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Steadfast Irs Pty Limited v Latchmi Mesuria

Steadfast Irs Pty Limited v Latchmi Mesuria

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Case Copied 27 July 2020 51 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Steadfast IRS Pty Limited v Latchmi Mesuria [2020] NSWSC 947
Hearing dates: 11 June and 24 June 2020
Decision date: 27 July 2020
Jurisdiction: Equity - Expedition List
Before: Sackar J
Decision:
See [116]-[117]

Catchwords:
CONTRACTS — Termination — Repudiation of contract — Whether business restructure led to repudiation of employment contract — Where employee relocated from Sydney to Melbourne — Where restructure led to change in job title and reporting lines
EMPLOYMENT AND INDUSTRIAL LAW — Contract — Restraint of trade — Whether non-solicitation restraint unreasonable or against public policy — Whether defendant had sufficient customer connection and access to confidential information to justify restraint — Where defendant was an experienced insurance broker with large client portfolio — Whether duration of restraint reasonable — Where restraint period defined as “cascading” periods of restraint ranging from twelve months down to three months after the end of the employment

Legislation Cited:
Restraints of Trade Act (NSW)

Cases Cited:
Adamson v New South Wales Rugby League Limited (1981) 27 FCR 535
Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288
Bulk Frozen Foods Pty Ltd v Excell [2014] TASSC 58; 24 Tas R 471
Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9
Cameron v Asciano Services Limited [2011] VSC 36
CGI Glass Lewis Pty Ltd v Vasey [2019] NSWSC 794
Crowe v Holwarth (Aust) Pty Limited v Loone [2017] VSCA 181
Dr Angel-Honnibal v Idameneo (NO 123) Pty Ltd (2003) 59 IPR 184; [2003] NSWCA 263
Easling v Mahoney Insurance Brokers (2001) 78 SASR 489
Hanna v OAMPS [2010] NSWCA 267
Idameno (No 123) Pty Ltd v Dr Therese Angel-Honnibal [2003] ATPR ¶41-918; [2002] NSWSC 1214
Izaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343
John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995
Keays v JP Morgan Administrative Services Ltd [2012] FCAFC 100
Landmark Underwriting Agency Pty Ltd v Kilborn [2006] NSWSC 1108
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623
McDonald v Denny Lascelles (1933) 48 CLR 457
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535
OAMPS Insurance Brokers Ltd v Hanna [2010] NSWSC 781
Orton v Melman (1981) 1 NSWLR 583
Otis Elevator Company Pty Limited v John Nolan [2007] NSWSC 593
Paul Fishlock v The Campaign Palace Pty Limited [2013] NSWSC 531
Popham Holdings Pty Ltd v Franklin [2016] VSC 597
Portal Software v Bodsworth [2005] NSWSC 1179
Russ Australia Pty Ltd v Benny [2006] NSWSC 1118
Seven Network (Operations) Ltd v Warburton (No 2) [2011] NSWSC 386; 206 IR 450
Shell UK Ltd v Lostock Garage Ltd [1976] 1 LR 1187
Shevill v Builders Licensing Board (1982) 149 CLR 620
Stenhouse Australia Ltd v Phillips [1974] AC 391
TullettPrebon (Australia) v Simon Purcell [2008] NSWSC 852
Woolworths Ltd v Olson [2004] NSWCA 372

Texts Cited:
J D Heydon, The Restraint of Trade…

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 947
Decision Date: 27 July 2020

CaseChat Overview and Summary

The parties in this case were Steadfast IRS Pty Limited and Latchmi Mesuria. Mesuria was employed by Steadfast IRS, an insurance broking firm, and relocated from Sydney to Melbourne for her employment. The dispute centred around the termination of her employment and a non-solicitation restraint clause within her employment contract. The court involved was the Supreme Court of New South Wales.

The primary legal issues the court had to decide were whether the business restructure led to a repudiation of the employment contract and whether the non-solicitation restraint was reasonable and not against public policy. Specifically, the court needed to assess whether Mesuria's change in job title and reporting lines constituted a repudiation by Steadfast IRS and whether the non-solicitation restraint was justified given Mesuria's role and client portfolio. Additionally, the court had to determine the reasonableness of the restraint period, which was defined as a cascading period from twelve months down to three months.

In its decision, the court held that the business restructure did not amount to a repudiation of the employment contract. The court reasoned that the changes in job title and reporting lines were internal adjustments and did not materially alter the essence of the contract. Regarding the non-solicitation restraint, the court found that Mesuria had a substantial customer connection and access to confidential information, justifying the restraint. The court also concluded that the duration of the restraint was reasonable, considering the nature of Mesuria's role and her large client portfolio.

The court's final orders included a declaration that the business restructure did not amount to a repudiation of the employment contract and that the non-solicitation restraint was reasonable and enforceable. The court did not impose any further orders or remedies.

Orders