Woolworths Ltd v Olson

Case [2004] NSWSC 849


Reported Decision:

63 IPR 258

Supreme Court


CITATION: Woolworths Limited v Mark Konrad Olson & Anor [2004] NSWSC 849
HEARING DATE(S): 7/09/04, 8/09/04, 9/09/04, 10/09/04, 13/09/04, 14/09/04, 15/09/04, 17/09/04
JUDGMENT DATE:
22 September 2004
JURISDICTION:
Equity Division
Commercial List
JUDGMENT OF: Einstein J
DECISION: Limited relief to be given. Short minutes of order to be brought in. ; [NOTE: This is the edited text of the judgment delivered on 22 September 2004. It does not include material [the subject of a confidentiality regime imposed by Court order] which may not be published except in such manner and for such purposes as the Court specifies. (See note at end of Judgment)]
CATCHWORDS: Anton Pillar relief granted by Federal Court - Cross-vesting orders made under Jurisdiction of Courts (Cross-Vesting) Act 1987 - Litigation before Supreme Court consolidated to include joint hearing of Federal Court proceedings, proceedings before Industrial Relations Commission under section 106 of Industrial Relations Act 1996-Confidential information - Intellectual Property - Fiduciary obligations of employee - Breach of copyright - Exemplary damages - Contract of employment - Employee agrees to be bound by employers code of conduct requiring employees to declare any interest they might have that could adversely affected employer - Fraudulent intent of employee - Employee determines to accept employment with competitor and to send to home computer e-mail attachments containing highly confidential information of first employer - Conflict between duty and interest exists from moment when employee forms intention to dishonestly take and use employers confidential information for his own benefit, contrary to fiduciary and contractual obligations - Further conflict of duty and interest constituted by the preferring by employee of his own interests in failing to disclose the conflict - Summary dismissal of employee - Restraint of Trade covenants - Employee proposes as soon as permitted to take up a position with major competitor - Relief - No evidence as to any pecuniary loss suffered by employer as a result of employees breach - No evidence of profit acquired by employee - Nominal damages - Restraint provision held invalid - Not possible to read down restraint period or geographic area to give restraint a reasonable operation - Court cannot redraft restraint provision
LEGISLATION CITED: Copyright Act 1968 (Cth)
Copyright Amendment (Digital Agenda) Act 2000 (Cth)
Corporations Act 2001 (Cth)
Evidence Act 1995 (NSW)
Industrial Relations Act 1996 (NSW)
Interpretation Act 1987 (NSW)
Jurisdiction of Courts (Cross--Vesting) Act 1987 (Cth)
Restraints of Trade Act 1976 (NSW)
Trade Practices Act 1974 (Cth)
CASES CITED: A Buckle & Son Pty Ltd v McAllister (1986) 4 NSWLR 426
Adami v Maison de Luxe Ltd (1924) 35 CLR 143
Adamson v New South Wales Rugby League Ltd (1991) 31 FCR 242
Amalgamated Mining Services Pty Ltd v Warman International Ltd (1992) 24 IPR 461
Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288
Angus & Coote Pty Ltd v Render (1989) 16 IPR 387
Ansell Rubber Co Pty Ltd v Allied Rubber Industries…

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AGLC
Woolworths Ltd v Olson [2004] NSWSC 849
Case
[2004] NSWSC 849
Decision Date

CaseChat Overview and Summary

Woolworths Ltd, a major Australian supermarket chain, brought a claim against former employee, Olson, in the Federal Court of Australia. The claim involved allegations of breach of copyright, misuse of confidential information, and breach of fiduciary and contractual obligations by Olson, who had accepted employment with a competitor while still employed by Woolworths. The dispute also included an application for Anton Pillar relief and cross-vesting orders under the Jurisdiction of Courts (Cross-Vesting) Act 1987, and a consolidation of litigation before the Supreme Court with proceedings before the Industrial Relations Commission.

The legal issues that the court was required to decide included the validity of the Anton Pillar relief and cross-vesting orders, the merits of the claim for breach of copyright, misuse of confidential information, and breach of fiduciary and contractual obligations by Olson, and the enforceability of the restraint of trade provision in Olson's employment contract. The court was also required to determine whether any damages should be awarded to Woolworths for the alleged breaches by Olson.

The court found that Olson had breached his fiduciary and contractual obligations by intending to dishonestly take and use Woolworths' confidential information for his own benefit, and by failing to disclose this conflict of interest. The court also found that Olson had breached his copyright by sending e-mail attachments containing highly confidential information to his home computer. The court granted Anton Pillar relief and cross-vesting orders, and consolidated the proceedings before the Supreme Court with the proceedings before the Industrial Relations Commission. However, the court found that the restraint of trade provision in Olson's employment contract was invalid as it was not possible to read down the restraint period or geographic area to give the restraint a reasonable operation. The court awarded nominal damages to Woolworths for the breaches by Olson, but found no evidence of any pecuniary loss suffered by Woolworths as a result of the breaches, or of any profit acquired by Olson.

In conclusion, the court found in favour of Woolworths on all counts except for the restraint of trade provision, which was held to be invalid. The court granted Anton Pillar relief and cross-vesting orders, and consolidated the proceedings before the Supreme Court with the proceedings before the Industrial Relations Commission. The court awarded nominal damages to Woolworths for the breaches by Olson, but found no evidence of any pecuniary loss suffered by Woolworths as a result of the breaches, or of any profit acquired by Olson.

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