Employsure Ltd v McMurchy - [2021] NSWSC 1179

Supreme Court

New South Wales

Medium Neutral Citation: Employsure Ltd v McMurchy; Employsure Ltd v Kumaran [2021] NSWSC 1179
Hearing dates: 12, 13, 14 & 19 April, 9 & 10 June 2021
Submissions of the Plaintiff dated 9 April & 3 June 2021
Confidential submissions of the Plaintiff dated 3 June 2021
Submissions of the Defendants dated 12 April, 3 & 9 June 2021
Confidential submissions of the Defendants dated 9 June 2021
Decision date: 17 September 2021
Jurisdiction: Equity - Expedition List
Before: Sackar J
Decision:
See [424]-[435]

Catchwords:
CONTRACTS — Construction — Whether letters of variation had the effect of reinstating a previous version of an employment contract
CONTRACTS — Rectification — Intention — Discerning the parties’ intention to correct an absurdity in an employment contract — Where reference in letter of variation to a previous version of an employment contract was an obvious error
CONTRACTS — Construction — Whether the employee’s contract of employment was terminated after he had given notice less than was contractually required or after his employer had given notice
CONTRACTS — Breach of contract — Whether former employee breached non-solicitation clause by aiding recruitment of another employee with competitor
EMPLOYMENT AND INDUSTRIAL LAW — Contract — Restraint of Trade — Whether restraint operates because parties are “in competition”
EMPLOYMENT AND INDUSTRIAL LAW — Contract — Restraint of Trade — Validity and reasonableness — Restraints of Trade Act 1976 (NSW) — Legitimate interests — Confidential Information — Length and scope of restraint
EQUITY — Fiduciary duties — Fiduciary relationships — Employee and employer — Whether former employee breached fiduciary duties by taking up employment with a competitor while still employed by original employer
TORTS — Economic torts — Inducing breach of contract

Legislation Cited:
Restraints of Trade Act 1976 (NSW)

Cases Cited:
Adamson v New South Wales Rugby League Limited (1981) 27 FCR 535; [1991] FCA 8
Agha v Devine Real Estate Concord Pty Ltd [2021] NSWCA 29
Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26; [1995] FCA 481
Automatic Fire Sprinklers v Watson (1946) 72 CLR 435
BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115
Belflora Pty Ltd v Vinflora Pty Ltd [2021] NSWCA 178
BGC Partners (Australia) Pty Limited v Hickey (2016) 259 IR 318; [2016] NSWSC 90
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66; [1933] HCA 8
Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717
Concut Pty Ltd v Worrell (2000) 75 ALJR 312; [2000] HCA 64
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184
De L’Isle v Knight [2021] NSWSC 809
DP World Sydney Ltd v Guy (2016) 262 IR 156; [2016] NSWSC 1072
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640; [2014] HCA 7
Emeco International Pty Ltd v O’Shea (No 2) (2012) 225 IR 423; [2012] WASC 348
Employsure Pty Ltd v McMurchy [2021] NSWSC 139
Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53
Flightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323
FSS Travel and Leisure Systems Ltd v Johnson [1998] IRLR 382
Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6
Gunasegaram v Blue Visions Management Pty Ltd [2018] NSWCA 179
Harcus Sinclair LLP and another v Your Lawyers Ltd [2021] UKSC 32 at [47]-[49]; [2021] 3 WLR 598
Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609
Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 at 178; [1946] 1 All ER 350
Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1
Hoh & Ors v Frosthollow Pty Ltd & Ors [2014] VSC 77
Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64
IceTV v Ross [2007] NSWSC 635
Izaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163
James Adam Pty Ltd v Fobeza Pty Ltd [2020] NSWCA 311
JMB (NSW) Pty Ltd v West [2020] NSWSC 1380
John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995
Just Group Pty Ltd v Peck (2016) 264 IR 425; [2016] VSCA 334
Kone Elevators Pty Ltd v McNay (1997) ATPR 41-564
Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449
Lablemakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512
Lansing Linde Ltd v Kerr [1991] 1 WLR 251
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181
Manildra Laboratories v Campbell [2009] NSWSC 987
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749
McHugh v Australian Jockey Club Ltd (2014) 314 ALR 20
Medsara Pty Ltd v Sande [2005] NSWCA 40
Metcash Ltd v Jardim (No 3) (2010) 273 ALR 407; [2010] NSWSC 1096
Miles v Genesys Wealth Advisors Ltd (2009) 201 IR 1; [2009] NSWCA 25
News Life Media Pty Ltd v Janeke [2016] NSWSC 1835
Nordenfelt v Maxim Nordenfelt Guns & Ammunition [1894] AC 535
Pearson v HRX Holdings Pty Ltd (2012) 205 FCR 187; [2012] FCAFC 111
Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45
Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; [2001] HCA 31
Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344
R v Byrnes (1995) 183 CLR 501; [1995] HCA 1
Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212
Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275
Scully (UK) Ltd v Lee [1998] IRLR 259
Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In liquidation) (2019) 99 NSWLR 317; [2019] NSWCA 11
Sidameno (No 456) Pty Ltd v Alexander [2011] NSWCA 418
Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47
Snowden v Australian Mortgage Assist Pty Ltd [2019] NSWSC 1799
Stacks Taree v Marshall [No.2] [2010] NSWSC 77
Steadfast IRS Pty Ltd v Latchmi Mesuria [2020] NSWSC 947
The Littlewoods Organisations Ltd v Harris [1978] 1 All ER 1026
Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; [2008] NSWSC 852
Two Lands Services Pty Ltd v Cave [2000] NSWSC 14
United Australia Ltd v Barclays Bank Limited [1941] AC 1
Veda Advantage (Australia) Pty Ltd v de Beer [2016] NSWSC 37
Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33
WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102
Weldon & Co v Harbinson [2000] NSWSC 272
Woolworths v Olson [2004] NSWCA 372
Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317

Category: Principal judgment
Parties:
2021/16210:
Employsure Pty Ltd (plaintiff)
David McMurchy (first defendant)
Elmo Software Ltd (second defendant)
2021/53385:
Employsure Pty Ltd (plaintiff)
Arumugam Kumaran (first defendant)
Elmo Software Ltd (second defendant)
Representation:
Counsel:
P J Brereton SC, P Moorhouse, J Simpkins (for the plaintiff)
I M Neil SC, Ms P Lowton (for the defendants)
Solicitors:
Kardos Scanlan (plaintiff)
HWL Ebsworths (defendants)

File Number(s): 2021/16210
2021/53385
Publication restriction: n/a

Judgment

These proceedings involve alleged breaches by two former employees (Mr McMurchy and Mr Kumaran) of the Plaintiff, Employsure Pty Ltd, for actual and threatened breaches of contract.
They are the First Defendant in each proceeding. They both left the Plaintiff to take up employment with the Second Defendant, ELMO Software Ltd, which it is asserted is a competitor of the Plaintiff.
As against Mr McMurchy it is alleged that he also breached his contract and his fiduciary duty to the Plaintiff while still employed by commencing employment with the Second Defendant and taking steps to recruit Mr Kumaran.
It is asserted that the Second Defendant is liable as having induced Mr McMurchy to breach his contract with the Plaintiff and for knowingly assisting Mr McMurchy’s breach of fiduciary duty.
The proceedings also involved claims to enforce post-employment restraints and for injunctive relief.

The Relevant Businesses

The Plaintiff is primarily a human resources and workplace health and safety service business operating throughout Australia and New Zealand.
It offers a product which involves the sale and support of a software product called ‘BrightHR’ and ‘BrightSafe’.
The software was initially developed in the United Kingdom, and is licenced exclusively to the Plaintiff for sales in Australia and New Zealand by BrightHR Limited, a UK company that is also owned by Employsure’s parent company (CB1/55 at [16], CB1/57 at [23]).
This software supports human resources and workplace health and safety and has been sold since October 2019. The particular software was developed to allow small to medium size enterprises with up to 50 employees to manage and automate their human resources function (CB 1/56 at [19]).
The Plaintiff seeks to sell Bright to all new customers who sign up for its product offerings, although subscribers may request not to include the Bright software (CB 1/58-59 at [28]). Those who request to remove it pay a reduced price (Confidential Transcript of Day Two at T.40/20).
As at the end of February 2021, the Plaintiff had 27,316 subscribers, with 10,311 of those having access to the Bright software as part of their subscription (CB 1/58 at [26]; CB 5/1568).
In addition to seeking to sell the Bright software products to all new customers that sign up to the Plaintiff’s business, it also sells the Bright software to its pre-existing (pre-October 2019) customers (CB 1/194 at [7]-[8]).
On the other hand, the Second Defendant is a software provider. It describes itself as a “leading provider of cloud human resources, payroll and rostering time software in Australia and New Zealand” (CB 3/813).
In a media release in October 2020 the Second Defendant announced that it had acquired the “UK HR platform Breathe”. It was described in the media release as a self-service HR platform which would provide the Second Defendant with entry into the small business market for organisations with less than 50 employees (CBB 3/741).
The Second Defendant launched the Breathe software in Australia during February 2021 (CB 1/155 at [38]; T.88/5-13). This process involved a “soft launch” date of 4 February (CB 1/155 at [38]), the launching of a new website on or around 11 February (CB 1/77 at [122]) and the active selling of Breathe since 21 February (T.68/35).
Breathe Software Pty Ltd was registered on 1 September 2020, and is wholly owned by the Second Defendant (CB 3/732-733). The Second Defendant established that wholly owned subsidiary to sell Breathe in Australia and New Zealand (CB 1/153 at [24]).
Breathe is targeted at businesses with up to 50 employees, although can be used by businesses with up to 200 employees (CB 1/153 at [25]).

The History of the Proceedings

The McMurchy Proceedings

The McMurchy proceedings commenced on 19 January 2021.
On 21 January 2021, Mr McMurchy gave certain undertakings, including that until further order or until after 5 February 2021 (later extended to 8 February 2021) he would not perform any work or duties for the Second Defendant (CB 5/1621).
On 8 February 2021, Parker J granted interlocutory relief, making orders (CB 5/1623) the reasons for which are set out in Employsure Pty Ltd v McMurchy [2021] NSWSC 139. The orders included:

that until 14 March 2021 or further order Mr McMurchy be restrained from performing any work or duties for, or at the direction of the Second Defendant; and

adjourning the balance of Employsure’s application for interlocutory relief to 4 March 2021.

These orders also record an undertaking given by Mr McMurchy not to use or disclose or allow to be used or disclosed Employsure’s confidential information. Therefore, the Plaintiff does not seek any further relief against Mr McMurchy in relation to his duties of confidence.
The matter was listed on 15 March 2021 (with the Kumaran proceedings) for hearing the balance of the Plaintiff’s application for interlocutory relief. On that date, after a further interlocutory hearing, Parker J made the following orders (CB 5/1630):

2 ORDERS that until 5pm on the final day of the trial or until further Order, the first defendant be restrained from performing any work or duties for, or at the direction of, the second defendant or Breathe Software Pty Ltd and from attending any work place under the control of the second defendant or Breathe Software Pty Ltd.
3 ORDERS that until 5pm on the final day of the trial or until further Order, the first defendant be restrained from attempting to entice away or solicit any employee of Employsure or any Related Body Corporate.

These orders remain in place. The Plaintiff has indicated that if the Court were to reserve judgment in this matter, it would seek an order extending the injunction until judgment is given. On 10 June 2021, I made those orders.
The Plaintiff also seeks final orders, as outlined in its draft of 9 June 2021, restraining Mr McMurchy up to and including 11 January 2022 from working for a business or prospective business in competition with the Plaintiff, including the Second Defendant (Order 6). It also seeks an order that up to and including 11 January 2022, Mr McMurchy be restrained from attempting to entice away or solicit any employee of the Plaintiff or any related body corporate (Order 7).

