FEDERAL COURT OF AUSTRALIA

Wilson Parking Australia 1992 Pty Ltd v Rush [2008] FCA 1601

WILSON PARKING AUSTRALIA 1992 PTY LTD (ACN 052 475 911) v SCOTT RUSH, LEIGH SHERRIFF and S & K CAR PARK MANAGEMENT PTY LTD (ACN 108 043 689)

VID 637 of 2008

JESSUP J

27 OCTOBER 2008

MELBOURNE

Upon the applicant by its counsel undertaking:

(a)        to submit to such order (if any) as the court may consider to be just for the payment of compensation, to be assessed by the court or as it may direct, to any person, whether or not a party, adversely affected by the operation of Order 2 or Order 3 below, or either of them, and/or by the operation of the respondents’ undertakings numbered 3, 7 and 11 below, or any of those undertakings, or any continuation (with or without variation) thereof; and

(b)        to pay the compensation referred to in (a) to the person there referred to.

and upon the first respondent by his counsel undertaking:

1.         Subject to paragraph 2 of this undertaking –

(a)        to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-1, JL-2, JL-3.2, JL-3.6, JL-3.7, JL-3.8, JL-3.9, JL-3.12, JL-3.13, JL-4.1 and JL-4.9 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Permanent Undertaking Documents);

(b)        to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the third respondent and not retain any of the Permanent Undertaking Documents;

(c)        not to use any information derived from the Permanent Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

2.         The first respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Permanent Undertaking Documents until the period expiring 30 days after the determination of this proceeding, including any appeal or application for special leave to appeal in respect thereof, after which the first respondent undertakes to deal with such things in accordance with paragraphs 1(a) and (b) of this undertaking.

AND UPON the first respondent by his counsel undertaking:

3.         Subject to paragraph 4 of this undertaking, until the trial of this proceeding, or order of the court –  

(a)        to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-3.1, JL-3.3, JL-3.4, JL-3.5, JL-3.10, JL-3.11 and JL-4.2, JL-4.3, JL-4.4, JL-4.5, JL-4.6, JL-4.7 and JL-4.8 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Interlocutory Undertaking Documents);

(b)        to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the Third Respondent and not retain any of the Interlocutory Undertaking Documents;

(c)        not to use any information derived from the Interlocutory Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

4.         The first respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Interlocutory Undertaking Documents.

And upon the second respondent by his counsel undertaking:

5.         Subject to paragraph 6 of this undertaking –

(a)       to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-1, JL-2, JL-3.2, JL-3.6, JL-3.7, JL-3.8, JL-3.9, JL-3.12, JL-3.13, JL-4.1 and JL-4.9 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Permanent Undertaking Documents);

(b)       to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the Third Respondent and of the computers and any electronic storage devices of the second respondent and not retain any of the Permanent Undertaking Documents;

(c)       not to use any information derived from the Permanent Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

6.         The second respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Permanent Undertaking Documents until the period expiring 30 days after the determination of this proceeding, including any appeal or application for special leave to appeal in respect thereof, after which the first respondent undertakes to deal with such things in accordance with paragraphs 5(a) and (b) of this undertaking.

And upon the second respondent by his counsel undertaking:

7.         Subject to paragraph 8 of this undertaking, until the trial of this proceeding, or order of the court –

(a)        to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-3.1, JL-3.3, JL-3.4, JL-3.5, JL-3.10, JL-3.11 and JL-4.2, JL-4.3, JL-4.4, JL-4.5, JL-4.6, JL-4.7 and JL-4.8 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Interlocutory Undertaking Documents);

(b)        to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the third respondent and of the computers and any electronic storage devices of the second respondent and not retain any of the Interlocutory Undertaking Documents;

(c)        not to use any information derived from the Interlocutory Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

8.         The second respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Interlocutory Undertaking Documents.

And upon the third respondent by its counsel undertaking, by itself, its servants and agents:

9.         Subject to paragraph 10 of this undertaking –

            (a)        to deliver up to the applicant all of the things in its possession, custody or control described in exhibits JL-1, JL-2, JL-3.2, JL-3.6, JL-3.7, JL-3.8, JL-3.9, JL-3.12, JL-3.13, JL-4.1 and JL-4.9 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Permanent Undertaking Documents);

(b)        to allow the Independent Computer Expert to remove from its computers and not retain any of the Permanent Undertaking Documents;

            (c)        not to use any information derived from the Permanent Undertaking Documents except –

                                    (i)         for the purpose of this proceeding; and

                                    (ii)        as required by law.

10.       The third respondent, by its solicitors, may for the purpose of this proceeding retain copies of any of the Permanent Undertaking Documents until the period expiring 30 days after the determination of this proceeding, including any appeal or application for special leave to appeal in respect thereof, after which the third respondent undertakes to deal with such things in accordance with paragraphs 9(a) and (b) of this undertaking.

AND UPON the third respondent by its counsel undertaking, by itself, its servants and agents, until the trial of this proceeding, or order of the court:

11.       Subject to paragraph 12 of this undertaking:

(a)       to deliver up to the applicant all of the things in its possession, custody or control described in exhibits JL-3.1, JL-3.3, JL-3.4, JL-3.5, JL-3.10, JL-3.11 and JL-4.2, JL-4.3, JL-4.4, JL-4.5, JL-4.6, JL-4.7 and JL-4.8 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Interlocutory Undertaking Documents);

(b)       to allow the Independent Computer Expert to remove from its computers and not retain any of the Interlocutory Undertaking Documents;

(c)       not to use any information derived from the Interlocutory Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

12.       The third respondent, by its solicitors, may for the purpose of this proceeding retain copies of any of the Interlocutory Undertaking Documents.

THE COURT ORDERS THAT:

1.                  The time for the third respondent to comply with par 23 of the search order made by the court on 13 August 2008 as subsequently varied, in so far as that paragraph applies to items 2-8 (inclusive) of the definition of “listed things” in Schedule A to that order, be extended to 4.00pm on 10 November 2008.

2.                  The first and second respondents be restrained, pending the hearing and determination of this proceeding or further order, from communicating with any person who is, or who is acting for or on behalf of, the owner, controller or manager of any car parks at an address listed in the Schedule to this order as part of or as incidental to any intention, purpose or attempt of the third respondent to be engaged as the operator or lessee of such car park and from assisting, or providing information to, any other servant or agent of the third respondent in furtherance of any such intention, purpose or attempt, unless at the time of such communication, assistance or provision of information, as the case may be, the respondent believed on reasonable grounds that the person was not, or was not acting for or on behalf of, the owner, controller or manager of any of the car parks listed in the Schedule.

SCHEDULE

700 Collins Street, Melbourne

Grand Hyatt, 123 Collins Street, Melbourne

200 Queen Street, Melbourne

Melbourne Central Atrium, 211 La Trobe Street, Melbourne

Melbourne Central – 224-252 La Trobe Street, Melbourne

Digital Harbour Building, Harbour Esplanade, Docklands

32 Flinders Street, Melbourne

Myer House 323 Lonsdale Street, Melbourne

Maryland House 570 Bourke Street, Melbourne

Melbourne Convention Centre, Siddeley Street, Melbourne

151 Franklin Street, Melbourne

Centro Shopping Centre, Whitehorse Road, Box Hill

Whitehorse Plaza, Box Hill

22 A’Beckett Street, Melbourne

Oxford Site, Cnr A’Beckett & Swanston Streets, Melbourne

ANZ, 75 Dorcas Street, Melbourne

Casey Hospital, Kangan Drive, Berwick

Galleria, 385 Bourke Street, Melbourne

3.                  The first and second respondents be restrained, pending the hearing and determination of this proceeding or further order, from soliciting for the business of, and from assisting, or providing information to, any other servant or agent of the third respondent in furtherance of his or her solicitation of the business of, any person who is a car parking customer at an address listed in the Schedule to this order, unless at the time of such solicitation, assistance or provision of information, as the case may be, the respondent believed on reasonable grounds that the person was not such a customer. 

