Nexgen Sydney Pty Ltd v Barakat [2022] NSWSC 312

Nexgen Sydney Pty Ltd v Barakat [2022] NSWSC 312

The Court found that while Ms Barakat and Mr Youssef took information (a spreadsheet and emails, respectively) upon leaving employment, the information as a whole (when compiled) did constitute confidential information and there was breach of contract. However, the plaintiffs failed to prove any compensable loss from this breach, and most of the information was accessible via other sources. Claims for breach of fiduciary duties and statutory breach failed for lack of proof of actual misuse or loss, and permanent injunction was refused as risk of future misuse was not established. Only nominal damages were awarded for contractual breach by Ms Barakat and Mr Youssef.

Jurisdiction
Australia
Judgment Date
24 March 2022
Procedural Posture
Principal Judgment / Final Orders After Hearing (includes Post Reserved Judgment and Further Submissions)
Outcome
Partial success for plaintiffs (nominal damages only); other claims dismissed.
Legal Topics
['breach of Confidence' 'breach of Employment Contract' 'fiduciary Duties' 'restraint of Trade' 'statutory Duties of Employees (ss 182, 183 Corporations Act)' 'equitable Remedies' 'evidence of Confidential Information' 'use of Customer/client Lists']
['equity' 'contract' 'corporations'] ['breach of Confidence' 'breach of Employment Contract' 'fiduciary Duties' 'restraint of Trade' 'statutory Duties of Employees (ss 182, 183 Corporations Act)' 'equitable Remedies' 'evidence of Confidential Information' 'use of Customer/client Lists']

Case Brief

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Procedural Posture

Principal Judgment / Final Orders After Hearing (includes Post Reserved Judgment and Further Submissions)

Legal Issues

  1. 1 ['Whether the defendants breached contractual obligations not to use or disclose confidential information of the plaintiffs' 'Whether the defendants breached their fiduciary duties to the plaintiffs' 'Whether the defendants contravened ss 182 or 183 of the Corporations Act 2001 (Cth)' "Whether the information taken constituted 'confidential information'" 'Whether the plaintiffs suffered loss' 'Whether injunctions and/or equitable compensation should be granted']

Ratio Decidendi

The Court found that while Ms Barakat and Mr Youssef took information (a spreadsheet and emails, respectively) upon leaving employment, the information as a whole (when compiled) did constitute confidential information and there was breach of contract. However, the plaintiffs failed to prove any compensable loss from this breach, and most of the information was accessible via other sources. Claims for breach of fiduciary duties and statutory breach failed for lack of proof of actual misuse or loss, and permanent injunction was refused as risk of future misuse was not established. Only nominal damages were awarded for contractual breach by Ms Barakat and Mr Youssef.

Court Disposition

Partial success for plaintiffs (nominal damages only); other claims dismissed.

Orders

  • ['Order that the first and third defendants pay the plaintiffs nominal damages in the amount of $1 for breach of her or his respective employment contracts.' "Dismiss the remainder of the plaintiff's amended statement of claim." 'Discharge the undertaking proffered by Ms Barakat and Mr Youssef on 29 November 2019.'...