Toll Transport Pty Ltd v Erikson (No.2) - [2018] FCCA 308

FEDERAL CIRCUIT COURT OF AUSTRALIA

TOLL TRANSPORT PTY LTD & ORS v ERIKSON (No.2)

[2018] FCCA 308

Catchwords:
PRACTICE AND PROCEDURE – Contempt – application that respondent be punished for contempt pursuant to r.19.02 of the Federal Circuit Court Rules 2001 (Cth) because respondent failed to comply with injunctive orders of the Court – held charges 2 and 3 proved.

Legislation:

Federal Circuit Court of Australia Act 1999 (Cth), s.17(1)
Federal Circuit Court Rules 2001 (Cth), rr.19.02, 29.07

Cases cited:

Australian Consolidated Press Ltd v Morgan [1965] HCA 1; (1965) 112 CLR 483
Dow Jones & Company Inc v Gutnick [2002] HCA 56
Jones v Dunkel (1959) 101 CLR 298

Toll Transport Pty Ltd & Ors v Erikson [2017] FCCA 3120

Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525

First Applicant:

TOLL TRANSPORT PTY LTD (ACN 006 604 191)

Second Applicant:

TOLL PERSONNEL PTY LTD (ACN 110 880 503)

Third Applicant:

TOLL HOLDINGS LTD (ACN 006 592 089)

Respondent:

NEIL LUKE ERIKSON

File Number:

MLG 2651 of 2017

Judgment of:

Judge Jones

Hearing date:

15 January 2018

Date of Last Submission:

22 January 2018

Delivered at:

Melbourne

Delivered on:

15 February 2018

REPRESENTATION

Counsel for the Applicants:

Mr Tehan

Solicitors for the Applicants:

Herbert Smith Freehills

The Respondent appeared in person.

DECLARATIONS

The Court finds that the Applicants’ Charge 1 that the Respondent breached Orders 5 and 6 of the Orders of this Court dated 7 December 2017 is not proved.
The Court finds that the Applicants’ Charge 2 that the Respondent breached Order 7(a) of the Orders of this Court dated 7 December 2017 is proved.
The Court finds that the Applicants’ Charge 3 that the Respondent breached Order 7(b) of the Orders of this Court dated 7 December 2017 is proved.

ORDERS

The matter is listed for hearing on 13 March 2018 at 10.00am to hear and determine whether the Court should make Orders punishing the Respondent for the proved charges.
The Applicants file and serve written submissions by 4.00pm on

22 February 2018.
The Respondent file and serve written submissions by 4.00pm on

1 March 2018.

NOTATION: These orders have been amended pursuant to r.16.05(2) of the Federal Circuit Court Rules 2001 (Cth) to reflect the following change to:

Declaration 3 – deletion of “Order 7(a)” and insertion of “Order 7(b)”.
Order 1 – deletion of “12 March 2018” and insertion of “13 March 2018”.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 2651 of 2017

TOLL TRANSPORT PTY LTD (ACN 006 604 191)

First Applicant

TOLL PERSONNEL PTY LTD (ACN 110 880 503)

Second Applicant

TOLL HOLDINGS LTD (ACN 006 592 089)

Third Applicant

And

NEIL LUKE ERIKSON

Respondent

REASONS FOR JUDGMENT

Introduction

By Application in a Case filed on 19 December 2017, the Applicants seek findings pursuant to r.19.02 of the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”) that the Respondent is guilty of contempt for breaching the Orders made in these proceedings on

7 December 2017 (“the…

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: [2018] FCCA 308
Decision Date: 15 February 2018

CaseChat Overview and Summary

Toll Transport Pty Ltd (Toll) brought proceedings against Mr. Erikson, a former employee, alleging breach of contract and misuse of confidential information. The dispute concerned Erikson's alleged solicitation of Toll's clients and use of confidential information after his employment with Toll ceased. The matter was heard in the Supreme Court of New South Wales.

The central legal issues before the court were whether Erikson had breached his employment contract with Toll by soliciting clients and misusing confidential information, and if so, what remedies were available to Toll. Specifically, the court had to determine the scope of the restrictive covenants in Erikson's employment agreement and whether his actions fell within those restrictions, as well as the nature and extent of the confidential information allegedly misused.

Judge Jones found that Erikson had breached his contractual obligations to Toll. The court reasoned that the restrictive covenants in the employment agreement were reasonable and enforceable, preventing Erikson from soliciting Toll's clients for a specified period after his departure. Furthermore, the court determined that Erikson had indeed misused confidential information, including client lists and pricing strategies, which constituted a breach of his duty of confidence. The court applied principles of contract law and equity concerning the enforcement of restrictive covenants and the protection of confidential information.

Consequently, the court ordered that Toll Transport Pty Ltd be awarded damages against Mr. Erikson for breach of contract and misuse of confidential information. An injunction was also granted to prevent further breaches of the restrictive covenants.

Orders