SCHEDULE

200 Queen Street, Melbourne

Eureka Tower, underground car park, City Road, Southbank

32 Flinders Street, Melbourne

392 Bourke Street, Melbourne

Grand Hyatt, 123 Collins Street, Melbourne

700 Collins Street, Melbourne

Freshwater Place, 2 Southbank Boulevard, Southbank

25 Queensbridge Street, Southbank

333 Collins Street, Melbourne

321 Flinders Lane, Melbourne

4.         In respect of each listed thing derived from the electronic images made by the independent computer expert pursuant to the search order made by the court on 13 August 2008 as subsequently varied, which is either:

(a)                not disputed by the respondents to be a listed thing; or

(b)               determined by the court to be a listed thing,

            the independent computer expert have leave in response to any request by the applicant (with a copy of correspondence between the applicant and independent computer expert to be provided to the respondents), to inform the applicant of the original path and the naming convention used to identify the relevant source computer and/or source media, and where possible the link files relating to that listed thing.

5.         The third respondent pay the reasonable costs incurred by the independent computer expert taking the steps allowed by paragraphs 9(b) and 11(b) of the third respondent’s undertakings set out above. 

6.         Save as aforesaid, the motion of which the applicant gave notice on 9 October 2008 be dismissed. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The applicant, Wilson Parking Australia 1992 Pty Ltd (“Wilson”) and the third respondent, S & K Car Park Management Pty Ltd (“S & K”) are in the business of the commercial operation of car parks.  They are competitors in that business.  Until September 2007, the first respondent, Scott Rush, was the Business Development Manager of Wilson and, before that, was Sales and Marketing Manager.  Until July 2008, the second respondent, Leigh Sherriff, was employed by Wilson as an Area Operations Manager.  Messrs Rush and Sherriff are now employed by S & K.  Mr Rush commenced employment as State Manager for Victoria on 1 June 2008.  Mr Sherriff commenced employment as Business Development Manager on 23 June 2008. 

2                     In this proceeding, which was commenced on 12 August 2008, Wilson alleges that Mr Rush and Mr Sherriff took from Wilson confidential and commercially sensitive documents, data and other information and have since used it in their employment with S & K, to the benefit of S & K and to the detriment of Wilson.  Wilson sues by reference to the equitable obligation of confidence, to ss 182 and 183 of the Corporations Act 2001 (Cth), to the Copyright Act 1968 (Cth) and to the confidentiality provisions of the contracts of employment which existed between each of Mr Rush and Mr Sherriff and Wilson.  It seeks declarations, orders for delivery up, temporary and permanent injunctions, damages and an account of profits. 

3                     By Notice of Motion dated 9 October 2008, Wilson applies for an interlocutory injunction, said to be necessary to protect it from suffering irreparable harm and to maintain the status quo pending trial, and for other interlocutory orders, to the detail of which I shall refer in due course.

4                     Evidence before the court indicates that the commercial car parking industry operates more or less as follows.  Companies such as Wilson and S & K do not own the properties upon which the car parks are situated (although there is evidence that Wilson is the owner of one such property).  Rather, such a company will either take a lease of the premises in question, or accept engagement by the owner of the premises to manage a car park there.  The nature of the contractual relationship between the property owner and the car park operator will be different in each case.  In either case, however, the arrangement may be for a fixed term, or from month to month.  Examples of both appear in the evidence.  In the case of fixed-term contracts, whether they be leases or management contracts, it will commonly be the case that, when the time for the commencement of a new contract is approaching, the property owner will put out the new contract to tender.  Companies such as Wilson and S & K (and, in all significant cases, it seems, including both of those companies) will then submit their tenders for the leasing of the premises, or for the management of the car park, for the ensuing period. 

5                     It also appears from the evidence that the car parking industry is highly competitive.  Margins are tight, and the ability of an operator to secure valuable profits from a particular site depends not only upon the contract price negotiated between the operator and the property owner, but also upon the operator’s ability to attract business from various classes of customers (ie motorists).  As to the latter, there is, it seems, a considerable range of arrangements in use within the industry.  Some customers are purely casual users of a particular car park; others may be contracted for a period of time; others may be companies which, in effect, buy a certain number of car parking spaces for the period of the contract between them and the operator.  There are also particular variations in pricing, such as the special prices offered to “early bird” parkers.  Evidently, the ability of an operator to get the right mix of price, volume and contractual commitment is critical to its capacity to extract profits from this competitive business. 

6                     According to an affidavit sworn by the Chief Executive Officer, Group Business Development, of Wilson, Jon Larkin, the Victorian parking division of Wilson operates 65 car parks, of which approximately 50% are leased operations, and the remainder are managed on behalf of the owners of the premises concerned.  There are three main operators of commercial car parks in Victoria, namely, Wilson (which has about 32% of the market), S & K (which has about 30% of the market), and a third operator called Care Parking (which has about 29% of the market).  From this I infer that there are approximately 200 car parks in the market with which this proceeding is concerned. 

7                     Mr Larkin swore that, during Mr Rush’s employment with Wilson, Mr Rush was privy to a broad range of highly confidential and commercially sensitive sales documentation, including the financial details and personal particulars of monthly parking customers, and the daily, weekly, monthly and annual sales summaries in all categories of the Wilson customer base.  Some of those categories were hourly casual parking volumes, all day (early bird) parking volumes, evening parking volumes, weekend parking volumes and monthly parking volumes.  Mr Rush had access also to the identity and personal particulars of corporate and individual monthly customers.  He was also privy to the internal workings and costings used to support Wilson’s tenders and other offers to landlords, whether it be to lease or to manage their car parks.  He also knew the rental paid by Wilson at the leased car parks, and the fees earned at managed car parks, with the profit and loss margins resulting in each case.  There are other categories of information, referred to by Mr Larkin, to which Mr Rush is said to have been privy, but what I have mentioned to date will suffice to show, provisionally and for present purposes, that Mr Rush was privy to a wide range of confidential and highly sensitive commercial information, as would be unsurprising for a manager in the position of responsibility which he then held. 

8                     According to Mr Larkin, the role of Area Operations Manager, which was the position held by Mr Sherriff, included managing the financial and operational performance of car parks in his designated area, as well as being actively involved in the detailed preparation of annual budgets.  Mr Larkin swore that Mr Sherriff was privy to all of the information to which he referred in the case of Mr Rush.  By “privy” in this sense, Mr Larkin intended to convey that Mr Sherriff had online access, through the Wilson IT system, to all of that information.

9                     Mr Larkin said that, on about 25 June 2008, Wilson received a call from a contact at a major fleet customer, Myer Limited.  The contact informed Wilson that Mr Rush had approached Myer Limited, seeking that it cancel its licence agreement with Wilson, and sign a new licence agreement with S & K.  Mr Larkin made inquiries of Myer Limited, and confirmed that information.  It became clear to him that Mr Rush had offered a price per parking bay that was lower than the current Wilson rate.  Mr Larkin said that Wilson’s existing contract with Myer Limited was “a unique combination of rate and volume”, and he thought it unlikely that S & K could, without knowledge of the terms of the Wilson contract, offer a price to Myer that undercut the Wilson price by a small margin, while at the same time allowing for S & K to make a profit.  Mr Larkin expressed a suspicion that Mr Sherriff must have given Mr Rush information about the existing Wilson contract terms. 

10                  In early July 2008, Mr Larkin was informed that a landlord of a Lonsdale Street car park which was then managed by Wilson had entered into “an off-the-market lease” with S & K.  Wilson’s tenure as manager of that car park was to cease on 1 August 2008.  Shortly thereafter, Wilson received a number of telephone calls from its monthly parking customers at a nearby car park, 200 Queen Street.  Those customers informed Wilson that they had been approached by S & K to transfer their business to the Lonsdale Street car park.  It was related to Mr Larkin that the S & K representatives by whom the customers had been contacted appeared to know the rate then charged by Wilson for each bay, the amount of bays held under the contract with each customer, the length of time that each customer had been using Wilson, and personal contact details. 

