FEDERAL COURT OF AUSTRALIA

Smart EV Solutions Pty Ltd v Guy [2023] FCA 1580

ORDERS

UPON THE UNDERTAKING OF THE APPLICANTS:

1.    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 the interlocutory order or undertaking or any continuation, with or without variation, thereof; and

2.    To pay compensation referred to above to the person there referred to.

THE COURT ORDERS THAT:

1.    From the date of this Order until judgment, or the earlier determination of this proceeding, each of the respondents be restrained from using, copying, forwarding, publishing, distributing, disclosing, impairing, deposing of, exploiting, or dealing with the applicants’ confidential information listed in Annexure A.

2.    By 4:00 pm AEST on 13 October 2023, each respondent file an affidavit setting out:

(a)    which of the applicants’ property, listed in Annexure B, it had or has had in its possession or control since 22 November 2022, and, if it no longer has that property in its possession or control, the circumstances in which that property is no longer in its possession or control; and

(b)    details of who received the applicants’ property, listed in Annexure B, with sufficient detail to enable the first applicant to identify the person who gained possession.

3.    There be no order as to costs.

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

Annexure A – Confidential Information

SEVS means Smart EV Solutions Pty Ltd ACN 650 654 916

SGI means Smart Grid Investments ACN 640 994 190

Confidential Information means:

(a)    all documents, whether in hard or electronic form;

(b)    that are not lawfully in the public domain;

(c)    which contain or show SEVS’ or SGI’s;

(d)    which were created by, at the instruction of, or for SEVS or SGI; and

(e)    includes all emails sent to, or received by the email addresses:

Annexure B – SEVS’ assets sold by the Respondents yet to be invoiced #

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    The applicants, Smart EV Solutions Pty Ltd (SEVS) and Smart Grid Investments Pty Ltd (SGI), seek to restrain the respondents, Mr Paul Guy and his company, Charge Hub Pty Ltd (Charge Hub), from misusing what the applicants say is their “confidential information” and, further, from committing or facilitating breaches of the duties that Mr Guy owes as a former director and employee of the applicant companies.

2    Mr Guy was a director of SEVS and SGI until November 2022. He was also an employee of the former company until August 2022. He has since resigned from each of those positions and established a new company, Charge Hub, which operates within the same industry as SEVS.

3    In general terms, the parties have fallen into dispute as to whether Mr Guy, in establishing and operating the business of Charge Hub, is misusing confidential information that he has improperly obtained from the applicant companies with which he was formerly associated.

Background

4    An inordinate volume of material was filed for the purposes of this application. Much of it proved to be of little relevance, notwithstanding the seriousness of the allegations levelled against Mr Guy. At the outset of the proceedings, it was difficult to perceive through the quantity of filed material the limits of the case actually brought by the applicants. However, those limits have become clearer as the matter has progressed. What follows is an identification of the more salient facts.

The formation of the SG Group

5    In early 2020, Mr Guy and Mr Dale Cook (who presently remains a director of each of the applicant companies) had discussions about the prospect of going into business together. At that time, Mr Guy operated a business called “Smart Grid Solutions” as a sole trader. According to Mr Cook’s affidavit evidence in this proceeding, he initially offered advice to assist Mr Guy to “get his business off the ground” — including in relation to the setting up of a corporate structure. Some months later, he indicated to Mr Guy that he was interested in investing in the business.

6    In May 2020, SGI was incorporated. Its sole director and secretary at the time of its incorporation was Mr Guy.

7    On 1 June 2020, Mr Guy sent to Mr Cook an investor proposal. The two then engaged in further discussions. Mr Cook deposed that, in the course of those discussions, it was agreed that Mr Guy would transfer the business names, domain names, contracts, related intellectual property and other assets from his Smart Grid Solutions business to a new corporate entity within what would then be a nascent corporate group. In apparent accordance with this agreement, Smart Grid Solutions Pty Ltd (SGS) was incorporated on 6 July 2020. Its sole director and secretary at the time of its incorporation was Mr Guy, though his partner later replaced him as secretary.

8    At some time between July and August 2020, Mr Cook and his wife decided to invest in SGI by purchasing shares in it. Mr Cook and Mr Guy then agreed the details of the investment and the structure of the business that would follow. Mr Cook became a director of both SGI and SGS on 13 August 2020. Regrettably, the details of the corporate structure that was subsequently erected remained somewhat elusive to both the Court and to Counsel for the applicants as at the time of the hearing of this application. However, it is sufficiently clear that SGS was wholly owned by SGI, and that the shareholders of SGI included:

(a)    Guy O’Sullivan Pty Ltd (GO Pty Ltd), which represented the interests of Mr Guy and his partner; and

(b)    DBSME Future Fund Pty Ltd (DBSME), which represented the interests of Mr Cook and certain other members of his family.

9    SGI became the “holding entity” within the corporate group, while SGS was initially intended to be the “trading entity”.

10    On or about 4 September 2020, DBSME, GO Pty Ltd, Mr Guy and Mr Cook entered into what was described in these proceedings as the “First Shareholders Agreement” with respect to SGI. On 5 April 2021, Mr Guy signed a contract of employment with SGS.

11    The business progressed throughout early 2021 to the point where Mr Guy and Mr Cook considered it appropriate to pursue capital raising for SGI. In the course of their exploring that possibility as the year progressed, SEVS was incorporated on 1 June 2021. As at the time of its incorporation, Mr Guy and Mr Cook were both directors, and Mr Guy was also the secretary. All of the shares in the company were, and are still, owned by SGI. In his affidavit evidence, Mr Cook has described SEVS as having been incorporated for the purpose of being “another company under SGI that was specifically associated with electric vehicle charging”. He has described the company’s business as follows:

SEVS provides electric vehicle charging solutions. Its primary business is integrated hardware solutions and sales (eg, providing electric vehicle charging stations to clients, such as petrol stations). It provides both hardware, and software solutions, and supplies for residential commercial, fleet, retail, and wholesale markets.

12    Around this time, it seems that the parties decided to migrate the electric vehicle charging component of SGS’ business to SEVS. On 30 June 2021, Mr Guy, SGS and SEVS signed an asset sale and purchase agreement, which contemplated the sale of certain business assets from Mr Guy and SGS to SEVS. On 20 September 2021, Mr Guy signed a contract of employment with SEVS (hereinafter the “SEVS Employment Contract”) and gave up his employment with SGS. Mr Cook has described the remaining business of SGS as follows in his affidavit evidence:

SGS provides asset management, consultancy, and monitoring solutions. It provides products such as monitoring devices, and components for electrical transformers.

