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Forkserve Pty Ltd v Jack

Forkserve Pty Ltd v Jack

Case [2000] NSWSC 1064 17 November 2000

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Reported Decision: [2001] 19 ACLC 299

New South Wales

Supreme Court

CITATION: Forkserve Pty Limited v Jack & 1 Ors [2000] NSWSC 1064

CURRENT JURISDICTION:
Equity

FILE 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 317

DECISION: Employee in breach of fiduciary duty only in respect of one established instance of client canvassing while employed.

IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITY

SANTOW J
No. 1736/98

Forkserve Pty Limited
Plaintiff
Leon Jack
First Defendant
Aussie Forklift Repairs Pty Limited
Second Defendant

JUDGMENT
17 November 2000
Table of Contents

Page

INTRODUCTION
SALIENT FACTS
RELEVANT LEGISLATION
Leon 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…

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.

Continue reading Forkserve Pty Ltd v Jack

Details

AGLC: Forkserve Pty Ltd v Jack [2000] NSWSC 1064
Case: [2000] NSWSC 1064
Decision Date: 17 November 2000

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.

Orders