Federal Court of Australia

New Aim Pty Ltd v Leung [2023] FCAFC 67

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    Paragraph 1 of the orders made by the primary judge on 23 June 2022, insofar as it relates to the applicant’s claims against the first, fourth and fifth respondents at first instance, be set aside.

3.    Paragraph 2 of the orders made by the primary judge on 15 July 2022 (which relates to costs) be set aside.

4.    The matter be remitted for retrial in relation to:

(a)    the applicant’s claims against the first respondent at first instance based on breach of confidence, breach of contract and contravention of s 183 of the Corporations Act 2001 (Cth); and

(b)    the applicant’s claims against the fourth and fifth respondents at first instance based on breach of confidence.

5.    Subject to paragraph 7, the respondents pay the appellant’s costs of the appeal.

6.    Subject to paragraph 7, the costs of the proceeding at first instance (apart from costs relating to New Aim’s Australian Consumer Law claim and New Aim’s copyright claim, which were the subject of costs orders made by the primary judge on 19 April 2022), be reserved for determination by the judge who hears the retrial.

7.    Either party may seek a variation of the orders in paragraph 5 and/or 6 above, by filing and serving a short written submission within seven days. In that event, the other party may file and serve a short responding written submission within a further seven days.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    The appellant, New Aim Pty Ltd (New Aim), conducts a large, online retail business in Australia and sources the products it sells from a range of suppliers in China. New Aim was the applicant at first instance.

2    The first respondent, Mr Man Hung (Jack) Leung, commenced employment with New Aim as a junior office assistant in 2009. He held various positions of increasing seniority over the years. In July 2020, he was appointed as the Chief Commercial Officer of New Aim, a position he held until 18 January 2021, when he resigned. Mr Leung was the first respondent at first instance.

3    The second respondent, Broers Group Pty Ltd (Broers), and the third respondent, Sun Yee International Pty Ltd (Sun Yee), also conduct online retail businesses in Australia, and are competitors of New Aim. Like New Aim, Broers sources its products from China. Sun Yee purchases products from Broers. Broers and Sun Yee were, respectively, the fifth and fourth respondents to the proceeding at first instance.

4    There were two other respondents at first instance – the second and third respondents at first instance. The applicant’s claims against them are not relevant for the purposes of this appeal and they can be put to one side.

5    In the proceeding at first instance, and relevantly for present purposes, New Aim claimed that Mr Leung:

(a)    had breached an equitable obligation not to reveal or use confidential information acquired during the course of his employment with New Aim;

(b)    breached duties in his employment contract with New Aim; and

(c)    contravened s 183 of the Corporations Act 2001 (Cth).

6    In broad terms, the factual basis of the claim was that Mr Leung had disclosed the identity and contact details of certain suppliers of products to New Aim to Broers and had used that information for the benefit of Broers and Sun Yee.

7    As against Broers and Sun Yee, and relevantly for present purposes, New Aim alleged that each received confidential information from Mr Leung in circumstances that bound those corporations to an equitable obligation not to use that information. There was also a claim that Broers and Sun Yee had breached New Aim’s copyright in certain images of products, but that claim is not relevant for present purposes. Likewise, a claim that Broers and Sun Yee had engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth), is not relevant for the purposes of the appeal.

8    The primary judge concluded that New Aim’s claims against Mr Leung based on breach of confidence, breach of contract and contravention of s 183 of the Corporations Act should be dismissed: New Aim Pty Ltd v Leung [2022] FCA 722 (J). As a consequence of the dismissal of the breach of confidence claim against Mr Leung, the primary judge dismissed the breach of confidence claims against Broers and Sun Yee: J[234].

9    New Aim appeals from the judgment of the primary judge insofar as his Honour dismissed the claims referred to in the preceding paragraph. The notice of appeal raises the following groups of issues:

(a)    issues concerning New Aim’s breach of confidence claims (ground 1 to 6);

(b)    issues concerning New Aim’s breach of contract claim (grounds 7 and 8);

(c)    issues concerning New Aim’s claim based on s 183 of the Corporations Act (grounds 9 to 11); and

(d)    an issue concerning the primary judge’s rejection of the entirety of the evidence of Ms Fangyun (Lindy) Chen, an expert witness called by New Aim (ground 12) (the expert evidence issue).

10    In the grounds of appeal relating to the s 183 claim, New Aim notes that, if a particular interpretation of the judgment of the Full Court of this Court in Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (2009) 81 IPR 1 (Futuretronics) is adopted, New Aim will contend that the matter was wrongly decided. In these circumstances, the present Full Court was constituted by five rather than three Judges. However, for reasons set out later in this judgment, we do not consider it necessary to decide whether Futuretronics was wrongly decided.

11    For the reasons that follow, we have concluded that the primary judge erred in his approach to the issue of whether the alleged confidential information was confidential. Grounds 1 and 2 have therefore been made out. As the primary judge’s conclusions in relation to New Aim’s breach of contract and s 183 claims against Mr Leung were dependent on his conclusion in relation to whether the alleged confidential information was confidential, the conclusions in respect of those claims cannot stand. We therefore uphold grounds 7 and 9.

12    Further, for the reasons that follow, we have concluded that the primary judge erred in rejecting the entirety of the evidence of Ms Chen. We therefore uphold ground 12.

13    We note that the (electronic) Appeal Book (AB) for this matter was prepared in a particular way. Rather than including the relevant evidence and materials from the proceeding at first instance in Part C of the Appeal Book, that Part contained a link to an abridged version of Part B. That abridged version contained a number of tabs. To assist the parties in considering these reasons, we have included some references to where documents are located in the materials before the Court.

New Aim’s case at first instance

14    Before outlining the primary judge’s reasons and considering the appeal grounds, we identify the way in which New Aim put its case at first instance.

15    In paragraph 11 of its further amended statement of claim (the FASOC), being New Aim’s pleading as amended during the trial, the alleged confidential information (referred to as the “New Aim Confidential Information”) was described in the following terms:

During the course of his employment with New Aim, Mr Leung had access to:

(a)    [deleted];

(b)    confidential and commercially sensitive business information of New Aim, comprising each of the following categories:

(i)    the identity and contact details of the suppliers to New Aim of products as at January 2021 and March 2021 including each of the New Aim Products (save for the identity of the supplier of the outdoor heating products sold by New Aim under the Devanti brand … in respect of which manufacturing details are required to be disclosed under the Electrical Equipment Safety Scheme (EESS));

(ii)    wholesale product information including wholesale prices for each of the New Aim Products;

(together, the New Aim Confidential Information).

16    It was further relevantly alleged, at paragraph 19 of the FASOC, that:

In the course of [his] work for Sun Yee and/or Broers … Mr Leung … [has] used the New Aim Confidential Information (or parts of it) including to assist Sun Yee and/or Broers to procure, promote and sell the Copied Products.

(Particulars omitted.)

17    To that allegation, the respondents pleaded, at paragraph 19 of the defence to the amended statement of claim (which the respondents did not amend following the filing of the FASOC):

They deny each allegation in paragraph 19 and say further that the information described in subparagraph 11(b)(i) and (ii) of the amended statement of claim suppliers of products [sic]:

(a)    is publicly available information; and/or

(b)    was imparted by suppliers to Mr Leung in circumstances where Mr Leung would reasonably expect that the suppliers would not wish him to keep the information confidential; and/or

(c)    formed part of Mr Leung’s stock of knowledge that he was free to use after ceasing his employment with New Aim.

18    As the primary judge recorded at [128], in opening submissions counsel for New Aim described the alleged confidential information as the product of work undertaken by New Aim to identify “suppliers who are reliable and produce high-quality products that are suitable for Australia”. The primary judge also noted that, in written closing submissions, counsel for New Aim identified the information as follows:

New Aim asserts that there has been misuse of the details of its suppliers and the fact that New Aim has identified them as reliable suppliers of high-quality products that are suitable for the Australian market (New Aim Information).

19    As noted by the primary judge at [129], in closing submissions, New Aim did not press its claim in relation to the wholesale product information as pleaded in paragraph 19(b)(ii) of the FASOC, save to the extent that it “relates to the identification of the New Aim suppliers and the use of the supplier details”.

20    In particular, New Aim contended that the confidential information misused by Mr Leung comprised the identity and contact details of representatives of certain suppliers to New Aim as recorded in the WeChat application on Mr Leung’s (personal) mobile phone. It is useful, at this stage, to identify and describe certain key documents that are relevant in this regard.

21    By way of background, at an early stage of the proceeding at first instance, on 26 October 2021, interlocutory orders were made requiring the provision of certain information by the respondents. These orders relevantly included orders that: Mr Leung file and serve an affidavit identifying any person to whom or which he had disclosed the New Aim Supplier Information since leaving the employment of New Aim; and Broers file and serve an affidavit identifying any person to whom or which it had disclosed the New Aim Supplier Information, and setting out details of all products that it had procured from suppliers to New Aim in the period from 1 January 2021 to the date of the affidavit. The “New Aim Supplier Information” was defined in the orders as meaning the identity and/or contact details of persons who were suppliers of products to New Aim as at January 2021 or March 2021 (subject to a limited exception that is not relevant for present purposes). The months January 2021 and March 2021 were the months when Mr Leung and the third respondent at first instance (Mr Lei (Ray) Xiao), respectively, left New Aim. In response to those orders, and relevantly for present purposes, the following affidavits were filed:

(a)    an affidavit of Mr Leung dated 5 November 2021; and

(b)    an affidavit of Mr Huailiang (Mac) Chen, a director and co-founder of Broers, dated 5 November 2021.