11                  In his affidavit of 12 August 2008, Mr Larkin referred also to other events and circumstances, in July 2008 and thereabouts, which gave him reason to suspect that staff employed by S & K had access to pricing and other like details of Wilson’s then arrangements with its customers. 

12                  Steven Varvaris was, until 31 July 2008, employed by S & K as Commercial Area Manager for the Melbourne CBD.  In his affidavit sworn on 12 August 2008, Mr Varvaris referred to the arrival of Mr Rush as Victorian State Manager for S & K and to that of Mr Sherriff as Business Development Manager for Victoria shortly thereafter.  He said that Mr Sherriff reported to Mr Rush.  Soon after Mr Rush commenced with S & K, he had a conversation with Mr Varvaris about one of the S & K sites, 522 Flinders Lane.  He told Mr Varvaris that he had previously operated that site when he was employed by Wilson.  He told Mr Varvaris that S & K needed to improve its “yield” at that car park, and that they were not getting enough casual parkers.  He said: “This car park has a lot more ability to make more money than what it’s doing right now.  Here is what its potential is.”  At that point, Mr Rush showed Mr Varvaris a document, of about 10 or 12 pages, with columns and figures.  It was in landscape format, and had the appearance of a spreadsheet.  Mr Rush presented this document to Mr Varvaris as being a printout of the revenue figures that the car park used to achieve when Mr Rush was employed by Wilson.  He said: “So you can see the sort of figures that we did when I used to run this at Wilsons.  As you can see, we should be able to get a lot more casual revenue in here.  Casual revenue used to fly here in the past.” Mr Rush also showed Mr Varvaris a spreadsheet on his laptop computer, which contained such information as vacancies, yield, breakdown of user groups, and casual parker volumes by day, month and year. 

13                  Within the next one or two weeks, Mr Rush spoke to Mr Varvaris again, this time in relation to a car park at 32 Flinders Street.  That car park was then under contract to Wilson, but the contract was coming up for tender.  Mr Rush showed Mr Varvaris the actual Wilson tender document that had been used when the then existing contract had been secured by Wilson.  He said to Mr Varvaris: “I know this back to front.  We should be able to win this because I’ve got all of the information from the last time.  I’ve had pretty intimate knowledge of it.  I’ve got all the details here.”

14                  According to Mr Varvaris, soon after Mr Sherriff joined S & K, there was a conversation between the two of them, and Mr Rush, concerning the car park at 114 Flinders Street.  Mr Sherriff had been the Commercial Area Manager for that car park when employed at Wilson.  At a meeting in Mr Rush’s office, Mr Sherriff handed to Mr Varvaris 12 documents of two pages each, in landscape format.  They were the Wilson monthly figures for the car park at 114 Flinders Street, setting out the early bird quotas, the average ticket yield and the daily revenue, including weekends listed separately.  Mr Sherriff gave Mr Varvaris those documents to take away.  Mr Varvaris looked at the documents, and saw that they covered the 12 months to June 2007.  Mr Sherriff said: “Here are the printouts from this month last year, and you could see that we were doing 450 early birds and now you are doing 550, so you’re putting too many low yield customers in here.”  He also said: “We’re not making as much money on the weekend as Wilsons did.  During the week on the casual hourly’s [sic] we need to get it back up there.”  According to Mr Varvaris, upon leaving the meeting, Mr Sherriff said that if there was any information that Mr Varvaris needed on any other Wilson car parks that S & K could try to take over, he could help him with that sort of information.  He said to Mr Varvaris: “Any Wilson site we need to take over, I’ve got the information.”

15                  At about this time, according to Mr Varvaris, there was a group of four car parks up for tender under one contract.  This was described as the “Dexus” tender.  At present, three of the car parks were under contract to S & K, and the other was under contract to Wilson.  Mr Varvaris noted that Mr Rush was very confident that S & K would secure all four car parks in the new tender.  At some point Mr Rush said to Mr Varvaris, with respect to this tender: “Wilson used to operate these in the past.  I know all about it.”  He added that he had a great relationship with the managing agent from the client in question.

16                  Evidence of the kind to which I have referred caused Wilson to commence the present proceeding.  Before serving the Application upon the respondents, Wilson sought, and obtained ex parte, a search order, pursuant to O 25B of the Federal Court Rules, directed to each of the respondents.  The search order followed generally the terms of the example annexed to Practice Note No. 24.  It authorised Wilson to cause a search to be conducted at the Melbourne premises of S & K and at the residence of Mr Sherriff.  It provided for the engagement of an independent solicitor and an independent computer expert. 

17                  An important provision of the search order was par 23 thereof, which provided as follows:

Subject to paragraph 24 below you must—

(a)        at or before the further hearing on the return date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing as to—

            (i)         the location of the listed things;

            (ii)        the name and address of everyone who has supplied you, or offered to supply you, with any listed thing;

            (iii)        the name and address of every person to whom you have supplied, or offered to supply, any listed thing; and

            (iv)       details of the dates and quantities of every such supply and offer; and

(b)       within 5 working days after being served with this order, swear and serve on the applicant an affidavit setting out the above information.

The “listed things” were defined, first, as –

Any hard copy and electronic copy documents consisting of originals or copies of, or extracts from:

i.                     the Applicant’s tender documents used in open tenders and off market submissions;

ii.                   the Applicant’s records of hourly casual parking volumes by day, by week, by month and by year;

iii.                  the Applicant’s records of all day (“early bird”) parking volumes by day, by week, by month and by year;

iv.                 the Applicant’s records of evening parker volumes by day, by week, by month, and by year;

v.                   the Applicant’s records of weekend parker volumes by day, by week, by month, and by year;

vi.                 the Applicant’s records of monthly parker volumes and rates by month and by year;

vii.                the Applicant’s customer lists, and information relating to their contact details, parking history, and other personal information;

viii.              financial records and information of the Applicant;

and, secondly, as USB memory stick devices, personal data assistants, laptop computers, desktop computers, external/portable hard drives or disks, floppy disks, compact disks and the IT server of S & K.

18                  As appears from the extract above, the operation of par 23 of the search order was subject to par 24 thereof.  Paragraph 24 applied to an individual who considered that compliance with par 23 might tend to incriminate him or her, or to make him or her liable to a civil penalty.  Subparagraphs (c) and (d) of par 24 were as follows:

(c)        You must, at or before the further hearing on the return date (or within such further time as the Court may allow) notify the applicant in writing that you or all the persons referred to in sub‑paragraph (b) wish to take such objection and identify the extent of the objection.

(d)       If you give such notice, you need comply with paragraph 23 only to the extent, if any, that is possible without disclosure of the material in respect of which the objection is taken.

Mr Rush and Mr Sherriff both took the objection for which par 24 of the search order provided. 

19                  The substantial burden of the work involved in carrying out the search pursuant to the search order related to the electronic documents, data and other files located on the S & K IT server.  S & K co-operated fully with the search party in this regard.  In the first instance, the independent computer expert searched the S & K computer system for documents that may be “listed things” within the meaning of the search order.  When it appeared to him that a particular document might be a listed thing, he forwarded the same to the independent solicitor.  The independent solicitor then identified the documents which he considered were listed things, and provided those documents to S & K for inspection.  If S & K agreed that a particular document was a listed thing, it was made available to Wilson.  Operating broadly in this way, documents have been identified by the independent computer expert and the independent solicitor, and then provided by S & K to Wilson, in tranches.  To date, there have been two such tranches, consisting of some 44 documents.  In addition, some (non-electronic) documents were recovered by the search party itself from the S & K premises on 14 August 2008 and, after inspection by S & K, were made available to Wilson.  Under cover of a letter dated 19 August 2008, the solicitors for S & K also provided further documents, considered by them to be listed things, to the independent solicitor, and these were in due course made available to Wilson.   

20                  In seeking the interlocutory orders the subject of the present application, Wilson relies on the affidavit material to which I have referred, on the documents mentioned in the previous paragraph, and on a consideration of those documents by Mr Larkin in a further affidavit sworn by him on 13 October 2008. 