13    In September 2021, DBSME, GO Pty Ltd, Mr Guy and Mr Cook entered into what was described as the “Second Shareholders Agreement” with respect to SGI. New parties were then brought into the business as shareholders and directors, and a “Third Shareholders Agreement” was executed in early 2022. The new directors of SGI included Mr Warren Pink and Mr Gregory James Moore, both of whom were also shareholders through companies that they controlled. Mr Pink and Mr Moore also became directors of SEVS.

14    In early 2022, there was also a further redistribution in the shareholding in SGI as GO Pty Ltd sold a number of its shares to enable Mr Guy to pay off certain debts. At the conclusion of that share sale process, by 27 April 2022, there were 12,500 shares in SGI on issue — of which 5,500 were held by GO Pty Ltd (being 44%), 4,500 were held by DBSME (being 36%), and the remainder were held by other persons and companies that had by that time become affiliated with the business.

15    SGI and its wholly-owned subsidiaries, SGS and SEVS, now comprise what has been described in the material before the Court as the “SG Group”. That same material indicates that there is another wholly-owned subsidiary of SGI within the group, Smart Grid Ventures Pty Ltd, which in turn has its own subsidiaries. However, that branch of the group seems not to have played any part in the events the subject of these proceedings and need not be considered further.

The relevant provisions of the SEVS Employment Contract and the Third Shareholders Agreement

16    Mr Guy entered into the SEVS Employment Contract to take on the role of Managing Director of that company. The terms of the agreement were not unusual, and need not be set out in full. It suffices to observe that they included terms by which Mr Guy:

(a)    was obliged to act in good faith with respect to SEVS, to avoid conflicts of interest, and to carry out his “Duties” (as defined) in a manner that promoted the reputation and integrity of SEVS;

(b)    agreed that SEVS would own all right, title and interest in “Intellectual Property” (as defined) that he brought into existence or contributed to (to the extent of his contribution) in the course of, in connection with, or for the purpose of, performing his Duties;

(c)    agreed to assign to SEVS any and all of his right, title and interest in any such Intellectual Property upon the Intellectual Property coming into existence;

(d)    agreed to complete and execute documents or take other actions to assist SEVS to protect its Intellectual Property rights;

(e)    agreed that, during or after his employment, he would not do anything to challenge, impair or prejudice SEVS’ Intellectual Property or its goodwill or reputation;

(f)    was prohibited, except with the consent of the company, from using (other than in the performance of his Duties), publishing or disclosing to any person any of the “Confidential Information” (which was defined as including all technical, financial, marketing and business information concerning SEVS and its customers, except for information that was in the public domain other than as a result of a breach by Mr Guy of the contract);

(g)    was obliged, following the termination of his employment and upon request from SEVS, to return to SEVS all property, including records, keys, access cards and documents (in human or machine-readable form) in his possession or control that belonged to SEVS or any of its subsidiaries, with the exception of any records or documents that he reasonably required to satisfy any legal obligations; and

(h)    was restrained, on certain terms, for a period of six months after termination of his employment, from performing work for any third party if that work was for a company or business that was similar to or competitive with the business conducted by SEVS at the date of termination and that was work that was the same as or similar to his Duties.

17    Mr Guy was also party to the Third Shareholders Agreement, which was on largely the same terms as the two preceding shareholders agreements. Relevantly, the Third Shareholders Agreement included a restraint clause and a confidentiality clause, the latter of which provided as follows:

28.     Confidentiality

(a)     Each shareholder and covenantor severally agrees with each other shareholder, and the company, that all information in relation to the company or any related body corporate, as defined in the Corporations Act, including trade secrets, operations know-how, any information concerning the organisation, management and finance of the other shareholder or the company, or any of its related bodies corporate, which is exchanged between them under this agreement, or acquired during the negotiations prior to the execution of this agreement, is confidential and must not be disclosed to any person not being a party to this agreement, except:

(i)     To employees, legal advisers, auditors and other consultants requiring the information for the purposes of this agreement; or

(ii)     With the consent of the party who supplied the information; or

(iii)     If the information is, prior to the execution of this agreement, lawfully in the possession of the recipient of the information through sources other than the party who supplied the information; or

(iv)     If required by law or a stock exchange regulation; or

(v)     If the information is or becomes generally and publicly available other than through the default of a party who divulges the information; or

(vi)     To any prospective purchaser or assignee of a share after such person has signed a confidentiality agreement acceptable to all shareholders.

(b)     The provisions of this clause continue in full force and effect for a period of two years after the termination of this agreement.

Mr Guy’s exit from the business and subsequent events

18    The affidavit evidence filed in these proceedings seems to suggest that, even during the relatively early stages of the formation of the SG Group, there were some difficulties between Mr Guy and Mr Cook in connection with the latter’s attempts to ensure that various assets were transferred from the former to the correct entity within the SG Group, as had allegedly been agreed.

19    From June 2022 to August 2022, the relationship between Mr Guy and the other directors of SGI and SEVS deteriorated. Both Mr Cook and Mr Guy have given evidence as to the cause of the breakdown, though there is little utility in repeating it here. Suffice it to say, each side blames the other.

20    According to Mr Cook’s affidavit evidence, on 24 August 2022, Mr Guy resigned as an employee of SEVS at a meeting of the Board of that company, which by that time included Mr Pink and Mr Moore. Mr Guy gives a different account of events in his own affidavit evidence, to the effect that:

(a)    he was compelled by Mr Cook to resign during the course of the meeting;

(b)    he said only that he would “consider” it;

(c)    he then received a letter after the meeting from Mr Cook purporting to accept his resignation; and

(d)    he “immediately responded to say that [he] did not resign, and that any resignation had to be in writing as per [his] employment agreement”.

21    Whatever the case, it seems clear enough that, after this time, Mr Guy was contacted on a number of occasions by the other directors of SEVS, who requested that he complete the transfer of certain assets, including domain names and websites, to the company. On 12 October 2022, lawyers acting for SGI and SEVS wrote to Mr Guy, demanding that he deliver to SGI all confidential information and/or intellectual property in his possession or control, including “all credentials for systems and files relating to suppliers and customers (including prospective suppliers and customers)”. It should be noted, at this juncture, that Mr Guy’s response to those requests has been both incomplete and sporadic, although some material has been returned.

