Federal Court of Australia

Ord Minnett Holdings Pty Ltd v Longmuir [2023] FCA 1262

ORDERS

PENAL NOTICE

THE COURT NOTES THAT:

A.    The Court has accepted the applicant's undertaking as to damages filed on 11 October 2023.

THE COURT ORDERS THAT:

1.    Until further order, the publication or other disclosure of annexure FH-10 to the affidavit of Francis John Hegerty affirmed 10 October 2023 and annexure FH-10 of the affidavit of Francis John Hegerty affirmed 17 October 2023 is prohibited pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) on the ground set out in s 37AG(1)(a).

2.    The respondent must not at any time on or before 19 December 2023 or until final determination of the originating application in this proceeding, whichever is the earlier, encourage or persuade or attempt to persuade any client of the applicant or its related bodies corporate (Group) with whom the respondent had work-related dealings during the 12 months preceding 19 September 2023 to:

(a)    cease doing business with the Group; or

(b)    reduce the amount of business which the person would normally do, or would otherwise have done, with the Group.

3.    The costs of the interlocutory application are reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

JACKSON J:

1    At a hearing on 20 October 2023 convened on an urgent basis I made an order, on the application of Ord Minnett Holdings Pty Ltd, to restrain a former employee, the respondent Faye Longmuir, from encouraging clients of Ord Minnett to cease to be its clients or to reduce the amount of business the clients gave to the company. These are my reasons for that order. Depending on the context I will use the term Ord Minnett to refer to the applicant entity and to the group comprised of that entity and its related bodies corporate.

2    Due to the manner in which Ms Longmuir conducted her opposition to the interlocutory application, the outcome came down to two questions. The first was whether Ord Minnett had established a sufficiently strong case that she had breached the obligations restraining her as a former employee from soliciting clients (or encouraging other employees to leave Ord Minnett). The second was whether the terms of the non-solicitation order sought left too much uncertainty as to what Ms Longmuir can and cannot do, so that the order should not be made, or should be made in different terms to those sought.

Ord Minnett, Advisers, clients and client information

3    The following is based on an affidavit of Francis John Hegerty affirmed on 17 October 2023, filed by Ord Minnett, an affidavit dated 18 October 2023 affirmed by Ms Longmuir, and various affidavits by clients of Ord Minnett (present or former) mentioned below.

4    Ord Minnett is an Australian wealth management group that provides full service stockbroking, financial planning, funds management and portfolio services. It has 14 offices throughout Australia and in Hong Kong, including an office in Perth.

5    Mr Hegerty is the Head of Private Wealth at Ord Minnett. Since the acquisition of the private wealth management business of EL & C Baillieu in late 2020, he has been responsible for managing over 100 advisers. Ord Minnett's private wealth business serves retail, sophisticated and wholesale investors. It is distinguished from another part of the business which serves institutional investors.

6    There are some 270 private client advisers working for Ord Minnett, whom are called 'Advisers'. From 20 January 2020 to 19 September 2023, Ms Longmuir was one of those Advisers, in the Private Wealth business. It appears that she worked out of the Perth office.

7    Advisers are the contact point for clients at Ord Minnett and manage clients' investments. They meet with clients, seek to understand their circumstances and risk profile (their tolerance for investment risk) and design a suitable investment portfolio. They are directly responsible for managing client relationships, and are also responsible for attracting new clients and thus growing Ord Minnett's business. Their role involves regular contact and discussions with clients and they will often develop close personal relationships with their clients.

8    According to Mr Hegerty, the relationship between Advisers and their clients is important because, among other reasons, 'it fosters loyalty and trust which are central to [clients'] enduring relationship with Ord Minnett' (para 30). In periods of volatility in investments, the strength of the personal connections can be important to maintaining the client relationship with Ord Minnett and Mr Hegerty's evidence is that this is why building and maintaining personal connections between Advisers and clients is 'so important to the business' (para 30).

9    There is, however, no sense in which Advisers, including Ms Longmuir, 'own' the clients. They are not entitled to take clients with them when they leave. The clients are not their clients, they are clients of Ord Minnett. An exception to this is Advisers who transferred from EL & C Baillieu, of which Ms Longmuir is not one. While this evidence was given in general terms, it was not objected to or disputed by Ms Longmuir for the purposes of the interlocutory application.

Ms Longmuir's employment with Ord Minnett

10    Ms Longmuir was employed by Macquarie Group in various financial planning and advice capacities from January 2000 to December 2019. A number of her clients at Macquarie followed her to Ord Minnett.

11    Ms Longmuir was employed by Ord Minnett from 20 January 2020 in the role of Private Client Adviser. There was a written contract of employment. The following clauses are relevant:

22    Restrictions after your employment ends

…

Inducing employees to leave the Group

22.2    You must not for a period of three months from the End Date induce or attempt to induce any Restricted Person to terminate his or her engagement with the Ord Minnett Group, whether or not that person would commit a breach of that person's contract of engagement.

22.3    'Restricted Person' means a person:

22.3.1    Who was a partner, joint-venturer, officer, contractor, consultant, agent, employee of the Ord Minnett Group at any time within the last 12 months of the termination of your employment; and

22.3.2    With whom you had material contact or dealings at any time within the last 12 months of the termination of your employment; and

22.3.3    Who satisfies one of the following conditions:

(a)    The person has had material contact or dealings with or has a direct or indirect influence over clients, customers, contractors or suppliers of the Ord Minnett Group; or

(b)    The person was, or is a member of Ord Minnett management or the management of any member of the Ord Minnett Group; or

(c)    The person was or is a senior member of the Ord Minnett workforce or the workforce of any member of the Ord Minnett Group, responsible for finance, sales marketing, research and development, information technology, human resources, training or any other key areas of Ord Minnett business or the business of any member of the Ord Minnett Group.

Persuading the Ord Minnett Group's clients to cease or reduce business

22.4    You must not for a period of three months from the End Date, solicit or persuade (or attempt to persuade) any client of the Ord Minnett Group with whom you had work related dealings during the 12 months preceding the End Date to cease doing business with the Ord Minnett Group or reduce the amount of business which the person would normally do, or otherwise have done, with the Ord Minnett Group.

12    The 'End Date' is the date on which the employee's employment with Ord Minnett ends: cl 22.1.2. The 'Ord Minnett Group' is defined to include the applicant and associated entities as defined in the Corporations Act 2001 (Cth): cl 28.1.

13    Ms Longmuir has raised no issue in the interlocutory injunction application about the reasonableness of the post-employment restraints in cl 22.2 and cl 22.4. They are for a relatively short time and include no restriction on the employment or other work Ms Longmuir may undertake after leaving Ord Minnett. For the purposes of the interlocutory injunction application I will proceed on the basis that the restrictions are reasonable, and so not liable to be void as a matter of public policy.

14    During her employment with Ord Minnett, Ms Longmuir worked with around 90 clients. As an Adviser, she held extensive client responsibilities of the kind described above.

The termination of Ms Longmuir's employment with Ord Minnett

15    On 19 September 2023, Ord Minnett sent Ms Longmuir a letter in which it said it was terminating her employment on notice. It paid out her notice period and did not require her to attend for work from that date. So it is common ground that the End Date of her employment with Ord Minnett is 19 September 2023.

16    The affidavits of Mr Hegerty and Ms Longmuir contain quite a bit of evidence about the circumstances leading up to the termination of Ms Longmuir's employment. It is not necessary to canvass all that evidence for the purposes of this judgment. It is only necessary to note the following matters.