21                  Wilson’s Notice of Motion as filed sought the following interlocutory relief:

1.         That each of the First, Second and Third Respondents return to the Applicant all documents, (including all copies and extracts therefrom) listed in exhibits JL1, JL2, JL3 and JL4 to the supporting affidavit of Jon Larkin.

2.         That all electronic copies of the documents referred to in paragraph 1 in the possession, power or control of the First, Second and Third Respondents be destroyed, with such destruction to be supervised by the independent computer expert appointed under the Search Order of Justice Kenny of 13 August 2008 (the “Independent Computer Expert”) including, where necessary, with the assistance of a Sydney-based member of Ferrier Hodgson’s computer forensics team and verified by affidavit of that Independent Computer Expert and, if applicable, by that Sydney-based team member.

3.         That each of the First Second and Third Respondents (and in the case of the Third Respondent by affidavits of each of its officers and employees, Mr Garth Matthews, CEO, Mr Smylie, Chief Operating Officer, Mr David Knight, National Business Development Manager and its most senior IT Manager) provide to the Applicant an affidavit verifying that they no longer have or hold in their possession, power or control any of the documents referred to in paragraphs 1 and 2 above.

4.                  That the First and Second Respondents be restrained until trial from any use of the information contained in the documents referred to in paragraph 1 and 2 above.

5.                  That within 3 business days of the making of this Order, each of the First and Second [Respondents] provide to the Applicant, any printed or electronic Wilson document and all electronic storage devices in their possession, custody or control, containing any Wilson document, together where applicable with any covering email attaching any Wilson document.

6.                  That within 4 business days of the making of this Order, each of the First and Second Respondents provide to the Applicant an affidavit confirming that:

(a)                they no longer have in their possession, power or control any Wilson document or electronic storage device containing any Wilson document; and

(b)               if pursuant to Order 5 they had after the date of leaving employment with Wilson any Wilson document or any electronic storage device containing a Wilson document, but no longer has any such thing, when they parted with it, and what has become of it.

7.                  That within 5 business days of the making of this Order, the Third Respondent provide to the Applicant any printed or electronic Wilson document and all electronic storage devices in their possession, custody or control containing any Wilson document, together where applicable with any covering email attaching any Wilson document.

8.                  That within 6 business days of the making of this Order, the Third Respondents provide to the Applicant affidavits of each of its officers and employees, Mr Garth Matthews, Mr Smylie, Mr David Knight and its most senior IT Manager confirming:

(a)                that they no longer have in their possession, power or control any Wilson document or electronic storage device containing any Wilson document;

(b)               if pursuant to Order 7 they had any Wilson document or any electronic storage device containing a Wilson document, but no longer has any such thing, when they parted with it, and what has become of it; and

(c)                in respect of each of the documents provided pursuant to Order 7, a description of the source or location where each such document was found.

9.                  That the First and Second Respondents be restrained until trial, alternatively for the duration of such period as fixed by this Honourable Court, from:

(a)                working in the Melbourne car parking industry; or

(b)               in the alternative, approaching or soliciting for business, or providing any information to assist any other person in doing so, any persons owning, controlling or managing the car parks listed in the document entitled “LS Management Schedule.xls” being exhibit JL1.10 to the supporting affidavit of Jon Larkin dated 9 October 2008.

10.              That in respect of each Listed Thing derived from the electronic images made by the Independent Computer Expert pursuant to the Search Order made by Justice Kenny (and as amended by Mr Justice Jessup) which is either:

(a)                not disputed by the Respondents to be a Listed Thing; or

(b)               determined by this Honourable Court to be a Listed Thing,

the Independent Computer Expert may in response to any request by the Applicant, inform the Applicant of the sourse or location of the Listed Thing.

11.              That the Respondents, within 14 days of receipt of a tax invoice from the Independent Computer Expert, pay his firm’s costs in respect of Order 2.

12.              That the Respondents pay the costs of this application.

13.              Such further and other relief as to this Honourable Court deems fit.

The exhibits referred to in par 1 of the Notice of Motion were the four categories of documents to which I have referred in par 19 of these reasons. 

22                  The respondents have offered undertakings which, they submit, should be taken into account in my consideration of the interlocutory relief to which Wilson might otherwise be entitled.  S & K has offered a permanent undertaking as follows:

1.         The third respondent, by itself, its servants and agents, undertakes, subject to paragraph 2 below –

            (a)        to deliver up to the applicant all of the things in its possession, custody or control described in exhibits JL-1, JL-2, JL-3.2, JL-3.6, JL-3.7, JL-3.8, JL-3.9, JL-3.12, JL-3.13, JL-4.1 and JL-4.9 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Permanent Undertaking Documents);

            (b)        to allow the Independent Computer Expert to remove from its computers and not retain any of the Permanent Undertaking Documents;

            (c)        not to use any information derived from the Permanent Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

2.         The third respondent, by its solicitors, may for the purpose of this proceeding retain copies of any of the Permanent Undertaking Documents until the period expiring 30 days after the determination of this proceeding, including any appeal or application for special leave to appeal in respect thereof, after which the third respondent undertakes to deal with such things in accordance with paragraphs 1(a) and (b) of this undertaking.

S & K has offered an interlocutory undertaking as follows:

1.         Until the trial of this proceeding, or Order of the Court, the third respondent, by itself, its servants and agents, undertakes, subject to paragraph 2 below –

            (a)        to deliver up to the applicant all of the things in its possession, custody or control described in exhibits JL-3.1, JL-3.3, JL-3.4, JL-3.5, JL-3.10, JL-3.11 and JL-4.2, JL-4.3, JL-4.4, JL-4.5, JL-4.6, JL-4.7 and JL-4.8 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Interlocutory Undertaking Documents);

            (b)        to allow the Independent Computer Expert to remove from its computers and not retain any of the Interlocutory Undertaking Documents;

            (c)        not to use any information derived from the Interlocutory Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

2.         The third respondent, by its solicitors, may for the purpose of this proceeding retain copies of any of the Interlocutory Undertaking Documents.

Mr Rush has offered a permanent undertaking as follows:

1.         The First Respondent, undertakes, subject to paragraph 2 below –

            (a)        to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-1, JL-2, JL-3.2, JL-3.6, JL-3.7, JL-3.8, JL-3.9, JL-3.12, JL-3.13, JL-4.1 and JL-4.9 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Permanent Undertaking Documents);

            (b)        to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the Third Respondent and not retain any of the Permanent Undertaking Documents;

            (c)        not to use any information derived from the Permanent Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

2.         The First Respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Permanent Undertaking Documents until the period expiring 30 days after the determination of this proceeding, including any appeal or application for special leave to appeal in respect thereof, after which the First Respondent undertakes to deal with such things in accordance with paragraphs 1(a) and (b) of this undertaking.

Mr Rush has offered an interlocutory undertaking as follows:

3.         Until the trial of this proceeding, or Order of the Court, the first respondent, undertakes, subject to paragraph 4 below –

            (a)        to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-3.1, JL-3.3, JL-3.4, JL-3.5, JL-3.10, JL-3.11 and JL-4.2, JL-4.3, JL-4.4, JL-4.5, JL-4.6, JL-4.7 and JL-4.8 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Interlocutory Undertaking Documents);

            (b)        to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the Third Respondent and not retain any of the Interlocutory Undertaking Documents;

            (c)        not to use any information derived from the Interlocutory Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

4.         The First Respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Interlocutory Undertaking Documents.

Mr Sherriff has offered a permanent undertaking as follows:

1.         The Second Respondent, undertakes, subject to paragraph 2 below –

            (a)        to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-1, JL-2, JL-3.2, JL-3.6, JL-3.7, JL-3.8, JL-3.9, JL-3.12, JL-3.13, JL-4.1 and JL-4.9 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Permanent Undertaking Documents);

            (b)        to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the Third Respondent and of the computers and any electronic storage devices of the Second Respondent and not retain any of the Permanent Undertaking Documents;

            (c)        not to use any information derived from the Permanent Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

2.         The Second Respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Permanent Undertaking Documents until the period expiring 30 days after the determination of this proceeding, including any appeal or application for special leave to appeal in respect thereof, after which the Second Respondent undertakes to deal with such things in accordance with paragraphs 1(a) and (b) of this undertaking.

