South Wales. The live question is what a reasonable duration for the restraints would be to protect the legitimate interests of all other parties to the shareholders agreement. This was the primary approach taken by Mr Moroney to this aspect of his case, with him primarily asserting that no duration of restraint was justified. I consider that stance goes too far and accordingly it is necessary to consider the different duration of the restraints imposed upon him, set out in the tables at [63]-[65] above.
18. The longest period for the third category of restraints, running from the Shareholder's Commencement Date, being 31 January 2020 for Mr Moroney and running for five years from then (as set out in Sch 1, Pt B to the shareholders agreement) already expired on 31 January 2025, prior to his employment ceasing on 13 February 2025. That leaves only:

(a) the first category, running from the time that IPS ceases to be a shareholder, and therefore from when Mr Moroney ceases to be a Key Person on that account; and

(b) the second category, running from the time that Mr Moroney becomes a Leaver, being from when he ceased being an employee of Operations on 13 February 2025.

1. Weighing up all the competing considerations, I am confronted with an essentially impressionistic evaluation of what is a reasonable restraint in terms of duration. In my view, taking into account the tight restriction on the use of confidential information, quite widely defined (see the definition in cl 1.1), and its firm application in cl 22, and the fact that some of these restraint periods do not start to run until a party is not a shareholder or a Key Person, the outer limits of multiple years are beyond what is reasonably necessary for the first and second categories, but was reasonable for the third category, mirroring the anticipated duration of Next Capital's investment.
2. In relation to the first and second categories, no specific argument was advanced by the respondents to justify such a long duration, especially in the context of when the clock starts to run.
3. For completeness, although the longest duration of five years from the Commencement Date has expired for the third category, and the respondents did not specifically rely upon this point in support of their argument for validity, I consider it significant that the transaction with Next Capital was premised on the assumption that Next Capital would sell the business after three to five years to achieve a six times multiple return on its investment. At the time it entered the business, Next Capital had already contemplated its exit, and this assumption was captured in the term sheet of the transaction. Given the employment agreement, the SSD and the shareholders agreement were all entered into as part of an overall transaction to facilitate Next Capital's investment in Holdings, such an understanding forms an important part of the context for the restraints in the shareholders agreement and gives an insight into what the parties had in mind at the time the agreements were entered into. Since reasonableness is assessed at the time the restraint is made, I consider this fact to support the reasonableness of the five-year restraint period in (q) of the definition of Restricted Period (5 years), which protects Holdings' legitimate interest by reference to the Shareholder's Commencement Date. In the case of Mr Moroney, this clause provided Holdings with five years of protection, from when IPS became a shareholder on 31 January 2020, until 31 January 2025.
4. As to the first and second categories, which can only have an operative effect after the valid period of the third category has expired, the practical effect of each is that either they will not make any difference because they expire within the period of operation of the third category, or will have some telescoping effect on top of the third category.
5. As to the first category, the restraint periods have not started to run because IPS has maintained its shareholding in Holdings (and has not attempted to sell this shareholding, as discussed at [109] above). I consider that no case has been advanced by the respondents to justify this restraint being operative for any extended period of time from when such a shareholding ceases. In my view, six months protection from the date of that event is ample and reasonable protection and anything longer than that does not meet that description. It is important in that regard to note that the confidentiality restrictions continue to apply. It follows that I conclude that the six-month restriction in paragraph (h) of the definition of Restraint Period (5 years) in cl 1.1 of the shareholders agreement is valid, and that the longer periods from one year in paragraph (g) up to five years in paragraph (a) are longer than is reasonably necessary and invalid for that reason.
6. As to the second category, which commenced when Mr Moroney became a Leaver on 13 February 2025, I consider that no case has been advanced by the respondents to justify this restraint being operative for any extended period of time from that event. In my view, six months protection from the date of that event is ample and reasonable protection and anything longer than that does not meet that description. As noted above, the confidentiality restrictions continue to apply. It follows that I conclude that the six-month restriction in paragraph (p) of the definition of Restraint Period (5 years) in cl 1.1 of the shareholders agreement is valid, and that the longer periods from one year in paragraph (o) up to five years in paragraph (i) are longer than is reasonably necessary and invalid for that reason.

