NTT DATA HONG KONG LTD v. OCTO3 LTD AND ANOTHER

NTT DATA HONG KONG LTD v. OCTO3 LTD AND ANOTHER

Lynch was a senior and key NTT employee engaged in the performance of NTT's obligations (he signed the Upfront Payment cheque and negotiated delivery arrangements); Octo's employment of Lynch therefore breached clause 13. That breach was material in the commercial context and entitled NTT to terminate under clause 12. The 15 November 2016 notice validly terminated the Agreement. NTT is entitled to summary judgment for refund of the Upfront Payment (with interest) for failure of consideration; judgment also entered on NTT's counterclaim in HCA 44/2017. Octo's separate claim for the balance of the Licence Fee in HCA 44/2017 is struck out, but Octo's quantum meruit claim for professional...

Citation
[2018] HKCFI 325
Parties
Plaintiff (hca 3446); Defendant (hca 44): NTT Data Hong Kong Limited; 1st Defendant (hca 3446); Plaintiff (hca 44): Octo3 Limited; 2nd Defendant (hca 3446): Tyrone Shaunessy Lynch
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
9 February 2018
Case Number
HCA3446/2016
Procedural Posture
Contract Dispute Concerning Software Licence, Employment Covenant and Summary Judgment Applications / Decision on Summary Judgment Application and Striking Out Application (final Decision on Interlocutory Issues)
Outcome
Summary judgment for NTT Data Hong Kong Limited on claims in HCA 3446/2016 and on NTT's counterclaim in HCA 44/2017; partial striking out of Octo3 Limited's claim in HCA 44/2017 (balance of Licence Fee); Octo's quantum meruit claim preserved.
Legal Topics
Non Solicitation Clause, Termination for Breach, Summary Judgment, Construction of Contract, Unjust Enrichment, Quantum Meruit, Without Prejudice Correspondence, Abuse of Process/striking Out
Source Language
EN
Contract Employment Commercial Law Civil Procedure Restitution/unjust Enrichment Non Solicitation Clause Termination for Breach Summary Judgment +5 more

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Parties

NTT Data Hong Kong Limited

Plaintiff (hca 3446); Defendant (hca 44)

Octo3 Limited

1st Defendant (hca 3446); Plaintiff (hca 44)

Tyrone Shaunessy Lynch

2nd Defendant (hca 3446)

Procedural Posture

Contract Dispute Concerning Software Licence, Employment Covenant and Summary Judgment Applications / Decision on Summary Judgment Application and Striking Out Application (final Decision on Interlocutory Issues)

Legal Issues

  1. 1 Whether Octo breached clause 13 (non-solicitation) by employing Lynch
  2. 2 Whether Lynch was 'engaged in the performance' of NTT's obligations under the Agreement
  3. 3 Whether any breach was material such as to permit termination under clause 12

Ratio Decidendi

Lynch was a senior and key NTT employee engaged in the performance of NTT's obligations (he signed the Upfront Payment cheque and negotiated delivery arrangements); Octo's employment of Lynch therefore breached clause 13. That breach was material in the commercial context and entitled NTT to terminate under clause 12. The 15 November 2016 notice validly terminated the Agreement. NTT is entitled to summary judgment for refund of the Upfront Payment (with interest) for failure of consideration; judgment also entered on NTT's counterclaim in HCA 44/2017. Octo's separate claim for the balance of the Licence Fee in HCA 44/2017 is struck out, but Octo's quantum meruit claim for professional...

Court Disposition

Summary judgment for NTT Data Hong Kong Limited on claims in HCA 3446/2016 and on NTT's counterclaim in HCA 44/2017; partial striking out of Octo3 Limited's claim in HCA 44/2017 (balance of Licence Fee); Octo's quantum meruit claim preserved.

Orders

  • Declaration that the Agreement was validly terminated by NTT on 15 November 2016 pursuant to clause 12.1(i)
  • Declaration that Octo3 Limited was in repudiatory/material breach of clause 13 of the Agreement by employing Tyrone Shaunessy Lynch