Wilson HTM Investment Group Limited & Ors v Pagliaro & Ors

60There are also in evidence Announcements to the ASX by the first plaintiff in which it reported revenues from ordinary activities. For instance, for the half-year ended 30 June 2011 the revenue figure provided was "down 15.2% to $139,765,000" and for the half-year ended 31 December 2011 the revenue figure provided was "down 44% to $41,695,000". 61The defendant submitted that the publication of these revenue figures is a clear indication that the plaintiffs do not regard (and as a public company cannot regard) the revenue figures as confidential information. There is no doubt that the particular figures that must be disclosed in the Annual Reports and in the Announcements to the ASX are not confidential. However during the course of operations of a business there are a number of matters relating to the structure of that business or, to use the language of the employment contracts, "the affairs" of that business that the corporation would wish to keep confidential. The revenue figures reported in the Annual Reports do not enable particular individuals to be identified and targeted as the high earners. Obviously if a company publishes the fact that certain individuals are high and efficient earners bringing in $X per month, it will attract offers of employment from other firms to its own detriment. The revenue figures, the subject of this litigation, are not general revenue figures but lists of specific amounts of revenue earned by named individuals within the plaintiffs' employment. I am not satisfied that the fact that the first plaintiff is a public company with reporting obligations means that the revenue information the subject of this litigation is not confidential information. 62Mr Coppin's affidavit evidence was that "neither advisors nor firms" within the industry disclose to third parties "the revenues which advisors earn from the clients they advise" (par 59). Mr Gale's affidavit evidence was that advisors' "revenue figures are confidential information" and are "not disclosed to other advisors" (par 34). However their evidence elicited in cross-examination referred to individual prospective employees' conduct that had not been mentioned in their affidavits. It is appropriate to set some of that evidence out in detail. 63Mr Coppin has had more than twenty-three years experience in the stockbroking industry in Australia. He has worked for very large stockbroking firms as an investment advisor and in senior management roles. He is familiar with the practices of stockbrokers, investment advisors and the wealth management business (including stockbroking and financial planning) in Australia. His affidavit evidence was that a sign-on fee is a sum that a stockbroking firm will pay an advisor to acquire the revenues associated with the clients for whom the advisor works. Sign-on fees are normally calculated as a multiplier of an advisor's revenue over the previous twelve months. 64Mr Coppin's evidence was that advisor revenue figures are kept confidential within the plaintiffs' business and advisors are not given access to the revenues of other advisors. Mr Coppin conceded that advisors might somehow be able to obtain that information however they are not authorised to do so. The Standards of Conduct for the plaintiffs' employees include a requirement that the plaintiffs' confidential information "must not be divulged to any other person" without the plaintiffs' written approval. Those Standards also provide that "no employee will use confidential information for personal advantage". 65Mr Coppin gave the following evidence in cross-examination (tr 65-66): Q: Now, in relation to the management of the business throughout 2012 you have gone out of your way to positively seek to employ stockbrokers from other firms into Wilson's. Correct? A: Correct. Q: And during the course of interviewing such people you have obtained from them revenue information, have you not? A: From time to time, yes. Q: And in relation to [named individual] you know that during his interview he gave you information about the revenues he was writing at his current employment? A: He gave me indications of what his revenue bands would be, yes. Q: Now, you can't recall whether you asked him or whether he just volunteered the information, can you? A: I don't recall, no. Q: But the information he gave you was sufficient for you to determine whether or not it was a good idea to employ him? A: Well, yes, because I had worked - he had worked for me before. Q: Yes, but also because you needed to know for the purpose of making that decision what revenues he was currently producing as a stockbroker - yes? A: Yes. Q: And the reason you needed to know that information was because the revenues produced by a stockbroker in the immediate preceding period are likely to be a reasonable guide as to what they will produce in the short term future? A: It is certainly an indication. Q: Because it is expected that the clients they deal with on a regular basis will probably follow them to the new employer, isn't it? A: It is one of the factors. ... Q: And in so far as the information that [named individual] gave you, you don't consider that you were doing anything wrong or that he was doing anything wrong when he provided you with that revenue information, do you? A: No, because it was part of a broader discussion. Q: Part of a broader discussion about whether he would work for you? A: Correct. 66Mr Coppin's attention was drawn to paragraphs 65 to 71 of a draft affidavit that had been prepared for him dated 27 August 2012 (Ex A) in which reference was made to the commercial significance to the plaintiffs of the remuneration of each financial advisor and the fact that they are kept confidential within the plaintiffs' business. That draft affidavit included the following: 68 The information is confidential because the revenue figures of individual financial advisors show how each individual is performing as part of the Private Wealth Management business unit, and is directly linked to their remuneration. 