mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353
Outcome: cited
I can now deal with the claims. The claims in contract can be disposed of in short order. The plaintiffs contend that by engaging in certain conduct, especially the conversations with clients, Ms Manning acted in breach of the post-employment restraint. Even if I were to make the assumption, as is required by cl 11, that the purpose of each call was to entice away clients or disrupt their relationship with AMP Services, the claim is hopeless. I need do no more than briefly state my reasons. First, by its terms (which notwithstanding the trust remain unaltered) the restraint operates "after the cessation of [Ms Manning's] employment with AMP." I have already explained that her employment did not come to an end until 16 February. By then the damage had been done. Second, it is a condition of the operation of the clause that Ms Manning work for a competitor of "AMP". It is clear from the opening paragraph of the employment contract that "AMP" is a defined term: it is defined to mean "AMP Services Limited". So far as I know GSJBW is not a competitor of AMP Services. It is of course a competitor of Arrive, but that is a different company. Absent a rectification order it is not possible to read "Arrive" for "AMP". Third, the prohibition imposed by cl 11 is against an approach to any client "of AMP" for the purpose of enticing them away "from AMP". The clients that Ms Manning approached were clients of Arrive and not AMP Services. Finally, if it were possible to extend the restraint to Arrive it would be void for being in breach of the common law doctrine of restraint of trade, the modern formulation of which is stated by Lord McNaughton in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535, 565 and accepted for Australia in Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353, 376. The unreasonableness of the restraint lies in the fact that it is wider than necessary, covering all Arrive clients, many of whom did not have any connection with Ms Manning: G W Ploughman &amp; Son Ltd v Ash [1964] 1 WLR 568. If the restraint had been limited to, say, clients of the Melbourne office it may have been lawful: see eg IF Asia Pacific Pty Ltd Galbally [2003] VSC 192 ; Brilliant Lighting (Aust) Pty Ltd v Baillieu [2004] VSC 248.
Case: Canson Enterprises Ltd v Boughton &amp; Co. (1991) 85 DLR (4th) 129
Outcome: followed
To accept Arrive's argument is to accept the notion that a fiduciary breach effectively "stops the clock" at the time of breach for the purpose of determining what actual loss was suffered by a party and what the party's ultimate "position" would have been. This line of reasoning was rejected by the House of Lords in Target Holdings Ltd v Redferns (a firm) [1996] 1 AC 421. There, Lord Browne-Wilkinson said (at 439): "Equitable compensation for breach of trust is designed to achieve exactly what the word compensation suggests: to make good a loss in fact suffered by the beneficiaries and which, using hindsight and common sense, can be seen to have been caused by the breach." See also Re Dawson [1966] 2 NSWR 211; Canson Enterprises Ltd v Boughton &amp; Co . (1991) 85 DLR (4th) 129; O'Halloran v RT Thomas &amp; Family Pty Ltd (1998) 45 NSWLR 262; Southern Real Estate Pty Ltd v Dellow &amp; Arnold (2003) 87 SASR 1. The cases make clear that the court must take advantage of the "full benefit of hindsight" to ensure that "the losses made good are only those which, on a common sense view of causation, were caused by the breach": Canson Enterprises Ltd v Boughton &amp; Co. (1991) 85 DLR (4th) 129, 163. 69 Though the actual quantification of the claim will take place at a later point, it is necessary to say one final word about the method of calculating that loss. When dealing with equitable compensation a court is often faced with the challenge of placing a monetary value on an elusive loss such as a "loss of opportunity", a loss that defies precise measurement: O'Halloran v RT Thomas &amp; Family Pty Ltd (1998) 45 NSWLR 262, 273, adopting Canson Enterprises Ltd v Boughton &amp; Co. (1991) 85 DLR (4th) 129, 163. To this end the court is permitted to use somewhat subjective "tools" in arriving at a valuation; tools such as common sense and general notions of justice and fairness.
