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Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWCA 418. Young JA, Beazley & Basten JJA agreeing.

53 On the basis that the appellant did obtain the goodwill of the Wyong Medical Centre (other than the goodwill of each doctor in his professional practice), which I will term "the practice goodwill", the doctors' counsel put that a restraint on the doctors after termination could not be for the protection of the practice goodwill.

54 "Goodwill" is a rather elusive concept. The best attempts at some form of definition may be found in Commissioners of Inland Revenue v Muller & Co's Margarine Ltd [1901] AC 217.

At 223 Lord Macnaghten said that goodwill "is a thing very easy to describe, very difficult to define", but he stated its key features.

This dictum has been oft repeated; see eg Hepples v Federal Commissioner of Taxation [1992] HCA 3; 173 CLR 492, 519 and Federal Commissioner of Taxation v Murry [1998] HCA 42; 193 CLR 605, 611 [12].

55 In Whiteman Smith Motor Co Ltd v Chaplin [1934] 2 KB 35, 42, Scrutton LJ adopted a text book suggestion that types of goodwill could usefully be categorized as cat, rat and dog types. At 49-50 Maugham LJ added the rabbit and in Federal Commissioner of Taxation v Williamson [1943] HCA 24; 67 CLR 561, 564, Rich J adopted that categorization.

56 This categorization differentiates

57 The High Court in Murry analysed the concept of goodwill in the modern law. The core of the analysis is at 614 [20] that:

The attraction of custom still remains central to the legal concept of goodwill. Courts will protect this source or element of goodwill.

58 As Brereton J pointed out in McHugh Holdings at [43], an element of goodwill may enhance the value of the premises from which a business is carried on and other elements may attach to the proprietors and the holders of the business name.

59 I can see no reason why, if the premises are owned by X, the business name by Y and Z carried out activities in the premises and in conjunction with the business, X and Y do not have a sufficient interest in Z's enterprise to prevent them taking a reasonable restrictive covenant to protect their own goodwill.

60 In employee cases, it is recognized that an employer has a legitimate interest in maintaining a stable workforceIngham v ABC Contract Services Ltd (English Court of Appeal, 12 November 1993) quoted by Brereton J in Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; 71 NSWLR 9, 23 [45] and see Dawnay Day at 111 and Kearney v Crepaldi [2006] NSWSC 23 (McDougall J).







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