FEDERAL COURT OF AUSTRALIA

Howden Australia Pty Ltd v Minetek Pty Ltd (Forensic Imaging) [2020] FCA 1419

ORDERS

THE COURT ORDERS THAT:

1.    On or before 5 pm on 9 October 2020, the Respondents provide to the solicitors for the Applicants a copy of any forensic image made, for the purpose of complying with order 2 of the orders made by Robertson J on 11 November 2019, of any of the following devices (‘the Respondents' Forensic Images’):

(a)    "Generic Red" USB flash drive (volume serial number: E8520053);

(b)    AutoDesk 32GB USB flash drive (serial number: PA5080L);

(c)    MSI Notebook (serial number: K1702N0054591);

(d)    The device or devices used by Mr Bourcier to email himself the RVC Emails;

(e)    The device or devices used by Mr Garth Bird to receive the Bourcier Email;

(f)    The device or devices on which the source documents for the May List Documents reside or have resided; and

(g)    Any other device of which a forensic image was made for the purpose of the Respondents giving discovery.

2.    On or before 5 pm on 9 October 2020, each of the Respondents make available for forensic imaging by the Applicants' independent engaged computer expert, Mr Rodney McKemmish, each of the following devices (‘the Devices to be Imaged’), together with the disk encryption key for each device:

(a)    “Generic Red" USB flash drive (volume serial number: E8520053);

(b)    AutoDesk 32GB USB flash drive (serial number: PA5080L);

(c)    MSI Notebook (serial number: K1702N0054591 );

(d)    The device or devices used by Mr Bourcier to send the RVC Emails;

(e)    The device or devices used by Mr Garth Bird to receive the Bourcier Email; and

(f)    The device or devices on which the source documents for the May List Documents reside or have resided.

3.    Until further order, access to the Respondents' Forensic Images and the Devices to be Imaged be limited to the Applicants' independent engaged computer expert and persons acting under his direction and instructions upon each of them giving an undertaking to the Court in a form approved by the Court.

4.    The Applicants' independent engaged computer expert is to:

(a)    Make a forensic image of each of the Devices to be Imaged (‘the Ordered Forensic Images’);

(b)    Make the following copies of the Ordered Forensic Images:

(i)    A working copy for analysis in accordance with sub-paragraphs (c) and (d) below;

(ii)    A control copy to be retained by Mr McKemmish; and

(iii)    One copy to be provided to the solicitor for the Respondents;

(c)    Using the working copy of the Ordered Forensic Images and the Respondents' Forensic Images, identify Howden Confidential Information contained in the Ordered Forensic Images and the Respondents' Forensic Images; and

(d)    Otherwise undertake non-destructive testing of the working copy of the Ordered Forensic Images and the Respondents' Forensic Images for the purpose of identifying Howden Confidential Information.

5.    The Applicants' independent engaged computer expert may disclose to the Applicants' legal representatives only the results of the investigations of the Ordered Forensic Images and the Respondents' Forensic Images pursuant to Order 4, including for the purposes of the Applicants' independent engaged computer expert preparing a report for this proceeding.

6.    An order that each Respondent must provide the Applicants' independent engaged computer expert with any usernames, passwords or other information necessary to conduct the investigations pursuant to Order 4.

7.    The Respondents bear the costs of the interlocutory application including the costs reserved by Robertson J on 11 November 2019.

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

REASONS FOR JUDGMENT

PERRAM J:

INTRODUCTION

1    By interlocutory application dated 25 June 2020 the Applicants (together, ‘Howden’) seek orders that the Respondents make various electronic storage devices in their possession available to be forensically imaged and that those images then be searched for documents which Howden submits have not been discovered. Howden also applies for an order that the Respondents provide any forensic images they have already made of the devices.

2    Howden submits that it is entitled to these orders because (a), the documents which the Respondents have discovered so far indicate that there are other documents which must exist and ought to have been discovered; (b), earlier sworn evidence given by the Third Respondent (‘Mr Bourcier’) that he had never transferred any of Howden’s files onto external devices when he left its employment can now be shown to be false; (c), the apparent contradiction between the Respondents’ denials of possessing Howden’s confidential documents and the inclusion of such documents in discovery; and (d), the necessity of properly ascertaining the use the Respondents have made of Howden’s confidential information.

