FEDERAL COURT OF AUSTRALIA
Canview Pty Ltd v Gilmore [2024] FCA 551
ORDERS
First Applicant VITURA HEALTH LTD Second Applicant VITURA HEALTH OPERATIONS PTY LTD Third Applicant | ||
AND: | Respondent | |
DATE OF ORDER: |
THE COURT NOTES THAT:
1. In these orders:
(a) Vitura Group has the meaning set out in paragraph 10 of the affidavit of Guy Headley sworn on 15 May 2024.
(b) Vitura System means the IT system described in paragraph 16 of the affidavit of Guy Headley sworn on 15 May 2024.
(c) Services Agreement means the Services Agreement between CanView Pty Ltd and Code4 Cannabis Pty Ltd (C4C) dated 18 August 2022.
UPON THE APPLICANTS, THROUGH THEIR COUNSEL, GIVING THE USUAL UNDERTAKING AS TO DAMAGES, THE COURT ORDERS THAT:
1. Subject to these orders, the Respondent will not access the Vitura System or instruct or permit any third party to do so, until further order, other than for the express purpose of carrying out the Services as contemplated by clause 6.3 of the Services Agreement (the Services).
2. Subject to order 3 or to further order, in carrying out the Services on the Vitura System, the Respondent must not access any of the following:
(a) documents including but not limited to any emails, email accounts, text messages and communications via any platform or app or messaging system whatsoever;
(b) calendars and/or any information within or associated with any scheduling apps and/or platforms whatsoever;
(c) documents relating to or containing strategies of any company, entity or business whatsoever;
(d) human resources files whatsoever including but not limited to documents relating to the hiring, review, assessment, promotion or termination of employees or consultants within the Vitura Group;
(e) documents whatsoever relating to marketing;
(f) documents relating to cyber security whatsoever including but not limited to cyber penetration testing;
(g) video recordings or sound recordings whatsoever; and
(h) any stored data or stored information whatsoever other than data or information generated by the CanView Software in order to carry out the Services
(i) on the Vitura System.
3. If the Respondent believes he will need to access anything referred to in paragraph 2(a) to 2(h) above for the purpose of carrying out the Services, he will not do so unless he:
(a) makes a written request to the First Applicant setting out in reasonable detail the reason for the request and the date and timeframe on that date that he wishes to access the document(s); and
(b) receives from the First Respondent its express consent in writing to the request and the proposed date and timeframe for access to the document which shall not be unreasonably withheld.
4. The Respondent will not make copies of or download any documents from or via the Vitura System whatsoever or instruct or permit any third party to do so.
5. The Respondent will not access, use or disclose any documents (or parts thereof) which have been copied, reproduced or downloaded from or via the Vitura System or any copies thereof (Copied Documents) or instruct or permit any third party to do so, save for the sole purpose of obtaining legal advice in respect of this proceeding and proceeding numbered 5036 of 2024 in the Supreme Court of Queensland, until further order.
6. The Respondent will not access, use or disclose any information from the Copied Documents or any copies thereof (Accessed Information) or instruct or permit any third party to do so, save for the sole purpose of obtaining legal advice in respect of this proceeding and proceeding numbered 5036 of 2024 in the Supreme Court of Queensland, until further order.
7. The Respondent will not delete or destroy the Copied Documents or any copies thereof, or documents containing Accessed Information, in his possession or control or instruct or permit any third party to do so, until further order.
8. The Respondent will within 7 days of the making of this order, file and serve on the Applicants an affidavit which deposes to the following matters subject to any claim made in the affidavit to privilege:
(a) specifying the Copied Documents and any copies thereof;
(b) specifying the Accessed Information;
(c) detailing what the Respondent has done with the Copied Documents and/or the Accessed Information, including providing details of any third parties to whom Copied Documents or any copies thereof and/or Accessed Information have been provided and/or with whom the contents have been shared.
9. The First Applicant will file within 7 days of the provision of the affidavit referred to at 8 above an application in the Supreme Court of Queensland Proceeding BS5036/24 (“Supreme Court Proceeding”) relating to the use of the Copied Documents and Accessed Information in that proceeding.
10. The Application is adjourned to a date to be fixed.
11. The parties have liberty to apply on three days’ notice.
12. Pursuant to Rule 9.05 of the Federal Court Rules 2011 (Cth), Vitura Health Operations Pty Ltd is joined to the proceeding as the third applicant.