The Kumaran Proceedings

The Kumaran proceedings were commenced on 24 February 2021.
The matter was listed on 4 March 2021 for hearing of the Plaintiff’s application for interlocutory relief but did not proceed on that day. Ultimately, the matter was listed on 15 March 2021, with the McMurchy proceedings, for hearing of the Plaintiff’s application for interlocutory relief.
On 4 March 2021, Mr Kumaran gave undertakings not to use or disclose the Plaintiff’s confidential information. Therefore, the Plaintiff does not seek any further relief in respect of his duties of confidence.
On 15 March 2021, Parker J made the following order (CB 5/1628):

2 ORDERS that until 5pm on the final day of the trial or until further Order, the first defendant be restrained from the time and date of these orders being entered on 15 March 2021 from performing any work or duties for, or at the direction of, the second defendant or Breathe Software Pty Ltd and from attending any work place under the control of the second defendant or Breathe Software Pty Ltd.

The order remained in place at the time of the hearing and, on application by the Plaintiff, on 10 June 2021 I extended this order until judgment is delivered in this matter.
The Plaintiff also seeks final orders, as outlined in its draft of 9 June 2021, restraining Mr Kumaran until 11 February 2022 from being engaged with any other business in competition with the Plaintiff, including the Second Defendant.

Some General Observations

Much of the basic factual material is not in dispute. Of course, Mr McMurchy’s contact with Mr Kumaran at the relevant time is not only in dispute but the parties are unsurprisingly at odds as to what inferences should or not be drawn.
The status of Mr McMurchy’s contract is logically the first issue to be addressed.
The next question concerns the extent to which by reason of his contractual or other duties he did or did not breach those duties and the consequences, if any, of those breaches. Inextricably bound up with those questions however is the extent to which it can be said that the Plaintiff and the Second Defendant are in competition one with the other.

Factual Background

Mr McMurchy and Mr Kumaran’s employment with Employsure

Mr McMurchy commenced employment with the Plaintiff in January 2015, under the terms set out in a letter of offer dated 23 January 2015, which included a schedule of standard terms (the “2015 McMurchy Contract”). A copy of the 2015 McMurchy Contract signed by Mr McMurchy is at CB 3/553-559.
With effect from 1 April 2018, Mr McMurchy was promoted to the role of Outbound Sales Manager. It was in that context that in February 2018, Employsure and Mr McMurchy entered into a new employment agreement (the “2018 McMurchy Contract”). A copy of the 2018 McMurchy Contract, dated 20 February 2018 and signed by both parties, can be found at CB 3/566-578.
There is a dispute about Mr McMurchy’s precise status following his 2018 promotion. However, it is asserted by the Plaintiff he held a senior position as a result of the promotion and was given confidential information as a result.
Mr McMurchy subsequently agreed to a total of five contract variation letters recording changes to his employment agreement. Three of the variation letters merely recorded a change to the person to whom Mr McMurchy reported (CB 3/584, CB 3/591 and CB 3/721). Another recorded a minor change to his job title (CB 3/709).
A more significant change occurred in June 2019, when Mr McMurchy moved into the new role of ‘Manager, BrightHR’, and at that time there were also changes to his salary and bonus arrangements (CB 3/592-594).
In June 2019, Mr McMurchy travelled to the United Kingdom in order to learn about and understand the BrightHR software and business (which was already operating in the UK) in advance of the BrightHR software being launched in Australia and New Zealand. Between June 2019 and October 2019 Mr McMurchy was setting up the systems and processes that were required for the October 2019 launch of BrightHR in Australia and New Zealand.
From the time Employsure’s BrightHR software product was launched until the end of his employment with Employsure, Mr McMurchy held the position of ‘Manager, BrightHR’ (later renamed ‘Manager, Bright’ after the introduction of the BrightSafe software product). The purpose of his position was to “support and deliver the vision, strategy and plan for Employsure’s BrightHR function” (CB 3/595 and CB 3/710).
Mr Kumaran commenced employment with Employsure on or around 27 February 2018, under the terms set out in a letter of offer dated 19 February 2018 that also included the terms set out in a “Schedule of Standard Terms” (the “Kumaran Contract”). A copy of the Kumaran Contract signed by Mr Kumaran is at CB 3/562-565E.
Mr Kumaran received a promotion to the position of Business Sales Executive, and then a further promotion to the position of Business Sales Partner, Inbound with effect from 4 November 2019. On each occasion he signed a letter noting that the Kumaran Contract otherwise remained unaltered and continued to apply (CB 3/623).
In his final role of Business Sales Partner, Inbound, Mr Kumaran was one of only 8 business sales partners with Employsure (a ‘partner’ is the most senior level of sales employee within Employsure’s sales employees) and was paid by both base salary and commission. He earned about $134,000 in his final year of employment. He worked within a team that received ‘inbound’ sales leads from potential customers who had self-identified a need for or interest in Employsure’s products and services.

Mr McMurchy and Mr Kumaran’s employment with the Second Defendant

On 16 November 2020, Mr McMurchy applied for a position with the Second Defendant (CB 3/754A). On 11 December 2020, he accepted a role with the Second Defendant in the position of ‘Sales & Customer Success Director, Breathe”. Employsure was unaware of these matters at the time.
On 14 December 2020, Mr McMurchy gave Employsure a purported letter of resignation (CB 3/783-784). The letter said that his last day of employment would be 11 January 2021, thus giving 4 weeks’ notice of his proposed departure. The Plaintiff contends that was less than the 3 months’ notice required by the 2018 McMurchy Contract, and as such that letter was not effective to terminate Mr McMurchy’s employment contract.
On 15 and 16 December 2020, Mr McMurchy’s manager informed him that he was required by his employment contract to give 3 months’ notice (CB 3/789 and CB 3/792). Mr McMurchy’s response was to confirm that his last day of employment would be 11 January 2021 (CB 3/801).
Mr McMurchy does not contend that he was told by Employsure that it would accept him giving 4 weeks’ notice, or that he was told by Employsure that his purported notice was effective to mean that his employment would end on 11 January 2021.

There were subsequent discussions about attempting to have Mr McMurchy remain with Employsure, but no agreement was reached.
On 8 January 2021, the Plaintiff’s lawyers, Kardos Scanlan, wrote to Mr McMurchy reminding him of his contractual obligations to Employsure, and stated that his purported notice of termination was not effective to bring his employment to an end and that he remained employed with Employsure. The letter also noted that the Second Defendant was a direct competitor with Employsure’s Bright software, and sought undertakings to confirm that he would comply with his contractual obligations to Employsure (CB 3/913-942).
There was then correspondence between the parties’ solicitors, which included the following exchange.

On 11 January 2021 Mills Oakley, acting for Mr McMurchy, wrote to Kardos Scanlan and said that Mr McMurchy did not regard himself as employed by Employsure, and referred to his “new employment with the Second Defendant Software Limited”. That letter did not provide any undertakings by or on behalf of Mr McMurchy (CB 3/913-942).

On 12 January 2021 Kardos Scanlan wrote to Mills Oakley (CB 3/950-954). By that letter Employsure:

gave Mr McMurchy 3 months’ notice of the termination of his employment, to bring his employment to an end on 12 April 2021; and

directed Mr McMurchy to not attend the Employsure office and not undertake any work other than as directed, but to remain available during business hours to respond to queries or perform duties as requested (as per cl 19.3 of the 2018 Employment Agreement).

The Plaintiff contended that the termination of Mr McMurchy’s employment contract occurred by means of the 3 months’ notice given by Employsure on 12 January 2021, which took effect on 12 April 2021.
After asking for a short period to consider his position (CB 3/955 and CB 3/9982-985), Mr McMurchy commenced employment with the Second Defendant on 19 January 2021. However, he only worked for 2 days as a result of the commencement of these proceedings and undertakings given by him, and subsequently injunctive relief granted by the Court.
Mr McMurchy’s position with the Second Defendant involves managing a sales team selling the Breathe software, and managing the support of existing Breathe software users (CB 4/1339-1341).
On 22 January 2021, Mr Kumaran received an offer of employment from the Second Defendant, and then a further and revised offer dated 25 January 2021, both of which proposed a commencement date of 12 February 2021 (CN 3/988-1003).
On 28 January 2021, Mr Kumaran gave notice of his resignation from Employsure, with his last day of employment to be 11 February 2021 (CB 3/1004).
Shortly after he gave his notice, Mr Kumaran told his direct manager, Mr Rory Thomson, that he had a couple of options as to where he worked next, including the Commonwealth Bank.
Although Mr Kumaran was required by his Employment Contract to give 4 weeks’ notice, he gave 2 weeks’ notice, and Employsure accepted the shorter period of notice in circumstances where it was not aware (and Mr Kumaran did not disclose) that he had already accepted employment with the Second Defendant.
On 2 February 2021, Mr Kumaran was provided with a letter accepting his shortened notice period and reminding him of his obligations to Employsure after the employment ended, including by providing him a copy of his employment contract (CB 4/1030).
On 12 February 2021, Mr Kumaran commenced work at the Second Defendant. On that day Employsure became aware of his employment.
Mr Kumaran’s position with the Second Defendant is described in his letters of offer as “Account Executive”, reporting to the General Manager (CB 3/988). Mr Kumaran describes his role as supporting existing customers of the Second Defendant’s Breathe software and seeking to sell that software to potential customers who have taken up a free trial of that software (Affidavit of Mr Kumaran, 1 April 2021 at [44]-[45]). Ms Watt describes Mr Kumaran’s position as a customer support and sales role associated with the Breathe software product (Affidavit of Ms Watt, 6 April 2021 at [62]).
On 15 February 2021, the Plaintiff’s solicitors wrote to Mr Kumaran, informing him that by working for the Second Defendant he would be in breach of the post-employment restraint in the Kumaran Contract (CB 4/1046-1050). The letter sought undertakings to confirm that Mr Kumaran would comply with his contractual obligations to Employsure.
On 18 February 2021, Mr Kumaran’s solicitors wrote to Employsure’s solicitors (CB 4/1060-1065 and 1074A). By means of that letter, Mr Kumaran provided certain undertakings, but did not provide any undertaking that he would not be engaged or concerned with any other competing business including the Second Defendant. The letter stated that Mr Kumaran had commenced employment with the Second Defendant on 12 February 2021.

The Relevant Documents

Below is a brief summary of some of the more important documents relied upon in the proceedings.

Variation Letter

First was the letter dated 22 March 2019 which varied the 2018 McMurchy Contract (CB 3/591). The letter states as follows:

Amendment to terms and conditions of employment
Your contract of employment dated 23 January 2015 (Employment Agreement) is being amended as follows:
Line Manager
you will report to the head of business sales in this role, unless notified otherwise.
All other terms and conditions of your employment remain unaltered and your Employment Agreement otherwise continues to apply, however, for the avoidance of doubt, in the event of any inconsistency between the terms stated above and your existing Employment Agreement, these terms will prevail.
Please confirm your agreement to this amendment by signing a copy of this letter and returning it to Talent. …

Mr McMurchy’s Notice

Second was Mr McMurchy’s purported notice of 14 December 2020 (CB 3/784) which stated:

Please accept this letter as formal notice of my resignation from my position as Manager, Bright at Employsure Pty Ltd. My last day of employment will be Monday, January 11th, 2021.

The 2015 McMurchy Contract

The post-employment clause (CB 3/554) in the 2015 McMurchy Contract provides that Mr McMurchy must not, after termination of employment:

engage or prepare to engage (directly or indirectly) in a business that competes with the [Employsure]”.

The restraint is expressed to apply for 12 months, and throughout Australia.