THE NATURE OF THE DISPUTE

3    Howden are the owners of information they claim to be confidential relating to the design and construction of large scale industrial fans known as mixed flow fans. Mixed flow fans are used in the mining industry to ventilate mine shafts. Mr Bourcier was employed as Howden’s senior design engineer. As such he had access to the information now claimed to be confidential. On 1 September 2016 Mr Bourcier left the employment of Howden and went to work for the First Respondent (‘Minetek’). At the time that Mr Bourcier joined Minetek it did not produce mixed flow fans for mine ventilation. Five months after Mr Bourcier’s arrival at Minetek, Minetek filed two provisional patent applications for mixed flow fans which named Mr Bourcier as the inventor. In mid-April 2019, one of Howden’s engineers saw a fan on a website which bore the name ‘Minetek’ and took a photograph of it. Minetek calls this fan a ‘high output axial fan’.

4    Howden was concerned that Mr Bourcier had taken its confidential information with him to Minetek and that Minetek’s development of its high output axial fan had resulted from a misappropriation of its confidential information. It commenced proceedings in this Court on 27 May 2019 and obtained orders for short service of an application for an interlocutory injunction from Stewart J on that day. That application was heard by Jagot J on 7 and 17 June 2019 and dismissed by her Honour on 21 June 2019: Howden Australia Pty Ltd v Minetek Pty Ltd [2019] FCA 981 (‘the Injunction Reasons’).

5    Her Honour accepted at [31] that Mr Bourcier may have had access to Howden’s confidential information whilst working for it but concluded that there was no evidence that he had taken any of that information with him. Her Honour was impressed by the fact that on the interlocutory injunction application evidence had been led from Mr Bourcier on affidavit in which he denied taking any of the information. Mr Bourcier’s evidence about this in his first affidavit (dated 5 June 2019) was contained in [70]:

70.     I deny any suggestion that I copied or transferred any document from my computer's C drive to any other storage device. I deny that I have any storage device or ever had any storage device containing any material from my Howden computer's C drive. I deny taking any information from the Howden offices. I deny the suggestion by Mr Mitchell and Mr Salvestro that the only way I could have developed the Minetek Mixed Flow Fan design was by using Howden confidential information that I took away with me when I left Howden's employment. That never happened.

6    Of this evidence, her Honour then said this at [31]:

31.    In my view, the answer is no. It may be accepted that while working at Howden Australia Mr Bourcier had access to Howden’s manuals in hard copy and also to all engineering drawings and the like stored on the R://drive. It may also be accepted on the evidence that Mr Bourcier was involved in the major project which ultimately led to substantial revisions to the Mixed Flow Fan Design Manual. There is no evidence of (and Mr Bourcier denies) taking any of this information with him when he left Howden. More relevantly still, there is no evidence that any information defined in sub paragraphs (c) or (d) of the definition of the Howden Confidential Information has been used in any way in the design of the Minetek fan. The evidence, such as it is, is confined to the alleged use of information from the Mixed Flow Fan Design Manual which, in turn, refers to the defined parts of the General Design Manual. This is important, as will become apparent below.

7    The reference to Mr Bourcier’s evidence in [31] was not fleeting or tangential. It is apparent that her Honour placed considerable reliance upon it in reaching the conclusion that interlocutory relief should be refused. For example, her Honour also observed at [37] and [39] as follows:

37.    Sixth, while an interlocutory application is not a trial within a trial, there is evidence from Mr Bourcier that he did not use any Howden information in the design of the Minetek fan and he gives a detailed description of how he did design that fan using standard texts, software and his own knowledge in the time it took which he said was plainly not impossible. The fact that he exhibited a confidential report of the design process rather than providing his original workings does not support the drawing of any adverse inference against the weight of his categorical denial of taking anything from or using anything of Howden’s in his design of the Minetek fan.

…

39.     If, contrary to my view, Howden has established a prima facie case, it would be at the weak end of the scale. The balance of convenience does not necessarily favour Howden as it appears to have assumed. In particular, it seems to have assumed that its confidential information will be released by Minetek to third parties in the form of design drawings and instruction manuals. As best as I can understand Howden is assuming that Minetek’s design drawings and instruction manuals will contain information from the Howden Confidential Information. However, there is no evidence to support this inference. Mr Bourcier says he has no such information. Mr Bird says he has never seen such information. The observations of some things in the Minetek fan being the “same as” or “similar to” the Howden fan does not mean that any part of the Howden Confidential Information appears in the Minetek design drawings or its instruction manuals. Howden’s fear of the confidentiality of its confidential information being dissipated is based more on assumption than logical inference from the scant evidence on which it relies that the Minetek fan was designed using any part of the Howden Confidential Information.

