| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2017] NZERA Auckland 194 |
| Hearing date | 31 May 2017 - 1 Jun 2017 (2 days) |
| Determination date | 04 July 2017 |
| Member | E Robinson |
| Representation | C Grenfell ; P McBride, K Thomas |
| Location | Hamilton |
| Parties | Craig R Yarndley CA Ltd and de Lautours.co Trust Partnership t/a de Lautours.co v Hunter |
| Summary | BREACH OF CONTRACT - Restraint of Trade - Applicant sought damages for loss incurred as result of breach - Clause in employment agreement created obligation that ex-employees who undertake work for previous clients of applicant will be liable for fee |
| Abstract | AUTHORITY FOUND -;BREACH OF CONTRACT: Clause not a liquidated damages clause as not genuine pre-estimate of damages. Clause not penalty clause as not in the nature of punishment or threat and sum to be paid not extravagant in comparison to greatest possible loss resulting from breach. Clause protects applicant’s proprietary interest in clients. Clause provided consideration for both parties. When viewed as a restraint of trade clause not unreasonable. However, clause not restraint but rather in nature of sale and purchase agreement. Clause binding. Applicant’s restructuring did not repudiate clause. Applicant did not waive clause. Respondent to pay applicant 60% of value of work performed for relevant clients in accordance with clause. Interest payable. |
| Result | Application granted ; Orders made ; Interest (5%) ; Costs reserved |
| Main Category | Breach of Contract |
| Statutes | ERA s137(1)(a)(i) ; Judicature (Prescribed Rate of Interest) Order 2011 |
| Cases Cited | Broadcasting Corporation of NZ v Nielsen (1988) 2 NZELC 96,040;Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 79 (HL);Fuel Espresso Ltd v Hsieh [2007] NZCA 58, [2007] 2 NZLR 651;Gallagher Group Ltd v Walley [1999] 1 ERNZ 490 (CA);General Billposting Co Ltd v Atkinson [1909] AC 118;New Zealand Professional Firefighters Union v New Zealand Fire Service Commission [2011] NZEmpC 149;Pottinger v Kelly Services (New Zealand) Ltd [2012] NZEmpC 101, [2012] ERNZ 411;Silver Fern Farms Ltd v New Zealand Meat Workers and Related Trade Unions Inc [2010] NZCA 317, [2010] ERNZ 317;Vector Gas Ltd v Bay of Plenty Energy Ltd [2008] NZSC 109;Workers Trust and Merchant Bank Ltd v Dojap Investments Ltd [1993] UKPC 7 |
| Number of Pages | 22 |
| PDF File Link: | 2017_NZERA_Auckland_194.pdf [pdf 255 KB] |