13. The Applicants have leave to amend the Originating Application so that references to the Applicants’ Microsoft 365 Account are amended to refer to the Vitura System.
14. The Applicants have leave to file the Outline of Submissions provided to Chambers on 21 May 2024.
15. Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
MEAGHER J
INTRODUCTION
1 By an interlocutory application filed on 16 May 2024, the applicants, Canview Pty Ltd and Vitura Health Ltd, urgently sought interlocutory orders restraining the respondent, Mr Gilmore, from accessing, using, disclosing and/or downloading certain documents and information which are the subject of the applicants’ claim for infringement of copyright, breach of confidence and conversion.
2 At the hearing of the interlocutory application, the applicants read the following material:
(1) Originating application filed 7 May 2024;
(2) Interlocutory application filed 16 May 2024; and
(3) Affidavit of Guy Rothwell Headley sworn 15 May 2024.
3 The respondent read the affidavit of Richard Terrick Cowen sworn 21 March 2024.
4 The orders sought by the applicants were allowed in part on 22 May 2024.
5 In the evening of 22 May 2024, the applicants indicated that they were intending to file an application for leave to appeal orders 5 and 6 and urgently seek a stay of those orders. The parties were advised on 23 May 2024 that written reasons will be provided shortly. What follows are my reasons for making those orders.
FACTUAL BACKGROUND
6 Vitura Health, the second applicant, is the holding company of the first applicant, Canview and the proposed third applicant, Vitura Operations. All employees are employed by the second applicant and the proposed third applicant.
7 The applicants are in the business of distributing medical cannabis products.
8 The respondent is the director of a company by the name of Code4 Cannabis Pty Ltd (C4C). C4C is to provide software to the first applicant (Canview Software).
9 Mr Headley, the Chief Commercial Officer and Executive Director of the second applicant deposes that the Canview Software is used to sell and distribute cannabis products by facilitating transactions and interactions between doctors, pharmacies and patients.
10 Pursuant to a software licence agreement between the first applicant and C4C (Services Agreement), the first applicant licences the Canview Software from C4C. Clause 6.3 of the Services Agreement provides:
The Supplier agrees and acknowledges that the Customer may grant the Supplier access to its systems, records and internal information (including but not limited to computer files, records, statements and documents) and the Supplier warrants that it will only access those documents for the purpose of carrying out the Services.
11 The applicants allege that the respondent has acquired confidential information and infringed the applicants’ copyright through two incidents, which are referred to in the applicants’ submissions as the ‘Hacking Incident’ and the ‘Unauthorised Access and Download Incident’. The hacking incident occurred on 16 April 2024 and the Unauthorised Access and Download Incident occurred between mid-November 2023 and 13 May 2024. Through those incidents, the applicants allege that the respondent accessed and downloaded many documents and much information without the knowledge or authority of the applicants.
Supreme Court Proceedings
12 On 15 April 2024, C4C sent a letter to the applicant stating that it would be terminating the Services Agreement, giving 14 days’ notice. The termination was based on alleged breaches of clause 5.2 of the Services Agreement, which in part provides that the first applicant is not to ‘decompile, disassemble, reverse engineer or otherwise attempt to derive the source code of the Software’.
13 On 22 April 2024, the first applicant filed proceedings against C4C in the Supreme Court of Queensland (Supreme Court Proceedings) seeking, inter alia, a declaration that the Notice of Termination dated 15 April 2024 issued by C4C was invalid and of no effect.
14 On 17 May 2024, C4C filed a defence denying that the Notice of Termination was invalid and bringing a counterclaim seeking declarations to the effect that it was a valid termination on the basis that the applicant had breached parts of the Services Agreement.
15 In its defence, C4C referred to a number of Microsoft Word documents which were published on the first applicant’s Sharepoint. C4C claims that the documents contain information which evidences fundamental breaches of the Services Agreement. C4C also referred to dates and times from 4 December 2023 to 29 March 2024 upon which it claims that employees of the applicant had accessed Developer Tools. Developer Tools are used to access the source code of web applications.
PROCEDURAL BACKGROUND
16 On 15 May 2024, the applicants approached the Duty Judge advising that an urgent interlocutory application will be filed and sought for it to be heard urgently on 23 May 2024. Based on the mutual availability of the Court and counsel, the hearing was instead listed on 22 May 2024 at 11:00 am.