The 2018 McMurchy Contract

The next document was the 2018 McMurchy Contract, in which several clauses were referenced.
Clause 5.1 (CB 3/569) included an obligation for Mr McMurchy to:

devote the whole of [his] time, attention and skill during normal business hours … to [his] duties for [Employsure] (cl.5.1(a))

Clause 16 (CB 3/571) expressly contemplated that the employee may receive confidential information and imposes obligations about what must and must not be done in respect of confidential information.
Clause 18.2 (CB 3/574-575) provided:

Without the prior written consent of [Employsure], the Employee must not, while employed by [Employsure], be engaged or interested in any other business or occupation (whether paid or unpaid) … that, in the reasonable opinion of [Employsure], may hinder or interfere with the performance of the Employee’s duties.

Clause 19.1 (CB 2/573) provided that the agreement may be terminated in writing at any time by either party, and with the period of notice set out in item 9 of the Schedule. Item 9 (CB 3/578) provides that the period of notice is three months.
The post-employment restraint in the 2018 McMurchy Contract was outlined in cl.20 (CB 3/574) which provided that Mr McMurchy “agrees not to carry on or be engaged, concerned or interested, directly or indirectly”, whether as an employee or otherwise:

… in any business or prospective business in competition with [Employsure] at the time of termination of employment.

The restraint is expressed to apply for up to 12 months, and throughout Australia

The Kumaran Contract

The Kumaran Contract included a term entitled “Restraint”. The introductory paragraph to this clause states (at CB 3/563):

During your employment you may be associated with our Clients, Intermediaries, and Employees and you may also have access to our confidential information. By accepting this offer of employment you acknowledge that it is commercially important to us that you are restricted in the way you are entitled to deal with such person or entities and any use of confidential information…

It also includes the following provision (at CB 3/564):

… you will not … be directly or indirectly engaged, concerned or interested with any other person or bu siness that is wholly or partly in competition (or is preparing to be wholly or partly in competition) with the business carried out by [The Plaintiff] …

This clause is expressed to apply for up to 12 months, and throughout Australia.

Legal Principles

Construction of Contracts

The principles governing the construction of commercial contracts were summarised recently by Gleeson J in De L’Isle v Knight [2021] NSWSC 809 as follows:

[74] …An objective approach is to be adopted in determining the rights and liabilities of parties to a contract. The contract is to be construed by what a reasonable businessperson would understand it to mean. That requires consideration of the language used by the parties, the surrounding circumstances known to them, and the commercial purpose or objects to be secured by the contract: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]; see also Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]–[52]; Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392 at [51]; Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [18] and [78].
[75] Regard can be had to the surrounding circumstances objectively known to the parties: Codelfa at 352 (Mason J). However, care must be exercised in considering evidence of negotiations between the parties. Evidence of negotiations is inadmissible for the purpose of construction insofar as it is no more than evidence of what the individual parties were subjectively trying to do when they negotiated the language of their agreement. Negotiations may be considered only to the extent that they identify mutually known facts which form part of the background to the transaction: Codelfa at 354. As Heydon and Crennan JJ said in Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26 at [98]:
… evidence of pre-contractual negotiations between the parties is inadmissible for the purpose of drawing inferences about what the contract meant unless it demonstrates knowledge of “surrounding circumstances”. (Citation omitted.)

See also the summary of Bathurst CJ (with whom Macfarlan and Meagher JJA agreed) in Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 at [52].

Rectification at Common Law and in Equity

Rectification may be undertaken at law or in equity, both of which are discussed in Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In liquidation) (2019) 99 NSWLR 317; [2019] NSWCA 11 (“Seymour Whyte”) at [6] 322 to [19] 325.
Where a Court can discern the parties’ intention from the factual and legal context, the Court can supply, omit or correct the words in the document to avoid absurdity or inconsistency, and in these cases, rectification is not required (Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 (“Fitzgerald v Masters”) at 426 - 427 and 437; Seymour Whyte at [6]-[10]; see also James Adam Pty Ltd v Fobeza Pty Ltd [2020] NSWCA 311 (“James Adam”) at [20]).
The two conditions necessary for Court to correct contractual language to avoid absurdity or inconsistency are firstly, that the literal meaning of the contractual words is an absurdity or is inconsistent, and secondly, it is self-evident what the parties’ objective intention was (Seymour Whyte at [8]-[10]; James Adam at [20]).
For equitable rectification to be available there must be an actual common intention of the parties which, through a common mistake, was not reflected in the document (Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [46], [103], [104]; Seymour Whyte at [12]).

Fiduciary obligations

A fiduciary, including an employee, agrees to act for or on behalf of, or in the interests of, another person in the exercise of a power or discretion that will affect the interests of that other person in a legal or practical sense (see Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 (“Hospital Products”)).
An employee must not work for another employer if the other employment is inconsistent with the first employment (Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 at 178; [1946] 1 All ER 350 at 356) or “could conflict with” the first employment (Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 (Nettle J) at [14]).
An employee will be in breach of duties owed to their employer if they actively entice an employee to leave to come to a new enterprise. In Lablemakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512 (“Lablemakers”) at [115] Tracey J said:

A conflict will […] arise if the employee seeks to persuade fellow employees to resign their employment and accept positions in the new business: see Warman International at 556, 566. To act in this way is to breach an employee’s duty “not to improperly use his position to cause detriment to his employer”: see WA Fork Truck Distributors at [67].

The manner of approaching employees and whether such approaches constitute a breach of contract or fiduciary duties, depends upon the manner in which the approach is made (WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 (“WA Fork Truck”) at [61]). It can constitute a breach of fiduciary duties of good faith (WA Fork Truck at [67]).

Restraint of Trade

In Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45, the High Court stated (at [14]) that the question of whether there is a “restraint” is to be answered having regard to the practical working of the alleged restraint.
At common law, a restraint of trade is contrary to public policy and void (citing Nordenfelt v Maxim Nordenfelt Guns & Ammunition [1894] AC 535 at 565 per Lord Macnaghten, cited in Agha v Devine Real Estate Concord Pty Ltd [2021] NSWCA 29 at [164]; see also Harcus Sinclair LLP and another v Your Lawyers Ltd [2021] UKSC 32 at [47]-[49]; [2021] 3 WLR 598). Under s.4(1) of the Restraints of Trade Act 1976 (NSW) (“Restraints Act”), however, a restraint is valid to the extent to which it is not against public policy even if not in severable terms (see also Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 (“Koops Martin”) at [26]-[27] per Brereton J). The effect of the Restraints Act is to allow the restraint to be read down so as to be valid to the extent necessary only to capture the conduct of the offending party, if a restraint to that extent would have been valid (Steadfast IRS Pty Ltd v Latchmi Mesuria [2020] NSWSC 947 (“Steadfast”) at [43] per Sackar J). Irrespective of whether an agreement is unreasonable as between the parties, if it is unreasonable in the public interest it will be void for that reason (Belflora Pty Ltd v Vinflora Pty Ltd [2021] NSWCA 178 (“Belflora”) per Bathurst CJ at [33]; Brereton JA at [59] and Emmett AJA at [62]).
The burden of justifying the restraint’s reasonableness lies on the party seeking to impose it (Adamson v New South Wales Rugby League Limited (1981) 27 FCR 535; [1991] FCA 8 at 554 per Hill J).
In Belflora, Brereton JA commented (at [46]) that:

[w]hether a restraint is reasonable having regard to the interests of the parties depends on two, albeit related, considerations: first, whether the covenantee has a legitimate protectable interest, and secondly, whether the restraint is no more than reasonable for the legitimate protection of that interest.

While the doctrine of restraint of trade applies to restrictions imposed during the currency of a contract, the pendency of the contract will usually be sufficient justification of their reasonableness (Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; [2008] NSWSC 852 (“Tullett Prebon”) at [40], [45]; cf Metcash Ltd v Jardim (No 3) (2010) 273 ALR 407; [2010] NSWSC 1096 (“Metcash”) at [43]).
The reasonableness of a restraint is tested at the time of entering into the contract, but taking into account future probabilities that could have been foreseen (Woolworths v Olson [2004] NSWCA 372 (“Woolworths v Olson”) at [40]). Some allowance can be made for potential developments in the role and the nature of the business for which an employee might be responsible in the future (Stacks Taree v Marshall [No.2] [2010] NSWSC 77 at [46]). Potential developments include the prospect of promotion as an ordinary incident of employment (Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 (“Cactus”) at [37]). Further, if the parties should be expected to realise that they are dealing with a business that might be expanding, the covenant can be that which is reasonable to protect the contemplated expansion (Sidameno (No 456) Pty Ltd v Alexander [2011] NSWCA 418 at [71]).
In Tullet Prebon, Brereton J (as his Honour then was) explained what might constitute a protectable interest as follows (at [47]):

A covenantee is not entitled to be protected against mere competition; the legitimate interests which may be the subject of protection by covenant are in the nature of proprietary subject matter [Vanderwell Products Ltd v McLeod [1957] RPC 185; Tank Lining Corporation v Dunlop Industries Ltd (1982) 140 DLR (3D) 659, 664], including trade secrets and confidential information, and goodwill including customer connection.

See also Tullett Prebon at [47]; Koops Martin at [30]).

While the Court gives considerable weight to what parties have negotiated and embodied in their contracts, but a contractual consensus cannot be regarded as conclusive, even where there is a contractual admission as to reasonableness (Woolworths v Olson at [39]).
The protection against the misuse of confidential information or trade secrets to an employer’s detriment after the departure of an employee is recognised as a legitimate protectable interest that can justify a post-employment restraint (Woolworths v Olson at [67]; Pearson v HRX Holdings Pty Ltd (2012) 205 FCR 187; [2012] FCAFC 111 at [52]-[54]).
Where confidential information is relied upon to support a post-employment restraint, it is not necessary to identify with the same particularity the relevant confidential information, as compared to the position when enforcing an equitable obligation of confidence or a direct restraint against the use of confidential information (Miles v Genesys Wealth Advisors Ltd (2009) 201 IR 1; [2009] NSWCA 25 (“Miles”) at [22]-[26]). “[T]he court must be satisfied of the anticipated existence of confidential information at the time of contract, and of potential prejudice to the employer’s interests from the information” although the confidential information need not be identified with precision (Emeco International Pty Ltd v O’Shea (No 2) (2012) 225 IR 423; [2012] WASC 348 (“Emeco”) at [100]). A restraint clause is not automatically invalid because an employee no longer has documents which contain the specific information or does not recall the details of the information (DP World Sydney Ltd v Guy (2016) 262 IR 156; [2016] NSWSC 1072 (“DP World”) at [49], relying on The Littlewoods Organisations Ltd v Harris [1978] 1 All ER 1026 (“Littlewoods”) at 1038-1039).
It can be practically difficult to prove a breach of a covenant against the use of confidential information. In Littlewoods at 1033, Lord Denning said:

Experience has shown that it is not satisfactory to have simply a covenant against disclosing confidential information. The reason is because it is so difficult to draw the line between information which is confidential and information which is not; and it is very difficult to prove a breach when the information is of such a character that a servant can carry it away in his (or her) head. The difficulties are such that the only practicable solution is to take a covenant from the servant by which he or she undertakes not to work for a trade rival. Such a covenant may well be held to be reasonable if limited to a short period.

Therefore, in recognition of these difficulties, a non-competition covenant may be held to be an appropriate means of protecting a company’s legitimate interests in preventing the disclosure of confidential information to a competitor: Woolworths v Olson at [67]; John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995 at [36], [37]).
A restraint is justified because of the difficulty of proving what the former employee has done or is doing or intends to do for the competitor (Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212 at [35]).
The ordinary rules of construction apply to a restraint clause. The task is to ascertain the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract (Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at [11]).
In Just Group Pty Ltd v Peck (2016) 264 IR 425; [2016] VSCA 334 (“Just Group”) (at [38]), the Court held that where there is an ambiguity, a restraint will be construed in favour of the employee so that, as between two reasonably available constructions, the one which imposes the lesser obligations on the employee will be preferred.
In Two Lands Services Pty Ltd v Cave [2000] NSWSC 14 (“Two Lands Services”) (at [62](3)), it was held that a restraint should be construed with reference to the object of “the protection of one of the parties against rivalry in trade”. The Court clarified at [65]) that a rival in trade must necessarily operate in a similar manner.
These principles were summarised and reiterated by Gleeson JA (with whom Bathurst CJ and Beazley P agreed) in Izaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163 at [59]-[72].