22    Annexure “ML-8” to Mr Leung’s affidavit of 5 November 2021 was a print-out of his WeChat contacts marked as “supplier” as at the date of the affidavit. That document was subsequently reproduced as annexure “ML-1” to Mr Leung’s first witness statement for the trial (the WeChat Contacts Print-out) (AB Part B, tab 11.1). WeChat is an application that enables users to communicate with each other. The primary judge found that WeChat operates rather like a list of contacts in the Apple system known as iMessage, or equivalents such as Facebook Messenger or WhatsApp: J[139]. The contact information stored in WeChat includes the unique WeChat identification number of an individual which can be used to communicate by instant messaging, voice and video call and social media: J[139]. For the contacts that appear in the WeChat Contacts Print-out, the information recorded is: an “alias” for the contact (not necessarily their real name or their full name); a “remark”; and a “tag”. For each of these contacts, the tag states “supplier”.

23    Annexure “MC-1” to Mr Chen’s affidavit of 5 November 2021 was a spreadsheet showing products procured by Broers from suppliers to New Aim. A version of this spreadsheet with some errors corrected was annexure “ML-25” to the second witness statement of Mr Leung for the trial dated 22 April 2022 (the Spreadsheet of Suppliers). (That witness statement was not included in the Appeal Book but was provided to the Court shortly before the hearing of the appeal.) The spreadsheet was prepared by Mr Leung, by cross-referencing his WeChat list of contacts with suppliers to Broers: J[152]. The spreadsheet shows that there were 17 suppliers of products to Broers that were also suppliers to New Aim (the 17 Suppliers): J[130], [152], [155].

24    It is also relevant to refer to a database kept by New Aim that stored information in relation to its suppliers. The database went through a number of iterations over the years. In its latest iteration as at the time of the trial, the database was referred to as the “New Aim Purchasing System”. We will refer to the database as the New Aim Purchasing System. The system acted as the centralised location that contained the entire list of suppliers and other information including the name, telephone number and bank details of the contact, as well as wholesale product information and purchase history: J[39]. The database did not contain the WeChat details for representatives of suppliers: J[99(b)]. It was not alleged at trial that Mr Leung had accessed the data contained in the New Aim Purchasing System: J[101], [177]-[178].

25    In summary, New Aim’s case at trial (in respect of its breach of confidence, breach of contract and s 183 claims against Mr Leung and its breach of confidence claims against Broers and Sun Yee) centred on the alleged misuse of the identity and contact details of suppliers to New Aim, in circumstances where the suppliers had been identified by New Aim as reliable suppliers of high-quality products that were suitable for the Australian market. In particular, the case focussed on the disclosure and use of the WeChat contact details of the representatives of the 17 Suppliers.

The reasons of the primary judge

26    After outlining the issues that arose on the pleadings (at [12]-[26]), the primary judge summarised the evidence of the witnesses called by each party. The evidence of the witnesses called by New Aim was considered at [30]-[78] and included a section (at [45]-[78]) on the evidence of Ms Chen. The primary judge considered the evidence of the respondents’ witnesses at [79]-[111].

27    The balance of his Honour’s judgment was structured as follows:

(a)    A section dealing with the general principles relating to breach of confidence ([112]-[137]). In this section, his Honour considered whether the requirement of specificity in relation to alleged confidential information was satisfied in the present case, concluding that it was (at [133]).

(b)    A section dealing with the confidential information analysis ([138]-[156]). In this section, his Honour made a number of factual findings regarding the alleged confidential information.

(c)    A section dealing with the confidentiality of the relevant information ([157]-[234]). This section contains his Honour’s evaluation of whether the alleged confidential information was in fact confidential, having regard to a number of factors or criteria referred to in the cases. The factors were considered under the following sub-headings:

(i)    What is the extent to which the information was/is known outside of the business of New Aim?

(ii)    What is the extent to which the information was known by employees and others involved in New Aim’s business?

(iii)    What is the extent of measures taken to guard the information within the business of New Aim?

(iv)    What is the value of the information to New Aim and its competitors?

(v)    What amount of effort or money has been expended by New Aim in developing the database information or the WeChat information?

(vi)    With what ease or difficulty could the information be properly acquired or duplicated by competitors of New Aim?

(vii)    Was it plainly made known to Mr Leung that the information was regarded by the applicant as confidential?

(viii)    What were the usages and practices of the industry?

(ix)    Was the information imparted to Mr Leung only by reason of his seniority or high responsibility?

(x)    Did New Aim genuinely believe the information to be confidential?

(xi)    To what extent was the information habitually handled by Mr Leung?

(xii)    Can the information be readily identified?

(xiii)    Other Factors in this Case

(d)    A section dealing with the breach of contract claim against Mr Leung ([235]-[246]).

(e)    A section dealing with the s 183 claim against Mr Leung ([247]-[251]).

28    We will discuss the primary judge’s reasons in the course of considering the issues arising on the appeal.

29    At this stage, however, we note that, in relation to the WeChat details on Mr Leung’s mobile phone, the primary judge made the following findings:

(a)    Mr Leung’s WeChat application contained 412 contacts. Of these, 111 were tagged as “supplier”. It is those 111 contacts that appear in the WeChat Contacts Print-out: J[88], [140].

(b)    Mr Leung sometimes used WeChat to communicate with people he met, including people he met at the Canton Trade Fair: J[86]-[87].

(c)    Mr Leung’s usual practice (both during and after his time at New Aim) was to add a “remark” when he first met a person and added them as a WeChat contact to remind him of how he met the person and the product (or products) they were associated with: J[86]-[87].

(d)    Mr Leung usually did not save the person’s company details on WeChat, and he did not usually update the person’s information if the person left their employer: J[86]-[87].

(e)    Mr Leung used the “supplier” tag to remind him of how he met the person. The tag did not mean that they necessarily supplied products to New Aim. He also used the “supplier” tag to save the details of freight companies (for example Toll) and freight forwarders: J[86]-[87].

(f)    Mr Leung’s WeChat contact list was informally composed over a long period of time, was not updated to reflect current suppliers to New Aim, and was not limited to suppliers to New Aim: J[141].

(g)    The recording of an initial point of contact with a person did not equate to New Aim supplier status: J[141]. (It is common ground on the appeal that there is a “not” missing in the seventh line of J[141].) See also J[145].

30    As recorded at J[103], Mr Leung did not dispute that he gave details of the contact persons for some suppliers stored in his WeChat application to Mr Chen (of Broers). In his oral evidence, Mr Leung gave evidence to the effect that he assisted Mr Chen to identify potential suppliers, and that he did so by sending him the WeChat contact details for the representative of the supplier: J[103]-[104]. There is no clear finding as to whether Mr Leung disclosed the WeChat contact details of the representatives of the 17 Suppliers to Broers (although this seems to have been accepted at J[203]). Further, there is no clear finding as to whether, if Mr Leung did disclose those details to Broers, he knew at that time that they were representatives of current suppliers to New Aim (and thus, by implication, suppliers that had been identified by New Aim as reliable suppliers of high-quality products that were suitable for the Australian market).

31    We now consider the issues raised by the appeal.

Breach of confidence grounds

32    Grounds 1 to 6 relate to New Aim’s breach of confidence claims. Ground 1 is a general ground, by which New Aim contends that the primary judge erred in dismissing its claim for breach of confidence. By ground 2, New Aim contends that the primary judge erred by treating supplier details stored in the WeChat application of Mr Leung as being distinct information from the details of those suppliers stored in the New Aim Purchasing System. It is unnecessary for present purposes to set out grounds 3 to 6.

33    In New Aim’s outline of submissions, it is submitted that two fundamental errors pervade the primary judge’s reasoning. One of these, which reflects ground 2, is said to be that the primary judge erred in treating the WeChat application information (being the details stored in the WeChat application on Mr Leung’s mobile phone) as being distinct information from the New Aim Purchasing System information. New Aim submits that the approach adopted by the primary judge inappropriately focussed on the location and method of storage of relevant information, rather than the nature, substance and commercial value of that information.

34    In essence, New Aim’s case was that confidentiality resided in the identity and contact details of its suppliers (in particular, the WeChat contact details of the representatives of the 17 Suppliers) in circumstances where the suppliers had been identified by New Aim as reliable suppliers of high-quality products that were suitable for the Australian market. Thus, New Aim submits, there was no relevant distinction between the information stored in Mr Leung’s WeChat application and the information (as to identity and contact details) stored in the New Aim Purchasing System.

35    There is no real doubt (having regard to the extracts from the primary judge’s reasons set out below) that his Honour did draw a distinction between the information held in the New Aim Purchasing System and the information in the WeChat application on Mr Leung’s mobile phone. The real issue is whether, by doing so, the primary judge failed to address the essence of New Aim’s case, which was that the identity and contact details of its suppliers (in particular, in respect of the 17 Suppliers) were confidential in circumstances where the suppliers had been identified by New Aim as reliable suppliers of high-quality products that were suitable for the Australian market.

