Bromhead & Ors v Graham

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.