A weak restraint clause and a four-month delay handed CCM a costly defeat
A cosmetic medicine clinic spent four months watching a former physician build a competing practice 750 metres from its Bowral clinic, then raced to court seeking an injunction. It got costs instead.
In a judgment handed down on May 25, Justice Williams of the New South Wales Supreme Court dismissed all claims for interim relief brought by Concept Cosmetic Medicine Holdings Pty Ltd against Dr Nicole Chater, a cosmetic physician who left CCM on December 19, 2025 and opened a competing practice through a new company, Mind Body Skin Institute Pty Ltd (MBSI), in Bowral from January 5, 2026. Sally Leonard, a part-time clerical employee who resigned the same day and joined MBSI, also had all claims against her dismissed. CCM was ordered to pay the defendants' costs.
The case turned on a single poorly drafted clause - and an evidentiary case that the court found wanting at almost every point.
CCM's main weapon was clause 21 of its licence agreement with Dr Chater, which CCM argued prohibited her from treating any of the 488 patients she had seen at its Bowral clinic for one year after she left. The clause defined the protected group - "CCM Clients" - as clients that CCM had specifically identified to Dr Chater or for whom CCM had provided contact information. The court found Dr Chater's narrower interpretation - that only patients CCM had actively referred or introduced to her fell within the definition - was "strongly arguable." CCM's broad construction, that the clause covered every patient she had ever treated at its premises, was, the court said, "barely arguable."
The court also found it was "strongly arguable" that the clause's final sentence, which specified a monetary remedy calculated as the equivalent licence fee for any services provided outside CCM's premises, was the only remedy available for any breach - making an injunction unavailable regardless.
For HR professionals and contract drafters, the lesson is direct. If a restraint clause is meant to cover all clients a departing contractor has ever encountered at your premises, it needs to say so clearly, using the same terminology as the rest of the agreement. A defined term that diverges from the language used throughout the rest of the contract is a gap a skilled lawyer will exploit.
The factual case fared no better. CCM alleged that Dr Chater and Ms Leonard had used confidential patient information to draw clients away, cancelled appointments improperly, and taken physical documents - including a drug register and a folder of employee contracts - from CCM's Drummoyne premises. The court found no forensic or other evidence that either defendant had copied, removed, or exported any information from CCM's patient management system. The allegation that Dr Chater had taken the physical documents was dismissed as "a bare assertion based on speculation," with no explanation of why those documents would have been of interest or use to her.
The court's own review of CCM's appointment records found patients described in the clinic's evidence as having their appointments cancelled who had, in fact, been rebooked for a different date on the same day. The court noted that CCM's own expert analysis was not tendered, and attributed no weight to the evidence it received on appointment cancellations as a result.
On patient contact, the court found that calls made by Dr Chater to a limited number of patients to advise them she would not be available for upcoming 2026 appointments were consistent with professional courtesy expected of any treating physician - not a breach of any confidentiality obligation. CCM's submissions, the court found, "failed to articulate any cogent reason" why those communications constituted unauthorised use of patient contact information.
Then there was the delay. CCM waited from late December 2025 until April 16, 2026 - nearly four months - before filing proceedings. The court noted that such delay is treated by courts as a "litmus test" of the seriousness of the alleged infringement. CCM argued it had spent the intervening period investigating. The court rejected that: the evidence showed nothing beyond phone calls to affected patients in December and January, and no explanation was offered for the gap between early February and mid-April.
Ms Leonard's position was straightforward. She gave two weeks' notice on December 19, 2025 and commenced with MBSI on January 5, 2026, after her notice period had run out. CCM alleged she had prematurely breached her notice obligations. The court found no basis for that claim. The source document records that there was no evidence CCM required Ms Leonard to work at the Bowral clinic during the notice period, and that the clinic was closed during that time. There is nothing unusual, the court noted, about an employee accepting a new role before handing in their notice.
For HR leaders, the case is a practical checklist. Define restraint clauses precisely, and test them against the rest of the contract language before you ever need them in court. Build your evidentiary record before filing, not after. Act promptly when a key employee or contractor departs to a competitor, because courts treat delay as evidence that the harm is not as urgent as claimed. And consider whether an injunction is the right remedy at all when the contract itself already provides a monetary outcome for any breach.
This was an interlocutory ruling on CCM's application for interim injunctions only. The substantive claims in the proceedings have not been heard on their merits, and no court has made final findings on the conduct alleged.