36    The key section of the primary judge reasons is at [157]-[234]. In that section his Honour considered whether the alleged confidential information was confidential. However, before turning to that section, it is relevant to refer to his Honour’s analysis in the immediately preceding section. At [152], the primary judge accepted that 17 out of 111 supplier contacts in Mr Leung’s WeChat contacts list were current suppliers to New Aim as at January and March 2021. At [154], the primary judge referred to the New Aim Purchasing System and the information that it contained. His Honour noted that it did not record any of the WeChat contact details that were recorded on Mr Leung’s mobile phone. The primary judge then stated at [155]-[156]:

155    For these reasons, I reject the applicant’s expansion of the definition of the confidential information the subject of this claim as it evolved during the course of the proceeding as comprising the details of the suppliers to New Aim and the fact that those suppliers had been identified by it as reliable suppliers of high-quality products suitable for the Australian market. In my view, the extent to which the claim to information belonging to the applicant has been made out on the evidence is limited to the pleading at paragraph 11(b)(i) of the FASOC, namely the identity and contact details of the suppliers to New Aim of products as at January and March 2021 and then confined to the 17 identified suppliers in annexure MC-1 to the affidavit of Mr Chen of 5 November 2021, when read with annexure ML-8 to the affidavit of Mr Leung of 5 November 2021.

156    In the balance of these reasons and for convenience, I refer to this more limited category of information as “the WeChat information” so as to distinguish it from the identity and contact details of suppliers to New Aim of products as at January and March 2021, as recorded in the New Aim Purchasing System, which also for convenience I refer to simply as “the database information”. Where it is unnecessary to distinguish between those categories, I employ the label “the information”.

37    It is unclear from [155] whether his Honour was excluding from further consideration the element of New Aim’s case by which it contended that the identity and contact details of its suppliers were confidential in circumstances where they had been identified by New Aim as reliable suppliers of high-quality products that were suitable for the Australian market. If his Honour was excluding this from consideration, that does not appear to have been justified, having regard to the way the case was presented in opening and closing submissions at first instance (as referred to at J[128] and set out at [18] above).

38    In any event, it is clear from [155]-[156] that his Honour did draw a distinction between the information stored in the New Aim Purchasing System and the information stored in Mr Leung’s WeChat application (which was then to be confined to the 17 Suppliers). Further, it appears from [155]-[156] that the primary judge was confining his subsequent consideration to the information stored in Mr Leung’s WeChat application (possibly limited to the 17 Suppliers). That in itself is not necessarily a problem. The issue is the way in which his Honour considered the information stored in Mr Leung’s WeChat application in the subsequent section of his reasons.

39    In the section of the primary judge’s reasons at [157]-[234], where his Honour considered whether the alleged confidential information was confidential by reference to a series of factors, there are many places where his Honour draws a distinction between the New Aim Purchasing System information and the WeChat application information in a way that suggests that his Honour did not address the essence of New Aim’s case, which was that the identity and contact details of its suppliers (in particular, in relation to the 17 Suppliers) were confidential.

40    In the section dealing with the question “What is the extent to which the information was known by employees and others involved in the applicant’s business?”, his Honour analysed separately the New Aim Purchasing System information and the WeChat application information. His Honour discussed some evidentiary issues concerning the number of employees having access to the New Aim Purchasing System and then stated at [176]-[177]:

176    … I find that the data, as comprised in the New Aim Purchasing System since the time of its implementation in 2018, has been generally available to all members of the Buyer Team, has not been restricted to the subgroups within the Buyer Team and that, at a minimum, 40 and up to approximately 80 individuals have had access to the data contained within the New Aim Purchasing System, which statistically is 10 or 20 per cent of the workforce. Often statistics can mislead. In reality, that data is open to be accessed by 100 per cent of the employees with the knowledge and ability to misuse it, being all members of the Buying Team.

177    However, none of that is of any real assistance. As I have explained, it is not alleged that Mr Leung accessed data contained in the New Aim Purchasing System. The focus of the proceeding is far narrower. The concern is with access by Mr Leung to the information which is limited to the 17 identified suppliers within the list of WeChat contacts on the personal mobile telephone of Mr Leung. The only person who was specifically aware of that information was Mr Leung. It was not known to any other employee within the applicant’s business, save for the former director Mr Liu who would attend the Canton Trade Fair with Mr Leung and who I find must have had general knowledge that Mr Leung stored supplier contact details in his list of WeChat contacts. And it is to be recalled that at no point in time has there been capacity within the supplier databases developed and maintained by the applicant for the entry of those WeChat contact details.

(Emphasis added.)

41    By focussing attention on the two distinct places where information was recorded – the New Aim Purchasing System and Mr Leung’s WeChat application – the primary judge appears not to have directed attention to New Aim’s case in relation to this factor, which was that the company limited access to information about the identity and contact details of its suppliers. When New Aim’s case is considered in this way, limitations on access to this information when stored on the New Aim Purchasing System were relevant in considering the confidentiality or otherwise of the contact details for the 17 Suppliers stored in the WeChat application on Mr Leung’s mobile phone. However, because of the way he approached the issue, the primary judge did not take this into account. Further, having regard to the way New Aim’s case was put, it was beside the point that the WeChat identification numbers (for the 17 Suppliers) were not stored in the New Aim Purchasing System. The WeChat details were merely one way of contacting the suppliers. The New Aim Purchasing System contained other contact details. The point was that both provided a means by which the supplier could be contacted.

42    Later in the same section of his reasons, his Honour stated at [179]:

To the extent that there is overlap between the WeChat information and the database information, Mr Leung is the only person who had access to the WeChat information. No step was taken by the applicant to restrict his access to the WeChat list of contacts on his mobile telephone. In a more general sense, the applicant did take the steps that I have summarised to restrict certain categories of its employees from having access to the contact name of a person who represented a supplier. But those restrictions did not extend to the WeChat contact details for the reason that none of the database systems maintained by the applicant provided for the uploading of the WeChat contact details: as put in the evidence, there was no “field” for the insertion of that data.

(Emphasis added.)

43    Again, by focussing on the distinction between the New Aim Purchasing System and the WeChat contacts list, the primary judge did not direct attention to New Aim’s case in relation to this factor, which included the restrictions on access to supplier details imposed on New Aim’s employees generally. However, this was relevant in considering the confidentiality or otherwise of the alleged confidential information.

44    In the section of the reasons dealing with the question “What amount of effort or money has been expended by the applicant in developing the database information or the WeChat information?”, the primary judge stated:

205    I accept that the applicant has established on the evidence that it invests a not insignificant amount of skill, effort and money in order to acquire the database information. Each of Mr Huang and Mr Li gave evidence to that effect and Mr Leung admitted that when cross-examined. On his evidence, the minimum time period to investigate a new product and to source its supply is 6 months. He admitted that the information listed in the Policy of the applicant is “commercially valuable” which I find is acceptance of the proposition that value is linked to the time and effort expended in order to compile information of that character.

206    The applicant did not adduce evidence as to the actual cost to it of acquiring and maintaining the database information but that does not detract from my finding, by reference to the entirety of the evidence. However, my findings of fact concerning how Mr Leung identified potential suppliers and uploaded contact information to his WeChat account do not support the same conclusion in relation to the WeChat information. The primary distinguishing feature is that the WeChat information was recorded in the list of contacts when Mr Leung first had contact with putative suppliers. At that point in time, the effort or money expended was limited: the undertaking of a search online of competitor products, attendance at the Canton Trade Fair and a search of the Alibaba website.

(Emphasis added.)

45    In the above passage, by drawing a distinction between the New Aim Purchasing System and the WeChat application, his Honour did not give attention to New Aim’s case in relation to this factor, which was that considerable effort and money had been expended in identifying reliable suppliers of quality products. Having regard to that case, it was not to the point that the contact details (in relation to the 17 Suppliers) were stored in the WeChat application on Mr Leung’s mobile phone rather than in the New Aim Purchasing System. The effort and money expended by New Aim in identifying reliable suppliers of quality products was relevant in considering the confidentiality or otherwise of the contact details for the 17 Suppliers (assuming that Mr Leung knew that they were current suppliers to New Aim at the time of disclosure, about which there is no clear finding).

46    In the section dealing with the question “Was it plainly made known to Mr Leung that the information was regarded by the applicant as confidential?”, the primary judge drew a distinction between information stored in New Aim’s database (which was previously known as Vtiger) and the WeChat application information: see [210]-[213]. The primary judge referred to a discussion between Mr Huang and Mr Leung and stated at [212]:

Plainly, that discussion concerned the detailed supplier data information which was maintained on the Vtiger database and which was to be transferred to the New Aim Purchasing System. It did not concern the WeChat information.

47    In relation to the information in Mr Leung’s WeChat application, the primary judge stated at [213]:

Turning specifically to the WeChat information, I have found that the applicant did not ever make it known to Mr Leung that it regarded the WeChat information as confidential. The applicant did not attempt to restrict the use of the WeChat information by Mr Leung. The applicant was aware that Mr Leung maintained the WeChat information on his personal mobile telephone. The applicant permitted Mr Leung to use his personal mobile telephone for work related purposes. The applicant did not ever request Mr Leung to transfer his personal WeChat contact details to any of the more formal supplier databases that it developed and maintained over time.

48    While the above matters were relevant in considering this factor (whether it was plainly made known to Mr Leung that the information was regarded as confidential), it was also relevant to consider whether New Aim made plainly known to Mr Leung that the identity and contact details of its suppliers (wherever stored) were regarded as confidential. By focussing on the location of the information rather than its nature and content, the primary judge unduly confined his analysis.

49    In the section addressing the question “Did New Aim genuinely believe the information to be confidential?”, the primary judge analysed separately the information in the New Aim Purchasing System and the information in Mr Leung’s WeChat application: see [219]-[222]. After stating that he was satisfied that New Aim genuinely considered the New Aim Purchasing System information to be confidential, his Honour stated at [222]:

However, I am not so satisfied in relation to the WeChat information. For the detailed reasons that I have given, the manner of compilation of that information by Mr Leung, that the contacts were not transferred to the more detailed databases developed and maintained by the applicant over time, that the WeChat list of identifiable suppliers to New Aim is limited to 17 contacts out of 111 suppliers and 412 contacts overall, that no step was taken by the applicant to control access by Mr Leung to his personal list of contacts either during or upon termination of his employment and that it is the database information which in detail records considerably more sensitive information than the WeChat information to which the applicant restricts access, cause me to find that the applicant did not genuinely regard the WeChat information as confidential.