69 The employment contracts of each advisor and each of the First to Fifth defendants state that the salary and commissions of individual advisors is confidential, disclosure of which will constitute misconduct. If financial advisors knew what other financial advisors were earning, this knowledge would be extremely divisive, as it could raise issues of preferential treatment, and lead to complaints that some advisors who are not performing should be performance managed. 70 If the financial advisor revenue figures were not kept confidential, they could be disclosed to a third party or a competitor. If a competitor obtained sufficient revenue figures from a sufficient number of employees in for example the Private Wealth Management business unit, a competitor could calculate the total revenue of the business unit. That information is valuable in the hands of a competitor. The competitor would know the profitability of the business unit, and whether particular financial advisors working for the Plaintiffs should be approached in order to poach them. This information would give competitor information regarding the scale of commissions payable by the Plaintiffs to their financial advisors. A competitor would then be in a position to frame offers of employment to financial advisors, providing for some more generous rates of commission than the Plaintiffs provided. 71 Additionally, because the First Plaintiff is a public company, if advisor revenue figures were not kept confidential, the continuous disclosure requirements of the ASX would then apply to this information. This is because the aggregate of the financial advisors' revenue would demonstrate the profitability of the PMW business unit, which in the present market, is the main contributor to the Plaintiff's profitability. The profitability of the Private Wealth Management business unit would be material to a shareholder when deciding whether or not to acquire shares. 67Mr Coppin was cross-examined in relation to those paragraphs as follows (tr 67-68): Q: Are you saying this, that really it boils down to what is in paragraph 70, that if a new employer gets revenue figures from a sufficient number of Wilson employees it will give that competitor a better opportunity to persuade the employees of Wilson's to come and work with them? A: Yes, I think there is a difference between having a general discussion with someone about the individual revenue and having access to a raft of information about a whole firm's revenue and all of its advisors including commission statements and other more intimate details. There is quite a big difference. Q: The commercial advantage that would give the competitor though is really it gives it a better ability to say to some or all of the employees, "come and work with us"; that is right, isn't it? A: Depending upon the level of detail but it very well could, yes. Q: You see, for example you say in paragraph 70: "the competitor would know the profitability of the business unit and whether particular financial advisors working for the plaintiff should be approached in order to poach them" so there you see a competitive advantage to the competitor in deciding whether to poach employees, is that what you are saying? A: If they have all of the revenue and commission details of the employees it would certainly be strategically advantageous, yes. Q: And it would give them information regarding the scale of commission payable by the plaintiff to their financial advisors, you say? A: If they are in possession of the commission statements, yes. Q: But they would know that anyway, wouldn't they, because the level of commissions is pretty much across the board, is it not? A: I don't think firms openly publish their commission schedules that they pay advisors but across the industry professionals that have been in it for a long time, we all have some relative understanding about who gets paid what within what's fees but it is not specific or readily available to my knowledge. Q: And what it really boils down to, what you are saying is this, isn't it, you are saying that if the competitor knows revenue figures either of individuals or of a group that is of assistance in that competitor enticing that employee to come and work for them? A: I believe that it would be advantageous. Q: And the revenue figure gives you a good indication of the actual commission that they will be receiving, does it not, because generally you will have an understanding of the level of commission? A: I mean, again, if the revenue figure is an entire revenue figure then yes, because in our industry you need to distinguish between revenue which could be comprising of brokerage plus other fees plus corporate transaction fees so the total revenue number combined with a commission would allow you to intimately understand what each person in the firm was actually getting paid. 68Mr Gale's affidavit evidence was that advisors do not have access to the revenues derived by other advisors. However, as Branch Managers, Mr Pagliaro and Mr A Bligh did have such access. Mr Gale's attention was drawn to his draft Supplementary Affidavit of 24 August 2012. That document (Ex 1) included the following (at 15): When I have interviewed new employees, both in my current role and at previous employers, I have not requested that candidates provide me with any evidence of the revenue that they earn, nor to provide details of clients or commissions. Instead, I might ask a general question such as "In broad terms, what level of revenue have you generated in the last year?" and I would expect an approximate round number in response. The purpose of that question is to understand their seniority and experience, where they might fit within the organisation and the current team and an appropriate base salary to offer them. I would not expect them to divulge precise figures or provide evidence taken from their employer's records of those figures. 