What does “in competition” mean?

The words “in competition with” one would expect commonly arises in contracts of this sort, however, the particular combination of words has to be viewed in the context of the particular contract and its context.
In News Life Media Pty Ltd v Janeke [2016] NSWSC 1835 (“News Life Media”), the defendant’s former employer sought to enforce a restraint of trade clause in the defendant’s contract. One of the questions in the case involved a determination of what was meant by the phrase “in competition with” in the contract. The Court noted (at [30]) that the construction to be given to this phrase must depend on the function the relevant clause was intended to perform in the context of the overall contract. What was sought to be prevented was the exploitation of confidential information by commercial rivals to the plaintiff, indicating the focus was on competition in a commercial context or sense (at [39]). Therefore, McDougall J held (at [39) that:

… in assessing the question of competition, it is necessary to look at the extent to which there is competition in some particular market. In that context, concepts of substitutability may well be significant. There was no evidence directed specifically to competition in that sense, as opposed to competition in the sense of commercial rivalry.

In News Life Media the words “in competition with” were combined with the phrase “parts of the business”. This combination meant that the clause operated to prevent the defendant from engaging in work in competition with the part of the business of the plaintiff for which she had worked in the relevant period (at [43]).
In Veda Advantage (Australia) Pty Ltd v de Beer [2016] NSWSC 37 (“Veda Advantage”), Black J (at [28]) held that the ordinary meaning of the word “competitor”:

…should be understood in the sense indicated in Sea Containers Ltd v ICT Pty Ltd (Supreme Court (NSW), O’Keefe CJ Comm D, 27 October 1994, unrep) where O’Keefe CJ Comm D, observed that:
“[i]n ordinary use the verb ‘to compete’ [involves] the notion of seeking or striving for something in opposition to others and the word competitor conveys the notion of a rival, including a rival in trade.”

I accept that a “competitor”, in ordinary usage, may also include an entity that sells similar products to a second entity so as to compete with it seriously (JD Heydon, The Restraint of Trade Doctrine, 3rd ed 2008, LexisNexis Butterworths at 305) or which is operating or about to operate a business in competition with a second entity (ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640 at 661) or which might pose a real commercial threat to the first entity (Pearson v HRX Holdings Pty Ltd [2012] FCAFC 111; (2012) 205 FCR 187 at [32], [44]) or where there is ‘substitution between the products and sources of supply’ of the two entities (John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995 at [18]).

Tort of inducing breach of contract

In Flightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 (“Flightvision”), the Court (Sheller, Stein and Giles JJA) summarised the test for the tort of inducing breach of contract at 509 [159] to 512 [171]). Their Honours stated the position as follows (at 512 [171]):

…The plaintiff must prove that the defendant intentionally procured the breach. The requirement that the defendant have sufficient knowledge of the contract is a requirement that he have sufficient knowledge to ground an intention to interfere with contractual rights. Ignorance of the existence of the contract or of its terms born of inadvertence or negligence is not enough. On the other hand, reckless indifference or wilful blindness to the truth may lead to a finding of the necessary intention.

See also Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344 at 99 [176].
The concepts of “knowledge” and “intention” are intertwined. As Lindgren J noted in Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26; [1995] FCA 481 (at 37), “a person's ‘knowledge’ that what he is inducing will constitute a breach of contract and his ‘intention’ to induce a breach of contract by what he is doing refer to one and the same thing”.
Their Honours in Flightvision also commented on the issue of loss and causation at 534 [280] to 535 [281], finding that:

[280] There is a loss, and where the defendant induced the breach of contract the finding of inducement means that it was caused by the defendant inducing the breach of contract. The loss flowing from the breach of contract was caused by the inducing even if a contributing cause of the loss was the contract breaker's disinclination to perform the contract.
[281] our view, any question is one of causation. A finding of inducing breach of contract carries with it a finding that the defendant's actions caused the breach of contract and the loss which flowed. It does not matter that the contract breaker yields readily or before the inducement was willing to break the contract: Woolley v Dunford (1972) 3 SASR 243 at 290-291; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 at 659. But it may be possible for the defendant to establish, according to the commonsense notion of causation in March v E & M H Stramare Pty Ltd (1991) 171 CLR 506, that inducing the breach of contract was not the cause of the loss because the loss would have been suffered in any event.

Submissions of the Parties in the McMurchy Proceedings

As is obvious from the submissions recorded below, there were numerous factual and legal disputes in what is a complex case. It is important therefore that I record in my view comprehensively the respective factual and legal submissions.

Plaintiff’s Submissions

The Plaintiff’s primary case in relation to Mr McMurchy is that his purported resignation on 14 December 2020 was not effective to terminate his employment contract, and that the termination of his employment contract occurred by means of the three months’ notice given by the Plaintiff on 12 January 2021, which took effect on 12 April 2021.

The 2018 McMurchy Contract applied

The first issue identified by the Plaintiff was whether at the time Mr McMurchy gave his purported notice of termination on 14 December 2020, his employment was governed by the 2018 McMurchy Contract, or as Mr McMurchy argues, the 2015 McMurchy Contract. This issue then determines whether Mr McMurchy was required to give either 3 months’ or 4 weeks’ notice of termination.
It is not in dispute that Mr McMurchy and the Plaintiff entered into the 2018 McMurchy Contract, which took effect from 1 April 2018. The Plaintiff therefore submits that there can be doubt that upon entry to the 2018 Contract, the 2015 McMurchy Contract was wholly replaced. The 2018 McMurchy Contract expressly states that it supersedes the 2015 McMurchy Contract (cl.2.3 at CB 3/569) and that any previous agreements cease to have effect.
The first amendment to the 2018 McMurchy Contract occurred on or about 22 November 2018 (CB 3/584), when Mr McMurchy signed an agreement letter dated 15 November 2018. By this amendment, the 2018 McMurchy Contract was varied to change Mr McMurchy’s line of report and is not relied on by Mr McMurchy as having the effect of reinstating the 2015 McMurchy Contract.
The critical amendment letter is that dated 22 March 2019 as extracted above at [64] (CB 3/591). This is the only “variation” that Mr McMurchy relies on in his evidence (McMurchy affidavit, 3 April 2021 at [66]-[69]).
The Plaintiff argued that the only consequence of this amendment is that the 2018 McMurchy Contract, as amended by the 15 November 2018 letter, was further amended to change Mr McMurchy’s line of report.
The Plaintiff submitted that if the parties had intended to bring the 2018 McMurchy Contract to an end and reinstate the 2015 McMurchy contract, very different words would have been required. There is obvious absurdity in referring “Your contract of employment dated 23 January 2015….is being amended as follows...” at a time when the 2015 Employment Contract had ceased to operate and been replaced by the 2018 McMurchy contract.
The Plaintiff argued that the language of the 22 March 2019 letter clearly indicates the parties’ objective intention was that the variation letters were effecting a variation to the existing employment agreement. The letter is headed “Amendment to terms and conditions of employment” and refers in multiple places to being an “amendment”. It also states that “all other terms and conditions of your employment remain unaltered and your Employment Agreement otherwise continues to apply…” (CB 3/591; CB 3/592; CB 3/709; CB 3/721). The variation letter also refers to the “existing Employment Agreement” as applying other than where inconsistent with the variation.
Furthermore, the 2015 McMurchy Contract provided for annual remuneration of $54,750 per annum while the 2018 McMurchy Contract provided for $109,500. If Mr McMurchy’s argument is correct, the effect of the variations would be to reinstate the former remuneration which would be a striking and absurd result.
That the objective intention was not to reinstate the 2015 McMurchy Contract is reinforced when viewed in the context of the amendment from the letter dated 15 November 2018. All that was intended by that letter and the letter dated 22 March 2019 was to alter Mr McMurchy’s line of report. The reference to 2015 in the latter letter is an obvious error.
The Plaintiff submitted that the objective intention of the parties is clear and that the Court can read the reference in the 22 March 2019 letter (and subsequent letters with the same language) to 2015 as a reference to the contract of employment dated 20 February 2018 (as amended by the letter dated 15 November 2018), or the reference to the 2015 agreement can be omitted entirely.
Nothing was said or done by the parties at the time of agreeing to the variation letters that contradicts the objectively clear intention that those letters were seeking to effect variations to the 2018 McMurchy Agreement. Mr McMurchy accepted that at the time there was no discussion about reinstating his 2015 Contract (T.119/10; T.119/24-28; T.128/11-12).
The Plaintiff submitted that the two conditions necessary for a Court to correct contractual language to avoid absurdity or inconstancy are both met here. Therefore, the Court can apply the principle expounded in Fitzgerald v Masters to amend or omit the references in the contract variation letters to the “contract of employment dated 23 January 2015” such that they reflect the parties’ objective intention to effect variations to the 2018 McMurchy Contract.
If rectification by construction is not available, then rectification in equity is available to achieve the same outcome, and the Plaintiff seeks rectification to the same effect as above.
The Plaintiff argued there is no doubt as to its actual intention. Mr Michael Morris, the Plaintiff’s “Talent Director” who was responsible for its HR function, signed four of the variation letters on behalf of the Plaintiff. His uncontested evidence was that the references to 2015 were administrative errors and at no time was he requested to, nor did he intend to reinstate or reintroduce the terms of the 2015 McMurchy Contract (Affidavit of Mr Morris, 24 March 2021, at [55]-[57]). Ms Lisa Allen, a “Talent Manager” within the Plaintiff who signed the final variation letter gave evidence to the same effect (Affidavit of Ms Allen, 22 March 2021, at [5]-[8]).
In relation to the variation letter dated 22 March 2019, Mr McMurchy’s affidavit evidence was that at the time he believed the Plaintiff was seeking to make a deliberate change to revert from the 2018 Contract to the 2015 Contract (Affidavit of Mr McMurchy, 3 April 2021, at [67]). Mr McMurchy did not give evidence as to his actual intentions in relation to other variation letters, save, as noted above, that he agreed in cross-examination that he did not think that the variation letter dated 15 November 2018 did anything other than change the identity of his line manager.
The Plaintiff argued Mr McMurchy’s evidence that he believed it was seeking to revert to the 2015 Contract should be rejected. Under cross-examination, Mr McMurchy could not give a coherent or plausible basis for this belief.
Mr McMurchy stated he believed the variation letter intended to change “the standard terms”, but accepted he did not believe his salary would be reduced nor his responsibilities changed (see T.120/5-T.122/11; T.126/17-44 and T.127/35-T.128/13). His only explanation for his alleged understanding at the time was that it came from the introductory line of the letter, “Your contract of employment dated 23 January 2015 (Employment Agreement) is being amended as follows…” (emphasis added), notwithstanding those words were followed by a specific amendment to the person to whom he reported (T.128/35-T.129/48 and T.130/41-49). He agreed the letter identified a very narrow amendment (T.130/31), but suggested at the time he had a different understanding because of “the atmosphere in which [it] was presented to me” (T.130/37-39).
Given that Mr McMurchy accepted that he did not understand that the letter would result in a change to his salary, to his job title or to his duties, the Plaintiff submitted it follows that he could not have understood that it was seeking to make a deliberate change to revert to the 2015 Contract. Rather his evidence appears to be that only some of the terms of the 2015 Contract were reinstated, but that finds no support in the language of the letter dated 22 March 2019. The belief or intention that Mr McMurchy advances is inconsistent with the language of the letter. Moreover, it is questionable whether Mr McMurchy could have truly believed the variation would revert to the 2015 Contract and not clarified with someone. Therefore, the Court should conclude that Mr McMurchy’s intention was to formalise a change in his line of report.
The Plaintiff submitted that when Mr McMurchy decided to join the Second Defendant in late 2020, it was in his interests for the notice period to be 4 weeks rather than 3 months so it is likely it was at this time he persuaded himself or came up with the argument that the 2015 Contract had been reinstated.
Thus either by the proper construction of the contractual documents, or, if necessary, as a result of the remedy of rectification, as at December 2020 Mr McMurchy was bound by cl 19.1 of the 2018 McMurchy Contract to give a period of notice of 3 months in order to terminate the contract.
The Plaintiff has an alternative case in the event that the Court concludes that the 2015 McMurchy Contract applied in December 2020, such that Mr McMurchy was entitled to give 4 weeks’ notice of termination and thus validly ended his employment on 11 January 2021. In those circumstances, Mr McMurchy breached the post-employment restraint in the 2015 McMurchy Contract by subsequently commencing employment with the Second Defendant.