50    While the above matters were relevant in considering this factor (whether New Aim genuinely believed the information to be confidential), it was also relevant to consider whether New Aim genuinely considered the identity and contact details of its supplier (wherever stored) to be confidential.

51    As the passages discussed above demonstrate, by focussing on the location of the information and the way it was stored, as distinct from the nature and content of the information alleged to be confidential (the identity and contact details of suppliers to New Aim), the primary judge unduly confined his analysis and failed to address New Aim’s case. This error applies generally to his Honour’s consideration of the confidentiality or otherwise of the alleged confidential information (at [157]-[234]).

52    For these reasons, we conclude that his Honour erred in his approach to the issue of whether the alleged confidential information was confidential. Grounds 1 and 2 have therefore been made out. In these circumstances, it is unnecessary to consider the balance of the grounds concerning breach of confidence, which concern particular aspects of his Honour’s reasons.

Breach of contract grounds

53    Grounds 7 and 8 relate to New Aim’s breach of contract claim against Mr Leung. Ground 7 is a general ground, contending that the primary judge erred in dismissing New Aim’s claim against Mr Leung for breach of contract. By ground 8, New Aim contends that the primary judge erred by finding that the details of the 17 Suppliers that were stored in Mr Leung’s WeChat application did not constitute “confidential information” within the meaning of the employment agreement between New Aim and Mr Leung dated 16 June 2020.

54    The primary judge’s conclusion that the relevant information was not confidential within the meaning of the contract (at [244]-[245] and [246]) was based on his conclusion that the alleged confidential information was not confidential (at [157]-[234]). The parties in their oral submissions proceeded on the basis that the outcome of the grounds relating to breach of confidence would flow through to the breach of contract grounds. In light of our conclusion that the primary judge erred in his approach to the breach of confidence issue, the primary judge’s conclusion in relation to breach of contract cannot stand.

55    We therefore uphold ground 7. It is unnecessary to decide ground 8.

Grounds relating to s 183 of the Corporations Act

56    Grounds 9 to 11 relate to New Aim’s claim against Mr Leung based on contravention of s 183 of the Corporations Act. Ground 9 is a general ground, by which New Aim contends that the primary judge erred in dismissing New Aim’s claim against Mr Leung for contravention of s 183. By ground 10, New Aim contends that the primary judge erred in finding that the concept of “information” in s 183 is limited to information which equity would restrict a person from using for his own benefit. The ground includes a statement that New Aim will contend that the decision of the Full Court in Futuretronics was wrongly decided insofar as it is said to support that finding. By ground 11, New Aim contends that the primary judge erred in finding that it was not improper (within the meaning of s 183) for Mr Leung to access and use the details of New Aim’s suppliers stored in his WeChat application for his own benefit and/or the benefit of Broers and Sun Yee.

57    Section 183(1) provides:

A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:

(a)    gain an advantage for themselves or someone else; or

(b)    cause detriment to the corporation.

58    The primary judge outlined the competing contentions of the parties as regards s 183 at [248]-[249]. At [250], his Honour referred to Futuretronics at [44]-[45] and quoted [46] from that judgment. The primary judge then stated at [251]:

I consider myself bound to apply that reasoning and in accordance with my findings on the equitable breach of confidence case, the statutory claim fails. However, even if the broader view is the correct approach there must still be, objectively, an improper use of the information. On the facts that I have found, it was not improper for Mr Leung to have access to and to use the WeChat information as part of his accumulated knowledge.

59    It is apparent from the first sentence of the above paragraph that the primary judge did consider Futuretronics to stand for the proposition that “information” for the purposes of s 183 must be information which would be protected at equity. However, that view was not determinative: his Honour found that, even if the broader view (which focussed on whether the use of the information was improper) were correct, the s 183 claim would still fail in light of his earlier findings. In reaching these conclusions (in respect of both the narrower view and the broader view), his Honour relied on his earlier consideration of the confidentiality of the information (at [157]-[234]). In light of our conclusion that the primary judge erred in his approach to the breach of confidence issue, the primary judge’s conclusion in relation to the s 183 claim cannot stand. It is therefore unnecessary to determine whether or not the primary judge’s interpretation of Futuretronics was correct and whether or not Futuretronics was correctly decided. In these circumstances, we consider it preferable not to determine those issues.

60    We therefore uphold ground 9. It is unnecessary to determine grounds 10 and 11.

The expert evidence issue

61    By ground 12, New Aim contends that the primary judge erred in rejecting the entirety of the written and oral evidence of the New Aim’s expert witness, Ms Chen, the Managing Director of ChinaDirect Sourcing Services Pty Ltd (ChinaDirect or CDS).

The expert report and its preparation

62    It is necessary to set out what the evidence at trial revealed concerning the preparation of Ms Chen’s report. Some of the facts are established by documentary evidence and are not open to serious debate. Other facts come from the evidence given by Ms Chen in cross-examination, much of which was not clear and some of which was open to differing interpretations.

63    On 21 February 2022, a lawyer employed by Corrs Chambers Westgarth (Corrs) sent an email to Ms Chen attaching an engagement letter and enclosures (AB Pt B, tab 15.3, p 1166 and AB Pt B, tab 1.1). The email indicated that it was sent as a joint email from the lawyer and the partner with conduct of the proceeding. The engagement letter was dated 21 February 2022. The stated purpose of the letter was “to confirm your retainer as an independent expert witness” in the proceeding “for the purpose of advising on the Chinese goods supplier industry”. The letter attached the Federal Court of Australia Practice Note on Expert Evidence (the Practice Note) (AB Pt B, tab 1.1, p 239), which included a copy of the Harmonised Expert Witness Code of Conduct (the Code) (p 246). The letter also stated:

As set out in the Practice Note and the Code, your role is to assist the Court and provide independent expert evidence based on your expertise; your role is not to act as an advocate for any party.

As an independent expert witness, you will be required to prepare written evidence in the form of an affidavit and/or expert report. You may also be required to give oral evidence in the Proceeding.

64    The letter requested that Ms Chen sign and return a copy of the letter to confirm that: (a) she agreed with the terms contained in the letter; and (b) she had read, understood and agreed to comply with the Practice Note and the Code (p 237).

65    There is some difficulty caused by the times recorded on the relevant emails, probably because Ms Chen and the relevant Corrs lawyers were located in different time zones, namely Brisbane and Melbourne respectively. Notwithstanding, it appears that the following then occurred on 21 February 2022:

    Ms Chen emailed the signed retainer letter to the lawyer, copied to the partner and other employees of Corrs (collectively, the Corrs Team) (AB Pt B tab 15.3, p 1166);

    Ms Chen had a meeting with Corrs for one and a half hours. This is unlikely to have occurred in person. After the meeting, Ms Chen sent an email to the lawyer, copied to the other members of the Corrs Team, stating that she would “prepare the documents and information you required during the meeting” and asking whom she should send her invoice to (AB Pt B, tab 15.3, p 1165);

    the lawyer responded to Ms Chen indicating the employee of Corrs to whom Ms Chen’s invoice should be directed (AB Pt B, tab 15.3, p 1165);

    Ms Chen gave instructions to an employee of ChinaDirect to prepare an invoice for “[c]onsultation service 21/02/2022 meeting time 1.5 hrs” and “[d]ocument preparation 1.5 hrs” (AB Pt B, tab 15.3, p 1165).

66    On 22 February 2022, Ms Chen sent an email to the lawyer, copied to the other members of the Corrs Team, referring to three attachments: (1) a “Bio”; (2) a “Script about ChinaDirect Sourcing” (the Script); and (3) a sample product inspection report which was entitled “Inspection Report – Insoles” (AB Pt B, tab 15.3, p 1164). The partner responded on 22 February 2022 thanking Ms Chen for the material and stating that it was very helpful (AB Pt B, tab 15.4).

67    Three observations should be made at this point about these documents.

68    First, the “Bio” became Attachment A to the expert report (AB Pt B, tab 1.2, p 272).

69    Secondly, the Script appears to have been created from a collection of four sets of speaking notes about ChinaDirect, which had presumably been used by Ms Chen at conferences in promoting ChinaDirect:

(1)    The first set of notes (“Script about ChinaDirect Sourcing”) is general and described ChinaDirect’s core business, namely product sourcing.

(2)    The second set of notes (“Script for research and tender”) describes ChinaDirect’s three stage importing process:

•    “Stage 1: research and tender”;

•    “Stage 2a sampling”;

•    “Stage 2b purchase order negotiation”; and

•    “Stage 3 production and delivery management”.

Amongst other things, these notes indicate that three reports will be given to a customer at the end of “Stage 1”, namely a “Supplier Summary report”, a “Quote Comparison report” and a “Landed Cost Analysis”.

(3)    The third set of notes (“Script for sampling process & Purchase Order”) describes the sampling stage. It is divided into three sections: “Sampling Process”; “Supplier selection criteria”; and “Purchase Order”.

(4)    The fourth set of notes (“Script for production and delivery management”) describes the process after a purchase order is placed. It is divided into two sections: “Production and Delivery management”; and “Inspection Options”.

70    Thirdly, a comparison of the expert report with the Script makes it clear that the former was drafted by reference to the latter.