8    The matter was then docketed to Robertson J and Howden set in train procedural steps to obtain discovery of Minetek’s computer records to show that Mr Bourcier had indeed taken Howden’s confidential information with him to Minetek and used it in the design of its mixed flow fan. Howden filed an application for discovery on 28 August 2019. The evidence in support of that application came from two of Howden’s solicitors, Ms Owen and Ms Currey, its computer forensics expert Mr McKemmish and its aftermarket retrofit applications manager, a Mr Stack.

9    Mr Stack previously worked at Minetek from November 2017 to December 2018. The evidence of Mr Stack reflected efforts on the part of Howden to improve its evidentiary position in the aftermath of the hearing before Jagot J. Mr Stack’s evidence was that whilst he had been employed by Minetek Mr Bourcier had given him an Excel spreadsheet which contained the file name ‘RVC Calculations.xls’. The RVC Calculations.xls file is alleged by Howden to contain some of the confidential information which it relies upon in the main suit. In response, the Respondents elicited a second affidavit from Mr Bourcier dated 20 September 2019. At [19] of this affidavit Mr Bourcier denied what Mr Stack had said:

19.     In response to paragraph 42 of the Stack Affidavit, I deny giving Mr Stack the spreadsheet he is referring to. This did not happen. I also deny Mr Stack’s assertion that he and I went through a spreadsheet. I did not conduct any calculations with Mr Stack on any spreadsheet or any other document…

10    Substantial other evidence in opposition to the discovery application was also filed on 20 September 2019. Robertson J heard the application on 1 and 11 November 2019 and delivered judgment on 11 November 2019 granting some, but not all, of the relief sought by Howden: Howden Australia Pty Ltd v Minetek Pty Ltd (No 3) [2019] FCA 1851 (‘the Discovery Reasons’). In short, his Honour required the Respondents to give standard discovery but declined at that time to make the Respondents submit to forensic examination of their electronic devices because he was not then persuaded that they would not comply with their discovery obligations. He did not, however, dismiss that aspect of the application but merely stood it over to a date to be fixed noting (at [16]) that ‘imaging may in due course be appropriate’. He noted the debate between Mr Stack and Mr Bourcier but did not resolve it (at [12]).

11    Consequent upon the retirement from the bench of Robertson J, the matter was docketed to me and on 15 April 2020 I extended the time for the Respondents to give discovery and made related orders. The matter came before me on 29 June 2020 when it became apparent that Howden wished to pursue its claim for imaging because of what it submitted were deficiencies in the Respondents’ discovery. I put in place a timetable for written submissions on the point with the matter to be determined on the papers. Both parties filed submissions with the last set of such submissions coming from the Respondents on 24 July 2020. Both parties were confined to 5,000 words for their submissions.

DEFICIENT DISCOVERY: THE MAY DISCOVERY

12    The first basis on which Howden puts its case was that the evidence showed that there were documents in the possession of the Respondents but which had not been discovered. To date the Respondents have given discovery in two tranches. The first was set out in three separate lists of documents which had been delivered by 22 May 2020. It contained 1,064 documents. I will refer to this as the May Discovery. The second was set out in another list which was delivered on 19 June 2020. I will refer to this as the June Discovery.

13    Howden submits that there are seven documents produced in the May Discovery which show that the Respondents have had possession of Howden’s confidential documents. These seven documents are as follows:

Document 3.008: ‘HO Axial Impeller Locking Ring Calculations test fan.xls’

14    Howden’s solicitor, Ms Owen, gave evidence on the present application, that she reviewed this file and its properties showed that it had been created by Mr Bourcier while he was employed by Howden and that the last time it had been modified was by Mr Bourcier after he left Howden’s employment.

15    Mr Kermond, the Respondents’ solicitor, did not contradict what Ms Owen had said about Document 3.008’s property field but he did seek to show that there had been no failure on the Respondents’ part to give discovery of the document that Ms Owen alleged Mr Bourcier used to generate Document 3.008. He gave evidence of having inquired from Ms Owen which document Howden was suggesting had not been discovered in light of Document 3.008. Ms Owen had responded by saying that Document 3.008 had been derived from a Howden document entitled ‘Locking Ring Calculations.xls’. Mr Kermond then asked the Respondents’ computer forensic expert, Mr Carson, to conduct a search for the file ‘Locking Ring Calculations.xls’.

16    Mr Carson gave evidence on the present application in the form of three affidavits, including one dated 6 July 2020 which annexes a report he prepared. The report established that for the purposes of discovery his firm had searched the following information systems or storage devices associated with the Respondents:

    Mr Bourcier’s Office 365 mailbox and OneDrive account;

    A Generic Red USB flash drive (volume serial number E8520053);

    An Autodesk 32GB USB flash drive (serial number PA5080L);

    An MSI Prestige notebook (serial number K1904N0031592);

    An MSI notebook (serial number K1702N0054591); and

    The Minetek main file server (named ‘AZSYDSVRDATA01’).