69Mr Gale was cross-examined as follows (tr 28-36 and 48): Q: The fact is you do when interviewing prospective new employees ask them a general question such as in broad terms, "what level of revenue have you generated in the last year?", correct? A: Yes. Q: And they answer that question, don't they? A: They generally give me a guideline of the range. Q: So of course you know that they would know the actual amount of revenue they generated in the last year, don't you? A: Assuming they have come from - assuming they have come from a broking firm as opposed to outside industry. Q: Well, of course, I mean, this discussion wouldn't happen if they were not coming from a broking firm. A: My discussion is I have far more interest in the level of revenue that they expect to write in the coming year. Q: But of course no-one can tell you what will happen in the future, correct? A: Correct. Q: But a good way to judge what might happen in the future is to look at what has happened in the past? A: It is a guide, yes. Q: So you ask them in broad terms, "what revenue have you produced in the last year?", yes? A: Yes. Q: And they answer that question, don't they? A: Yes. ... Q: Can I ask you this: The notion of "in broad terms", do you have yourself an expectation as to what a proper answer to that question might entail, for example, does that mean they don't have to give you the precise dollars and cents figure? A: No, I wouldn't expect the precise dollars and cents. Q: But you would expect them to round it to the nearest, what, hundred thousand? A: I would say in the range of under 500,000, over 500,000, over 1 million. Q: So if someone said, "well, I made revenue last year of over one million" wouldn't you ask some more questions about that? A: Yes, I would. Q: You would say, "well, how much over a million?", wouldn't you? A: I would say, "is over a million, you know, 2 million or is that between one and one and a half million?". Q: And they tell you? A: Yes. Q: And from that you can judge the level of business that you would expect that they might be able to bring over to your firm if they take a job with you? A: Yes. Q: And do you do that expecting that their contract at their current employer if they are a stockbroker would have a provision in it preventing them from providing you with revenue figures? A: Yes. Q: And do you say that the way you deal with that situation is to simply ask them to tell you in broad terms? A: I haven't thought about that. ... Q: And you draw a distinction between specific numbers and numbers within a range, do you? A: Yes. ... Q: And I was asking you to explain what that distinction is by reference to commercial matters? A: Okay. With regard to commercial matters the reason I am looking at it in those broad categories is that I am trying to get an understanding of the revenue that they would generate when they come to work with me or if they come to work with me and that impacts the way I would structure the office with regard to support needs and other matters. ... Q: You expect them to do the best they can to estimate what their revenues were within the last 12 months, correct? A: I expect them to give me a guide. Q: But are you disagreeing with what I have put to you? A: Yes. Q: So you don't expect them to do the best they can to tell you the revenues they have generated in the last 12 months. A: I would expect them to do the best they can to give me a guide. ... Q: Dealing with the position industry wide, you wouldn't say that advisor revenue figures are treated across the board as a matter of practice as confidential, would you? A: I think firms treat that information as confidential. I think some of the advisors within the industry choose to make their position public. 70It appears that at least Mr Gale expects that individual employees will provide their own approximate revenue figures to prospective employers, notwithstanding that the revenue figures are treated as confidential information within the plaintiffs' business. The fact that an individual employee might breach their employment contract by providing more specific detail of their remuneration or the revenue information without the consent of their employer does not mean that the information is not confidential information. The plaintiffs submitted that the defendant did not call any evidence of industry practice in relation to what individual employees might do and that the highest the evidence from Mr Gale could be put was that it was his practice (rather than industry practice) to obtain general, rather than specific, information from prospective employees. 71The plaintiffs submitted that the defendant sought to keep its communications with Mr Pagliaro secret from the plaintiffs. That submission was based in part on the fact that Mr Pagliaro was asked to use only personal emails. It was also based in part on the ruse used by Mr Pagliaro in his pretence in advising the plaintiffs that he had heard rumours of people leaving the plaintiffs' employment but that he was staying with the plaintiffs. It was submitted the defendant's requirement for secrecy in the process of communicating with Mr Pagliaro supports the conclusion that it well knew that the revenue information was confidential. 