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

Supreme Court New South Wales

Medium Neutral Citation: Employsure Ltd v McMurchy; Employsure Ltd v Kumaran [2021] NSWSC 1179 Hearing dates: 12, 13, 14 & 19 April, 9 & 10 June 2021 Submissions of the Plaintiff dated 9 April & 3 June 2021 Confidential submissions of the Plaintiff dated 3 June 2021 Submissions of the Defendants dated 12 April, 3 & 9 June 2021 Confidential submissions of the Defendants dated 9 June 2021 Decision date: 17 September 2021 Jurisdiction: Equity - Expedition List Before: Sackar J Decision: See [424]-[435] Catchwords: CONTRACTS — Construction — Whether letters of variation had the effect of reinstating a previous version of an employment contract CONTRACTS — Rectification — Intention — Discerning the parties' intention to correct an absurdity in an employment contract — Where reference in letter of variation to a previous version of an employment contract was an obvious error CONTRACTS — Construction — Whether the employee's contract of employment was terminated after he had given notice less than was contractually required or after his employer had given notice CONTRACTS — Breach of contract — Whether former employee breached non-solicitation clause by aiding recruitment of another employee with competitor EMPLOYMENT AND INDUSTRIAL LAW — Contract — Restraint of Trade — Whether restraint operates because parties are "in competition" EMPLOYMENT AND INDUSTRIAL LAW — Contract — Restraint of Trade — Validity and reasonableness — Restraints of Trade Act 1976 (NSW) — Legitimate interests — Confidential Information — Length and scope of restraint EQUITY — Fiduciary duties — Fiduciary relationships — Employee and employer — Whether former employee breached fiduciary duties by taking up employment with a competitor while still employed by original employer TORTS — Economic torts — Inducing breach of contract Legislation Cited: Restraints of Trade Act 1976 (NSW) Cases Cited: Adamson v New South Wales Rugby League Limited (1981) 27 FCR 535; [1991] FCA 8 Agha v Devine Real Estate Concord Pty Ltd [2021] NSWCA 29 Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26; [1995] FCA 481 Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 Belflora Pty Ltd v Vinflora Pty Ltd [2021] NSWCA 178 BGC Partners (Australia) Pty Limited v Hickey (2016) 259 IR 318; [2016] NSWSC 90 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66; [1933] HCA 8 Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 Concut Pty Ltd v Worrell (2000) 75 ALJR 312; [2000] HCA 64 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 De L'Isle v Knight [2021] NSWSC 809 DP World Sydney Ltd v Guy (2016) 262 IR 156; [2016] NSWSC 1072 Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640; [2014] HCA 7 Emeco International Pty Ltd v O'Shea (No 2) (2012) 225 IR 423; [2012] WASC 348 Employsure Pty Ltd v McMurchy [2021] NSWSC 139 Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 Flightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 FSS Travel and Leisure Systems Ltd v Johnson [1998] IRLR 382 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Gunasegaram v Blue Visions Management Pty Ltd [2018] NSWCA 179 Harcus Sinclair LLP and another v Your Lawyers Ltd [2021] UKSC 32 at [47]-[49]; [2021] 3 WLR 598 Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609 Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 at 178; [1946] 1 All ER 350 Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1 Hoh & Ors v Frosthollow Pty Ltd & Ors [2014] VSC 77 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 IceTV v Ross [2007] NSWSC 635 Izaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163 James Adam Pty Ltd v Fobeza Pty Ltd [2020] NSWCA 311 JMB (NSW) Pty Ltd v West [2020] NSWSC 1380 John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995 Just Group Pty Ltd v Peck (2016) 264 IR 425; [2016] VSCA 334 Kone Elevators Pty Ltd v McNay (1997) ATPR 41-564 Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 Lablemakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512 Lansing Linde Ltd v Kerr [1991] 1 WLR 251 Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 Manildra Laboratories v Campbell [2009] NSWSC 987 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 McHugh v Australian Jockey Club Ltd (2014) 314 ALR 20 Medsara Pty Ltd v Sande [2005] NSWCA 40 Metcash Ltd v Jardim (No 3) (2010) 273 ALR 407; [2010] NSWSC 1096 Miles v Genesys Wealth Advisors Ltd (2009) 201 IR 1; [2009] NSWCA 25 News Life Media Pty Ltd v Janeke [2016] NSWSC 1835 Nordenfelt v Maxim Nordenfelt Guns & Ammunition [1894] AC 535 Pearson v HRX Holdings Pty Ltd (2012) 205 FCR 187; [2012] FCAFC 111 Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; [2001] HCA 31 Pittmore Pty Ltd v Chan; Chan v Tan (2020) 104 NSWLR 62; [2020] NSWCA 344 R v Byrnes (1995) 183 CLR 501; [1995] HCA 1 Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212 Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 Scully (UK) Ltd v Lee [1998] IRLR 259 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In liquidation) (2019) 99 NSWLR 317; [2019] NSWCA 11 Sidameno (No 456) Pty Ltd v Alexander [2011] NSWCA 418 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 Snowden v Australian Mortgage Assist Pty Ltd [2019] NSWSC 1799 Stacks Taree v Marshall [No.2] [2010] NSWSC 77 Steadfast IRS Pty Ltd v Latchmi Mesuria [2020] NSWSC 947 The Littlewoods Organisations Ltd v Harris [1978] 1 All ER 1026 Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; [2008] NSWSC 852 Two Lands Services Pty Ltd v Cave [2000] NSWSC 14 United Australia Ltd v Barclays Bank Limited [1941] AC 1 Veda Advantage (Australia) Pty Ltd v de Beer [2016] NSWSC 37 Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 Weldon & Co v Harbinson [2000] NSWSC 272 Woolworths v Olson [2004] NSWCA 372 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 Category: Principal judgment Parties: 2021/16210: Employsure Pty Ltd (plaintiff) David McMurchy (first defendant) Elmo Software Ltd (second defendant)