Dreamstreet Lending Pty Ltd v Weiss (No 2)

The case of Dreamstreet Lending Pty Ltd v Weiss (No 2) involved a dispute between a mortgage broking business, Dreamstreet, and a consultant, Mr Weiss. Dreamstreet brought claims against Mr Weiss for breach of contract, inducement of breach of contract by third parties, copyright infringement, and an economic tort. Mr Weiss made a cross-claim for unpaid commissions and the repayment of improper deductions. The case was heard in the Federal Court of Australia.

The court was required to determine whether Mr Weiss breached the notice period clause, the exclusive service obligation, and the confidentiality obligations in his services agreement with Dreamstreet. The court also had to decide whether the restraint of trade clause in the agreement was reasonable and enforceable. Additionally, the court had to assess whether Financepath and another individual, who were alleged to have induced Mr Weiss to breach his contract with Dreamstreet, had the requisite knowledge and intention to do so. Furthermore, the court needed to establish whether copyright subsisted in the compilations of records in Dreamstreet's customer relationship management system and whether any infringement occurred.

The court found that Mr Weiss breached the notice period clause by not providing the required notice before leaving Dreamstreet. However, Dreamstreet waived compliance with the notice period as it was not ready and willing to perform its obligations under the contract. Mr Weiss also breached the exclusive service obligation by signing an employment contract with another mortgage broking business during the term of his services agreement with Dreamstreet. Furthermore, Mr Weiss breached confidentiality obligations by making and retaining various downloads of customer-related information from Dreamstreet's customer relationship management system. However, Dreamstreet did not suffer any loss or damage as a result of these breaches. The court found that the restraint of trade clause in the services agreement was unreasonable and unenforceable.

In relation to the claims against Financepath, the court determined that the respondents did not have the requisite knowledge and intention to procure a breach of contract by Mr Weiss. Therefore, the claim for inducement of breach of contract failed. The court also found no copyright subsisted in the compilations of records in Dreamstreet's customer relationship management system, and no infringement occurred. Regarding Mr Weiss's cross-claim, the court found that he was entitled to payment of some trail commissions and that Dreamstreet made improper deductions under the services agreement.

The court awarded nominal damages for the breaches of contract, ordered Mr Weiss to delete and make unavailable any copies of the downloads he made, and restrained him from using the information contained in the downloads for certain purposes. The court also granted Mr Weiss's entitlement to unpaid commissions and ordered Dreamstreet to repay the improperly deducted amounts. The court dismissed the remaining claims and ordered the parties to confer and reach an agreement on the form of orders, including the costs.

The final orders included a requirement for the parties to submit a form of order that provides for declaratory relief and nominal damages, clawback in relation to certain commissions, payment of unpaid commissions, repayment of improperly deducted amounts, and specific obligations for Mr Weiss regarding the downloads he made. The court also addressed costs, inviting the parties to reach a negotiated position and to make written submissions on the matter. If the parties could not agree on the orders, the court scheduled a case management hearing to resolve the orders.