Rickard & Wilson & Active Safety Services Pty Ltd v Testel Australia Pty Ltd

The appeal concerned a dispute between Testel Australia Pty Ltd, a franchisor of electrical testing services, and its former franchisees, Mr Rickard and Mr Wilson, and their new company, Active Safety Services Pty Ltd. Testel alleged that Mr Rickard and Mr Wilson, after their business relationship broke down, incorporated Active Safety Services Pty Ltd with the intention of taking over Testel's client, Flinders Medical Centre. Testel sought damages for loss of profits and, in a cross-appeal, exemplary damages and an account of profits. The appeal was heard by the Full Court of the Supreme Court of South Australia.

The primary legal issues before the Full Court were whether the trial judge erred in assessing the quantum of damages awarded to Testel, specifically concerning the loss of profits from the Newmont Mine contract, and whether the trial judge was correct in refusing to award exemplary damages and an account of profits against Mr Wilson and Active Safety Services Pty Ltd. Testel also contended that the trial judge failed to attribute Mr Rickard's conduct in suppressing evidence to Active Safety Services Pty Ltd.

The Full Court dismissed the appeal concerning the assessment of damages for the Newmont Mine contract, finding no error in the trial judge's assessment of the probability of Testel reclaiming the work. However, the Court allowed a minor adjustment to the damages award to account for contingencies related to a thermal imaging issue, reducing the total damages from $144,812.63 to $142,526.19. Regarding the cross-appeal, the Court upheld the trial judge's decision not to award exemplary damages, agreeing that the conduct, while wrongful, was not sufficiently contumelious or outrageous to warrant such an award. The Court also dismissed the claim for an account of profits.