Integration Management Pty Ltd v Soo [2004] NSWSC 908

New South Wales Supreme Court

CITATION : Integration Management Pty Ltd v Soo [2004] NSWSC 908 revised - 30/11/2004 HEARING DATE(S) : 30 September 2004 JUDGMENT DATE : 30 September 2004 JURISDICTION: Equity JUDGMENT OF : Hamilton J DECISION : Interlocutory injunction granted restraining ex-employee from interfering with negotiations for contract on which he was working at time of termination of employment.

CATCHWORDS : EQUITY [36] - General principles - Fiduciary obligations - Particular cases - Employees - Contribution to employer's asset - Employee using information after termination of employment - Employer's loss of profits. CASES CITED : Co-ordinated Industries Pty Limited v Elliott (1998) 43 NSWLR 282 Integration Management Pty Ltd (P) PARTIES : Brendon Soo (1D) Carondon Pty Limited (2D) INTEC Telecom Systems (Australia) Pty Limited (3D) FILE NUMBER(S) : SC 5260/04 A R Moses (P) COUNSEL : K G Bennett (1 & 2D) B D Hodgkinson SC (3D) Corrs Chambers Westgarth (P) SOLICITORS : Fisher Cartwright Berriman (1 & 2D) Clayton Utz (3D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

THURSDAY, 30 SEPTEMBER 2004

5260/04 INTEGRATION MANAGEMENT PTY LTD v BRENDON SOO & 2 ORS JUDGMENT 1 HIS HONOUR: This was a contest conducted before me between, on the one hand, a former employer, being the plaintiff, and, on the other hand, as first defendant, a former employee and, as second defendant, a company controlled by him. The business of the plaintiff is the provision of consultancy services to telecommunications operators. 2 The first defendant was employed by the plaintiff as a business development manager between 5 February 2004 and September 2004. He left its employ after a disagreement with Mr Goodwin, the managing director of the plaintiff. There were contained in his contract of employment provisions for the protection of confidentiality of information while in the plaintiff's employ, but no restraint of trade preventing him from working in the industry or for a competitor after the termination of the employment. 3 As far as the general preservation of confidentiality provisions are concerned, there was no conflict before me. The first and second defendants have properly given undertakings to the Court that there will be no breach of the contractual promises which they concede were made by the first defendant. The plaintiff, however, seeks one further matter; that is cast in the application in terms of restraint of the first and second defendants from interfering with contractual negotiations called "the Smart Contract". 4 The evidence shows that the position held by the first defendant with the plaintiff was essentially a sales position. There is no doubt on the evidence that the first defendant was playing a significant part in those negotiations up to the time of the termination of his employment. Mr Bennett, of counsel for the defendants, seeks to minimise the role the first defendant was playing. He urges that he was not the sole person negotiating and that it was the participation of Mr Goodwin in the negotiations which led to the conflict between the first defendant and Mr Goodwin. On the other hand, in my view, it is quite clear, from the first defendant's own version of a disputed conversation and from the terms of an email which he sent to Mr Goodwin complaining of Mr Goodwin's conduct, that the first defendant regarded himself as having a significant role in those negotiations. 5 In the absence of a provision in the contract imposing a restraint of trade, Mr Moses, of counsel for the plaintiff, relies upon an equity in the nature of that found to exist by Hodgson CJ in Eq (as his Honour then was) in Co-ordinated Industries Pty Limited v Elliott (1998) 43 NSWLR 282. That equity arose from Mr Elliott having played an important part in working towards the attaining of a contract by his former employer at the time of the termination of his employment. Hodgson CJ in Eq said at 288 - 289: