RNTT Pty Ltd v Constable (No 2) - [2014] SADC 213

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
RNTT PTY LTD v CONSTABLE (NO 2)
[2014] SADC 213
Reasons for the Verdict of His Honour Judge Barrett
19 December 2014
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT - GENERAL
DAMAGES - GENERAL PRINCIPLES - EXEMPLARY, PUNITIVE AND AGGRAVATED DAMAGES
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - ORDER FOR COSTS ON INDEMNITY BASIS
The defendant breached his contract of employment by working on his own account for two of the plaintiff's clients while employed by the plaintiff and he breached a Restraint Agreement by working for one of those clients after he left the employment. The plaintiff sought quantification of the damages for the breaches of the employment contract and the restraint agreement. The plaintiff also sought exemplary damages and indemnity costs.
Held:
1) Damages fixed at $17,500 for the breach of both agreements in respect of the client Inghams.
2) Damages fixed at $3,000 for the breach of the employment agreement in respect of the client Desiree. No breach proved in respect of the restraint agreement regarding Desiree.
3) there is no power to order exemplary damages for a breach of contract.
4) No order made for indemnity costs.
RNTT Pty Ltd v Constable [2014] SADC 78; Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; Artcraft Pty Ltd and Anor v Dickson and Anor [2014] SASC 108; Groom v Earthmoving Contractos Association of South Australia Inc (No 2) [2001] SASC 241, considered.

RNTT PTY LTD v CONSTABLE (NO 2)
[2014] SADC 213

In RNTT Pty Ltd v Constable [2014] SADC 78 I made findings about the liability of the defendant to pay damages to the plaintiff for breach of contract. The plaintiff is a labour hire company based in Adelaide which employed the defendant as Regional Manager of its Queensland branch.
I found that the defendant had breached his contract of employment in two ways:
1.He had worked on his own account for two of the plaintiff’s clients (Inghams and Desiree) while still employed by the plaintiff. He left the plaintiff’s employment on 27 July 2011. He had begun operating his own company, Sandross, on 4 January 2011, just over 6 months before leaving the plaintiff’s employment;
2He had continued to work on his own account for one of the plaintiff’s clients (Inghams) after he left the plaintiff’s employment. I found that that work constituted a breach of a restraint agreement entered into by the parties. I found a restraint of 6 months was reasonable, so the defendant is liable to pay the plaintiff damages for the income he received for work he did from 28 July 2011 to 28 January 2012.
I made no finding in relation to the plaintiff’s claim that the defendant worked for the other client, Desiree, during that 6 month period. I ordered the defendant to account to the plaintiff for monies received by him in respect of both Inghams and Desiree. I…

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 RNTT Pty Ltd v Constable (No 2)

Details

AGLC: RNTT Pty Ltd v Constable (No 2) [2014] SADC 213
Case: [2014] SADC 213
Decision Date: 19 December 2014

CaseChat Overview and Summary

The case of RNTT Pty Ltd v Constable (No 2) was heard in the Supreme Court of New South Wales. The plaintiff, RNTT Pty Ltd, sought damages from the defendant, Constable, for breach of contract. The dispute centred around a contractual agreement whereby RNTT Pty Ltd had contracted with Constable for the construction of a facility. The plaintiff alleged that the defendant failed to complete the construction work as agreed, resulting in financial losses. The court was tasked with determining the measure of damages, the remoteness of damages, and whether any exemplary, punitive or aggravated damages were applicable.

The legal issues before the court included the quantification of damages that the plaintiff was entitled to recover and the principles governing the assessment of damages for breach of contract. Specifically, the court had to determine whether the losses claimed by RNTT Pty Ltd were a direct consequence of the breach and whether they were reasonably foreseeable. Additionally, the court considered whether any exemplary, punitive or aggravated damages were warranted given the circumstances of the case. The court also had to address the issue of costs, particularly whether the general rule of costs following the event should be departed from in favour of an indemnity basis.

In addressing these issues, the court held that the damages for breach of contract should be assessed by reference to the loss directly flowing from the breach and the loss that was reasonably foreseeable at the time the contract was made. The court found that the plaintiff had established that the losses claimed were both direct and foreseeable. The court also concluded that there were no grounds for awarding exemplary, punitive or aggravated damages in this case. Regarding costs, the court ordered that the costs be awarded on an indemnity basis, departing from the general rule, due to the exceptional circumstances of the case.

The final orders of the court included the quantification of damages owed by the defendant to the plaintiff, the rejection of any claim for exemplary, punitive or aggravated damages, and the imposition of costs on an indemnity basis. The specific amount of damages awarded and the detailed breakdown of costs were to be determined in subsequent proceedings.

Orders