17    Mr Hegerty's affidavit contains what appears to be second hand hearsay evidence sourced from John Morrissy, Ord Minnett State Manager for South Australia, Western Australia and Tasmania about a meeting Ms Longmuir had with him on 5 September 2023 in relation to whether certain leave she took should have been taken as annual leave, not carer’s leave. According to Mr Morrissy, Ms Longmuir said at the meeting, 'I can take an offer from Canaccord and leave'.

18    'Canaccord' is Canaccord Genuity Financial Pty Ltd. It provides financial management services similar to those of Ord Minnett and is one of Ord Minnett's main competitors. It has an office in Perth.

19    Ms Longmuir denies in her affidavit that she said she could take an offer from Canaccord and leave, although she did say to Mr Morrissy, in effect, that she was not sure she wanted to work for Ord Minnett. On her own evidence: 'After this meeting, my frustrations with management increased because I did not feel valued or respected and felt like management was treating me with hostility.'

20    There is also second hand hearsay evidence of an incident on 7 September 2023 where, it is alleged, Ms Longmuir stood up in Ord Minnett's open plan office and stated words to the effect: 'I'm going to Canaccord. Who wants to come with me?' (or 'Who's coming with me?'). She is then alleged to have directly asked three other employees present, including a junior staff member James Lobb, if they wanted to go with her to Canaccord. Mr Lobb responded with words to the effect: 'I will'. They then went and had a coffee together.

21    Ms Longmuir's evidence is that the coffee had been arranged at Mr Lobb's request before this incident. As for the incident itself, her evidence is that what she said in the open plan office was 'Everyone seems to be moving to Canaccord, maybe we should too', and that she said it in front of Vanessa Scott, an Associate Adviser at Ord Minnett, Melissa Cover, Ord Minnett's Perth Branch Administration Manager, and Mr Lobb only. She says that she had not at that time decided to resign from Ord Minnett, and that she had not accepted a position at Canaccord.

22    Also in evidence in an email dated 7 September 2023, as what appears to be third hand hearsay, is a statement Ms Longmuir is alleged to have made to Ms Scott, that Ms Longmuir had received an offer of employment at Canaccord and had said to Ms Scott, 'business is business, I'll go hard at our joint clients'. Although Ms Longmuir's affidavit addresses most of the other allegations embodied in Mr Hegerty's affidavit, it does not refer to this one.

23    On 7 September 2023 at 4.21 pm, Ms Longmuir emailed client account information to her personal email address. This was after she had left the office for the day. The information she emailed, which is in evidence on a confidential basis, is a spreadsheet containing the details of 85 clients (being individuals and couples, with each couple counted as a single client). The details in the spreadsheet included such sensitive private details as their risk profile rating, the investment product they had purchased and the amount of funds under management.

24    The information is self-evidently sensitive, confidential and valuable in the sense that a competitor who had access to it could use it to attempt to procure the business of the clients listed in it. Ms Longmuir did not contend to the contrary. The sending of this email to her personal email address was revealed by a search conducted of her work emails, which had occurred as a result of her recent conduct. As a result, a decision was made to temporarily suspend her account to ensure that client confidentiality was not being compromised.

25    Also on 7 September 2023, at 5.59 pm, Ms Longmuir sent a note to a client (as a comment in a declined meeting message) 'A heads up between you and me only. I think I am going to be leaving Ords so I am a bit under the pump. Happy to catch up one on one with you another time but feel I cant talk freely in front of Vanessa & Dwight so I will sit this one out'. Ms Longmuir's evidence is that she had not decided at this time to resign from Ord Minnett, but her affidavit does not explain why, then, she said to the client that she thought she was going to be leaving the firm.

26    At a disciplinary meeting with Ms Longmuir on 8 September 2023, which Mr Hegerty attended, Ms Longmuir said that she had no idea that it was a breach of policy to send client information to her personal email address. She said that she sent the spreadsheet to herself every three months. The explanation that Ms Longmuir gives in her affidavit of the sending of the spreadsheet to herself is:

Since the commencement of my career at Macquarie Group and then throughout the balance of my career at Ords, I have maintained a growing client list. I regularly add to this list on an ongoing basis. On 7 September 2023, I emailed myself at my personal email address a copy of the client list. I had done so on many previous occasions throughout my three and a half years at Ords. I use the list when I am working at home and to contact clients over evenings and weekends. Many of my clients have also become good personal friends that I maintain relationships with outside of my employment.

27    Searches of Ms Longmuir's work email account revealed that she had sent client account information to her personal email address on multiple occasions between 17 April 2020 and 7 September 2023, but according to a 'show cause' letter from Ord Minnett to Ms Longmuir dated 11 September 2023, none of the emails she sent to herself contained a spreadsheet resembling the one sent on 7 September.

28    At the 8 September meeting, Ms Longmuir sought to explain the declined meeting note as a throwaway comment when she was trying to get out of a lunch with the client. According to Mr Hegerty, Ms Longmuir also said at this meeting that she had no intention of leaving and had not received an offer from Canaccord and had not had any communication with Canaccord.

29    There was a show cause disciplinary meeting on 11 September 2023 (attended by Mr Hegerty, Ms Longmuir and others) and a final meeting on 18 September 2023 (also attended by them and others). At the latter meeting, Ms Longmuir was told that her employment was terminated. The termination letter mentioned above followed on the next day.

30    Ms Longmuir's evidence is that, 'Prior to these meetings and receipt of the show cause letter and termination letter referred to above, I had not decided to resign from Ords or accepted a position at Canaccord'.

31    Ms Longmuir's evidence is that at an unspecified time following termination from her employment, she deleted the emails from her Ord Minnett email account to her personal email account. And, she says, 'I went into my laptop to see if I had files from Ords and deleted any files I had from Ords'. On this basis, Ord Minnett did not press orders protecting confidential information that originally formed part of its interlocutory application.

Communications from clients before and after the end of Ms Longmuir's employment

32    Mr Hegerty's affidavit also contains evidence about contact from clients of Ord Minnett for whom Ms Longmuir was the Adviser. The identities of the particular clients in question are not relevant and I will not use their names unless they or their spouses have provided affidavits (as some of them have).

33    This evidence goes directly to the key issue on this application, namely the strength of Ord Minnett's case that Ms Longmuir has been soliciting clients in breach of the post-employment restraints in her contract of employment. As discussed below, the short term of the contractual restraint may mean that in practical terms, the outcome of the interlocutory application will determine the outcome of the matter as a whole, at least in so far as injunctive relief is concerned. It is therefore appropriate to consider the evidence in some detail so that the strength of Ord Minnett's case can be evaluated.

34    Ms Longmuir's affidavit contains some general evidence about contact with clients between 18 and 20 September 2023 but I put no weight on it due to its general nature. I will focus on the evidence about specific clients.

35    On 18 September 2023, a couple for whom Ms Longmuir had acted as Adviser emailed Ord Minnett saying:

Please terminate our advisor fee with Ord Minnett as Faye Longmuir is no longer with the firm. I am in a state of shock and will evaluate my situation with what I am going to do in a couple of months.

This was sent on the day before Ms Longmuir's employment was terminated, and Mr Hegerty's evidence is that Ord Minnett had not informed the clients that this was going to happen (or had happened).

36    However, Ms Longmuir's affidavit annexes a screen shot of a text message from one of the clients, bearing the date 18 September 2023, saying:

Hello What's happening??? Are you leaving Ord Minnet[t]?