17    In his report Mr Carson made clear that the searches his firm had conducted included searches for documents which had been deleted. This had been done using the applications Forensic Explorer and Encase. Howden’s expert, Mr McKemmish observed that deleted files could also be recovered using ‘data carving’ and that the use of data carving was likely to be more efficacious than Forensic Explorer and Encase. Mr Carson however considered that there was real uncertainty as to whether data carving would be able to recover any of the deleted documents due to a range of factors. He also thought that using data carving would be very expensive and resource intensive. He had not attempted it.

18    As I have said, Mr Carson was asked specifically to look for ‘Locking Ring Calculations.xls’ (the Howden document said to be the origin of Document 3.008). He did not locate ‘Locking Ring Calculations.xls’ on any of the above information systems or storage devices.

19    The evidence about Document 3.008: ‘HO Axial Impeller Locking Ring Calculations test fan.xls’ therefore shows (a) that it was discovered by the Respondents in the May Discovery; (b) that according to Ms Owen the document’s properties indicate that it derives ultimately from a file (‘Locking Ring Calculations.xls’) which was Howden’s; (c) the document believed to be the origin document, ‘Locking Ring Calculations.xls’, has not been found on the Respondents’ information systems or storage devices using Forensic Explorer or Encase; and, (d) data carving may reveal more than Forensic Explorer and Encase have so far but it may not and the issue is speculative.

20    Mr Bourcier has not provided any further evidence about this. The Respondents did not put on any evidence that Document 3.008: ‘HO Axial Impeller Locking Ring Calculations test fan.xls’ was not derived from ‘Locking Ring Calculations.xls’ and I have therefore not found it necessary to determine whether it does.

21    That leaves a large number of unanswered questions in the case of Mr Bourcier. Did he take any steps so that what started life as ‘Locking Ring Calculations.xls’ on Howden’s servers became Document 3.008 ‘HO Axial Impeller Locking Ring Calculations test.fan.xls’ on Minetek’s servers? Are there intermediate documents which explain the link between the two files? Did Mr Bourcier possibly migrate ‘Locking Ring Calculations.xls’ from Howden’s servers? On what device was the first version of Document 3.008 ‘HO Axial Impeller Locking Ring Calculations test fan.xls’ saved? None of these questions presently has answers.

22    Whilst one may accept Mr Kermond’s evidence that Minetek has explained as much as it can this does not appear to be the case for Mr Bourcier who is also one of the Respondents. It seems unavoidable that there are several discoverable documents of the intermediate kind I have just mentioned. What are they? Did Mr Bourcier have access to them? If he did, where did Mr Bourcier store them? Where are they now?

Document 3.009 ‘HO Axial Impeller Locking Ring Calculations.xls’

23    The evidence about this document was essentially the same as in the case of Document 3.008: ‘HO Axial Impeller Locking Ring Calculations test fan.xls’. I draw the same conclusions.

Document 3.012 ‘HO Axial Impeller Locking Ring Calculations.xls’

24    Ms Owen’s evidence about this document was the same as in the case of Documents 3.008 and 3.009. The property information for Document 3.012 shows Mr Bourcier as its creator, that it had been created whilst he was still employed by Howden and that he last modified it after he left its employ. Mr Kermond appeared to give no evidence about this document in his affidavit of 6 July 2020. However, he did give some evidence about Document 3.011 and his evidence about that document at [11] to [13] tends to suggest that he intended to refer to Document 3.012 and to do so in terms implying that it was caught up in his correspondence with Ms Owen referred to in the case of Document 3.008 above. I infer therefore that the same conclusion applies in the case of this document as applies in the case of Documents 3.008 and 3.009.

25    It is not altogether clear whether evidence that Mr Bourcier had been taking files from Howden seemingly contrary to his evidence before Jagot J would be relevant only to his credibility or whether it might also be relevant to a fact in issue. I suspect it would be the latter. Howden is entitled to put on a circumstantial case in which the alleged fact of Mr Bourcier taking files from Howden is one of the integers. That such a fact would appear to contradict his evidence before Jagot J may reflect negatively on his credit. Ordinarily evidence relevant to credibility is not admissible (s 102 of the Evidence Act 1995 (Cth) (‘the Act’)) but here it is also relevant to a circumstantial case. It may be therefore that the Respondents would be entitled to obtain a direction under s 136 of the Act limiting the use to which any evidence that Mr Bourcier was taking files from Howden might be put to proving the circumstantial case and not to attacking his credibility.

