Employsure Ltd v McMurchy; Employsure Ltd v Kumaran [2021] NSWSC 1179

Employsure Ltd v McMurchy; Employsure Ltd v Kumaran [2021] NSWSC 1179

The operative employment contract governing McMurchy at the time of resignation was the 2018 agreement; references to the 2015 contract in variation letters were an obvious and administratively mistaken error, not reviving its terms. Mr McMurchy's purported four weeks’ notice was ineffective; the Plaintiff validly terminated the contract on three months’ notice ending 12 April 2021. Taking up employment with a competitor (Elmo Software) during that period, and soliciting Kumaran, breached contractual and fiduciary duties. At date of termination the Plaintiff and Second Defendant were 'in competition' in respect of relevant market segments, so the nine-month post-employment restraint in...

Parties
Plaintiff: Employsure Pty Ltd; First Defendant: David McMurchy; Second Defendant: Elmo Software Ltd; First Defendant: Arumugam Kumaran
Jurisdiction
Australia
Judgment Date
17 September 2021
Procedural Posture
Principal Judgment / Final Decision
Outcome
Judgment for the Plaintiff in both proceedings, with orders to be finalised upon short minutes reflecting the reasons.
Legal Topics
Restraint of Trade, Fiduciary Duties, Rectification of Contract, Breach of Contract, Inducing Breach of Contract
Contracts Employment and Industrial Law Equity Torts Restraint of Trade Fiduciary Duties Rectification of Contract Breach of Contract +1 more

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Parties

Employsure Pty Ltd

Plaintiff

David McMurchy

First Defendant

Elmo Software Ltd

Second Defendant

Arumugam Kumaran

First Defendant

Procedural Posture

Principal Judgment / Final Decision

Legal Issues

  1. 1 Whether the 2015 or 2018 McMurchy Contract governed the resignation and applicable notice period; Whether Mr McMurchy was in breach of his employment and fiduciary duties by commencing employment with a competitor and soliciting another employee; Whether the post-employment restraint was reasonable and enforceable; Whether Elmo Software Ltd was liable for inducing breach of contract and knowing assistance in breach of fiduciary duty; Whether Mr Kumaran breached his contract and valid restraint clause

Ratio Decidendi

The operative employment contract governing McMurchy at the time of resignation was the 2018 agreement; references to the 2015 contract in variation letters were an obvious and administratively mistaken error, not reviving its terms. Mr McMurchy's purported four weeks’ notice was ineffective; the Plaintiff validly terminated the contract on three months’ notice ending 12 April 2021. Taking up employment with a competitor (Elmo Software) during that period, and soliciting Kumaran, breached contractual and fiduciary duties. At date of termination the Plaintiff and Second Defendant were 'in competition' in respect of relevant market segments, so the nine-month post-employment restraint in...

Court Disposition

Judgment for the Plaintiff in both proceedings, with orders to be finalised upon short minutes reflecting the reasons.

Orders

  • Declaration the 2018 McMurchy Contract governed the relevant period; variation letters do not reinstate the 2015 terms.
  • Declaration the attempted resignation notice did not terminate the contract; the contract ended 12 April 2021.