A tale of victory for the employer! Case note: APT Technology Pty Ltd v Aladesay [2014] FCA 966

What's the issue?

The Federal Court has delivered a significant win for employers by granting a temporary non-solicitation restraint to prevent a former employee from competing against his former employer even though the employment contract did not contain any post-employment restraints!

What happened?

The employee worked for APT Technology (APT Technology Pty Ltd v Aladesay [2014] FCA 966), an engineering consultancy company. During his employment, the employer discovered that the employee had set up a competing business and was stealing information, such as the identity of clients, databases, reports and information about the employer's equipment, software and charges.

The employee's conduct amounted to a breach of several obligations in his employment contract but the contract did not include any clauses to prevent him from dealing with the employer's clients after his employment ended.

To protect its interests, the employer applied to the Federal Court for an urgent injunction restraining the employee from dealing with the employer's clients and from misusing confidential information, as well as damages arising from the employee's breach of his employment contract.

At an interim stage in the case, the Court decided that the risk to the employer was so great that it justified making an interim order that the employee be restrained from soliciting the employer's clients, even though the contract contained no such restraint.

The restraint only applied until the final hearing of the Court case, which is still to be resolved at the time of writing, but it is an unusual and welcome development for employers.

That's great, but avoid Court if you can!

Even though the employer was successful in this instance, it helped that the employee's conduct was so serious in nature as to cause real economic harm to the employer's business. It may be difficult to obtain such a restraint in other circumstances.

The safest course for employers is to ensure that their employee contracts contain a restraint-of-trade clause, with such restraints being fair, reasonable and legally enforceable. A well-drafted contract can protect an employer in a way that is much more efficient and cost-effective than Court proceedings!

If you need any advice on how to best protect your business against unreasonable competition from former employees, please feel free to contact Mitchell Zadow, Managing Principal and Accredited Specialist in Commercial Law or Samuel Ellemor, Employment Law expert.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

For further information contact

Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.

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A tale of victory for the employer! Case note: APT Technology Pty Ltd v Aladesay [2014] FCA 966

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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A tale of victory for the employer! Case note: APT Technology Pty Ltd v Aladesay [2014] FCA 966

What's the issue?

What happened?