26    One obstacle in the path of that course may be s 103 of the Act which allows evidence about credibility to be adduced under cross-examination where it may substantially affect the credibility of the witness. In any event, there is no need to form a view about these matters for present purposes.

Document 3.011 ‘HO Axial blade Springback calcs.xls’

27    According to Ms Owen, this document was created by Mr Bourcier at 2.03 pm on 27 March 2003 (when he was at Howden) and was last modified by him on 8 February 2017 (whilst he was at Minetek). The file properties list the originator company as ‘Howden Sirocco Pty Ltd’. There is a Howden document which Howden claims is one of its confidential documents which has identical file information, ie, it was created by Mr Bourcier at 2.03 pm on 27 March 2003. That file is entitled ‘Mixed Flow Blade Size Rev 1 BAR 21-04-09.xls’.

28    Mr Kermond’s evidence was that he had asked Mr Carson to search for ‘Mixed Flow Blade Size Rev 1 BAR 21-04-09.xls’ on the Respondents’ information systems and storage devices listed above. According to Mr Kermond, Mr Carson did not find that file itself but he did find a reference to that file on one of Mr Bourcier’s information systems or storage devices. The fact that document existed but was no longer in Mr Bourcier’s possession was in fact discovered to Howden in Mr Bourcier’s list of documents delivered in June as part of the June Discovery.

29    The gravamen of that evidence is, essentially, that there is ‘nothing to see here’: Yes, Mr Bourcier appears to have taken ‘Mixed Flow Blade Size Rev 1 BAR 21-04-09.xls’ from Howden and subsequently deleted it from his information systems or storage devices. And yes, it is now apparent that a trace of this document has been found on one of his devices but he has already given discovery of that fact in the June tranche. What more can be done?

30    However, I think this line of reasoning tends to ignore the elephant in the room which is the fact that Mr Bourcier has given categorical sworn evidence that he never did any such thing. He gave that evidence before Jagot J and it was part of the reason her Honour refused Howden’s injunction application. The same evidence was forcefully advanced by the Respondents before Robertson J and was part of the reason his Honour observed at [16] that ‘I do not accept, in anticipation, that the respondents will not comply with their [discovery] obligations’. In fact, the detection of a trace of ‘Mixed Flow Blade Size Rev 1 BAR 21-04-09.xls’ on Mr Bourcier’s devices where he has sworn emphatically that he took no files from Howden demonstrates that it may not be safe to assume that Mr Bourcier will comply with his discovery obligations.

31    Indeed, the possibility of Mr Bourcier producing what at first blush has the appearance of false evidence to thwart Howden’s interlocutory injunction, while not a foregone conclusion, suggests to me that it is at least arguable that Mr Bourcier may be an unreliable witness. Of course, he has not been cross-examined about any of this and has not yet had an opportunity to give an explanation for the current state of the evidence. The picture is therefore incomplete and the possibility that he may ultimately have a full explanation cannot be discounted. However, as I explain shortly, Howden does not need to need to prove that Mr Bourcier has sworn false evidence (although they did seek to do so) and the Court does not need to form a concluded view about that matter either. The only question is whether sufficient grounds now exist to warrant forensic imaging. It is enough that there may be real reason to think that his testimony may be false.

Document 7.092 ‘HOAx Noise Data Calcs.xls’

32    Ms Owen thought that this document had been derived from the confidential Howden document ‘MixedFlowFans21.xls’. There were two sets of reasons for this. First, it had been originally created by Mr Bourcier whilst at Howden on 30 March 2008 at 3.04 pm and had last been modified by him at 9.37 am on 5 March 2020 whilst employed by Minetek. Secondly, it was apparent from looking at Document 7.092 and ‘MixedFlowFans21.xls’ that the former had been drawn from the latter. For example, the tab headed ‘Calculations’ in Document 7.092 was substantially identical to the tab ‘MF NoiseCalc’ in ‘MixedFlowFans21.xls’ and similar relations existed between other tabs in both spreadsheets: the ‘Tables’ and ‘Casing’ tabs in Document 7.092 were substantially the same as the ‘BARNoiseTable5&6’ and ‘BARNoiseTable7&8’ tabs in ‘MixedFlowFans21.xls’. I have not conducted this comparison myself but Ms Owen did and Mr Kermond did not venture to contradict her opinion on this. I accept it.

33    What Mr Kermond did say, however, was that he had instructed Mr Carson to search the Respondents’ information systems and storage devices for ‘MixedFlowFans21.xls’ and that Mr Carson had found neither that file nor any trace of it. On this view of affairs, the reason that the Respondents had not discovered ‘MixedFlowFans21.xls’ was because it was not in their possession and they had no reason to think that it had been.

