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Plus One International Pty Ltd v Ching (No 3)

Plus One International Pty Ltd v Ching (No 3)

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Case Copied 13 November 2020 80 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598
Hearing dates: 25 – 27 August 2020
Date of orders: 13 November 2020
Decision date: 13 November 2020
Jurisdiction: Equity
Before: Hallen J
Decision:
The Court:
(1) Directs the parties, within 14 days, to undertake the calculations which will give effect to these reasons for judgment and to provide the Court with draft short minutes of order which reflect the matters of quantum about which they are agreed and those in dispute.
(2) Directs the parties to attempt to agree on an order as to costs.
(3) Directs that if the parties are unable to agree on draft short minutes of order, or are unable to agree on costs, then, within 7 days thereafter, their respective draft short minutes of order, and short submissions, of no more than 3 pages, as to the differences between them, in hard and soft copy, are to be provided to the Court.

Catchwords:
EMPLOYMENT AND INDUSTRIAL LAW – Contract – Breach of contract by use of what was said to be confidential information – Where no written contract of employment – Where Defendants alleged to have taken confidential documents and client contacts – Where Defendants alleged to have established a competing business using the confidential information as a “springboard” – Whether Defendants breached implied duties of fidelity and confidentiality – Whether Plaintiffs entitled to an injunction
EQUITY – Breach of confidence – Conduct constituting breach – Where Defendants alleged to have taken confidential information and client contacts – Where Defendants alleged to have established a competing business using confidential information as a “springboard” – Whether equitable duty persists where an equivalent contractual duty exists – Whether Defendants breached their equitable obligation – Whether Plaintiffs entitled to an injunction or account of profits
EQUITY – Fiduciary duties – Fiduciary relationships – Employee and employer – Conflict of interest and duty – Where Defendants’ position low in the hierarchy of the Plaintiffs’ business – Whether fiduciary duty arises
CORPORATIONS – Employees – Duties – Duty not to use position as employee improperly – Duty not to use information improperly – Whether information required to be “confidential” – Whether Defendants contravened provisions of the Act

Legislation Cited:
Civil Procedure Act 2005 (NSW), ss 21, 60
Corporations Act 2001 (Cth), ss 9, 180, 181, 182, 183, 184, 185, 1317E, 1317H, 1317J
Education Services for Overseas Students Act 2000 (Cth)
Evidence Act 1995 (NSW), s 140
Uniform Civil Procedure Rules 2005 (NSW), rr 14.27, 21.2, 23.8, 25.19, 31.3, 31.10, 34.1

Cases Cited:
Adler v Australian Securities and Investments Commission (2003) 179 FLR 1; [2003] NSWCA 131
AG Australia Holdings Limited v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170
Agricultural Land Management Ltd v Jackson (No 2) (2014) 48 WAR 1; [2014] WASC 102
AIIB Pty Limited v Beard [2009] NSWSC 1001
Amway Corporation v Eurway International Limited [1973] FSR 213
Ancient Order of Foresters in Victoria…

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: [2020] NSWSC 1598
Decision Date: 13 November 2020

CaseChat Overview and Summary

The case of Plus One International Pty Ltd v Ching (No 3) involved a dispute between the Plaintiff, Plus One International, and the Defendants, Ching, over the alleged breach of contract and equitable obligations by the Defendants. The Plaintiff alleged that the Defendants, who were former employees, breached their contractual and fiduciary duties by using confidential information, including client contacts, to establish a competing business. The matter was heard in the Supreme Court of Queensland. The primary legal issues the court had to determine were whether the Defendants breached their implied contractual duties of fidelity and confidentiality, and whether they breached their equitable obligations of confidence and fiduciary duties. The court also had to consider whether the Plaintiff was entitled to an injunction against the Defendants' use of confidential information and client contacts.

The court found that the Defendants breached their implied contractual duties of fidelity and confidentiality by using confidential information to establish a competing business. The court noted that while there was no written employment contract, the Defendants' duties were implied based on their roles and the nature of their employment. The court held that the Defendants' use of confidential information to start a competing business constituted a breach of their implied duties. In addition, the court determined that the Defendants breached their equitable obligations of confidence by misappropriating confidential information. The court found that the equitable duty persisted despite the existence of equivalent contractual duties, and the Defendants were liable for breach of confidence. Furthermore, the court considered the Defendants' fiduciary duties but found that, given their position in the hierarchy of the business, no fiduciary duty arose. The court concluded that the Plaintiff was entitled to an injunction against the Defendants' use of confidential information and client contacts.

The court's final orders included an injunction preventing the Defendants from using the Plaintiff's confidential information and client contacts, and an account of profits to determine the Defendants' gains from the breach. The court also ordered the Defendants to deliver up any documents and information that contained the Plaintiff's confidential information. The court's decision emphasised the importance of protecting confidential information and the potential consequences of breaching implied and equitable duties.

Orders