FEDERAL COURT OF AUSTRALIA

APT Technology Pty Ltd v Aladesaye, In the matter of ATP Technology Pty Ltd [2014] FCA 966

IN THE MATTER OF APT TECHNOLOGY PTY LTD (ACN 070 670 325)

UPON the plaintiff by its Counsel undertaking to the Court:

   (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 Orders 1, 2 and 3 below, or any of them, or any continuation (with or without variation) thereof;

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

THE COURT ORDERS THAT:

1.    Up to and including 5 February 2015, or until earlier further order, the defendant whether by himself or his servants or agents or howsoever otherwise be restrained from directly or indirectly canvassing, soliciting or dealing with, counselling, procuring or assisting another person to canvass, solicit or deal with any client of the plaintiff.

2.    Up to and including the final hearing of this proceeding, or until further order, the defendant whether by himself or his servants or agents or howsoever otherwise be restrained from directly or indirectly using or disclosing any confidential information or intellectual property belonging to the plaintiff, to any person, other than for the purpose of complying with these orders.

THE COURT NOTES THAT, in Orders 1 and 2 above:

(i)    Client means any person or entity that was a client of the plaintiff at any time between 15 September 2008 and 15 June 2014.

(ii)    Confidential information means all data, details, plans, designs, computer software, figures, financials, costings, developments, results, technical advice, trade secrets, samples, specifications, formulae, ideas, drawings, concepts, technology, manufacturing processes, intellectual property rights, documents, commercial knowledge, human resources information, marketing information, business information, Board Minutes, corporate records and any other proprietary information of the plaintiff ("the Information") whether in documentary, visual, oral, machine-readable or other form together with all copies, extracts, samples, materials, equipment, media, inventions, computer hardware, videos, compact discs, CDs, CD-Roms or other items containing or referring to any of the Information which is not in the public domain (except as a result of a failure to comply with an obligation to maintain confidentiality), irrespective of how it is known by the Defendant or in his possession.

(iii)    Intellectual property means all inventions, improvements, designs, creations and other developments relating to or deriving from any of the business systems or technology used by the plaintiff at any time during the defendant’s employment.

THE COURT ALSO ORDERS THAT:

3.    Up to and including the final determination of this proceeding, or until further order, the defendant keep accounts of all business conducted by him under the business names “Advanced Vibration & Reliability Engineers”, AVRE or VIN.

4.    The costs of and incidental to the Interlocutory Process filed by the plaintiff on 18 July 2014 be the plaintiff’s costs in the proceeding.

5.    The final hearing of the proceeding be expedited.

6.    The proceeding be listed for further directions before Foster J at 9.30 am on 8 October 2014.

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

IN THE MATTER OF APT TECHNOLOGY PTY LTD (ACN 070 670 325)

REASONS FOR JUDGMENT

Introduction

1    The plaintiff (APT) carries on the business of providing mechanical engineering consultancy services throughout Australia.

2    The defendant was employed by APT in its Adelaide office throughout the period from mid-September 2008 until 16 June 2014. On 16 June 2014, he was summarily dismissed.

3    The defendant was dismissed because:

(a)    Since about January 2013, he had been conducting a rival business called “Advanced Vibration & Reliability Engineers” (AVRE) in competition with APT’s business in Adelaide in breach of his employment contract with APT and probably in breach of other duties owed by him to APT; and

(b)    Both during his employment with APT and after the termination of that employment, he made use of APT’s confidential information in breach of an express term of his employment contract and in breach of general law and statutory duties of confidence owed by him to APT.

4    The defendant does not dispute that he conducted the business of AVRE from early 2013 in competition with APT’s business in Adelaide. Nor does he dispute that, for the purposes of and in connection with that business, he used and disclosed APT’s confidential information and has continued to do so since the termination of his employment. However, he claims that, by the end of July 2014, he had ceased using that information.

5    On 18 July 2014, APT commenced the present proceeding. Its claims for final relief are made in an Amended Originating Application filed on 18 July 2014. Those claims are supported by a Statement of Claim filed on the same day. By way of final relief, APT claims:

(a)    A declaration that the defendant breached clauses 2, 15 and 16 of his employment contract with APT and damages for such breaches. Clause 2 of that contract provided that the defendant was to devote all of his time and attention to the performance of his duties as APT’s employee and to do so diligently. It also required the defendant to use his best endeavours to promote APT’s commercial aims and objectives and to refrain from doing any act or thing which might adversely affect APT’s present or future interests. Clause 15 was an express prohibition on the defendant using APT’s confidential information. Clause 16 governed the disposition of inventions and designs used by the defendant during the course of his employment.

(b)    A declaration that the defendant breached fiduciary duties owed by him to APT and damages, or, in the alternative, an account of profits, or, in the alternative, equitable compensation for such breaches.

(c)    A declaration that the defendant breached his equitable duty of confidence owed to APT and appropriate injunctive and pecuniary relief on account of such breaches.

(d)    A declaration that the defendant breached his common law duty of fidelity and good faith owed to APT as its employee and damages for such breaches.

(e)    Compensation for the defendant’s breaches of s 182 and s 183 of the Corporations Act 2001 (Cth) (Corporations Act).

(f)    Damages or an account of profits for infringing APT’s copyright in its reports to clients, business documents and other documents in its database.

(g)    Orders for the delivery up and destruction of APT’s confidential information in the possession of the defendant.

(h)    Permanent injunctive relief restraining the defendant from using or disclosing to any person any confidential information or intellectual property belonging to APT.

(i)    An additional injunction restraining the defendant until 16 June 2015 from directly or indirectly canvassing, soliciting or dealing with, or counselling, procuring or assisting another person to canvass, solicit or deal with any client of APT.

6    By Interlocutory Process filed on the same day that the present proceeding was commenced, APT sought:

(a)    An order requiring the defendant to deliver to APT’s solicitors various classes of documents evidencing the defendant’s and AVRE’s dealings with APT’s existing clients and prospective clients.

(b)    An order requiring the defendant to deliver up to APT any confidential information and intellectual property in physical form which is the property of APT.

(c)    An order requiring the defendant to delete and to destroy all electronic copies of confidential information and intellectual property which is the property of APT from any computer, telephone or other electronic device.

