Friendly texts and a "take them back" promise didn't save them when the court read the fine print
Two advisors left, took clients to a new firm, and breached their restraint. A court confirmed the bill.
On June 9, 2026, the Full Court of the Federal Court of Australia dismissed an appeal by financial advisors Brett Puxty and Francis Coggan, upholding findings that they breached post-employment restraint clauses by soliciting their former employer's clients and moving them to their own company, Odyssey Advisory Services.
For HR professionals, the case is a tidy lesson in how restraint clauses get tested - and how courts put a dollar figure on the damage when they break.
The story is straightforward. Puxty and Coggan signed contracts with Monarch Advisory Group dated December 7, 2018. Clause 19 said that, without Monarch's prior consent, neither could solicit or accept instructions from any Monarch client for 12 months after leaving. They resigned effective January 31, 2020, and the restraint kicked in the next day. The court found that from early February 2020 the pair contacted clients using their Monarch email addresses, and that some of those clients soon became clients of Odyssey.
Their defence was consent. Puxty argued that Monarch's director, Tatiana Coulter, had agreed he could "take back" the clients he originally brought to the firm if a separate deal with law firm Madison Marcus collapsed. He pointed to a run of 2018 text messages, including one from Coulter that read: "You know I wouldn't fuck you over - ie if all this falls over you can transfer them back."
The trial judge wasn't persuaded. She found those messages related to a temporary transfer of certain at-risk clients before Puxty became an employee - not to what would happen after he joined. The Full Court agreed. There was no prior consent, and the restraint was valid and enforceable.
That's the first takeaway: friendly reassurances, even in writing, don't easily trump a signed restraint clause. Context decides.
The richer issue is damages. Monarch ran two claims. The first, lost profit during the restraint period, was assessed at $106,145.60 and wasn't challenged. The second was the lost opportunity to sell the business to Newlane Risk at a higher price, because the departed clients weren't in the book Monarch sold.
Monarch's expert, Michael Potter of Ernst & Young, put the purchase-price shortfall at $324,080 excluding GST. But he had assumed every client would stay until the deferred-payment date in May 2022, and he accepted in cross-examination that the risk of clients leaving was an essential component of a proper damages calculation. The trial judge found Monarch hadn't proven its assumptions, applied a 40% discount, and arrived at $194,448.
Both sides appealed the figure. The advisors argued there was no second-claim loss at all. Monarch argued the discount was too harsh. The Full Court knocked back both.
And here's the part worth pinning to the wall. Monarch leaned hard on what it called the "presumption against wrongdoers" - the idea that when a party's own breach makes loss hard to measure, doubts should fall against them. Justice Wheelahan said that label "is liable to mislead." Properly understood, he said, it is the narrower "facilitation principle": it can help a claimant prove loss, but it does not shift the legal burden. The claimant still has to bring the evidence.
In practice, that means a wronged employer can't just point at the other side and expect the court to fill the gaps. Monarch could have led evidence on client attrition and on how its business was valued. It didn't. The court said Monarch was "fixed with the incomplete basis on which it ran its case at trial."
So what should HR and employment-law teams take from it? Restraint clauses still have teeth - but drafting counts. The court noted that clause 19 was "poorly drafted," even though that didn't sink the case. If you mean to let someone out of a restraint, get the consent in writing and make it unmistakable. And if you ever sue over departed clients, be ready to prove your loss with hard evidence - not with the other side's conduct as a shortcut.
