| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | AA 38/08 |
| Hearing date | 9 Nov 2007 |
| Determination date | 12 February 2008 |
| Member | D King |
| Representation | D Law ; B Cunningham |
| Location | Auckland |
| Parties | Koolfoam Industries Ltd v Bath |
| Summary | BREACH OF CONTRACT – Applicant claimed respondent breached confidentiality provisions and good faith obligations of employment agreement (“EA”) – Applicant manufacturer of expanded polystyrene (“EPS”) – Respondent set up EPS factory and traded through company “EFL” where owned 50 percent of shares – Applicant executed Anton Piller order on EFL premises and respondent’s home – Applicant claimed search uncovered lists of names and telephone numbers taken while respondent employed by applicant for purposes of using information to compete with applicant – High Court granted interim injunction restraining EFL from contacting or disclosing names identified as customers of applicant – Respondent denied breached duty of good faith or fidelity towards applicant – Respondent argued owed contractual duty of confidentiality but denied separate obligation of confidence – Respondent denied taking confidential information and submitted applicants claims based on considerable overlap between customer lists – Authority accepted applicant’s argument that respondent’s contact list contained numbers that could not have been obtained from source other than applicant – Authority found since respondent not in position trusted with confidential information, must have gone out of way to obtain information to set up competing business – Authority found respondent an unreliable witness due to inconsistencies in affidavit evidence – Authority found implausible explanations by respondent used to explain how numbers on list obtained – Authority outlined numerous examples of incongruities in respondent’s evidence – Authority accepted sufficient evidence that contact information sourced from applicant – Authority satisfied information confidential – Authority concluded respondent went out of way during employment to access respondent’s customer lists and did not obtain lists from external sources as argued – Respondent argued nothing novel about applicant’s customer list and anyone in related business could reconstruct list – Authority found respondent did not reconstruct list but copied customer details and used information to compete with applicant – Found actions amounted to misuse of confidential information – Authority accepted that having found respondent took contact list information from former employer while an employee breached duty of fidelity and good faith obligations – Authority considered submission respondent may not have entirely understood some questions asked – However, found respondent understood questions but had difficulty providing answers – Damages – Issue of damages not something to be decided in this case – Authority suggested parties to discuss damages issue before deciding whether to return to Authority |
| Result | Application granted ; Damages (Assessment to be made on application by parties) ; Costs reserved |
| Main Category | Breach of Contract |
| Statutes | ERA s4 |
| Cases Cited | Coco v A N Clark (Engineers) Ltd [1969] RPC 41;Force Four NZ Ltd v Curtling [1994] 1 ERNZ 542;Peninsula Real Estate Ltd v Harris [1992] 2 NZLR 216;Schilling v Kidd Garrett Ltd [1977] 1 NZLR 243;Walden v Barrance [1996] 2 ERNZ 598 |
| Number of Pages | 11 |
| PDF File Link: | aa 38_08.pdf [pdf 48 KB] |