(d)    An order requiring the defendant to file an affidavit deposing to his strict compliance with the requirements of Orders (a), (b) and (c) above.

(e)    Interlocutory injunctions restraining the defendant up to and including the final hearing or until further order from dealing with APT’s existing clients or APT’s prospective clients and also restraining the defendant from using APT’s confidential information and intellectual property.

7    The matter was initially returned before the Corporations Duty Judge. On a subsequent occasion, the Corporations Duty Judge fixed the hearing of APT’s Interlocutory Process before me on 25 August 2014.

8    At that hearing, APT informed the Court that, given that orders for delivery up and destruction had been made on 31 July 2014, it was no longer necessary for it to pursue further the claims for relief made by it in its interlocutory process which I have described at [6](a) to (d) above and that the only claims for relief which remained for determination by the Court were the claims described at [6](e) above being APT’s claim for interlocutory injunctive relief pending the final hearing of the matter.

9    After the hearing before me had concluded, APT submitted a draft of the interlocutory injunctions which it ultimately pressed the Court to grant. The draft submitted to me after the hearing was a revised form of the injunctions claimed by APT in its Interlocutory Process. The interlocutory injunctions now sought by APT are in the following terms:

1.    Upon the Plaintiff by its counsel giving the usual undertaking as to damages, until further order of the court, the Defendant (whether by himself or his servants or agents or howsoever otherwise) be restrained from directly or indirectly:

(a)    canvassing, soliciting or dealing with, or counselling, procuring or assisting another person to canvass, solicit or deal with any client of the plaintiff; and

(b)    using or disclosing any confidential information or intellectual property belonging to the plaintiff, to any person, other than for the purpose of complying with these orders.

2.    The proceedings be stood over for Directions at 9.30 am AEST on __ September 2014.

NOTE - In this order:

‘Client’ means any person or entity that was a client of APT Technology Pty Ltd between 15 September 2008 and 16 June 2014.

‘confidential information’ ” means all data, details, plans, designs, computer software, figures, financials, costings, developments, results, technical advice, trade secrets, samples, specifications, processes, formulae, know-how, ideas, drawings, concepts, technology, manufacturing processes, intellectual property rights, documents, commercial knowledge, human resources information, marketing information, business information, Board Minutes, corporate records and any other proprietary information of the Company ("the Information") whether in documentary, visual, oral, machine-readable or other form together with all copies, extracts, samples, materials, equipment, media, inventions, computer hardware, videos, compact discs, CDs, CD-Roms or other items containing or referring to any of the Information which is not in the public domain (except as a result of a failure to comply with an obligation to maintain confidentiality), irrespective of how it is known by the Defendant or in his possession.

‘intellectual property’ means all inventions, improvements, designs, creations and other developments relating to or deriving from any of the business systems or technology used by the Plaintiff at any time during the Defendant’s employment or within a reasonable time thereafter, shall be the property of the Company and shall constitute Confidential Information.

10    The differences between the form of the injunctions originally sought by APT in its Interlocutory Process and the form of the injunctions now sought by it in its revised draft may be summarised as follows:

(a)    Prospective clients have been removed from the definition of “client” with the consequence that the restraint upon the defendant now sought is a restraint preventing him from contacting existing clients only.

(b)    Confidential information is specifically defined. The definition reproduces the defintion of confidential information found in cl 15 of the defendant’s contract of employment with APT but deletes therefrom the concepts of know-how and processes.

(c)    Intellectual property is now specifically defined. The definition is the definition of that expression found in cl 16 of the defendant’s employment contract with APT.

11    The defendant accepts that APT has made out a prima facie case or serious question to be tried, at least in relation to its contract claims, and that the balance of convenience and justice favours the grant of appropriate interlocutory injunctions. However, he does not agree that the terms of the injunctions sought by APT are justified. He argues for different and substantially less restrictive injunctions. He says that the appropriate order is an order which restrains him from directly or indirectly using or disclosing to any person APT’s database containing data collected by it over the years in respect of clients’ machinery and reports made to clients in respect of that machinery other than for the purpose of complying with the injunctions themselves.

12    Therefore, the differences of substance between the parties’ respective positions are:

(a)    APT seeks to restrain the defendant from dealing with its clients whereas the defendant does not accept that such a restraint is either necessary or appropriate; and

(b)    APT seeks to restrain the use or disclosure of both its confidential information (as defined in the defendant’s employment contract with APT but excepting therefrom knowhow and processes) and its intellectual property. Whereas the defendant says that the restraint should relate only to the database which I have described at [11] above.

13    By these Reasons for Judgment, I determine APT’s claim for interlocutory injunctive relief.

APT’S cASE

14    APT relied upon three affidavits affirmed by Shadia Cavalli on 18 July 2014, 28 July 2014 and 21 August 2014 respectively. Ms Cavalli is APT’s office manager. She has personal knowledge of some matters dealt with by her in those affidavits and testified on information and belief in relation to other matters.

15    The following narrative is taken from Ms Cavalli’s affidavits and from other documents tendered by APT. It describes APT’s case as disclosed in the evidence before me.

16    APT is a national mechanical engineering consultancy organisation which has been in business since 1993. It provides machine condition monitoring solutions, testing, engineering improvement and analysis for its clients, using highly specialised equipment. The services provided by APT to its clients are designed to increase the reliability and productivity of those clients’ machinery and equipment.

17    In order to provide an engineering report for its clients, APT first conducts an audit of the client’s plant and equipment. The client’s equipment is listed, numbered and assessed by APT. This information is then entered into a database maintained by APT. APT’s database includes details of the various measurement points on each item of machinery which is tested.

18    The testing equipment used by APT is supplied to APT with appropriate software. This software takes the data from the testing equipment and converts it into a readable format. It is the data created in this fashion that is then analysed in order to provide commentary and advice to clients in the engineering reports supplied by APT to those clients. Once a database is set up for a client, the testing instrument can then be used to download additional information to a computer, from where the results can then be analysed. It is for these reasons that single measurements are not as important as historical information which can be used to discern changes in the machinery and equipment over time.