The 2018 McMurchy Contract continued until 12 April 2021

The second issue the Plaintiff considered was whether, assuming it was correct that the 2018 McMurchy Contract applied in December 2020, the notice given by Mr McMurchy on 14 December 2020 was effective notice so as to bring his contract to an end on 14 March 2021 (after 3 months).
The Plaintiff contended that Mr McMurchy’s purported notice was not effective to terminate the contract (CB 3/784, extracted above at [65]).
Mr McMurchy gave 4 weeks’ notice in circumstances where cl.19.1 required 3 months.
In response to his manager telling him twice on 15 December 2020 that he was required to give 3 months’ notice (CB 3/789 and 792), Mr McMurchy confirmed on 17 December 2020 that his “intended last day of employment still stands as January 11^th 2021” (CB 3/801).
The Plaintiff did not agree to a shorter period of notice than the required 3 months. It did not meet the requirement of cl.19.1 of 3 months’ notice and did not operate to terminate his employment contract.
The defendants adopt as correct Parker J’s tentative reasoning on the requirement of notice in Employsure v McMurchy [2021] NSWSC 139 (“Employsure v McMurchy”) at [58]-[61]. At [58], his Honour made reference to Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 (“Mannai”) at 768 to assert that while notice must comply with the relevant terms of the contract, beyond that the only requirement is that the notice must convey with a sufficient degree of clarity that the contractual power is being exercised.
The Plaintiff argued that the facts of Mannai were very different from those of the present proceedings. Mannai concerned notice given by a tenant to a landlord. The relevant contractual clause allowed termination by not less than 6 months’ notice in writing to expire on the third anniversary of the commencement of the lease. The tenant gave 6 months’ notice in writing, expressly referring to the clause of the contract pursuant to which such notice was able to be given, but erred in stating that the lease would end on 12 January 1995, whereas the third anniversary of the commencement of the lease was 13 January 1995. The majority of the House of Lords held, considering the matter objectively, that it would have been obvious to a reasonable recipient that the tenant wished to exercise the contractual power to end the lease on the third anniversary of the commencement of the lease (at 768A, 773C, 774H-775A, 783A). There was no respect in which the tenant had not complied with the requirements of the clause allowing it to give notice. The tenant referred in its notice to the correct clause in the lease and it gave the requisite notice of not less than 6 months, but merely made an error in stating that the lease would determine on 12 January 1995, when the correct date was 13 January 1995. By way of contrast, Mr McMurchy did not give the required period of notice (3 months).

The Plaintiff submitted that unlike the position in Mannai, it would not have been obvious to a reasonable recipient of Mr McMurchy’s notice that Mr McMurchy was intending to give notice to terminate the contract of employment 3 months from the date of the notice, rather that he was purporting to give 4 weeks’ notice. Moreover, Mr McMurchy was not intending to give 3 months’ notice and confirmed as such in subsequent correspondence (CB 3/801).
The Plaintiff admitted that it may be accepted, as Parker J noted at [60] that if the notice merely contained the first line (that Mr McMurchy was resigning from his position), then it would be effective to terminate the contract after 3 months. Such a notice would implicitly give 3 months’ notice. But the notice also included the second sentence specifying the last day of Mr McMurchy’s employment period. The “incorrect identification of the notice period” in the second sentence was not a slip or obvious error in the Mannai sense. To this very day, Mr McMurchy contends that the reference to 11 January 2021 in the notice was intended and involves no error. On close analysis, what Parker J described as arguable, is not.

Restraints of trade during an employment contract

The next issue was whether Mr McMurchy was in breach of the 2018 McMurchy Contract in taking up his position with the Second Defendant in the period up to the termination of his employment contract with the Plaintiff. This assumes that the 2018 McMurchy Contract governed his employment and did not terminate on 11 January, and that from 12 January 2021 (and until 12 April 2021, or alternatively 14 March 2021), Mr McMurchy remained employed by the Plaintiff.
The Plaintiff submitted that when Mr McMurchy commenced employment with the Second Defendant on 19 January 2021 he did so in breach of his contract with the Plaintiff.
Clause 18.2 of the 2018 McMurchy Contract prevented Mr McMurchy from working for another business while he remained employed and during his notice period (extracted above at [71] of the “background facts”). Clause 5.1, which sets out Mr McMurchy’s principal duties, is also relevant (extracted above at [69]).
The fact that Mr McMurchy was still employed and entitled to be paid during his contractual notice period goes to the reasonableness of the restraint while the contract is on foot: Metcash at [47], [48].
The Plaintiff cited BGC Partners (Australia) Pty Limited v Hickey (2016) 259 IR 318; [2016] NSWSC 90 (“BGC Partners”), where the Court held that there was nothing unreasonable about a restraint to protect legitimate interests for so long as the employee was bound by the employment contract (at [97]), although the Court went on, as a matter of discretion, to limit an injunction requiring compliance with the employee’s contractual obligations not to work for any other business to a period of 9 months after the employee actually ceased working. The Plaintiff argued that similarly it is reasonable for it to protect its legitimate interests in its confidential information, and its interest in having Mr McMurchy available to work or respond to queries as directed.
Therefore, the Plaintiff was entitled to direct Mr McMurchy to refrain from taking up employment with the Second Defendant at the time that he did, meaning that he was in breach of cl.5.19(a) and cl.18.2 of his employment contract.
The Plaintiff addressed each of Mr McMurchy’s counter-arguments on this issue in turn, beginning by restating its position that the 2018 McMurchy Contract is the relevant one.
Next, the Plaintiff dismissed Mr McMurchy’s argument that cll.5.1(a) and 18.2 are an unreasonable restraint of trade and thus invalid. Mr McMurchy suggested that those clauses operate oppressively where Mr McMurchy could be (and was) placed on “gardening leave” while his contract remained on foot. The Plaintiff noted, however, that this is exactly what the parties agreed could occur (cl.19.3 at CB 3/573). As noted by Parker J in Employsure v McMurchy at [42], the outcome advanced by Mr McMurchy would deprive the notice and gardening leave provisions of much of their practical utility. It is also notable that in Tullett Prebon, Metcash and BGC Partners a restraint that applied while the employment contract remained in place was held to be reasonable and enforceable, notwithstanding that in each case the employee had ceased actual work.
The Plaintiff rejected Mr McMurchy’s argument that it had accepted his repudiation by directing him to return all of its property in its solicitors letter of 12 January 2021 (CB 3/950-954). The Plaintiff argued the letter was not a direction to return property on termination of employment, rather directed Mr McMurchy to return all property and confidential information of the Plaintiff in light of his indication to commence with the Second Defendant, stating that access to the Plaintiff’s IT system and property required for specific tasks would be provided on an “as needs” basis (at CB 3/951). Furthermore, the letter was clearly affirming the contract and not accepting a repudiation, because the Plaintiff gave 3 months’ notice in accordance with the contract and expressly stated Mr McMurchy would remain employed with it until 12 April 2021. The letter also relied on the gardening leave clause and clarified Mr McMurchy would continue to be paid. There was no unequivocal act on the part of the Plaintiff to accept the repudiation and to terminate the contract with immediate effect (United Australia Ltd v Barclays Bank Limited [1941] AC 1 at 30 per Lord Atkin).
Next, the Plaintiff addressed Mr McMurchy’s suggestion that cl.18.2 should be construed as limited to additional employment rather than “entirely new employment”. If this is intended to mean that “while employed by [Employsure]” when used in cl.18.2 only refers to the period while Mr McMurchy is actually working and does not include any period while the employment contract remains in place but the “actual employment” has concluded, then it should not be accepted. Viewed in context, it is apparent that cl.18.2 applies while the employment contract remains on foot even if the actual employment has come to an end. See, in support of that position, the use of “employed” in the definition of “Termination Date” in cl.1 (CB3:568), and the reference to “Termination of employment” in the heading to cl.19 (CB3:573). Those references to “employed” and “employment” are clearly references to the whole of the period up to the termination of the employment contract. The contrary position would allow Mr McMurchy to unilaterally bring that obligation to an end on the basis of his own breach and deprive the notice period of its practical utility for the employer. The Plaintiff relied on similar discussion in BGC Partners at [66]-[83].

Breach of fidelity and fiduciary duty

The Plaintiff submitted that by commencing employment with the Second Defendant while still employed and in his notice period, Mr McMurchy also acted in breach of his express and implied contractual duty of fidelity, and the ‘no conflict’ aspect of his fiduciary obligations to the Plaintiff.
The 2018 McMurchy Contract contained express contractual obligations to:

“faithfully and diligently perform the duties and exercise the powers entrusted to [him] from time to time” (cl.5.1(b)); and

“promote the interests and prosperity” of the Plaintiff (cl.5.1(c)).

The Plaintiff argued there was, owing to the nature of the employment contract, an implied obligation of fidelity and good faith (as per Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66; [1933] HCA 8 at 81-82; Concut Pty Ltd v Worrell (2000) 75 ALJR 312; [2000] HCA 64 at [57]). Additionally, as a managerial employee, Mr McMurchy owed fiduciary obligations to the Plaintiff (Hospital Products at 68 (Gibbs CJ) and 96-97 (Mason J). Mr McMurchy owed fiduciary duties as he had agreed to act for or in the interests of Employsure in the exercise of powers or discretions relating to his employment (Hospital Products at 96-97; Gunasegaram v Blue Visions Management Pty Ltd [2018] NSWCA 179 at [55], [167]; Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 (“Hodgson”) at [1359]).
Mr McMurcy was under a duty not to put himself in a position where his interests and duties conflicted (Hodgson at [1363]). His “no conflict” obligations to the Plaintiff required him to avoid situations where there was or could be a conflict, or a real or substantial possibility of conflict, between his personal interests and the Plaintiff’s (Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; [2001] HCA 31 at 199). He could not place himself in a position where he owed conflicting duties (R v Byrnes (1995) 183 CLR 501; [1995] HCA 1 at 516).
Mr McMurchy commenced with the Second Defendant on 19 January 2021, while still employed by the Plaintiff, notwithstanding he had been informed in writing on 8 January 2021 that the Plaintiff considered the Second Defendant a direct competitor (CB 3/913 at 914) and on 12 January 2021 that the Second Defendant was a competitor and he should treat himself as an employee of the Plaintiff until 12 April 2021 (CB 3/950-952).
Further, Mr McMurchy held the role of “Manager Bright” and had been involved in the setting up of those systems and the launch of BrightHR in Australia so there was a clear potential for the use of that information in his new role at the Second Defendant.