Case: Charles Lo Presti Pty Ltd v Karabalios [2000] NSWSC 395
Outcome: cited
The actual loss that Arrive has suffered is not the broad "total loss of clients" as Arrive would have it but the loss of the "value" of keeping those clients between 20 January and 16 February (being the day Ms Manning's employment terminated) together with, perhaps, the loss of the opportunity to take steps in that period to retain the lost clients: Southern Real Estate Pty Ltd v Dellow and Arnold (2003) 87 SASR 1, 12-15; Charles Lo Presti Pty Ltd v Karabalios [2000] NSWSC 395 , [31], [49], and [56]. On this latter aspect, however, given the history and the close relationship between Ms Manning and her clients, I am not at this point persuaded that "but for" her breach of fiduciary duty the clients would have remained with Arrive. On the contrary, the evidence so far suggests that regardless of Ms Manning's breach of duty the clients would have remained with Arrive only until her move to GSJBW and they would then have followed her.
Case: Claremont Petroleum NL v Cummings (1992) 110 ALR 239
Outcome: cited
The conditions for the application of that rule are explained in Payne v Parker [1976] 1 NSWLR 191, 201-202. Opinions have differed as regards whether these conditions can be satisfied when a witness is equally available to both parties. Some judges have said that in such circumstances no inference is available: see eg Claremont Petroleum NL v Cummings (1992) 110 ALR 239. This is not a universally accepted view. For example, in Earle v Castlemaine District Community Hospital [1974] VR 722, 728, a decision of the Full Court of the Supreme Court of Victoria, Little J, cites with approval the following passage from 2 Wigmore on Evidence (3 rd ed, 1940) SS288, 0"> 169- 171 : "The more logical view is that the failure [by both parties] to adduce is open to an inference against both parties, the particular strength of the inference against either depending on the circumstances. To prohibit the inference entirely is to reduce to an arbitrary rule of uniformity that which really depends on the varying significance of facts which cannot be so measured." The judge went on to say that it would be erroneous to lay down any "general rule" that if a witness was available to both parties no inference could be drawn against either and that it must depend on the facts and circumstances of a particular case. This, I think, is the correct view.
Case: Dawson, Re [1966] 2 NSWR 211
Outcome: followed
To accept Arrive's argument is to accept the notion that a fiduciary breach effectively "stops the clock" at the time of breach for the purpose of determining what actual loss was suffered by a party and what the party's ultimate "position" would have been. This line of reasoning was rejected by the House of Lords in Target Holdings Ltd v Redferns (a firm) [1996] 1 AC 421. There, Lord Browne-Wilkinson said (at 439): "Equitable compensation for breach of trust is designed to achieve exactly what the word compensation suggests: to make good a loss in fact suffered by the beneficiaries and which, using hindsight and common sense, can be seen to have been caused by the breach." See also Re Dawson [1966] 2 NSWR 211; Canson Enterprises Ltd v Boughton &amp; Co . (1991) 85 DLR (4th) 129; O'Halloran v RT Thomas &amp; Family Pty Ltd (1998) 45 NSWLR 262; Southern Real Estate Pty Ltd v Dellow &amp; Arnold (2003) 87 SASR 1. The cases make clear that the court must take advantage of the "full benefit of hindsight" to ensure that "the losses made good are only those which, on a common sense view of causation, were caused by the breach": Canson Enterprises Ltd v Boughton &amp; Co. (1991) 85 DLR (4th) 129, 163.
