Within months of selling Trans-Space Industries for $1.92 million and agreeing not to set up a rival business within the next three years, Tim Gordon was selling aluminium office partitioning in direct competition. The High Court ordered he stop immediately, with a further court hearing looming to assess damages.
Mr Gordon purchased Trans-Space in 2012. It manufactures and supplies office partitioning. Seven years later he sold out to Trans-Space employees: Tony Christensen and Woody Purdom. He agreed to a restraint of trade, not to compete against Trans-Space for a period of three years. The High Court was told Mr Gordon, his wife Angela and their son Joshua continued working for Trans-Space immediately following the sale. Evidence was given that Mr Gordon was actively seeking new business opportunities at that time. He denied any plans to set up in opposition. Within five months of signing a three year restraint of trade he agreed to buy competitor Autex PSL. After taking control he changed the company name to Aluminate Solutions Ltd. Mr Gordon immediately resigned from Trans-Space as an employee. Wife Angela was fired. Son Joshua later left.
When challenged, Mr Gordon said he was not competing directly with Trans-Space. Aluminate sold aluminium components which customers then assembled. Trans-Space was in a different line of business, he said; it manufactured and installed complete interior fit-outs.
Justice Palmer ruled Mr Gordon was in breach of the agreed restraint of trade. Wording of the restraint prohibited ‘distribution’ of partitioning systems; distribution of components was a breach.
An injunction was issued prohibiting Mr Gordon from competing with Trans-Space. He was ordered to hand over all profits earned.
Christensen & Purdom Family Trusts v. Gordon – High Court (16.03.21)
21.053