19    The form of the analysed data and subsequent reports have been developed by APT and its employees over time. The form of that material has improved over the years.

20    Reports generated by APT are user-friendly and easy for a client to read, interpret and understand. They provide information to the clients which assists them to make decisions about the health and productivity of particular machines and items of equipment.

21    The historical information held by APT in its database is very valuable to APT’s business.

22    In addition to providing its clients with engineering and other reports which summarise the findings of the testing carried out by APT, APT also provides to its clients tailored advice based upon the results of that testing.

23    Prior to 2012, APT used testing equipment and software supplied by a German company called Pruftechnik. APT was the sole distributor of Pruftechnik equipment in New South Wales and had distribution rights in other States including South Australia. Since 2012, APT has been using equipment and software provided by SPM Instruments, although it still owns and operates the Pruftechnik system in its business.

24    At pars [19]-[26] of her first affidavit, Ms Cavalli said:

19.    APT now operates solely out of Sydney.

20.    Until 28 February 2014, APT leased and operated an office in Adelaide at 238 St Vincent Street, Port Adelaide.

21.    Some of the clients which APT provided services to in Adelaide included PepsiCo, Allwater, Veridian, Electrolux, Transfield and Challenger Gold Mine.

22.    From 1 March 2014 to 16 June 2014 APT’s Adelaide branch operated from the home office of the respondent at 216 Grand Junction Road, Pennington, South Australia.

23.    From 17 June 2014 to date APT has not had an Adelaide office and has been forced to attempt to run the Adelaide operations from Sydney, however this has been difficult due to clients in the South Australian market preferring local suppliers, and the loss of APT’s clients in South Australia since early 2013.

24.    APT is considering hiring a replacement engineer to be based in Adelaide, however this would not be something APT would do without the interlocutory relief sought because APT could not compete with the respondent while he retains and uses APT’s confidential information to service APT’s clients.

25.    APT operates nationally but predominantly in NSW and South Australia. At times, APT will use consultants to service other states if there are particular projects that arise in other states.

26.    The Adelaide office, while it was operational, only used the Pruftechnik equipment.

25    The defendant commenced his employment with APT in mid-September 2008. He was employed to be APT’s main engineer and sole point of contact for business in Adelaide. According to Ms Cavalli, the defendant was the face of APT’s Adelaide business.

26    On 8 June 2009, APT and the defendant signed an employment agreement. That agreement was in the form of a letter dated 27 March 2009 sent by APT to the defendant containing the terms of his employment which letter was ultimately countersigned by the defendant on 8 June 2009.

27    Clauses 2, 15 and 16 of that agreement are presently relevant. Those clauses were in the following terms:

2.    Your Duties

    You must:

(a)    diligently perform the duties specified in the attached position description in Schedule B (“the Duties”) and such other duties the Company may from time to time reasonably require;

(b)    obey, observe and comply with all of the Company’s reasonable and lawful directions, rules, policies and procedures. Although you must comply with Company policies, they do not form part of your contract;

(c)    use your best endeavours to promote the Company’s commercial aims and objectives and refrain from doing any act or thing which will or may adversely affect the Company’s present or future interests; and

(d)    devote the whole of your time, attention and skills to the Duties and must not whilst in the Company’s employment take on any other employment, engage in any other business activity, or be involved either directly or indirectly in any business or activity similar to and in competition with that conducted by the Company, unless otherwise agreed with the Directors of the Company.

…

15.    Confidential Information

    “Confidential Information” means all data, details, plans, designs, computer software, figures, financials, costings, developments, results, technical advice, trade secrets, samples, specifications, processes, formulae, know-how, ideas, drawings, concepts, technology, manufacturing processes, intellectual property rights, documents, commercial knowledge, human resources information, marketing information, business information, Board Minutes, corporate records and any other [proprietary information of the Company (“the Information”) whether in documentary, visual, oral, machine-readable or other form together with all copies, extracts, samples, materials, equipment, media, inventions, computer hardware, videos, compact discs, CDs, CD-Roms or other items containing or referring to any of the Information which is not in the public domain (except as a result of a failure to comply with an obligation to maintain confidentiality), irrespective of how it is known by you or in your possession.

    You acknowledge and agree that you will be afforded access to, and acquire knowledge of the Confidential Information of the Company. You agree that you must not use the Confidential Information for any purpose other than to perform the Duties and you must not disclose to others or independently use any such Confidential Information without the written authorisation of the Company. This obligation is binding, has worldwide effect and shall continue indefinitely, subject to:-

(a)    the Confidential Information being in the public domain (except as a result of failure to comply with the obligation in this clause);

(b)    the Confidential Information being required by law to be disclosed by the Employee; and

(c)    the Confidential Information being known and proven to have been known to the Employee prior to its disclosure to the Employee.

You acknowledge the necessity of protecting the Company’s Confidential Information and agree that any disclosure in breach of this Agreement may cause damage to the Company.

You must not make any written notes, copy, reproduce, retain, store record, computerise, document or duplicate any part of the Confidential Information which appears in written, computerised or other recorded form, except as required in fulfilment of the Duties.

If you are uncertain whether any information comprises part of the Confidential Information then you must seek direction from the Company before divulging the information to any other person.

16.    Restrictions on the Use of Intellectual Property

    All inventions, improvements, designs, creations and other developments relating to or deriving from any of the business systems or technology used by the Company at any time during your employment or within a reasonable time thereafter, shall be the property of the Company and shall constitute Confidential Information. You must notify the Company immediately of any invention, design, discovery or publication by you and must sign any documents and take any action which may be necessary to enable the Company or its nominees, to apply for a patent, registered design or any other intellectual property protection. If you fail to do so, you hereby authorize the Company’s Managing Director to act as your agent to perform any necessary acts.

28    On 1 July 2011, the defendant was promoted to the position of Reliability Manager with APT. This role had national responsibilities. In this role, the defendant’s key duties were to identify and secure business opportunities for APT with existing and new clients. The defendant received a substantial salary package as a result of this promotion.