37    Ms Longmuir's evidence is that they then spoke on the telephone, when the client asked, 'why were you terminated?'. Ms Longmuir responded by saying 'I was unhappy and I will do some due diligence to see where I would go next. I am not allowed to solicit clients, including you'. The client asked what her rights were, because the only reason they were at Ord Minnett was because they were referred to Ms Longmuir by their accountant. Ms Longmuir responded by saying, 'When I left Macquarie Group they waived their advice fee so that clients can make an informed decision. At the end of the day it is your money and your choice where you would get advice. Ords will appoint a new advisor for my old accounts'. The client said 'I don't want a new advisor, I want to stay with you' and said that her husband and her would be in touch later.

38    On 20 September 2023, Ord Minnett received an email from another client for whom Ms Longmuir had acted as Adviser, Michele Crawford. Its subject heading was 'Current News re Faye Longmuir'. It said:

I have just heard the news that Faye Longmuir has left Ord Minnett. I am extremely shocked and concerned. There is much I need to think about.

With immediate effect please turn off my Advice Fee with Ord Minnett.

Please confirm that you have done so by return e mail.

Mr Hegerty says that at the time of the email, Ord Minnett had not informed the client that Ms Longmuir had left Ord Minnett.

39    Ms Longmuir has put screen shots of text messages from Ms Crawford in her affidavit, bearing the dates 18 September and 20 September, asking whether all was OK, whether Ms Longmuir was OK and saying that Ms Crawford was 'very worried about what's going on'. Ms Longmuir also gives evidence of a telephone conversation with Ms Crawford on or around 20 September 2023 when Ms Longmuir said 'I can't provide you with advice or ask you to leave Ords'.

40    Ms Crawford has sworn an affidavit. It says that she has known Ms Longmuir for 25 years and they would regularly speak about financial advice and investment opportunities. Ms Crawford's affidavit says:

3.    In mid-September 2023 I had not heard from Faye for a number of days which was unusual. On or around 18 September 2023 I telephoned Faye on her mobile telephone and we had the following conversation:

Michele: Are you okay?

Faye: Yes but I have left Ord Minnett.

Michele: Can I see you? I want to make sure you are okay.

Faye: Yes alright.

4.    I recall the following conversation from when I met with Faye:

Michele: Why did they terminate you?

Faye: I was unhappy with management and the lack of direction.

Michele: I want you to stay as my Advisor.

41    Ms Crawford gives no evidence of any text messages. She does not say when she met with Ms Longmuir although it can be inferred that it was prompted by the request to meet on 18 September 2023.

42    Also on 20 September 2023, Ord Minnett received an email from another client, Emma Tobias, for whom Ms Longmuir had acted as Adviser. The email said:

I got a call from a Craig I think yesterday who told us that Faye had left with immediate effect. He mentioned he'd email us. We haven't had anything yet.

Given we now don't have an advisor at ORDS please can you place a halt on all adviser fee's until this is sorted. This would include the following accounts:

[Accounts named]

We're on holiday at the moment so this came as a shock. We will get back next week and see who the suggested Advisor is and then make our decision on if we accept that Advisor and how this impacts us.

43    It appears that 'Craig' is Craig Ellis, a Senior Investment Adviser at Ord Minnett. Nevertheless, Mr Hegerty's evidence is that at the time of receiving this email, Ord Minnett had not yet informed the client that Ms Longmuir had left Ord Minnett. Mr Hegerty does not seek to explain or otherwise refer to the first sentence of the email. In oral argument, counsel for Ord Minnett conceded that Mr Hegerty's evidence on this point was incorrect.

44    Ms Tobias has sworn an affidavit in which she says that on 19 September 2023 she received a call from a man who identified himself as 'Craig' who said that he was calling Ms Longmuir's clients because she had left Ord Minnett with immediate effect, and that he would send an email to confirm his details 'and a proposed plan for moving forward'.

45    Ms Tobias annexes to her affidavit a screen shot of text messages with Ms Longmuir on 19 September 2023. Ms Tobias told Ms Longmuir that she had had a call from Ord Minnett saying that Ms Longmuir had left with immediate effect, and that Ms Tobias 'acted surprised as I was'. Ms Tobias asked Ms Longmuir if she was OK. Ms Longmuir said that she will be but did not want to disrupt Ms Tobias's holiday. Ms Tobias asked whether she and her partner or wife (it is not clear from the evidence) could call her 'late this afternoon? [You're] not disrupting us but now but now we are thinking about it anyway :)'. Ms Longmuir replied, 'Absolutely 👍🏻'. Another text message Ms Tobias sent, this one after her email to Ord Minnett, said 'So far as they know we've asked for stop in fees whilst they propose a new advisor…'.

46    According to Ms Tobias, on 19 or 20 September 2023 she had a telephone conversation with Ms Longmuir. She does not say who called whom, but it is open to infer that Ms Tobias called as foreshadowed in the text messages. Her evidence is that the conversation went as follows:

Emma: What happened?

Faye: I am sorry as I did not want to disturb your holiday.

Emma: That's ok. What's going on?

Faye: I have been terminated by Ord Minnett and I can no longer advise you.

Emma: Why did they terminate you?

Faye: I have not been happy at Ord Minnett for as they had several management changes and they thought I was leaving. It escalated from there.

Emma: So you don't have a job? Are you ok?

Faye: No it all happened very quickly.

Emma: Ok well Craig told me that he will send me with a plan moving forward but right now I have no idea whose managing our money. I'm going to cancel our fees as I am not paying them unless I have an advisor. Sonya and I have said we'll look at what they propose when we get back from holiday.

47    On 21 September 2023 Ms Cover received an email from a client for whom Ms Longmuir had acted as adviser, Kyle Vanzati. The subject heading was 'Fwd: Vanzati accounts'. The email had no text in it, save that it forwarded (inline, that is, not as an attachment) an email sent less than ten minutes earlier from Ms Longmuir's personal email address to Mr Vanzati's email address with the subject heading 'Vanzati accounts' and the following text:

Hi Melissa

We understand that our friend and advisor, Faye Longmuir has left Ords. Please accept this email as our authority to send our superannuation files to Faye's personal address.

C/o [address redacted]

Regards

Kyle Vanzati

Melissa email address

[email address redacted]

At the time of receiving this email, Ord Minnett had not informed Mr Vanzati that Ms Longmuir had left Ord Minnett.

48    According to Ms Longmuir's affidavit, she told Mr Vanzati and his wife Jodi, while they were travelling around Australia, that she had been terminated and was no longer employed by Ord Minnett. While it is not abundantly clear, her evidence appears to be that this was on an occasion when they called her to discuss their travels and catch up on their lives.

49    According to Ms Longmuir, the Vanzatis' superannuation documents (which it is said were not Ord Minnett documents) were being held by Ord Minnett until they came back from holidays but 'they did not want the documents held at Ords without my being employed there, and I said "you can have them sent to my house and I will hold them there until you come home"'. And then 'they said, "Okay, can you draft an email for us?"'.

50    Mr Vanzati's wife, Jodi Vanzati, has affirmed an affidavit in which she says that she has known Ms Longmuir since she was five years old and Ms Longmuir is her best friend. According to Ms Vanzati, on 19 September 2023 she spoke with Ms Longmuir on the telephone. She does not say who telephoned whom. According to the affidavit, the conversation included the following:

Faye: I was terminated with Ords.

Me: How am I going to get my files over to you?

Faye: You can contact Melissa and ask her.

Me: Do you have her contact information and what do I say to her?

Faye: I will email you her email address and you need to ask for the files back.

Me: Can you prepare that for me?

51    On 21 September 2023, Mr Ellis received an email from another client of Ord Minnett for whom Ms Longmuir had acted as Adviser. The email said:

Thank you for your email.

Further to our telephone conversation and as this means I now no longer have a financial advisor could you please suspend the monthly advisor fee until further notice.

Thank you.

