Andrews Advertising Pty Ltd v David Andrews [2014] NSWSC 318

Andrews Advertising Pty Ltd v David Andrews [2014] NSWSC 318

Dean Andrews, while employed, breached fiduciary and contractual duties by diverting lucrative Sleep City business to AMC without authority, for his and Danielle Andrews' benefit. Danielle Andrews, as sole director/shareholder of AMC, had knowledge of enough circumstances to be liable for knowing assistance under the second limb of Barnes v Addy. Both are liable to account to the Company for the profit received. The restraint of trade clause was reasonable and enforceable, and Dean Andrews is liable for damages for post-employment breach. No improper use of confidential information post-employment (s183) was established. Dean Andrews liable to reimburse the Company for personal expenses...

Parties
Plaintiff: Andrews Advertising Pty Limited; First Defendant: David Andrews; Second Defendant: Dean Andrews; Third Defendant: Andrews Media & Creative Pty Limited; Fourth Defendant: Smart Retail Pty Ltd; Fifth Defendant: Danielle Louise Andrews; Sixth Defendant: Smart Market Pty Ltd
Jurisdiction
Australia
Judgment Date
25 March 2014
Procedural Posture
Equity (principal Judgment) / Judgment After Trial
Outcome
Judgment for plaintiff and dismissal of cross-claim
Legal Topics
Fiduciary Duties, Account of Profits, Breach of Contract, Restraint of Trade, Knowing Assistance, Statutory Duties Under Corporations Act
Equity Contract Corporations Law Fiduciary Duties Account of Profits Breach of Contract Restraint of Trade Knowing Assistance +1 more

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Parties

Andrews Advertising Pty Limited

Plaintiff

David Andrews

First Defendant

Dean Andrews

Second Defendant

Andrews Media & Creative Pty Limited

Third Defendant

Smart Retail Pty Ltd

Fourth Defendant

Danielle Louise Andrews

Fifth Defendant

Smart Market Pty Ltd

Sixth Defendant

Procedural Posture

Equity (principal Judgment) / Judgment After Trial

Legal Issues

  1. 1 Whether Dean Andrews breached fiduciary and contractual duties owed to Andrews Advertising Pty Ltd by diverting business to AMC
  2. 2 Whether Danielle Andrews incurred accessorial liability under Barnes v Addy for knowing assistance in the breach of fiduciary duty
  3. 3 Whether post-employment restraints against Dean Andrews were enforceable under s4 Restraints of Trade Act 1976 (NSW)

Ratio Decidendi

Dean Andrews, while employed, breached fiduciary and contractual duties by diverting lucrative Sleep City business to AMC without authority, for his and Danielle Andrews' benefit. Danielle Andrews, as sole director/shareholder of AMC, had knowledge of enough circumstances to be liable for knowing assistance under the second limb of Barnes v Addy. Both are liable to account to the Company for the profit received. The restraint of trade clause was reasonable and enforceable, and Dean Andrews is liable for damages for post-employment breach. No improper use of confidential information post-employment (s183) was established. Dean Andrews liable to reimburse the Company for personal expenses...

Court Disposition

Judgment for plaintiff and dismissal of cross-claim

Orders

  • Dean Andrews and Danielle Andrews (as knowing assistant) liable to account for benefits/profit of $233,108.27 to Company for breach of fiduciary duty.
  • Dean Andrews is liable to pay Company $300,000 as damages for breach of contract (enforceable restraint).