29    By January 2014, Mr Soper, APT’s General Manager, had become concerned that APT’s revenue from its Adelaide operations had been in decline for some time. On 29 January 2014, Mr Soper travelled to Adelaide in order to discuss the poor performance of APT’s Adelaide operations with the defendant. Mr Soper met with the defendant at the end of January 2014. According to Ms Cavalli, the defendant told Mr Soper at this meeting that he did not wish to leave APT and was of the view that, with some changes, he could keep the business going and restore it to a reasonable level of profitability. He agreed to take a salary reduction. The variations to the defendant’s remuneration and duties were documented in a letter to him dated 31 January 2014.

30    APT’s Adelaide office was closed on 28 February 2014 and APT’s Adelaide operations were thereafter conducted by the defendant from his home in a suburb of Adelaide.

31    In February/March 2014, the defendant travelled to Nigeria. While he was away Ms Cavalli discovered that he had established a business called “Vibration Institute of Nigeria” (VIN) which was providing machine conditioning and monitoring training to industry personnel in Nigeria. Ms Cavalli reported this fact to Mr Soper. Mr Soper raised the matter with the defendant who assured him that all activities relating to VIN were being conducted outside normal business hours and that VIN was operating only in Nigeria.

32    On 30 May 2014, the defendant submitted his resignation to Mr Soper. In his letter of resignation, the defendant gave four weeks’ notice to APT.

33    On 11 June 2014, Mr Soper travelled to Adelaide in order to conduct meetings with APT’s clients in light of the defendant’s resignation. During one of the meetings which he had at this time, being a meeting with a representative from the All Water Joint Venture, Mr Soper mentioned a piece of work which was to be undertaken by APT for that joint venture. The person with whom he was speaking told Mr Soper that: “Matthew has already done it.” When this was said, Mr Soper was surprised. He did not understand what the representative with whom he was speaking meant by this remark.

34    Mr Soper then asked the defendant to hand in the mobile phone and laptop which APT had provided to him.

35    On 13 June 2014, Mr Soper returned to Sydney with the phone and the laptop. Ms Cavalli switched on the phone in order to divert the number to the APT office line. Emails began to appear on the screen, including one from a client sending an account establishment form. That client already had an account established with APT.

36    Thereafter, Ms Cavalli began to undertake a more thorough investigation of the emails on the phone. She discovered that three email addresses were connected to the mobile phone which had been used by the defendant. There were hundreds of emails from an AVRE Engineers email address. Ms Cavalli reviewed all of the emails on the phone and discovered that:

(a)    From January 2013 until 12 June 2014, the defendant had been dealing with and providing services to APT’s clients through AVRE;

(b)    From January 2013 until 12 June 2014, the defendant (through AVRE) had been performing machine condition monitoring solutions, engineering improvement and analysis for APT’s clients and provision of engineering reports and other services through AVRE;

(c)    The reports produced by the defendant through AVRE were formatted in almost identical terms to APT’s engineering reports;

(d)    Other documents, including invoices and quotations, were very similar to the counterparts of those documents used by APT;

(e)    A number of APT’s clients had done business with AVRE;

(f)    A large number of transactions and activities connected to VIN had taken place during business hours;

(g)    A number of APT’s potential clients had been solicited by the defendant on behalf of AVRE; and

(h)    The defendant had taken over the lease of the Adelaide office premises vacated by APT on 28 February 2014.

37    On 27 May 2014 and again on 28 May 2014, the defendant had forwarded several emails from his APT email address to his personal email account and to AVRE’s email account. These emails contained confidential information belonging to APT, including notes and records of confidential discussions between Mr Soper and the defendant about business opportunities in Adelaide, template documents, client reports, and information about the sale of APT’s office and Pruftechnik equipment previously used in its Adelaide operations.

38    It also appears that the defendant purchased the Pruftechnik equipment from APT without disclosing the fact that he was the purchaser. Apparently, whilst employed the defendant had used that equipment and other APT facilities to further AVRE’s and VIN’s business.

39    On 16 June 2014, Mr Soper and Ms Cavalli called the defendant and confronted him with what they had learned about his activities. For the first 20 minutes or so of that conversation, the defendant denied any wrongdoing. Eventually, he confessed to operating the AVRE business in competition with APT. He said:

I take responsibility for everything, invoicing, doing jobs during business hours while employed by APT. I did it all. It’s my fault and I’m the one behind it. Blame me for it, penalise me for it. I say yes to everything. I’m chasing your clients, I’m going to go after them all, I’m going to take all your old customers and I’m going to destroy the market.

40    Mr Soper then immediately terminated the defendant’s employment with APT.

41    Immediately after 16 June 2014, APT endeavoured to re-engage with its Adelaide clients. It has only been partially successful in doing so. Some clients have simply ignored its overtures.

42    On 11 July 2014, APT’s solicitors wrote to the defendant requesting undertakings that he cease dealing with APT’s clients for a period of 12 months and deliver up all of APT’s confidential information and intellectual property held by him.

43    Although the defendant was prepared to provide an undertaking on a temporary basis, the terms of the undertaking which he was prepared to provide were not satisfactory to APT. The defendant had also insisted that the provision of the undertaking which he had offered would be in full and final settlement of all claims against him. This was a matter that was also unacceptable to APT.

44    In the period from early 2013 until shortly after the commencement of the present proceeding, the defendant had possession of and used to his advantage and to the disadvantage of APT the following information:

(a)    The identity of APT’s clients and specific information relevant to the services performed by APT for those clients;

(b)    APT’s databases;

(c)    A collection of engineering and other reports.

(d)    Details of APT’s business plans and forecasts.

(e)    Knowledge of APT’s charges to its clients.

(f)    Use of the Pruftechnik equipment and its associated software.

45    Ms Cavalli said that the continued use by the defendant of APT’s confidential information will potentially cause APT irrecoverable losses.

46    The defendant has continued to deal with APT’s clients since his employment with APT was terminated on 16 June 2014.

47    At pars 81-88 of her first affidavit, Ms Cavalli said:

81    The respondent’s business has had an unfair advantage since around January 2013 in that the respondent has:

(a)    Relied on APT’s relationships developed with its clients to forge a relationship between his new business and the clients to the exclusion of APT.

(b)    Used APT’s equipment, resources, confidential information and intellectual property to perform work for clients through his own business, AVRE.