The post-employment restraints – the Second Defendant is relevantly in competition with Employsure

The Plaintiff’s primary case is that Mr McMurchy’s employment contract terminated on 12 April 2021, and from that date the post-employment restraints in cl.20 of the 2018 McMurchy Contract applied. On its alternative case, the contract terminated on 14 March 2021, and from that date cl.20 of the 2018 contract applied. On its further case, the contract terminated on 11 January 2021, and from that date the post-employment restraints in the 2015 McMurchy Contract applied.
The relevant clauses are cl.20 of the 2018 McMurchy Contract (CB 3/574, extracted above at [73]) and the restraint clause of the 2015 McMurchy Contract (CB 3/554). Both these clauses are expressed to apply for up to 12 months and throughout Australia.
The issue for determination in the Plaintiff’s primary case is therefore whether the Second Defendant is a business or prospective business in competition with Employsure as at 12 April 2021, within the meaning of cl.20.1(b) of the 2018 McMurchy Contract. On the alternative case the same question arises but in relation to 14 March 2021. If the 2015 McMurchy Contract applied, the issue is whether the Second Defendant is a business that competes with Employsure, within the meaning of that contract.
In oral submissions, the Plaintiff addressed the question of the construction of the phrase “prospective business” in cl.20.1(b), arguing this would include the prospect of competition between the company and some other entity and that there was competition at the date of termination (Confidential Transcript of Day Six at T.16/3-10). The question to ask is whether there is competition between these two enterprises at the relevant time, being the date of termination, or prospectively (Confidential Transcript of Day Six at T.18/11-14).
Having regard to the ordinary rules of construction, the question becomes what a reasonable person in the position of the parties would have understood ‘in competition’ or ‘competes’ to mean, including having regard to the commercial purpose or objectives to be secured by the contract (Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640; [2014] HCA 7 at [35]). Such a reasonable person would not have understood ‘in competition’ or ‘competes’ to mean that a competitor or prospective competitor must compete with the whole of the Plaintiff’s business for the restraint to be enlivened, as that would not be a commercially sensible purpose. Rather, a commercially sensible purpose would be reflected by a construction that provided that the restraint was enlivened if there is competition with some segment of the economic activities undertaken by the Plaintiff.
The Plaintiff submitted that the Court should adopt the discussion of the ordinary meaning of “competitor” in Veda Advantage at [28].
The Plaintiff submitted that its BrightHR software and the Second Defendant’s Breathe software, while having some different functionality, are similar products aimed at the same market, being the “SME HR software market” (Report of Mr Guazzarotto at 5.9.6 at CB 2/450) or the “SME focussed HR Technology market” (Report of Ms Moore at 5.1 at CB 2/245).
The Plaintiff’s BrightHR allows for managing leave, storing employee documents, managing rostering, tracking working hours and breaks/leave, dealing with probation periods, and performance management, as part of its functionality (CB 1/30-31, Affidavit of Marsden, 23 March 2021 at [15]).
Overlapping significantly, the Second Defendant’s Breathe software has functions that include centralised employee data storage, managing leave, organising (i.e., storing) employee documents, enhancing performance management and payroll management (CB 4/1077A-1077B). The payroll function is optional and involves additional cost (CB 4/1077B). Breathe, and Breathe with payroll, can be thought of as two separate products, with the basic Breathe software not including the payroll functionality (T.68/45-T.69/16).
The Plaintiff submitted that Mr Guazzarotto’s oral evidence was consistent with his opinions in this report that both software products were aimed at the same market, and that while the software had some differences in functionality, both products met the needs of and are suitable for “the SME HR software market” (Report dated 7 April 2021 at 5.8.1 (CB 2/448)).
Contrastingly, Ms Moore in her oral evidence moved away from the opinions expressed in her report that there would not be a market for BrightHR as a stand-alone product in competition with Breathe, and that BrightHR lacked some significant functionality that was present in other software in the market (see 11.1 to 11.3 of Ms Moore’s report at CB 2/427-428).
Mr Plavsic expressed the opinion in his report that Breathe and BrightHR are two products with similar attributes (Report dated 24 March 2021 at 6.4-6.8, CB 2/216-217) and that customers would view them “to a great extent, as substitutes and compete in the same market” (Report dated 24 March 2021 at 6.8, CB 2/217).
Dr Coker’s evidence was that the two software products differed significantly in price, availability and suitability (or functionality) (Report at 3.1.3, CB 2/350). Dealing only with the latter issue of any difference in suitability or functionality, Dr Coker acknowledged that he was not a HR expert (T.155/29 and T.156/4) and his evidence on this issue cannot be preferred over the essentially agreed position of Mr Guazzarotto and Ms Moore that the two software products have similar functionality, and both have the core functionality that an SME is looking for in HR software.
Furthermore, the Plaintiff highlighted that there is evidence that prior to the proceedings commencing, BrightHR Ltd in the United Kingdom considered Breathe to be a similar and substitutable software product (see Affidavit of Marsden, 23 March 2021, Confidential Ex JM7, CB 5/1477-1482; Affidavit of Marsden, 23 March 2021, Ex JM1 at p 103, CB 3/744).
Both products are aimed at SMEs, in particular, those with up to 50 employees. The Plaintiff argued it is worth noting the size of the SME market. Australian Bureau of Statistics (“ABS”) reports relied upon by both Mr Guazzarotto and Ms Moore suggest that there are about 50,000 businesses with 20-199 employees, which they take as an approximation of the SME market for HR software (CB 2/444, Guazzarotto report, 7 April 2021, at 5.3.2; CB 2/427, Moore report, 1 April 2021, at 10.1.3). Mr Plavsic used ABS statistics to estimate that there are approximately 860,000 businesses in Australia with less than 50 employees (CB 2/223, Plavsic report, at 6.30). On either basis, the market is substantial.
The Plaintiff therefore argued that the fact that BrightHR and Breathe are similar and substitutable products aimed at the same market would mean that it was clear that the Second Defendant was “in competition with” (from the 2018 McMurchy Contract) or was “a business that competes with” (from the 2015 McMurchy Contract) the Plaintiff. If the products of each business compete, then the businesses compete (Veda Advantage at [28]).
The Plaintiff submitted that the expert evidence as to the meaning of competition supports that view. Mr Plavsic stated that “competition refers to the rivalry between suppliers of products for the demand of consumers or customers” (T.148/46-47). While Dr Coker had commented in his report on the possibility of market segments, his definition of competition was the same, being “the idea that two firms compete for the same customers” (at 3.1.1 at CB 2/350).
The Plaintiff admitted that the complication in these proceedings is that its BrightHR product is not obtainable as a standalone product. A potential customer wishing to acquire the product must do so as part of an Employsure subscription that also provides access to Employsure’s advisory and consultancy services. The Plaintiff noted, however, that the 2018 software licence agreement that allows it to supply the BrightHR software in Australia required it to have established, by 1 October 2019, a sales team responsible for marketing and promoting the sale of the software as a standalone product (CB 5/1365, at cl.5.3.3). This was delayed due to the current Covid-19 pandemic (CB 1/40, Affidavit of Ms Marsden, 23 March 2021, at [66]; T.57/3-8).
The Plaintiff argued that notwithstanding the BrightHR software is not presently able to be obtained as a stand-alone product, the Second Defendant and Breathe represent a business in competition with the Plaintiff, in three dimensions.
First, there are approximately 17,000 businesses who currently have a subscription with the Plaintiff which does not include access to the Bright software (CB 1/58, Affidavit of Morris, 24 March 2021, at [26]). This is referred to as the “backbook”, because it represents older Employsure subscribers who took out subscriptions before it started supplying the BrightHR software. The Plaintiff intends on selling the Bright software to the “backbook” in future (CB 1/194-196, Affidavit of Nicholson, 9 April 2021, at [8]). For an extra fee, those subscribers can add the BrightHR to their existing package, and for them the software is an alternative and substitutable product. There is therefore a head to head competition in respect of this large group of business. It does not matter if the Second Defendant does not specifically target that group of customers, it is sufficient they fall within the general class of persons to whom the Second Defendant promotes Breathe.
Mr Plavsic supported the above conclusion (CB 2/224, Report at 7.2; T.181/29-34). Dr Coker disagreed but the Plaintiff submitted his evidence on that issue was somewhat incoherent and should not be accepted.
Second, while the Plaintiff’s business model is to seek to obtain new customers by selling on subscription a package of services that includes the BrightHR software along with other HR consultancy services, the Plaintiff is willing and does enter into new subscription arrangements with customers that exclude the BrightHR software from the customer’s subscription package. Customers who exclude the BrightHR software receive a discount on the price of the usual subscription including the BrightHR software (CB 1/59, Affidavit of Mr Morris, 24 March 2021, at [28(d)]). Thus, for SMEs who are not subscribers to the Plaintiff, the BrightHR software can be removed from any Employsure subscription they obtain such that they are then free to subscribe to the Breathe software (or any other comparable HR software). In that respect, the Breathe software and the BrightHR software are substitutable and compete in the market comprised of SMEs with up to 50 employees who are seeking HR software and who do not already have an Employsure subscription.

Another category of consumers is those who could take their HR consultancy services from someone other than Employsure and take the Breathe software from the second defendant creating a bundle similar to that offered by the Plaintiff.
Mr Plavsic thought the mere fact that the Plaintiff offered a bundle detracted from it being seen as in the same market as the second defendant and he said so expressly in his report at 6.24-6.29 and at T.154/12-23 and T.172/30-34.
Dr Coker accepted that in theory a supplier of a package could compete with someone only supplying one component by reference to the travel industry, T.171/15-34 and importantly in relation to the Plaintiff’s bundle of the BrightHR software and its HR consultancy services as compared with a customer obtaining the Breathe software and HR consultancy services from a third party provider or perhaps the Plaintiff, T.182/25-50. He was not however prepared to accept that that concession had the effect of accepting that there was competition between BrightHR and Breathe. I do not accept Dr Coker on this point and I again regard his evidence as untenable.
There is evidence that at the time of launching its Breathe software the second defendant considered the Plaintiff and the BrightHR software to be a competitor. This is referred to in the report of Mr Plavsic at 5.29 and the evidence of Dr Coker at T.191/12-33.
There is also evidence which is in the confidential materials. Whilst on the anecdotal front I have put to one side the evidence of Ms Watt (the second defendant’s Chief Human Resources Officer) that she had not heard of Employsure at the time Mr McMurchy was being recruited so as to perhaps suggest they could not be competitors. I put her evidence to one side of being of little value as it is likely a reflection of her limited role and experience within the second defendant (perhaps as she was not concerned with marketing). Her ignorance of the fact is however rather perplexing given the marketing manager of the second defendant for the Breathe product, Mr Gonsalves who specifically identified the Plaintiff as a competitor in February 2021.
Mr McMurchy himself (at or about the time BrightHR was launched in October 2019) considered the second defendant to be one of the Plaintiff’s direct competitors along with others, CB 3/618-619. He said in his evidence that he had changed his views around the time of the proceedings which is rather co-incidental and convenient. I do not accept his evidence on that issue.
However, on all of the evidence I am satisfied I should find that the BrightHR and Breathe products are similar products aimed at the same or similar market being the SME HR market, such that they should be regarded as competitors or “in competition”.

What is a reasonable restraint in the circumstances?