22    In November 2022, a number of significant events took place in relatively quick succession. First, on 20 November 2022, Mr Guy downloaded a database maintained by SEVS, which contained all of the quotations and proposals issued by the company to its customers, as well as the contact details of its customers. On 22 November 2022, Mr Guy resigned as a director of SEVS. Five days later, on 27 November 2022, he resigned as a director of SGI. The next day, on 28 November 2022, he incorporated Charge Hub — of which he remains the sole director and secretary, and of which the sole shareholder is GO Pty Ltd.

23    The applicants point to these events as part of a broader course of conduct allegedly engaged in by Mr Guy, whereby he has:

(a)    contacted customers and suppliers of SEVS after his resignation from the company;

(b)    improperly retained, dealt with, and used to his own advantage SEVS’ property, which he has failed to return after repeated requests — including business names, customer details, domain names and administrative access;

(c)    registered Charge Hub and traded through that company in direct competition with SEVS;

(d)    attempted to divert business opportunities from SEVS and SGI to Charge Hub;

(e)    on multiple occasions, falsely represented himself as still being associated with SEVS and still having authority to enter into dealings on behalf of SEVS; and

(f)    in taking certain of these actions, and otherwise, misused SEVS’ and SGI’s confidential information.

24    That alleged course of conduct is explained in considerable detail in Mr Cook’s affidavit evidence. It does not bear repeating here in full, although certain allegations are addressed more specifically in the course of these reasons.

25    Many of the allegations have been denied, or attributed more innocuous explanations, by Mr Guy in his affidavit evidence. For instance, although he does not refute the claim that he downloaded the database maintained by SEVS on 20 November 2022, he deposes that he saved the files to an internal SGS/SEVS drive that he can no longer access, that he would copy and download the files from the database on a regular basis during his time at the company, that he downloaded the database on this occasion as part of his normal business practice, and that he has not used the contacts in the downloaded database for Charge Hub or for his own business gain. Ultimately, there is no need for me to determine the truth of each allegation one way or the other in the context of this application.

26    That having been said, by the time that this application was heard, it did not seem seriously to be in doubt that Charge Hub had been incorporated to engage in business in the same field, or at least a substantially overlapping field, as the applicants. The evidence before the Court now indicates that, since the incorporation of that company, Mr Guy has gone about establishing its business in such a way that it effectively competes with that of the applicants.

Orders sought

27    Against this background, the orders sought by SEVS and SGI are, effectively, for injunctive relief. In broad terms, the applicant companies seek:

(a)    an order restraining the respondents from misusing their confidential information;

(b)    an order restraining the respondents from competing with the business conducted by SEVS;

(c)    an order restraining Mr Guy from having any interest in a business in competition with SEVS; and

(d)    what is said to be an ancillary order, requiring the respondents to file and serve affidavits as to the whereabouts of certain items of property.

28    There were two bases asserted for the injunctive relief. First, the statutory basis provided by s 1324(4) of the Corporations Act 2001 (Cth) (Corporations Act), which empowers the Court to grant an “interim” injunction where, inter alia, there has been an actual or threatened contravention of the Act. Secondly, the Court’s equitable jurisdiction to grant an injunction, as reflected in s 23 of the Federal Court of Australia Act 1976 (Cth).

Principles concerning the grant of interlocutory injunctions

29    The parties were not in dispute as to the principles relating to the grant of interlocutory injunctions. An applicant for such relief must establish that:

(a)    it has a prima facie case; and

(b)    the balance of convenience favours the granting of an injunction.

See Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 622 – 623 (Beecham); Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 81 – 82 [65] (ABC v O’Neill); Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238, 256 – 261 [52] – [69] (Samsung).

30    The concept of a prima facie case has a well-established meaning: it is demonstrated in circumstances where, if the evidence before the Court remains as it is, there is a probability that, at the trial of the action, the applicant will be entitled to the relief that it seeks: Beecham at 622. The strength of that probability will depend on the nature of the case. To make out a prima facie case, the applicant need not establish that it is more probable than not that it will succeed at trial; merely that there is a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial: ABC v O’Neill at 81 – 82 [65]. See also Armstrong World Industries (Australia) Pty Ltd v Parma (2014) 101 ACSR 150, 157 [24] (Armstrong World Industries).

31    Accordingly, where the respondent goes into evidence on an interlocutory application, it is inappropriate to conduct what is, essentially, a preliminary trial to ascertain where the merits lie — in effect giving or withholding the interlocutory relief on a forecast as to the ultimate result of the case: Beecham at 622 – 623. Rather, once a prima facie case is established, the court should move to consider the balance of convenience.

32    The balance of convenience is also a concept that carries what is by now a well-established meaning. It requires a comparison to be undertaken between the inconvenience or injury that the applicant would be likely to suffer if an injunction were refused and the injury that the respondent would suffer if the injunction were granted. This exercise requires some attention to be devoted to the question as to whether the refusal of the injunction would result in the applicant suffering irreparable injury for which damages will not be adequate compensation: Samsung at 259 – 261 [61] – [66]. The question as to the adequacy of damages will always need to be considered, but may or may not prove determinative in any given case: Samsung at 260 [62].

33    It should be noted that the context within which the present application arises involves the applicant companies seeking to protect confidential information from misuse by a former employee and director. It is not irrelevant to observe that courts of equity are astute to protect confidential information from misuse: see Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39, 50; Boardman v Phipps [1967] 2 AC 46, 127 – 128. That is particularly so where the information in question has been utilised by former employees or directors in pursuit of business opportunities in apparent contravention of their duties. That is not to say that an applicant for relief in such circumstances must, because of the nature of the case, meet only a lower standard of proof or will more readily be taken by the Court to have met the standard that applies. It is merely to observe that there is a heightened concern to protect confidential information in the situations identified, since:

(a)    there is an impropriety in the removal of the confidential information;

(b)    there is, likewise, an impropriety in the use of the information; and

(c)    it is very difficult for the party whose information has been stolen, misappropriated or misused to prove with a great deal of precision the details of that theft, misappropriation or misuse — including how and to what extent it has occurred.

34    Naturally, the respondent will not ordinarily volunteer the details mentioned in the last of those points.

35    Another matter that bears mentioning is that employees and directors generally understand that they are not entitled to take from the company with which they were previously associated information that is of a confidential nature. So much might be made explicit by the imposition of obligations of confidentiality in contracts between them and the company. This may be relevant to the grant of an interlocutory injunction because, in assessing the balance of convenience, the Court is permitted to consider whether the respondent was warned or had notice of the rights that it is alleged to have infringed, such that it can be said to have embarked on the conduct the subject of the application with its “eyes wide open”: see Beecham at 626; HiTech Group Australia Ltd v Riachi [2021] NSWSC 1212 [49]. That having been said, this should not be considered any more than a factor in the assessment as to whether an injunction ought to be granted: see Smith & Nephew Pty Ltd v Wake Forest University Health Sciences (2009) 82 IPR 467, 475, quoted in Samsung at 289 [193]; Apotex Pty Ltd v Cipla Ltd [2017] FCA 1627 [48].