17 On 21 May 2024, the parties each provided written submissions and proposed forms of orders sought.
18 At 10:15 am and 10:36 am on 22 May 2024, the applicants provided revised proposed orders (Revised Proposed Orders).
19 During the interlocutory hearing, the parties were in agreement that a prima facie case existed and that damages may not be an adequate remedy in respect of the interlocutory application. It also appeared that the balance of convenience was at least to some extent conceded by the respondent in that he agreed that interlocutory orders should be made. What remained in dispute was the form of the orders.
20 After brief openings, counsel addressed the form of the applicants’ Revised Proposed Orders on an order-by-order basis.
21 At the hearing, the parties were able to reach agreement on some matters but remained in dispute about other important matters, including particularly the definition and scope of the ‘Vitura System’ and whether the respondent should be able to access, use or disclose any of the Copied Documents and Accessed Documents for the purpose of the Supreme Court Proceedings and to carry out the services.
22 To ensure that I was provided with the precise form of orders which by then were being sought, I requested that the parties confer and provide to chambers an updated proposed order which reflected any orders which had been agreed during the hearing and that any orders not agreed be identified in markup.
23 At 3:18pm on 22 May 2024, the parties provided updated proposed orders which reflected not only agreement reached during the hearing, but also that further agreement had occurred subsequent to it (Marked-Up Proposed Orders). The Marked-Up Proposed Orders also indicated those matters which remained in dispute. The Marked-Up Proposed Orders were in the following form:
In these orders:
Vitura Group has the meaning set out in paragraph 10 of the affidavit of Guy Headley sworn on 15 May 2024.
Vitura System means the IT system described in paragraph 16 of the affidavit of Guy Headley sworn on 15 May 2024.
[Respondent:
Vitura System means any of:
a) Microsoft 365;
b) Physical or virtual computer servers;
c) Electronic devices, including computer workstations, laptops, mobile devices and tablets; and
d) Virtual Private Networks;
owned and operated by the Applicant, or Vitura Health Ltd, or its affiliates.]
[Applicants do not agree, and see amended order 2(h)]
Services Agreement means the Services Agreement between CanView Pty Ltd and Code4 Cannabis Pty Ltd (C4C) dated 18 August 2022.
[Subject to change above, definitions agreed by respondent]
UPON THE APPLICANTS, THROUGH THEIR COUNSEL, GIVING THE USUAL UNDERTAKING AS TO DAMAGES;
THE ORDER OF THE COURT IS THAT:
1. Subject to these orders, the Respondent will not access the Vitura System or instruct or permit any third party to do so, until further order, other than for the express purpose of carrying out the Services as contemplated by clause 6.3 of the Services Agreement (the Services).
[Agreed by respondent]
2. Subject to order 3 or to further order, in carrying out the Services on the Vitura System, the Respondent must not access any of the following:
(a) documents including but not limited to any emails, email accounts, text messages and communications via any platform or app or messaging system whatsoever;
(b) calendars and/or any information within or associated with any scheduling apps and/or platforms whatsoever;
(c) documents relating to or containing strategies of any company, entity or business whatsoever;
(d) human resources files whatsoever including but not limited to documents relating to the hiring, review, assessment, promotion or termination of employees or consultants within the Vitura Group;
(e) documents whatsoever relating to marketing;
(f) documents relating to cyber security whatsoever including but not limited to cyber penetration testing;
(g) video recordings or sound recordings whatsoever;
(h) documents whatsoever relating to patients and or patient records;
(i) servers or devices whatsoever other than servers or devices that are solely dedicated to providing the Services and are controlled by C4C and not Vitura;
(j) any stored data or stored information whatsoever other than data or information generated by the CanView Software in order to carry out the Services;
on the Vitura System.
[Respondent: strike out (h), (i) and (j)] [Applicants agree to strike out (h) only]
3. If the Respondent believes he will need to access anything referred to in paragraph 2(a) to 2(j) above for the purpose of carrying out the Services, he will not do so unless he:
(a) makes a written request to the First Applicant setting out in reasonable detail the reason for the request and the date and timeframe on that date that he wishes to access the document(s); and
(b) receives from the First Respondent its express consent in writing to the request and the proposed date and timeframe for access to the document which shall not be unreasonably withheld.
