CFC Consolidated Pty Ltd v Cooper - [2015] WASC 185

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CFC CONSOLIDATED PTY LTD -v- COOPER [2015] WASC 185

CORAM: MITCHELL J

HEARD: 19 MAY 2015

DELIVERED : 19 MAY 2015

PUBLISHED : 25 MAY 2015

FILE NO/S: CIV 1725 of 2015

BETWEEN: CFC CONSOLIDATED PTY LTD
Plaintiff
AND
JOHN GRAHAM COOPER
Defendant

Catchwords:

Contract - Restraint of trade

Procedure - Ex parte application for search orders - Whether criteria satisfied

Legislation:

Rules of the Supreme Court 1971 (WA), O 52B

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr E W L Greaves
Defendant: No appearance

Solicitors:

Plaintiff: Greenmonts Legal Pty Ltd
Defendant: No appearance

Case(s) referred to in judgment(s):

Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55; [1976] 2 WLR 162; [1976] 1 All ER 779
Booker McConnell Plc v Plascow [1985] RPC 425
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Hartleys Ltd v Martin [2002] VSC 301
Long v Specifier Publications Pty Ltd (1998) 44 NSWLR 545
MITCHELL J:

Background

This is the plaintiff's ex parte application for search orders under O 52B of the Rules of the Supreme Court 1971 (WA) (Rules). The principal proceedings were commenced in this court on 15 May 2015.
The plaintiff's claim arises out of the termination of an employment contract between the plaintiff and the defendant, which was entered into on 30 June 2014 (employment contract). The plaintiff provides labour hire services to Centurion Transport Company Pty Ltd (Centurion), which is said to be a 'related company' of the plaintiff on the basis that the plaintiff and Centurion share a common director. The plaintiff claims that, until 21 April 2015, it employed the defendant as the 'Major Account Manager - Rio Tinto Pilbara' for Centurion. Centurion's business includes providing road transport services to clients including 'Rio Tinto' and 'Chevron'. The clients to which services are provided are not more particularly identified in either the statement of claim or the affidavits filed in the proceedings.
Affidavits filed by the plaintiff indicate that, in late 2014, 'Chevron' called for tenders to move freight between locations in Perth and the Karratha region. Centurion placed its tender in January or February 2015. There is evidence that the defendant had access to material relating to this bid, although he was not primarily involved in the bid because his primary responsibility was with 'Rio Tinto'.
There is also evidence that the defendant had access to material on Centurion's 'tender drive', which contains confidential information for each of Centurion's tenders. There is no evidence as to the extent to which the defendant exercised his capacity to access the 'tender drive'. The plaintiff's counsel expressly disclaimed any claim for breach of confidence.
On 7 April 2015 the defendant tendered his resignation to Centurion's General Manager of Business Development and Strategy (Mr Ford), who is also an employee of the plaintiff. By agreement between the plaintiff and defendant, the contract of employment came to an end on…

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 CFC Consolidated Pty Ltd v Cooper

Details

AGLC: CFC Consolidated Pty Ltd v Cooper [2015] WASC 185
Case: [2015] WASC 185
Decision Date: 25 MAY 2015

CaseChat Overview and Summary

CFC Consolidated Pty Ltd, trading as Centurion, brought an application in the Federal Court against its former employee, Mr Cooper, for search orders in relation to alleged breaches of the restraint of trade provisions in his employment contract. Mr Cooper had been employed as Operations Manager for the plaintiff and had left the business to commence employment with the defendant, Sadleirs Nexus Pty Ltd. The plaintiff alleged that Mr Cooper had breached the restraint of trade provisions by being involved in a recruitment process for Sadleirs Nexus and by being involved in a process to obtain new business from Chevron, a client of the plaintiff.

The court was required to determine whether the plaintiff had demonstrated a sufficient likelihood of a breach of the restraint of trade clause in Mr Cooper’s employment contract. The plaintiff argued that Mr Cooper was involved in recruiting employees for Sadleirs Nexus and in procuring new business from Chevron. The court considered whether the evidence showed that Mr Cooper had breached the restraint of trade provisions in his employment contract, which were designed to protect the plaintiff’s business interests.

In determining whether the plaintiff had satisfied the threshold for granting search orders, the court examined the evidence provided. The court concluded that the evidence did not demonstrate a likelihood that Mr Cooper had breached the restraint of trade provisions in his employment contract. The court found that the email that Mr Cooper had been copied in was not evidence of soliciting or enticing new business from Chevron. Additionally, the meeting invitation that Mr Cooper had received was for recruitment purposes and did not suggest that he was soliciting or enticing Chevron as a client for Sadleirs Nexus. The court determined that the plaintiff had not demonstrated a sufficient likelihood of a breach of the restraint of trade provisions.

The court dismissed the plaintiff's application for search orders.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Assuming that those inferences can be drawn, in my view they do not of themselves support the conclusion that the defendant has acted in breach of the restraint of trade provision of his employment contract. The email was merely copied to the defendant. Further, the subject of the email is the 'TransLogix maintenance system'. Even if the defendant was involved in the procurement or installation of that system, either directly or (as would be more likely for an operations manager) overseeing the process, this would not amount to 'soliciting' or 'enticing' from the plaintiff or Centurion 'the custom' of Chevron, on any reasonable construction of that term. Of course, as with all commercial contracts, the restraint of trade clause must be construed by reference to what a reasonable businessperson would have understood its terms to mean.[7] I do not consider that a reasonable businessperson would understand an employee of a company, working on systems which might be promoted by his employer to obtain new business, to be soliciting or enticing custom. If the restraint of trade provision were construed so as to prohibit such conduct, the enforceability of the restraint of trade provision would be highly suspect, and counsel for the plaintiff accepted that the restraint of trade provision should not be so construed.[7] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35]. I do not draw from this email the inference that the defendant was participating in providing to Chevron responses to requests for information arising out of the tender process. The fourth piece of evidence relied on by the plaintiff is a calendar invitation sent by a Phil Scott to Matthew Brown (a 'Sadleirs' employee), the defendant and a Stuart Donnelly with a 'chevron.com' email account on 23 April 2015. This invitation was sent two days after the termination of the defendant's employment with the plaintiff. The meeting proposed was for 27 April 2015 in the 'Samson Boardroom - Kewdale'. I am told by counsel for the plaintiff that 'Samson' is the ultimate holding company of Sadleirs Nexus. There is no evidence that the defendant accepted or attended this meeting. But even if he did accept and attend, the subject of the meeting was 'recruitment screening … To review potential candidates'. That meeting invitation, read as a whole, hardly suggests that the meeting was for the defendant to solicit or entice Chevron as a client for Sadleirs Nexus. It may be noted that Centurion had not interviewed potential candidates with Chevron, suggesting that this was not part of the tender process. Counsel for the plaintiff submits I should draw the inference that the meeting related to recruitment of key personnel by Sadleirs Nexus if it were successful in the tender. In my view, the fact that the defendant has had contact with a Chevron employee while performing a recruiting function does not mean that he was necessarily soliciting or enticing Chevron's custom. One might speculate that soliciting might have occurred at the meeting, if the meeting had taken place and if Mr Donnelly had attended, but there is no evidence from which I would be prepared to draw an inference that this in fact occurred.