52    Mr Hegerty's evidence is that at the time of receiving this email, Ord Minnett had not yet informed this client that Ms Longmuir had left Ord Minnett. But, as the client's email indicates, she was replying to an email from Mr Ellis (subject heading, 'contact'). In it, Mr Ellis said:

Thank you for returning my call, and once again I understand the circumstances are not ideal. My details are below and as mentioned I look forward to meeting you soon

53    Mr Hegerty's affidavit does not seek to explain how this email and the client's reply are consistent with his evidence that Ord Minnett had not yet informed the client that Ms Longmuir had left Ord Minnett. Ord Minnett has not filed any affidavit from Mr Ellis. Once again, at the hearing on 20 October 2023, counsel for Ord Minnett conceded that Mr Hegerty's evidence on this point was incorrect.

54    On 27 September 2023, Ord Minnett received an email from clients for whom Ms Longmuir had acted as Adviser, Tim and Alison Bray. It said:

We have just found through my dad [over the] weekend that Faye has left, both Tim and I are very shocked at this news.

In light of this development we would like some time to evaluate, can you please turn our advice off until we next contact you.

55    Mr Hegerty says in his affidavit, again, that at the time of receiving this email, Ord Minnett had not yet informed Mr and Ms Bray that Ms Longmuir had left Ord Minnett.

56    Ms Longmuir's affidavit says that Ms Bray's father called her and said he wanted to transfer funds from his account and she explained that she had been terminated by Ord Minnett. According to Ms Longmuir, Ms Bray's father said 'there is no way we are staying at Ords. We will be in touch later to move.' On 16 October 2023 (after the first interlocutory hearing in this matter, which was on 12 October), Ms Bray's father emailed Ms Cover saying:

Hi Melissa, Re Fay Longmuir and our account, as Faye has been our initial go to person from 16 years ago when she set up our accounts for us and family members, Faye in that period has been an excellent manager of our account, we have decided to follow her to her new position. Please note Faye did not solicit us, we are moving our account of our own volition

57    Ms Bray has sworn an affidavit. It says, as her email does, that she found out from her father that Ms Longmuir had left Ord Minnett (although the date she gives for that would not have been 'over the weekend' as the conversation with her father was about a week prior). She says she telephoned Ms Longmuir on 20 September 2023 and had a conversation to the following effect:

Alison:    Faye, Dad has told us that you've left and the circumstances. Regardless of wherever you go, we want you to remain our financial advisor. Can we sort this out?

Faye:        Sit tight.

There is no evidence, however, that Ms Bray's father told her the circumstances of Ms Longmuir's departure.

58    About a week later, Ms Bray then sent the email set out above. On 16 October 2023, she sent an email to Ord Minnett saying that after learning of Ms Longmuir's departure from Ord Minnett, 'we contacted Faye to request that she continue as our financial adviser'. However, Ms Bray gives no evidence about that contact. Ms Bray's evidence is that the decision to move her and her husband's account from Ord Minnett was theirs alone, and was not influenced by Ms Longmuir, who did not ask them to leave Ord Minnett or ask for their account after she left them.

59    Mr Hegerty's affidavit also contains hearsay evidence of discussions that Ord Minnett personnel had with clients other than those mentioned above. For the most part, those personnel were Mr Ellis and Ms Scott, who were calling clients on 19 September 2023.

60    One client, Steven Hogden, is said to have known the details around Ms Longmuir's departure when contacted (including apparently saying 'It was all a joke' regarding the alleged outburst in the open plan office on 7 September 2023). Mr Hogden demanded all fees to be cancelled across all accounts, including his father's account.

61    Ms Longmuir's affidavit says that she received a call from Mr Hogden, whom she describes as a personal friend who she worked with at Macquarie, and she told him she had been terminated. He is said to have told her that he would move his files over when she had a new place of employment.

62    Mr Hogden has affirmed an affidavit in which he says that he received a call from Mr Ellis on 19 September 2023 in which Mr Hogden said, 'I am aware of the story and think it is disgraceful how you've treated someone who is a rusted-on Ords supporter. It was all a joke, mate'.

63    According to Mr Hogden, Mr Ellis responded to the effect, 'I'm not the manager, I'm just calling to let you know that Faye's no longer with us' and Mr Hogden said:

Integrity and trust are the cornerstone of a relationship between a client and their adviser. I cannot trust a firm that would treat its staff in the manner in which Ords have treated Faye. It sounds to me like the managers at Ords are all a joke. I want you to switch off my fees and for them to be cancelled today. I also want my father's fees to also be cancelled today.

64    Mr Hogden's evidence is that at no stage has Ms Longmuir or any other person asked or encouraged him to leave Ord Minnett. He says his decision to cease his engagement with Ord Minnett is his alone.

65    There is also evidence about conversations that Mr Ellis or Ms Scott had with five other clients. It is in the form of brief internal email reports from Ms Cover to another Ord Minnett staff member which contain much by way of assumptions or inferences that have little or no obvious support in the few objective facts stated. I put no weight on this evidence and will not describe it further.

66    According to hearsay information of Ms Cover given through Mr Hegerty's affidavit, on 4 October 2023 and 5 October 2023, new Microsoft Outlook meetings appeared in Ms Longmuir's Outlook calendar with Ord Minnett. It appears from each that Ms Longmuir was organising to have a meeting with a client of Ord Minnett (that is, two meetings, each with a different client). Mr Morrissy apparently called one of the clients, who said she was a friend of Ms Longmuir's and would be staying with her and 'she then shut down the conversation very quickly and didn't want to talk any further'.

67    The first meeting was scheduled for 9 October 2023 and the second for 11 October 2023. The second one bears a date that may be the date on which it was created, namely 5 October 2023. The first also seems to bear such a date but it is illegible in the screenshot annexed to Mr Hegerty's affidavit.

68    In relation to the first of these clients, Ms Longmuir's evidence is that when she was still employed by Ord Minnett she scheduled a meeting with the client that was to take place at a time after 19 September 2023. After she was terminated she did not show up to the meeting, at which point the client said, 'You are like my daughter and I could not cope without you. Promise me you will transfer my files when you find a new job.' Ms Longmuir then made an appointment with the client for 9 October 2023.

69    In relation to the second client, a couple, Ms Longmuir's evidence is that she had been scheduled to have a review meeting with them prior to her termination, and when that was cancelled they contacted her. According to Ms Longmuir she told them that she could not solicit them to her next place of employment. But they asked her to transfer their files to the new place of employment when she started as they did not want to be without her advice. Ms Longmuir organised to meet with them on 11 October 2023.

70    There was an initial hearing of the interlocutory injunction application on 12 October 2023 at which Ms Longmuir, through her counsel, agreed to interim restraints so that she could have more time to prepare her response to the application. One of the restraints, embodied in an order of the Court, was in terms that closely reflected cl 22.4 of the employment contract, against soliciting or persuading (or attempting to persuade) any client of Ord Minnett with whom Ms Longmuir had work related dealings during the 12 months preceding 19 December 2023 to cease doing business with Ord Minnett or reduce the amount of business which the person would normally do, or otherwise have done, with Ord Minnett.

71    On 15 October 2023 another client of Ord Minnett, Barbara Goldstein, emailed Ord Minnett saying:

I have found out through the West Australian that Faye has left the firm.

I am upset that you did not tell me before. Faye has been my advisor for over twenty years and I have called her and asked to move my account to her new firm.

72    Ms Longmuir's affidavit says that she received a call from Ms Goldstein on 13 October 2023 which went as follows:

Barbara: Faye, I read that you left Ord Minnett in the West Australian, is it true?

Me: Yes it is.

