Charltons CJC Pty Ltd v Fitzgerald (No 2) - [2013] NSWSC 958

Supreme Court

New South Wales

Medium Neutral Citation: Charltons CJC Pty Ltd v Fitzgerald (No 2) [2013] NSWSC 958
Decision date: 02 August 2013
Jurisdiction: Equity Division - Expedition List
Before: Pembroke J
Decision:
See paragraph [101]

Catchwords: EMPLOYMENT LAW - concurrent breach of contract and fiduciary duty based on the same conduct may give rise to different remedies - appropriate to grant declarations for both breach of contract and breach of fiduciary duty
DE MINIMUS - cultivation of clients may have long-term impact - present value of reasonably estimated future fees relevant not just the initial work done - inappropriate to apply the de minimus principle
Cases Cited: AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170
Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23
Pilmer v Duke Group Ltd (in liquidation) (2001) 207 CLR 165; [2001] HCA 31
Prest v Petrodel Resources Ltd [2013] UKSC 34
Youyang Pty Ltd v Minter Ellision (2003) 212 CLR 484; [2003] HCA 15
Category: Consequential orders
Parties: Charltons CJC Pty Ltd - plaintiff
Alden Gregory Fitzgerald - first defendant
Kamal Kishore - second defendant
Kirat Krishan Prasad - third defendant
Intuitive Accountants & Associates Pty Ltd - fourth defendant
Representation: Counsel:
Ian Neil SC with David Chin - for the plaintiff
Peter M Kite SC with Gerard Boyce - for the first, second, third and fourth defendants
Solicitors:
Whittens & McKeough - for the plaintiff
FCB Workplace Law - for the first, second, third and fourth defendants

File Number(s): 2012/00278861

Judgment

Introduction

This is a restraint of trade case. On 24 April 2013, I gave judgment in which I held that I was satisfied as to both of the following:

(a) that prior to their departure from the firm known as Charltons, the defendants Fitzgerald and Kishore provided accounting services to persons or entities who were not existing clients of the firm; that they did not bill those persons or entities on behalf of Charltons; and that they effectively diverted from Charltons the business opportunity that those clients represent; and

(b) that after their departure from the firm, the first three defendants (Fitzgerald, Kishore and Prasad) assisted each other, and assisted the fourth defendant company of which they were directors (Intuitive), to solicit and entice away from Charltons a significant number of existing clients of the firm.

The purpose of this hearing is to ascertain and identify the precise extent of the 'breaches' by the defendants. The hearing is directed to the identification of the individual breaches and will be followed in September by a further hearing before Rein J at which the plaintiff will seek to prove and recover its entitlement to loss and compensation attributable to each of the breaches so found.

The parties addressed me by reference to four substantial issues which, they agreed, constituted a convenient vehicle for the determination of this aspect of the proceedings. Those issues are as follows:

(a) whether the plaintiff is entitled to…

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.

Keep reading for free

Create a free CaseChat account to read Charltons CJC Pty Ltd v Fitzgerald (No 2) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2013] NSWSC 958
Decision Date: 02 August 2013

CaseChat Overview and Summary

Charltons CJC Pty Ltd, a legal firm, brought an action against its former employee, Fitzgerald, for breach of contract and fiduciary duty. The dispute arose from Fitzgerald's alleged misappropriation of clients and confidential information following his departure from the firm. The matter was heard in the Supreme Court of New South Wales. The legal issues before the court were whether Fitzgerald breached his contractual obligations and fiduciary duties and, if so, what remedies should be granted.

The court examined the nature of the breaches and their impact. It concluded that the concurrent breach of contract and fiduciary duty based on the same conduct could indeed give rise to different remedies. The court determined that it was appropriate to grant declarations for both breach of contract and breach of fiduciary duty. The court rejected the argument that the de minimus principle should apply, which would have minimised the significance of the breaches. The court found that the cultivation of clients could have a long-term impact, and the present value of reasonably estimated future fees was relevant, not just the initial work done. The court held that it was inappropriate to apply the de minimus principle to this case.

The court ordered Fitzgerald to pay damages to Charltons CJC Pty Ltd and make a full disclosure of the client information he had retained. It also granted declarations that Fitzgerald breached his contractual obligations and fiduciary duties.

Orders