34    Again, the difficulty with that submission comes down to the position of Mr Bourcier. Somehow ‘MixedFlowFans21.xls’ on Howden’s servers has found its way into Document 7.092 ‘HOAx Noise Data Calcs.xls’ on Minetek’s. Mr Bourcier’s fingerprints appear to be on Document 7.092 ‘HOAx Noise Data Calcs.xls’ both in 2008 and 2020 and it is known to have started life at Howden. Many pieces of this picture are missing.

Document 7.206 ‘HOAx Noise Data Calcs.xls’

35    The same issues arise in relation to this document as in relation to Document 7.092 ‘HOAx Noise Data Calcs.xls’.

Document 7.207 ‘HOAx Noise Data Calcs_1.xls’

36    Largely similar issues arise in relation to this document as in relation to Document 7.092 ‘HOAx Noise Data Calcs.xls’. There is a small difference in that the creator of Document 7.092 at Howden was a Mr Russell rather than Mr Bourcier. But from the perspective of the current debate that is of little moment.

MR BOURCIER: THE JUNE DISCOVERY

37    I have already referred above to the difficulties which Mr Bourcier’s sworn affidavit appears to generate. However, Howden also relied on the further tranche of discovery given by the Respondents in June. The list of documents provided in June now contained a new category entitled ‘Howden Confidential Information’. This was a surprising development considering that the Respondents’ dogmatic defence before Jagot J and Robertson J was that there were no such documents in their possession. The list identifies 10 documents as ‘Howden Confidential Information’ and these are said to have been found on Mr Bourcier’s notebook and the Minetek file server (both of these were amongst the information systems and storage devices examined by Mr Carson). Four of these documents are relevant for present purposes. These are:

Document 10.005 Emails from Mr Bourcier to himself attaching ‘RVC Calculations.xls’

38    Mr Bourcier appears to have sent himself emails from his personal email address to his email address at Minetek. Attached to these emails was the file ‘RVC Calculations.xls’. Howden alleges that this file is part of its confidential information. Mr Bourcier denies ever having taken any of Howden’s files.

39    Mr Kermond says that the file ‘RVC Calculations.xls’ has been discovered by the Respondents in their June Discovery as Documents 10.002, 10.004, 10.006 and 10.008 which does not appear to be in contest. I think Mr Kermond’s evidence is good so far as it goes. However, Mr Kermond does not comment on the significance of Mr Bourcier emailing the document from his personal email to himself at Minetek.

Document 10.007 Email from Mr Bourcier to Mr Stack and others enclosing ‘RVC Calculations.xls’ file

40    In their efforts to persuade first Jagot J and then Robertson J that Mr Bourcier had not taken any of Howden’s files the Respondents relied upon Mr Bourcier’s blanket denial in his first affidavit. When Howden produced Mr Stack during the discovery debate to say that Mr Bourcier had given him a copy of the ‘RVC Calculations.xls’ Mr Bourcier filed an affidavit in which he denied the truth of Mr Stack’s evidence. He said this in his second affidavit at [19]:

19.     In response to paragraph 42 of the Stack Affidavit, I deny giving Mr Stack the spreadsheet he is referring to. This did not happen. I also deny Mr Stack's assertion that he and I went through a spreadsheet. I did not conduct any calculations with Mr Stack on any spreadsheet or any other document. As I have already stated, I told Mr Stack that I had rejected his rotary actuator idea as unworkable.

41    This evidence led to robust submissions on behalf of all of the Respondents dated 25 October 2019 attacking Mr Stack’s credibility:

Given the admissions made by Stack that he took confidential documents when he left Howden, in breach of his fiduciary duty to Howden, the inconsistencies in his evidence, and the denials of Mr Stack's allegations by the respondents' witnesses, the Court ought to give little to no weight to Mr Stack's evidence and the respondents' evidence should be preferred.

42    Having dispatched with Mr Stack the Respondents made further submissions (dated the 8 November 2019) repeating the central thrust of Mr Bourcier’s evidence at [19] and [20]:

19.    In contrast, there is no credible evidence that Minetek had in its possession or used any of the Howden Confidential Information to design or develop the Minetek fan. Instead, there are direct denials by Mr Bourcier that he copied, retained or used any of the Howden Confidential Information after he left Howden. Also, the applicants do not seek an order that Mr McKemmish be permitted to take copies of any data on the respondents' computers recording the Howden Confidential Information; the proposed regime is far broader than that. In those circumstances, Career Step, LLC v TalentMed Pty Ltd is distinguished from the present case.

