| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Wellington |
| Reference No | [2014] NZERA Wellington 58 |
| Hearing date | 19 - 20 Mar 2013 |
| Determination date | 30 May 2014 |
| Member | T MacKinnon |
| Representation | J Miles, T Clarke ; S Hughes |
| Location | New Plymouth |
| Parties | Tag Oil (NZ) Ltd v Watchorn |
| Summary | BREACH OF CONTRACT - Applicant sought damages for respondent's breach of employment agreement (EA") - Oil and gas exploration and mining - Resignation to work for applicant's competitor - Copying of applicant's data from computer server to respondent's personal external hard drive - Removal of hard drive and failure to return information - Whether respondent carried out responsibilities honestly and diligently - Whether respondent took actions intended or likely to adversely affect applicant's business or reputation - Criminal charge - PENALTY - Applicant sought penalty for respondent's breach of EA - COMPLIANCE ORDER - INJUNCTION - Applicant sought compliance with respondent's EA and injunction in relation to respondent's breaches of EA - Production / facility manager" |
| Abstract | AUTHORITY FOUND -;BREACH OF CONTRACT: Respondent's assertion did not know files worked on during employment applicant's property unconvincing. Respondent's claim believed entitled to take templates" did not explain why respondent executed "gross data dump" of approximately 350,000 documents from applicant's server to respondent's hard drive. Respondent's assertion did not know geoscience data included in data dump unlikely. Respondent's reply to letter from applicant's lawyers seeking return of confidential information deceptive rather than simple understatement of material on personal hard drive. Respondent took highly confidential and commercially sensitive information extending far beyond respondent's work and some of which at heart of applicant's success. More likely than not inclusion of geoscience data deliberate rather than inadvertent. Reason given by respondent for downloading entire contents of computer drive lacked credibility. No reason for applicant to ask respondent about information on hard drive when respondent resigned. Letter from applicant's lawyers alerted respondent to seriousness of matter. Respondent breached express terms of employment agreement and implied duties of fidelity and trust and confidence by copying information to personal hard drive on eight occasions and taking information without authority upon resignation. No evidence respondent disclosed information. Compensatory damages inappropriate as no loss established. General and exemplary damages inappropriate. Appropriate to order payment of special damages relating to cost of computer forensic investigation and legal fees relating to investigation into respondent's actions. Respondent to pay applicant $65,567 damages.;PENALTY: Penalties warranted due to seriousness of respondent's breaches and to serve as deterrent. Appropriate to award penalty for each of four days respondent copied information. $12,000 penalty appropriate.;COMPLIANCE ORDER - INJUNCTION: Not appropriate to order compliance or grant injunction given seizure of relevant computers and hard drives by Police. Applications dismissed. Leave reserved for parties to return to Authority if matters outstanding." |
| Result | Applications granted (breach of contract)(penalty) ; Damages ($65,567) ; Penalty ($6,000)(payable to applicant)($6,000)(payable to Crown) ; Applications dismissed (compliance order)(injunction) ; Costs reserved |
| Main Category | Breach of Contract |
| Statutes | ERA;ERA s174 |
| Cases Cited | Prins v Tirohanga Group Ltd (formerly Tirohanga Rural Estates Ltd) [2006] ERNZ 321 |
| Number of Pages | 18 |
| PDF File Link: | 2014_NZERA_Wellington_58.pdf [pdf 268 KB] |