Barbara: I am upset you didn't tell me. Are you able to prepare paperwork to transfer my account over to you? I have been with you for twenty years and I want you to continue to manage it.

Me: I can't solicit you or ask you to come with me.

Barbara: I am a free agent and I can solicit you. Ord Minnett can't restrain me and I can have who I want as an advisor. I want you.

Me: Okay. I will prepare the paperwork.

73    Ms Longmuir says that after this phone call, on or around 15 October 2023, she met with Ms Goldstein to set up an account with Canaccord.

74    Ms Goldstein has affirmed an affidavit. She has known Ms Longmuir for more than 20 years. It appears that she had followed Ms Longmuir as a financial adviser from Macquarie Group to Ord Minnett. The affidavit confirms that Ms Goldstein became aware of Ms Longmuir's departure from Ord Minnett through media reporting, presumably a report of the hearing of 12 October 2023. Ms Goldstein's affidavit says:

7.    Upon reading the newspaper report, I was immediately concerned that I had not been advised of Faye's departure, either by Ords or Faye herself. Faye had served as my professional wealth adviser for more than two (2) decades. I was alarmed by the failure of Ords to communicate the departure of the person who had successfully managed my affairs for a long period of time.

8.    Soon after reading the report, I telephoned Faye on her mobile number, which I have had saved in my phone for many years. This was the first occasion I communicated with Faye since prior to her departure from Ords.

9.    I said words to the effect of: 'Faye, I've just read the paper. Please would you take me on as a client again?'

10.    Faye responded with words to the effect of: 'Barbara! Of course I will! You'll just need to fill out some paperwork.'

11.    On 15 October 2023 at 3:26 pm I sent a text message to Melissa Cover (Melissa) from Ords … who I previously had dealings with as Faye's assistant, that stated the following:

Hello Melissa

I have found out through the West Australian that Faye has left the firm.

I am upset that you did not tell me before. Faye has been my advisor for more than twenty years. I have called her and asked to move my account to my new firm.

Regards

Barb[a]ra Goldstein

12.    On or around 16 October 2023, I called Melissa on a telephone number I had long saved in my mobile phone and said words the effect of: 'Hello Melissa, I am going with Faye. Can I please have a copy of my Will.'

13.    Melissa responded to the effect of: 'Barbara would you prefer I get a consultant to speak with you?'

14.    I responded: 'No.'

Telephone call with Ords

15.    On or around 16 October 2023, I received a telephone call from a man called John, who identified himself as a consultant from Ords.

16.    He said words to the effect of: 'Hello Mrs Goldstein, I am calling about your account with us and some concerns you may have.'

17.    I instructed the gentleman that I wanted to move my account to Canaccord, and said words to the effect of: 'Thank you very much but I would just like a copy of my Will please.'

75    According to Mr Morrissy, whose hearsay information appears in Mr Hegerty's affidavit, he was the 'John' who called Ms Goldstein on 16 October 2023. He says she told him that she had met with Ms Longmuir the day before to complete paperwork for Ms Goldstein to open an account with Canaccord. This evidence was in an affidavit filed on 17 October 2023. Ms Goldstein's affidavit was filed on 19 October 2023. While it is consistent with her having met Ms Longmuir to fill out paperwork, it does not mention that, or say whether, how or when Ms Longmuir provided or helped with the paperwork that she mentioned in the telephone conversation soon after reading the news report.

76    Ms Goldstein says that the decision to move her account was her unilateral decision and was not influenced by Ms Longmuir or anyone else.

77    Mr Hegerty also provides evidence of social media posts and text messages by Ms Longmuir since her termination making what may be disparaging statements about Ord Minnett and some of her former colleagues there. In one of the posts she says (it is not clear to whom) ‘Did you think it was going to be easy stealing my clients'. In another she says (to Mr Ellis, according to a letter in evidence from Ord Minnett's lawyers to Ms Longmuir's lawyers):

Please don't bully my clients with bull shit

Huge mistake

78    There is also an email dated 12 October 2023 in evidence in which Ms Longmuir gave a 'referral partner' of Ord Minnett her new contact details at Canaccord, and introduced Mr Lobb to the referral partner. It appears that a referral partner is another business, in this case a law firm, who may refer clients to Ord Minnett for investment advice and portfolio management.

79    Out of the 90 or so clients that Ms Longmuir worked with at Ord Minnett, 17 have terminated their engagement with Ord Minnett.

Ms Longmuir's and Mr Lobb's employment with Canaccord

80    On 21 September 2023, Ord Minnett's compliance team received an email from Canaccord with certain compliance documents requesting information about Ms Longmuir. It included a 'Consent to share personal information' form signed by Ms Longmuir on 20 September 2023. In Mr Hegerty's experience, these documents are sent to prior employers when a person takes up employment at a new firm.

81    On 9 October 2023, Canaccord confirmed on LinkedIn that Ms Longmuir had joined them. Ms Longmuir also posted on LinkedIn to the same effect on the same day. Ms Longmuir's affidavit says that is when she commenced employment with Canaccord. She does not say anywhere when she approached Canaccord for a job, or when they approached her, or indeed who approached whom. She does not say when she received a job offer. She does not say when she decided to accept the offer or when she did accept it.

82    Mr Lobb resigned from Ord Minnett on 25 September 2023 and on 9 October 2023 he stated on LinkedIn that he had joined Canaccord.

Correspondence about an undertaking

83    In a letter dated 17 October 2023, Ms Longmuir's solicitors provided an undertaking in a letter to Ord Minnett's solicitors (an undertaking to Ord Minnett, not to the Court). The undertaking was in the terms of the interim orders made on 12 October 2023, save that it would last until 19 December 2023, being three months from the termination of Ms Longmuir's employment with Ord Minnett. It thus reflected closely the relevant terms of the employment contract.

84    Ord Minnett's solicitors, Lander & Rogers, replied on 18 October 2023, saying that the undertaking proffered on Ms Longmuir's behalf gave their client no comfort in circumstances where, according to them, Ms Longmuir appears to have a fundamental misunderstanding of the legal effect of her obligations to Ord Minnett. Essentially, the letter asserts that Ms Longmuir has been acting on an understanding of what it means to solicit a client that is too narrow as evidenced, in particular, from her interactions with Ms Goldstein after the interim orders were made.

85    It is not necessary to go into the detail of the points put by Lander & Rogers; the meaning of 'solicit' in the employment agreement is not in dispute and will be described below. Their letter indicated that the undertaking would be acceptable only if it were made to the Court, if Ms Longmuir confirmed that her understanding of its scope was the same as that outlined in the letter from Ord Minnett's solicitors, and if she provided an affidavit confirming that she had destroyed confidential information.

86    The next day Ord Minnett's solicitors sent another letter indicating that their client would be prepared to agree to an adjournment of the hearing the following day if, essentially, she agreed to the same undertaking, provided it was made to the Court (or embodied in consent orders of the Court). Ord Minnett reserved the right to seek to relist the matter urgently if it became aware of a breach of the undertaking.

87    Ms Longmuir's solicitors replied the same day rejecting both offers, asserting that Ord Minnett's case that Ms Longmuir had breached the employment contract did not rise to the standard necessary to justify an interlocutory injunction. A without prejudice offer apparently followed, but Ord Minnett did not accept it so the hearing proceeded.

Principles

88    There is no need to recite the well-established principles that govern applications for interlocutory injunctions: see eg Frigger v Trenfield [2019] FCA 1746 at [6]. In short, the applicant must demonstrate a sufficiently serious question to be tried to justify interlocutory relief after the balance of convenience, including the practical consequences likely to flow from the injunction, is considered. That assumes that damages will not be an adequate remedy, which was not in issue in this case.

