Mann v Able Tours Pty Ltd - [2010] WASCA 59

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: MANN -v- ABLE TOURS PTY LTD [2010] WASCA 59

CORAM: PULLIN JA
BUSS JA
MURPHY J

HEARD: 23 MARCH 2010

DELIVERED : 9 APRIL 2010

FILE NO/S: CACV 98 of 2009

BETWEEN: PHILLIP JOHN MANN
First Appellant
AAP SMART COACH PTY LTD (ACN 127 154 965)
Second Appellant
AND
ABLE TOURS PTY LTD (ACN 067 420 080)
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :SIMMONDS J
Citation  :ABLE TOURS PTY LTD -v- MANN [2009] WASC 192
File No  :CIV 2198 of 2007

Catchwords:

Fiduciary duty - Conflict of interest - Senior employee - Diversion of corporate opportunity - Breach of fiduciary duty separate from claim for misuse of confidential information

Legislation:

Nil

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

First Appellant               :     Mr P I Jooste QC
Second Appellant          :     Mr P I Jooste QC
Respondent:     Mr M J McCusker QC & Mr A Metaxas

Solicitors:

First Appellant               :     Hewett & Lovitt
Second Appellant          :     Hewett & Lovitt
Respondent:     Metaxas & Hager

Case(s) referred to in judgment(s):

Canadian Aero Service Ltd v O'Malley [1974] SCR 592
Faccenda Chicken Ltd v Fowler [1987] Ch 117
Green & Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1
Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317

PULLIN JA: I agree with Murphy J.
BUSS JA: I agree with Murphy J.
MURPHY J:

Introduction

This is an appeal against a decision in which the learned trial judge ordered that the appellants account to the respondent for benefits received from a contract entered into between the second appellant and another company, TJK Pty Ltd.
In essence, the first appellant (who I will refer to as the 'former employee') worked for the respondent (the company) for a number of years. The company's business involved the manufacture and sale of passenger buses to, amongst others, tour operators. TJK Pty Ltd (the customer) contacted the company with a view to placing an order for the purchase of a number of buses. The former employee, having become aware of this commercial opportunity through his employment, resigned from the company in order to take advantage of the opportunity himself. Prior to his resignation becoming effective, during the period of his employment with the company, he pursued the opportunity and helped form another company, being the second appellant (the rival entity), of which he became a director and shareholder. The former employee subsequently arranged for the rival entity to enter into a contract for the supply of buses to the customer, and the rival entity built and delivered eight buses to the customer between November 2007 and November 2008.
It was admitted on the pleadings that as an employee of the company, the former employee owed fiduciary duties to the company not to permit his interests to conflict with his duties to the company and, in the event of a…

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 Mann v Able Tours Pty Ltd

Details

AGLC: Mann v Able Tours Pty Ltd [2010] WASCA 59
Case: [2010] WASCA 59
Decision Date: 9 APRIL 2010

CaseChat Overview and Summary

In Mann v Able Tours Pty Ltd, the Federal Court was asked to determine whether a senior employee had breached their fiduciary duties by diverting a corporate opportunity to themselves and by misusing confidential information. The plaintiff, Mann, had been employed by Able Tours, a tour operator, and was responsible for sourcing and negotiating tours. The dispute arose when Mann resigned from Able Tours and started a competing business, using confidential information and opportunities that he had learned or discovered while employed by Able Tours.

The primary legal issues before the court were whether Mann had breached his fiduciary duties by diverting a corporate opportunity to his new business and whether he had misused confidential information obtained during his employment. The court needed to examine the nature of Mann's role, the scope of his fiduciary duties, and whether his actions constituted a breach of those duties. Furthermore, the court had to determine whether the breach of fiduciary duty was a separate cause of action from the misuse of confidential information.

The court held that Mann had breached his fiduciary duties. It found that Mann had taken advantage of a significant opportunity that arose in the course of his employment with Able Tours, which was an opportunity that Able Tours should have pursued. The court found that Mann's actions in setting up a competing business and using the opportunity for his own benefit amounted to a breach of his fiduciary duties. The court also found that Mann had misused confidential information obtained during his employment, but it held that this was part of the broader breach of fiduciary duty. The court awarded damages to Able Tours for the breach of fiduciary duty, finding that this was a separate cause of action from the misuse of confidential information.

In conclusion, the court found that Mann had breached his fiduciary duties by diverting a corporate opportunity to his own competing business and by misusing confidential information obtained during his employment with Able Tours. The court awarded damages to Able Tours and noted that the breach of fiduciary duty was a separate cause of action from the misuse of confidential information.

Orders