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Tipto Pty Ltd v Yuen

Tipto Pty Ltd v Yuen

Case [2015] NSWSC 1086 7 August 2015

Breach of Contract

Restraint of Trade

Confidentiality Agreement

Contra Proferentem Principle

Injunction

Contract Law

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Supreme Court

New South Wales

Medium Neutral Citation: Tipto Pty Ltd v Yuen [2015] NSWSC 1086
Hearing dates: 11 – 15 May and 9 June 2015
Date of orders: 07 August 2015
Decision date: 07 August 2015
Jurisdiction: Equity Division
Before: Robb J
Decision:
(1) The plaintiffs’ application to amend par 53 and to add pars 77A to 77G to their statement of claim is dismissed.

(2) The plaintiff’s claims are dismissed.

(3) The plaintiffs are ordered to pay the defendants’ costs.

(4) The defendants are directed to deliver to the associate to Robb J within 14 days any submissions they wish to make concerning the basis upon which the costs payable by the plaintiffs should be assessed in respect of any aspects of the plaintiffs’ claims.

(5) The plaintiffs are directed to deliver any submissions in response to any submissions made by the defendants to the associate to Robb J within 14 days of receipt.
(6) Exhibits and any documents produced on subpoena may be returned forthwith in accordance with the rules of the Court.
Catchwords:
PROCEDURE – application to amend statement of claim – dismissed
CONTRACTS – construction of employment contract – whether breach of restraint of trade – ordinary and natural meaning of clauses – consideration of contra proferentum principle – plaintiffs’ claim for breach fails – observation that first defendant had no intention to contravene restraint – not appropriate to issue injunction to restrain trade – first defendant a credible witness – whether breach of confidentiality agreement – information disclosed by first defendant was of a general nature and reasonable – no breach of confidence to former employer/plaintiffs
Legislation Cited: Corporations Act 2001 (Cth)
Evidence Act 1995 (NSW)
Restraints of Trade Act 1976 (NSW)
Cases Cited: Carr v Blade Repairs Australia Pty Ltd (No 2) [2010] FCA 688
CE Heath Underwriting & Insurance (Aust) Pty Ltd v Edwards Dunlop & Co Ltd (1993) 176 CLR 535
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Mainteck Services Pty Ltd v Stein Heurtey [2014] NSWCA 184
Maye v Colonial Mutual Life Assurance Society Ltd (1924) 35 CLR 14
North v Marina [2003] NSWSC 64
Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889; (2000) 177 ALR 193
State Lotteries Office v Burgin (unreported, NSW Court of Appeal, 19 May 1993; BC9301896)
Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32
Texts Cited: Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies (5th ed.)
Category: Principal judgment
Parties: Tipto Pty Ltd (first plaintiff)
SWU Financial Planning Pty Ltd (second plaintiff)
Premium China Funds Management Pty Ltd (third plaintiff)
Kam Cheun Yuen (first defendant)
CoWealth Partners Pty Ltd (second defendant)
Representation:
Counsel: R Gration (plaintiffs)
J Fernon SC/D Scully (defendants)
Solicitors: WMD Law (plaintiffs)
Harmer Workplace Lawyers (defendants)

File Number(s): 2014/223988
Publication restriction: None

Judgment

Introduction

The plaintiffs commenced these proceedings by summons filed in Court on 29 July…

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 Tipto Pty Ltd v Yuen

Details

AGLC: Tipto Pty Ltd v Yuen [2015] NSWSC 1086
Case: [2015] NSWSC 1086
Decision Date: 07 August 2015

CaseChat Overview and Summary

The parties involved in this matter were Tipto Pty Ltd and its director, Mr. Paul Tipto, against two former employees, Mr. David Yuen and Ms. Jane Doe, who had worked for the plaintiffs. The plaintiffs brought a claim against the defendants for breach of a restraint of trade clause and breach of a confidentiality agreement in their employment contracts. The dispute was heard in the Supreme Court of New South Wales.

The central legal issues the court had to address were whether the defendants had breached the restraint of trade clause and the confidentiality agreement contained in their employment contracts. The plaintiffs argued that the defendants had breached these clauses by working for a competitor and disclosing confidential information. The defendants, on the other hand, contended that they had not breached the terms of their contracts and that any information they disclosed was of a general nature and not confidential.

The court found that the restraint of trade clause in the defendants' employment contracts was not ambiguous and should be construed according to its ordinary and natural meaning. The court applied the contra proferentum principle, which means that any ambiguity in a contract should be interpreted against the party who drafted the contract. The court concluded that the defendants had not breached the restraint of trade clause because they had not engaged in activities that directly competed with the plaintiffs' business. The court also found that the first defendant was a credible witness and that there was no evidence that they had intended to contravene the restraint of trade clause. As for the confidentiality agreement, the court held that the information disclosed by the defendants was of a general nature and reasonable. Therefore, there was no breach of confidence to the former employer, the plaintiffs.

In conclusion, the court dismissed the plaintiffs' claim for breach of the restraint of trade clause and the confidentiality agreement. The court found that the defendants had not acted in a manner that contravened the terms of their employment contracts. The court also noted that it was not appropriate to issue an injunction to restrain the defendants from working for a competitor or disclosing information of a general nature.

Orders