Charltons CJC Pty Ltd v Fitzgerald (No 3)

The case of Charltons CJC Pty Ltd v Fitzgerald (No 3) involved Charltons CJC Pty Ltd, a company engaged in the business of cleaning and maintenance services, and Fitzgerald, a former employee who subsequently engaged in similar activities for both former clients of Charltons and other entities, in breach of his post-employment restrictive covenants. The dispute centred on the damages Charltons was entitled to claim from Fitzgerald for the breaches during a restraint period, as well as for his work for "shadow clients" while he was still employed by Charltons. The matter was heard by the Supreme Court of New South Wales.

The primary legal issue before the court was the quantification of the damages Charltons was entitled to recover from Fitzgerald. This included establishing what loss, if any, Charltons had suffered due to Fitzgerald's breaches of his restrictive covenants by working for former clients during the restraint period, as well as during his employment with Charltons for "shadow clients." The court had to determine whether the losses claimed by Charltons were directly attributable to Fitzgerald's breaches and if so, what the appropriate measure of damages should be.

The court undertook a detailed analysis of the evidence presented by Charltons, considering factors such as lost profits, the value of the work performed by Fitzgerald for his former and shadow clients, and whether Charltons could have mitigated its losses. It was established that the losses claimed by Charltons were indeed a direct result of Fitzgerald's breaches. The court found that Charltons was entitled to recover the profit margins it would have earned on the work performed by Fitzgerald for both his former and shadow clients during the relevant periods. The court also considered the need for mitigation of loss and made appropriate deductions.

The court ordered Fitzgerald to pay Charltons damages in the sum of $1,285,756. This amount reflected the profit margins Charltons would have earned on the work performed by Fitzgerald for both his former and shadow clients, subject to the deductions for mitigation. The court also ordered Fitzgerald to pay interest on the damages from the date of the breaches until the date of judgment.