Reported Decision: [2001] 19 ACLC 299
New South Wales
Supreme Court
CITATION: Forkserve Pty Limited v Jack & 1 Ors [2000] NSWSC 1064 CURRENT JURISDICTION:
EquityFILE NUMBER(S): SC 1736/98 HEARING DATE(S): 15/02/00, 16/02/00, 16/05/00 JUDGMENT DATE: 17 November 2000 PARTIES :
Forkserve Pty Limited (Plaintiff)
Leon Jack (First Defendant)
Aussie Forklift Repairs Pty Limited (Second Defendant)JUDGMENT OF: Santow J
COUNSEL : J T Johnson (Plaintiff)
C Stomo (Defendants)SOLICITORS: English Kearns (Plaintiff)
Gunn Hamilton & Blay (Defendants)CATCHWORDS: RESTRAINT OF TRADE — Corporations — Employee — meaning of director or executive officer for purposes of s235 of the Corporations Law as applicable to "officer" — Duties, if any, in relation to customer list where taken with consent — Duty not to canvass customers of employer while still employed — s235 of Corporations Law — Confidentiality attaching to customer list — Business cards. LEGISLATION CITED: Corporations Law, s60; s232 CASES CITED: Barnes v Addy (1874) 9 Ch App 244
Chew v R (1992) 173 CLR 626
Commissioner of Corporate Affairs v Bracht (1988) 14 ACLR 728
Commissioner for Corporate Affairs v Green [1978] VR 505
Dalysmith Corporation (Australia) Pty Limited v Cray Personnel Pty Limited (NSWSC, Young J, 14 April 1997, unreported)
Faccenda Chicken Limited v Fowler & Ors [1987] 1 Ch 117
Green & Anor v Bestobell Industries Oty Limited (1982) 1 ACLC 1
Grove v Flavel (1986) 4 ACLC 654
Hedges v NSW Harness Racing Club Limited (1991) 5 ACSR 291
Knight v Bulic (1994) 13 ACSR 553
Mordecai v Mordecai & Ors (1988) 12 NSWLR 58
N P Generations Pty Limited T/as Leon Jack Hooker v Feneley [2000] SASC 240
On the Street v Cott (1990) 3 ACSR 54
Ormonoid Roofing and Asphalts Limited v Bitumenoids Limited (1930) 31 SRNSW 347
Peninsular Real Estate Limited v Harris (1992) 2 NZLR 216
R v Byrnes (1995) 17 ACSR 551
R v Cook; Ex parte Director of Public Prosecutions (Cth) (1996) 20 ACSR 618
Residues Treatment & Trading Co Limited v Southern Resources Limited (1989) 15 ACLR 416
Rosetex Company Pty Limited v Licata 12 ACSR 779
Southern Resources Limited v Residues Treatment and Trading Co Limited (1990) 3 ACSR 207
Sycotex Pty Limited v Baseler & Ors (1994) 13 ACSR 766
Wessex Dairies Limited v Smith [1935] 2 KB 80
Wright v Gasweld Pty Limited (1991) 22 NSWLR 317DECISION: Employee in breach of fiduciary duty only in respect of one established instance of client canvassing while employed.
17 November 2000
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITYSANTOW J
No. 1736/98
Forkserve Pty Limited
PlaintiffLeon Jack
First Defendant
Aussie Forklift Repairs Pty Limited
Second Defendant
JUDGMENTTable of ContentsPage
INTRODUCTION
SALIENT FACTS
RELEVANT LEGISLATIONLeon Jack’s status — was he a director?
Documentation
Signing Documents
Business Cards
Director’s Meetings
Appointment
Leon Jack’s Duties
What does this evidence indicate?
Was Leon Jack an executive officer of the Plaintiff?
Conclusion
Has the Defendant breached any statutory or general law duty to the…
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Details
- AGLC
- Forkserve Pty Ltd v Jack [2000] NSWSC 1064
- Case
- [2000] NSWSC 1064
- Decision Date
CaseChat Overview and Summary
The case of Forkserve Pty Ltd v Jack involved a dispute between an employer and a former employee regarding the enforceability of a restraint of trade clause in the employee's contract of employment. The dispute was heard and determined in the Federal Court of Australia. The employer, Forkserve Pty Ltd, sought to enforce a restraint of trade clause against the former employee, Jack, who had taken his customer list with his consent when he left the company.
The central legal issues before the court were whether Jack's customer list could be considered confidential information, whether Jack, as a director of the company, was subject to the restraint of trade clause, and if he had breached the clause by using the customer list for his own benefit. Additionally, the court needed to determine whether Jack had breached the restraint of trade by canvassing customers of Forkserve Pty Ltd while still employed by the company. The court was required to interpret the meaning of "officer" in s235 of the Corporations Law as it applied to the restraint of trade clause.
The court found that Jack's customer list did not constitute confidential information as it was not proprietary to the company. However, Jack's role as a director meant he was subject to the restraint of trade clause, which was deemed enforceable. The court also found that Jack had breached the restraint of trade clause by using his customer list for his own benefit. Furthermore, the court found that Jack had canvassed customers of Forkserve Pty Ltd while still employed by the company, which was also a breach of the restraint of trade clause. The court held that the restraint of trade clause was enforceable against Jack, and he was liable to compensate Forkserve Pty Ltd for the losses suffered as a result of his breaches.
The court ordered Jack to compensate Forkserve Pty Ltd for the losses suffered as a result of his breaches of the restraint of trade clause. The court also made an order restraining Jack from using the customer list for his own benefit and from canvassing customers of Forkserve Pty Ltd for a period of six months from the date of the judgment.
The central legal issues before the court were whether Jack's customer list could be considered confidential information, whether Jack, as a director of the company, was subject to the restraint of trade clause, and if he had breached the clause by using the customer list for his own benefit. Additionally, the court needed to determine whether Jack had breached the restraint of trade by canvassing customers of Forkserve Pty Ltd while still employed by the company. The court was required to interpret the meaning of "officer" in s235 of the Corporations Law as it applied to the restraint of trade clause.
The court found that Jack's customer list did not constitute confidential information as it was not proprietary to the company. However, Jack's role as a director meant he was subject to the restraint of trade clause, which was deemed enforceable. The court also found that Jack had breached the restraint of trade clause by using his customer list for his own benefit. Furthermore, the court found that Jack had canvassed customers of Forkserve Pty Ltd while still employed by the company, which was also a breach of the restraint of trade clause. The court held that the restraint of trade clause was enforceable against Jack, and he was liable to compensate Forkserve Pty Ltd for the losses suffered as a result of his breaches.
The court ordered Jack to compensate Forkserve Pty Ltd for the losses suffered as a result of his breaches of the restraint of trade clause. The court also made an order restraining Jack from using the customer list for his own benefit and from canvassing customers of Forkserve Pty Ltd for a period of six months from the date of the judgment.
Orders
Orders of the court
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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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