iCollector win New York Internet bidding case

On February 8, the jury at the Supreme Court returned a verdict in favour of iCollector and parent company Ableauctions.com Inc., who alleged former associates Julian R. Ellison and John Ralston had unfairly started up a rival venture, LiveAuctioneers.com while still employees of the company. They awarded Ableauctions.com Inc., and iCollector.com a total of $417,300 in damages related to lost profits.

The crux of the case lay in determining exactly what Mr Ellison’s responsibilities were to iCollector – the dotcom established in London as iCollector plc that (after debts of £24m) was later ‘phoenixed’ as Vancouver-based iCollector.com Technologies Ltd.

Both Mr Ellison and Mr Ralston had left the bankrupt British company in February 2002. However, that same year, Mr Ellison’s services were re-engaged by iCollector’s chief operating officer Abdul Lahda to work for the new company in New York City. In July of last year Mr Lahda was barred by London’s High Court of Justice from serving as a director of any British company for seven years.

Attorney Arthur R. Lehman argued in court that his clients Mr Ellison and Mr Ralston had no restrictions on their conduct, either written or verbal, and maintained that the defendants operated only as consultants for the iCollector operation in its North American guise.

However, the jury agreed with the plaintiffs, finding that Mr Ellison had breached fiduciary duties owed to iCollector, and that both he and Mr Ralston had engaged in unfair competition and incurred unjust enrichment.

While the court awarded damages to iCollector, they did not award the injunctive relief that would have impeded LiveAuctioneers’ ability to conduct its business with 226 auction house clients. Mr Ellison said he would appeal against the ruling.