71    On 25 February 2022, the lawyer wrote an email to Ms Chen, copied to the other members of the Corrs Team, stating (AB Pt B, tab 15.5, p 1197):

We are progressing your witness statement and would like to arrange a call with you next week to discuss it further.

Would you please let us know your availability on Wednesday [2 March 2022] or Thursday [3 March 2022] of next week for a 90-minute call?

72    Some further emails were exchanged with agreement ultimately being reached on Tuesday, 1 March 2022, for the meeting to occur on Wednesday, 2 March 2022 at 11.30 am Brisbane time (AB Pt B, tab 15.5, p 1196). A meeting took place at that time.

73    On Sunday, 6 March 2022, the lawyer emailed Ms Chen, copied to the other members of the Corrs Team, stating (AB Pt B, tab 15.5, p 1196):

We are in the process of finalising your statement and hope to have it to you soon.

As discussed, we would appreciate it if you would send us examples of the following completed documents:

•    *supplier summary report;

•    *quote comparison report; and

•    *landed cost analysis.

We will redact the client and supplier names and any financial figures. If there is anything further you would like redacted, please let us know. As promised, we will not file anything without your clear approval.

74    On 7 March 2022, Ms Chen emailed various documents to the lawyer, copied to the other members of the Corrs Team, stating that “[l]anded cost analysis is not provided, due to all the sensitivity” (AB Pt B, tab 15.6, p 1202).

75    The lawyer responded by email on 7 March 2022, copied to the other members of the Corrs Team, thanking Ms Chen for the documents and stating (AB Pt B, tab 15.6, p 1202):

I tried to call you earlier to discuss an unrelated point in your statement. Would you be available this afternoon for a 10 minute call? I am available any time between 2-4 pm (Bris time).

76    Later on 7 March 2022, the lawyer wrote again to Ms Chen, copied to the other members of the Corrs Team, thanking Ms Chen for her time on the phone during the day and attaching a letter of instructions. The email also stated: “We will send to you your draft statement shortly” (AB Pt B, tab 15.7, p 1210). The letter instructed Ms Chen to (AB Pt B, tab 1.1, p 252):

•    provide an overview of your business, ChinaDirect Sourcing and the services that your company provides; and explain, based on your experience and expertise, the process involved to identify reliable suppliers in China suitable for the Australian market, with a particular focus on the e-commerce sector; [and]

•    explain the practices (if any) in the industry (including, in particular, in the ecommerce sector) concerning the use and treatment of information pertaining to the identities and details of suppliers in China.

77    On 8 March 2022 at 11.40 am, the lawyer wrote an email to Ms Chen, copied to the other members of the Corrs Team, referring to a call earlier that morning and attaching a draft witness statement and expert report for Ms Chen’s review (AB Pt B, tab 15.8, p 1220). The witness statement to which the export report was annexed was signed on 8 March 2022. It was not suggested that there were any differences between the draft witness statement and expert report sent by Corrs to the versions of those documents which were filed after Ms Chen signed the witness statement.

The expert report (AB Pt B, tab 1.2)

78    The expert report comprised 60 paragraphs:

(1)    Section A of the expert report was entitled “My qualifications and experience” and comprised paragraphs 1 to 14.

(2)    Section B was entitled “Overview of CDS” and comprised paragraphs 15 to 21.

(3)    Section C was entitled “CDS’ procurement process” and comprised paragraphs 22 to 55. It was subdivided into the following parts:

(a)    “Stage 1: Research and tender”;

(b)    “Stage 2A: Sampling”;

(c)    “Stage 2B: Purchase order and negotiation”;

(d)    “Stage 3: Order and delivery”; and

(e)    “Typical length and costs of procurement process”.

(4)    Section D was entitled “Industry practice concerning use and protection of supplier information”. It comprised five paragraphs, paragraphs 56 to 60, being the remaining paragraphs of the report.

79    Sections A to C of the expert report (paragraphs 1 to 55) comprised factual material addressing Ms Chen’s qualifications and experience, an overview of ChinaDirect and a description of ChinaDirect’s procurement process. As mentioned earlier, it is clear that this was drafted by reference to the Script which Ms Chen had provided and, presumably, clarifications or additions provided by Ms Chen during conferences.

80    Section D of the expert report (paragraphs 56 to 60) was more in the nature of expert opinion evidence. Parts were objected to and not read, such that what was admitted into evidence was as follows:

56.    Our clients (including those in the e-commerce sector), and CDS on their behalf, make a significant investment of time and resources in order to identify and source products from suitable suppliers in China.

57.    Further, in my experience, the use of personal contacts and the maintenance of professional relationships with suppliers is essential. This is because it is a general Chinese custom that prospective business partners must first build a relationship, which will then lead to sustained successful and reliable commercial transactions. This is a key reason why the initial stage of the supplier procurement process is fundamental; and why it is preferable to continue with existing suppliers, and only identify new ones where necessary.

58.    In my experience, a list of suppliers in China who are reliable and produce a range of products of a high quality suitable for the Australian market at an attractive cost, is almost always considered to be and is treated by CDS customers as confidential and a very valuable asset of the business. This is principally because, as discussed above, there are typically thousands of Chinese suppliers for any given product; the offerings of these suppliers in terms of, for example, quality, sophistication, manufacturing capacity etc. varies enormously; and the process of finding a reliable supplier is very time and resource intensive.

59.    With some limited exceptions (for example, where the product is branded by a Chinese supplier and merely distributed by a local Australian entity), CDS’ clients typically request that the identity and details of the supplier are not disclosed on (for example) the product packaging or in the product information material, especially if the client sells its own branded product. They may also require suppliers not to disclose that they manufacture product for CDS’ clients. In my experience, this is usually because clients are seeking to protect the investment that they have made to identify the relevant supplier, and avoid the possibility of competitors procuring the same products from their supplier.

60.    In my opinion, in light of the number of suppliers of similar products in China, it would be extremely difficult to identify the supplier of a product manufactured in China if the details were not disclosed on the product.

81    There were three attachments to the report, being Ms Chen’s “Bio”, a document entitled “Stevie Awards information pages” and a “Copy of Sample Supplier Summary Report and Sample China Quote Comparison”.

Consideration

82    The primary judge stated at [45] that he admitted Ms Chen’s expert report dated 8 March 2022 after ruling on objections. (Those objections were dealt with on day 3 of the hearing before the primary judge. In relation to paragraph 57 and the second and third sentences of paragraph 59 of Ms Chen’s report, these parts of the report were “not read” by New Aim in response to objections.) His Honour then stated:

I have now concluded that I should reject each of the statements of fact and the expression of opinions as contained therein for the following reasons.

83    The primary judge then set out his reasons, addressing in some detail the evidence concerning the preparation of Ms Chen’s evidence as revealed during her cross-examination. At [70], the primary judge stated:

There are many difficulties with the expert report of Ms Chen, which individually and cumulatively lead me to the conclusion that I should reject it in its entirety.

84    The primary judge stated at [77]:

In the result, I cannot be satisfied that the opinions expressed in the report by Ms Chen truly represent her honest and independent opinions and that no matters of significance have been withheld. I reject all opinions and other factual material as set out in her report of 8 March 2022.

85    It appears from the passages quoted above that the primary judge ultimately decided to reject Ms Chen’s evidence, as opposed to attaching little or no weight to it. The primary judge’s reasoning did not distinguish between the factual material and that part of the evidence which was opinion evidence; his Honour rejected all of the factual material set out in paragraphs 1 to 55 of the expert report and all of the expert evidence in paragraphs 55 to 60. It is not a fair reading of the reasons to conclude that the primary judge simply attached little or no weight to the evidence which had been admitted.

86    The main part of the primary judge’s reasoning commenced at [47] with the following observations:

She attached a number of documents to her witness statement including a retainer letter from Corrs dated 21 February 2022, an instruction letter from the firm dated 7 March 2022 and her expert report dated 8 March 2022. What is remarkable about that timeline is that the letter of instruction directed Ms Chen to provide an overview of her business, with a focus upon the service that her business provides to clients and then to explain the practices “(if any) in the industry (including in particular, in the e-commerce sector) concerning the use and treatment of information pertaining to the identities and details of suppliers in China”, all of which was able to be answered by Ms Chen in the form of her expert report the following day, comprising 16 pages and 60 paragraphs, not including attachments.

87    It is evident from this reasoning that the primary judge initially approached Ms Chen’s evidence with an understanding that Ms Chen was implicitly asserting that she had prepared the report within one day because the letter identifying the questions to be answered had only been sent the day before. It is not unusual for a final letter of instructions, containing the final form of the questions to be answered by an expert, to be prepared shortly before an expert report is finalised. Indeed, this is a common occurrence, particularly where the issues are novel or complex or the questions require a position to be adopted concerning the correct construction of a statutory provision in relation to which the expert opinion evidence is being sought. It would not ordinarily be concluded from the fact that the final letter of instructions is dated the day before the final expert report that work on the report only started once the letter of instruction (in final form) had been received, at least as a matter of course. Such a conclusion is against common experience. This is all the more so when it is clear from other communications with the expert, including letters of retainer, that the expert had been retained at an earlier date and had been actively engaged in providing information and observations on the issues upon which the expert’s input was sought.

