Liver cancer treatment company Sirtex Medical Ltd has applied for an injunction against former chairman Bruce Gray to stop him from competing with the firm after he backed down from an earlier commitment.
Liver cancer treatment company Sirtex Medical Ltd has applied for an injunction against former chairman Bruce Gray to stop him from competing with the firm after he backed down from an earlier commitment.
According to Sirtex, Dr Gray had previously notified the company of his intention to revoke an undertaking that he would not compete with the business, as settled in a signed agreement.
However Dr Gray has started legal proceedings against Sirtex in the Supreme Court of Western Australia, seeking declarations that the agreement is unenforceable as unreasonable restraints of trade.
The proceedings have not yet been listed for a final hearing.
"Dr Gray has indicated that he intends to pursue his revocation of the undertaking but has informed Sirtex that it is not his present intention to be involved in any business which is competitive with any part of the business of Sirtex 'as it existed in 1997'," Sirtex said.
"Sirtex has invited Dr Gray to reinstate his undertaking and to date he has not done so."
The New South Wales-based Sirtex said it is seeking an urgent hearing of its application.
The latest legal development follows an appeal by the University of Western Australia made in May against a Federal Court decision which ruled in favour of intellectual property claims by Dr Gray, a former employee and founder of Sirtex.
UWA had claimed that it had rightful ownership of a cancer treatment technology - currently being commercialised by Sirtex - which it alleges was developed by Dr Gray during his employment with the university.
At stake was Dr Gray's majority shareholding in Sirtex which Dr Gray's lawyer, Martin Bennett from Lavan Legal, said is worth some $90 million.
Below is today's announcement by Sirtex:
Sirtex has previously announced that Dr Gray had provided Sirtex with notice of his intention to revoke an undertaking given to the company that he would not compete with the business of Sirtex (the terms of the undertaking are set out in the Sirtex ASX announcement of 11 August 2008).
The undertaking is consistent with contractual obligations contained in the Subscription and Shareholders Agreement which was signed by Dr Gray when the company was established and other employment contracts relating to Dr Gray.
Sirtex has also previously announced that Dr Gray had commenced proceedings against Sirtex in the Supreme Court of Western Australia (Dr Gray Proceedings) seeking declarations that the relevant provisions of the Subscription and Shareholders Agreement and employee contracts referred to above are unenforceable as unreasonable restraints of trade (the terms of the restraints are explained in more detail in the Sirtex ASX announcement of 2 November 2007).
Sirtex is defending the Dr Gray Proceedings.
The Dr Gray Proceedings are at an interlocutory stage and have not yet been listed for a final hearing.
There have been communications between the legal representatives of the parties since Dr Gray's notice revoking his undertaking was received. Dr Gray has indicated that he intends to pursue his revocation of the undertaking but has informed Sirtex that it is not his present intention to be involved in any business which is competitive with any part of the business of Sirtex 'as it existed in 1997'.
The statement by Dr Gray of his present intention is qualified, not in the same terms as his undertaking and not consistent with the contractual obligations referred to above.
Sirtex has invited Dr Gray to reinstate his undertaking and to date he has not done so.
In light of Dr Gray's position, Sirtex has filed an application in the Dr Gray Proceedings seeking injunctive relief restraining Dr Gray from breaching his contractual obligations to the company. Sirtex is seeking an urgent hearing of its application.