1. There is a legitimate interest held by Operations to be protected in relation to the restraints in the employment agreement. However, that interest differs from the legitimate interest identified above in relation to the shareholders agreement, which relates to securing investment protection for shareholders in the context of a business expansion. This and other differences may be seen to explain the need for an employment agreement as well as a shareholders agreement, both containing restraint of trade provisions. At the hearing there was some discussion as to whether customer connection could be the legitimate interest being protected by the restraints in the employment agreement. Mr Moroney accepts that customer connection can be a legitimate interest in an employment context but contends that it does not exist in this case because he is not the "face" of the business. The respondents contend that customer connection exists as a legitimate interest to be protected in the context of both agreements.
2. Mr Moroney contends that the evidence did not show that his role in the business was such that he would influence a client to stay with him personally, as opposed to the business. He relies on the nature of his work, noting that he typically worked for tenants in respect of leases close to expiry to assist them in the renewal or changeover process. This meant that he would reach out about once a year to tenants he had worked with to maintain a connection with them during the term of the lease. He also points to evidence given by Mr Andjelkovic, who described the industry as "very cutthroat", to advance his submission that the industry was a competitive one in which various players would compete for potential work and clients would base their decision on who could best cater to their needs, rather than on factors like loyalty or past connection. In that sense, Mr Moroney distinguishes the relationship between him and clients from other relationships like those between solicitors and clients and doctors and patients, in which there are closer connections based on trust and advice between the parties. For those reasons, Mr Moroney contends that although personal attributes were important in his role, the nature of his work and his interaction with the clients did not rise to the level where he became the "human face" of the business: Cactus Imaging at [25] (Brereton J).
3. In the alternative, Mr Moroney contends that if a relevant customer connection is established, it is of a kind where only a short period of restraint would be justified, because other people within the business were also connected with the clients that Mr Moroney dealt with and could take over the management of those relationships within a short period after his departure.
4. The respondents contend that their customer connection was a legitimate interest which could be protected because it was envisaged at the time that the restraints were entered into that Mr Moroney would be exposed to clients and be required to build relationships with them. I consider that the manner and extent to which this has occurred (as described in the evidence which is summarised below) provides content to what was envisaged at that time, and can thus inform the assessment of the reasonableness of any restraint and its duration. Further, they contend that longer restraints are reasonably necessary due to the lengthy terms of the leases entered into by Operations' clients, in that the real need for protection only arises towards the expiry date of the lease. As such, they submit that the restraint period needs to cover that renewal period which, for some leases, would not arise until many years have passed.
5. Both the terms of the employment agreement and the law in relation to restraints in employment contracts more readily favour Mr Moroney, especially as to duration.
6. There is no suggestion, and in any event, no evidence, that he has taken with him, or readily retains in his mind, any confidential information. Mr Moroney worked for Operations as a real estate agent with a focus on commercial tenancy agreements. His skills are largely personal in nature and the information he uses, while compiled at Operations in apparently useful and efficient data bases, is, on his evidence in this regard, largely publicly available, at least for the Australian states that he works in. Of course, it is convenient to have disparate information readily accessible, but the database software is apparently available commercially, and information about the properties, such as contact details for both the tenant and the landlord, can be harvested from a range of publicly available sources, including by internet searches and by site visits. In addition, as outlined above at [59], the confidentiality obligations in the employment agreement are extensive given the broad definition given to "Confidential Information". Mr Moroney does not challenge the validity of those obligations, and they continue to apply after the termination of his employment. As such, the restraint of trade clause is largely targeting the personal service aspect of Mr Moroney's work, given the disclosure or use of any confidential information would be separately captured by the confidentiality obligations.
7. Mr Moroney's evidence disclosed that he did cultivate relationships with customers of Operations in an assiduous way, and to that extent I readily infer that he did represent Operations from the perspective of those clients, to paraphrase the portion of Cactus Imaging at [25] emphasised in the quote above at [21]. He was much more than an employee providing entirely transitory services. However, I am satisfied that this was not a long-lasting effect resulting in any enduring customer connection, and would not have lasted beyond six months after the date he left the employment of Operations. In light of that conclusion, I consider that the respondents have not demonstrated any real need for the restraint in the employment agreement to operate any longer than six months from the end of Mr Moroney's employment with Operations. That conclusion is bolstered by the practical realities of his termination, given he was placed on gardening for three months prior to the end of his employment and could no longer access the Surga or CRM Database by late November 2024.