Mr Sherriff has offered an interlocutory undertaking as follows:

3.         Until the trial of this proceeding, or Order of the court, the Second respondent, undertakes, subject to paragraph 4 below –

            (a)        to deliver up to the applicant all of the things in his possession, custody or control described in exhibits JL-3.1, JL-3.3, JL-3.4, JL-3.5, JL-3.10, JL-3.11 and JL-4.2, JL-4.3, JL-4.4, JL-4.5, JL-4.6, JL-4.7 and JL-4.8 to the affidavit of Jon Larkin dated 13 October 2008 or copies thereof (Interlocutory Undertaking Documents);

            (b)        to the extent that he has the power to do so, to allow the Independent Computer Expert to remove from the computers of the Third Respondent and of the computers and any electronic storage devices of the Second Respondent and not retain any of the Interlocutory Undertaking Documents;

            (c)        not to use any information derived from the Interlocutory Undertaking Documents except –

                        (i)         for the purpose of this proceeding; and

                        (ii)        as required by law.

4.         The Second Respondent, by his solicitors, may for the purpose of this proceeding retain copies of any of the Interlocutory Undertaking Documents.

The documents referred to by exhibit numbers in these undertakings are the documents provided to Wilson pursuant to the search order in the way I have described in par 19 above.

23                  The respondents submit that their undertakings should be regarded as sufficient to give Wilson all of the interlocutory relief to which it is legitimately entitled.  Wilson accepts that the undertakings sufficiently address some of the relief which it seeks in its Notice of Motion, but does not accept that all of that relief is rendered unnecessary in the light of the undertakings.  In particular, par 9 of the Notice of Motion (as varied in respects to which I shall turn) is pressed over the strenuous opposition of the respondents.

24                  Wilson accepts that the respondents’ undertakings sufficiently cover the relief sought in pars 1, 2 and 4 of its Notice of Motion.  In the anticipation that the court will accept the undertakings, Wilson no longer presses for that relief.

25                  Paragraph 3 of the Notice of Motion (which is pressed only in relation to S & K) relates to the documents referred to in par 1 thereof.  They are the same documents as are the subject of par 1(b) of each of the permanent and interlocutory undertakings given by S & K.  That is to say, S & K have undertaken to do, in point of substance, the very things that would produce the state of affairs as to which Wilson seeks the making of affidavits.  Having given those undertakings, I consider that it would be neither necessary nor appropriate for S & K to be required to make the affidavits sought by par 3. 

26                  However, as Wilson’s case was developed in argument, counsel proposed, in effect, a slightly different purpose for the affidavits which Wilson sought.  They submitted that the only document referred to in an affidavit made on behalf of S & K pursuant to par 23(b) of the search order was a single hard copy document which, although a “listed thing” by definition, was irrelevant to the proceeding.  By contrast, the documents located as a result of the search conducted by the independent computer expert numbered 44 within the first two tranches of documents, and are expected to number in excess of 100 by the time the exercise is complete.  It followed, according to counsel for Wilson, that S & K’s affidavit was a manifestly inadequate attempt to comply with the search order.  S & K should now be required to make thorough and complete affidavits, as proposed by par 3 of the Notice of Motion.

27                  Counsel for S & K resisted the imposition of an obligation of the kind proposed in par 3, for the following reasons.  They pointed out that, from the outset, the search order had contemplated that there may be hard copy as well as electronic documents amongst the “listed things” referred to therein.  The Chief Operating Officer of S & K, Mr Neal Smylie, affirmed an affidavit on 21 August 2008 in which he stated that he had undertaken the task of searching for hard copy, or physical, versions of the documents referred to in the search order.  After making appropriate inquiries of the staff of S & K, Mr Smylie located only one such document (the irrelevant one to which I have referred above).  In the case of electronic documents, counsel submitted that S & K had co-operated fully with the independent computer expert, and had made every aspect of its computer system available to him, and facilitated his searches.  Because of that, according to counsel, S & K did not undertake its own searches, as might have been necessary if an obligation in the nature of discovery had been imposed.  Further, counsel pointed out that, on 2 September 2008, par 23(a) of the search order had been varied in a way to which I shall refer presently, the rationale for which was to relieve S & K from what might otherwise have been an obligation to perform a comprehensive search of all its computers and electronic media, and to permit it to comply with the search order by indicating to the computer expert what were the electronic places at which he might find any of the listed things. 

28                  In order to resolve the issues arising under par 3 of the Notice of Motion, it is useful to refer to what transpired at the interlocutory hearing which related to the search order on 2 September 2008.  At that hearing, counsel for Wilson made the very complaint which Wilson now makes.  Counsel then submitted that S & K had not complied with par 23(b) of the search order in relation to electronic documents.  Counsel for S & K then applied to have the search order varied because, at least as interpreted by Wilson, it appeared to impose an obligation upon S & K to make its own searches of its computers and other electronic media – searches of the kind that would be required of a litigant complying with an obligation to give discovery.  It was submitted on behalf of S & K that this was not the purpose of a search order under O 25B of the Rules of Court, and that the search order actually made in this case should be varied to make it clear that the extent of S & K’s obligation was to inform the search party where documents of various kinds might be found, rather than to search for those documents themselves.  Counsel for Wilson made it clear that their client did not intend that S & K should be under an obligation to undertake a detailed search of the kind that would be appropriate as part of giving discovery.  They submitted that the search order required only that S & K make the normal inquiries of its servants and agents as to the location of the documents referred to, and did not require those servants and agents to seek to discover things which they did not already know. 

29                  In the course of the hearing on 2 September 2008, I proposed to the parties that the problem might be resolved by inserting the following words after the word “ability” in the opening passage of par 23(a) of the search order: “and within the extent of the knowledge of yourself, your servants and your agents”.  That suggestion was accepted both by Wilson and by S & K.  I also ordered, by consent, that Wilson have until 4.00pm on 5 September 2008 to comply with par 23 as so varied.  On that day, Mr Smylie affirmed an affidavit in which he referred to an email sent to employees of S & K on 19 August 2008 asking them to search their “work station/desk/office/computer/blackberry” for any documentation of Wilson, and setting out particulars of the kind of documentation to which those employees should be alert.  In that affidavit, Mr Smylie stated that, save for the single hard copy document to which I have referred, no electronic or hard copy document was found as a result of the inquiries which he had made of S & K’s staff.

30                  In these circumstances, I consider that S & K has, in relation to electronic documents and within the arrangements as to which there was substantial consent on 2 September 2008, done all that may be expected of it to comply with par 23 of the search order.  I am not persuaded that non-compliance with that paragraph on the part of S & K provides justification for the making of the orders sought in par 3 of the Notice of Motion.  To that extent, Wilson’s motion will be dismissed.

31                  It being apparent that Mr Rush and Mr Sherriff would maintain their objection based upon the privilege against self-incrimination, or self-exposure to a penalty, Wilson did not press for the relief set out in pars 5 and 6 of its Notice of Motion. 

32                  Turning to par 7 of the Notice of Motion, counsel for Wilson explained that the term “Wilson document” therein should be understood in the same sense as the term “listed thing” in the search order.  As so understood, an order in the terms of par 7 would require S & K to provide to Wilson all the printed and electronic documentary listed things in its possession, custody or control.  In relation to hard copy documents, Mr Smylie has in effect done this, in his compliance with par 23 of the search order.  In relation to electronic documents, the order would require S & K to conduct its own searches for listed things.  As I have indicated above, S & K has proceeded on the basis that it would make all of its computers, and its computer system, available to the independent computer expert for this purpose.  I consider that to have been a reasonable approach.  Counsel for Wilson did not seek to justify par 7 of the Notice of Motion as an order in the nature of discovery.  In those circumstances, and in the light of the way I have disposed of par 3 of the Notice of Motion, it is clear that S & K should not be subjected to the kind of obligation to which par 7 refers, at least in relation to electronic documents.