88    In a case involving quite different circumstances to the present, BrisConnections Finance Pty Limited (Receivers and Managers Appointed) v Arup Pty Limited [2017] FCA 1268; (2017) 252 FCR 450, Lee J referred to a “practice [which] seems to have developed whereby a letter of instruction is provided contemporaneously (or near contemporaneously) with the finalisation of the expert report” and raised a question about whether such a course complies with r 23.13(1)(d) of the Federal Court Rules 2011 (Cth): at [70]. At [71], his Honour stated:

The point of a letter of instruction being annexed to a report is not to act out a stylised ritual, but to provide to the Court with a transparent indication of what has been provided to the expert and the questions that the expert was actually asked to address. It should be able to be read literally without being silly. As is (at the very least) implicit in FCR 23, the work of the expert is to attend to the questions “the expert was asked to address”, not to invert the process by using the expert’s specialised knowledge in order to identify the questions that should have been asked and the assumptions that should have been given. The true instruction to Mr Veitch was oral and only emerged in the evidence on the voir dire. The integrity of the expert evidence process and the independence of experts is best facilitated by transparency in what is being asked of experts prior to, or at the time, they are forming their opinions and, if the questions need to change because they are misdirected, a record being made by way of supplementary instructions as to what has changed.

89    His Honour’s core point is that the process should be transparent so that what has occurred is clear. We agree. The point of a letter of instruction is not to act out of ritual. The material placed before the Court should make clear what has been provided to the expert and the questions that the expert was asked to address. We observe that it is not unusual in a number of contexts not to finalise the formulation of the question asked of the expert without first discussing the issues with the expert. It would be expected, for example, that a solicitor would engage with an expert in a specialised field of scientific knowledge about how to frame a question so as not to give rise to a nonsensical question or one which misses the real issues or one which fails to engage with all of the issues. This is not an inversion of a process which must be necessarily followed of first asking a question and then having its inadequacies pointed out. The laborious following of such a process is likely to result in increased costs and delay for the parties and ultimately a waste of the Court’s time. Rule 23 does not require every single question asked of the expert during the course of the expert’s retainer to be identified. It requires the report to identify the question the expert was asked to address in his or her report. That question may or may not be formulated at the time the expert was first retained. In the present case, the question was not finally reduced to writing until a day before the report was filed, a fact which was made clear by the material filed with the report. This was not a case like BrisConnections where the “true instruction to [the expert] was oral and only emerged in the evidence on the voir dire [held to determine admissibility of the report]”. It is not possible or desirable to state universal propositions in this context. What is appropriate or desirable depends on any number of circumstances peculiar to the particular case and different equally proper approaches can be expected from different legal practitioners.

90    The primary judge then stated at [48]:

As might be expected, the apparent ability of Ms Chen to produce an expert opinion report so quickly was the subject of detailed cross-examination by counsel for the respondents. Initially, it was put directly to her that she did not draft “this entire report” herself within a space of 24 hours. Ms Chen answered, “I prepared within 24 hours” [sic]. She then disclosed that she had “a couple of conversations” with unidentified lawyers from Corrs between 21 February and 7 March 2022. She was pressed as to whether she had prepared and submitted earlier drafts of her report. She answered, “I think it was about two or three”. She accepted that she sent drafts of her report to Corrs for comment. She accepted that she received comments from Corrs during a video conference. She denied receiving comments in writing, by email or otherwise. She was pressed as to whether the solicitors suggested to her that she should make changes to her draft report. To this simple question, she prevaricated and gave unsatisfactory and at times unresponsive answers. To this point her evidence was inconsistent, at times confusing and I began to doubt her independence. Eventually, she was asked the direct question: “who drafted the version of” her report as attached to her witness statement. She answered, “I started first” [sic]. Her evidence continued:

Yes? – And then we had a video conference, and then we went through some of the things, and the videoconference had, like, more information revealed. So, the second version – there are some other actual information in there.

Who put together the second version? – I think it’s [lawyer’s name].

Who’s [lawyer’s name]? – [Lawyer’s name] is Corrs – the lawyer from the Corrs.

91    A number of observations should be made about this reasoning. First, something should be said about Ms Chen’s answer “I prepared within 24 hours”. This occurred in the following exchange at T212-214:

92    Ms Chen’s evidence is not clear. However, in context, Ms Chen’s answer, “I prepared within 24 hours”, was not obviously intended as confirming that the process of drafting and finalising the report had occurred within 24 hours or that she was solely or primarily responsible for drafting it:

    At T213.10, before the answer “I prepared within 24 hours”, Ms Chen was asked “did you draft it yourself within 24 hours”. Ms Chen sought to explain that most of the report was describing the processes used in ChinaDirect’s operations which were matters of fact known to her. As has been set out above, this factual material was the subject of the Bio and Script which Ms Chen had sent to Corrs on 22 February 2022.

    The cross-examiner then asked the question again at T212.15 and secured the response: “I prepared within 24 hours”.

    The cross-examiner did not appear to understand Ms Chen’s answer as intending to assert that the report had been drafted by Ms Chen within 24 hours, because his next question was to ask what work had been done on the report before 7 March 2022.

93    Secondly, the primary judge, at [48], stated that Ms Chen was “pressed as to whether she had prepared and submitted earlier drafts of her report” (emphasis added) to which she answered “I think it was about two or three”. In fact, the question was not whether Ms Chen had prepared earlier reports, but rather simply how many reports had been prepared (at T214.13 to .15):

[COUNSEL:] Ms Chen, how many drafts of this report were prepared before the final version was arrived at?---I think it was about two or three. Yes. I need to – yes. Probably two or three.

94    The cross-examination then continued at T214.17 to T214.23:

[COUNSEL:] Okay. And after you prepared those drafts, you sent them to New Aim’s solicitors for comments, didn’t you?---Yes.

And New Aim’s solicitors sent you back comments on your draft, didn’t they?---Yes.

Now, did they do that by telephone or did they do that in writing?---We did on video conference.

95    The first question set out at [94] above, assumed an answer which had not been given by Ms Chen, namely that she had prepared drafts of her report. In any event, Ms Chen had in fact sent three documents to Corrs which had been used in the preparation of the expert report.

96    The answer to the second question set out at [94] above, expresses agreement to the proposition that Corrs sent back comments; but the answer to the third question set out at [94] above, makes it clear that nothing was actually sent because the comments were made during a video conference. This was confirmed again at T214.36 to T214.39:

[COUNSEL:] I see. Did you also receive comments in writing or did they do it all by video conference?---It – we had a video conference.

Did you also receive comments in writing by email or otherwise?---No.

97    Thirdly, the primary judge stated that Ms Chen “was pressed as to whether the solicitors suggested to her that she should make changes to her draft report” and that “[t]o this simple question, she prevaricated and gave unsatisfactory and at times unresponsive answers”. His Honour continued that, to this point, Ms Chen’s evidence was inconsistent and at times confusing and he began to doubt her independence. His Honour then recorded that Ms Chen was asked directly who prepared the report and she stated that she started first. This aspect of his Honour’s reasoning is based on T214-215:

98    It is not clear why the answers at T214.41 to T215.15 involve prevarication or are unsatisfactory or unresponsive, especially when Ms Chen was not permitted by the cross-examiner to finish her answer.

99    As to Ms Chen’s evidence that she “started first”, this was likely a reference to the documents which she had provided to Corrs on 22 February 2022. The Script which she had provided was clearly used to prepare 55 of the report’s 60 paragraphs. This was not referred to in the primary judge’s reasons.

100    At [49], the primary judge stated:

Counsel then pressed the witness with detailed questions in order to elicit information as to who was responsible for the drafting of which portions of the expert report. She specifically denied the proposition that “the drafting has generally been done by New Aim’s solicitors rather than by you, hasn’t it?” Her attention was drawn to certain paragraphs in her report which bear a remarkable similarity to paragraphs in the witness statement of Mr Huang. Once again it was directly put to her that she was not the author of all of her expert report. She failed to give satisfactory answers to those questions but eventually conceded that “but if you say every words of the sentence is exactly 100 per cent written by me, no” [sic]. Her demeanour was distinctly uncomfortable in giving that answer.

101    The cross-examination during which Ms Chen denied that the drafting was “generally done” by Corrs is at T215.42 to T215.45:

[COUNSEL:] Okay. And the drafting has generally been done by New Aim’s solicitors rather than by you, hasn’t it?---No.

Okay?---I wouldn’t say – I wouldn’t say that.

102    The cross-examination in which it was put that she was not the author of all of her expert report is at T218.10 to 218.15:

[COUNSEL:] What I’m suggesting to you is that the matters that are set out in paragraph 58, they are matters that were told to you by New Aim’s solicitors. They are not matters that were drafted by you. Do you agree with that?---Well, in that case, you know, if you say the – the – the discussion we had is about this matter, then we have discussed this matter, but if you say every words of the sentence is exactly 100 per cent written by me, no.

103    This evidence was directed to paragraph 58 of the expert report which stated:

In my experience, a list of suppliers in China who are reliable and produce a range of products of a high quality suitable for the Australian market at an attractive cost, is almost always considered to be and is treated by CDS customers as confidential and a very valuable asset of the business. This is principally because, as discussed above, there are typically thousands of Chinese suppliers for any given product; the offerings of these suppliers in terms of, for example, quality, sophistication, manufacturing capacity etc. varies enormously; and the process of finding a reliable supplier is very time and resource intensive.

104    Mr Huang’s witness statement of 16 March 2022 (AB Pt B, tab 3) at [41] stated:

Whilst the number of suppliers for any given product can vary, there are usually thousands of potential suppliers in China for any one product, and the suppliers’ capabilities, product qualities, sophistication and costs vary significantly. As a consequence, locating potential new suppliers is typically a very labour and resource intensive exercise.