The ROT Act in relation to the employment agreement

1. In addition to the common law, the ROT Act also applies to the restraint in the employment agreement as that agreement is governed by New South Wales law. Section 4 states:

(1) A restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not.

(2) Subsection (1) does not affect the invalidity of a restraint of trade by reason of any matter other than public policy.

(3) Where, on application by a person subject to the restraint, it appears to the Supreme Court that a restraint of trade is, as regards its application to the applicant, against public policy to any extent by reason of, or partly by reason of, a manifest failure by a person who created or joined in creating the restraint to attempt to make the restraint a reasonable restraint, the Court, having regard to the circumstances in which the restraint was created, may, on such terms as the Court thinks fit, order that the restraint be, as regards its application to the applicant, altogether invalid or valid to such extent only (not exceeding the extent to which the restraint is not against public policy) as the Court thinks fit and any such order shall, notwithstanding sub-section (1), have effect on and from such date (not being a date earlier than the date on which the order was made) as is specified in the order.

1. The operation of s 4(1) of the ROT Act was explained by Gleeson JA in Dargan:

[61] The correct approach to the application of s 4(1) of the Restraints of Trade Act is well settled. In Orton v Melman [1981] 1 NSWLR 583 at 587 McLelland J (as his Honour then was) explained that first, the court determines whether the alleged breach (independently of public policy considerations) does or will infringe the terms of the restraint properly construed. Next, the court determines whether the restraint, so far as it applies to that breach, is contrary to public policy. If it is not, the restraint is valid, subject to any order which may be made under s 4(3). These principles have been approved in later cases including in this court: Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 328; Woolworths Ltd v Olson [2004] NSWCA 372 at [42]-[44]; Jardin v Metcash Ltd (2011) 214 IR 448; [2011] NSWCA 409 at [87].

[62] The effect of s 4(1) of the Restraints of Trade Act is to require, for the purpose of determining the validity of a restraint, that attention be focused on the actual or apprehended breach, rather than on imaginary or potential breaches: Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006]; NSWSC 717 at [10] (Brereton J).

1. Mr Moroney submitted that s 4(1) of the ROT Act did not change the onus of proof of unreasonableness at common law: Dargan at [75]. This was not disputed by the respondents.
2. Additionally, in Orton v Melman [1981] 1 NSWLR 583, McLelland J observed in relation to the operation of s 4(3), at 589:

It is a condition precedent of the power of the court to grant relief under this provision that there be found to be "a manifest failure by a person who created or joined in creating the restraint to attempt to make the restraint a reasonable restraint". The onus of establishing this rests upon the applicant [...]

1. Mr Moroney sought an order entirely or partially invalidating the restraints under s 4(3) of the ROT Act in addition or in the alternative to his claim at common law. I have not found it necessary to have separate regard to the ROT Act in light of the conclusions I have reached about the limited validity of the restraints in the employment and shareholders agreement. It follows that it has not been necessary to be satisfied that Operations did not attempt to draft a restraint that was reasonable.

1. For the foregoing reasons, I made the declarations on 17 October 2025. The orders also made on that date allow the parties two weeks from the publication of these reasons within which to submit joint or conflicting proposals to vary the form of the declarations already made, before they are formally entered. Costs should be reserved, subject to any application of s 570 of the Fair Work Act 2009 (Cth).

I certify that the preceding one hundred and thirty-seven (137) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromwich.

Shareholders agreement - confidentiality obligations

22. Confidentiality

22.1 Confidentiality obligations

Each party must:

(a) use Confidential Information only for the purposes of the Business or to make decisions regarding its investment in the Company; and

(b) keep Confidential Information confidential and not disclose it or allow it to be disclosed to any third party except:

(i) with the prior written approval of the Board and the Investor Shareholders; or

(ii) to officers, employees and consultants or advisers of the parties who have a need to know (and only to the extent that each has a need to know) and are aware that the Confidential Information must be kept confidential,

and the parties must take or cause to be taken reasonable precautions necessary to maintain the secrecy and confidentiality of the Confidential Information.