20.    In the circumstances, there is no satisfactory reason given under r 20.15(3) by Ms Currey or any other witness for the applicants in any of the applicants' affidavits in support of the application as to why the proposed orders ought to be made applying the imaging regime to the respondents' entire computer system instead of the standard discovery order proposed by the respondents.

43    The significance of this email is therefore that it undermines the Respondents’ endeavour to besmirch Mr Stack and to fortify their position that Mr Bourcier took no files from Howden and did not give Mr Stack the ‘RVC Calculations.xls’ file. The email in which Mr Bourcier gave the file to Mr Stack exists. It appears to be, at the risk of a dangerously mixed metaphor, that rare bird, the smoking gun. The email must cast doubt on Mr Bourcier’s evidence that he did no such thing.

44    Furthermore, the submissions made on Minetek’s behalf show that if Mr Bourcier did engage in a campaign of deliberately false evidence this may not have been limited to a one-man show. It is at least arguable that Minetek would be involved in it as well. It is possible that at least up to the time of the application before Robertson J, that Minetek would not have known if Mr Bourcier was in fact giving false evidence. For example, it is possible that he could have been lying (on the hypothesis that he was lying – I reach no view on the correctness of that hypothesis) to everyone including Minetek. However, Minetek has not withdrawn any of the submissions it made to Robertson J. It has not, for example, conceded that its attack upon Mr Stack was arguably scandalous in light of this document and what it appears to show. It has not sought to explain its position vis a vis Mr Bourcier’s denials. It has not retracted any of the submissions about him it has previously made or explained how they co-exist with this document. Indeed, Minetek and Mr Bourcier continue to be represented by the same lawyers making the same joint submission. This is not a conclusive finding on the issue and there are two sides to every story. However, on this application, Minetek has not taken steps to explain how this email interacts with its earlier submissions. There may be a perfectly good explanation which emerges at trial. However, on this application the evidentiary situation does not instil confidence in the discovery process.

Document 10.009 Email from Mr Bourcier to Mr Garth Bird of 22 December 2017 attaching Document 10.010 ‘Mixed Flow Impeller Proportions updated.jpg’

45    It is convenient to deal with these documents together since Document 10.010 is the attachment to Document 10.009. The body of the email (not the attachment) contains information under the heading ‘MF 107 Performance Data’ and refers to the attachment (Document 10.010) as ‘Details of AF107/19 Mixed Flow Fan Blade’. Ms Owen says, and it is not denied by anyone, that these are references to Howden’s products and, further, that its fan is called the MF 107. The email attached Document 10.010 which comprises the file ‘Mixed Flow Impeller Proportions updated.jpeg’.

46    Ms Owen says that both Documents 10.009 and 10.010 contain extracts from a Howden report entitled ‘AA16 - Performance of AF107-19 Mixed Flow Fan with Varying Blade Stagger Angle’. That document is alleged by Howden to be part of its confidential information.

47    The significance of Document 10.009 is that it is an email from Mr Bourcier to Mr Garth Bird (a consultant at Minetek) which, Ms Owen suggests, shows that Mr Garth Bird was aware of the fact that Mr Bourcier had access to Howden confidential information. If this contention is accurate it suggests that the idea that Mr Bourcier was acting alone without the knowledge of Minetek will be incorrect.

48    Mr Garth Bird has already given evidence in the hearing before Robertson J by way of affidavit dated 20 September 2019. At [16] of his affidavit he said:

16.     In response to paragraph 52 of the Stack Affidavit, I have never been aware of Mr Bourcier or Mr Stack being in possession of any Howden documents. Although I had a number of discussions with Mr Stack, at no time did he say or do anything to suggest that he had Howden documents in his possession. With respect to Mr Bourcier, I worked closely with him during the time that Minetek was developing the design of the Minetek mixed flow fan, and at no time did Mr Bourcier ever say or do anything to indicate that he held, or had used, any Howden documents. Mr Bourcier has never said or done anything to cause me to doubt that what Mr Bourcier told me was true.

49    Howden submits that this evidence would appear to be false in light of the email which is Document 10.009. Unlike Mr Bourcier, who did not put on any evidence in response to Ms Owen’s investigations, Mr Garth Bird did. What he said about the email and its attachment in his affidavit dated 6 July 2020 was this:

(1)    He was unaware of the contents of the information that Howden claims is confidential in the proceeding;

(2)    It was only in the two weeks before he swore this most recent affidavit that he had become aware of the email and its attachment from Mr Bourcier. He was not conscious of receiving or reading it before then;

(3)    He does not recall receiving Documents 10.009 or 10.010 and he does not recall he ever forwarded or replied to Document 10.009;

(4)    Mr Bourcier did not tell him the origin of the attachment (Document 10.010) to the email; and

(5)    Reading the attachment (Document 10.010) there is nothing to suggest that it contains Howden’s confidential information.