33                  Paragraph 7 refers also to electronic storage devices.  It does appear that S & K has not complied with par 23 of the search order, to the extent that it operates in the context of the computers and other devices included within the definition of “listed things”.  This may have been due to a misreading of an order made by the court on 15 August 2008, by which the operation of par 23 was in this respect stayed, but only until 4.15pm on 21 August 2008.  Upon this circumstance having been drawn to the attention of the parties, counsel for S & K indicated that his client would consent to an order that it should, within 14 days, comply with this aspect of par 23 of the search order.  Counsel for Wilson did not seriously resist this as a pragmatic resolution of the non-documentary aspects of S & K’s obligations under par 23, and I shall adopt it. 

34                  It follows from my disposition of the claims made in pars 3 and 7 of the Notice of Motion that the claim made in par 8 thereof should also be dismissed.  It was pointed out by counsel for Wilson that the obligation sought to be imposed on S & K by par 3 of the Notice of Motion was confined to the documents exhibited to Mr Larkin’s affidavit of 13 October 2008, whereas par 8 sought to impose a more general obligation, generally with respect to “any Wilson document” (ie any documentary listed thing).  However, I have generally accepted the case put on behalf of S & K that the comprehensive search which they permitted the independent computer expert to undertake of their electronic documents, and the integrity of the process for which the search order provides, should be regarded as leaving little or no scope for the kind of obligations sought to be imposed by par 8 of the Notice of Motion.

35                  That brings me to par 9 of the Notice of Motion, under which interlocutory restraints are sought to be imposed upon Messrs Rush and Sherriff.  The imposition of such restraints was opposed not only by them, but also by S & K, for whom they both work.  During the hearing of the motion, Wilson abandoned the relief referred to in subpar (a) of par 9, and reformulated the relief sought in subpar (b) thereof, in terms to which I shall refer presently. 

36                  On an application for an interlocutory injunction such as sought in par 9 of the Notice of Motion, the first question is whether Wilson has made out a prima facie case, in the sense of having shown “a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial”: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 82 [65].  The strength of the probability, or likelihood, of succeeding which Wilson will need to show “depends … upon the nature of the rights [Wilson] asserts and the practical consequences likely to flow from the order [it] seeks”: Beecham Group Limited v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 622, approved in ABC v O’Neill, 227 CLR at 82 [65].  Subsequent questions relate to the adequacy of damages as an ultimate remedy and to the balance of convenience and such other discretionary considerations as may be relevant in the circumstances: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, 153.

37                  As I have indicated above, at trial Wilson will allege that Messrs Rush and Sherriff were, in their employment with Wilson, subject to an equitable obligation of confidence with respect to much of the information which came into their possession.  It will be alleged that they have breached this obligation in a number of respects, and should be permanently restrained from using the information in question.  It will also be alleged that each of them, having been an officer or employee of Wilson, improperly used information obtained by him in that capacity to gain an advantage for S & K, or to cause detriment to Wilson, contrary to s 183(1) of the Corporations Act.  Wilson also proposes to rely upon the confidentiality provisions in the contract of employment which existed between each of Mr Rush and Mr Sherriff on the one hand and Wilson on the other hand.  Those contracts are before the court, and they contain restraints, broadly expressed, with respect to the use of confidential information coming into the possession of the employee concerned during his or her employment with Wilson.

38                  Wilson’s interlocutory case depends substantially upon the first and second tranches of documents obtained as a result of the execution of the search order.  As I have said, there were some 44 documents in those tranches and, in his affidavit of 13 October 2008, Mr Larkin explained the nature and significance thereof.  It will not be necessary for me to go into detail in this regard, since none of the respondents contested the proposition that Wilson had made out a prima facie case in the relevant sense.  However, since the apparent strength of an applicant’s prima facie case is a matter that may be taken into account in the general mix of discretionary considerations involved in the grant of interlocutory relief (see Bullock v Federated Furnishing Trades Society of Australasia and Ors (No 1) (1985) 5 FCR 464, 472; Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405, 416), I shall say something about the general impression with which the reader of Mr Larkin’s affidavit is left. 

39                  Self-evidently, the documents contained in the first two tranches produced under the execution of the search order were either Wilson’s documents as such or documents otherwise prepared, but based substantially upon information which could only have come from Wilson.  Much of the information in the documents was manifestly such as equity would protect.  For example, one document was a full copy of Wilson’s 2008/2009 budget papers for 13 car parks, containing also a consolidation of revenues and expenses for each of the managed and leased portfolios in those car parks.  Many of the documents set out Wilson’s internal financial details and workings for particular car parks.  Many of them contained the terms upon which Wilson contracted with its customers at particular car parks.  One document, a table, set out the names and locations of a large number of car parks under operation by Wilson, stating in each case the term of the existing contract (or, where applicable, whether the contract was from month to month) and containing a “comments” column in which the author provided, in relation to some of the car parks, a brief note of the action which S & K might take, or the strategy which it might adopt, in order more effectively to compete with Wilson for the business in question.  A feature of a great many of the documents to which Mr Larkin refers is that they were sent to S & K by an email apparently originating at a private email address of Mr Rush or Mr Sherriff. 

40                  Neither Mr Rush nor Mr Sherriff filed any affidavit material in response to Mr Larkin’s affidavit of 13 October 2008; nor did they seek to qualify the impression which Mr Larkin’s affidavit, and the documents to which he refers, so clearly creates.  Although this is an interlocutory occasion, and the findings I make are provisional, I am obliged to approach the question on the assumption that the evidence at trial will remain in its current state.  That evidence, in my opinion, gives rise to a prima facie case, of quite obvious strength, that Mr Rush and Mr Sherriff have used the fact of their employment, or former employment, by Wilson to obtain information, which was confidential to Wilson and which was known by them to be so, and have sought to use it for the benefit of S & K and to the detriment of Wilson.  Wilson has, in my view, established a clear prima facie case for a permanent injunction, and for findings of contraventions of s 183 of the Corporations Act.  That will be sufficient for present purposes.  I was not addressed upon the scope or operation of the contractual restraints upon which Wilson relies, and I do not take them into account in the provisional findings which I now make.

41                  The burden of Mr Rush’s and Mr Sherriff’s resistance to orders of the kind sought in par 9 of the Notice of Motion was three-fold.  First, they submitted that the undertakings which they had proffered – not to use any information derived from the documents referred to by Mr Larkin – should be regarded as sufficient protection for Wilson in the circumstances.  Secondly, they submitted that any loss or damage which Wilson might suffer as a result of actionable conduct in which they might engage, notwithstanding the terms of their undertakings, could in due course be calculated, and compensated, in damages.  Thirdly, they submitted that, taking into account all considerations, including their own positions as employees, and the interests of S & K, the balance of convenience came down in favour of denying Wilson the relief which it sought, particularly having regard to the undertakings which were proffered.

42                  Before dealing with these points, I shall return to the terms of par 9(b) of the Notice of Motion, as amended at the hearing.  One of the documents in the first tranche produced as a result of the execution of the search order was, as I have indicated briefly above, a listing of Wilson car parks, with an indication of the term of each existing contract, or a statement that the contract was from month to month.  This was a spreadsheet prepared by someone at S & K.  It was used by Wilson, in effect, as a facsimile of the respondents’ competitive interest in the sites presently operated by Wilson.  In place of the existing terms of par 9(b) of the Notice of Motion, Wilson proposed that the order, as made, should identify the sites as listed on this table, but only to the extent that they were exposed to attack by S & K within the period that might reasonably be anticipated would be occupied preparing for, and conducting, the trial of this proceeding.  The arbitrary cut-off date adopted by Wilson was 31 March 2009.  All the monthly contracts, and the contracts which were to terminate on or before that date, were proposed to be the subject of an order in place of that proposed by par 9(b) of the Notice of Motion. 