72There is really no issue that the content of the commission statement sheets is the source of the revenue figures used by the defendant in formulating offers of employment and sign-on bonuses for the Advisors. The defendant had precise revenue figures for each of eighteen individuals who were employed by the plaintiffs. The plaintiffs submitted that the revenue figures that Mr Pagliaro provided to the defendant were not given to the defendant in the context of individual employees providing the material in broad terms at a meeting with a prospective employer. Rather it was submitted that the giving of the revenue figures to the defendant was the first step in obtaining the identity of the plaintiffs' employees to enable the defendant to target and to achieve a "team" transfer of the plaintiffs' employees to it. 73The defendant contended that if the employment contracts prevent employees from disclosing the revenue information to prospective employees, the provision should be regarded as an unreasonable restraint and that it would, therefore, be void: Restraints of Trade Act 1976. It was submitted that a restraint of this kind would be unreasonable not only having regard to the interests of the contracting parties but by reference to the interests of the public. The defendant submitted that if on the proper construction of the contract, the provision of the revenue information is a breach, such provision could only lessen the opportunity of the employees to obtain better employment. It was contended that this is quintessentially anti-competitive and does not protect what the cases describe as the legitimate commercial interests of a party. It was submitted that the provision is therefore invalid and unenforceable. 74The plaintiffs submitted that a legitimate commercial interest to be protected is the maintenance of a stable workforce. In this regard, reliance was placed on what Brereton J said in Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9 at 26-27 [55] as follows: But apart from protection against misuse of confidential information, does an employer have a protectable interest in staff connection - that is, in maintaining a stable trained workforce? The cases denying that there is any such legitimate interest emphasised that an employer does not own the workforce, as if employees were akin to stock-in-trade. That is self-evident, but nor does an employer own the customers, who are also not akin to stock-in-trade; yet a connection with customers is unquestionably amenable to protection by covenant. The employees, along with the suppliers and the customers make up the three relations upon which the profitability of a business depends. The customers are not property, but their connection with the business adds value to the business and is recognised as deserving of protection in the proprietor's legitimate interest. Similarly, employees are not property, but, all else being equal, a business with a stable trained workforce will be more attractive to a purchaser and command a higher price than one with a workforce which is unstable, disruptive or poorly trained, just as a loyal and satisfied clientele makes a business more attractive and valuable. In my opinion, staff connection constitutes part of the intangible benefits, which may give a business value over and above the value of the assets employed in it, and thus comprises part of its goodwill. It is amenable to protection by a covenant in a manner similar to customer connection, even in the absence of protectable confidence. 75I do not regard the inclusion of revenue in the definition of confidential information in the employment contracts as an unreasonable restraint. I am satisfied that the plaintiffs have a legitimate commercial interest to protect their business from an exodus of its workforce by reason of competitors stealing a march on it by use of its confidential information. This case is not about the commercial morality of competitors luring employees away from their employment. The issue is whether the defendant wrongfully obtained the plaintiffs' confidential information to set the lure. If a competitor is aware of the relative revenues of each of the plaintiffs' employees, it will have the capacity to structure targeted offers over and above the revenues and/or commissions being paid by the plaintiffs. Depending upon the commercial climate (and a number of unknown personal factors) this may be irresistible to some or all of those employees who are so targeted. It also provides the competitor with the commercial edge because the plaintiffs, unaware of these offers, would be unable to compete to retain those employees. 76I am satisfied that the plaintiffs have a system in place to keep the revenue information in respect of employees confidential. It is possible that a prospective employer might be able to obtain an individual employee's revenue information. Indeed if they interview numerous employees who are willing to publish remuneration information in breach of their employment contracts, the prospective employer might gather quite a deal of revenue information in relation to a particular business. However the evidence establishes that the plaintiffs, and the industry generally, treat revenue information of their employees as confidential. I am satisfied that the revenue information is confidential information. Inducement of breach of contract 77The plaintiffs must establish that the defendant intended to induce a breach of contract and that the defendant knew that the conduct it was inducing would be a breach of contract. The defendant's state of knowledge of the contract is a necessary consideration in determining whether the defendant had the requisite intent: Cleary v Kocatekin & Seven Network (Operations) Ltd [2012] NSWSC 692. It is not enough to show that the defendant procured an act that, as a matter of construction of the contract, is a breach. It must be shown that the defendant realised that it would have such effect: OBG Ltd v Allan; Douglas v Hello! Ltd; Mainstream Properties Ltd v Young [2007] UKHL 21; [2008] 1 AC 1 at [39]. 