[Agreed by respondent]
4. The Respondent will not make copies of or download any documents from or via the Vitura System whatsoever or instruct or permit any third party to do so.
[Agreed by respondent]
5. The Respondent will not access, use or disclose any documents (or parts thereof) which have been copied, reproduced or downloaded from or via the Vitura System or any copies thereof (Copied Documents) or instruct or permit any third party to do so, save for the sole purpose of obtaining legal advice in respect of this proceeding, until further order.
[Respondent:
The Respondent will not access, use or disclose any documents (or parts thereof) which have been copied, reproduced or downloaded from or via the Vitura System or any copies thereof (Copied Documents) or instruct or permit any third party to do so, save for the sole purpose of this proceeding, proceeding numbered 5036 of 2024 in the Supreme Court of Queensland or to carry out the Services until further order.]
[Applicants do not agree]
6. The Respondent will not access or use or disclose any information from the Copied Documents or any copies thereof (Accessed Information) or instruct or permit any third party to do so, save for the sole purpose of obtaining legal advice in respect of this proceeding, until further order.
[Respondent:
The Respondent will not access, use or disclose any information from the Copied Documents or any copies thereof (Accessed Information) or instruct or permit any third party to do so, save for the sole purpose of this proceeding, proceeding numbered 5036 of 2024 in the Supreme Court of Queensland or to carry out the Services until further order.]
[Applicants do not agree]
7. The Respondent will not delete or destroy the Copied Documents or any copies thereof, or documents containing Accessed Information, in his possession or control or instruct or permit any third party to do so, until further order.
[Agreed by respondent]
8. The Respondent will within 7 days of the making of this order, file and serve on the Applicants an affidavit [respondent: subject to any claim for privilege] [Applicants: Disagree with this wording. Applicants agree the additional wording “which deposes to the following matters subject to any claim made in the affidavit to privilege”]:
(a) specifying the Copied Documents and any copies thereof;
(b) specifying the Accessed Information;
(c) detailing what the Respondent has done with the Copied Documents and/or the Accessed Information, including providing details of any third parties to whom Copied Documents or any copies thereof and/or Accessed Information have been provided and/or with whom the contents have been shared.
9. The First Applicant will file within 7 days of the provision of the affidavit referred to at 8 above an application in the Supreme Court of Queensland Proceeding BS 5036/24 (“Supreme Court Proceeding”) relating to the use of the Copied Documents and Accessed Information in that proceeding.
10. The Application is adjourned to a date to be fixed.
11. The parties have liberty to apply on three days’ notice.
12. Pursuant to Rule 9.05, Vitura Health Operations Pty Ltd is joined to the proceeding as the third applicant.
13. The Applicants have leave to amend the Originating Application so that references to the applicants’ Microsoft 365 Account are amended to refer to the Vitura System.
14. Costs reserved.
(Highlighting removed)
24 As can be seen, the matters which largely remained in dispute can be summarised as follows:
(1) the definition of the ‘Vitura System’;
(2) whether the respondent should be permitted to access servers, devices, stored data and stored information without first seeking the express consent of the applicant;
(3) whether the respondent should be able to access, use or disclose any Copied Documents or Accessed Documents for the purpose of the Supreme Court proceedings and to carry out the Services; and
(4) whether the respondent should have to depose as to which matters are subject to a claim of privilege in the affidavit.
SUBMISSIONS OF THE PARTIES
Definition of Vitura System
25 First and importantly, the applicants urged for a wide definition of the Vitura system and the respondent for it to be framed more narrowly. The applicants’ definition is taken from the affidavit of Mr Headley which, at paragraph 16, deposes to the following:
16. The Vitura Group operates a digital, IT and computer network (the Vitura System) comprised of, amongst other things, the following:
(a) Third party software: software that the Vitura Group use on the system and which is licenced from third parties including, for example:
i. the CanView Software which is licensed from C4C to conduct its core business activities including selling and distributing medical cannabis products. Amongst other things, the CanView Software allows CanView's customers, primarily doctors, pharmacies and patients (also known as end users) to interact with an interface to the platform for the purpose of facilitating the prescription, ordering, purchasing, dispensing and physical distribution of CanView's products.
