| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2015] NZERA Auckland 186 |
| Hearing date | 31 mar 2015 |
| Determination date | 24 June 2015 |
| Member | TG Tetitaha |
| Representation | DJ Clark ; CT Patterson |
| Location | Auckland |
| Parties | Caffe Coffee (NZ) Ltd v Farrimond |
| Summary | BREACH OF CONTRACT – Applicant sought damages for respondent’s breaches of employment agreement (“EA”) by setting up competing business, removing and misusing confidential information and intellectual property, and diverting clients away from applicant– Whether respondent had implied duty of fidelity not to set up competing business - INJUNCTION – Applicant sought permanent injunction restraining applicant from further breaches of EA – PENALTY - Applicant sought penalty for respondent’s breaches of EA – General Manager |
| Abstract | AUTHORITY FOUND –BREACH OF CONTRACT: Respondent discussed nature of new business with applicant but respondent did not state was going to set up competing business. Respondent incorporated company and named as director while still employed by applicant in breach of EA. Respondent took other preparatory steps towards setting up new business but steps did not lead to competition with applicant’s business. Credit card expenses appeared to be legitimate business expenses. Respondent unaware of company policies regarding travel and entertainment expenses. Unlikely respondent trying to match applicant’s product due to differences in clients and costs. No evidence respondent diverting business from applicant. Respondent did not take confidential information away from business and returned all files that could have had benefit to respondent. Respondent did not uplift or misuse confidential information. Respondent breached EA by incorporating new company. No damages.INJUNCTION: Permanent injunctive relief not appropriate. Application for permanent injunction dismissed.PENALTY: Breach of EA one-off and had negligible impact on applicant. Respondent accepted existence of breach at earliest opportunity. Publication of determination sufficient punishment. No penalty. |
| Result | Application partially granted (breach of contract) ; Applications dismissed (injunction)(penalty) ; Costs reserved |
| Main Category | Breach of Contract |
| Statutes | ERA s135;ERA s135(4) |
| Cases Cited | Big Save Furniture Ltd v Bridge [1994] 2 ERNZ 507 (CA);Corbett v National Mutual Finance Ltd (1992) 5 PRNZ 386 (CA);Eftpos NZ Ltd v Walker [1998] 3 ERNZ 304 (EmpC);Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617 (CA);Griffith v Sunbeam Corporation Ltd EmpC Wellington WC13/06, 28 July 2006;Hakaraia v Foodstuff (Wellington) Co-operative Society Ltd [2001] ERNZ 105 (EmpC);Kelly v Accident Rehabilitation & Compensation Insurance Corporation EmpC Wellington WC13/99, 24 March 1999;NZ Merchant Service Guild IUOW Inc v NZ Rail Ltd [1991] 2 ERNZ 587 (LC);RNZAF Museum Trust Board v Hunter EmpC Wellington WC11/00, 1 March 2000;Rooney Earthmoving Ltd v McTague [2009] ERNZ 240 (EmpC);T v SAR Ltd ERA Christchurch CA126/05, 23 September;Taiapa v Te Runanga O Turanganui A Kiwa t/a Turanga Ararau Private Training Establishment [2012] NZERA Auckland 252 ;;Tan v Yang [2014] NZEmpC 65;Tisco Ltd v Communication and Energy Workers Union [1993] 2 ERNZ 779 (CA);Xu v McIntosh [2004] 2 ERNZ 448 (EmpC);Young v Venables t/a Mt Eden Bakery & Delicatessen EmpC Auckland AC88/00, 7 November 2000 |
| Number of Pages | 20 |
| PDF File Link: | 2015_NZERA_Auckland_186.pdf [pdf 285 KB] |