78There are two aspects to the claim of inducement of breach of contract by Messrs Pagliaro and A Bligh. The first is the alleged breach of clause 3.3 of their employment contracts. It is alleged that Messrs Pagliaro and A Bligh breached clause 3.3 by assisting the defendant to target the plaintiffs' workforce knowing that it would be harmful to the plaintiffs for there to be a large "walk out" of its advisors. The second is the alleged breaches of clause 9.3 and 9.4 of their employment contracts. It is alleged that Messrs Pagliaro and A Bligh breached clauses 9.3 and 9.4 by providing the revenue figures to the defendant to enable them to identify and target the plaintiffs' advisors for the purpose of offering employment to those advisors as a "team" and causing a "walk out" of a large part of the workforce from the plaintiffs. 79The defendant was aware that the Advisors with whom they were dealing, in particular Mr Pagliaro and Mr A Bligh, were employed with the plaintiffs pursuant to employment contracts. I am satisfied that the defendant would have been aware that the Advisors were subject to a contractual obligation to be loyal to and not harm the plaintiffs while in their employment. I am also satisfied that the defendant would have been aware that the plaintiffs would have protected their confidential information by a contractual prohibition on publication of such information by the Advisors and the other advisors to third parties, in particular to competitors. 80It follows from the concession that the defendant obtained the revenue figures (the revenue information) from Mr Pagliaro and the surrounding circumstances (including the arrangement of meetings and the communications referred to above) that the revenue information was provided to the defendant for the purpose of enabling the defendant to make offers of employment and offers of sign-on bonuses to the Advisors and other advisors. The evidence establishes that the defendant approached and made offers to (or was preparing itself to make offers to) 23 of the plaintiffs' advisors. 81The defendant had been in merger negotiations with the plaintiffs and, more probably than not, was aware that the plaintiffs' financial position was the subject of some rumour. I am satisfied that the defendant would have been well aware that to entice 23 top tier employees of the plaintiffs away from the plaintiffs' employment would harm the plaintiffs' business, at least in the short term. 82There is an issue as to whether the defendant procured Mr Pagliaro to identify the Advisors and other advisors in the plaintiffs' employment who might be willing to leave the plaintiffs' employment or whether Mr Pagliaro invited the defendant to accept such information. There is also an issue as to whether the defendant procured Mr Pagliaro to provide it with the revenue information or whether Mr Pagliaro invited the defendant to accept such information. The plaintiffs submitted that, if Mr Pagliaro invited the defendant to accept the information, it would have known at the time of the communication of the information that Mr Pagliaro was in breach of his contract of employment with the plaintiffs. That is so because it would have been obvious to the defendant that Mr Pagliaro was pursuing a plan to have the Advisors and the other advisors in the plaintiffs' Sydney and Brisbane offices leave the plaintiffs' employment at the same time, with the consequential obvious detriment or damage to the plaintiffs' business by the loss of that earning capacity. 83The defendant contended that there was no inducement of the plaintiffs' employees to breach their contracts. It was submitted that they already wanted to leave the plaintiffs' employment (as can be seen from Mr A Bligh's communications with Mr Tritton) and it was the Advisors who approached the defendant. It was submitted that they did not need any inducement to breach their contracts because they were willing to do so irrespective of the defendant's conduct. The defendant submitted that the result of its conduct was that the Advisors resigned their employment. It was submitted that they were entitled to resign and therefore there was no breach of contract and accordingly no inducement of a breach of contract. 84I am satisfied that in the circumstances of this case it does not matter who made the first contact. It is clear that Mr Pagliaro and the other Advisors already wanted to leave the plaintiffs' employment. However there is a difference between having a desire to leave employment and taking the step of leaving that employment. There is also the distinction to be drawn between an individual employee deciding to leave employment and employees plotting with a competitor to take a group of employees out of the workforce of their employer for the purpose of transferring that workforce to the competitor. Such a step, if taken, would be in breach of contract in that it would not promote the interests of the employer and, indeed, would harm the employer. The inducement for the breach is the defendant's offer to take the group as a team and/or to make a competitive bid for the employees as a team by structuring salaries and/or sign-on bonuses at a more attractive level than the employees' present remuneration. That is what was done. 85The defendant chose not to go into evidence (other than to tender the documents referred to earlier). The defendant submitted that an adverse inference should not be drawn against it because there is nothing in the plaintiffs' case against it that requires any explanation. In circumstances where there has been a secret plan pursued with the assistance of the plaintiffs' employees, it is very difficult for the plaintiffs to prove by direct evidence the detail of the defendant's conduct. However the plaintiffs have garnered the evidence of Messrs Bryant, Fleming and Burton and tendered the documents evidencing the communications between the Advisors and the defendant. It is obvious that the defendant's meetings with the Advisors and other advisors were as a result of the conversations with Mr Pagliaro and Mr A Bligh. Mr Pagliaro was a pivotal part of the defendant's plan to transfer a large part of the plaintiffs' workforce to itself. He co-ordinated the plan with Mr A Bligh and Mr Gunning. He set up meetings and invited Mr Gunning into his home to meet with the members of the plaintiffs' workforce. It is also obvious that the defendant was in receipt of information to enable it to structure its approach to the Advisors and other advisors. 