NEWS

Employer v Employee – The Gold Titan Case

In Gold Titan Pty Ltd v Lopez (No. 2) [2021] FCA 1523, the Court determined that the respondent had used his former employer’s client list to promote his new business, which was a competitor to his employer.1

The employer claimed damages for loss of profits, loss due to discounting prices, loss of goodwill, damage to reputation and hurt feelings with the claim for a net loss of profit in the range of $370,000.00 and $375,000.00. The former employee submitted that the applicant’s claim for damages was worth approximately $16,984.11.

In support of the claim for damages, the employer’s primary evidence was its ‘profit and loss statement’ for the 2019 and 2020 financial years. There was no further explanation concerning the financial information contained in the statements. The applicant claimed that the loss was ‘evidenced’ by comparing the profit and loss statement for the financial year 2019 and financial year 2020.

The former employee submitted  that to properly compare the employer’s financial position, more complete financial information for at least several years would be required to demonstrate the employer’s usual trading conditions. In the circumstances, it was reasonable to suggest that the 2019 financial year was unusually profitable as opposed to the mark against which the employer’s loss as a direct result of the former employee’s breach can be measured.

The employer did not provide any expert evidence  establishing the quantum of the damages it says was suffered. The employer claimed that there was no need for a forensic accountant as they presented their claim on a simpler basis because they sought to prove their loss by way of their own accounting records. Without further explanation as to the information to give the purported figures meaning, however, it was unclear how useful the employee’s records were to the court.

His Honour commented that the approach taken by the employee concerning the presentation of its evidence for damages failed to adequately address issues that arose from the liability judgment.

Notwithstanding the criticisms of the employer’s evidence in support of its claim for damages, His Honour awarded the employer the sum of $150,000.00 for breaches of confidence and the ACL contraventions. The claim for breaches of the ACL was limited to damages in the sum of $25,000.00 on the basis that the breaches had occurred over a limited period of time.

This case highlights the need to ensure when preparing for a case:

  1. The evidence addresses each of the points of claim. The damages claimed as against each of the respondents (if more than one); and
  2. The evidence is sufficiently clear to assist the court in assessing the party’s claim for damages.

 


1. Gold Titan Pty Ltd v Lopez [2021] FCA 918 (liability judgment)

The content of this article is intended to provide a general guide to the subject matter. Specific advice should be sought about your specific circumstances.

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