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AMP Services Ltd v Manning

AMP Services Ltd v Manning

Case [2006] FCA 256 24 March 2006

Breach of Contract

Breach of Fiduciary Duty

Unconscionable Conduct

Specific Performance

Res Judicata

Compensatory Damages

Employment & Labour Law

Commercial Law

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FEDERAL COURT OF AUSTRALIA
AMP Services Ltd v Manning [2006] FCA 256
EMPLOYMENT – contract of employment – post-employment restraint – invalid restraint of trade – solicitation of clients – breach of employee’s duty of good faith – compensation – principles
EVIDENCE – rule in Jones v Dunkel – whether applicable if witness available to both parties
Corporations Act 2001 (Cth) ss 182, 183
Aberdeen Railway Co v Blaikie Bros (1854) Macq 461 cited
American Financial Corporation v Computer Sciences Corporation, 558 FSupp 1182 (D.Del, 1983) cited
Brilliant Lighting (Aust) Pty Ltd v Baillieu [2004] VSC 248 cited
Buckley v Tutty (1971) 125 CLR 353 cited
Canadian Aero Service Ltd v O’Malley (1973) 40 DLR (3d) 371 followed
Canson Enterprises Ltd v Boughton & Co. (1991) 85 DLR (4th) 129 followed
Charles Lo Presti Pty Ltd v Karabalios [2000] NSWSC 395 cited
Claremont Petroleum NL v Cummings (1992) 110 ALR 239 cited
Dawson, Re [1966] 2 NSWR 211 followed
Earle v Castlemaine District Community Hospital [1974] VR 722 followed
Enoch and Zaretzkey, Bock & Co’s Arbitration [1910] 1 KB 327 cited
Foran v Wight (1989) 168 CLR 385 followed
G W Ploughman & Son Ltd v Ash [1964] 1 WLR 568 applied
IF Asia Pacific Pty Ltd Galbally [2003] VSC 192 cited
Industrial Equity Limited v Blackburn (1977) 137 CLR 567 cited
Jones v Dunkel (1959) 101 CLR 298 discussed
Nocton v Lord Ashburton [1914] AC 932 followed
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 applied
O’Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 followed
Payne v Parker [1976] 1 NSWLR 191 cited
Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 followed
Southern Real Estate Pty Ltd v Dellow and Arnold (2003) 87 SASR 1 followed
Target Holdings Ltd v Redferns (a firm) [1996] 1 AC 421 followed
Walker v Winborne (1976) 137 CLR 1 followed
William Hill Organisation Ltd v Tucker [1999] ICR 291 cited
Wigmore on Evidence (3^rd ed, 1940)
Restatement (Second) of Contracts
In the matter of AMP Services Ltd and Arrive Wealth Management Ltd
AMP SERVICES LTD and ARRIVE WEALTH MANAGEMENT LTD v ANGELA MANNING and POLLIANNA HARKNESS
NSD 983 of 2004
FINKELSTEIN J
24 MARCH 2006
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 983 of 2004

In the matter of AMP Services Ltd and Arrive Wealth Management Ltd

BETWEEN:

AMP SERVICES LTD and
ARRIVE WEALTH MANAGEMENT LTD
Plaintiffs

AND:

ANGELA MANNING and
POLLIANNA HARKNESS
Defendants

JUDGE:

FINKELSTEIN J

DATE:

24 MARCH 2006

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The plaintiffs, AMP Services Ltd (AMP Services) and Arrive Wealth Management Ltd (Arrive), are members of the AMP group. Arrive operates a financial planning business which it purchased from PricewaterhouseCoopers (PwC) on 28 June 2002 for around $9 million. AMP Services employs the financial advisers who work in the business. The defendants were two of those advisers. In January 2004 the first defendant went to work for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading AMP Services Ltd v Manning

Details

AGLC: AMP Services Ltd v Manning [2006] FCA 256
Case: [2006] FCA 256
Decision Date: 24 MARCH 2006

CaseChat Overview and Summary

The plaintiffs, AMP Services Ltd and Arrive Wealth Management Ltd, brought a case against the defendants, Angela Manning and Pollianna Harkness, seeking compensation for breach of contract and fiduciary duties, and misuse of confidential information. The plaintiffs claimed that Manning and Harkness had breached their post-employment restraint and confidentiality clauses by leaving Arrive to work for a competitor, Goldman Sachs JBWere Services Pty Ltd (GSJBW). The plaintiffs also alleged that Manning and Harkness had breached their statutory and fiduciary duties by soliciting clients and employees of Arrive to join GSJBW. The defendants denied the allegations. The court found that Manning and Harkness had breached their post-employment restraint and confidentiality clauses, but the clauses were either invalid or inapplicable to the defendants' conduct. The court also found that Manning and Harkness had breached their fiduciary duties by soliciting clients to follow them to GSJBW, but the plaintiffs were not entitled to full compensation for the loss of clients as the clients had made independent decisions to follow Manning. The court ordered further hearings to determine the appropriate compensation for the plaintiffs.

The legal issues in this case were whether the defendants had breached their post-employment restraint and confidentiality clauses, their statutory duties under the Corporations Act 2001 (Cth), and their fiduciary duties of good faith and loyalty to the plaintiffs. The court held that the defendants had breached their post-employment restraint and confidentiality clauses, but the clauses were either invalid or inapplicable to their conduct. The court also held that the defendants had breached their fiduciary duties by soliciting clients to follow them to GSJBW, but the plaintiffs were not entitled to full compensation for the loss of clients as the clients had made independent decisions to follow Manning. The court held that the appropriate compensation for the plaintiffs would be the value of keeping the lost clients between the date of Manning's resignation and the date of her termination, together with the loss of the opportunity to take steps to retain the lost clients during that period.

The outcome of the case was that the defendants were liable for breach of fiduciary duty, but the plaintiffs were not entitled to full compensation for the loss of clients. The court ordered further hearings to determine the appropriate compensation for the plaintiffs. The court also dismissed the claims for breach of contract, statutory duties, and conspiracy. The court did not award costs to the defendants.

Orders