86The irresistible conclusion is that it was the defendant who pursued the plaintiffs' employees as a result of the receipt of the information from Mr Pagliaro and Mr A Bligh. I am satisfied that it is appropriate to infer that any evidence the defendant might have given would not have assisted it in defending the claim that it had induced Messrs Pagliaro and A Bligh to breach their employment contracts with the plaintiffs. 87I am satisfied that the defendant knew that its conduct in inducing Mr Pagliaro and Mr A Bligh to arrange meetings with the Advisors and the other advisors for the purpose of enabling the defendant to formulate and make offers of employment to those Advisors and other advisors, was conduct that would in fact be a breach of Mr Pagliaro's and Mr A Bligh's contracts of employment with the plaintiffs. This was obviously conduct that would harm the plaintiff and I have no doubt that the defendant intended that its conduct would result in a breach of contract by Mr Pagliaro and Mr A Bligh. 88I am satisfied that Mr Pagliaro provided the details of the earnings and revenue of each of the Advisors and other advisors to the defendant. I am also satisfied that the defendant was well aware that the provision of the revenue of all the Advisors and other advisors was a provision of information that was confidential to the plaintiffs and in breach of Mr Pagliaro's employment contract. I am satisfied that the defendant intended that such conduct occur. The defendant was able to identify and target those individuals that it sought to bring across to its employment as a result of the provision of this information. 89I am satisfied that the plaintiffs have established that the defendant induced breaches of contract by Mr Pagliaro and Mr A Bligh. Damages 90The plaintiffs submitted that but for the defendant's inducement, the probabilities are that the Advisors would not have left the plaintiffs' employment on 11 July 2012. Rather, it was submitted they would have stayed on for at least the completion of the Pinnacle transaction (the sale of an asset in which the Advisors had an interest as shareholders). It must be remembered that it was the plaintiffs who gave two of the Advisors notices of termination. Although those notices were for a period of three months, I am satisfied that the relevant period is only one month and the plaintiffs were not entitled to bind the Advisors to any greater timeframe. 91It was submitted that the probabilities are that the Advisors would have remained employed with the plaintiffs after July 2012. However it was submitted that it is "a matter for the Court to assess just how long they would have stayed" in the plaintiffs' employment "but for the defendant's conduct". It was also submitted that on any view "a safe assessment would be two months after 11 July 2012". 92It may be that the Advisors would have been interested to receive any distribution that would have come to them from the Pinnacle transaction. There is no evidence of the status of that transaction. However it is common ground that it had not been completed as at July 2012. The Advisors were looking at alternatives to their employment with the plaintiffs and, had another employer offered them employment either individually or as a group or team transfer, I am satisfied that in the particular environment that existed in early July 2012, they would have given one month's notice to the plaintiffs. In those circumstances and doing the best I can on the paucity of the evidence before me, I am satisfied that the appropriate timeframe for the calculation of damages is one month. 93The plaintiffs claim that the damages should be assessed by a calculation on the average monthly revenues of each of the five Advisors. Those revenues total $436,042. The plaintiffs submitted that this is the measure of damages that, but for the defendant's conduct the plaintiffs would have received had the Advisors stayed in employment with the plaintiffs. On reflection, the plaintiffs conceded that the amount needs adjustment to take into account remuneration and other relevant costs about which there was a paucity of evidence. However there was evidence that the "standard percentage that is paid across the industry" in relation to remuneration is 35% to 60% of revenue (tr 40). The confidential commission statement sheets also provide some evidence. There is also the probability that at the time the Advisors were actively pursuing alternative employment, their average monthly revenues would have been adversely affected. Just how much that affect may be is not possible to calculate with any precision. 94On the basis that these Advisors would be at the upper end of the range, an appropriate percentage reduction is 50%. There should also be a further reduction for the abovementioned matters of other costs and the adverse effect on earnings. I am of the view that a further reduction of 10% should be made. Accordingly the amount of $436,042 is reduced to $174,416. 