82    APT has already suffered very substantial damage and losses by the stagnation of business from clients that the respondent, through AVRE, has been dealing with. For example, PepsiCo has not dealt with APT since August 2013, despite PepsiCo being a client of APT’s since 2010.

83    The continued use of APT’s confidential information by the respondent will potentially cause APT irrecoverable losses. In particular, the respondent has been able to charge clients up to 50% less than what APT might charge, based at least in part on the fact that the respondent has had little to no start-up costs for his business, due to his reliance on APT’s customer connections, confidential information, intellectual property and what I have assumed is the improper purchase of testing equipment from APT. APT is unable to compete with the respondent while he charges these sorts of rates.

84    The respondent has continued to deal with APT’s clients since termination. The respondent invoiced the client Allwater for work on 25 June 2014. This work likely relates to work foreshadowed in emails between the respondent and Allwater which scheduled work on 17, 18, 19, 20 and 23 June 2014. Annexed and marked “SC12” is a copy of the respondent’s invoice to Allwater dated 25 June 2014.

85    Annexed and marked “SC13” are copies of invoices AVRE has been invoicing to clients of APT’s taken from the emails discovered on the respondent’s phone.

86.    On 17 July 2014 I was told and verily believe that Mr Soper had a conversation with Peter Watson from the client Allwater. Mr Watson indicated that he thought the respondent had been at Allwater’s site to perform work some time in the week commencing 7 July 2014.

87    On 17 July 2014 I was told and verily believe that SGS, a supplier of APT’s received a credit application from AVRE on 16 July 2014.

88    The respondent’s dealings with APT’s clients continue to undermine APT’s business in South Australia and restricts [sic] APT’s opportunity to re-engage with the clients that have ceased or reduced business with APT as a result of instead dealing with AVRE.

48    In her second affidavit, Ms Cavalli testified that:

(a)    After the sale of the Pruftechnik testing equipment from APT to AVRE, the defendant retained the Pruftechnik software and the licence associated with that software notwithstanding the fact that the licence belongs to APT and the fact that APT never transferred that licence to him or to AVRE at the time the testing equipment itself was sold. Nor did the defendant or AVRE pay any amount for the software licence.

(b)    An investigation by APT’s IT technician of the defendant’s laptop revealed that a number of client reports prepared by APT and graphs depicting data obtained from the Pruftechnik equipment were forwarded to the defendant’s personal email address.

(c)    APT is missing a number of databases for clients which were under the defendant’s direct control before his appointment was terminated.

(d)    There is a large amount of data missing from the databases relating to some clients. Ms Cavalli suspects that this is because the defendant has been performing work for these clients on a computer of his own using APT databases.

49    In her third affidavit, Ms Cavalli provided responses to various matters raised by the defendant in two affidavits affirmed by him on 15 August 2014 and 22 August 2014 respectively. It is not necessary to traverse these responses in detail.

50    In addition, Ms Cavalli set out her reasons for thinking that the defendant had not fully complied with his obligation to answer a Notice to Produce served by APT upon him and with the orders of the Court made on 23 July 2014 requiring the delivery up of certain documents and the filing of an affidavit of disclosure. In particular, Ms Cavalli said that the defendant did not appear to have produced or delivered up to APT:

(a)    Client databases for Veridian, Electrolux, PGH, Mobil and Allwater Turbine House; and

(b)    AVRE databases for all other existing or prospective clients for whom APT had done or hoped to do work, other than PepsiCo and Allwater.

51    Ms Cavalli also believes that the defendant has an additional computer on which he may have stored APT’s confidential information.

52    Ms Cavalli also said that the clients which APT has lost have, for the most part, been lost to AVRE.

The Defendant’s Evidence

53    In his affidavits, the defendant accepted that one of his responsibilities in the latter years of his employment with APT was to “… prospect for new and repeat business”. He claimed nonetheless that he did not participate in APT’s business decisions either as to its business as a whole or as to its Adelaide operations. I took this to mean that the defendant was asserting that he was not in as senior a position as APT had suggested.

54    He accepted that, from January 2013, he had been conducting the AVRE business from premises in Adelaide which had previously been the business premises of APT. He said that the AVRE business was providing his only source of income at present. He said that the practical effect of any injunction prohibiting him from contacting clients of APT would be to close his business and leave him without any income.

55    The defendant claimed that, on or about 18 June 2014, following the termination of his employment with APT, he had returned APT’s property by courier to its Sydney headquarters. He said that he returned stationery, file records, promotional material and other physical material, including the laptop computer which had been supplied to him by APT and the mobile phone also supplied to him by APT.

56    At par 17 of his first affidavit, the defendant said:

I had retained a copy of APT’s client base on my own computer but I have now, since the institution of these proceedings, deleted that database and on 29 July 2014 I provided APT by courier a USB flash drive which contains a complete copy of that database.

57    The defendant then affirmed that he had delivered his own computer to the office of APT’s solicitors on 6 August 2014 in order to enable that computer to be examined to see whether any data belonging to APT remained on that computer.

58    It appears from this evidence that the defendant was using a second computer (that is to say, an additional computer to that which had been supplied by APT) but that the second computer had been submitted to APT’s solicitors for examination on 6 August 2014.

59    The defendant also argued that he had only done business with those clients of APT who were dissatisfied with APT, particularly in respect of the charges being made to them by APT. He seemed to be suggesting that APT had already lost the business of those clients because its charges to them had not been competitive.

60    The defendant denied that he had done work for VIN during ordinary business hours whilst employed by APT. He also denied making the admissions which Ms Cavalli said that he had made in the telephone conversation with Mr Soper and her which took place on 16 June 2014. He also claimed that, by 15 August 2014, he had delivered up all of APT’s confidential information and intellectual property held by him.

61    At par 39 of his first affidavit, the defendant said:

The volume and complexity of the data derived from the machinery tested is such that I have no memory of past test results for any particular machine owned by one of APT’s customers. Hence without the data files now, I would have to test afresh and report to an owner of machinery without the benefit of historical results. As I presently have no access to any information of APT that could be considered confidential, I am in no more advantageous a position in dealing with and securing the custom of potential customers in the area of machinery vibration analysis services in South Australia than APT or any of its competitors.