50    Mr Garth Bird does not, however, deny receiving the email. And although he says that there is nothing in the attachment (Document 10.010) which indicates its origins, he appears to evade Ms Owen’s evidence that it is what is in the body of the email which indicates that it is concerned with Howden’s information.

51    The last matter to note is that in Mr Bourcier’s most recent list of documents he has given discovery of 386 documents which have been deleted from the two USB flash drives to which reference has already been made. Mr Bourcier’s list gives precise file names and times of deletion. This led Mr McKemmish to inform Ms Owen that the Respondents must have performed a forensic analysis of both devices. However, in light of Mr Carson’s evidence there is no doubt that this has occurred.

FORENSIC IMAGING SHOULD OCCUR

52    The Court has the power to order the inspection of property (including servers and storage devices) and the copying of data contained therein: Federal Court Rules 2011 (Cth) r 14.01(1)(a)(i) and (ii). This includes the forensic imaging of information systems and storage devices. Such an order is intrusive. Where an order for imaging is made necessarily it will sweep up a lot of unrelated information. Appropriate safeguards must be in place to protect information of that kind. Orders of this kind should not therefore be made on a whim. That said, orders of this kind have certainly been made in the past: Cadence Australia Pty Ltd v Chew [2008] NSWSC 1074; Athlete’s Foot Australia Pty Ltd v Divergent Technologies Pty Ltd (1997) 78 FCR 283; Evans Deakin Pty Ltd v Orekinetics Pty Ltd [2002] QSC 042; 2 Qd R 345. Although the circumstances in which such an order might ever be made cannot be definitively stated, it seems reasonable to conclude that they would include the situation where there is reason to doubt that adequate discovery has actually been given: Metso Minerals (Australia) Ltd v Kalra [2009] FCAFC 57.

53    That is the case and, in my opinion, it presents a clear case for imaging. The documents currently discovered suggest that Mr Bourcier may not have been entirely truthful about what he has taken from Howden. The only way justice will be served is for Minetek’s and Mr Bourcier’s information systems and storage devices now to be gone over with a fine tooth comb. I would have hesitated to permit such a process but the apparent conduct of Mr Bourcier leaves me little choice. My doubts about Mr Bourcier extend to Minetek. I am not satisfied with Mr Garth Bird’s response in relation to the email he received.

54    I reject the Respondents’ submissions that any further discovery is unnecessary. Here the argument was that showing that Howden’s documents were on Minetek’s servers at best would provide Howden with documents it already had. In order to gauge whether its confidential information had been taken all that was needed was the confidential information and the Respondents’ fan.

55    The notion that it is irrelevant that Howden’s confidential information has been found on Minetek’s servers (and apparently surreptitiously deleted) is ambitious. I reject it; the Respondents’ submissions are to a degree unrealistic. Moreover, as I have stated above many unanswered questions remain in relation to the possible existence of intermediary documents which forensic imaging may be able to shed light on.

56    There is a dispute between Mr McKemmish and Mr Carson about the adequacy of the latter’s search procedures. I do not think it is necessary to resolve that debate. The possible dishonesty which the discovery to date has revealed entitles Howden to use as much forensic brute force as it wishes. I do not disregard the Respondents’ submissions about how much they have spent on discovery to date but I do not think that what is now to occur is likely to be onerous for them from a resources perspective. They will hand their devices over to Mr McKemmish and he will make forensic images of them. The work he will do after that will not be to their immediate expense.

57    I will make the orders sought in the interlocutory application with the compliance date changed to 9 October 2020. If the Respondents have made any forensic images of the devices already they should provide them. If the production of such images makes unnecessary further imaging by Mr McKemmish the orders to permit imaging by him may be varied. The important thing is for an independent copy of the devices to be obtained. If one already exists, so much the better. If not, then it must happen. The Respondents must bear the costs of the interlocutory application including the costs reserved by Robertson J on 11 November 2019.

58    Although Howden urged the Court to conclude that Mr Bourcier had lied to it on oath, I have not found it necessary to do so for the purpose of these reasons. There is certainly material tending in that direction but, as I have said, only one side of the story has been heard and experience shows one needs to see the whole picture before drawing such adverse conclusions. What Howden has shown, however, is more than sufficient to justify the forensic imaging orders now sought.

Associate:

Dated:    2 October 2020