Case: Earle v Castlemaine District Community Hospital [1974] VR 722
Outcome: followed
The conditions for the application of that rule are explained in Payne v Parker [1976] 1 NSWLR 191, 201-202. Opinions have differed as regards whether these conditions can be satisfied when a witness is equally available to both parties. Some judges have said that in such circumstances no inference is available: see eg Claremont Petroleum NL v Cummings (1992) 110 ALR 239. This is not a universally accepted view. For example, in Earle v Castlemaine District Community Hospital [1974] VR 722, 728, a decision of the Full Court of the Supreme Court of Victoria, Little J, cites with approval the following passage from 2 Wigmore on Evidence (3 rd ed, 1940) SS288, 0"> 169- 171 : "The more logical view is that the failure [by both parties] to adduce is open to an inference against both parties, the particular strength of the inference against either depending on the circumstances. To prohibit the inference entirely is to reduce to an arbitrary rule of uniformity that which really depends on the varying significance of facts which cannot be so measured." The judge went on to say that it would be erroneous to lay down any "general rule" that if a witness was available to both parties no inference could be drawn against either and that it must depend on the facts and circumstances of a particular case. This, I think, is the correct view.
Case: Enoch and Zaretzkey, Bock &amp; Co's Arbitration [1910] 1 KB 327
Outcome: cited
If it were possible, I would have called the clients myself in order to get to the truth of the matter. After all, the principal object of a court proceeding is to find the truth and arrive at the right result. Or at least that should be the object. Unfortunately, while the adversary system is touted as "the greatest legal engine ever invented for the discovery of truth" (5 Wigmore on Evidence (3 rd ed, 1940) SS1367) it often falls well short of the mark. The problem is that the system leaves it to the parties to shape the issues to be litigated and to call the evidence they feel will resolve those issues. And in a civil case it is not permissible for the judge to go behind the parties to call witnesses: Enoch and Zaretzkey, Bock &amp; Co's Arbitration [1910] 1 KB 327. Perhaps this will one day be reformed. But until that occurs all a judge is able to do when faced with a refusal by a party to call relevant evidence is, if appropriate, to apply the rule in Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298.
Case: Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385
Outcome: followed
During the course of argument Ms Manning attempted to rely on two other incidents as a repudiation of the contract which justified her purported termination of it on 21 January. The first is steps taken around 23 January to revoke Ms Manning's status under the Corporations Act 2001 (Cth) as an Authorised Representative of Arrive and the second is the instruction on 4 February to terminate Ms Manning's fortnightly salary payments. This conduct is not repudiatory. Even if it were, it would not assist Ms Manning. It is a well established rule of contract law that if a party gives an incorrect reason for terminating a contract this does not prevent him from later asserting a good reason, whether or not he was aware of the reason when he brought the contract to an end: Shepherd v Felt and Textiles of Australia Ltd [1931] HCA 21 ; (1931) 45 CLR 359, 377-378. The rule is so well established it needs no elaboration. But the rule only applies if the unstated (and sometimes unknown) ground was available at the time the contract was brought to an end. If the repudiatory conduct occurs later it cannot be relied upon retrospectively but only as a trigger for a later acceptance, and there was none. Further, by the time the second of the events had occurred Ms Manning had begun to work for GSJBW although still an employee of AMP Services. For example, she attended GSJBW's office on most working days, she sat in on at least one interview with a client (and probably gave advice to the client during the course of the interview), she helped draft letters to clients of Arrive to assist them to transfer their business to GSJBW and she presented a paper at an in-house conference. This put her in breach of her employment contract (a breach not pleaded) and disentitled her from terminating the contract for repudiation: Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385.
