Bromhead v Graham [2007] NSWSC 609

Bromhead v Graham [2007] NSWSC 609

The employment contract was not repudiated by the plaintiff partners and the partnership was not dissolved: the termination letter gave notice to 27 April 2007, the direction not to work during the notice period was not repudiatory, and the deed of dissolution was only an unaccepted proposal rather than a clear notice under the Partnership Act 1892, s 32. Mr Graham remained employed until 27 April 2007 and, by canvassing partnership clients before that date, breached fiduciary duties of fidelity and confidence. The non-solicitation restraint was not invalid as applied to clients served by Mr Graham, and a six-month restraint was not against public policy; no manifest failure to attempt a...

Jurisdiction
Australia
Judgment Date
14 June 2007
Procedural Posture
Employment Law Proceedings Concerning Restraint of Trade, Fiduciary Duty and Injunctive Relief / Judgment on Injunctive Relief and Liability, With Inquiry as to Damages to Follow
Outcome
Injunctive relief refused; inquiry as to damages for breach of fiduciary duty of fidelity and breach of the non-solicitation restraint.
Legal Topics
['non Solicitation Restraint' 'fiduciary Duty of Fidelity' 'confidential Information' 'repudiation of Employment Contract' 'dissolution of Partnership' 'public Policy' 'discretion to Grant Injunctive Relief']
['employment Law' 'equity' 'partnership Law' 'restraint of Trade'] ['non Solicitation Restraint' 'fiduciary Duty of Fidelity' 'confidential Information' 'repudiation of Employment Contract' 'dissolution of Partnership' 'public Policy' 'discretion to Grant Injunctive Relief']

Case Brief

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Procedural Posture

Employment Law Proceedings Concerning Restraint of Trade, Fiduciary Duty and Injunctive Relief / Judgment on Injunctive Relief and Liability, With Inquiry as to Damages to Follow

Legal Issues

  1. 1 ["Whether the plaintiff partners repudiated Mr Graham's employment contract so that the non-solicitation restraint came to an end." 'Whether the partnership had been dissolved, with the consequence that the employment contract was repudiated.' 'Whether Mr Graham breached fiduciary duties of fidelity and confidence while still employed by canvassing clients of the partnership.' 'Whether cl 20.3 was against public policy as an unreasonable restraint of trade.' 'Whether the restraint should be declared invalid under the Restraints of Trade Act 1976, s 4(3) because of a manifest failure to attempt to make it reasonable.' 'Whether the Court should exercise its discretion to refuse injunctive relief.']

Ratio Decidendi

The employment contract was not repudiated by the plaintiff partners and the partnership was not dissolved: the termination letter gave notice to 27 April 2007, the direction not to work during the notice period was not repudiatory, and the deed of dissolution was only an unaccepted proposal rather than a clear notice under the Partnership Act 1892, s 32. Mr Graham remained employed until 27 April 2007 and, by canvassing partnership clients before that date, breached fiduciary duties of fidelity and confidence. The non-solicitation restraint was not invalid as applied to clients served by Mr Graham, and a six-month restraint was not against public policy; no manifest failure to attempt a...

Court Disposition

Injunctive relief refused; inquiry as to damages for breach of fiduciary duty of fidelity and breach of the non-solicitation restraint.

Orders

  • ['Injunctive relief against Mr Graham and Stacks refused.' "There should be an inquiry as to damages for Mr Graham's breach of obligations of fidelity and confidence." 'The parties are to bring in short minutes of order reflecting the reasons.' 'The parties are to be heard on the appropriate terms of orders and on...