AIM MAINTENANCE LTD -v- BRUNT & ANOR [2004] WASC 49

Author: Valentina Misevska

Publish Date: December 16, 2004

A trial pending in the Supreme Court of Western Australia is set to clarify what type of information, which is gained by an employee whilst employed, an employee may be restrained from using after the employment ends.

The Facts

Aim Maintenance Ltd (“Aim”) is a corporation which carries on business in mining, engineering and maintenance.

Brunt and Jenkins were both employed by Aim. Brunt was employed from January 2000 as a fitter and from about November 2000 as an engineering supervisor. Jenkins was employed from about January 2001 as foreman and workshop personnel supervisor.

Each of the Defendants signed an employment contract, confidentiality agreement and intellectual property agreement with Aim on becoming employees.

On 13 January 2004, both Brunt and Jenkins resigned from their employment with Aim effective immediately.

Aim believed that prior to or about the time they resigned and after they resigned, Brunt and Jenkins formed a new business and entered into negotiations with 2 of Aim’s major customers Lightnin Mixers Pty Limited (“Lightnin”) and National-Oilwell Pty Ltd (“National”) to take over Aim’s business with those customers and in doing so used certain of Aim’s trade secrets and/or confidential information for their own benefit.

Aim considered this constituted a breach of Brunt and Jenkins’ confidentiality agreements and of their fiduciary duties as senior employees.

Orders Sought by Aim

That Brunt and Jenkins be restrained from:

Entering into contracts or performing any contracts already entered into, with Lightnin and National for the supply of gearboxes or pumps for mining equipment; and
Using the following of Aim’s trade secrets or confidential information for their benefit or to the detriment of Aim -

(a) Pricing structure and arrangements for the manufacture of gearboxes and pumps for mining machinery, for Lightnin and National;

(b) Technical knowledge concerning the manufacturing of pumps and of gearboxes for mining equipment for Lightnin and National;

(c) Details as to Aim’s existing contracts with, needs of and projected work for Lightnin and National.

The Issues

(a) Was there a serious issue to be tried in relation to the protection of confidential information either pursuant to the confidentiality agreement or Brunt and Jenkins’ fiduciary duties?

(b) If so, does the balance of convenience lie in favour of granting Aim the orders?

The Court’s Response

(a) Yes.

The Court accepted that the information referred to in the orders is capable of attracting protection as trade secrets or confidential information. Whether it would do so in fact would depend on the particular circumstances of the case as established by the evidence at trial.

(b) Yes.

The Court considered the following factors:

Brunt and Jenkins’ new business was not dependent on getting work from Lightnin and National and the orders sought wouldn’t prevent them from conducting their business with other customers;
If Aim’s action were to succeed the outcome would not be known for some time. If the orders were not granted, Brunt and Jenkins would have the benefit of the relevant information to Aim’s immediate, irreparable and on‑going detriment; and
Lightnin and National were 2 of Aim’s major customers and the relationships had taken significant time, effort and money to develop. Without these customers the relevant division of Aim would be forced to close.

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