Shareholders agreement - restraint of trade clause

23. Restraint

23.1 Prohibited activities

Each Restricted Party severally undertakes to the Company and each other Shareholder that it will not during each Restraint Period and, for clauses 23.1(a) and 23.1(b) only, within each Restraint Area:

(a) Engage In, or prepare to Engage In, a business or an activity that is:

(i) the same or similar to the Business Activity or any material part or parts of the Business Activity; or

(ii) in competition with the Business Activity or any material part of it;

(b) induce, solicit, canvass, approach or accept an approach from a person who was at any time during the 18 months ending on the date when the relevant Restricted Party stops being a Shareholder or Key Person (as the case may be), a client or Identified Prospective Client of the Group with a view to obtaining their custom in a business that is:

(i) the same or similar to the Business Activity or any material part or parts of it; or

(ii) in competition with the Business Activity or any material part of it;

(c) without limiting clause 23.1(a), collaborate or otherwise work together with any person who has at any time during the previous 18 months been a senior employee of or otherwise engaged at a senior level in the Business, to Engage In, or prepare to Engage In, a business or an activity which is:

(i) the same or similar to the Business Activity or any material part or parts of it; or

(ii) in competition with the Business Activity or any material part of it;

(d) do or say anything harmful to the reputation of the Business Activity or the Group which may lead a person to stop, curtail or alter the terms of its dealings with the Group;

(e) interfere with the relationship between the Group and its clients, Identified Prospective Clients, third party investors, financiers, employees, contractors or suppliers in a manner which is adverse to the Group;

(f) induce or help to induce an employee, contractor or officer of the Group to leave their employment, office or other engagement with the Group;

(g) seek to engage or engage the services of any person who is or becomes an employee, contractor or officer of the Group;

(h) after the Restricted Party stops being a Shareholder or Key Person (as the case may be), represent itself as being in any way connected with or interested in the Group, other than in the capacity of a former Shareholder, officer or employee;

(i) except in the proper conduct of the Business, use or permit to be used the word 'TMI Insight', 'TMCL' or any of the trade marks, business names, or other intellectual property connected with the Business;

(j) directly or indirectly assist any person to, or procure any person to, do any of the acts or anything else contemplated by clause 23.1.

23.2 Interpretation

The parties acknowledge and agree:

(a) the restraints in clause 23.1 are separate restraints for each Restraint Period and, for clauses 23.1(a) and 23.1 (b) only, each Restraint Area;

(b) each undertaking in clause 23.1 is independent from the remaining restraints and works cumulatively with the remaining restraints; and

(c) if any of the several restraints is invalid or unenforceable for any reason it may be severed without affecting the validity or enforceability of the remaining restraints.

23.3 Exceptions - general

Despite any other term of this document (but acknowledging clause 23.5), this clause 23 does not restrict a Restricted Party from:

(a) performing any employment or consultancy agreement with the Group;

(b) holding 5% or less of the shares of a listed company;

(c) holding Equity Securities in the Company; or (d) where the Restricted Party is SW Investment Group ACN 618 892 710 as trustee for the Andrew Walsh Family Trust, Andrew Nicholas Walsh, Abitrium Pty Ltd ACN 627 970 487 as trustee for the Kookaburra Trust or Anna Maras, being employed within any Restraint Area and during any Restraint Period in any capacity for an owner, developer or a manager of real estate who is acting in the capacity as a landlord or lessor only (and not in the capacity as a tenant or a lessee) in the industrial, commercial or diversified sectors.

23.4 Acknowledgments

Each Restricted Party acknowledges that:

(a) all the covenants given in this clause 23 are material to the decision of the Shareholders to enter into this document and to the Company's decision to enter into this document;

(b) all the prohibitions and restrictions in this clause 23 are reasonable in the circumstances and necessary to protect the business, financial and proprietary interests and goodwill of the Business and the value of the Shares and are givenin consideration of the benefits to be derived by the Shareholders pursuant to this document;

(c) damages are not an adequate remedy if the Restricted Party breaches this clause 23;

(d) the Company or any Shareholder may apply for injunctive relief if:

(i) the Restricted Party breaches or threatens to breach this clause 23; or

(ii) the Company or the Shareholder believe the Restricted Party is likely to breach this clause 23; and

(e) each Key Person is interested in the Shareholder to which the Key Person relates and will be obtaining or has obtained a benefit from that Shareholder being a Shareholder and such benefit is consideration for the Key Person providing the undertakings in this clause 23.

23.5 Conflict

The undertakings in this clause 23 are in addition to, and not in lieu of, any similar undertakings by the relevant Restricted Party, whether under law or any agreement or arrangement to which the relevant Restricted Party is, or may in the future become, a party. In the event of any conflict between the provisions of any such agreements or law, all such agreements and laws must be construed in such a manner as to be as consistent as possible and enforceable to the fullest extent.