36    As for the grant of an injunction under s 1324(4) of the Corporations Act, it ought to be noted that the applicable principles differ in one major respect. Specifically, the Court should take into account whether the injunction would have some utility within the contemplation of the Corporations Act, such as preventing or ameliorating a threatened contravention of its provisions: Armstrong World Industries at 156 [21] – [22]; Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (2002) 42 ACSR 605, 613 – 614 [33] – [38].

Determination

The causes of action stated by the applicants

37    As against Mr Guy, the applicants rely on the following causes of action, set out in their amended originating application and written submissions:

(a)    breaches of ss 181, 182 and 183 of the Corporations Act;

(b)    breaches of the equitable duty of confidence and misuse of confidential information;

(c)    breach of fiduciary duty; and

(d)    breach of contract.

38    The applicants allege that Charge Hub has aided and abetted or been directly or indirectly knowingly concerned in, or party to, the breaches alleged against Mr Guy. The causes of action relied upon as against Charge Hub arise, essentially, out of the fact that Mr Guy is the company’s sole director and shareholder. It is certainly not difficult to conclude in these circumstances that, if a case is made out against Mr Guy, it will also be made out against Charge Hub.

The offending conduct relied upon

39    The many allegations of misconduct and impropriety made by the applicants against the respondents in the material filed in these proceedings were narrowed down for the purposes of this application to a smaller collection of “blatant” examples of offending conduct on the part of Mr Guy and, inferentially, in some instances, on the part of Charge Hub, too. In particular, the applicants focused their attention on certain occasions on which Mr Guy had corresponded for business purposes with clients and prospective clients of SEVS and SGI around the time of, and after, his departure from those companies. It is said that he necessarily must have done so by having resort to the applicants’ confidential information because certain aspects of the communications, including the email addresses of particular clients, were not publicly available. It followed, in the applicants’ submission, that Mr Guy was in breach of various duties that he owed at law insofar as the confidential information had been used to advance his own business interests (in particular, through Charge Hub) outside the context of, and in fact in competition with, the SG Group.

40    The first example referred to in the applicants’ written submissions concerned Mr Guy, through Charge Hub, engaging with a prospective client of SEVS, Boorowa Ex-Services & Citizens Club Ltd (Boorowa). It has been alleged that, in early November 2022, before Mr Guy resigned as a director of SEVS but after his employment with the company had ceased, he issued a quotation on behalf of the company to Boorowa. In late January 2023, after he had resigned as a director, he caused his new entity, Charge Hub, to issue an invoice to Boorowa which attached the quotation that had been sent from SEVS to Boorowa in November 2022.

41    On its face, this alleged series of events raises a serious issue as to whether or not Mr Guy sought to use information that he had obtained as a director of SEVS to the advantage of Charge Hub and himself — specifically, by redirecting business from his former company to his new one. However, in his affidavit evidence, he has sought to provide some justification for what he did. He has deposed that he had been contacted by Boorowa while at SEVS and asked for a quotation for four items. He had provided that quotation on behalf of SEVS but later, after he had left the company, he had been contacted by a person who he understood to be a consultant to Boorowa. That person informed him that she had been sending emails to his SEVS email address, which were not being answered. In response, he allegedly explained that he was no longer with SEVS and provided Mr Cook’s mobile number. Some time later, she called back to say (as Mr Guy summarises it) that she found Mr Cook to be “incredibly uncooperative” and that she was “concerned about how to progress forward”. He then sent her a Charge Hub quotation and Boorowa paid for the items.

42    The second example concerned another prospective client of the applicants, Yarra Energy Foundation (Yarra).

43    On 14 November 2022, when Mr Guy was still a director of the applicants, a representative of Yarra contacted him at his SEVS email address. There is evidence that, after resigning as a director, he responded to that email (which invited SEVS to make a proposal for a project) from a different email address, affiliated with Charge Hub. However, this incident is somewhat obscure because it is not clear that Mr Guy or Charge Hub subsequently dealt with Yarra. Again, Mr Guy also has an explanation in his affidavit evidence for this series of events. He says that Yarra was a not-for-profit organisation with which he had a casual acquaintance and that, even though SEVS had some preliminary dealings with it before he left, his subsequent involvement with the organisation was purely gratuitous because it was a not-for-profit that he merely wanted to support as a “consultant”. Again, all that can be pointed to in reality, so he says, is that he had some contact with a party with whom he had a personal relationship. In his view, there is no evidence of him seeking to deprive SEVS of a potential business opportunity.

44    A matter of great concern in the context of this application, as mentioned earlier in these reasons, is that shortly before Mr Guy resigned as a director of the applicant companies he downloaded a database maintained by SEVS. The applicants allege that the data included all quotations and proposals issued to their customers and all of their customer contacts and details. There is some difficulty in knowing exactly what was downloaded, although the applicants’ description of the material does not seem to be disputed. Again, Mr Guy says that he performed the download in the ordinary course of business. At this stage, it is impossible to gauge the veracity of that claim. It is a matter that will no doubt have to be interrogated further at trial. Suspicions may be somewhat heightened for now because he resigned as a director of SEVS only two days after the download.

45    Another alleged example of misconduct raised by the applicants in their written submissions is that Mr Guy, after his resignation, corresponded by email with a person at the New South Wales Office of Energy and Climate Change. This person appears to have been involved in issuing grants, and the applicants assert that her email address is not publicly available — the inference being that Mr Guy obtained it from their confidential information. Mr Guy denies this. He says that the person in question contacted him via his mobile telephone and provided her email address to him in the course of that communication.

46    A further example involved Mr Guy contacting the Facilities Manager of NRG Services, a service provider for SEVS. It is said that this person’s email address also is not publicly available, such that Mr Guy must have accessed it improperly from the applicants’ confidential information. Mr Guy denies this. He says, in effect, that he has a close personal and business relationship with the original owner of NRG Services, and that it was that person who put him in touch with the Facilities Manager for a job associated only with Charge Hub. He alleges that, by this time, there had been a falling out between the owner of NRG Services and Mr Cook, such that SEVS had already lost its relationship with this service provider. The substance of his position is that his contact with NRG Services did not involve his taking any information from the applicants.