Case: G W Ploughman &amp; Son Ltd v Ash [1964] 1 WLR 568
Outcome: applied
I can now deal with the claims. The claims in contract can be disposed of in short order. The plaintiffs contend that by engaging in certain conduct, especially the conversations with clients, Ms Manning acted in breach of the post-employment restraint. Even if I were to make the assumption, as is required by cl 11, that the purpose of each call was to entice away clients or disrupt their relationship with AMP Services, the claim is hopeless. I need do no more than briefly state my reasons. First, by its terms (which notwithstanding the trust remain unaltered) the restraint operates "after the cessation of [Ms Manning's] employment with AMP." I have already explained that her employment did not come to an end until 16 February. By then the damage had been done. Second, it is a condition of the operation of the clause that Ms Manning work for a competitor of "AMP". It is clear from the opening paragraph of the employment contract that "AMP" is a defined term: it is defined to mean "AMP Services Limited". So far as I know GSJBW is not a competitor of AMP Services. It is of course a competitor of Arrive, but that is a different company. Absent a rectification order it is not possible to read "Arrive" for "AMP". Third, the prohibition imposed by cl 11 is against an approach to any client "of AMP" for the purpose of enticing them away "from AMP". The clients that Ms Manning approached were clients of Arrive and not AMP Services. Finally, if it were possible to extend the restraint to Arrive it would be void for being in breach of the common law doctrine of restraint of trade, the modern formulation of which is stated by Lord McNaughton in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535, 565 and accepted for Australia in Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353, 376. The unreasonableness of the restraint lies in the fact that it is wider than necessary, covering all Arrive clients, many of whom did not have any connection with Ms Manning: G W Ploughman &amp; Son Ltd v Ash [1964] 1 WLR 568. If the restraint had been limited to, say, clients of the Melbourne office it may have been lawful: see eg IF Asia Pacific Pty Ltd Galbally [2003] VSC 192 ; Brilliant Lighting (Aust) Pty Ltd v Baillieu [2004] VSC 248.
Case: IF Asia Pacific Pty Ltd Galbally [2003] VSC 192
Outcome: cited
I can now deal with the claims. The claims in contract can be disposed of in short order. The plaintiffs contend that by engaging in certain conduct, especially the conversations with clients, Ms Manning acted in breach of the post-employment restraint. Even if I were to make the assumption, as is required by cl 11, that the purpose of each call was to entice away clients or disrupt their relationship with AMP Services, the claim is hopeless. I need do no more than briefly state my reasons. First, by its terms (which notwithstanding the trust remain unaltered) the restraint operates "after the cessation of [Ms Manning's] employment with AMP." I have already explained that her employment did not come to an end until 16 February. By then the damage had been done. Second, it is a condition of the operation of the clause that Ms Manning work for a competitor of "AMP". It is clear from the opening paragraph of the employment contract that "AMP" is a defined term: it is defined to mean "AMP Services Limited". So far as I know GSJBW is not a competitor of AMP Services. It is of course a competitor of Arrive, but that is a different company. Absent a rectification order it is not possible to read "Arrive" for "AMP". Third, the prohibition imposed by cl 11 is against an approach to any client "of AMP" for the purpose of enticing them away "from AMP". The clients that Ms Manning approached were clients of Arrive and not AMP Services. Finally, if it were possible to extend the restraint to Arrive it would be void for being in breach of the common law doctrine of restraint of trade, the modern formulation of which is stated by Lord McNaughton in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535, 565 and accepted for Australia in Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353, 376. The unreasonableness of the restraint lies in the fact that it is wider than necessary, covering all Arrive clients, many of whom did not have any connection with Ms Manning: G W Ploughman &amp; Son Ltd v Ash [1964] 1 WLR 568. If the restraint had been limited to, say, clients of the Melbourne office it may have been lawful: see eg IF Asia Pacific Pty Ltd Galbally [2003] VSC 192 ; Brilliant Lighting (Aust) Pty Ltd v Baillieu [2004] VSC 248.
Case: Industrial Equity Limited v Blackburn [1977] HCA 59 ; (1977) 137 CLR 567
Outcome: cited
I can also dispose of the statutory claims without much ado. The amended points of claim assert that the duties imposed by ss 182 and 183 are owed to AMP Services. This is correct. In Walker v Winborne [1976] HCA 7 ; (1976) 137 CLR 1, 6-7, Mason J (as he then was) pointed out that because each company in a group is a "separate and independent legal entity" the officer of a company owes his duties to that company alone. See also Industrial Equity Limited v Blackburn [1977] HCA 59 ; (1977) 137 CLR 567. Here it is said that Ms Manning made "(1) improper use of her position to (a) gain an advantage for herself or someone else; or (b) cause detriment to [AMP Services]; (2) improper use of confidential information [vis name, contact details or financial position of clients] obtained in the course of her employment to (a) gain an advantage for herself or someone else; or (b) cause detriment to [AMP Services]." There is no evidence to support the first allegation and, if it matters, none of the conduct about which complaint is made (even if proven) is conduct engaged in by Ms Manning in her "position" with AMP Services. As to the second allegation, the evidence shows that the information (whether confidential or not) was not the property of Arrive but AMP Services. Sections 182 and 183 do not provide a cause of action for the misuse of confidential information which belongs to a related company and causes damage to the related company.