89    It is relevant, however, to note two points that are material to this application. The first is that on an interlocutory injunction application, the Court will not conduct a preliminary trial of the action in order to resolve conflicts in the parties' evidence. Therefore the use to which a respondent's evidence can be put may be a limited one. The evidence may be such as to explain away the case put by the applicant, or it may show that in reality there is no such case. But it will not be enough merely to raise a conflict of evidence: see generally Warner-Lambert Company LLC v Apotex Pty Ltd [2014] FCAFC 59 at [72] (Allsop CJ, Jagot and Nicholas JJ), quoting with approval from Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 734.

90    The second point of particular relevance has already been mentioned: the short period for which the relevant contractual prohibition runs in this case means that the practical effect of interlocutory relief may be to decide the matter once and for all. That is because it appears unlikely that a full trial of the matter will be held and judgment delivered before the three month life of the post contractual restraint expires. As I have said, this means that I considered it appropriate to canvass the evidence in some detail so as to evaluate the strength of Ord Minnett's case for final relief: see Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 536 (McLelland J).

91    While these two principles may appear to be in tension, in truth they are not. The nature of the task as described under the heading of the first principle remains the same. It is still an application for interlocutory relief. But the practical consequences of granting or refusing relief in this particular case make it appropriate to go into the evidence in more detail than the Court might otherwise have done.

92    The only other point of principle that needs to be mentioned concerns the meaning of 'solicitation' in contractual restraints of the kind that is presently in issue. As has been said the parties were, helpfully, in agreement as to that meaning. As put in Lander & Rogers' letter of 18 October 2023:

(a)    solicitation is not limited to instances where the former employee makes the first approach to an old client;

(b)    whether solicitation occurs depends upon the substance of what passes between them once they are in contact with each other;

(c)    there is solicitation of a client by a former employee if the former employee in substance conveys the message that the former employee is willing to deal with the client and, by whatever means, encourages the client to do so; and

(d)    the line is crossed where the former employee, in response to an approach by a customer, encourages the customer to engage him or her.

93    I accept this to be a correct summary of the principles that emerge from the cases on which Lander & Rogers rely, in particular Hellmann Insurance Brokers v Peterson [2003] NSWSC 242 at [12] and IceTV v Ross [2007] NSWSC 635 at [47].

Why an interlocutory injunction was ordered in relation to the non-solicitation obligation

The balance of convenience

94    There was no dispute about the balance of convenience here, so it will be dealt with first. Counsel for Ms Longmuir properly accepted that when an applicant moves to enforce a lawful negative stipulation in a contract, the balance of convenience will usually favour the applicant, so that the threshold for the case the applicant must establish is a low one.

95    It is nevertheless relevant to note that Ms Longmuir put on no evidence and made no submissions to suggest that the grant of an injunction restraining her from soliciting clients of Ord Minnett would in any way prejudice her. She has employment at Canaccord and presumably can earn a satisfactory income without the business of such Ord Minnett clients as she might otherwise have attracted to follow her to Canaccord, if she were not restricted from soliciting their business. Any submission to the contrary would have been surprising in circumstances where, at the present time, the restriction only has about two months more to run anyway.

96    In contrast, Ord Minnett did adduce evidence indicating that it was suffering loss as a result of what it says are breaches of Ms Longmuir's non-solicitation obligations. It estimates that 17 clients formerly served by her have left since her departure. Even if only a part of those client departures are attributable to the alleged breaches, they still could result in substantial losses of fee revenue over time.

The strength of Ord Minnett's case

97    Despite those matters, and the correspondingly low threshold for the case that Ord Minnett had to demonstrate, Ms Longmuir submitted that it had not met that threshold in this case. In her submission, the evidence described above established the following:

(1)    Ms Longmuir was an Adviser at Ord Minnett and so was the main point of contact and had a close personal relationship with the clients she serviced.

(2)    When it became apparent that Ms Longmuir’s employment with Ord Minnett was to come to an end, and following the termination of her employment, various clients contacted Ord Minnett terminating or suspending their engagement with Ord Minnett.

(3)    Ord Minnett had not told these clients of Ms Longmuir’s termination.

(4)    Following Ms Longmuir’s termination she met with two of Ord Minnett’s clients.

(5)    Once Ms Longmuir commenced employment with Canaccord, a client opened an account with Canaccord.

98    Ms Longmuir submits that at its highest, 'all this establishes is that Ms Longmuir has spoken to clients of Ord Minnett and she is now undertaking work for those clients at Canaccord' (Longmuir written submissions paras 25-26).

99    With respect, these submissions do not do justice to the weight of the evidence as a whole. If that evidence is accepted at trial, it will be open to the Court to make the following findings (paragraph references are to the above).

100    By 5 September 2023, at least, Ms Longmuir was dissatisfied with Ord Minnett and considering leaving [17], [19]. While the allegation that she said she could leave appears to be based on second hand hearsay, Ms Longmuir made no submission that its weight should be discounted (in contrast to other evidence mentioned below).

101    On at least three occasions between 5 September and 7 September 2023, Ms Longmuir mentioned going to Canaccord [20]-[22]. She also told a client in the meeting declined note that she thought she would be leaving Ord Minnett [25]. It will be open to the Court to find that she was, at least, considering going to Canaccord then, and that she had received an offer of employment from Canaccord.

102    Ms Longmuir does submit that Mr Hegerty's second hand hearsay evidence about her standing up in the middle of the office and saying 'I'm going to Canaccord' should be given little weight. But the evidence is recorded in a contemporaneous email to Mr Hegerty, which lends it more weight than it might receive if it had not been recorded at the time. In any event, Ms Longmuir herself admits to saying something about going to Canaccord in the open plan office on 7 September 2023 ('Everyone seems to be moving to Canaccord, maybe we should too') and according to Mr Hegerty she told him something similar on the same day.

103    In my view all this evidence is sufficient to raise a serious case that by 7 September 2023, Ms Longmuir had decided to go to Canaccord. While Ms Longmuir's evidence is that she had not decided to resign from Ord Minnett, that is in the category of evidence that potentially contradicts Ord Minnett's evidence; it does not explain it away or otherwise make it plain that Ord Minnett has no case.

104    On 7 September 2023, the same day of the incident in the open plan office in which, it is open to find, Ms Longmuir had implicitly expressed dissatisfaction with Ord Minnett and a preference for working at Canaccord, Ms Longmuir emailed herself her client list [23]. Although she says she did this regularly during her time at Ord Minnett, the fact that she did it on this particular day provides support for an inference that she had decided to take at least some of her clients with her to Canaccord or, at least, had decided to make provision for the possibility that she would wish to do so in the future. Whether such an inference should be made will be a matter for trial, but the evidence canvassed above is enough to give rise to a serious prospect that it will be. Further, if, as suggested by the show cause letter of 11 September 2023 [27], the Court finds that Ms Longmuir had not in fact sent this apparently comprehensive client spreadsheet to herself before, that will strengthen the inference.

105    Ms Longmuir's evidence about when she decided to leave Ord Minnett, when she had received an offer of employment from Canaccord and when she accepted that offer was sparse and ambiguous. For example, she said that she had not decided to resign or accept a position at Canaccord before 'these meetings' (apparently meetings on 11 and 18 September 2023), receipt of the show cause letter (11 September 2023) and receipt of the termination letter (19 September 2023) but which of these dates is the relevant one is ambiguous [30]. Both parties were careful not to criticise the other for gaps in their evidence in an interlocutory application where affidavits were prepared in a hurry. But even allowing for that, Ms Longmuir’s evidence about her intentions to leave was carefully worded and evidently incomplete. That can also be said of other evidence in her affidavit about interactions with clients, and about some of the affidavits given by the clients themselves.