I am therefore of the view that the time Mr McMurchy’s 2018 contract ended the Plaintiff and the second defendant were in competition in the sense that that term should be understood in the contract.
The next question is whether the restraint in the 2018 contract is reasonable. That assessment of course needs to take place at the time of entry into the contract.
By the terms of cl.16.2 of the 2018 contract, Mr McMurchy acknowledged that confidential material would be disclosed to him. But this in one sense goes without saying because not an unimportant aspect of what occurred in 2018 was that he was promoted to the position of Outbound Sales Manager. In that role he was to contribute to the development and execution of the Plaintiff’s overall business strategy and plan and to engage with key stakeholders. Mr McMurchy accepted as much in his evidence, T.106/43-50 and T.107/31-40. He also contemplated that he would on the assumption of the role becoming privy to the Plaintiff’s strategic vision, T.111/10-13.
The role of Outbound Sales Manager was clearly a senior one within the Plaintiff. Mr McMurchy had a group of team leaders reporting to him who in turn had about 100 sales staff reporting to them.
Upon the assumption of his role as Sales Manager he began attending senior management team meetings and receiving team reports. He accepted again in his evidence that the materials he was then receiving were highly confidential, covering all aspects of the Plaintiff’s business, T.114/10–T.115/5 and T.115/26-28. Mr McMurchy had an obligation to view the Plaintiff’s offering holistically and in so doing he was obviously, of necessity, exposed to a significant amount of the Plaintiff’s confidential material.
According to Mr Morris, the business of the Plaintiff had grown significantly since 2011 when it commenced its operations. It may safely be assumed that as Mr McMurchy was employed from 2015 and promoted in 2018, he obviously participated in the expansion of the business and must have gained intimate knowledge of its strategic strengths and weaknesses. Ultimately, however, his appointment as Manager for BrightHR gave him a particular cachet. He was involved in the launch, development, marketing and support of the BrightHR business in Australia. He was in a unique position to gauge the product’s shortcomings and its potential developments. He was also involved in its marketing and was exposed no doubt to confidential information in that regard which could be used by the Second Defendant to the detriment of the Plaintiff. This is information that would have informed Mr Shevers whose role was to closely consider the experience and utility of Mr McMurchy’s work at the Plaintiff in terms of his suitability at the Second Defendant (T.78/15-20). The position at the Second Defendant also being a senior leadership role (T.81/30-34).
The fact that the parties agreed to a restraint of twelve months should be given significant weight but that in itself is not conclusive.
In determining reasonableness an assessment must be made as to the length of time the Plaintiff’s confidential information remains current and of commercial advantage. I accept that Mr McMurchy was in a position where he was to support and deliver strategy and to that end would have had and been interested to have a real interest in commercially sensitive information. But there can be long-term and short-term strategies and of course strategies change.
Mr McMurchy was working for the Plaintiff at a key moment in the development of BrightHR but there must be an element of reality attaching to placing too much weight on the possibility that a departing employee could retain information for too long apart from the information arguably becoming outdated. It may be accepted that strategic considerations may fall into a slightly different category. In all the circumstances and given the nature of the confidential information in this case and Mr McMurchy’s status I consider a period of nine months’ restraint in the circumstances, beginning on 12 January 2021.

Did Mr McMurchy breach his contract in his communication with Mr Kumaran?

A further question that arises is whether Mr McMurchy breached his contractual and or fiduciary duties to the Plaintiff by inducing or encouraging Mr Kumaran to leave the Plaintiff.
It will be recalled that he was obliged pursuant to cl.5.1(b) and cl.5.1(c) to both faithfully and diligently perform and in doing so promote the interests and prosperity of the Plaintiff. He was also subject to an implied obligation of fidelity and good faith.
There is little doubt that if it be the fact an employee seeks to persuade a fellow employee to resign and accept a position elsewhere that would be to the detriment of the employer such that that employee would be in breach of his/her contractual and or fiduciary duties.
Mr McMurchy resigned by letter of 14 December 2020 having accepted employment with the second defendant on 11 December 2020.
On 14 December 2020 Mr McMurchy offered to supply the second defendant with the names of potential sales employees. That arises expressly from a message exchange between Mr McMurchy and an employee of the second defendant, Mr Shevers, CB3:785. There had been a discussion between the two in which Mr Kumaran had been mentioned, T.100/38-39, T.138/9, T.138/11-14,19-20,49-50.
In any event Mr McMurchy responded to Mr Shevers later on 14 December in which he mentioned three employees, Mr Kumaran being one, CB 3/793. Mr McMurchy and Mr Shevers communicated the next day again, CB 3/793 by message from which it may reasonably be inferred there was some further discussion. Mr Shevers was not called in the proceedings and Mr McNurchy said nothing about the matter in evidence.
But the very next day Mr McMurchy wrote to Mr Shevers indicating that each of the three employees previously mentioned (importantly Mr Kumaran) was “very keen on the role and opportunity”, CB 3/794.
It may reasonably be inferred from that communication that Mr McMurchy could only have communicated in those terms if he had approached them about a role with the second defendant and that they were interested.
It is also clear that Mr Shevers had made arrangements to meet with one of the other employees on 23 December 2020, CB3:794.
Mr McMurchy accepted in his evidence that he called Mr Kumaran at about the time he provided Mr Kumaran’s name to Mr Shevers as potential candidate to tell him he was leaving the Plaintiff and that he was taking up a position with the second defendant (at Breathe) and that it would be a good opportunity for him. He also told him how exciting the opportunity was, T.140/6-17 and he explained to Mr Kumaran what the role and opportunity with the second defendant was, T.140/31-33.
Here it is put that Mr Kumaran had independently decided to leave his employment. However there is no doubt in my mind that Mr McMurchy both identified Mr Kumaran as a potential target for the second defendant and he, by the very approach and words used, set out to encourage Mr Kumaran to join him in his new “exciting” employment, (Mr McMurchy,T.101/42-45,T.140/6-17 and Mr Kumaran, T.228/43-45).
And whilst I accept Mr Kumaran might have been disgruntled at not being promoted by the Plaintiff I do not on the evidence consider he had made a decision to leave apart from considering his options and he had not applied for any positions, (Mr Kumaran, T.226/1-3).
In any event I am also not satisfied that Mr McMurchy could have come to the conclusion that at the time he spoke with Mr Kumaran, he had decided to leave the Plaintiff’s employ, T.101/4.
Whilst Mr Kumaran may have been less than impressed with the Plaintiff at the time Mr McMurchy spoke with him he was clearly susceptible to Mr McMurchy’s approach and was “ripe for the picking”. To that extent, the Plaintiff was entitled to expect that Mr McMurchy would attempt to entice employees away. Here there is no suggestion in my view on the evidence that Mr Kumaran had decided to leave let alone know about an opportunity at the second defendant were it not for Mr McMurchy.

The case against the Second Defendant

However, although Mr McMurchy engaged in subversive conduct, the further question arises as to the extent his conduct implicates the second defendant.
It is put that the second defendant should be held liable for the tort of inducing a breach by Mr Kumaran of his contract with the Plaintiff.
The Plaintiff rightly acknowledges the relevant components of the tort, and of course bears the onus to prove each. Those components can shortly be described as requiring the Plaintiff to prove each of the existence of a contract, knowledge on the part of the defendant as to the existence of a contract, knowledge on the part of the defendant that some act on the part of one of the contracting parties would involve a breach and lastly but importantly an intention on the part of the defendant to induce or procure a contracting party to breach the contract and lastly that the breach has caused loss to the plaintiff.
The first three may in most cases be safely inferred as almost de rigueur in any employment or commercial context and here is no exception.
Here, Ms Watt accepted she understood that Mr McMurchy gave 4 weeks’ notice of his employment on 14 December 2020 (T.81/420-48; T.84/15-20) and it would follow that she understood he was still subject to contract with the Plaintiff. And given the dates of their communicating I am satisfied Mr Shevers would also have had the same knowledge.
It may also be inferred that either Mr Shevers or Ms Watt (although she seems to have been a little out of touch, see, e.g., T.70/45-50; T.71/15-20) must have known that Mr McMurchy had obligations both contractual and fiduciary to act in the Plaintiff’s best interest. Ms Watt agreed that she would have expected as such (T.85/1-10). It may also be inferred that Mr Shevers at the least would have known that to encourage or induce an employee of the Plaintiff to leave its employ would amount to a breach of contract by Mr McMurchy. Ms Watt considered Mr Shevers was just doing his job as “sales talent acquisition specialist” (T.72/50) by asking the likes of Mr McMurchy to recruit other employees to leave contrary to the recruiters contractual and or fiduciary obligations (T.87/32-33). Ms Watt indicated that it was an active part of her brief to take candidates from competitors (T.93/10-20). It does seem rather odd that a person holding a position as Ms Watt would find that conduct acceptable. But perhaps in her case it is not.
The notions of inducing or encouraging are qualitatively different to advising, however, I accept fine distinctions may be involved. But the terms and the tone of the messages between Mr McMurchy and Mr Shevers persuades me that Mr Shevers was caught up in positively encouraging Mr McMurchy, actively to recruit amongst others Mr Kumaran to leave. Mr Shevers was speaking to Mr McMurchy about the “best approach” to adopt and wanted to speak to Mr McMurchy about the “next steps”. The fact that Mr McMurchy informed Mr Shevers that Mr Kumaran was “looking out for your message “ and that he, Mr Kumaran, was “very keen on the role and opportunity” smacks of enticement, encouragement and / or inducing, not merely the giving of advice. I am satisfied on the state of the evidence as a whole, especially by reason of a failure to call Mr Shevers, that the requisite intention on the part of the second defendant has been proved.
If it were necessary to do so I am also satisfied Mr Shevers’ conduct amounts to knowing assistance on his part in Mr McMurchy breaching his fiduciary duty by encouraging Mr Kumaran to leave the Plaintiff’s employ.
There is no doubt the Plaintiff has suffered loss in Mr Kumaran resigning. He was an employee who had to be replaced at expense to the Plaintiff.

The case against Mr Kumaran

Mr Kumaran commenced employment with the Plaintiff on or about 27 February 2018.
On each of the two occasions he was promoted he signed a letter reaffirming his original contractual terms set out in the letter of offer of 19 February 2018.
Prior to leaving the Plaintiff he was one of eight business sales “partners” (denoting a senior sales employee) and he earned $134,000 per annum.
Having received an offer from the second defendant he resigned from the Plaintiff on 28 January 2021.
He was obliged to give four weeks’ notice but the Plaintiff accepted two weeks’ notice in ignorance of the fact that he had accepted employment with the second defendant, Affidavit of Thomson, 24 March 2021, [10]-[11]. The plaintiff only became aware of his employment with the second defendant on 12 February 2021.
It should be noted that after proceedings were commenced against him, Mr Kumaran gave undertakings not to use or disclose the Plaintiff’s confidential information.
Mr Kumaran pursuant to his contract is restrained from working for any entity which is “wholly or partly engaged…in competition…” and for a period of 12 months.
As a result of my earlier findings as to the respective businesses of the Plaintiff and the second defendant, Mr Kumaran was in breach of his contract by working for the second defendant.
Mr Kumaran prior to his departure to the second defendant was in a sales consultant role. He had received a number of promotions but not as many as he thought he deserved.
There is no doubt that Mr Kumaran was expected to be exposed to highly confidential information in his various roles. That was obviously understood at the outset hence the relevant contractual terms.
The coalescence between the Plaintiff’s growth and Mr Kumaran’s promotion and ambitions is the very dynamic it is reasonable to suppose the parties contemplated at the time the contract was entered. The restraints imposed upon and agreed to by Mr Kumaran to protect the use or misuse of the Plaintiff’s confidential material were entirely reasonable on the Plaintiff’s part.
There is no doubt that at the very least in his final role as a “sales partner” he had access to a good deal of confidential material about digital marketing and the strategies and productivity of the inbound sales teams, Affidavit of Morris, 24 March 2021, [90]-[98] and the emails at CB5:1542,1544.
He was intimately involved in the needs and potential needs of customers and he made himself aware no doubt of customer data including their identities and dealings.
There is no doubt that the Plaintiff has a legitimate interest in the protection of its confidential information to which he has and indeed it was reasonably contemplated he would have access to.
Mr Kumaran agreed to a 12-month restraint. Again, that is important but not conclusive. The length of the restraint depends on the time the employers’ information will remain current. Given his status I am of the view that much of what he may have been exposed to will have evaporated from his head and in the circumstances a nine month restraint is sufficient and I would read down the contract accordingly.
The general question that I consider arises is if and to what extent I should grant injunctive relief.
It is impossible to evaluate precisely what specific confidential information either Mr McMurchy or for that matter Mr Kumaran have in their heads. But I consider that when Mr McMurchy was with the Plaintiff he played such an integral role in the development of the strategy and positioning of BrightHR and he had such a vested interest in those activities that it is highly likely he has retained an unspecified but nonetheless an amount of material information. The other factor which is here relevant is that he and Mr Kumaran will now apply their contractual and fiduciary obligations in the interest of the second defendant. Even on their own I would consider injunctive relief appropriate but together I consider it would be even more appropriate to restrain the real possibility of them using acquired knowledge and familiarity with the Plaintiff’s confidential information.

