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Bradford Trust Ltd v Roebeck and Anor
26 Feb 2008, L Robinson, AA 60/08, (26 pages)
BREACH OF CONTRACT – Applicant alleged respondents breached contractual duty of fidelity and statutory duty of good faith – Applicant provided industrial cleaning services – Respondents acquainted with applicant’s client contact details, pricing information, information relating to current and future tenders and information regarding internal systems, strategy and planning – Respondents held share in another business (“Environmental”) – Second company (“Coatings”) incorporated and first respondent’s nephew appointed director and shareholder – Common law implied duties of fidelity, good faith and honesty – Applicant alleged respondents, while employees of applicant, colluded to establish and run businesses in competition with applicant – Authority satisfied respondents directors of Environmental while also employees of applicant – First respondent tendered on applicants behalf for new project (“Project 1”) – Unknown to applicant tender also submitted by Environmental – Due to change in requirements client approached for tenderers again – Quote provided by second respondent on behalf of Coatings – First respondent provided quote on behalf of applicant – Client accepted Coatings tender as lower than applicants – Authority accepted applicant’s claim that Environmental and Coatings made use of applicant’s system information to have received approval from client in such short time – Subcontract between client and Coatings signed by second respondent and witnessed by first respondent when respondent’s neither directors or shareholders of Coatings – Authority found respondents had effective management and control of Coatings – Matter put beyond doubt on evidence that first respondent had signing authority and able to pay employees of Coatings – Applicant learned first respondent involved when saw him driving new car registered by Environmental – Environmental invited to tender for second project (“Project 2) – Tender submitted and approved by client – Third client contacted second respondent directly asking for quotation for project (“Project 3”) – Sub-contract was signed between client and Coatings – Authority found respondents breached duties in respect of Project 1 as pursued personal interests ahead of applicants – Competing with applicant through tender for projects breach of duty to serve applicant faithfully – Respondents acted to undercut employers tender for work – Deliberately underbid employers tender price to secure Project 1 for own benefit – Work/wage bargain required respondents to devote efforts to employers best interests – Respondents acted dishonestly by not disclosing involvement with Environmental to applicant – Respondents also acted in breach of IEAs – Breaches found to be blatant and deliberate – Respondents also breached duty to applicant with respect to project 2 and project 3 – First respondent was in position to secure project 2 and project 3 for employer – Deliberate and calculated decision made not to further employers interests – Respondents stood to benefit directly from Coatings – DAMAGES – Damages awarded for breach of implied term of fidelity – Damages to reinstate applicant to position it would have been in had breaches not occurred – Damages for loss in respect of Project 1 $136,500 – Damages for loss in respect of Project 2 $12,000 – Damages for loss in respect of Project 3 $75,000 – PENALTY – Penalties directed at legislative objectives of punitive sanction – Considerable public utility to proscribe conduct as wholly undesirable and to additionally discourage similar behaviour – Respondents found to have failed to act in good faith towards applicant – Through various activities were deceptive, dishonest and underhanded – Penalty $5000 each
Result: Application granted; Breach of contract ($223,500)(Damages) ; Penalty against first respondent ($5,000) ; Penalty against second respondent ($5000) ; Non-publication order ; Costs reserved
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Flynn v The Bacon Barn Ltd
8 Jun 2007, D King, AA 169/07, (5 pages)
UNJUSTIFIED DISMISSAL - Constructive dismissal - Applicant claimed unjustifiably dismissed by respondent - Dispute over whether offer to sell share of business - Authority accepted applicant believed had been offer to sell, but evidence did not support that perception - Respondent made number of requests for recipes applicant had created for job - At meeting applicant refused to disclose recipes until agreed to sell share in business - Applicant then gave letter of resignation, giving week's notice - Had meeting to discuss it - Respondent wanted to adjourn to enable applicant to seek representation but applicant refused - Respondent adjourned meeting anyway - Applicant believed had been dismissed - Respondents did not hear from applicant until raised personal grievance, despite attempts at contact - Not constructively dismissed - Tendered resignation - No breach by respondent to entitle applicant to think employment at end - Refusal to hand over recipes breach of lawful and reasonable instruction - Would have entitled respondent to dismiss him - No actual dismissal during notice period - COUNTERCLAIM - BREACH OF CONTRACT - Respondent claimed damages for removal and use of intellectual property, and damage to equipment - Insufficient evidence regarding damage caused by removal of recipes - Insufficient evidence applicant caused equipment damage - Small goods manufacturer
