Courtenay Polymers Pty Ltd v Deang

The matter of Courtenay Polymers Pty Ltd v Deang involved a dispute between a former employee, Courtenay Polymers, and three individuals who had been directors of the company, Deang and two others. The primary issues revolved around the enforceability of a restraint of trade clause in the employee's contract and the directors' fiduciary duties, including their involvement in the establishment of a competing business. The dispute was adjudicated in the Supreme Court of South Australia.

The court had to determine the validity of the restraint of trade clause in the employee's contract and whether it was excessive, thereby invalid. Additionally, the court examined the fiduciary duties of the directors both before and after their resignation and whether they breached these duties by using confidential information to establish a competing business. The court was also tasked with determining whether the third defendant had dishonestly assisted the first defendant in breaching their fiduciary duties.

The court found that the restraint of trade clause was overly broad and therefore invalid. The clause was not necessary to protect the legitimate interests of the employer, and thus it was unenforceable. Regarding the fiduciary duties, the court concluded that the directors breached their duties subsequent to their resignation by establishing a competing business and using confidential information to the detriment of the company. The court also held that the third defendant had dishonestly assisted in these breaches, making them liable under the second limb of Barnes v Addy. The court followed precedents from Southern Real Estate Pty Ltd v Dellow and IF Asia Pacific v Galbally in its reasoning and conclusions.

The court ordered the first defendant to compensate Courtenay Polymers for breach of the non-solicitation provision and misuse of confidential information. Additionally, the third defendant was held liable for their involvement in the breaches of fiduciary duties. The court provided detailed findings and relief based on the established breaches of contract and fiduciary duties.