Definitions

Affiliate means with respect to any person:

(a) any other person which directly or indirectly Controls, is Controlled by, or is under common Control with that first person;

(b) without limiting paragraph (a), if that first person is a body corporate, each of that body's directors;

(c) without limiting paragraph (a), if that first person is a natural person, any:

(i) relative (as defined in the Corporations Act) of that person or that person's spouse; and

(ii) body corporate in relation to which that person and any relative of that person or that person's spouse Controls; and

(d) without limiting paragraph (a), if that person is an Investor Shareholder:

(i) the General Partner of that Investor Shareholder;

(ii) any Related Body Corporate of that Investor Shareholder;

(iii the Investment Manager of that Investor Shareholder;

(iv) a trust, venture capital limited partnership, limited partnership, company or other entity or person of which the Investor Manager of that Investor Shareholder or a Related Body Corporate of that Investor Manager, is the manager, investment adviser, trustee, responsible entity or General Partner;

(v) a trustee or custodian of that Investor Shareholder; or

(vi) a co-investor who is a present or potential investor in a trust, venture capital limited partnership, limited partnership, company or other entity of which the Investor Manager or a Related Body Corporate or assignee of the rights and obligations of the Investor Manager, is the manager, investment adviser, trustee, responsible entity or general partner.

Bad Leaver means a Leaver who is not a Good Leaver

Business means:

(a) the businesses carried on by the Group at the Commencement Date, being advisory services in the supply chain, property (including industrial and commercial property), hotel and hospitality industries;

(b) if the Bolt-on Acquisition completes, the businesses carried on by XAct Solutions Pty Ltd ACN 116 478 561 (and its Subsidiaries) as at the date the Bolt-on Acquisition completes; and

(c) any other activities that the Board decides from time to time will be carried on by the Group, subject to a Super-Majority Resolution if required under the terms of this document.

Business Activity means:

(a) while the relevant Restricted Party remains a Shareholder or a Key Person (as the case may be), the Business; and

(b) after the relevant Restricted Party stops being a Shareholder or Key Person (as the case may be), the business carried on by the Group at the date the relevant Restricted Party stops being a Shareholder or Key Person

Confidential Information means: means any of the following:

(a) information concerning the contents of the Transaction Documents or any transaction undertaken or to be undertaken under the Transaction Documents;

(b) information concerning the Bolt-on Acquisition;

(c) all data bases, source codes, methodologies, manuals, artwork, advertising manuals, trade secrets and all financial, accounting, marketing and technical information, customer and supplier lists, know-how, technology, operating procedures and other information, used by or relating to the Group and its transactions and affairs;

(d) information relating to the Business or the Group:

(i) which is by its nature, confidential;

(ii) that the relevant party knows or ought to know, is confidential; or

(iii) which is designated by the Company as confidential;

(e) all notes and reports incorporating or derived from information referred to in paragraphs (a) to (d); and (f) all copies of the information, notes and reports referred to in paragraphs (a) to (e).

Engage In includes:

(a) to carry on, participate in, provide services to, or otherwise be directly or indirectly involved in or have an interest in (directly or through any interposed body corporate, trust, partnership or entity) whether as a shareholder, unitholder, director, consultant, adviser, contractor, principal, agent, manager, employee, beneficiary, partner, associate, trustee or financier;

(b) management without salary, advising or influencing on a continuing basis whether for direct remuneration or benefit or otherwise, and influencing through any association or arrangement with any person in or over which any interest or influence (absolute or partial) is held.

Good Leaver means:

(a) a Leaver whose employment, non-executive directorship or engagement as a consultant or contractor ceased or terminated in any of the following circumstances:

(i) death (except for death which arises as a result of the relevant person's criminal act or deliberate self-harm);

(ii) illness, serious disability or permanent incapacity through ill health (except for illness, disability or incapacity which arises as a result of the relevant person's criminal act or deliberate self-harm) which renders the relevant person incapable of continuing in their current position;

(iii) redundancy of the Leaver's position; or

(iv) retirement after the age of 65; or

(b) a Leaver determined by Super-Majority Resolution (at the absolute discretion of those parties) to be regarded for all purposes under this document as a 'Good Leaver'.

