Commercial Dispute - Breach of NDA/Confidentiality Agreement?

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11 July 2014
Hi All,
Thank you in advance for potentially considering my position.

In 2011, I started a business with a business partner who I funded to go into business with.
We split the company 60% for me and 40% for him. I paid the legal setup. as well as this we hired a prominent legal company to take care of shareholder agreements, company setup, NDA's etc, commercial contracts the works for a flat fee of $50K. They took on unlimited legals to get us going correctly, based on selling themselves as a startup specialist and having connections to prominent entrepreneurs etc.

In 2012, we were approached by an investor who made an offer to buy the business for $1.5M. it is an IT company and we had a very successful first year with a number of very strong opportunities and great revenue transacted.

We signed at the same time an NDA with another similar business in which we were looking to merge with, we brought the opportunities - they had the technical / delivery function down-pact. I mentioned the potential merger and investor to my legal company that was responsible for helping us and they stated that as long as we use the NDA it will be fine and we will be safe.

The investor didn't seem to like me which is fine - you can't please everyone, but we clashed and after a personality profiling. He worked out that he and I had the same traits which is why apparently we clashed, both strong personalities and leaders. He had run his own business and had retired and had the bug and wanted to get back into watching a younger team grow.

Anyway, everything aside from that was going along well - with the exception that his offers went from $1.5M through to $100K over a series of months. In this time we were bled dry and I came to understand that this is standard practice for investors. Personally I have a young family and we literally were bled dry to the point I had invested more than $300K in the business as well as $50K under in Visa credit.

After celebrating the offer and thinking that we were in the money, my 'business partner', started to become distant and I noticed on Facebook that he had spent a weekend with the investor who lives in Queensland partying, as well as the company we were looking to merge with. Around this time I was forced into accepting a job at a prominent IT Vendor with a view to coming back with my 'business partner' saying he would look after everything.

1 month later, I get a letter from my 'business partner', who I had literally spent over a hundred thousand dollars on stating that he was going to work with the company that we were looking to merge with. Furthermore, the investor had invested into them.

Wind forward 2 years and the company in question is now one of the fastest growing companies in Australia. The issue is they sold into the companies I had had relationships with.

Further, the Investor breached his NDA with my company in effectively shafting me in going after the company we introduced him too. My business partner shafted me in going with the company I introduced him to. The company we were merging with broke his NDA in stealing my partner and Investor.

After this all played out, I reviewed in detail my NDA and it unfortunately did not have a no-hire clause in it which I found very unusual given the guidance from the specialist lawyer I spent a fortune with.

Apologies for the novel, and the emotion - my life savings are lost and I have nothing to show for what I tried to build, besides feeling ripped off by a number of parties.

I have long felt I have no comeback under contract law, but I wanted get through my situation out there and see if anyone has any ideas. If anyone wanted to take the case on, I would gladly split any remedies and believe that I have immaculate records including signed NDA's, proof of all communications, etc.

If it is a lost cause, which I have thought for a long time, at least I asked the question.


11 July 2014
To anyone that reads this post, any feedback or ideas would be appreciated.
I am in my early thirties with two kids and times are not as good as they should be.


Well-Known Member
11 July 2014
Hi Aquamale28

Your question is on the lengthier side. To be clear from the outset I am not in a position to respond substantively, however to give perhaps an easier entry point for other contributors I have tried to summarise in two paragraphs some of the key commercial/legal points in your description. Of course contributors who respond to this should read your question in full.

You started a technology company in 2011 with a business partner (equity split 60% for you, 40% for him) and retained a law firm to manage your initial registrations and corporate documents. In 2012 an investor offered to buy the company for 1.5M after some early company success. At the same time you were negotiating a potential merger with another company. The law firm retained (or another specialist lawyer??) advised you to use an NDA (which years later you realised did not contain a no hire clause) in your negotiations with each of the investor and potential merger company. You had some personality conflict/tensions with the investor. The investor's offer went from 1.5M to $100,000 over some months. You invested over $350,000 in the company (of which $50,000 was on credit).

Your business partner started to spend social time together with the investor and people from the potential merger company. Due to financial pressures you took a job with an IT company, and your business partner told you he would manage the company affairs. One month later your business partner informed you he had decided to work with the other potential merger company which by then had received funds from the investor. By 2014 this company had become very successful. You are very upset by these events. You believe other parties to be in breach of the NDAs which were agreed. You have kept all documents carefully and would like to know if a lawyer is willing to take on your case with payment in the form of sharing any remedies obtained.

Hope this helps. Good luck Aquamale28.