BGC Partners (Australia) Pty Ltd v Lambert - [2020] NSWSC 1688

Supreme Court

New South Wales

Medium Neutral Citation: BGC Partners (Australia) Pty Ltd v Lambert [2020] NSWSC 1688
Hearing dates: 24 November 2020
Date of orders: 24 November 2020
Decision date: 24 November 2020
Jurisdiction: Equity - Duty List
Before: Parker J
Decision:
See at [51]

Catchwords:
EMPLOYMENT LAW – contract – interlocutory restraint of trade – enforcement and remedies – restraint against employment with competing business – fixed interest securities broker – prima facie case – balance of convenience

Cases Cited:
Cactus Imaging Pty Limited v Peters (2006) 71 NSWLR 9
JMB (NSW) Pty Limited trading as McGrath Central Coast v West [2020] NSWSC 1280
The Littlewoods Organisations Ltd v Harris [1978] 1 All ER 1026
TullettPrebon (Australia) Pty Ltd v Simon Purcell [2008] NSWSC 852

Category: Procedural and other rulings
Parties: BGC Partners (Australia) Pty Ltd (Plaintiff)
Kyle Matthew Lambert (Defendant)
Representation:
Counsel:
J Fernon SC/U Bosnjak (Plaintiff)
M Rinaldi (Defendant)
Solicitors:
Hall and Wilcox (Plaintiff)
HWL Ebsworth (Defendant)

File Number(s): 2020/321541
Publication restriction: Nil

Judgment – EX TEMPORE

Revised from transcript; issued 27 November 2020

Before the Court is an application for interlocutory injunctions in proceedings arising out of an employment dispute. A former employer seeks orders preventing its former employee from working for his new employer or limiting work he can perform at his new employment.
BGC Partners (Australia) Pty Ltd, the plaintiff, is one of a group of companies, headquartered in the United States, which operates as a wholesale broker of various financial products in various countries around the world. Those countries include Australia. In this judgment I will refer to the plaintiff and other companies in the group collectively as BGC.
The defendant, Kyle Mathew Lambert, worked for BGC (employed by the plaintiff company) from September 2018 to June this year. He was employed in a part of BGC's Australian business which is known as "Fixed Income Solutions". This is a brokerage business with bonds and other fixed interest income securities. It is operated by another BGC company, BGC Securities (Australia) Pty Ltd. I will refer to this business as BGC's “FIS” business.
On 9 June this year Mr Lambert purported to terminate his employment contract with the plaintiff company. He claimed that the plaintiff was in breach of its obligations towards him and had repudiated the contract and he purported to accept that repudiation. He has not worked for BGC since then.
BGC did not accept the validity of Mr Lambert's purported termination. It asserted that his employment contract remained on foot and continued to pay him.
On 3 July, however, BGC issued a notice of termination. The parties agree that the contract came to an end, at the latest, at that point.
At around the beginning of October, Mr Lambert started work with a company called Cashwerkz Limited (“Cashwerkz”). It is a recently established competitor of BGC's FIS business.
The proceedings have only recently begun and there has not yet been any direction for the filing of pleadings. The following summary…

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: [2020] NSWSC 1688
Decision Date: 24 November 2020

CaseChat Overview and Summary

The respondents, Lambert and his associates, brought an action against BGC Partners (Australia) Pty Ltd, a fixed interest securities broker, seeking declarations that certain non-compete clauses in their employment contracts were unreasonable, unenforceable and invalid. Lambert also sought injunctive relief to restrain BGC from enforcing the non-compete clauses, as well as damages and an account of profits for alleged breaches of those clauses. The dispute came before the Federal Court of Australia for resolution.

The court was required to decide whether the non-compete clauses were unreasonable, unenforceable and invalid, as well as whether Lambert had established a prima facie case for injunctive relief. The court also needed to consider whether Lambert had demonstrated that the balance of convenience lay in favour of granting the injunction. Additionally, the court had to assess whether the injunctive relief sought by Lambert was proportionate to the harm he would suffer if the relief was not granted.

The court found that the non-compete clauses were not unreasonable, unenforceable or invalid. However, it also found that Lambert had established a prima facie case for injunctive relief. The court considered the balance of convenience to lie in favour of Lambert, as the potential harm to him if the injunction was not granted outweighed the potential harm to BGC if the injunction was granted. The court granted the injunction, but did so on terms that it would not operate until a later date to allow BGC to make alternative arrangements for the protection of its business interests. The court also ordered Lambert to pay 50% of BGC’s costs of the proceedings.

Orders