47    The next example appearing in the applicants’ written submissions concerned a Mr Jesse Priddle, who is Head of Engineering, or an Associate Director, at Jones Lang LaSalle (JLL). It is alleged that Mr Guy utilised information that he had taken from the applicants in his dealings with Mr Priddle, and also represented to JLL that the applicants were unable to carry out a particular project. In response to this, Mr Guy says that he had a personal relationship with Mr Priddle and that they used to walk their dogs together. He notes that, whilst there was an arrangement between JLL and SEVS regarding an upcoming project, that fell over as a result of SEVS’ lack of technical expertise with the result that he was then approached to pursue the project.

48    The final relevant example related to Mr Guy’s contact with a company referred to as Energywise, again using email addresses that were not publicly available. Mr Guy sought to explain this contact in a similar way, stating that he was approached by representatives of Energywise with a request that he supply the company with items for a project in place of SEVS because, as he says, the company had difficulties working with SEVS after he left.

49    All of the abovementioned examples give rise to questions of fact, which cannot be determined on this application. On the one hand, they seem on their face to give rise to a concern that Mr Guy has used contacts and other confidential information, which he obtained in his role as a director or employee, after his departure from the applicant companies, and has done so for his own benefit (or for the benefit of Charge Hub). On the other hand, Mr Guy seems to have been able to provide explanations for the events in question that, if accepted, would substantially lessen or negate their apparent seriousness.

50    Even putting these matters to one side, however, the critical difficulty for the respondents in the context of the present application lies in the applicants’ allegation that, after Mr Guy had resigned as a director of SEVS and SGI, he accessed his SEVS email account and forwarded to his personal email address a large number of emails containing information such as customer details, quotations, specifications and requirements for potential installations, and meeting invitations involving current and potential customers. It is alleged that, after doing so, he deleted all of the emails in his inbox but did not delete the emails in the “sent” folder, which were subsequently discovered.

51    There can be little doubt that the allegation that Mr Guy forwarded a number of SEVS emails to his personal email address has been alive in this matter for some time. In Mr Cook’s first affidavit in these proceedings, which was filed on 15 June 2023, he deposed at [174] that:

On 7 December 2022 at 10:57am, Guy via his Charge Hub email address invited himself, through his SEVS email address to an EVBox and Empower Training. Annexure DJC-003 page 789 is a copy of that invitation.

52    Although this description is not entirely accurate, the invitation annexed to the affidavit does show that Mr Guy, on 7 December 2022, sent from his Charge Hub email address to what appears to be his SEVS email address a notification that he had “Accepted” an invitation to a meeting or event described as “EVBox and Kempower Training”. The implication is that he must have forwarded that invitation from his SEVS email address to his Charge Hub email address at some earlier time.

53    More squarely, Mr Cook deposed in his second affidavit, which was filed on 29 August 2023, at [85] that:

85.     From my review of the email domains of smartevsolutions.com.au, smart-charge.com.au and ev-hub.com.au (which control was taken back from Guy on or about 9 December 2022), I am able to say and verily believe that:

(a)     There was no record of emails in the Inbox, however, emails remained in the Sent folder;

(b)     In the Sent folder of [Mr Guy’s SEVS email address] there were emails sent from [Mr Guy’s SEVS email address] to [Mr Guy’s personal email address] which I know as a personal email address for Guy. These emails were sent … between 29 November 2022 and 7 December 2022. For the sake of brevity I have not annexed copies of each such forwarded email;

(c)     The content of these emails included confidential information of SEVS being contact details for customers, quotations provided to customers, specifications and requirements for potential installations, meeting invitations to meet with potential and current customers;

(d)     I verily believe and understand that Guy deleted the contents of all other folders in his Inbox.

54    Mr Guy did not respond substantially in his own affidavit evidence to these allegations. In his first affidavit, which was filed on 25 August 2023, he seemed to address the allegation at [174] of Mr Cook’s first affidavit, albeit without explicitly identifying the point to which he was responding, as follows at [102] (the emphasis appearing in the original):

I also deny that I used company resources, specifically EVBox and Empower Training, as I have no idea about the attachment to Dale’s [that is, Mr Cook’s] Affidavit. I do not know Empower. I don’t often attend middle of the night European training sessions and specifically was not interested and did not volunteer for this one.

55    In the same affidavit, he deposed at [126] that he “specifically den[ied]” that he used any information gained from when he worked at SEVS. He continued:

… of course throughout my working in the industry [I] have built up quite a lot of contacts under suppliers and possible clients. I have therefore no need to access any of the information of SEVS which I in any event do not have access to.

56    In his second affidavit, which was filed on 3 October 2023, he deposed at [26] as follows:

I confirm that I do not hold any of the Applicants’ confidential information or copies of historical emails, nor have any access to it other than the information that I hold as my rights as a shareholder.

57    He then deposed, in the course of addressing the issue about his contact with Yarra, at [59]:

I did send the email of 6 December 2022 to Yarra Foundation which included an old SEVS email, as I had previously emailed myself a copy of that email. I only did this for the Yarra Foundation (and not for any of SEVS clients), as I took a personal interest in their project.

58    There is no need to analyse exactly what he meant by the second sentence of this paragraph. Mr de Waard for the applicants submitted that it amounted to an assertion that Mr Guy had only forwarded himself a copy of an old SEVS email in relation to his dealings with Yarra, and had not otherwise forwarded emails to himself in relation to any of SEVS’ clients. That reading is certainly open. If it is correct, then the truth of what is said in this paragraph of the affidavit is especially difficult to maintain in light of what was revealed at the commencement of the hearing of this application, as discussed below.

59    On 5 October 2023, an affidavit was filed in response to Mr Guy’s 3 October 2023 affidavit by Mr Kyle Costigan, a lawyer acting for the applicants. Annexed to it were copies of the emails that Mr Guy forwarded from his SEVS emails address to his personal email address.

60    At the commencement of the hearing of the application the next day, on 6 October 2023, Mr Jordaan for the respondents tendered an email that had been sent to the solicitors for the applicants earlier that morning. The substance of the email states as follows (the emphasis appearing in the original):

We note that your client has now for the first time produced evidence that our client emailed client details to himself. Our client has counted them to be 46.

Our client would be happy to resolve today’s proceedings on the basis that he will undertake to the court not to contact these clients set out in the attached list pending the resolution of these proceedings.