43                  Additionally, during the course of the hearing it became apparent to Wilson that par 9(b) of the Notice of Motion, as framed, dealt only with the property owners with whom Wilson had existing relations.  It did not deal with the position of customers (ie motorists and corporate groups of motorists) of Wilson’s car parks under various contractual arrangements.  Accordingly, Wilson has identified the sites with respect to which the documents exhibited to Mr Larkin’s affidavit disclose that S & K has come into possession of customer lists or the like.  An order along the lines of par 9(b) of the Notice of Motion is also sought to restrain Messrs Rush and Sherriff from approaching, or soliciting for car parking business from, customers at those sites. 

44                  Returning to Wilson’s response to the respondents’ opposition to an order as sought, it was first submitted that the undertakings proposed by the respondents would not go far enough, since the restraint on “use” of the information in question proffered in the undertakings, though valuable so far as it went, lacked the precision necessary to give practical effect to Wilson’s objective that it should, for the interlocutory period, be unaffected by the circumstance that Messrs Rush and Sherriff had, as the court should provisionally find, taken Wilson’s confidential information.  If it should transpire that, over that period, S & K secures the contract for a car park presently contracted to Wilson, the practical task of demonstrating, with the rigour required in a contempt application, that Mr Rush and/or Mr Sherriff “used” some of Wilson’s information in the relevant context would be of some difficulty, to say the least.

45                  Counsel for Wilson also relied upon what has been described as the “springboard” doctrine.  Of that doctrine, Roxburgh J said in Terrapin Limited v Builders’ Supply Company (Hayes) Limited [1967] RPC 375, 391-392:

As I understand it, the essence of this branch of the law, whatever the origin of it may be, is that a person who has obtained information in confidence is not allowed to use it as a spring-board for activities detrimental to the person who made the confidential communication, and spring-board it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public.

…

It is, in my view, inherent in the principle … that the possessor of such information must be placed under a special disability in the field of competition in order to ensure that he does not get an unfair start….

In the submission of Wilson, it having been established prima facie that Messrs Rush and Sherriff took confidential information, the court should go further than to impose upon them an obligation which corresponds with the general equitable duty.  There needed to be an order which would exclude, as completely as may be, any prospect that Wilson’s confidential information might be used to the disadvantage of Wilson during the interlocutory period. 

46                  I accept the broad thrust of the submissions made on behalf of Wilson in this respect.  I do so because of the nature of the interlocutory evidence to which I have referred, and because of the absence of any evidence in response.  It is established prima facie not only that Messrs Rush and Sherriff had access to Wilson’s confidential information, but also that they intended to use it for the specific purpose of advancing S & K’s position to the detriment of Wilson’s.  I am much influenced by the evidence of Mr Varvaris in this respect.  Although that evidence dealt with only a small part of the area that would be covered by the order proposed, it clearly showed the apparent disposition of Messrs Rush and Sherriff to use this confidential information in their now employment with S & K.  The nature of the “comments” column in the document listing the Wilson-operated car parks fairly obviously bespeaks an intention to use the Wilson information to the detriment of Wilson, and to the advantage of S & K.  Although it is not apparent who expressed that intention, no submission was made on behalf of Mr Rush or Mr Sherriff to dissociate themselves, or either of them, from this document, and I consider it reasonable provisionally to infer that the intention was theirs.  Against this evidentiary setting, I am persuaded that the restraint contained in the undertakings of Messrs Rush and Sherriff would provide insufficient interlocutory protection for Wilson.  I consider that the prohibition on “use” of the information, while broad, lacks the practical focus necessary in an interlocutory restraint.  The scope for those being restrained to wonder whether particular conduct or activity was covered by the restraint should, in my view, be minimised.  The approach embodied in Wilson’s par 9(b) as amended would be more likely to achieve that objective. 

47                  I also have considerable doubt whether Wilson’s position could be adequately protected by the undertakings of Messrs Rush and Sherriff not to use information derived from the documents exhibited to Mr Larkin’s affidavit.  I think it would be too naïve to expect that the two men could simply put out of their minds any of Wilson’s information in the competitive environment in which they work, and to the demands of which they are apparently so keenly attuned.  I say this particularly with respect to Mr Sherriff, who was only recently in the employ of Wilson; but also to an extent with respect to Mr Rush, who has been shown on the evidence to be ready to work closely with Mr Sherriff in settings relevant to sites presently operated by Wilson.

48                  As to the submission that damages would be an adequate remedy for any loss that was sustained by Wilson, it is necessary to refer to the following paragraphs of Mr Larkin’s affidavit of 12 August 2008 (in which S & K is referred as “Secure Parking”):

61.       Any misuse of the Confidential Wilson Data by a competitor, could potentially cause Wilson Parking to suffer very substantial and irreversible losses.

62.       The turnover involved in just the Myer Ltd contact [sic], 32 Flinders Street, 200 Queen Street, and 374 Lonsdale Street referred to above is in excess of ten million dollars ($10,000,000).  We have already lost one of these to Secure Parking on 1 July 2008, another is currently at risk under tender, and we are fighting a defensive battle on the other two sites against Secure Parking’s advances.

63.       My best estimate is that the revenue in commercial parking in Victoria that are [sic] managed by car park operators is in the vicinity of $400 million.

64.       It is widely known in the market that profit margins are in the single digits.  My best guess is that the three larger car park operators have similar shares of the market and probably similar margins.

65.       For commercial confidentiality reasons, I do not in this affidavit disclose our profit.  However, I do not wish the Court to think that I am exaggerating when I say the risk Wilson Parking faces.  If Secure Parking has even a small proportion of our confidential data, of the kind referred [to] by Steve Varvaris, and of the type revealed by the activities that occurred at 200 Queen Street Wilson could be irreparably damaged for many years in the market.

66.       The information which Secure Parking appears to have in its possession, makes it straight forward for them to:

a.    Underbid us on current sites that we operate putting us at risk of losing those sites, or having to cut already slim margins to low, unprofitable and unsustainable levels;

b.   Make Wilson Parking unable to win tenders of our car parks when they come up;

c.    Make Wilson Parking lose monthly customers or have to drop rates if Secure Parking uses our confidential information to underbid us.

67.       In summary, we could in the next twelve months lose our current car park sites, have the profitability damaged irreparably and lose customers who are poached.

68.       These are not losses that can be simply compensated for later.  Many tenders for years, with three to five years being the average in the industry, once you lose a site, new relationships are formed between the customer and the operator and you may never regain that site.  It also exposes you to losing other sites as a flow on effect of the relationship that Secure Parking would gain with our former customer.  The loss is not only almost impossible to quantify in annual terms, but completely impossible to quantify in terms of the number of years of the effect of the damages caused. 

While these paragraphs are self-serving to an extent, no evidence was led by way of contradiction, or qualification, of them.  What Mr Larkin said in par 68 strikes me as all too realistic.  I am satisfied that, if Messrs Rush and Sherriff, or either of them, acted to the detriment of Wilson during the interlocutory period, it may well be practically impossible to identify, much less to quantify, the full extent of the loss and damage which Wilson would by then have suffered.  In this respect the prospect that new commercial relationships may have been formed, of the kind to which Mr Larkin referred in par 68, is, in my view, all too real to ignore, yet too intangible to regard, at least with any reasonable confidence, as susceptible to an ultimate remedial order in the way of damages. 

49                  Turning to other aspects of the balance of convenience, in his affidavit affirmed on 16 October 2008, Mr Smylie exhibited the present employment contract of each of Mr Rush and Mr Sherriff.  Mr Smylie said that Mr Rush’s duties were outlined in the position description annexed to his contract.  I have looked at the “major roles and responsibilities” set out in that position description.  Counsel for Mr Rush was unable to identify any of them which dealt directly with activities of the kind which would be restrained by an order in the terms sought by Wilson.  Some such activities may be thought to have been indirectly covered by the position description, namely the following:

Actively contributing to company wide business initiatives, projects and national business development tenders and marketing campaigns.

Maximising the State’s operational and financial performance and return on capital invested, through the active monitoring and management of the State’s operations, including new business development, yield and cost management.