105    At [50], the primary judge stated:

Eventually, Ms Chen conceded that she had received emails from Corrs, the effect of which was to suggest that she make changes to her draft report. Prudently, counsel for the respondents called for the production of all documents sent by Corrs to the witness, to the effect that alterations be made to, or commentary upon, her draft report. The evidence of Ms Chen was then adjourned so that she could attend at her office, obtain her computer and locate any other documents within the ambit of the call for production. Documents were produced, without objection as to legal professional privilege, and the cross-examination of Ms Chen resumed.

106    The evidence which Ms Chen had given in cross-examination was as follows (at T222):

[COUNSEL:] Ms Chen, did you receive any emails from Corrs with suggested changes to your draft report?---You mean from 8 March or you mean from - - -

At any time?--- - - - the first conversation? At any time?

Yes?---Yes. I received the email from Corrs.

No, no, no. Please listen to my question, Ms Chen. I’m talking about an email from Corrs which suggests changes to be made to your report. Did you receive such an email?---Yes, I did.

How many?---I don’t recall. I need to go back, check my records, if you want exact number.

Okay. I call for production of all documents sent from Corrs Chambers Westgarth to the witness which suggest changes to or comment on any draft of her expert witness report.

107    At [51] to [59], the primary judge examined the written communications between Corrs and Ms Chen (and other communications) and made certain comments critical of some of those communications, but there is no example of a written communication from Corrs in which Corrs suggested a change to Ms Chen’s report.

108    The primary judge then stated at [60]:

I return to the cross-examination of Ms Chen about this chronology of events. She was questioned as to which portions of her expert report were drafted by her and which portions were drafted by Corrs. She answered, “I don’t know how to define that part”. She agreed that her report was “a collaboration” between her and the lawyers from Corrs. She was questioned further about other aspects of the drafting of her report, which I do not find it necessary to address in these reasons, save for her evidence about the drafting of paragraphs [58] – [60]. These paragraphs appear at the end of her report and state various opinions to the effect that, in the experience of Ms Chen, a list of suppliers in China who are reliable and produce a range of high-quality goods suitable for the Australian market “is almost always considered to be and is treated… as confidential and a very valuable asset of the business”, that her clients “typically request that the identity and details of the supplier are not disclosed” and that “it would be extremely difficult to identify the supplier of a product manufactured in China if the details were not disclosed on the product.” Ms Chen accepted that paragraph [58] was drafted by Corrs but reflected her opinion. However, it is also the fact that the second sentence of that paragraph, as counsel for the respondents correctly observed, bears a “striking similarity” to paragraph [41] of the witness statement of Mr Huang dated 16 March 2022. I infer that those sentences were drafted by the same person, in this case, one or more lawyers from Corrs. She further accepted that the drafting selectively reproduced portions of her book, favourable to the applicant’s case.

109    The final sentence of this paragraph does not reflect any evidence given by Ms Chen and the basis for the primary judge’s conclusion was not identified by the respondents. As to the balance of the reasoning at [60], the cross-examination to which the primary judge referred is at T288.6 to 288.9, T288.21 to T288.24 and T288.38 to 289.18:

110    The primary judge stated at [70] to [73]:

70    There are many difficulties with the expert report of Ms Chen, which individually and cumulatively lead me to the conclusion that I should reject it in its entirety. I am left in a state of uncertainty as to who was responsible for the drafting of which portions of her report. It would appear that most of the report was, at least initially, the product of drafting by the lawyers for the applicant, albeit in reliance upon some material of a non-specific nature that Ms Chen provided to the lawyers. The fact that Ms Chen adopted the drafting of others as her opinion does not address the more fundamental issue that her engagement obliged her to act as an independent expert witness conformably with the requirements of the Expert Evidence Practice Note and the Harmonised Expert Witness Code of Conduct. Clause 3.2 of the Practice Note advises that:

A party or legal representative should be cautious not to have inappropriate communications when retaining or instructing an independent expert, or assisting an independent expert in the preparation of his or her evidence.

71    That statement of good practice was not complied with in this case. It may be perfectly appropriate, such as in cases where an expert is unfamiliar with the form and content requirements for an expert opinion report, for that document to be settled in an admissible form by someone else, but then in my opinion, only if that fact is disclosed in the report. In this case, that fact was not only withheld but was only ascertained during the course of cross-examination of Ms Chen, which in my opinion, was grossly unsatisfactory.

72    The Code of Conduct at clause 2 states the obvious proposition that an expert witness “is not an advocate for a party and has a paramount duty, overriding any duty to the party to the proceedings or other person retaining the expert witness, to assist the Court impartially on matters relevant to the area of expertise of the witness.” In this case, that requirement of impartiality was substantially undermined by the failure to disclose the methodology of preparation of the expert report.

73    In the last paragraph of the signed witness statement, Ms Chen declared that she had “made all the enquiries which I believe are desirable and appropriate and no matters of significance which I regard as relevant here, to my knowledge, have been withheld from the Court.” I cannot accept that Ms Chen failed to appreciate that the fact that her report was drafted, not by her but by the lawyers for the applicant, was not a matter of significance. It plainly was.

111    Two observations should be made about the reasoning at [70]. First, the primary judge concluded at [70] that “most of the report was, at least initially, the product of drafting by the lawyers for the applicant, albeit in reliance upon some material of a non-specific nature that Ms Chen provided to the lawyers”. The material which Ms Chen provided to Corrs on 22 February 2022 included Ms Chen’s Bio and the Script which set out ChinaDirect’s three stage process for its core business of “product sourcing”. The majority of the expert report was factual in nature, not comprising expert opinion evidence. The majority of the expert report described Ms Chen’s experience and described ChinaDirect’s business and the “three stage process” used in that business. The material provided by Ms Chen to Corrs was not “non-specific”. The primary judge’s reasons suggest that the primary judge was unaware of the similarities between what Ms Chen had provided to Corrs, in particular the Script, and the expert report. Paragraphs 1 to 55 of the expert report were plainly drafted by reference to the documents which Ms Chen had provided to Corrs. The evidence given by Ms Chen in cross-examination indicated that Corrs’ drafts of the expert report were discussed in video conferences.

112    Secondly, whilst it is true that Ms Chen was retained as an independent expert, it is also true that the majority of her report was factual in nature, describing ChinaDirect’s business and processes. The primary judge’s reasoning for rejecting the entirety of Ms Chen’s evidence focussed on the last five paragraphs of the report, in particular paragraph 58, which might be regarded as providing expert opinion evidence. There was no separate explanation given for why the factual material (in paragraphs 1 to 55) was rejected. The drafting of written evidence of a factual nature by a solicitor from a statement or other material provided by a witness is far from unusual.

113    At [74], the primary judge stated:

Regrettably, I also find that the conduct engaged in preparing and delivering the report of Ms Chen was misleading. The letter of instruction of 7 March 2022 conveys the representation that Ms Chen was engaged to prospectively consider each of the two questions the subject of her instruction. Contrary to that representation, a draft of her expert report had been prepared by Corrs no later than 25 February 2022. It was wrong in my opinion to state in the letter of 7 March 2022 that Ms Chen was instructed to prepare a report in response to the two questions posed in that letter, when the author was plainly aware not only of what the answers would be, but also, as to the form of the opinion and the fact that its expression was the product of drafting by Corrs. The letter of 7 March 2022 conveys the false representation that Ms Chen, as the independent expert, would upon receipt of the instruction set about the task of preparing her report. The failure to disclose those facts to the solicitor for the respondents and ultimately to the Court is most concerning, as it strikes at the very heart of the paramount and overriding duty that an independent expert has to assist the court impartially on matters relevant to the area of expertise of the witness, as stated at clause 2 of the Code of Conduct.

114    The letter of instruction of 7 March 2022 did not convey the representation that Ms Chen had been “engaged to prospectively consider each of the two questions the subject of her instruction”. The reason for the primary judge’s contrary conclusion in this respect is not stated. The letter of 7 March 2022 is unlikely to have been understood as conveying such a false representation, particularly in circumstances where the letter was read (as it was intended to be) as an annexure to Ms Chen’s witness statement, to which would also be annexed the letter of 21 February 2022 and the expert report. Less still did the letter of 7 March 2022 contain “the false representation that Ms Chen, as the independent expert, would upon receipt of the instruction set about the task of preparing her report”. For the reasons we have given, no such representation was conveyed.

115    At [75] the primary judge stated:

The solicitor for the respondents made two requests for the provision of “all documents regarding any communications between your firm and Ms Chen”. Each request was denied, with the express representation that all documents evidencing or disclosing instructions given by Corrs to Ms Chen “have already been produced” as attachments to her witness statement of 8 March 2022. That was false in that the email correspondence that was exchanged between Corrs and Ms Chen commencing on 22 February 2022 was concerned with instructions as to who would draft the report and what it would be based upon.

116    This paragraph must be read with J[56] to [59]:

56    On 11 April 2022, the solicitor for the respondents emailed correspondence to [lawyer’s name] at Corrs, referenced the expert report of Ms Chen and stated:

Please provide, by no later than 4 pm on Wednesday, 13 April 2022, copies of the following documents:

(a)    All documents recording any communications between your firm and Ms Chen;

(b)    All documents recording any communications between your client, including their employees and Ms Chen; and

All drafts of the expert report.