Result: Application dismissed ; Costs reserved
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NZ Amalgamated Engineering, Printing & Manufacturing Union Inc and Ors v Carter Holt Harvey Ltd
26 Apr 2007, D King, AA 122/07, (7 pages)
BREACH OF CONTRACT - DISPUTE - Applicants contend respondent breached individual employment agreements ("IEAs") of second and third applicants by failing to comply with requirement to accord priority for re-employment after they were made redundant - Applicants not appointed to vacancy as respondent considered did not have required skills and priority period had lapsed - Applicants' IEAs included obligation to provide re-training and no time limit on priority - Respondent submitted changes to re-employment provisions in subsequent collective employment agreements ("CEAs") applied retrospectively to applicants, despite fact not covered by bargaining - Rights created under IEA not forfeited by subsequent CEA to which holders of those rights not party - Could not legitimately impose variations on applicants - Respondent breached applicants' IEAs by failing to give them priority and by failing to give training to overcome any skill deficit - Respondent ordered to comply with IEAs - PENALTY - Applicants claimed respondent wilfully attempted to appoint someone other than second and third applicants to vacant position after being notified of claim for compliance - Making permanent appointment in circumstances where rights of parties at issue not conducive to maintaining good employment relationship with any of applicants - Breach of duty of good faith - However, no penalty awarded as respondent genuinely believed position correct and agreed last minute to leave reappointment issue in abeyance until matter determined
Result: Application granted ; Orders accordingly ; Costs reserved
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Ringrose v Brazin Ltd and Bras n Things New Zealand Ltd
5 Feb 2008, Y S Oldfield, AA 31/08, (29 pages)
BREACH OF CONTRACT – UNJUSTIFIED DISADVANTAGE – Applicant claimed health harmed by workplace stress and respondent failed to provide safe system of work – On doctor’s advice took two weeks leave - Applicant required to start new operation from scratch with inexperienced staff – Job too much for one person – Excessive workload caused applicant’s health problems – However, risk not foreseeable – Claim for wages lost while on leave dismissed – UNJUSTIFIED DISMISSAL – Constructive dismissal – Applicant claimed when returned to work, workload remained excessive and subjected to unreasonable and bullying treatment by managers – Applicant given strict instructions to improve stores – Conflict with manager led to “counselling” about behaviour and investigation into alleged serious misconduct – Applicant resigned, claimed lost all confidence in manager and felt overwhelmed – Applicant clearly suffered harm – Harm and resignation direct result of pressure applicant faced upon return to work – Counselling sessions unfair – While more likely than not applicant’s tone “unprofessional”, in context manager should have seen reaction as sign of distress – To describe actions as serious misconduct out of proportion with gravity of error – Extent of demands broke applicant’s health while unreasonable nature of demands destroyed her trust and confidence in managers – Ill health and resignation foreseeable and direct consequences of treatment she received from managers – Rather than attempt to prevent further harm, respondent imposed additional and unreasonable demands – Serious breach of duty to provide safe system of work – Remedies – Very distressing experience for applicant – Diagnosed with reactive depression and unable to work for several months - $20,000 compensation appropriate – PRACTICE AND PROCEDURE - Dispute and counterclaim relating to applicant’s expenses reserved as neither party provided enough evidence for Authority to make determination
Result: Application dismissed (breach of contract, unjustified disadvantage) ; Application granted (unjustified dismissal) ; Reimbursement of lost wages (4 weeks) ;Wages in lieu of notice (2 weeks) ; Application reserved (Dispute and counterclaim) ; Costs reserved
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