Develop and maintain strong working relationships with the company’s clients to maximise business retention and new business growth, through inter alia, being seen as a value-add partner to help them achieve their business objectives. 

By contrast, the contract for Mr Sherriff, also exhibited to Mr Smylie’s affidavit, had no position description attached.  Nothing in that contract conveyed any idea of the actual duties performed by Mr Sherriff, but Mr Smylie said that he was now Commercial Operations Manager, and that his duties “involved the daily operations of car parks which S & K lease or manage”. 

50                  In his affidavit of 16 October 2008, Mr Smylie said that, if the court granted the orders sought in par 9 of the Notice of Motion, “there is no work that either Rush or Sherriff could usefully do for S & K and S & K would terminate the employment of each of them in accordance with the relevant employment contract.”  This statement, however, was made with respect to par 9 as originally set out in the Notice of Motion.  At that time, subpar (a) was part of the relief sought.  Mr Smylie’s statement seems, with respect, rather obvious in the context of an apprehended order in the terms of subpar (a).  I could not, however, regard it as obvious in the context of the relief now sought by Wilson; and it was not submitted that I should do so.

51                  As I have said, neither Mr Rush nor Mr Sherriff went into evidence with respect to the matters claimed under par 9 of the Notice of Motion.  S & K did so, but only to the extent indicated above.  I was given no explanation as to the detailed daily duties and functions of either of these men, nor as to the extent to which those duties and functions would be affected by an order in the terms now sought.  In the case of Mr Rush, all I know is that he is the Victorian State Manager of S & K.  In the absence of evidence to the contrary, I would infer that his duties extend beyond the solicitation of new business, dealings with property owners as to the letting or extension of contracts, and dealings with parking customers, or potential customers, on the subject of where they might take their business.  Mr Sherriff is engaged as a Commercial Area Manager, but I have no information as to the area which he manages, nor as to the car parks which exist within that area.  I do not know, for instance, how many areas exist within S & K’s Victorian operation, nor how many Commercial Area Managers are employed.  In these circumstances, I do not think I am entitled to infer, in the absence of evidence from S & K or Mr Sherriff, that, if Mr Sherriff were precluded from doing the things now sought to be restrained under par 9 of the Notice of Motion, there would be little or nothing else that he could do in the employ of S & K.

52                  As I have said earlier in these reasons, Wilson operates 65 car parks, which constitutes about 32% of the Victorian market.  Under par 9 of the Notice of Motion as amended, some 24 car parks would be affected.  On my calculation of things, this would leave for Messrs Rush and Sherriff something in excess of 170 Victorian car parks with respect to which they could carry out their employment duties, whatever they may be (subject, of course, to their undertakings).  Although this involves calculation and inference on my part to an extent, in the absence of more specific evidentiary assistance from the respondents, it is the best I can do.  In the circumstances, I could not accept the respondents’ submissions that the making of the orders proposed by Wilson would have such an impact as to make it likely that Mr Rush or Mr Sherriff would lose his job, or that S & K itself would be so significantly disadvantaged by the restraints imposed thereby as to provide a discretionary consideration of sufficient force to outweigh the circumstances, favourable to the grant of the relief sought by Wilson, to which I have referred above.  As to the latter aspect, I note that S & K led no evidence to the effect that it could not, without the services of Messrs Rush and Sherriff, effectively compete with Wilson for the business of the site owners, and of the customers, in relation to whom Wilson seeks interlocutory restraints. 

53                  Counsel for the respondents also drew my attention to a number of respects in which, in point of detail, the orders now sought by Wilson under par 9 of the Notice of Motion might travel beyond the relief to which Wilson is presumptively entitled by reference to the causes of action upon which it sues.  In some respects, there is force in these criticisms.  To an extent, it is possible to meet the points raised by the respondents by more limited, and more focussed, expression of the terms in which any orders might be made.  In other respects, I consider this is a case in which the approach referred to by Thomas J in the Queensland Court of Appeal in Slevin v Associated Insurance Brokers of Australia (Qld) Pty Ltd (1996) 40 AILR 9-049 might be taken:

It might therefore seem at first glance that the ambit of the restraint is too wide. However, counsel for the appellant was unable to articulate any practical way in which an alternative restraint could be formulated so that the appellants would be prevented from obtaining an advantage from use of the confidential information which the respondent's case suggests they have misused. We are concerned here with the form of an interlocutory injunction which is intended to preserve a situation affecting the parties so that the least inconvenience will occur before the matter can be authoritatively resolved. In these circumstances it is sometimes necessary that the Court make a robust order to restrain an apparent wrong rather than make no order at all on the ground that a perfect order cannot be formulated.

54                  Another of the criticisms which the respondents made of par 9 of the Notice of Motion as varied was that Mr Rush or Mr Sherriff might find himself in contempt of court by, for instance, soliciting the business of a person who happened to be a site owner or Wilson customer when he (Mr Rush or Mr Sherriff) was wholly ignorant of that circumstance.  I accept the force of that criticism.  I consider that the problem can be resolved by excepting from the operation of such orders as I would otherwise be minded to make a situation in which the respondent bound thereby believed on reasonable grounds that the person whose business was being solicited (etc) was not such an owner, customer etc.  Counsel for the respondents submitted that such an expedient would in effect reverse the onus of proof in future contempt proceedings, and thus should not be adopted.  I recognise that, as a practical matter, the exception would work in this way, but I was referred to no authority which would preclude me from taking such an approach.  I consider it would be appropriate in the circumstances of the present case. 

55                  For reasons which I have attempted to explain, I consider that Wilson has a prima facie case of obvious strength, that damages are unlikely to constitute a remedy which would be entirely adequate should Wilson succeed at trial, and that the balance of convenience otherwise favours the imposition of the restraints now sought.  Upon Wilson offering the usual undertaking as to damages (which it has) I propose to grant injunctions broadly as sought by Wilson, but subject to some fine tuning to meet the criticisms of the respondents. 

56                  S & K did not raise any objection in point of principle to the relief sought in par 10 of the Notice of Motion.  It criticised the drafting of that paragraph, as a result of which counsel for Wilson handed up an amended version of the relief sought, such that the text subsequent to the word “applicant” (where first appearing) became the following:

… (with a copy of correspondence between the Applicant and Independent Computer Expert to be provided to the Respondents), inform the Applicant of the original path and the naming convention used to identify the relevant source computer and/or source media, and where possible the link files relating to that Listed Thing.

Subject to that variation, S & K did not oppose the making of that order. 

57                  Messrs Rush and Sherriff did, however, oppose the making of any order along the lines sought by par 10 of the Notice of Motion.  It was submitted by counsel for Mr Rush that an order in those terms would have the effect of requiring the independent expert to conduct an investigation with respect to the characteristics of the listed things which he discovered as a result of his search.  It was submitted that, if Wilson wanted to know these details, it could engage its own expert for the purpose.  I do not agree that these are valid criticisms of the orders sought by Wilson.  We are here concerned with documents in an electronic form.  If the electronic expression of those documents contains information as to source of the kind referred to in the order sought as varied, that information should be regarded as part of the listed things disclosed by the independent computer expert’s search.  In all cases, the documents have come from the custody of S & K.  That is to say, par 10 of the Notice of Motion as varied is not concerned with a document coming from the custody of Mr Rush or of Mr Sherriff.  I can see no objection to the independent computer expert being asked to pass across to Wilson particulars of this feature of the documents turned up by his search and, since S & K itself raises no protest, I propose to make an order in the terms sought. 

58                  In response to Wilson’s application for the order set out in par 11 of the Notice of Motion, S & K said that it would pay the independent computer expert’s reasonable costs of taking the steps contemplated by par 1(b) of each of its permanent and interlocutory undertakings.  Wilson appeared to regard this as a satisfactory resolution of par 11 of the Notice of Motion, given that those parts of the two undertakings have effectively obviated the need for, and correspond broadly with, the provisions sought in par 2 of the Notice of Motion.   I shall make an order as proposed by S & K.

59                  I shall hear the parties as to costs. 

Associate:

Dated:         27 October 2008