Group means:

(a) the Company and all of its Subsidiaries from time to time;

(b) a trust that is Controlled by the Company and/or its Subsidiaries; and

(c) any other entity that the Board declares is a member of the Group from time to time;

Identified Prospective Client means any person identified by a Group Company as an opportunity for obtaining future business (whether directly or through referral of other business).

Leaver means a person (other than an Investor Shareholder) who:

(a) having been employed by a Group Company on a full time basis, ceases or gives notice that it will cease to be employed by that or any other Group Company on a full time basis; or

(b) having been engaged by a Group Company as a consultant or contractor, ceases or gives notice that it will cease to be engaged by that or any other Group Company; or

(c) having been a non-executive Director of a Group Company, ceases or gives notice that it will cease to be a non-executive Director of that or any other Group Company; or

(d) is an Affiliate of a person who ceases or gives notice that it will cease to be a full time employee, contractor, consultant or non-executive Director of a Group Company,

and who will either be a Good Leaver or a Bad Leaver in accordance with this document. For the avoidance of doubt, a Management Shareholder and its Related Manager are Affiliates.

Management Shareholder means the Initial Management Shareholders, the Other Management Shareholders and any other person Shareholders, the proportions which their respective Shareholdings bear to the aggregate of their Shareholdings at the time of the relevant event.

Restraint Area means:

(a) each country in which the Business is conducted;

(b) the Asia Pacific region;

(c) New Zealand;

(d) Singapore;

(e) Vietnam;

(f) Thailand;

(g) Japan;

(h) Indonesia;

(i) Hong Kong;

(j) Australia;

(k) Queensland;

(l) New South Wales;

(m) Victoria;

(n) South Australia;

(o) Western Australia;

(p) Tasmania;

(q) Northern Territory;

(r) Australian Capital Territory;

(s) each State in which the Business is conducted;

(t) each State in which the Business is conducted as at the time the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(u) each city within which the Business is conducted;

(v) each city within which the Business is conducted as at the time the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(w) a 200 kilometre radius from each Property;

(x) a 200 kilometre radius from each Property as at the time the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(y) a 100 kilometre radius from each Property;

(z) a 100 kilometre radius from each Property as at the time the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(aa) a 50 kilometre radius from each Property;

(bb) a 50 kilometre radius from each Property as at the time the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(cc) a 25 kilometre radius from each Property;

(dd) a 25 kilometre radius from each Property as at the time the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder.

Restraint Period in respect of each Restricted Party, means:

(a) where the Restricted Party is a Shareholder or the Related Manager of a Shareholder that is a Level 1Shareholder, Restraint Period (5 years);

(b) where the Restricted Party is a Shareholder or the Related Manager of a Shareholder that is a Level 2 Shareholder, Restraint Period (2.5 years);

(c) where the Restricted Party is a Shareholder or the Related Manager of a Shareholder that is a Level 3 Shareholder, Restraint Period (1 year).

The Restraint Period of each Initial Management Shareholder, each Initial Key Person, each Other Management Shareholder and each Other Key Person as at the Shareholders' Commencement Date is set out in Parts Band C of Schedule 1, but is subject to change in accordance with the above.

Restraint Period (5 years) means the period commencing when the relevant Restricted Party becomes a Shareholder or Key Person (as the case may be) and ending:

(a) five years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(b) four years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(c) three years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(d) 30 months after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(e) two years after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(f) 18 months after the date when the relevant Restricted Party stops being a Shareholder or, in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(g) one year after the date when the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(h) six months after the date when the relevant Restricted Party stops being a Shareholder, or in the case of a Key Person, when the Shareholder of which it is the Related Manager stops being a Shareholder;

(i) five years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(j) four years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(k) three years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(I) 30 months after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(m) two years after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(n) 18 months after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(o) one year after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(p) six months after the date when the relevant Restricted Party (or its Related Manager, if applicable) becomes a Leaver;

(q) five years after the Shareholder's Commencement Date;

(r) four years after the Shareholder's Commencement Date;

(s) three years after the Shareholder's Commencement Date;

(t) 30 months after the Shareholder's Commencement Date;

(u) two years after the Shareholder's Commencement Date;

(v) 18 months after the Shareholder's Commencement Date;

(w) one year after the Shareholder's Commencement Date;

(x) six months after the Shareholder's Commencement Date.

Restricted Party means each Shareholder (other than an Investor Shareholder) and Key Person.

