The Advocate | Issue 374 | June 2026

The recent Employment Court decision in Manawatu Motors 1970 Limited (T/A Robertson Motors) v Renner [2026] NZEmpC 68, (among other issues), analysed the issue of whether an employer is entitled to damages for loss of chance, where an employee used his client and supplier relationships acquired in his employment to compete with his employer. 

The Court considered whether Renner had breached his duties of good faith, fidelity and loyalty which he owed to Robertson Isuzu. If there was a breach, the Court would then consider what damages were owed to Robertson Isuzu. 

The Authority found that although both parties were in breach of duties they owed to one another, it considered that no loss was suffered by either party. Robertson Isuzu challenged the Authority’s determination in the Employment Court, claiming that Renner should pay special (compensatory) damages of $2,240,000 for loss of profit suffered. In the alternative, Robertson Isuzu sought damages for $900,000 for loss of a chance to retain a client caused by Renner’s breaches of duty. 

Renner commenced employment as a salesperson with Robertson Isuzu on 8 February 2004, primarily selling trucks. In around 2011, he identified an opportunity to import equipment from Japanese company, ShinMaywa, and to fit that equipment to trucks being sold by Robertson Isuzu (e.g. rubbish compactors, slide-tippers and side loaders). He raised the idea with Robertson Isuzu, who agreed that he should pursue the matter. 

In 2016, Robertson Isuzu and ShinMaywa entered into an agreement for Robertson Isuzu to be the sole distributor of ShinMaywa products in New Zealand. Renner was the principal point of contact for Robertson Isuzu with ShinMaywa and “ developed good relationships ” with its representatives. 

Renner was scheduled to have a serious operation in August 2023 and would not be able to work for 5-6 weeks afterwards. The day before going on sick leave, he gave notice of his resignation with his employment to end on 8 September 2023. 

On 7 August 2023, Robertson Isuzu received an email from ShinMaywa advising that it wished to change distribution rights so that Robertson Isuzu no longer had the exclusive right to sell its products in New Zealand. Robertson Isuzu became suspicious, given the timing being around the same time as receiving Renner’s resignation. 

On 16 August 2023, Robertson Isuzu sent Renner’s manager to visit him to see how he was after his operation, but also to uplift his company laptop and cellphone. When Robertson Isuzu reviewed Renner’s work devices, it found a number of concerning communications between Renner and ShinMaywa and Renner and Robertson Isuzu customers. 

Over 2023/2024 Robertson Isuzu made attempts to shore up the relationship with ShinMaywa, however it declined to meet. Eventually, ShinMaywa confirmed it intended to deal with Renner directly. 

On 31 August 2023, Roberston Isuzu raised concerns with Renner. It asked him to complete statutory declarations acknowledging his obligations with respect to commercially sensitive and valuable information belonging to Robertson Isuzu. 

Robertson then raised claims in the Employment Relations Authority against Renner. Renner raised counterclaims for various matters. 

In particular, Robertson Isuzu claimed that Renner had breached his obligations expressly provided under his employment agreement including with respect to his obligations as an employee, confidential information, and non-solicitation. It also claimed that Renner had breached his common law duties of fidelity and good faith. This was by him:

• Soliciting ShinMaywa away from the exclusive arrangement it had with Robertson Isuzu; 
• Providing email contacts for ShinMaywa personnel to a customer of Robertson Isuzu (being Robertson Isuzu’s confidential information); 
• Soliciting or endeavouring to entice customers away from Robertson Isuzu; and 
• Failing to protect and promote the relationship of Robertson Isuzu and ShinMaywa. 

While an employee is allowed to take preparatory steps to compete against their employer, even while still employed it was stated;

“What an employee cannot do, however, is act in breach of their duty of fidelity and good faith by taking steps that can or does cause damage to the employer, including to the employer’s goodwill and reputation. This includes that the employee cannot let others know of their plan to leave their employer and set up a competing business in such a way that the plans become widely known but kept from the employer, and in a way that is potentially damaging to it.

This obligation of fidelity and good faith exists throughout the employment right up until it ends. The boundaries of the duty owed by an employee are decided on the facts of each case; it is not necessary that the employee’s conduct is dishonest, nor is it necessary that the employee proposes to compete against the employer. The key question is whether the conduct of the employee is contrary to the interests of the employer such that it amounts to a breach of the duty of fidelity.”

The Court found that Renner had taken several steps to undermine Robertson Isuzu’s relationships with its supplier, ShinMaywa, and also its customers. All those steps were in breach of his obligations of fidelity and good faith and occurred while he was still an employee. 

The Court found that Renner had also breached his employment agreement, including that: 

• He did not carry out his duties faithfully, giving Robertson the full benefit of his experience and knowledge; 
• He did not use his best endeavours to promote, develop, and extend Robertson Isuzu’s business interests and reputation; 
• He acted to its detriment; 
• He endeavoured to discourage customers of Robertson Isuzu from dealing with it in relation to products available from ShinMaywa, and discouraged ShinMaywa from continuing its exclusive arrangement with Robertson Isuzu. 

However, the Court did not find that Renner had breached confidentiality under his employment agreement, as Robertson Isuzu did not treat the information as confidential (i.e. multiple customers would be copied to the same emails). 

The Court then turned to whether Robertson Isuzu had suffered loss as a result of Renner’s breaches. It had to decide whether to award damages for loss of the exclusive agreement with ShinMaywa, or for loss of chance of securing the arrangement with ShinMaywa. It determined that loss of a chance was the proper approach, as although Renner would have been prevented from soliciting actual or potential customers for 6 months following the end of his employment, some of his actions would have been permissible immediately following the end of his employment (i.e. because there was no enforceable restraint of trade for non-competition in his employment agreement). As Renner had not complied with the agreement and waited for the required periods, Robertson Isuzu had lost its opportunity to have a smooth transition handing over the relationship from Renner to another staff member. 

The Court awarded damages of $900,000 against Renner, representing approximately 40% of the loss claimed. Furthermore, Renner was ordered to pay interest on the balance due from 9 September 2023 until the remaining debt was paid in full. 

This case highlights having robust provisions around employee obligations both during and post-employment, particularly where an employee is privy to sensitive commercial information.