Baird v Crowe Horwath (Aust) Pty Ltd - [2016] FCCA 1379

FEDERAL CIRCUIT COURT OF AUSTRALIA

BAIRD v CROWE HORWATH (AUST) PTY LTD

[2016] FCCA 1379

Catchwords:
INDUSTRIAL LAW – Breach of contract by employee – employee in senior role with employer – employee actively enticing fellow employees to work with him in a business to operate in competition with employer.

EQUITY – Breach of fiduciary duties – employee’s misuse of confidential information – exploiting employer’s confidential information to acquire a personal benefit to the employee.

CONTRACT – Summary termination for egregious breaches of contract of employment and of fiduciary duties.

Legislation:

Corporations Act 2001 (Cth), s.182

Fair Work Act 2009, ss.44, 117, 123, 323

Cases cited:
AMP Services Ltd v Manning [2006] FCA 256
Blackmagic Design Pty Ltd v Overliese (2011) 191 FCR 1
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66
Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch. D. 399
Clouston & Co Ltd v Corry [1906] AC 122
Concut Pty Ltd v Worrell (2000) 103 IR 160
Deeson Heavy Haulage Pty Ltd v Cox (2009) 82 IPR 521
Digital Pulse Pty Ltd v Harris (2002) 166 FLR 421
Dinte v Hales [2009] QSC 63
English & Australian Copper Co Ltd v Johnson (1911) 13 CLR 490
Hansen v Mount Martha Community Learning Centre Inc [2015] FCA 1099
Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch. 169
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Keech v Sandford (1726) Cas. Temp. King 61
Labelmakers Group Pty Ltd v LL Force Pty Ltd [2012] FCA 512
Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20
Pearce v Foster (1886) 17 QBD 536
Rankin v Marine Power International Pty Ltd (2001) 107 IR 117
Sanders v Parry [1967] 2 All ER 803
Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488
Victoria University of Technology v Wilson (2004) 60 IPR 392
WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102
Warman International Ltd v Dwyer (1995) 182 CLR 544
Wessex Dairies Ltd v Smith [1935] 2 KB 80

P. D. Finn, Fiduciary Obligations (1977)

Applicant:

ANDREW BAIRD

Respondent:

CROWE HORWATH (AUST) PTY LTD ACN 006 466 351

File Number:

MLG 792 of 2014

Judgment of:

Judge Wilson

Hearing dates:

2 – 3 December 2015

Date of Last Submission:

3 December 2015

Delivered at:

Melbourne

Delivered on:

10 June 2016

REPRESENTATION

Counsel for the Applicant:

Mr D. Bongiorno

Solicitors for the Applicant:

Holding Redlich

Counsel for the Respondent:

Mr J. Tracey

Solicitors for the Respondent:

Minter Ellison

ORDERS

The Application – Fair Work Division filed by the applicant on

30 April 2014 is dismissed.
Within 14 days of the date of this order, each party file and serve written submissions with respect to costs.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 792 of 2014

ANDREW BAIRD

Applicant

And

CROWE HORWATH (AUST) PTY LTD

ACN 006 466 351

Respondent

REASONS FOR JUDGMENT

Introduction

By application filed 30 April 2014, Andrew Baird (“the applicant”) sought liquidated damages…

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.

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Details

Case: [2016] FCCA 1379
Decision Date: 10 June 2016

CaseChat Overview and Summary

Baird (the employee) appealed a decision of the Federal Circuit Court of Australia concerning alleged breaches of his employment contract and fiduciary duties owed to Crowe Horwath (Aust) Pty Ltd (the employer). The dispute arose from Baird's actions in allegedly enticing fellow employees to join him in a competing business and misusing confidential information belonging to his employer.

The primary legal issues before the court were whether Baird had breached his employment contract by engaging in conduct detrimental to his employer's interests and whether he had breached his fiduciary duties by misusing confidential information and soliciting clients and employees for a competing venture. The court was also required to consider whether these breaches justified the summary termination of Baird's employment.

Judge Wilson found that Baird had indeed breached his contractual obligations and fiduciary duties. The court reasoned that Baird's conduct in actively soliciting colleagues to join him in a competing business, while still employed, constituted a serious breach of trust and loyalty. Furthermore, the misuse of confidential information for personal gain was deemed a fundamental violation of his fiduciary responsibilities. These egregious breaches were held to justify the employer's decision to summarily terminate Baird's employment without notice.

Orders