A practitioner who breached her fiduciary and contractual duties to a Brisbane firm has been ordered to pay more than $230,000 in compensation and interest.
In June, Brisbane District Court Judge Suzanne Sheridan found the practitioner breached her duties to the firm by inducing one of its clients to go to her new firm, and by inducing another person not to become a client of the firm but to engage her when she moved to a new firm.
Judge Sheridan ordered the Brisbane firm was entitled to relief by way of an account of profits or damages or compensation at its election.
On Friday, she delivered judgment for the firm in the amount of $173,314.36 plus interest of $59,428.10.
She also ordered the practitioner to pay the firm’s court costs
The firm employed the practitioner between July 2019 and April 2020, under a contract containing a clause that the practitioner did not solicit any clients from the firm for at least 12 months after resignation.
The day after leaving the firm, the practitioner began as a principal of her own Brisbane practice (which was sanctioned this year for employing a disqualified person).
Friday’s 19-page decision shows that on written submissions, the Brisbane firm sought to rely on what it described as deemed admissions on the pleadings as to causation and quantum.
The practitioner opposed the relief sought, including challenging the profit margin of the firm, and referring to the unlikelihood of her being paid by the first induced client.
She had also lodged an application to reopen the case, which was heard on 11 September. The application was refused, on the basis there was nothing in the evidence sought to be adduced which would justify a reopening, and she was ordered to pay the Brisbane firm’s costs of the application on an indemnity basis.
Judge Sheridan said in relation to the first induced client, the firm alleged the practitioner issued invoices to the client totalling $129,474.07 for work performed in her new firm from 12 November 2020 and 12 May 2021.
The firm claimed that but for the breach, the client would have remained a client of the firm until at least 3 May 2021, and the firm would have performed the same work, charged the same amount, and received the same amount (a partial payment of $55,645.58).
It also alleged that by reason of the breaches, it lost almost $79,000 in profit it would have earned on the paid and unpaid fees.
In relation to the second induced person, the firm alleged the practitioner’s new firm issued invoices in the total amount of $283,539.46.
It claimed that but for the breach, the person would have become a client, and the firm would have performed the same work, charged the same amount, and received the same amount.
It also alleged that by reason of the breaches, it lost $94,513.06 in profit it would have earned on the fees less incremental expenses.
The practitioner’s defence included that she “can not plead to truth or otherwise of the reconciliations of the accounts”, and that some of the firm’s claims were “speculative, presumptive and untrue”.
Judge Sheridan described the defence as evasive and inconsistent, and said it failed to respond to the allegations.
She pointed out that it was “almost perverse” for the practitioner to claim that they could not plead to the truth or otherwise of the reconciliation of the accounts.
In relation to equitable compensation, Judge Sheridan said the practitioner was not only in breach of her fiduciary obligations to the firm, but was dishonest in relation to her account of those dealings.
She relied on the admissions to determine the profit margin claimed and the claims for loss of opportunity and payment of paid fees.
Read the case here.
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