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
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Employsure Ltd v McMurchy
Sign in free to access the full text
Details
AGLC
Employsure Ltd v McMurchy [2021] NSWSC 1179
Case
[2021] NSWSC 1179
Decision Date
CaseChat Overview and Summary
In the case of Employsure Ltd v McMurchy, the respondent, Mr McMurchy, had been employed by the appellant, Employsure Ltd, under an employment contract which included a non-solicitation clause. After giving notice of termination, Mr McMurchy commenced employment with a competitor. Employsure Ltd sought relief for the alleged breach of the non-solicitation clause, inducement of breach of contract, and fiduciary duty breaches. The case was heard in the Supreme Court of New South Wales.
The primary legal issues the court needed to address included whether the letters of variation served by the employer had the effect of reinstating an earlier version of the employment contract, the intention behind the parties' agreement to correct an obvious error in the contract, and the validity of the non-solicitation clause. The court also had to determine whether the employer had terminated the contract in a manner consistent with the contract terms, and if Mr McMurchy had breached his non-solicitation clause by aiding the recruitment of another employee with a competitor.
The court found that the letters of variation did not have the effect of reinstating the previous version of the employment contract, as the reference to the earlier version was an obvious error. The court discerned the intention of the parties to correct this error and held that the non-solicitation clause was valid and enforceable. It was determined that the employer had not terminated the contract properly, but Mr McMurchy had breached the non-solicitation clause by assisting in the recruitment of another employee with a competitor. The court also found that Mr McMurchy had breached his fiduciary duties by taking up employment with a competitor while still employed by Employsure Ltd, and that he had induced breach of contract.
The final orders of the court included a declaration that Mr McMurchy had breached his non-solicitation clause and fiduciary duties, an injunction restraining him from competing with Employsure Ltd, and an order for damages to be assessed. The court also ordered that the non-solicitation clause and other restraints in the contract were valid and enforceable, subject to the provisions of the Restraints of Trade Act 1976 (NSW).