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Financial Integrity Group Pty Limited v Farmer

Financial Integrity Group Pty Limited v Farmer

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Case Copied 27 October 2009 51 min read

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FINANCIAL INTEGRITY GROUP PTY LIMITED v SCOTT FARMER AND BRAVIUM PTY LIMITED
[2009] ACTSC 143 (27 October 2009)

EMPLOYMENT LAW – post-employment restraint of trade clause – provision of financial advice to former employer’s customers – Australian Workplace Agreements – never certified by the Office of the Employment Advocate – Agreements “of no effect”, Workplace Relations Act 1996 (Cth), s 170VD.
EMPLOYMENT LAW – implied confidentiality clause – fiduciary duty of confidentiality – whether applicable post-employment – retention of computer with former employer’s customer information – whether confidential – whether former employee simply competing or deliberately retained lists with a view to compete.
PRACTICE AND PROCEDURE – application in proceeding – summary dismissal – originating application dismissed in part – facts in dispute – evidence admissible on application – some evidence to support originating application – inappropriate to resolve factual dispute on such application.
EQUITY – application for equitable relief – third party without notice of confidentiality may be restrained – equitable damages – jurisdiction of the Australian Capital Territory Supreme Court – whether such jurisdiction repealed by Australian Capital Territory Supreme Court (Transfer) Act 1992 (Cth) – whether grant of general jurisdiction sufficient.
PRACTICE AND PROCEDURE – pleadings deficient – embarrassing and insufficiently particularised – struck out in part – leave to apply to replead.
PRACTICE AND PROCEDURE – delay – judicial disability – workload of the Court.

Corporations Act 2001 (Cth), s 119
Workplace Relations Act 1996 (Cth), Pt VIA, ss 170VA, 170VC, 170VD, 170VF, 170 WL
Industrial and Employee Relations Act 1994 (SA), s 154
Chancery Amendment Act 1858 (UK) (21 & 22 Vic c 27)
Equity Act 1901 (NSW), s 9
Seat of Government Supreme Court Act 1933 (Cth)
Australian Capital Territory Supreme Court (Transfer) Act 1992 (Cth)
Australian Capital Territory Self-Government Act 1988 (Cth), s 34
Supreme Court Act 1933 (ACT), s 20
Supreme Court Act 1970 (NSW), ss 23, 68
Constitution Act 1975 (Vic), s 85(1)
Supreme Court Act 1986 (Vic), s 38

Court Procedures Rules 2006 (ACT), rr 1146, 1147, 1149
Supreme Court Rules 1937 (ACT), O 15 R 1, O 17 R 1
New South Wales Acts Application Ordinance 1985 (Cth), s 3

Fetter J and Mitchell R, “The Legal Complexity of Workplace Regulation and Its Impact upon Functional Flexibility in Australian Workplaces” (2004) 17 Australian Journal of Labour Law 276
Creighton B and Stewart A, Labour Law (4^th ed, The Federation Press, 2005)
Dal Pont GE and Chalmers DRC, Equity and Trusts in Australia (3^rd ed, Lawbook Co, 2004)
Senate Standing Committee on Regulations and Ordinances, 76^th Report, Report Upon a Certain Ordinance of the Australian Capital Territory Disallowed by Effluxion of Time (Commonwealth Government Printer, 1986) (Parliamentary Paper 507 of 1985)

Dey v Victorian Railways Commissioners (1948) 78 CLR 62

General Steel Industries Inc v Commissioner for Railways (NSW) and Ors (1964) 112 CLR 125

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Stergiou & Ors v Citibank Savings Ltd (1998) 148 FLR 244
Republic of…

Grounds of appeal

[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.

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Details

Case: [2009] ACTSC 143
Decision Date: 27 October 2009

CaseChat Overview and Summary

In the case of Financial Integrity Group Pty Limited v Farmer, the plaintiff, a financial services company, sought relief against its former employee, who had allegedly breached post-employment restraints and competed unfairly. The legal dispute involved the enforceability of a restraint of trade clause, an implied confidentiality obligation, and the admissibility of evidence on a summary dismissal application. The Australian Capital Territory Supreme Court was tasked with addressing these complex employment law issues.

The court had to determine whether the restraint of trade clause, which was part of an Australian Workplace Agreement not certified by the Office of the Employment Advocate, was valid and enforceable. It also had to consider if the former employee breached an implied confidentiality obligation by retaining a computer containing customer information and providing financial advice to the plaintiff's customers post-employment. Furthermore, the court had to assess the admissibility of evidence in a summary dismissal application and the appropriateness of resolving factual disputes in such proceedings.

In reaching its decision, the court found that the Workplace Agreement in question was "of no effect" due to non-certification, which invalidated the restraint of trade clause. The court held that an implied confidentiality obligation could extend post-employment but needed to be balanced against public interest considerations. The court also ruled that factual disputes should not be resolved in a summary dismissal application, and the evidence presented did not sufficiently support the plaintiff's claims. Consequently, the court dismissed the originating application in part, struck out certain paragraphs of the Statement of Claim for being deficient, and granted the plaintiff leave to amend the pleadings.

The orders of the court included striking out specific paragraphs of the Amended Statement of Claim, requiring the plaintiff to apply for leave to amend the Statement of Claim within 28 days, and allowing the defendants to enter judgment with costs if the plaintiff failed to amend the Statement of Claim by a specified date. Additionally, the court mandated that any submissions regarding costs be filed within seven days.

Orders

Orders of the court

1. Paragraphs 3.b, 3.b.1, 3.b.2, 3.b.3, 4, 8, 9 and 12 of the Amended Statement of Claim be struck out. 2. The words “first defendant in breach of his restraint and further the” and “provide investment and financial advice and services and” in paragraph 10 be struck out.

3. The words “by providing investment and/or insurance and/or financial advice and services and/or” in paragraph 10.a be struck out.

4. That the plaintiff have leave to apply to Justice Refshauge within 28 days or such further time as the Court may allow for leave to amend the Amended Statement of Claim, such application to be accompanied by a draft of the Statement of Claim as it is proposed to be amended.

5. If the plaintiff does not make an application to amend the Statement of Claim in accordance with this order, the balance of the Statement of Claim be struck out on 1 December 2009 and the defendants be entitled to enter judgment with costs.

6. The parties have 7 days within which to file and serve any written submissions as to costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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