62    In his second affidavit, the defendant said that, although, in his view, the software associated with the Pruftechnik equipment was included in the purchase of that equipment which was made by AVRE from APT, he was prepared to return the software to APT and purchase the relevant software on his own account.

63    In addition, he said that the reason that, on 15 August 2014, he had produced additional documents in answer to the Notice to Produce served upon him by APT was that he had earlier attempted to produce those documents electronically but had been unable to do so because the emails had bounced. He said that, in light of that circumstance, he had decided to print out the relevant emails and send them by post and that this had taken some considerable time. In addition, he explained that the late production of additional emails on 15 August 2014 was the result of further consideration being given to the requirements of the Notice to Produce by him in conjunction with his new solicitor.

Consideration

64    In Samsung Electronics Company Pty Ltd v Apple Inc (2011) 217 FCR 238 at 254–261 [44]–[70], the Full Court explained the principles which govern the grant of interlocutory injunctive relief. In particular, at 255– 56 [51]–[53], the Full Court said:

51    It is true that an applicant for interlocutory relief need not necessarily show that its case is, on balance, likely to succeed. However the exercise described in O'Neill may lead to the conclusion that in order sufficiently to recognize the serious consequences for the respondent of the grant of interlocutory relief, the applicant should reasonably be expected to demonstrate such likelihood. Where the merits and the question of convenience are fairly evenly balanced, there will be no injustice in requiring that the party seeking relief demonstrate good prospects of success before imposing almost certain prejudice on the other side.

The Correct Approach

52    In Lenah Game Meats, a majority of the High Court held that, where an interlocutory injunction is sought (inter alia) in respect of private rights, it is necessary to identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought. As Gleeson CJ said at [15] (p 218):

“If the respondent cannot show a sufficient colour of right of the kind sought to be vindicated by final relief, the foundation of the claim for interlocutory relief disappears.”

See also [8] to [21] (pp 216-220) (per Gleeson CJ); [59] to [61] (pp 231-232) (per Gaudron J); and [86] to [92] (pp 239-242); [98] to [100] (pp 244-246); and [105] (p 248) (per Gummow and Hayne JJ). At [10] (p 216), Gleeson CJ also specifically cited with approval Spry, The Principles of Equitable Remedies (5th edn, 1997) (pp 446-456).

53    At [13] (p 218), Gleeson CJ expressly approved the following passage from the judgment of Mason ACJ in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153:

In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.

65    The Full Court went on to explain the relevant principles in greater detail by reference to the High Court decisions of Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 and Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57.

66    At 259-261 [59]-[68], the Full Court said:

59    Both Beecham and American Cyanamid were cases of patent infringement. The appeal in each case resulted in the grant of an interlocutory injunction in favour of the patentee. The critical integer in the test explained in Beecham is the need for the Court to assess the strength of the probability of ultimate success on the part of the plaintiff. The strength of that probability will depend upon the nature of the rights asserted and the practical consequences likely to flow from the grant of the injunction which is sought. The emphasis in Beecham is on the need to assess the plaintiff's probability of success at trial. The extent of the strength required will vary from case to case.

60    At [19] in O'Neill, Gleeson CJ and Crennan J said:

“As Doyle CJ said in the last-mentioned case, in all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff's entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction. These are the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. We agree with the explanation of these organising principles in the reasons of Gummow and Hayne JJ. (See [65]-[72], and their reiteration that the doctrine of the Court established in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 should be followed. See also Firth Industries Ltd v Polyglas Engineering Pty Ltd (1975) 132 CLR 489 at 492 per Stephen J; Winthrop Investments Ltd v Winns Ltd [1975] 2 NSWLR 666 at 708 per Mahoney JA; World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 186 per Bowen CJ.)”

61    The requirement that, in order to obtain an interlocutory injunction, the plaintiff must demonstrate that, if no injunction is granted, he or she will suffer irreparable injury for which damages will not be adequate compensation (the second requirement specified by Mason ACJ in Castlemaine Tooheys at p 153) was not mentioned in Beecham. Nor was it referred to by Gummow and Hayne JJ in O'Neill. Nonetheless, Gleeson CJ and Crennan J included that requirement in their articulation of the relevant “organising principles” (at [19] (p 68) in O'Neill). They also agreed with the explanation of those principles given by Gummow and Hayne JJ at [65]-[72] (pp 81-84) in the same case. One way of reconciling the views of Gleeson CJ and Crennan J with those of Gummow and Hayne JJ on this point is to treat “irreparable harm” as one of the matters which would ordinarily need to be addressed in the Court's consideration of the balance of convenience and justice rather than as a distinct and antecedent consideration. This has been the approach taken by some judges (eg Ashley J in AB Hassle v Pharmacia (Australia) Pty Ltd (1995) 33 IPR 63 at 76-77; Gordon J in Marley New Zealand Ltd v Icon Plastics Pty Ltd [2007] FCA 851 at [3]; Kenny J in Medrad Inc v Alpine Pty Ltd (2009) 82 IPR 101 at [38] (p 109); and Yates J in Instyle Contract Textiles Pty Ltd v Good Environmental Choice Services Pty Ltd (No 2) [2010] FCA 38 at [55]-[64]).

62    The assessment of harm to the plaintiff, if there is no injunction, and the assessment of prejudice or harm to the defendant, if an injunction is granted, is at the heart of the basket of discretionary considerations which must be addressed and weighed as part of the Court's consideration of the balance of convenience and justice. The question of whether damages will be an adequate remedy for the alleged infringement of the plaintiff's rights will always need to be considered when the Court has an application for interlocutory injunctive relief before it. It may or may not be determinative in any given case. That question involves an assessment by the Court as to whether the plaintiff would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted (see the discussion of this aspect in Spry, The Principles of Equitable Remedies (8th edn, 2010) at pp 383-389; at pp 397-399; and at pp 457-462).

63    The interaction between the Court's assessment of the likely harm to the plaintiff, if no injunction is granted, and its assessment of the adequacy of damages as a remedy, will always be an important factor in the Court's determination of where the balance of convenience and justice lies. To elevate these matters into a separate and antecedent inquiry as part of a requirement in every case that the plaintiff establish “irreparable injury” is, in our judgment, to adopt too rigid an approach. These matters are best left to be considered as part of the Court's assessment of the balance of convenience and justice even though they will inevitably fall to be considered in most cases and will almost always be important considerations to be taken into account.