95Accordingly the plaintiffs are entitled to damages as against the defendant in the amount of $174,416. Restraint 96The injunction that the plaintiffs seek restraining the defendant from employing certain named individuals would obviously affect those individuals. They are not joined in these proceedings and have not had the opportunity of cross-examining any of the plaintiffs' witnesses and/or calling evidence or making submissions. I am satisfied that it would be inappropriate to restrain the defendant from employing the named individuals: News Limited & Ors v Australian Rugby Football League & Ors (1996) 139 ALR 193 at 300-301. However I am satisfied that the defendant should be restrained from utilising the plaintiffs' confidential information. Accordingly an injunction will issue restraining the defendant from using, publishing or otherwise dealing with any of the advisor revenue and other information recorded in any of the plaintiffs' financial advisor commission statement sheets that were provided to Mr Thomas and/or Mr Gunning. Breach of Duties 97There is no real issue in these proceedings that the Advisors' employment contracts have implied into them an obligation to serve the plaintiffs with "good faith": Faccenda Chicken Limited v Fowler & Others [1986] 1 All ER 617 at 625. Having regard to the findings made above in particular in relation to the inducement of breaches of clause 3.3, I am satisfied that the plaintiffs have established that Messrs Pagliaro and A Bligh were in breach of the implied obligations of good faith and their fiduciary duties to the plaintiffs not to obtain for themselves a benefit by a breach of their duty of fidelity and loyalty. I am satisfied that they were induced by the defendant to breach those obligations and duties. Equitable compensation is sought in the same amount as the damages sought for the inducement of breach of contract. Accordingly the plaintiffs are entitled on this approach to equitable compensation in the amount of $174,416. Other Claims 98When the proceedings were commenced on 27 July 2012, the Summons contained the relief sought without the inclusion of any contentions setting out the causes of action. It was not until the plaintiffs filed their Points of Claim on 2 August 2012 that the ambit of the claims against all of the defendants was identified. In that first 'pleading' there was a claim that the Advisors were in breach of their obligations imposed on them by s 182 and s 183 of the Corporations Act 2001. However there was no claim against the defendant that it had contravened these sections of the Corporations Act by being involved in the breaches by the Advisors. There was no contention pleaded against the defendant in relation to alleged unconscionable conduct under the Australian Consumer Law or the ASIC Act. 99The plaintiffs filed Amended Points of Claim on 14 August 2012 in which for the first time an allegation was made against the defendant that it had caused the Advisors to breach their obligations imposed by s 182 and s 183 of the Corporations Act. It was not until the last day of the trial that the plaintiffs filed in Court Second Amended Points of Claim in which, for the first time, allegations of unconscionable conduct under the Australian Consumer Law and the ASIC Act were made against the defendant. 100The defendant has accommodated the urgent amendments to the 'pleadings', however the main issues that were the subject of final submissions were the construction of the employment contracts, the question of the confidentiality of the revenue information, the claims of inducement of breaches of contract and the injunctive relief. The plaintiffs dealt with the additional claims in their submissions, however the defendant did not make detailed submissions in relation to them. The plaintiffs have succeeded in the claims referred to above and I do not regard it as prudent to deal with these additional claims in the absence of detailed submissions. However I will refer to the nature of the claims and the way forward should the plaintiffs wish to press them. Corporations Act 101The plaintiffs claim that Mr Pagliaro and Mr A Bligh contravened s 182 and s 183 of the Corporations Act 2001 and that the defendant was involved in those contraventions. Section 182 prohibits an employee of a corporation from improperly using their position to gain an advantage for themselves or to cause detriment to the corporation by which they are employed. Section 183 prohibits an employee of a corporation from improperly using information obtained by reason of that employment to gain an advantage for themselves or to cause detriment to the corporation. Each of those sections provides that a person, including a company, who is "involved" in a contravention itself contravenes the section: s 182(2); s 183(2). Section 79 provides that a person is "involved" if the person has aided, abetted, counselled or procured, or induced, or been knowingly concerned or a party to the contravention: s 79(a)-(c). 102Sections 182 and 183 are civil penalty provisions: s 1317. An essential aspect to the plaintiffs' case against the defendant is that there should be a finding that Mr Pagliaro and Mr A Bligh contravened those sections of the Act so that a finding can be made that the defendant was involved in those contraventions. If the Court is satisfied that there is a contravention of those sections, it "must" make a declaration of contravention: s 1317. However it is not necessary for a Court to make a declaration of contravention under s 1317E in proceedings for an order for compensation brought by a corporation under s 1317H or s 1317HA: One.Tel Limited (In Liquidation) v John David Rich and Ors [2005] NSWSC 226; (2005) 53 ACSR 623 at [70]. 103The plaintiffs contend that both Mr Pagliaro and Mr A Bligh used their positions as Senior Advisors to arrange meetings with the defendant and promote attendance at those meetings for the purpose of gaining advantage for themselves (in the form of sign-on bonuses) and causing detriment to the plaintiffs. 104Although the plaintiffs claimed that both Mr Pagliaro and Mr A Bligh were in breach of s 183 of the Corporations Act, final submissions were made only in relation to Mr Pagliaro. In final submissions, attention was drawn to the divergent judicial views as to whether the section is applicable only to the use of confidential information: McNamara v Flavel [1988] 13 ACLR 619. In any event I have already concluded that the information that was utilised by Mr Pagliaro was confidential information. 