Employment agreement - confidentiality obligations

17 Confidential Information

17.1 You acknowledge that the Confidential Information remains at all times the Property of TM Insight or that of the relevant Group Member or both.

17.2 You must:

(1) take all steps necessary to maintain the strict confidentiality of Confidential Information;

(2) ensure that proper and secure storage is provided for Confidential Information while in the possession or under the control of you;

(3) take all precautions necessary to prevent disclosure of Confidential Information;

(4) not use or attempt to use Confidential Information in any manner which may injure or cause loss, either directly or indirectly to TM Insight or any other Group Member, or which may be likely to do so;

(5) not copy or remove from the Group's premises any document or record which contains Confidential Information other than in the proper performance of your duties;

(6) not disclose Confidential Information to any person other than in the proper performance of your duties; and

(7) immediately notify TM Insight if you suspect or become aware that Confidential Information has been improperly used, copied or disclosed.

17.3 When you disclose Confidential Information as permitted by this Agreement, you must use your best endeavours to ensure that those persons comply with the obligations under this clause 17 as if the obligations were expressed to apply to them.

17.4 Your obligations under this clause apply during the Employment and after its termination.

Employment agreement - restraint of trade clause

24 Restraint extending after Employment ceases

24.1 You must not during each Restraint Period and, for clauses 24.1 (1) and 24.1 (2) only, within each Restraint Area:

(1) Engage In, or prepare to Engage In, a business or an activity that is:

1. the same or similar to the Business Activity or any material part or parts of the Business Activity; or

2. in competition with the Business Activity or any material part of it;

(2) induce, solicit, canvass, approach or accept an approach from a person who was at any time during the Relevant Period, a Client or Identified Prospective Client of the Group with a view to obtaining their custom in a business that is:

1. the same or similar to the Business Activity or any material part or parts of it; or

2. in competition with the Business Activity or any material part of it;

(3) without limiting clause 24.1, collaborate or otherwise work together with any person who has at any time during the Relevant Period been a senior employee of or otherwise engaged at a senior level in the Business, to Engage In, or prepare to Engage In, a business or an activity which is:

1. the same or similar to the Business Activity or any material part or parts of it; or

2. in competition with the Business Activity or any material part of it;

(4) do or say anything harmful to the reputation of the Business Activity or the Group which may lead a person to stop, curtail or alter the terms of its dealings with the Group;

(5) interfere with the relationship between the Group and its Clients, Identified Prospective Clients, third party investors, financiers, employees, contractors or suppliers in a manner which is adverse to the Group;

(6) induce or help to induce an employee, contractor or officer of the Group to leave their employment, office or other engagement with the Group;

(7) seek to engage or engage the services of any person who is or becomes an employee, contractor or officer of the Group;

(8) represent yourself as being in any way connected with or interested in the Group, other than in the capacity of a former shareholder, officer or employee;

(9) use or permit to be used the word 'TMI Insight', 'TMCL' or any of the trade marks, business names, or other intellectual property connected with the Business;

(10) directly or indirectly assist any person to, or procure any person to, do any of the acts or anything else contemplated by clause 24.1.

(1) the restraints in clause 24.1 are separate restraints for each Restraint Period and, for clauses 24.1 (1) and 24.1 (2) only, each Restraint Area;

(2) each undertaking in clause 24.1 is independent from the remaining restraints and works cumulatively with the remaining restraints; and

(3) if any of the several restraints is invalid or unenforceable for any reason it may be severed without affecting the validity or enforceability of the remaining restraints.

24.3 Despite any other term of this document (but acknowledging clause 24.5), this clause 24 does not restrict you from:

(1) performing your Employment;

(2) holding 5% or less of the shares of a listed company; or

(3) holding equity securities in the Holding Company.

(1) the Employment is conditional upon you complying with the postemployment restrictions;

(2) all the prohibitions and restrictions in this clause 24 are reasonable in the circumstances and necessary to protect the business, financial and proprietary interests, Confidential Information, staff and client connections and goodwill of the Business;

(3) any combination of the acts referred to in this clause 24.1 for each separate Restraint Period and, if applicable, Restraint Area would be unfair and damage our Confidential Information, staff and client connections, goodwill and Business and would lead to substantial loss to the Group;

(4) your remuneration under this Agreement incorporates consideration for the post-employment restrictions; and

(5) damages are not an adequate remedy if you breach this clause 24; and

(6) we or any Group Member may apply for injunctive relief if:

a. you breach or threaten to breach this clause 24; or

1. we or another Group Member believe you are likely to breach this clause 24.