64    Gleeson CJ also observed in Lenah Game Meats (at [18] (p 219)), that, where there is little or no room for argument about the legal basis of the applicant's claimed private right, the court will be more easily persuaded at an interlocutory stage that a prima facie case has been established. The court will then move on to consider discretionary considerations, including the balance of convenience and justice. But, as his Honour also observed at [18]:

“The extent to which it is necessary, or appropriate, to examine the legal merits of a plaintiff's claim for final relief, in determining whether to grant an interlocutory injunction, will depend upon the circumstances of the case. There is no inflexible rule.”

65    The resolution of the question of where the balance of convenience and justice lies requires the Court to exercise a discretion.

66    In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the plaintiff if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the plaintiff for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted.

67    As Sundberg J observed in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339 at [15] (p 342), when considering whether to grant an interlocutory injunction, the issue of whether the plaintiff has made out a prima facie case and whether the balance of convenience and justice favours the grant of an injunction are related inquiries. The question of whether there is a serious question or a prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at [416] per Burchett J; Aktiebolaget Hassle v Biochemie Australia Pty Ltd (2003) 57 IPR 1 at [31] (p 10) per Sackville J; Hexal Australia Pty Ltd v Roche Therapeutics Inc (2005) 66 IPR 325 at [18] (p 329) per Stone J; and Castlemaine Tooheys at 154 per Mason ACJ.

68    It may also be necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and the public generally.

67    The Full Court then moved on to consider particular circumstances which might influence the outcome of an application for interlocutory relief to which I need not presently refer.

68    I am satisfied that, on the evidence before me, APT has made out a prima facie case or serious question to be tried in respect of all of the causes of action upon which it relies in the proceeding. The defendant, in breach of his employment contract with APT and in breach of duties owed by him to APT, set up AVRE in competition with APT. He commenced to compete with APT in about January 2013 and proceeded to do so continuously thereafter. Throughout the period from January 2013 to 16 June 2014, the defendant remained in the employment of APT. In addition, there is ample evidence in support of APT’s case that, both during the time that he was employed by APT and after the termination of his employment with APT, the defendant has used and disclosed for his own purposes the contents of APT’s client databases, reports prepared by APT and other business documentation used by APT.

69    Although the defendant has denied making the admissions which Ms Cavalli said he made on 16 June 2014, he has not seriously disputed the fact that he commenced to compete in his own right with APT as long ago as January 2013 and has, until very recently, used and disclosed APT’s confidential information.

70    For present purposes, I need focus only on APT’s prima facie case that the defendant breached clause 15 of his employment contract, that the defendant breached the equitable duty of confidence owed by him to APT and that the defendant breached the fiduciary duties specified at paragraph 11 of APT’s Statement of Claim. I appreciate that there will be an issue at trial as to whether or not the defendant owed any fiduciary duties to APT. However, at this stage of the proceeding, I am satisfied that the evidence led by APT is sufficient to support a case to a prima facie level that the defendant owed such duties (see Bailey & Associates v DBR Australia Pty Ltd [2013] FCA 1341 at [229]-[237]).

71    As I have mentioned at [11]-[12] above, the defendant accepts that APT has established an entitlement to some protection on an interlocutory basis although he argues for more limited injunctions than those which APT seeks.

72    Relying upon the judgment of Goulding J in Faccenda Chicken Ltd v Fowler at first instance (1985) 1 All ER 724 at 731-733, Counsel for the defendant submitted that the subject matter of any injunction should be restricted to APT’s trade secrets. He went on to submit that, in the circumstances of the present case, the injunctions should relate only to APT’s client databases and not to any other allegedly confidential information. He also submitted that it would be inappropriate to restrain the defendant from using his considerable store of knowledge acquired over the years both from the formal education which he has undertaken and from his practical experience in the workforce. In the cases, this store of knowledge has often been called know-how.

73    Finally, Counsel for the defendant submitted that there was no basis whatsoever upon which the Court could restrain the defendant from approaching existing clients of APT or organisations which APT considered to be business prospects.

74    The draft injunctions now proposed by APT accommodate the defendant’s concern in respect of know-how.

75    However, APT persists with its claim that the injunction should not be restricted to APT’s client databases. In addition, APT has abandoned its claim for a restraint on the defendant’s capacity to approach organisations which are not yet clients of APT but are considered by APT to be prospective clients and confined the scope of the injunction concerning solicitation to organisations which had been a client of APT during the period of the defendant’s employment with APT.

76    The conduct to which the defendant has admitted constitutes a flagrant breach of his employment contract with APT and a flagrant breach of the various duties owed by him to APT during the course of his employment. He has pursued his own financial interests without any regard to his responsibilities to his employer. The evidence suggests that he continued to use and to disclose APT’s confidential information even after being confronted with his wrongdoing by Mr Soper and Ms Cavalli and after receiving a solicitor’s letter from APT’s lawyers. In particular, the defendant used APT’s historical data to service APT’s clients during the period of his employment with APT. In addition, apparently without any compunction, so it was submitted by APT, the defendant actively deceived APT during his paid employment by repeatedly assuring APT that he was using his best endeavours to secure business for APT from the very same clients he had already approached and serviced in competition with APT. For reasons not explained by the defendant, he retained a copy of APT’s client database on his own computer. Prior to the commencement of the current litigation, the defendant did not return APT’s confidential information and intellectual property and made false denials about his conduct. Even now, APT has not been able to retrieve from the defendant all of the databases he created or accessed during his employment. There is some basis for thinking that the defendant has not complied with the Notice to Produce served upon him and that he has not complied with the orders of the Court made on 31 July 2014. The defendant continues actively to deal with clients and former clients of APT and continues to use the software associated with the Pruftechnik equipment, although he now says he will cease doing so.

77    In those circumstances, I do not consider that it is appropriate to restrict the subject matter of the confidential information injunction in the way contended for by the defendant. I think that the confidential information restraint should be expressed in the terms sought by APT which, after all, are based upon clause 15 of the defendant’s employment contract with APT with some minor deletions.

