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Macquarie bruised in legal dust-up with sales defector

Macquarie Corporate Telecommunications (MCT) has failed in the NSW District Court to block a former employee from dealing with five potential clients for its data hosting business.MCT attempted to restrain a former sales executive, Julian Carter -- currently running a Linux consultancy -- from selling Web-hosting and disaster recovery services to five unnamed companies until July 2005 and sought AU$12,000 in commercial damages.

Macquarie Corporate Telecommunications (MCT) has failed in the NSW District Court to block a former employee from dealing with five potential clients for its data hosting business.

MCT attempted to restrain a former sales executive, Julian Carter -- currently running a Linux consultancy -- from selling Web-hosting and disaster recovery services to five unnamed companies until July 2005 and sought AU$12,000 in commercial damages.

However, on Monday, the judge presiding over the case, Justice Bishop, rejected MCT's claim, ending a 16-month court battle in which allegations of intimidation, threats of violence and evidence of high staff turn-over at the telecommunications provider were hoisted into the public domain.

MCT claimed that Carter worked for Comindico whilst still an employee of the company and used confidential information held by the company to win clients for his new employer.

Carter today claimed that MCT's court action was an attempt to intimidate him into resigning his position at Comindico.

During the trial the judge noted that Anthony Shewn, then head of MCT corporate development, had told Carter he would be watched closely "particularly in view of the fact that several other employees had gone over to Comindico".

"The case was vigorously prosecuted by Macquarie Telecommunications," said Carter's barrister, Louise Clegg.

Court documents indicate that MCT sought AU$750,000 in damages in its initial claim against Carter -- the maximum allowed under district court rules -- but it later reduced the sum.

MCT today limited its comments on the case to a short statement in which is raised the prospect of appealing the judge's decision.

"Macquarie believes the judgment is erroneous and is currently reviewing its right to appeal. This decision will be made in the near future. It is not Macquarie policy to comment further on ongoing proceedings."

MCT's case against Carter centred on a dispute about when he became eligible to be employed by Comindico and his dealings with two of MCT's prospective clients.

MCT's legal representatives claimed that Carter began working with Comindico on 10 June even though he was still a paid employee of the company on "gardening leave" until 13 June.

Carter successfully contested the claim using evidence from MCT's human resources department. Carter told the court that his employment was terminated June 9 and that he wasn't paid additional salary reflecting the June 13 termination date until after Macquarie had commenced legal proceedings against him.

Another major plank of MCT's case concerned an e-mail that Carter sent to Hub-on-line -- a company that had appeared in MCT sales diaries --within days of joining Comindico.

Justice Bishop appeared to accept Carter's explanation that while he remembered MCT's large clients he had no recollection of dealing with the Hub-on-line.

On Monday the court will decide whether MCT should be forced to pay an indemnity cost -- a court penalty -- for pursuing the case against Carter.

Carter claimed he was retrenched by Comindico shortly after MCT lawyers served the company with a subpoena for documents to support its case in the trial.

Carter said his business soon expected to take a personal equity stake in a managed services company that he claimed sat among MCT's largest data hosting clients.