24.5 The undertakings in this clause 24 are in addition to, and not in lieu of, any similar undertakings by you, whether under applicable law or any agreement or arrangement to which you are, or may in the future become, a party. In the event of any conflict between the provisions of any such agreements or applicable law, all such agreements and laws must be construed in such a manner as to be as consistent as possible and enforceable to the fullest extent.

24.6 This clause continues to apply after this Agreement and the Employment come to an end.

24.7 Any promise, warranty or covenant made by you under clause 24.1 in favour of TM Insight and each Group Member, and clause 31 applies.

(3) Business means the businesses carried on by TM Insight and the Group;

(4) Business Activity means:

a. during your Employment, the Business; and

1. after your Employment ends, the businesses carried on by TM Insight and the Group at the date your Employment ends;

(5) Client means any individual, firm, company, organisation or any other person that has purchased products and services of TM Insight or a Group Member;

(7) Confidential Information means information which came to your knowledge in the course of or as a result of the Employment (or former employment or engagement (whether direct or indirect) with a different Group Member in connection with the Group's business).

Confidential Information includes, but is not limited to:

(a) information which is specifically designated as confidential by TM Insight, the Group, or their respective clients;

(b) information which by its nature or the circumstances of its disclosure may be reasonably understood to be confidential:

(c) trade secrets, know-how, inventions, research, formulas, patterns, compilations, devices, techniques, processes, ideas, concepts and other confidential or proprietary information of TM Insight and the Group;

(d) Intellectual Property of TM Insight and the Group;

(e) all information learned or accessed by you in the context of or otherwise as a result of the Employment (or any previous employment or engagement with the Group);

(f) information regarding the financial or business affairs of TM Insight and the Group, including:

(i) board papers and reports;

(ii) financial and management accounts and reports;

(iii) business and marketing plans and strategies; and

(iv) market research information or surveys;

(g) any agreements, arrangements or terms of trade with a Client, Identified Prospective Client, supplier to TM Insight or prospective supplier to TM Insight;

(h) information about the identity, contact details or requirements of Clients, Identified Prospective Clients, suppliers or prospective suppliers;

(i) technical, business and personal information of Clients, Identified Prospective Clients, suppliers or prospective suppliers, including, without limitation, information regarding the business operations, methods, practices and products of such customers or suppliers;

(j) contractual, technical and production information,

(k) information relating to any products, compounds, materials, processes, know how, configurations, apparatuses, samples, and data of TM Insight, the Group or clients and any information derived therefrom;

(I) notes and developments regarding confidential information;

(m) the terms and conditions of employment of employees of the Group;

(n) the terms and conditions of this Agreement;

(o) business systems, and operating procedures or manuals; and

(p) all information (regardless of form) which in whole or in part includes or has been derived or created from the information referred to in clauses 1.1(7)(a) to 1.1(7)(o) (inclusive) of this Schedule 2.

Confidential Information does not include information that:

(a) is publicly available at the Commencement Date; or

(b) becomes publicly available during or after the Employment without breach of any obligation of confidence by you:

(9) Employment means employment of you by TM Insight, on the terms and conditions set out in this Agreement;

(10) Engage In includes:

1. to carry on, participate in, provide services to, or otherwise be directly or indirectly involved in or have an interest in (directly or through any interposed body corporate, trust, partnership or entity) whether as a shareholder, unitholder, director, consultant, adviser, contractor, principal, agent, manager, employee, beneficiary, partner, associate, trustee or financier;
2. management without salary, advising or influencing on a continuing basis whether for direct remuneration or benefit or otherwise, and influencing through any association or arrangement with any person in or over which any interest or influence (absolute or partial) is held.

(12) Group means the Holding Company, its Related Bodies Corporate (including TM Insight) and any trust of which the Holding Company or its Related Body Corporate is trustee, from time to time;

(13) Group Member means any member of the Group;

(15) Identified Prospective Clients means individuals, firms, companies, businesses, organisations or any other persons that have been identified by TM Insight or any one or more Group Member as an opportunity for obtaining future business (whether directly or through referral of other business);

(27) Relevant Period means:

1. during your Employment, the period of your Employment; and
2. after your Employment ends, the final 18 months of Employment, or if the Employment was for a period of less than 18 months, that lesser period;