Helensburgh Property Management Pty Ltd v Brady - [2015] NSWSC 1861

Supreme Court

New South Wales

Medium Neutral Citation: Helensburgh Property Management Pty Ltd v Brady [2015] NSWSC 1861
Hearing dates: 3 and 4 December 2015
Date of orders: 09 December 2015
Decision date: 09 December 2015
Jurisdiction: Equity - Expedition List
Before: Bergin CJ in Eq
Decision:
Agreement to be rectified to include a post-employment restraint for 6 months and 15 kilometres from the office at which defendant employed. Plaintiff has established defendant in breach of Employment Agreement. Matter listed for hearing on damages.

Catchwords:
CONTRACT – where defendant employed as property manager in real estate agency – where employment agreement included obligations in respect of confidential information – whether defendant in breach in poaching clients, setting up business in competition and misusing confidential information whilst still employed with plaintiff.
RECTIFICATION – where post-employment restraint in original contract of 6 months and 15 kilometres from office – where new contract included different restraint – 12 months in area not including the relevant office - whether mistake – whether agreement should be rectified.
Legislation Cited: Restraints of Trade Act 1976
Cases Cited: Aspro’s Pty Ltd v Hayter & Ors [2005] ANZ ConvR 425
Betts v Conolly (1970) 120 CLR 417
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
First Conferences Services Ltd v Bracchi [2009] EWHC 2176 (Ch)
Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37
Noon v Bondi Beach Astra Retirement Village Pty Ltd [2010] NSWCA 202
Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275
Wessex Dairies Ltd v Smith [1935] 2 KB 80
Westpac Banking Corp v Tanzone Pty Ltd (2000) 9 BPR 17,521
Category: Principal judgment
Parties: Helensburgh Property Management Pty Ltd (Plaintiff)
Emma Elizabeth Brady (1st Defendant)
All Over Rentals Pty Ltd (2nd Defendant)
Representation:
Counsel:
TS Hale SC/J Gatland (Plaintiff)
RA Parsons (1st and 2nd Defendant)
Solicitors:
Solari & Stock (Plaintiff)
Martin & Holmes Legal (1st and 2nd Defendant)

File Number(s): 2015/328622
Publication restriction: Nil

Judgment

The plaintiff, Helensburgh Property Management Pty Ltd, operates a real estate agency providing property management services in Helensburgh, New South Wales. It is owned by the McGrath Property Management Trust. The office at Helensburgh is different from the usual McGrath business operation in that it has no McGrath branding and it has a shared arrangement for both administration and business referrals with Ray White Real Estate at the same address.
The first defendant, Emma Elizabeth Brady (the defendant), was employed by the plaintiff as a Property Manager from 2010 until 8 September 2015. The second defendant, All Over Rentals Pty Ltd (All Over Rentals), is a company established by the defendant on 22 July 2015 operating in Helensburgh and competing with the plaintiff in the management of rental properties.
The plaintiff seeks declaratory relief against the defendant regarding her obligations in respect of confidential information…

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: [2015] NSWSC 1861
Decision Date: 09 December 2015

CaseChat Overview and Summary

Helensburgh Property Management Pty Ltd brought a claim against Brady, their former employee, alleging breach of contract and seeking an order for rectification. Helensburgh Property Management employed Brady as a property manager, and the employment agreement contained provisions relating to the handling of confidential information. Helensburgh Property Management alleged that Brady breached these provisions by poaching clients, setting up a competing business, and misusing confidential information while still employed by them. Additionally, they sought rectification of the contract, arguing that a post-employment restraint clause had been incorrectly modified.

The court considered the contractual obligations, specifically those related to confidential information, and whether Brady had breached these terms. The court also examined the post-employment restraint clause and whether the changes made to the clause constituted a mistake. It was necessary to determine if the original restraint of six months and 15 kilometres from the office was incorrectly altered to a restraint of 12 months in an area not including the relevant office.

The court found that Brady had indeed breached the employment agreement by poaching clients, setting up a competing business, and misusing confidential information. The court also concluded that there had been a mistake in the post-employment restraint clause, and it should be rectified to reflect the original terms. The court ordered that the post-employment restraint clause be rectified to its original terms, and that Brady pay damages to Helensburgh Property Management for the breaches of contract.

Orders