105The plaintiffs seek compensation under s 1317H for damage resulting from the defendant's contraventions of ss 182 and 183, by reason of its involvement in the alleged contraventions by Mr Pagliaro and Mr A Bligh. Findings of contravention of civil penalty provisions of the Corporations Act can have very serious consequences, irrespective of whether a declaration is made under s 1317E of the Act. If findings of contraventions are made against Messrs Pagliaro and A Bligh, and if findings of contraventions are made against the defendant on the basis it was "involved" in the contraventions by Messrs Pagliaro and A Bligh, the appropriate measure of compensation would be $174,416. 106However if the plaintiffs wish to press for these findings I would invite further submissions from the plaintiffs as to whether Messrs Pagliaro and A Bligh should be provided with the opportunity to be heard. I would also need to hear submissions from the defendant and arrangements will have to be made to re-list the matter for that purpose. Australian Consumer Law and the ASIC Act 107The plaintiffs claim that the defendant's conduct was "unconscionable" within the meaning of that term in s 21 of the Australian Consumer Law and s 12CB of the ASIC Act. 108Section 21 of the Australian Consumer Law provides relevantly: 21 Unconscionable conduct in connection with goods or services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. ... (3) For the purpose of determining whether a person has contravened subsection (1): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section. (4) It is the intention of the Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and (c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of: (i) the terms of the contract; and (ii) the manner in which and the extent to which the contract is carried out; and is not limited to consideration of the circumstances relating to formation of the contract. 109Section 12CB of the ASIC Act relevantly provides: Unconscionable conduct in connection with financial services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of financial services to a person (other than a listed public company ); or (b) the acquisition or possible acquisition of financial services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. 110The plaintiffs submitted that the defendant systematically set out to obtain the plaintiffs' business without paying any consideration for it. It was contended that the defendant sought to acquire the services of the Advisors by the use of, and on the basis of, confidential information provided by those Advisors to the defendant in breach of their contractual, equitable and statutory obligations and duties. 111It was submitted that the unconscionability of the defendant's conduct is particularly stark in light of the fact that during the first part of 2012 the defendant had discussions with the plaintiffs in relation to the question of a possible merger of the two businesses. It was submitted that the conduct of the defendant was conduct in trade or commerce in connection with the supply by the Advisors to the defendant of services and the acquisition by the defendant from those Advisors of those services and that it was unconscionable within the meaning of both s 21 of the Australian Consumer Law and s 12CB of the ASIC Act. 112The plaintiffs' contention that the defendant's conduct was unconscionable under s 21 of the Australian Consumer Law is possibly more tenable than the equivalent claim under s 12CB of the ASIC Act. "Services" as defined in the Australian Consumer Law includes "a contract for or in relation to the performance of work (including work of a professional nature)": s 2. Accordingly the breadth of s 21 read with s 2 accommodates a claim that the defendant's conduct in acquiring services from the Advisors (that is, in entering into contracts for the performance of work) was unconscionable because the defendant used the plaintiffs' confidential information in acquiring those services. 113The claim under s 12CB of the ASIC Act is more problematic. The conduct must be in connection with the acquisition (or supply) of financial services from (or to) a person. The defendant was not acquiring financial services from the Advisors. It was seeking to acquire professional services from the Advisors. It does not seem to me that this provision has application to the alleged conduct. However this has not been debated. 114Should the plaintiffs wish to proceed with these claims I would require further submissions and arrangements will have to be made to re-list the matter for that purpose. Orders 115The plaintiffs have established that the defendant induced Mr Pagliaro and Mr A Bligh to breach their employment contracts with the plaintiffs and to breach their implied contractual duties and fiduciary duties of loyalty to the plaintiffs. The plaintiffs are entitled to damages in the amount of $174,416. 116The plaintiffs have also established that the revenue information and the information in the commission statement sheets is confidential information. The defendant is restrained from using, publishing or otherwise dealing with any of the revenue information and information recorded in any of the plaintiffs' financial advisors' commission statement sheets that were provided to Mr Thomas and/or Mr Gunning. 117The plaintiffs' application for an injunction to restrain the defendant from employing the individuals named in the Second Amended Points of Claim is dismissed. The defendant is released from the undertaking it gave to the Court on 31 August 2012. 118The parties are to prepare Short Minutes of Order reflecting these findings and an agreed costs order. If agreement on a costs order cannot be reached I will hear argument when the matter is listed for the purpose of making final orders in the Short Minutes of Order prepared by the parties. I grant liberty to restore on short notice.

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