Case: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298
Outcome: discussed
If it were possible, I would have called the clients myself in order to get to the truth of the matter. After all, the principal object of a court proceeding is to find the truth and arrive at the right result. Or at least that should be the object. Unfortunately, while the adversary system is touted as "the greatest legal engine ever invented for the discovery of truth" (5 Wigmore on Evidence (3 rd ed, 1940) SS1367) it often falls well short of the mark. The problem is that the system leaves it to the parties to shape the issues to be litigated and to call the evidence they feel will resolve those issues. And in a civil case it is not permissible for the judge to go behind the parties to call witnesses: Enoch and Zaretzkey, Bock &amp; Co's Arbitration [1910] 1 KB 327. Perhaps this will one day be reformed. But until that occurs all a judge is able to do when faced with a refusal by a party to call relevant evidence is, if appropriate, to apply the rule in Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298.
Case: Nocton v Lord Ashburton [1914] AC 932
Outcome: followed
Arrive is entitled to compensation for Ms Manning's breach of duty. In equity, the object of compensation is to restore the person who has suffered loss to the position in which they would have been if there had been no breach of the equitable obligation: Nocton v Lord Ashburton [1914] AC 932; O'Halloran v RT Thomas &amp; Family Pty Ltd (1998) 45 NSWLR 262; Southern Real Estate Pty Ltd v Dellow and Arnold (2003) 87 SASR 1. The critical question to determine is in what position would Arrive have been had Ms Manning not breached her equitable obligation -- that is to say, what actual loss was suffered by Arrive due to the breach?
Case: Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535
Outcome: applied
I can now deal with the claims. The claims in contract can be disposed of in short order. The plaintiffs contend that by engaging in certain conduct, especially the conversations with clients, Ms Manning acted in breach of the post-employment restraint. Even if I were to make the assumption, as is required by cl 11, that the purpose of each call was to entice away clients or disrupt their relationship with AMP Services, the claim is hopeless. I need do no more than briefly state my reasons. First, by its terms (which notwithstanding the trust remain unaltered) the restraint operates "after the cessation of [Ms Manning's] employment with AMP." I have already explained that her employment did not come to an end until 16 February. By then the damage had been done. Second, it is a condition of the operation of the clause that Ms Manning work for a competitor of "AMP". It is clear from the opening paragraph of the employment contract that "AMP" is a defined term: it is defined to mean "AMP Services Limited". So far as I know GSJBW is not a competitor of AMP Services. It is of course a competitor of Arrive, but that is a different company. Absent a rectification order it is not possible to read "Arrive" for "AMP". Third, the prohibition imposed by cl 11 is against an approach to any client "of AMP" for the purpose of enticing them away "from AMP". The clients that Ms Manning approached were clients of Arrive and not AMP Services. Finally, if it were possible to extend the restraint to Arrive it would be void for being in breach of the common law doctrine of restraint of trade, the modern formulation of which is stated by Lord McNaughton in Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535, 565 and accepted for Australia in Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353, 376. The unreasonableness of the restraint lies in the fact that it is wider than necessary, covering all Arrive clients, many of whom did not have any connection with Ms Manning: G W Ploughman &amp; Son Ltd v Ash [1964] 1 WLR 568. If the restraint had been limited to, say, clients of the Melbourne office it may have been lawful: see eg IF Asia Pacific Pty Ltd Galbally [2003] VSC 192 ; Brilliant Lighting (Aust) Pty Ltd v Baillieu [2004] VSC 248.