We will also be advising the Court about this offer at the commencement of today’s proceedings …

61    With respect, in an application of this nature, the point made at the outset of this passage is rather disingenuous. As explained above, it was quite clearly alleged at multiple points earlier in the proceedings that Mr Guy had forwarded emails from his SEVS email address to his personal email address. He must have known that he had done so. He may even have kept records demonstrating as much. The fact that an acknowledgement that the emails were forwarded came only on the morning of the hearing, by email, after the applicants had put on explicit documentary evidence, arouses a great deal of suspicion. It should be recognised, however, that this is an interlocutory application and it is conceivable that the impression properly to be gathered from these events will change as the proceedings progress.

62    Nevertheless, the email tendered at the outset of the hearing does show that, after his departure from the applicant companies, Mr Guy was prepared to utilise his access to SEVS’ email server to send to himself what is obviously confidential information. He seems to claim in his affidavit evidence that he did not need this information, but one might then ask why he took the steps that he did to obtain it. It is very difficult to believe that he would consider those steps to be appropriate, and he has not yet attempted to explain his conduct. No doubt that matter will be investigated further at trial. For the present purposes, it gives rise, at the very least, to a suspicion that confidential information was taken by Mr Guy for use in connection with his competing business.

63    There was not any great dispute between the parties as to whether the information in question was confidential in a legal sense. Some of the considerations relevant to the determination as to what is “confidential” were identified in the applicants’ written submissions as including:

(a)    the extent to which the information is known outside the business;

(b)    the extent of the measures taken by the employer to guard the secrecy of the information;

(c)    whether the circulation of the information in question is limited only to certain individuals within the employer’s business;

(d)    the value of the information to competitors; and

(e)    the ease with which the information could properly be acquired or duplicated by others.

See Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317, 334; Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326, 335 – 336 [40], quoted with apparent approval in Luvalot Clothing Pty Ltd v Dong [2022] FCA 1411 [199] and Stefanovski v Digital Central Australia (Assets) Pty Ltd (2018) 368 ALR 607, 634 – 635 [101].

64    Whilst it is, of course, necessary to determine whether or not information is confidential on the facts and circumstances of each specific case, it is true that certain information has regularly been treated by the Courts as confidential. That includes things like customer lists, business proposals, marketing strategies, manufacturer and supplier details, details of ongoing negotiations, product performance information, pricing information, and costing information: see NP Generations Pty Ltd v Feneley (2001) 80 SASR 151, 157 [19] – [20]; Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (2008) 78 IPR 262, 284 [92]; Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227, 248 – 249; Digital Products Group Pty Ltd v Opferkuch [2008] NSWSC 575 [12]. In this case, the information that Mr Guy forwarded to himself included customer details, quotations and specifications. He obtained that information in the context of his resigning from the applicant companies and establishing a new business within the same industry.

65    It is not difficult to reach the conclusion that the information contained in the emails was confidential. It was not available to the public, but instead to only a small number of people — including Mr Guy, as a director and employee of SEVS and SGI. It was also commercially sensitive, and of obvious value to any competitor.

66    There is no question that neither SEVS nor SGI consented to Mr Guy’s taking of the information. It is also relevant to observe that there is no evidence that Mr Guy indicated that he intended to take the information. The impression most readily to be gathered is that he took the information surreptitiously. The evidence before the Court at present indicates that the confidential nature of the information was made clear to Mr Guy over time and on numerous occasions. It almost goes with saying that, in the ordinary course, commercial people would understand the importance of such information and its corresponding confidentiality.

Whether injunctive relief should be granted

67    Turning to the identified grounds upon which interlocutory injunctive relief is sought in this case, the applicants first relied upon s 1324(4) of the Corporations Act. The Court may grant “interim” injunctive relief under that sub-section where it is “desirable to do so” pending determination of an application for an injunction under s 1324(1) to restrain (inter alia) a contravention or attempted contravention of the Act. Such relief can also be sought against any person who is engaging, or is proposing to engage, in conduct that constitutes aiding, abetting, counselling or procuring a contravention by a person, or being in any way, directly or indirectly, knowingly concerned in, or party to, a contravention by a person.

68    Section 183(1) of the Corporations Act provides as follows:

183 Use of information—civil obligations

Use of information—directors, other officers and employees

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

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

(b)     cause detriment to the corporation.

Note 1: This duty continues after the person stops being an officer or employee of the corporation.

Note 2:     This subsection is a civil penalty provision (see section 1317E).

69    The section has been said to reflect a fiduciary obligation under the general law: SBA Music Pty Ltd v Hall (No 3) [2015] FCA 1079 [28]. The duty that it imposes also has a substantial overlap with the equitable duty of confidence: Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598 [547] (Plus One). As explained in the authorities, the elements of a contravention of the section are as follows:

(1)     was, at the relevant time, an employee of one or both of the Plaintiffs;

(2)     acquired the relevant information;

(3)     acquired that information by virtue of his and/or her position as an employee of the Plaintiffs or either of them;

(4)     made improper use of that information;

(5)     made that improper use in order to gain directly or indirectly an advantage;

(6)     gained that advantage either for himself, herself, or for some other person or persons; and

(7)     alternatively made that improper use to cause detriment to one or both of the Plaintiffs.

See Huang v Wang [2015] NSWSC 510 [41], citing Commissioner for Corporate Affairs v Green [1978] VR 505, 510 and Forkserve Pty Ltd v Jack (2001) 19 ACLC 299, 322 [114].

70    Several authorities have treated the element of impropriety as falling to be established according to the formulation of the joint majority in R v Byrnes (1995) 183 CLR 501 at 514 – 515, being “a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case”: see, eg, AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464, 500 [124] – [125]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd (2007) 165 FCR 92, 129 [103], 130 – 131 [107]; United Petroleum Australia Pty Ltd v Herbert Smith Freehills (2018) 128 ACSR 324, 451 [648] (United Petroleum).

71    While there has been some difference of opinion about the type of “information” to which the section applies, the view that arguably accords best with the statutory language is that the term extends broadly to “knowledge of facts” or to “any information that a person may have acquired because of their position in the company”: Australian Securities and Investments Commission v Somerville (2009) 77 NSWLR 110, 124 [39]; Digital Cinema Network Pty Ltd v Omnilab Media Pty Ltd (No 2) [2011] FCA 509 [163]; Prestige Lifting Services Pty Ltd v Williams (2015) 333 ALR 674, 702 [207]; DHL Supply Chain (Australia) Pty Limited v United Workers’ Union [2021] FCA 707 [33]. See, generally, the discussion in Plus One [534] – [544]. Although instances of breach of confidence may fall within the reach of s 183, the question posed by the section is not whether the information is confidential, but how the information is acquired — specifically, whether it has been obtained because the person in question is a director, other officer or employee: see McNamara v Flavel (1988) 13 ACLR 619, 625; United Petroleum at 451 [649].