78    I now turn to deal with APT’s claim embodied in paragraph 1(a) of its proposed orders, namely, its claim for an interlocutory injunction restraining the defendant from approaching or dealing with organisations which were clients of APT during the period of the defendant’s employment with it.

79    The final relief claimed by APT which is relevant to this claim on an interlocutory basis is the claim for a permanent injunction made in par 9 of APT’s Amended Originating Application being a permanent injunction from dealing with APT’s clients up to and including 16 June 2015.

80    That claim is not directly sourced in the defendant’s employment contract with APT. The defendant’s employment contract contains no express restraint of trade provision. As far as the evidence before me goes, the parties never agreed upon any contractual restraint of trade. In particular, no such agreement was made in respect of the period after the termination of the defendant’s employment with APT.

81    APT relies upon the springboard principle. That principle was referred to and explained by Goulding J in Faccenda Chicken Ltd at 732 (f) – (j) in the following terms:

Much was made in argument of the so-called springboard doctrine, stated in the following terms by Roxburgh J in Terrapin Ltd v Builders’ Supply Co (Hayes) Ltd [1960] RPC 12 as set out in Cranleigh Precision Engineering Ltd v Bryant [1964] 3 All ER 289 at 301, [1965] 1 WLR 1293 at 1317-1318:

‘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.’

The Terrapin case was not one between master and servant, but the spring-board doctrine is nevertheless, in my opinion, applicable in proper circumstances to such a case. The Cranleigh Precision case is itself an example. However, the sphere in which it can be applied as between master and servant is considerably limited by the servant’s freedom, after lawful termination of his employment, to compete with his former employer and to solicit the latter’s customers, unless, of course, he has been restrained by express contract from doing so.

82    The springboard principle was also referred to by Jacobson J in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2005] FCA 130 at [62]-[63]. There, his Honour said:

62    There seems little doubt, at least on the evidence to date, that BGC would obtain a substantial headstart over ICAP by reason of the recruitment of ICAP’s futures desk employees in the circumstances which I have outlined above. In Hospital Products, at 229 – 230, the New South Wales Court of Appeal said that in a footnote to the argument in the UK Court of Appeal in Terrapin, Roxburgh J is recorded as having said the following about the decision in Saltman:

“As I understand it, the essence of this branch of 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 springboard for activities detrimental to the person who made the confidential communication, and springboard it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public… The possessor of the confidential information still has a long start over any member of the public… It is, in my view, inherent in the principle upon which the Saltman case rests that the possessor of such information must be placed under a special disability in the field of competition to ensure that he does not get an unfair start.”

63    After reviewing the authorities on the springboard principle, the New South Wales Court of Appeal in Hospital Products said at 233:

"This review shows that that headstart approach to damages or other relief is not based on some artificial or arbitrary doctrine, to be applied regardless of the facts of the case. It is a principle applied in conformity with the more general principle that a person misusing confidential information must answer for his default according to his gain. A headstart may often be the gain in these cases. If it is the gain, damages will be assessed accordingly and any other relief, such as injunction, will be moulded".

83    In Wilson Parking Australia 1992 Pty Ltd v Rush [2008] FCA 1601, Jessup J was confronted with a case which was not dissimilar to the present case. Two former employees of Wilson Parking had entered into competition with that organisation. It was alleged by Wilson Parking that those employees took from it confidential and commercially sensitive documents, data and other information which they then used for their own benefit in breach of various duties, including the equitable obligation of confidence, ss 182 and 183 of the Corporations Act and contractual confidentiality provisions. There was no contractual restraint of trade in place in that case.

84    At [44]-[47], his Honour said:

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. [His Honour then quoted the well-known passage from Terrapin Ltd to which Jacobson J referred in ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd.]

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.

85    These observations made by Jessup J are apt to be applied in the present case. In the special circumstances of this case, I think that APT is entitled to the additional protection sought by it by means of proposed injunction 1(a). It has an entitlement to have its confidential information protected and not used against it by its former employee who owed contractual, equitable and statutory duties to it during the course of and, in some respects, after, the period of the defendant’s employment with it. The defendant has had a significant head-start over APT in securing the business of its former and existing clients and in servicing them to the detriment of APT. He has used his position as APT’s employee and the possessor of APT’s confidential information to gain a significant advantage over APT in securing the future business of its existing and former clients. A restraint on the defendant’s dealings with those existing and former clients pending the final hearing of this proceeding is justified upon the basis that it is appropriate relief moulded to the circumstances of the case designed to protect APT from the damage already caused to it and its business and likely to be caused to it and its business by reason of the defendant’s breaches of duty. I am sensitive to the desirability of not granting a non-solicitation interlocutory injunction for an indefinite period. Bearing in mind that the final relief sought by APT relates to the period up to and including 16 June 2015, I think that I should limit the period of the non-solicitation injunction which I propose to grant to a period expiring before that date and to a period which sensibly accommodates a final hearing. To this end, I think that the injunction should be expressed to expire on 5 February 2015 or earlier further order. For the same reasons, the final hearing should be expedited.

86    For the reasons which I have already explained, I consider that damages would not be an adequate remedy for the damage already suffered and likely to be suffered in the period after the termination of the defendant’s employment up to and including the final determination of this proceeding.

87    As far as the balance of convenience and justice is concerned, APT has legitimate and reasonable concerns that, if the defendant is free to continue dealing with APT’s existing and former clients pending the final determination of this proceeding, the damage will be so severe and irreparable that little could be done to reverse its impact. Against this, all that the defendant puts forward is the fact that the business which he has established and pursued in breach of his duties to APT is his only source of income at present. That is hardly a significant factor to be weighed in the balance, in the circumstances of this case.

Conclusions

88    I think that APT is entitled to interlocutory relief in the terms in which I have outlined.

89    As far as costs are concerned, APT has succeeded after a contested hearing. In those circumstances, I propose to order that the costs of and incidental to APT’s application for interlocutory relief be APT’s costs in the cause.

90    I also propose to order the defendant to keep accounts.

91    There will be orders accordingly.

Associate:

Dated:    5 September 2014