ii. Microsoft 365 for business which is licensed to the Vitura Group by Microsoft (Microsoft 365). Microsoft 365 is a suite of software that includes Microsoft applications including Microsoft Word, Microsoft Excel, Microsoft Outlook (ie. email), Microsoft SharePoint, Microsoft OneDrive and Microsoft Power BI;
i. SharePoint is a Microsoft product that essentially creates website and or webpages and these can be user internally and or shared with third-parties, and can include document libraries;
ii. PowerBI is a Microsoft product that allows users to report data and other data based metrics, and can be used internally or with external third-parties.
iii. Fishbowl software (Fishbowl). Fishbowl is a third-party software provided to the Vitura Group under licence used by BHC to record the storage and distribution of products via the CanView Platform in relation to warehouse management and inventories. As the name suggests, Fishbowl allows its licenced users to look at inventory levels across the business.
iv. Operating system software including Windows, which is also created by Microsoft (Windows).
(b) Vitura owned software: software the copyright in which is owned by companies within the Vitura Group including, for example, the software used as part of Vitura’s ‘Doctors on Demand’ business.
(c) Data: the Applicants store a large amount of data and information that is used in the operating of the business. The data is stored in several places including on remote servers provided by Amazon Web Services (AWS). The data that is. stored with AWS can be accessed and or is reported via Power Bl.
(d) Servers: the CanView System is hosted on servers, located in two lqcations in Queensland. One of the servers is known as the 'Fish-Back' server and is located on Vitura's premises in the Gold Coast, Queensland and the other server is known as the ‘BHC-FB Server’. A large amount of data and information is stored on the servers and, whilst they are secure, they are accessible to a small number of users who are given access to the servers via a 'local admin account'.
(e) Electronic devices: Staff within the Vitura Group also use computers including laptops, iPads, mobile phones most of which, if not all, have access to the Vitura System.
(f) Virtual Private Network: The Vitura Group operates a virtual private network (or VPN) known as ‘Merakai’ or the ‘Merakai VPN’. A VPN can be used for a number of reasons, but Vitura uses a VPN to ensure the privacy, security of online communications within the VPN.
(Emphasis in original)
26 The respondent contended that the definition of the Vitura system should be as follows:
Vitura System means any of:
a) Microsoft 365;
b) Physical or virtual computer servers;
c) Electronic devices, including computer workstations, laptops, mobile devices and tablets; and
d) Virtual Private Networks;
owned and operated by the Applicant, or Vitura Health Ltd, or its affiliates.
(Emphasis in original)
27 Counsel for the applicant advanced the following as justification for the width of the definition:
Given the extent of the breaches, the applicants have lost faith in the respondent. The gravity of the breaches was emphasised, in the applicants’ submission, by the respondent’s failure to address the strength of the case against him and his failure to swear an affidavit himself.
Mr Headley’s affidavit annexes “two detailed reports” from the Vitura Group’s security experts “detailing all the steps he took to hack and to unlawfully download copyright-protectable material and confidential information. It even discloses the material - attempts by him to wipe, to cover his tracks”.
The orders proposed by the respondent are framed in a way which does not capture material already downloaded or copied to his own “computers, to his programs, to his laptop, to his phone, who knows”.
The effect of an order framed in the way advanced by the respondent would be to allow him to access the applicants’ documents and material that he already has even though he is prevented from accessing it again.
The applicants’ case is a very strong one, both in this Court and in the Supreme Court Proceedings. Counsel submitted that in the Supreme Court, the orders that they had sought were “in effect” not opposed.
28 Counsel for the respondent submitted that the orders proposed by the applicants would have the effect of inhibiting the respondent from accessing systems and applications owned by C4C which would significantly inhibit his ability to run his own business, and indeed provide to Canview the services necessary to comply with the Services Agreement. It was also contended that such an order might limit the respondent’s ability to access his own devices.