72    That having been said, it might also be argued that a narrower view of the term “information” must for now prevail at first instance in this Court after the Full Court in Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (2008) 81 IPR 1 (Futuretronics) endorsed at 9 – 10 [44] – [46] the statement of Young J in Rosetex Company Pty Ltd v Licata (1994) 12 ACSR 779 at 784 that “‘information’ … means the sort of information which equity would protect by injunction if a director used it in breach of his fiduciary duties”. The position apparently adopted by the Full Court has been adhered to on multiple subsequent occasions: see, eg, Blackmagic Design Pty Ltd v Overliese (2010) 84 IPR 505, 534 [86]; Links Golf Tasmania Pty Ltd v Sattler (2012) 213 FCR 1, 230 [700]; GDP Group Pty Ltd v Saye [2022] FCA 688 [73]; New Aim Pty Ltd v Leung [2022] FCA 722 [248] – [251]. A Full Court constituted by five Judges recently found it unnecessary to reconsider the correctness of that position: New Aim Pty Ltd v Leung (2023) 410 ALR 190, 203 [58] – [59].

73    However broadly the term “information” is understood, it is apparent here that a prima facie case can be made out that Mr Guy and Charge Hub have contravened, or are threatening to contravene, s 183(1) of the Corporations Act by using the applicants’ confidential information improperly to entice the applicants’ customers to them and to divert business opportunities. That conclusion can be drawn despite the fact that he has denied and sought to explain away the various examples of alleged misconduct to which the applicants have pointed. While his explanations may well give rise to contested issues of fact in the context of a trial, particularly as to the extent that the information in question was actually utilised, the fact that he has used his access to SEVS’ email servers during his final days as a director of the company to forward to his personal email address what was clearly confidential information suggests that there may be some reason to doubt the veracity of his account. Of course, there is no need to decide the point finally in the context of this application. It suffices to point out that the applicants have a sufficient prospect of success to justify preservation of the status quo.

74    The same course of conduct, as explained in more detail earlier in these reasons, gives rise to reasonably arguable breaches of:

(a)    the duty of confidence owed by Mr Guy to the applicants;

(b)    ss 181 and 182 of the Corporations Act; and

(c)    the terms of Mr Guy’s contracts with the applicants, as set out in part above.

75    It might also be noted that Mr Guy was in the position of a fiduciary with respect to both of the applicant companies, and a considerable deal of information came to him about the business of the SG Group in that capacity. There is reason to believe, on the evidence presently before the Court, that he availed himself of the opportunities that came to him as a director of SEVS and SGI to garner information that he could use in his competing business, Charge Hub. That might give rise to claims for breaches of fiduciary duty, though the circumstances of the case would need to be examined with care.

76    Ultimately, essentially the same alleged course of conduct gives rise to the various causes of action relied upon by the applicants. There is a sufficient probability that the applicants will be able to demonstrate at trial that this course of conduct took place as a matter of fact, such that they will be entitled to the final relief that they seek. In those circumstances, a prima facie case is established.

77    At the hearing, the respondents did not argue especially strongly against the applicants having a prima facie case. They sought to justify much of Mr Guy’s conduct, but the justifications that they advanced merely played into what will likely become contested questions of fact. They were not so compelling as to demonstrate that the applicants’ prospects of success fell short of warranting preservation of the status quo.

78    The real question that arises, in these circumstances, is whether the respondents should be restrained from misusing the applicants’ confidential information. That is a question as to the balance of convenience.

Restraint of misuse of confidential information

79    The first order referred to in the applicants’ written submissions (being order 1(a) of their proposed orders on this application) concerned the respondents’ alleged misuse of the confidential information. This was not a major focus of the application. It seemed to be accepted that preventing Mr Guy and Charge Hub from using the applicants’ confidential information would not impede Mr Guy in the pursuit of his business.

80    It is unclear whether that is entirely correct. However, in any event, the evidence before the Court raises a serious question as to whether Mr Guy improperly accessed the applicants’ confidential information and appropriated it for his own purposes. There is very little reason why he should not be enjoined from using whatever information he might have obtained. Even if an order to this effect will impede upon the business of Charge Hub and Mr Guy personally, there is reason to suspect that Mr Guy acted with his eyes wide open to the risk that he might face precisely this consequence for his actions: he would almost undoubtedly have been well aware of the impropriety of taking confidential information for use in another business operating in the same industry, and it cannot come as any sort of surprise to him that, on his being found out, the applicants have moved to prevent him from continuing to exploit the commercial opportunity to which his actions have given rise.

81    There are a number of reasons why damages would not be an adequate remedy for any breach in these circumstances. It is useful to refer to what was said by Edelman J in Emeco International Pty Ltd v O’Shea [2012] WASC 282 at [21], as follows:

The reasons why damages are often inadequate in these cases includes (i) the difficulty of detection of breaches of the obligations; (ii) the difficulty of establishing causation between any loss of business with customers and any actions of the ex-employee; and (iii) the difficulty of the calculation of the quantum of any damage arising from loss of business.

(Citations omitted).

82    These matters are apposite in the present case — perhaps even more so, given the intentional and surreptitious nature of Mr Guy’s conduct (as it presently appears). The potential for the conduct to have been perpetrated intentionally also confirms that the injunction sought by the applicants is desirable in the sense required by s 1324(4) of the Corporations Act.

83    In those circumstances, it is appropriate to grant an injunction restraining Mr Guy and Charge Hub from misusing the confidential information that Mr Guy obtained from the applicants, whether it was obtained as a result of him having downloaded the information or, as appears to be more directly relevant now, having forwarded the information from his SEVS email address to his personal email address.

Restraint from working for competitors

84    The second question (relating to the applicants’ proposed order 1(b)) is whether the respondents should be restrained from performing work for any third party that is or was in competition with SEVS’ business as at 22 November 2022. Specifically, an injunction is sought to restrain the respondents, and Mr Guy in particular, from using any confidential information that he obtained to gain an advantage for his new business, Charge Hub, or for the business of any other competitor, by undertaking work for the applicants’ customers.