57    [Corrs partner’s name] responded to that request by email on 12 April 2022. Inter alia he said:

There is no legitimate basis for such a request. Insofar as your clients seek production of correspondence with Ms Chen, our client maintains its privilege over that correspondence, except to the extent that it discloses the instructions given to Ms Chen (and those documents have already been produced at Annexure FC-1 of Ms Chen’s witness statement dated 8 March 2022). The filing of Ms Chen’s witness statement does not itself lead to a waiver …

58    The solicitor for the respondents did not accept that. A detailed and reasoned request for the production of the documents was sent by email on 13 April 2022, although the attached letter is wrongly dated 11 April 2022. The requested documents were not produced. On 16 April 2022, [the Corrs partner] sent correspondence by email to the solicitor for the respondents. Amongst other things he said:

As we previously communicated, all of the instructions given to Ms Chen have already been provided (as Annexure FC-1 to Ms Chen’s witness statement). For completeness, we also advise that there are no communications between New Aim and Ms Chen. To the extent that your client presses for drafts of Ms Chen’s report and any other communications between Corrs and Ms Chen record instructions given to Ms Chen, our client maintains that this is neither necessary nor appropriate. In particular, as discussed further below, these communications and documents are privileged, and there has been no waiver of that privilege.

59    The respondent’s solicitor did not respond to that email.

117    Contrary to what the primary judge stated at [75], the email correspondence sent by Corrs to the solicitors for the respondents below was not “false”. Corrs maintained the position that its communications with Ms Chen were privileged except to the extent that the communications disclosed instructions. The communications which were ultimately produced pursuant to the call which had been made, being the email correspondence that was exchanged between Corrs and Ms Chen from 21 February 2022, did not disclose instructions. The material was arguably, if not probably, privileged from production at the time of the correspondence between the solicitors (in April 2022), but any such privilege was waived by production of the material.

118    At [76], the primary judge stated:

What occurred in this case went far beyond the permissible scope of involvement of lawyers who retain an independent expert in order to give evidence in a proceeding. I reject the submission of counsel for the applicant that I should accept Ms Chen as an independent expert witness and that “the process by which her evidence was prepared is unremarkable.” For the reasons I have given, it most certainly was not. Even if in some circumstances it is proper for lawyers to draft an independent expert witness statement for consideration by the putative expert, that fact must be disclosed in the expert report conformably with the obligations that the expert assumes in accordance with the Expert Evidence Practice Note of this Court and the Harmonised Expert Witness Code of Conduct. And then, all correspondence relating to the manner of preparation of the report should be disclosed and, to the extent that oral advice is conveyed to the expert, the substance should be documented and disclosed. What occurred in this case should not be repeated.

119    The Court’s expectations concerning independent expert witnesses is set out in the Practice Note and the Code. Ms Chen was retained as an independent expert, although the majority of her evidence was factual in nature. There are various ethical requirements on legal practitioners involved in the process of gathering or putting evidence into an appropriate form for hearing. At the core of these is a requirement not to influence a witness’s evidence. This applies both to witnesses of fact and expert witnesses providing opinion evidence. Legal practitioners commonly take proofs of evidence from, or draft affidavits of, witnesses of fact. These are commonly drafted from oral communications which occur in conference or written material provided by the witness or which are otherwise available. It is less common for this to occur in the preparation of expert evidence, but there are reasons why it might occur. Where a legal practitioner takes responsibility for the drafting of evidence, the perception may arise that the drafter may have influenced the content of the evidence, even subconsciously.

120    There is not one rule or practice which covers all experts or all situations. For example, in the typical case where medical opinion evidence is required, the medical expert would ordinarily draft his or her own report. The same is generally true of an expert valuer preparing a valuation or an accountant preparing a report about economic loss. There may be discussion in relation to drafts of the report, but one would ordinarily expect the report to be drafted by the expert rather than the legal practitioner. Nevertheless, a number of situations might arise where legal practitioners are involved in the process of recording an expert’s evidence, including by preparing or drafting the report. For example, there may be physical, language or resource difficulties. Where these situations arise, care must be taken to ensure that the legal practitioner does not suggest what the expert’s evidence should be and that the report is drafted from what the expert has communicated to the legal practitioner as fact or what the expert has assumed or what the expert’s opinion is. Leaving aside formal matters or instructions or assumptions the expert is required to make, it is difficult to conceive of a situation in which a legal practitioner, acting appropriately and ethically, could draft an expert’s report otherwise than on the basis of what the expert had communicated to the legal practitioner to be his or her evidence.

121    The primary judge observed at [76] that, if legal practitioners are involved in the drafting of an expert report that fact must be disclosed in the expert report. This may well be desirable, forensically or otherwise, but there is no legal obligation as such to do so. Whether there is an ethical obligation to do so depends on the particular circumstances.

122    The primary judge also observed at [76] that all correspondence relating to the preparation of the report must be disclosed. Again, this might be desirable, but there is no legal obligation as such to do so. Again, whether there is an ethical obligation to do so depends on the particular circumstances.

123    As to the primary judge’s observation that any oral advice conveyed by a legal practitioner to the expert should be documented and disclosed in the expert’s report, the legal or ethical necessity of this depends on all of the circumstances, including the nature of the advice conveyed to the expert and the relevance of it, if any, to the report or opinions expressed.

124    The primary judge’s reasons for rejecting Ms Chen’s report focussed attention on Ms Chen’s opinion evidence from paragraphs 56 to 60. The primary judge stated at [77]:

In the result, I cannot be satisfied that the opinions expressed in the report by Ms Chen truly represent her honest and independent opinions and that no matters of significance have been withheld. I reject all opinions and other factual material as set out in her report of 8 March 2022.

125    It is not clear why the primary judge rejected paragraphs 1 to 55 of the Ms Chen’s report, apart from the fact that the primary judge was not satisfied that the opinions in paragraphs 56 to 60 reflected Ms Chen’s honest and independent opinions. There was substantial material before the primary judge which indicated that paragraphs 1 to 55 of Ms Chen’s expert report were drafted by reference to Ms Chen’s Bio and Script and on the basis of discussions with Ms Chen during one or more video conferences in relation to a draft or drafts prepared by Corrs. The reasons contained no reference to the similarities between paragraphs 1 to 55 of Ms Chen’s expert report and her Script. No clear reasons were given as to why this factual evidence was rejected.

126    There was also substantial material to suggest that paragraphs 56 to 60 were drafted on the basis of Ms Chen’s written and oral communications. The reasoning adopted for the rejection of the opinion evidence at paragraphs 56 to 60 contains a number of factual errors and errors of approach, discussed above, which, if they had not occurred, might well have resulted in the evidence not being rejected.

127    At the hearing of the appeal, counsel for the respondents submitted that ground 12 was not material to the outcome of the appeal. In summary, he contended that, having regard to other evidence before the primary judge (in particular, the evidence of Mr Huang), the evidence of Ms Chen, had it not been rejected, would have made no difference to the outcome of the case.

128    We do not accept that submission. The report of Ms Chen (both in its factual content and in the opinions it expresses) was potentially relevant to a number of the factors or criteria considered by his Honour in evaluating whether the alleged confidential information (in particular, the WeChat contact details of the representatives of the 17 Suppliers) was confidential. In particular, Ms Chen’s evidence was potentially relevant to (at least) the following sections of the primary judge’s reasons:

(a)    What is the value of the information to the applicant and its competitors?

(b)    What were the usages and practices of the industry?

129    That Ms Chen’s report was potentially relevant to these sections is apparent from the primary judge’s reasons at [203] and [215], which make specific reference to New Aim not being able to rely on the evidence of Ms Chen.

130    While it is true that the evidence of Mr Huang was in some respects substantially the same or similar to that of Ms Chen, he was not independent of New Aim, whereas Ms Chen was an independent witness. Therefore, we do not accept the proposition that the evidence of Ms Chen added nothing or very little, or that it would necessarily have been treated in the same way.

131    It is also true that the opinion section of the report of Ms Chen is expressed very briefly. Nevertheless, it is to some extent underpinned by the factual section of the report. In any event, it is not for this Court to determine what weight would have been given to Ms Chen’s report had it not been rejected.

132    For the above reasons, ground 12 should be upheld.

Conclusion

133    It follows from the conclusions we have reached above that the order of the primary judge dismissing New Aim’s claims against Mr Leung based on breach of confidence, breach of contract and contravention of s 183 of the Corporations Act and New Aim’s claims against Broers and Sun Yee based on breach of confidence, needs to be set aside, and these claims need to be remitted for retrial.

134    We will therefore make orders to the effect that:

(1)    The appeal be allowed.

(2)    Paragraph 1 of the orders made by the primary judge on 23 June 2022, insofar as it relates to the applicant’s claims against the first, fourth and fifth respondents at first instance, be set aside.

(3)    Paragraph 2 of the orders made by the primary judge on 15 July 2022 (which relates to costs) be set aside.

(4)    The matter be remitted for retrial in relation to:

(a)    the applicant’s claims against the first respondent at first instance based on breach of confidence, breach of contract and contravention of s 183 of the Corporations Act 2001 (Cth); and

(b)    the applicant’s claims against the fourth and fifth respondents at first instance based on breach of confidence.

135    In the circumstances, we consider that it would be appropriate for the retrial to take place before a Judge other than the primary judge, but we do not consider it necessary for this to be specified in the order.

136    In relation to the costs of the appeal, there is no apparent reason why costs should not follow the event. We will make an order to this effect, but will give the parties the opportunity to file submissions if they seek a different order.

137    In relation to the costs of the proceeding at first instance (apart from costs relating to New Aim’s Australian Consumer Law claim and New Aim’s copyright claim, which were the subject of costs orders made by the primary judge on 19 April 2022, which are not sought to be disturbed), it would appear to be appropriate for these costs to be reserved for determination by the judge who hears the retrial. Again, we will give the parties the opportunity to file submissions if they seek a different order.

Associate:

Dated:    10 May 2023