Bromhead & Ors v Graham - [2007] NSWCA 257

New South Wales

Court of Appeal

CITATION: Bromhead & Ors v Graham [2007] NSWCA 257

HEARING DATE(S): 21 August 2007

JUDGMENT DATE:
21 September 2007

JUDGMENT OF: Beazley JA at 1; Giles JA at 2; Santow JA at 6

DECISION: (1) Respondent's cross-appeal dismissed; (2) Noting the orders made by consent on 21 August 2007, thus obviating the orders sought under para 3 of the Amended Notice of Appeal, appeal allowed to the extent only that the proceedings be remitted to an Associate Justice for assessment of the damages in accordance with the reasons of this Court; (3) The respondent to pay 95 per cent of the costs of the appeal and cross-appeal.

CATCHWORDS: PARTNERSHIP - dissolution of partnership - whether notice of intention to dissolve was given - whether dissolution terminated employee's employment - employee's covenant not to canvass clients - did so - whether injunction to restrain further breach of covenant - dissolution of partnership does not necessarily terminate employment - did not do so on facts of this case - injunction agreed without admissions - inquiry into damages to be held.

LEGISLATION CITED: Partnership Act 1892 (NSW)
Restraints of Trade Act 1976 (NSW)

CASES CITED: Brace v Calder [1895] 2 QB 253;
Briggs v Oates [1991] 1 All ER 407;
Rose v Dodd [2005] ICR 1776.

PARTIES: Stephen Bruce Bromhead - First Appellant/Cross-Respondent
John William Walker - Second Appellant/Cross-Respondent
Michael Noel Crozier - Third Appellant/Cross-Respondent
Ian James Graham - Respondent/Cross-Appellant

FILE NUMBER(S): CA 40435/07

COUNSEL: R F Margo SC & T Leibman - Appellants/Cross-Respondents
G Lindsay SC & J T Johnson - Respondent/Cross-Appellant

SOLICITORS: Walker Smith Solicitors - Appellants/Cross-Respondents
Stacks Forster Pty Ltd - Respondent/Cross-Appellant

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): SC 2352/07

LOWER COURT JUDICIAL OFFICER: Gzell J

LOWER COURT DATE OF DECISION: 14 June 2007

LOWER COURT MEDIUM NEUTRAL CITATION: Bromhead v Graham [2007[ NSWSC 609

CA 40435/07
SC 2352/07

BEAZLEY JA
GILES JA
SANTOW JA
FRIDAY 21 SEPTEMBER 2007

Stephen Bruce BROMHEAD and Others v Ian James GRAHAM

Judgment

1 BEAZLEY JA: I have had the benefit of reading in draft the judgment of Giles JA and of Santow JA. I agree substantially with the reasons of Santow JA and with the orders he proposes. However, I consider that it is not appropriate to determine the question whether there has been a dissolution of the partnership. In this regard, I agree with Giles JA.

2 GILES JA: The issues in the appeal and cross-appeal are described in the reasons of Santow JA, which I have had the advantage of reading in draft. It is unfortunate that, being better placed than most to appreciate the evils of litigation, the parties have found it necessary to engage in these proceedings.

3 The parties argued the central issue as one of repudiation of the employment contract by reason of the dissolution of the partnership. I question whether repudiation is the correct conceptual basis for termination of the contract of employment, but…

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: [2007] NSWCA 257
Decision Date: 21 September 2007

CaseChat Overview and Summary

The parties to this appeal were Bromhead & Ors (the appellants) and Graham (the respondent). The dispute concerned the termination of the respondent's employment and his subsequent alleged breach of a covenant not to canvass clients. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the court were whether the respondent's employment had been terminated by the dissolution of the partnership, and if not, whether his actions constituted a breach of his restrictive covenant. The court was also required to consider the appropriate remedy for any proven breach.

Santow JA, with whom Beazley and Giles JJA agreed, reasoned that the dissolution of a partnership does not automatically terminate the employment of its employees. On the facts of this case, the court found that the respondent's employment had not been terminated by the partnership's dissolution. Consequently, the respondent's subsequent canvassing of clients was considered a breach of his restrictive covenant. While Beazley JA agreed substantially with Santow JA's reasons, he also concurred with Giles JA that it was not appropriate to definitively determine whether a dissolution of the partnership had occurred.

The court allowed the appeal in part, remitting the proceedings to an Associate Justice for an assessment of damages, noting that an injunction had been agreed to by consent without admissions. The respondent was ordered to pay 95 per cent of the costs of the appeal and cross-appeal.

Orders

Orders of the court

(1) Respondent's cross-appeal dismissed; (2) Noting the orders made by consent on 21 August 2007, thus obviating the orders sought under para 3 of the Amended Notice of Appeal, appeal allowed to the extent only that the proceedings be remitted to an Associate Justice for assessment of the damages in accordance with the reasons of this Court; (3) The respondent to pay 95 per cent of the costs of the appeal and cross-appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Bromhead & Ors v Graham [2007] NSWCA 257
HEARING DATE(S):	21 August 2007
JUDGMENT DATE:	21 September 2007
JUDGMENT OF:	Beazley JA at 1; Giles JA at 2; Santow JA at 6
DECISION:	(1) Respondent's cross-appeal dismissed; (2) Noting the orders made by consent on 21 August 2007, thus obviating the orders sought under para 3 of the Amended Notice of Appeal, appeal allowed to the extent only that the proceedings be remitted to an Associate Justice for assessment of the damages in accordance with the reasons of this Court; (3) The respondent to pay 95 per cent of the costs of the appeal and cross-appeal.
CATCHWORDS:	PARTNERSHIP - dissolution of partnership - whether notice of intention to dissolve was given - whether dissolution terminated employee's employment - employee's covenant not to canvass clients - did so - whether injunction to restrain further breach of covenant - dissolution of partnership does not necessarily terminate employment - did not do so on facts of this case - injunction agreed without admissions - inquiry into damages to be held.
LEGISLATION CITED:	Partnership Act 1892 (NSW) Restraints of Trade Act 1976 (NSW)
CASES CITED:	Brace v Calder [1895] 2 QB 253; Briggs v Oates [1991] 1 All ER 407; Rose v Dodd [2005] ICR 1776.
PARTIES:	Stephen Bruce Bromhead - First Appellant/Cross-Respondent John William Walker - Second Appellant/Cross-Respondent Michael Noel Crozier - Third Appellant/Cross-Respondent Ian James Graham - Respondent/Cross-Appellant
FILE NUMBER(S):	CA 40435/07
COUNSEL:	R F Margo SC & T Leibman - Appellants/Cross-Respondents G Lindsay SC & J T Johnson - Respondent/Cross-Appellant
SOLICITORS:	Walker Smith Solicitors - Appellants/Cross-Respondents Stacks Forster Pty Ltd - Respondent/Cross-Appellant
LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 2352/07
LOWER COURT JUDICIAL OFFICER:	Gzell J
LOWER COURT DATE OF DECISION:	14 June 2007
LOWER COURT MEDIUM NEUTRAL CITATION:	Bromhead v Graham [2007[ NSWSC 609