Conclusion

The 2018 McMurchy Contract, as amended by the variation letters, was relevantly in force when Mr McMurchy resigned on 14 December 2020. The references to his “contract of employment dated 23 January 2015” in the variation letters did not reinstate the terms of the 2015 McMurchy Contract, to do so would have led to an objectively absurd result, including significantly less remuneration. Further, no reasonable person could have rationally believed that the variation letters would only be reinstating the former contract in relation to one element, being the shorter period of notice. The reference to the 2015 McMurchy Contract should be read as a reference to the contract of 20 February 2018 (as amended by the letter dated 15 November 2019) and I would therefore rectify the contract at common law.
As it was the 2018 McMurchy Contract which governed the parties’ relations it follows that Mr McMurchy was required to give three months’ notice pursuant to cl.19.1. He did not do so.
Mr McMurchy’s letter of resignation purporting to give four weeks’ notice did not operate to terminate the contract. Rather, the contract was still in force on 12 January 2021 when the Plaintiff gave Mr McMurchy three months’ notice of termination, bringing the contract to an end on 12 April 2021. Mr McMurchy had repudiated his contract and while it was open to the Plaintiff to accept it, they did not. He was, from 12 April 2021, subject to the post-employment restraints contained in the 2018 McMurchy Contract.

By reason of the general law, and clauses 5.1(b) and (c) of the 2018 McMurchy Contract, Mr McMurchy was bound by both contractual and fiduciary obligations to the Plaintiff. Therefore, Mr McMurchy was in breach of his contract when he took up employment with the Second Defendant on 19 January 2021. Doing so without the Plaintiff’s informed consent was also a breach of cl.18.2 of the 2018 McMurchy Contract. Clause 5.1 required him to devote the whole of his time to his duties for the Plaintiff.
Undertaking the task of construction, using the ordinary contract rules, I examined the restraint in cl.20 of the 2018 McMurchy Contract. This involved asking whether there was competition between the Plaintiff and Second Defendant at the date of termination or prospectively. I accept that the words “in competition” (which are undefined in the contract) may refer to some segment of economic activity undertaken by the Plaintiff in competition with another entity in some particular market. Even despite BrightHR not being sold as a stand-alone product I find that the different software are in competition. In my view, the price difference of the products is relevant in an assessment of competition, but not defining. The backbook customers alone provide a sample of customers who both entities could compete for. Furthermore, there is contemporaneous evidence that the Second Defendant and Mr McMurchy considered the Plaintiff to be a competitor.
I accept that both Breathe and BrightHR are software products being sold in the same or similar markets, providing SMEs with HR software solutions. At the time that Mr McMurchy’s 2018 contract ended, the Plaintiff and Second Defendant were in competition.
I found that the restraint in the 2018 McMurchy Contract was reasonable at the time of entry into the contract. The parties contemplated that Mr McMurchy would be privy to confidential information and the nature of his role further reinforced this. The information he was exposed to was commercially sensitive and would have had both longer and shorter term relevance. I therefore consider a period of nine months’ restraint from 12 January 2021 reasonable in all the circumstances.
Mr McMurchy took an active part in ensuring Mr Kumaran left his employment with the Plaintiff for the Second Defendant, in breach of his contract. While Mr Kumaran may have been dissatisfied at work it was not until Mr McMurchy directed him to the Second Defendant that he made a decision to leave.
Mr Shevers of the Second Defendant took positive steps to encourage Mr McMurchy to recruit Mr Kumaran and others to leave the Plaintiff’s employ, with knowledge of Mr McMurchy’s fiduciary obligations to the Plaintiff. The Second Defendant knowingly assisted in the breach of the 2018 McMurchy Contract and the Plaintiff suffered loss as a result.
In relation to the case against Mr Kumaran, I note that he was contractually bound to give four weeks’ notice but the Plaintiff accepted two weeks in ignorance of the fact he had accepted employment with the Second Defendant. He did so in breach of his contract with the Plaintiff. In his role with the Plaintiff he had access to confidential material of the Plaintiff’s which was vulnerable to misuse. I would read down the 12 month restraint in his contract to nine months from 11 February 2021 to account for my view that while he was exposed to important information, much of this would not be retained or remain relevant for longer than this period.
Considering the important role Mr McMurchy played in the strategy of BrightHR and the information he would have retained in doing so, as well as the fact that he will now be working with Mr Kumaran with whom he can combine his knowledge for the benefit of the Second Defendant, I would grant injunctive relief to restrain the pair from using their acquired knowledge and familiarity with the Plaintiff’s confidential information.
I would invite the parties to send to my Associate short minutes of order reflecting these reasons. I will reserve the question of costs and will hear the parties on this issue if required.

**********

Decision last updated: 17 September 2021

Medium Neutral Citation:	Employsure Ltd v McMurchy; Employsure Ltd v Kumaran [2021] NSWSC 1179
Hearing dates:	12, 13, 14 & 19 April, 9 & 10 June 2021 Submissions of the Plaintiff dated 9 April & 3 June 2021 Confidential submissions of the Plaintiff dated 3 June 2021 Submissions of the Defendants dated 12 April, 3 & 9 June 2021 Confidential submissions of the Defendants dated 9 June 2021
Decision date:	17 September 2021
Jurisdiction:	Equity - Expedition List
Before:	Sackar J
Decision:	See [424]-[435]
Catchwords:	CONTRACTS — Construction — Whether letters of variation had the effect of reinstating a previous version of an employment contract CONTRACTS — Rectification — Intention — Discerning the parties’ intention to correct an absurdity in an employment contract — Where reference in letter of variation to a previous version of an employment contract was an obvious error CONTRACTS — Construction — Whether the employee’s contract of employment was terminated after he had given notice less than was contractually required or after his employer had given notice CONTRACTS — Breach of contract — Whether former employee breached non-solicitation clause by aiding recruitment of another employee with competitor EMPLOYMENT AND INDUSTRIAL LAW — Contract — Restraint of Trade — Whether restraint operates because parties are “in competition” EMPLOYMENT AND INDUSTRIAL LAW — Contract — Restraint of Trade — Validity and reasonableness — Restraints of Trade Act 1976 (NSW) — Legitimate interests — Confidential Information — Length and scope of restraint EQUITY — Fiduciary duties — Fiduciary relationships — Employee and employer — Whether former employee breached fiduciary duties by taking up employment with a competitor while still employed by original employer TORTS — Economic torts — Inducing breach of contract
Legislation Cited:	Restraints of Trade Act 1976 (NSW)
Cases Cited:	Adamson v New South Wales Rugby League Limited (1981) 27 FCR 535; [1991] FCA 8 Agha v Devine Real Estate Concord Pty Ltd [2021] NSWCA 29 Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26; [1995] FCA 481 Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 Belflora Pty Ltd v Vinflora Pty Ltd [2021] NSWCA 178 BGC Partners (Australia) Pty Limited v Hickey (2016) 259 IR 318; [2016] NSWSC 90 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66; [1933] HCA 8 Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 Concut Pty Ltd v Worrell (2000) 75 ALJR 312; [2000] HCA 64 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 De L’Isle v Knight [2021] NSWSC 809 DP World Sydney Ltd v Guy (2016) 262 IR 156; [2016] NSWSC 1072 Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640; [2014] HCA 7 Emeco International Pty Ltd v O’Shea (No 2) (2012) 225 IR 423; [2012] WASC 348 Employsure Pty Ltd v McMurchy [2021] NSWSC 139 Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 Flightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 FSS Travel and Leisure Systems Ltd v Johnson [1998] IRLR 382 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Gunasegaram v Blue Visions Management Pty Ltd [2018] NSWCA 179 Harcus Sinclair LLP and another v Your Lawyers Ltd [2021] UKSC 32 at [47]-[49]; [2021] 3 WLR 598 Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609 Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 at 178; [1946] 1 All ER 350 Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 Hoh & Ors v Frosthollow Pty Ltd & Ors [2014] VSC 77 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 IceTV v Ross [2007] NSWSC 635 Izaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163 James Adam Pty Ltd v Fobeza Pty Ltd [2020] NSWCA 311 JMB (NSW) Pty Ltd v West [2020] NSWSC 1380 John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995 Just Group Pty Ltd v Peck (2016) 264 IR 425; [2016] VSCA 334 Kone Elevators Pty Ltd v McNay (1997) ATPR 41-564 Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 Lablemakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512 Lansing Linde Ltd v Kerr [1991] 1 WLR 251 Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 Manildra Laboratories v Campbell [2009] NSWSC 987 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 McHugh v Australian Jockey Club Ltd (2014) 314 ALR 20 Medsara Pty Ltd v Sande [2005] NSWCA 40 Metcash Ltd v Jardim (No 3) (2010) 273 ALR 407; [2010] NSWSC 1096 Miles v Genesys Wealth Advisors Ltd (2009) 201 IR 1; [2009] NSWCA 25 News Life Media Pty Ltd v Janeke [2016] NSWSC 1835 Nordenfelt v Maxim Nordenfelt Guns & Ammunition [1894] AC 535 Pearson v HRX Holdings Pty Ltd (2012) 205 FCR 187; [2012] FCAFC 111 Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; [2001] HCA 31 Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344 R v Byrnes (1995) 183 CLR 501; [1995] HCA 1 Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212 Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 Scully (UK) Ltd v Lee [1998] IRLR 259 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In liquidation) (2019) 99 NSWLR 317; [2019] NSWCA 11 Sidameno (No 456) Pty Ltd v Alexander [2011] NSWCA 418 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 Snowden v Australian Mortgage Assist Pty Ltd [2019] NSWSC 1799 Stacks Taree v Marshall [No.2] [2010] NSWSC 77 Steadfast IRS Pty Ltd v Latchmi Mesuria [2020] NSWSC 947 The Littlewoods Organisations Ltd v Harris [1978] 1 All ER 1026 Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; [2008] NSWSC 852 Two Lands Services Pty Ltd v Cave [2000] NSWSC 14 United Australia Ltd v Barclays Bank Limited [1941] AC 1 Veda Advantage (Australia) Pty Ltd v de Beer [2016] NSWSC 37 Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 Weldon & Co v Harbinson [2000] NSWSC 272 Woolworths v Olson [2004] NSWCA 372 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317
Category:	Principal judgment
Parties:	2021/16210: Employsure Pty Ltd (plaintiff) David McMurchy (first defendant) Elmo Software Ltd (second defendant) 2021/53385: Employsure Pty Ltd (plaintiff) Arumugam Kumaran (first defendant) Elmo Software Ltd (second defendant)
Representation:	Counsel: P J Brereton SC, P Moorhouse, J Simpkins (for the plaintiff) I M Neil SC, Ms P Lowton (for the defendants) Solicitors: Kardos Scanlan (plaintiff) HWL Ebsworths (defendants)
File Number(s):	2021/16210 2021/53385
Publication restriction:	n/a