What the respondent may not access
29 The applicant proposed the following order setting out what material the respondent may not access:
2. Subject to order 3 or to further order, in carrying out the Services on the Vitura System, the Respondent must not access any of the following:
(a) documents including but not limited to any emails, email accounts, text messages and communications via any platform or app or messaging system whatsoever;
(b) calendars and/or any information within or associated with any scheduling apps and/or platforms whatsoever;
(c) documents relating to or containing strategies of any company, entity or business whatsoever;
(d) human resources files whatsoever including but not limited to documents relating to the hiring, review, assessment, promotion or termination of employees or consultants within the Vitura Group;
(e) documents whatsoever relating to marketing;
(f) documents relating to cyber security whatsoever including but not limited to cyber penetration testing;
(g) video recordings or sound recordings whatsoever;
(h) documents whatsoever relating to patients and or patient records;
(i) servers or devices whatsoever other than servers or devices that are solely dedicated to providing the Services and are controlled by C4C and not Vitura;
(j) any stored data or stored information whatsoever other than data or information generated by the CanView Software in order to carry out the Services;
on the Vitura System.
30 The applicants submitted that C4C was incorporated specifically to provide services to it. Accordingly, there should be no need for the respondent to access anything pertaining to it other than for the provision of the services. The applicants submitted that they had ensured that the respondent would have the access he needs by the inclusion of the words “other than servers or devices that are solely dedicated to providing the services and are controlled by C4C and not Vitura”. Further, it was submitted, the first applicant would require the services of the respondent for some time to come, and that, in any case, he had the means to obtain any necessary access not foreseen in the orders by virtue of proposed order 3 which provides a mechanism for him to obtain the consent of the first applicant should he need to access anything prohibited by order 2 to enable him to provide the services.
31 Counsel for the respondent urged for the exclusion of 2(h), (i) and (j). The basis advanced for excluding (h) was that any access to the system would necessarily involve patients and patient records. Ultimately, the applicants conceded that (h) should not form part of the orders.
32 As to 2(i), counsel for the respondent submitted that there would be difficulty in “dissecting” devices or servers dedicated solely to providing services to the first applicant and the extent to which they are controlled by C4C as opposed to Vitura. That would give rise to the risk of the respondent committing technical breaches of the orders. The same argument was advanced with respect to 2(j).
Access to Copied Documents and Accessed Documents for the purposes of the Supreme Court Proceeding
33 A major point of contention between the parties was whether the respondent should be allowed access to any of the documents he has obtained, according to the applicants, “unlawfully” to defend the Supreme Court Proceedings. This issue arises in relation to proposed orders 5 and 6.
34 Both parties made submissions that it would be inappropriate to ask this Court to decide whether the documents and information accessed by Mr Gilmore should be able to be used in the Supreme Court Proceedings. The applicant contended that on the basis of “comity between courts”. The respondent’s counsel submitted that it was for the Supreme Court to decide for itself what documents it would permit C4C to rely upon, and that I should not be asked to make that decision.
35 Both parties also made submissions as to the strength of the respective cases in the Supreme Court. On the part of the applicants, it was contended that their case was a “very strong” one. The respondent’s counsel submitted that there were “different views” as to the strength of that case.
36 Counsel for the applicants submitted that the respondent should not be allowed access to the documents and information to assist C4C in the Supreme Court proceedings. The submission was that, on the basis of the respondent’s conduct so far, they would be provided to C4C and its solicitors, if that had not already occurred, when the possibility is that the Supreme Court may not allow C4C to rely on the documents pleaded in its defence and therefore, inter alia, might be in a position to seek to have it struck out. This argument was bolstered, in the applicants’ submission, by the defence in the Supreme Court Proceedings, a copy of which was annexed to Mr Cowen’s affidavit, which clearly demonstrated that at least four of the documents have already been provided to C4C.
37 Counsel for the applicants went on to contend that proposed order 9, which contemplates that the first applicant make an application in the Supreme Court was purposely included to enable the resolution of what material obtained by Mr Gilmore may be used by C4C. On the proposed orders, that application would proceed after provision by the respondent of a Norwich Pharmaceutical affidavit; Norwich Pharmacal Co v Commissioners of Customs and Excise [1974] AC 133; [1973] 2 All ER 943. The timeframes for those steps were finite and therefore, according to the applicants’ counsel, the order will “not operate forever”.
38 The applicants say that they will make full and proper discovery in the Supreme Court Proceedings and therefore there should be no advantage to C4C in having the documents in advance of that step taking place in the usual course in that litigation.
