Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458

Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458

Mr Hurd, while holding positions of fiduciary responsibility at Zomojo, deliberately and covertly engaged in competing business ventures (primarily via Zeptonics and Crosswise) in direct breach of his contractual, statutory, and equitable obligations. He diverted opportunities from Zomojo, developed and marketed similar products using confidential information and know-how gained through his role, and took active steps to solicit Zomojo's employees for his competing businesses. The Court found the contractual confidentiality and restraint provisions (read down for time period as appropriate), and the assignment requirements for inventions, to be reasonable and enforceable. OptiCast (later...

Jurisdiction
Australia
Judgment Date
19 December 2012
Procedural Posture
Corporate and Employment Dispute (claims for Breach of Fiduciary, Statutory and Contractual Duties; Cross Claim Regarding Share Acquisition and Oppression) / Judgment on Liability (quantum and Account of Profits Reserved for Further Hearing)
Outcome
Judgment for the Applicant on liability. Declarations of breach of duties. Injunctions granted requiring assignment and delivery up of relevant inventions (OptiCast/ZeptoLink, ZeptoNIC, ZeptoAccess KRX, Crosswise ATS), and restraining further misuse of confidential information for one year. Declarations that...
Legal Topics
["directors' Duties" 'breach of Contract' 'confidential Information' 'fiduciary Obligations' 'restraints of Trade' 'know How' 'employee Share Plans' 'remedies (injunction, Damages, Account of Profits)' 'constructive Trusts']
['corporations Law' 'contract Law' 'employment Law' 'equity' 'intellectual Property'] ["directors' Duties" 'breach of Contract' 'confidential Information' 'fiduciary Obligations' 'restraints of Trade' 'know How' 'employee Share Plans' 'remedies (injunction, Damages, Account of Profits)' 'constructive Trusts']

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Procedural Posture

Corporate and Employment Dispute (claims for Breach of Fiduciary, Statutory and Contractual Duties; Cross Claim Regarding Share Acquisition and Oppression) / Judgment on Liability (quantum and Account of Profits Reserved for Further Hearing)

Legal Issues

  1. 1 ['Did Mr Hurd, as a director and employee, breach his statutory, fiduciary and contractual duties by establishing and pursuing competing business interests while employed by Zomojo?' 'Were the relevant restraints and confidentiality provisions enforceable and reasonable?' 'Did Hurd misuse confidential information or inventions belonging to Zomojo?' 'Did Hurd and corporate respondents knowingly assist in breaches of duty or induce breaches of contract?' 'Is Zomojo entitled to injunctive and declaratory relief, assignment of intellectual property, an account of profits and/or damages?' "Were the disciplinary and buyback provisions regarding Mr Hurd's shares enforceable, and/or penal, and/or oppressive?" 'Were corporate respondents liable to account on a constructive trust basis for profits?' 'Were the relevant board resolutions valid?']

Ratio Decidendi

Mr Hurd, while holding positions of fiduciary responsibility at Zomojo, deliberately and covertly engaged in competing business ventures (primarily via Zeptonics and Crosswise) in direct breach of his contractual, statutory, and equitable obligations. He diverted opportunities from Zomojo, developed and marketed similar products using confidential information and know-how gained through his role, and took active steps to solicit Zomojo's employees for his competing businesses. The Court found the contractual confidentiality and restraint provisions (read down for time period as appropriate), and the assignment requirements for inventions, to be reasonable and enforceable. OptiCast (later...

Court Disposition

Judgment for the Applicant on liability. Declarations of breach of duties. Injunctions granted requiring assignment and delivery up of relevant inventions (OptiCast/ZeptoLink, ZeptoNIC, ZeptoAccess KRX, Crosswise ATS), and restraining further misuse of confidential information for one year. Declarations that...

Orders

  • ['Mandatory injunctions: Mr Hurd to assign, or procure assignment of OptiCast (ZeptoLink), ZeptoNIC, ZeptoAccess KRX, and Crosswise ATS to Zomojo.' "Mandatory injunctions: Mr Hurd to deliver up all prototypes, products, and documents relating to these inventions within his or respondents' control." 'Declarations:...