106    That being so, and acknowledging that Ms Longmuir had no onus of proof, it appears that she chose to go into evidence in an incomplete way. While that is her right, it is nevertheless something that can be taken into account in determining whether there is a serious question to be tried. It is open to the Court to infer that if a party does not give evidence that is uniquely within her power to give, that can help support an unfavourable inference against the party: see Coshott v Prentice [2014] FCAFC 88; (2014) 221 FCR 450 at [80]-[81]. While that inference will inevitably be weaker at an interlocutory stage such as this, it is still available to support the Court's overall assessment of the strength of Ord Minnett's case.

107    Canaccord sent Ord Minnett compliance documents connected with Ms Longmuir's employment at Canaccord, one of which she herself signed on 20 September 2023 [80]. That is the very next day after she was terminated at Ord Minnett. It is open to infer that she had in fact accepted a position at Canaccord before that termination, and that she did so (at the latest) some time between 11 and 19 September.

108    In addition, Ms Longmuir appears to have been liberal in making disparaging comments about Ord Minnett and former colleagues there, from at least the time of her termination [77]-[78]. This strengthens the likelihood that she was also making disparaging comments to clients, alleged instances of which are referred to below. Also, on several occasions she referred to the Ord Minnett clients she had served as 'my clients'. It is true that she appears to have had a close relationship with several of the clients, in some cases one that predated her time at Ord Minnett. While that relationship may explain the willingness of some clients to leave Ord Minnett, it also may make it easier for Ms Longmuir to encourage them to leave.

109    In all that context, and from 18 September 2023, the day before her termination, clients began communicating with Ord Minnett to terminate or suspend their accounts. The inferences open from that need to be assessed in light of Ms Longmuir's possible intentions and state of mind as described above. In particular:

(1)    The couple referred to at [35]-[37] above terminated their Adviser fee with Ord Minnett before Ms Longmuir's employment was terminated. There is a text message that suggests that Ms Longmuir contacted them to tell them on 18 September 2023, and she herself admits she spoke to them on that day. While her evidence about the conversation, if accepted, may negative the allegation of soliciting, that can only be determined after cross examination and other trial processes. The evidence does not explain away the inference that is open on the materials, namely that the clients terminated the fee arrangement because Ms Longmuir encouraged them to do so. Also, there is no evidence from these clients.

(2)    The evidence about Michele Crawford may lead to a conclusion that she contacted Ms Longmuir on 18 September 2023, not the other way around. But that in itself does not mean that Ms Longmuir did not solicit Ms Crawford to cease doing business with Ord Minnett. On Ms Crawford's own evidence, Ms Longmuir told her that she was unhappy with the management and lack of direction at Ord Minnett, and immediately after that Ms Crawford said she wanted to stay with Ms Longmuir, which necessarily meant leaving Ord Minnett. Also, this occurred at a meeting at an unspecified time, where Ms Longmuir gave no evidence about the meeting, and Ms Crawford's evidence about it was plainly incomplete [38]-[40]. So it is open to find that Ms Longmuir expressed dissatisfaction with Ord Minnett at a meeting with Ms Crawford, following which (although the sequence of events is unclear) Ms Crawford asked for Ord Minnett to 'turn off my Advice Fee'. The inference that this was because of encouragement from Ms Longmuir is open, notwithstanding Ms Longmuir's evidence that she told Ms Crawford that she cannot ask her to leave Ord Minnett.

(3)    Ms Tobias seems to have learned about the termination of Ms Longmuir's employment from Mr Ellis [42]-[46]. For that reason, Mr Hegerty's evidence that Ord Minnett had not told her about the termination appears to be incorrect. That, and the fact that similar evidence was also incorrect (see [51]-[53] above) leads me to put no weight on Mr Hegerty's evidence to that effect in relation to any of the clients. But Ms Tobias's text message to Ms Longmuir that she 'acted surprised' when Ord Minnett told her that Ms Longmuir had resigned, and that 'So far as they know' she had only asked for a stop in fees support an inference that Ms Tobias and Ms Longmuir had discussed Ms Tobias leaving Ord Minnett to a greater extent than the evidence currently reveals. All this means it is open to infer that Ms Tobias placed a halt on her adviser fees with Ord Minnett after speaking to Ms Longmuir, in a conversation where Ms Longmuir said she was not happy at Ord Minnett.

(4)    It does not appear to be disputed that Ms Longmuir prepared the email from Mr Vanzati asking for superannuation files to be sent to Ms Longmuir because she, 'our friend and advisor' had left Ord Minnett [47]-[50]. She also appears to have suggested that the Vanzatis arrange to send their superannuation documents to be held by her. Whatever the surrounding circumstances and conversations there is, at least, a serious prospect that the Court will find that these matters amounted to encouragement to the Vanzatis to cease their business with Ord Minnett.

(5)    By the time Mr Ellis spoke to Stephen Hogden on 19 September 2023, he was already 'aware of the story', presumably concerning Ms Longmuir's dismissal from Ord Minnett, and thought it was 'disgraceful' and, it is open to conclude, had formed the view from things he had been told that Ms Longmuir had been mistreated and management at Ord Minnett were 'a joke' [60]-[64]. Mr Hogden's affidavit provides no clear explanation of how he could have learned those things and formed those impressions other than from a conversation or conversations with Ms Longmuir. There is therefore a serious prospect that the Court will find that she disparaged Ord Minnett to Mr Hogden and thereby encouraged him in his apparent decision to leave Ord Minnett. Like some of the other client witnesses, Mr Hogden says that the decision to leave Ord Minnett was his alone. But that does not rule out the possibility that he received encouragement to reach that decision from Ms Longmuir.

(6)    Ms Longmuir had arranged to meet two other Ord Minnett clients, one on her first day at Canaccord, and the other two days afterwards [66]-[69]. It is open to infer that at those meetings they discussed the clients transferring their business from Ord Minnett to Canaccord, and that by being willing to discuss it, Ms Longmuir provided encouragement. There is no evidence from these clients. And while, once again, Ms Longmuir's evidence about them may negative the inference if it is accepted at trial, it does not presently explain it away, or otherwise demonstrate that there is no serious case to be tried.

(7)    On Ms Goldstein's evidence, Ms Longmuir indicated an enthusiastic willingness to take her on as a client at Canaccord ('Barbara! Of course I will!') and both she and Ms Longmuir appear to give evidence that Ms Longmuir met with her to facilitate her move from Ord Minnett [71]-[75]. It will be open to the Court to conclude that this amounted to encouragement.

110    It is worth noting that there are numerous respects in which the evidence given by the clients is inconsistent with the evidence given by Ms Longmuir, and those inconsistencies are left unexplained. The matters on which Ms Longmuir and the clients gave evidence are matters which would require a full trial to be resolved. While this does not remove the onus on Ord Minnett to demonstrate that there is a serious question to be tried, it does provide further support for the view that the evidence adduced by Ms Longmuir neither clearly negatives Ord Minnett's case, nor explains away the evidence on which it relies.

111    The evidence summarised in [109] needs to be considered as a whole, in all the context outlined above. After doing so, I was comfortably satisfied that there was a serious question to be tried that Ms Longmuir had breached her non-solicitation obligation on more than one occasion. It may be that some of the instances just summarised will be explained away after full evidence. It may be that Ms Longmuir's evidence and that of the clients ends up being accepted. But there was enough to demonstrate that Ord Minnett's case went beyond suspicion and conjecture, to establish a serious case to be tried.