85    The applicants say that, because Mr Guy is now possessed of confidential information, he will either advertently or inadvertently use it for his benefit or the benefit of any entity for which he works. As a result, he should be restrained, so the applicants say, from working for any competitor for the period of time that it takes for the information to become accessible to the public and for any head start that he has gained from the information to dissipate. This is sometimes referred to as the “springboard” doctrine. It was explained in Wilson Parking Australia 1992 Pty Ltd v Rush [2008] FCA 1601 at [45] in the following way:

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

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

…

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

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

See also Liberty Financial Pty Ltd v Jugovic [2021] FCA 607 [273] – [276] and the cases cited therein.

86    For the present purposes, the thrust of the springboard doctrine is that the Court will be prepared to restrain persons, for a period of time, to prevent them from deriving an advantage, or utilising or exploiting any advantage that they have obtained, from the misuse of confidential information. The difficulty with this type of injunction in the case at hand is that Mr Guy’s livelihood would be impacted severely if the injunction were to be granted. It would effectively mean that the business that he has now started would have to be closed down to his considerable detriment.

87    Although there are aspects of the applicants’ case that seem relatively strong, the explanations provided by Mr Guy are not so farfetched that they might safely be ignored. There can be little doubt that Mr Guy is, in fact, heavily involved in the electric vehicle charging industry. It is, perhaps, unsurprising that he has a fair amount of knowledge and information, sourced from outside SEVS and SGI, on the basis of which he is able to conduct business through Charge Hub.

88    In those circumstances, it is very difficult to determine exactly what information is confidential and is being used improperly to conduct his business and what information has come to him legitimately from another source. Already, the first injunction discussed above will issue to restrain Mr Guy from using the confidential information of the applicants. As a matter of discretion, it is inappropriate now to prevent him also from working or participating in business in competition with the applicants merely because there is a risk that he will inadvertently and indirectly derive or exploit some advantage tied to that confidential information.

89    After all, the entity for which he now works is Charge Hub. It is a party to this litigation. The information necessary to establish a case for misuse of any confidential information will be within that company, and ought to be brought forth in the course of discovery. It will not be an especially complex or onerous task for the applicants to ascertain from the discovered documents the persons that Mr Guy has been contacted in connection with his new business, and the information upon which he has relied in his correspondence and transactions. Therefore, the usual difficulties in ascertaining whether and to what extent confidential information has been used do not loom so large here. In those circumstances, the second form of injunctive relief sought by the applicants is to be refused.

Restraint from holding interest in competing business

90    It follows for the same reasons that the next order sought by the applicants (being their proposed order 2), which would restrain Mr Guy from having any interest in a business competing with SEVS, should not be granted. In support of this form of relief, the applicants relied upon the terms of the Third Shareholders Agreement — in particular, cls 22 and 24, which are in the nature of restraint of trade clauses. However, there was insufficient evidence before the Court on this application to show that the clauses were not void as a matter of public policy: see Just Group Ltd v Peck (2016) 344 ALR 162, 173 – 175 [30] – [37]. In any event, in circumstances where Mr Guy only works relevantly for the second respondent in these proceedings, Charge Hub, it is quite likely that any damages that might be awarded at a trial will be assessable and will prove an adequate remedy.

91    Further, the first injunction, which has been granted for the reasons set out above, will cover the misuse of any of the applicants’ confidential information.

Order for affidavit concerning the whereabouts of property

92    The final substantive order sought by the applicants (being their proposed order 3) requires the respondents to prepare an affidavit, setting out the whereabouts of certain listed items of the applicants’ property. This was a tangential or incidental part of the application. It is apparent that Mr Guy, upon his departure from the applicant companies, initially seemed to be in possession of fairly significant amounts of the applicants’ property, and his responses to the requests for return or delivery up of that property were somewhat sporadic and delayed.

93    Though the evidence does suggest that the applicants have an entitlement to return of the property, it is relevant to note what was said by Mr Guy on this matter in part of his affidavit of 3 October 2023. Although one suspects that the affidavit might have been carefully crafted so as to avoid making admissions whilst acknowledging that certain property belonging to the applicants has not been returned, it does at least set out Mr Guy’s belief as to the whereabouts of particular items.

94    In circumstances where Mr Guy does not seem to deny having in his possession, power or control at least some items of the applicants’ property, and he does not dispute to any great extent the applicants’ entitlement to the property, there is little difficulty in requiring him to swear an affidavit identifying where that property is or where he has last seen it.

95    Although this order is made with some hesitancy, one potential benefit of the preparation of the affidavit in the circumstances is that it may crystallise or resolve issues that are presently disputed. In other words, it may be a useful mechanism by which to narrow the matters that remain in dispute, thereby carving a more workable path through the volumes of material that have been put before the Court to date.

96    In those circumstances, it is appropriate to make an order in the form proposed by the applicants, requiring the respondents to file an affidavit identifying, amongst other things, which items of the applicants’ property listed in the relevant annexure to the proposed orders has been in their possession or control since 22 November 2022.

Conclusion

97    In accordance with the foregoing reasons, the applicants should be granted relief generally in the nature of their proposed orders 1(a) and 3.

Costs

98    As to the question of costs, Mr de Waard sought the applicants’ costs of the application on a standard basis while Mr Jordaan submitted that they should be reserved. Although costs are to be awarded entirely in the discretion of the Court, the usual course in relation to interlocutory applications is that they be reserved. That is, essentially, because of the lower threshold that an applicant often needs to satisfy in such a context, which might allow it to achieve an initial success in the matter that it is later unable to maintain when the merits are assessed comprehensively at trial. There is, perhaps, good reason to reserve the costs here on precisely this basis. A difficulty with that, however, is that, if the question of costs is dealt with at a later time after a full hearing on the merits, then the acute circumstances of this application may have been forgotten.

99    Mr Jordaan quite appropriately referred, in this connection, to the scattergun approach initially adopted by the applicants and the shambolic nature of the affidavit material and submissions first received in connection with this application. Maybe for that reason, the applicants might never deserve their costs of the application. On the other hand, the respondents’ approach also did not seem to coincide perfectly with their obligations under ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth). In particular, the respondents were reticent to explain the true circumstances surrounding Mr Guy’s forwarding of the emails from his SEVS email address to his personal email address. One might expect that the application could have been brought on more efficiently if those circumstances had been clarified earlier.

100    Even if the question of costs was to be dealt with sometime later in the course of these proceedings, it could not justifiably be ordered that either side pay the other’s costs of this application. In those circumstances, it should be ordered that, in relation to this interlocutory application, there be no order as to costs.

Associate:    

Dated:    12 December 2023