SWM Financial Services Pty Ltd v Lloyd [2011] NSWSC 1108

Supreme Court New South Wales

Medium Neutral Citation: SWM Financial Services Pty Ltd v Lloyd [2011] NSWSC 1108 Hearing dates: 29 August 2011 to 2 September 2011 and 22 September 2011 Decision date: 31 October 2011 Jurisdiction: Equity Division Before: Ball J Decision: See paragraph 118 of this judgment. Catchwords: CONTRACT - construction - vendor warranty to 'do all things necessary' to retain staff post sale of business - whether should be interpreted as 'best endeavours' clause CONTRACT - acceptance - whether term of draft consultancy agreement incorporated by reference into another agreement. CONTRACT - construction - meaning of "entice". CONTRACT - termination -whether change in composition of partnership or dissolution of partnership terminate employment by operation of law -whether change in employee's role resulted in termination of contract. EQUITY - fiduciary duties - employer/employee relationship AND CONTRACT - implied terms - obligation to act with good faith - employee entitled to establish competing business post employment - preparatory acts to establish while still employed must not be inconsistent with duties as employee - no breach - confidential information - extent to which employee can use knowledge gained in course of employment. VICARIOUS LIABILITY - whether vicarious liability exists for breach of implied contractual or fiduciary duty to third party - whether conduct in course of employment. CONTRACT - implied terms - whether term should be implied in contract for sale of business providing for deferred consideration that purchasers would conduct business in a proper, business like and professional manner. TRADE PRACTICES - misleading and deceptive conduct - representations concerning how would conduct business - not misleading or deceptive - no loss or damage suffered Legislation Cited: Fair Trading Act 1987 (NSW) Partnership Act 1892 (NSW) Restraints of Trade Act 1976 (NSW) Cases Cited: Allen & Son v Coventry [1980] 1 ICR 9 Brace v Calder [1895] 2 QB 253 Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Bromhead v Graham [2007] NSWCA 257 Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347 Commercial & Accounting Services (Camden) Pty Ltd v Cummins [2011] NSWSC 843 Coulthard v State of South Australia (1995) 63 SASR 531 Deeson Heavy Haulage Pty Ltd v Cox [2009] QSC 277; 82 IPR 521 Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 Deutz Australia Pty Ltd v Skilled Engineering Ltd [2001] VSC 194 Ecco Personnel Pty Ltd v Barrett [1996] NSWSC 475 Forkserve Pty Ltd v Pacchiarotta [2000] NSWSC 979 Kooee Communications v Primus Telecommunications Pty Ltd [2008] NSWCA 5 Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; 210 CLR 181 Mainland Holdings Ltd v Szady [2002] NSWSC 699 Manildra Laboratories v Campbell [2009] NSWSC 987 Marks v GIO Australia Holdings [1998] HCA 69, 196 CLR 494 Menkens v Wintour [2011] QSC 7 Mid-City Skin Cancer & Laser Centre Pty Ltd v Zahedi-Anarak [2006] NSWSC 844; 67 NSWLR 569 New South Wales v Lepore [2003] HCA 4; 212 CLR 511 Orica Investments Pty Ltd v McCartney [2007] NSWSC 645 Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 Ridgeway International Ltd v McCullum [1998] NSWSC 151 Riteway Express Pty Ltd v Clayton (1987) 10 NSWLR 238 at 240 Rose v Dodd [2005] ICR 1776 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 Sheffield District Railway Co, v Great Central Railway Co [1911] 27 TLR 451 Southern Real Estate Pty Ltd v Dellow [2003] SASC 318; (2003) 87 SASR 1 St Hilliers (Developments) Pty Ltd v Radmanovich [2002] NSWSC 524; 11 BPR 20, 191 Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272 Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; 26 VR 668 Woolworths Ltd v Olson [2004] NSWCA 372 Texts Cited: K Lewison, The Interpretation of Contracts, 3rd Ed, (2004), Sweet & Maxwell The Restraint of Trade Doctrine 2nd Ed (Butterworths, Sydney, 1999) Category: Principal judgment Parties: SWM Financial Services Pty Ltd (First Plaintiff) Michael William Murphy (Second Plaintiff) Kendall McMaster (Third Plaintiff) Mark Frederick (Fourth Plaintiff) Stuart G Lloyd (First Defendant) Belinda Wu (Second Defendant) James Finlay (Third Defendant) Judy Wai Ching Wu (Fourth Defendant) TTT Australia Pty Ltd (Fifth Defendant) Representation: Mr M Condon (Plaintiffs) Mr R Alkadamani (First & Second Defendants) Mr S R Meehan (Third to Fifth Defendants) Somerset Ryckmans (Plaintiffs) Haywards (First & Second Defendants) Meridian Lawyers (Third to Fifth Defendants) File Number(s): 2009/287505