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Ask Leon Your Own Question
Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 42650
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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Brandon,Recently sold a business with a 3 yr in Victoria

Customer Question

Hi Brandon,Recently sold a business with a 3 yr in Victoria restraint of trade,i have done a couple of sales interstate not in Victoria,i have been summons to appear in Melbourne on the 18/9/15 Commercial/Division County Court,the new owners of the business are not going to good,as my work computer was included in the sale,somehow they have found my personel email address and have gained confidential documents about my activites without my consent,they have all invoices and correspondence with other dealers,and have supplied me all the emails along with their claim document bundle,claiming breach of contract,and looking to sue for $300k.
I have spoken with Telstra they have told me that is illegal and are currently investigating the matter.I honestly believe that doing the odd deal in say Qld/NSW/SA was not in anyway a breach of restraint of trade,however my greatest concern is the emails,is it illegal for their solicitor to use my emails against me.
Regards David.
Email david.noon
Submitted: 1 year ago.
Category: Australia Law
Expert:  Leon replied 1 year ago.

Good Morning

My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advise but a guide to assist you.

What does the restraint of trade clause say?

Customer: replied 1 year ago.
Hi Leon,
Clause #17 Restraint of Trade.
Three (3) Years The State of Victoria
Customer: replied 1 year ago.
wondering if you got it?
Expert:  Leon replied 1 year ago.

Good Afternoon

Ok did you trade in victoria?

It is very wide as it stops you working in Victoria and you may not be able to earn a living.

Customer: replied 1 year ago.
No I have not traded in Victoria,i have spoken with dealers old friends in Victoria and other states over some months,following the sale of the business in March 2015 about enquiries of interstate sales only.I have been in the
equipment business for around 35 years I happen to know a lot of people they mainly contact me if they want to buy or sell,
I have been involved in three deals over the past 3-4 months,information as follows.
1.Purchased a Manitou Forklift from CQ Forklifts In Mackay Qld and sold to YG Lifting in Moorebank NSW.
2. " a Dieci from Rough Terrain Plant Hire in Sydney NSW and sold to a farmer in S.A.
3.Had commenced a deal to purchase a Manitou Forklift from CQ Forklifts in Mackay Qld to a client in Victoria,
after some careful consideration I advised the client to deal direct with CQ Forklifts in Mackay, the client instructed his financier to send payment direct to CQ Forklifts upon receipt of a tax invoice from CQ Forklifts Qld Mackay Qld as I didn't
wish to be seen to be dealing in Victoria.
They had accessed my computer and have copied all of above,(that's the scary bit), and more,in your opinion do you think
is it legal or illegal for them to gain all the confidential documents from computer without my authority?surely their legal team would be on top of that?i know that the buyers of my business are not looking to good have no stock,border line going broke,
and would be very keen to find an out.
Expert:  Leon replied 1 year ago.

If you have not been trading in victoria you are not in breach.

Does it also mention not to contact customers of the former business, and if so did you do that?

Customer: replied 1 year ago.
Hi Leon,
Really appreciate your help,i have just been looking at my copies of the sale documents,i had read from back to front and the original wording for,
Clause #17 Restraint of trade:
Time of settlement,
Two (2) years Distance:Radial distance of 30 kilometeres from the Business Premises.
Warren Graham & Murphy Solicitors,
Main Street,
Bairnsdale.
The actual wording had been changed without my knowledge,as at the time of signing I assumed that the documents were
as I had previously sighted,and no need to examine them closely,iám in shock?can't believe that the words for the restraint of trade had been changed,i don't know where this is going know,hopefully in my favour?
Updated restraint of trade and signged,
Time from date of settlement
Three years (3) years Distance The State of Victoria.Restraint of trade consists of 13-1 13-2 13-3
Vendor not be involved in anyway in a business of a similar type,within the radial distance from the
business described in the particulars,without written consent. 13-1
Involved in anyway includes a partner,agent,or any other person.13-2
Any corporation must include any shareholder to enter an agreement with the purchaser for restraint of trade. 13-3*Restraint of trade Agreement*
I separately and independently promise to comply with the vendors obligations in general condition 13-1 of the contract
as if I was named as,and in place of,the vendor.This promise is made to the purchaser in consideration of the purchaser
entering into the contract at my request.
*Contract* means the contract of sale of the business.
Dated---------------not dated
Vendor-------------not signed
Purchaser---------not signed
Name of business-------not mentioned
Signed as a deed on --/--/-- not dated
Signature:------------not signed
Name:-----------------no name
Address---------------no address
13-4 This general condition 13 is for the benefit of the purchaser.
Hope this is some help?
Regards,
David.
Expert:  Leon replied 1 year ago.

Good Afternoon

Do you have a copy of what you have signed?

Is the wording

Time of settlement, Two (2) years Distance:Radial distance of 30 kilometeres from the Business Premises

or

Updated restraint of trade and signed, Time from date of settlement Three years (3) years Distance The State of Victoria

If the latter did you sign this after the contract?

Customer: replied 1 year ago.
unfortunatley to the latter,the contract had all the relevant documentation in all the right places,ready for signing I feel that the buyers were called in first for the signing,and obviously had the restraint of trade wording changed,then I was called in for signing thinking that it was the same wording in the document that I had sighted earlier in the week,do I have any recourse as I definantley not told of any changes to the contract that I can recall,would the magistrate take that into consideration?maybe look at differently?.
Regards,
David.
Sorry to a pest but does the email issue carry any weight,as I feel that is so so important.
Expert:  Leon replied 1 year ago.

Good Afternoon

Did you have a lawyer acting for you?

Customer: replied 1 year ago.
No not at this time any suggestions
Expert:  Leon replied 1 year ago.

Good Evening

It is too broad and you can have the court change it.

Did they have a solicitor and did you sign in front of the solicitor?

Customer: replied 1 year ago.
No I haven't signed any thing in respect to the court date of the 18/9/15,they have just summons me to attend in Melbourne at 10.00am on that date,can I ring/contact the court and change time and date etc.
Expert:  Leon replied 1 year ago.

I mean the contract. When you signed it, did you go to their solicitors office.

If you did they owed you a duty of care to tell you of the changes before you signed and you can report them for that failure.

Here is how the courts deal with the clauses.

http://www.hhg.com.au/announcements/restraint-of-trade-clauses-in-employment-contracts

Even though you were selling a business the idea is the same.

Customer: replied 1 year ago.
Thanks Leon no we attended my solicitors and independently signed at different times
Expert:  Leon replied 1 year ago.

Good Afternoon

Did your solicitor go through the contract with you? Was this explained to you?

Customer: replied 1 year ago.
The first time yes obviously not so in the updated version?
Expert:  Leon replied 1 year ago.

If your solicitor prepared the contract he should have noticed the change.

There could be some negligence in this.

Have you spoken to him?

You can fight this and you will be successful but the problem is it will cost you money

Customer: replied 1 year ago.
No I haven't spoken to Warren Graham & Murphy Solicitors,what do you think they would say?of course we told David??I guess I will have find some money?i would like to thank you again for your valued input,not much more to say,
Regards,
David.
Expert:  Leon replied 1 year ago.

Good Afternoon

You have to ask them when did the clause change and that when you signed you believed it was the original clause.

They will assist you in dealing with this and they will also tell you what happened with the contract.

All the best

You are very welcome and thank you for using my services.

If I have missed anything, or you have any further questions please let me know

If there is anything else in the future please do not hesitate to ask.

Please do not forget to leave positive feedback.

Regards

Leon