39 For Mr Gilmore, counsel submitted that in order that C4C be able to have a fair trial in the Supreme Court Proceeding, it needed to be able to access the documents. Further, the documents were not, in Mr Gilmore’s submission, obtained unlawfully. At least some of them, including those referred to in the defence in the Supreme Court Proceeding, were available to the respondent via the SharePoint site and were easily able to be accessed by him by simply logging on and looking at them. Therefore, in the respondent’s submission, the documents could not have been unlawfully obtained. In any case, it was submitted, while the documents may have been obtained in breach of confidence or contract, that remains to be determined.
40 Furthermore, referring to the affidavit of Mr Cowen, Mr Gilmore’s counsel submitted that the applicants’ conduct appeared to engage clause 5.2.1.3 of the Service Agreement. That clause contains a prohibition on Canview decompiling, disassembling, reverse engineering or otherwise attempting to derive the source code of the Software.
41 The respondent’s counsel contended that an order confining his client to only being able to seek legal advice in relation to the documents and information in this proceeding did not go far enough as C4C may, in the Supreme Court Proceedings, assert that some, or all, of the documents were not obtained unlawfully and therefore it may want to exhibit them to a confidential affidavit.
Mr Gilmore’s right to claim privilege against self-incrimination
42 At the hearing, counsel for the applicants contended that some matters have already been “conceded” in the Supreme Court Proceedings’ defence, the affidavit material and the submissions, amounting to a waiver of the privilege against self-incrimination.
43 Nonetheless, the parties ultimately appeared to be largely in agreement that the respondent should be allowed to claim privilege against self-incrimination in his affidavit of disclosure. What remained in dispute was the precise wording of the relevant order.
44 Upon the receipt of the Marked-Up Proposed Orders, it appeared that there was disagreement in the form of the orders sought whereby the applicant sought that the respondent be made to depose as to the matters which are the subject of any claim for privilege. Conversely, the respondent sought that the wording be limited to ‘subject to any claim for privilege’.
CONSIDERATION
45 The principles relevant to the granting of interlocutory injunctions are well-settled and were recently summarised in Karas v LK Law Pty Ltd (2023) 296 FCR 39 at [72] as follows:
An applicant for an interlocutory injunction must demonstrate that there is a serious question to be tried, the applicant is likely to suffer injury for which damages will not be an adequate remedy and the balance of convenience favours the grant of the relief sought: Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 at [19] (Gleeson CJ and Crennan J). As to whether there was a serious question to be tried, [the applicant] had to demonstrate a ‘sufficient colour of right to the final relief’ in order to support interlocutory relief: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199 at [11] (Gleeson CJ). If there was a sufficient basis for a claim then an assessment of the strength of the claim was also relevant to the balance of convenience: Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238 at [67].
46 As the respondent accepted that a prima facie case exists and damages may not be an adequate remedy, the question turned on whether the balance of convenience favours the granting of the relevant interlocutory orders.
47 As to what matters are relevant when assessing the balance of convenience, in Directed Electronic OE v OE Solutions Pty Ltd [2018] FCA 142, Beach J stated at [19]:
…the balance of convenience looks at what the inconvenience, injury or injustice to [the Applicant] would be if the injunction were refused and seeks to weigh that against the inconvenience, injury or injustice to the [Respondent] if the injunction were granted … . It was submitted before me that I should assess the balance of convenience also in the context of considering the strength of the prima facie case: Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 at [67]. I agree that the stronger the prima facie case, then the less strong the balance has to weigh in favour of [the Applicant] (and, of course, vice versa). Putting it slightly differently, if the balance is more equally poised, but [the Applicant] has a strong prima facie case, then the interaction between the two limbs may tip the balance in favour of granting an injunction. …
48 Ultimately, the terms of the orders have to be considered as a whole, taking into account the interdependencies between the various orders made.
49 Given the nature of the Vitura System, the definition proposed by the respondent was, in my view, too narrow. It did not capture the extent of the Vitura system, which, according to clause 6.3 the Services Agreement C4C, of which Mr Gilmore is a director, warrants it will only access “for the purposes of carrying out the Services”. Were the definition to be constrained in the way contended for by counsel for the respondent, it would be both difficult to make certain and, to the extent that it could be made certain, contemplate far less than the Vitura System as described in the affidavit of Mr Headley. In light of the clear boundaries as to what the respondent may access to provide the services, and the removal of the reference to servers or devices in paragraph 2(i), the definition proposed by counsel for the applicants is, in my view, the appropriate one.