Conclusion on interlocutory injunction regarding solicitation restraint

112    It must be acknowledged that despite the detail of the evidence that the parties marshalled in a relatively short time, much of Ord Minnett's case still depends on inference. That is perhaps inevitable in a case of this kind, before full pre-trial processes and cross examination have taken place. For that reason, and having assessed Ord Minnett's case carefully, I would not go so far as to describe it as strong.

113    Nevertheless, the accumulation of evidence just described amounts to a serious case. And that is in a situation where the restraint will only last for another two months, at most, where there is no evidence that it is detrimental to Ms Longmuir's interests. So the serious case, and the fact that the balance of convenience clearly favours Ord Minnett, led me to determine that an injunction to enforce Ms Longmuir's obligation not to solicit clients should be granted.

114    I did not consider that the undertaking proffered on Ms Longmuir's behalf stood in the way of the grant of an injunction. As an undertaking offered to a party, not the Court, and in terms that reflected the contractual prohibition, it added nothing to the contract itself. In the circumstances described above, Ord Minnett was entitled to have the potential sanctions of the Court attached to that prohibition.

The restraint on inducing other Ord Minnett staff to leave

115    I did not determine, however, that there was a serious case to be tried that Ms Longmuir had breached cl 22.2 of the employment agreement, which prohibits her from inducing any 'Restricted Person', which includes employees of Ord Minnett, from terminating their engagement with Ord Minnett.

116    The evidence of any such breach was scant. Even if one accepts that Ms Longmuir's communications with Mr Lobb on 7 September 2023, around the incident that took place in the open plan office, included some sort of encouragement for him to go to Canaccord, that occurred before Ms Longmuir ceased her employment. So it could not have been a breach of the post-employment restraint, and no breach of any other term is alleged. There is no evidence of when Mr Lobb decided to leave Ord Minnett (before his resignation on 25 September 2023), save that Ms Longmuir gives specific evidence that he was in touch with a recruiter from around 12 September 2023.

117    The only other piece of evidence that could go to a breach of cl 22.2 is a text message from Ms Longmuir to an unidentified employee of Ord Minnett which says 'And please know that if they choose to close the Perth office at the end of all this, you will always have a job with me'. But this is simply part of a bundle of text messages and social media posts annexed to Mr Hegerty's affidavit, and with no context, or even date, provided I put little weight on it.

118    I was not satisfied that Ord Minnett had demonstrated that there was a serious case to be tried of breach (or threatened breach) of cl 22.2.

The form of orders

119    The other main issue at the hearing was the form of any order to restrain Ms Longmuir from breach of cl 22.4 of her contract of employment with Ord Minnett. It will be recalled that the operative words of that clause provide that Ms Longmuir must not 'solicit or persuade (or attempt to persuade)' clients of Ord Minnett to cease or reduce their business with the firm. While, as mentioned above, the parties seem to be in agreement as to what it means to 'solicit' a client, they were not necessarily agreed as to how that prohibition would apply to specific fact situations.

120    For that reason, after hearing the matter and before adjourning for a short time to consider my decision, I directed counsel for the parties to confer as to the form of any order to restrain a breach of cl 22.4. They could not reach agreement, and submitted competing minutes. Ord Minnett's minute made it express that, along with a prohibition on soliciting or persuading, Ms Longmuir was to be prohibited from encouraging clients to cease or reduce their business with Ord Minnett. Ms Longmuir's minute sought to change that prohibition to inducement, rather than encouragement, and added a list of three carve outs specifying certain conduct that was not prohibited, namely:

(e)    accepting calls or responding to other forms of communication from such clients;

(f)    accepting to undertake work for such clients upon those clients’ express request to do so; or

(g)    once a request is made by such clients for the Respondent to undertake work for them, making the necessary arrangements to have their accounts transferred to Canaccord.

121    Ms Longmuir submitted that while the word 'encourage' does emerge from the authorities as being equivalent to 'solicit', it was still open to debate what kind of conduct does or does not fall within the scope of the word. The intention of Ms Longmuir's proposed orders was thus to make it clear what does not fall within the restraint. Ms Longmuir submitted that it ought to be made plain in the orders that if she engages in that conduct, it will not be held to be a contravention of the restraint.

122    I was concerned, however, that including the list of excluded matters may cause more confusion than it avoided. For quite plainly, Ms Longmuir could engage in the listed conduct, while at the same time contravening the prohibition in cl 22.4. Undertaking to make arrangements to transfer accounts to Cannacord could, for example, be taken as a form of encouragement to transfer from Ord Minnett. Whether that is or is not a breach will depend, in the end, on assessing the particular conduct involved, taken in all its context.

123    It appeared to me, therefore, that the proposed list of permitted conduct did not solve the problem. But more fundamentally, it would not be a problem caused by any difficulty in understanding or construing the order made. It is a problem caused by the potential variety of human conduct caught by the prohibition. To the extent that Ms Longmuir submitted that indeterminacy in how the prohibition might be applied made it undesirable to make any order at all, I did not accept that. Any indeterminacy is a function of the nature of the prohibition to which Ms Longmuir freely agreed. It cannot render the Court powerless to enforce that prohibition.

124    In any event, the principle that an injunction should be expressed with precision and clarity may not fully apply when the question is the enforcement of a negative contractual stipulation: Orleans Investments Pty Ltd v MindShare Communications Ltd [2009] NSWCA 40 at [97] (Giles JA, Spigelman CJ and Allsop P agreeing). Giles JA went on to observe (also at [97]):

Certainty is important because contempt of court by infringement of the injunction may bring a heavy penalty, but "[e]xcessively narrow formalism in framing the injunction may wreak its own injustice": per Callinan J in Maggbury [Pty Ltd v Hafele Australia Pty Ltd (2001); 210 CLR 181] at [104]. It was said by this court (Meagher, Handley and Cripps JJA) in Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 349 that the principle "is a counsel of perfection rather than a mandatory standard, and there are limits to its application", an observation endorsed by Spigelman CJ in Bankstown City Council v Alamdo Holdings Pty Ltd (2004) 135 LGERA 312; [2004] NSWCA 325 at [106] (Bankstown City), Ipp JA and I agreeing, and by Ipp JA in Y v W (2007) 70 NSWLR 377; [2007] NSWCA 329 at [76], Spigelman CJ relevantly agreeing. Uncertainty or oppression in an injunction taking up the terms of cll 7 and 10.1(a) was to be evaluated and taken into account, but as a discretionary consideration and not as a bar to relief if there were less than complete clarity for the appellants’ future conduct.

125    Taking the alleged uncertainty into account here, I determined that it was not a bar to granting an injunction. That is so for the reasons expressed at [123] above, and because the prohibition will only last for another two months, in circumstances where there is no evidence that limiting Ms Longmuir's contact with her former clients at Ord Minnett is going to prejudice her in any way.

126    As Giles JA also observed in Orleans Investments, at [105], 'Injunctions are practical tools in the administration of justice. There are limits to the precision and clarity which can be attained; reflecting the words of Callinan J earlier cited, [the applicant] should not suffer an injustice through undue insistence on precise statement of what the appellants must do or not do.' His Honour went on to cite examples of injunctions being granted in wide terms, such as to restrain the causing of 'a nuisance'.

127    I therefore determined that it was not appropriate to attempt to define the prohibition with further particularity by attempting to specify what it did or did not cover. I considered that it would, however, assist to put the main prohibition in terms of 'encouragement', as that was agreed by the parties to be the substance of the prohibition on 'solicitation', and it has the advantage of being an ordinary English word that everyone understands.

128    Accordingly, orders were made in the terms set out at the beginning of this judgment.

Associate:

Dated:    24 October 2023