50 As to what Mr Gilmore may not access, I considered it appropriate that Mr Gilmore be able to access servers and devices as set out in 2(i) for two reasons. First, on the evidence of Mr Cowen, were he not to have that access, his broader business would be disadvantaged as the servers in question also operate a number of other businesses not related to that of Canview. Secondly, on the evidence of Mr Cowen, the Canview platform is a ‘cloud platform owned and operated by C4C’. The software ‘back end’ is operated on servers controlled and operated by Pharamdata and C4C. Accordingly, Mr Gilmore would not be able to perform the services under the Service Agreement without that access. In the circumstances, to exclude those servers in the way proposed by the applicants heightens the risk of Mr Gilmore committing technical breaches of the orders and limits his ability to provide the services which according to the Service Agreement, as deposed to by Mr Cowen, might result in C4C not receiving payment for its work, which would be ‘catastrophic’ for its business, ‘rendering it quickly insolvent’.
51 With respect to data, in my view the respondent is not similarly at risk. The provision that he be able to access the Vitura system for the express purpose of carrying out the Services means that he has all the access he is reasonably likely to need, and therefore a strict prohibition as to data is appropriate.
52 In terms of all of the strict prohibitions, I observe that in any case the orders in order 3 ensure that should the respondent need access to anything the orders prohibit him from accessing, there is a mechanism for that to occur. As counsel for the applicants quite properly conceded, consent pursuant to that order may not be unreasonably withheld.
53 There was a real controversy between the parties as to how the respondent may use the documents and information he has already accessed. As is set out above, the respondent’s counsel contended for him to be allowed to use them, “for the sole purpose of this proceeding, proceeding numbered 5036 of 2024 in the Supreme Court of Queensland or to carry out the Services until further order”.
54 The applicants’ position was quite contrary to that, accepting only that the respondent be able to use the documents and information for the sole purpose of obtaining legal advice in respect of this proceeding. Counsel for the applicants submitted in effect that the prima facie case was so great that the balance of convenience entirely favoured his clients and that was at least a partial objection to the respondent being able to use the documents outside of this litigation. At one stage, the submission was advanced that Mr Gilmore’s concession as to the existence of a prima facie case supported this position. Counsel for the applicants also noted that, by proposed order 9, the applicants will bring an application in the Supreme Court of Queensland within 14 days of the order relating to the use of the Copied Documents and Accessed Information in the Supreme Court Proceedings.
55 It should be noted that, as set out in Mr Cowen’s affidavit, the respondent denies that he has hacked the Vitura System and maintains that the only documents which are in his possession are the ones that were on the Sharepoint file to which he had authorised access. Accordingly, it was submitted, the prima facie case is just that and no more. The respondent denies that the relevant evidence is improperly or illegally obtained.
56 In resolving this issue, I considered that it was both artificial, and, more importantly, antithetical to the interests of justice, for the respondent not to be able to obtain legal advice regarding the very documents about which the applicants propose to make an application to the Supreme Court. Furthermore, as contended by counsel for the respondent, in making the orders proposed by the applicants, I may be, in effect, making a determination as to the whether the documents were indeed unlawfully obtained, when such a determination ought be left to the Supreme Court in the application foreshadowed by order 9. Such a determination goes beyond the finding that a prima facie case exists, which is what is to be made by the Court in granting an interlocutory injunction.
57 By allowing the respondent to obtain legal advice in respect of the documents, the respondent is afforded the ability to make full and frank disclosure of the relevant matters to his solicitors as facilitated by legal professional privilege in relation to this proceeding. Such orders maintain that the respondent is restrained from accessing, using or disclosing the documents and information in either proceeding on an interlocutory basis. Further, the orders include that the respondent is not to permit or instruct any third party to access, use or disclose the documents and information for any purpose other than obtaining legal advice. This would capture the use of the documents by C4C in the Supreme Court Proceedings.
58 By s 23 of the Federal Court of Australia Act 1976 (Cth), the Court is empowered to make interlocutory orders as the Court considers appropriate. I was satisfied, having regard to the balance of convenience and on the evidence before me, that this is the appropriate order in these circumstances.
59 As to whether the respondent should be required to depose as to any claim of privilege in his affidavit, I was satisfied that the form of orders proposed by the applicants was more appropriate to facilitate disclosure at this early stage of the proceeding and make it clear as to which matters are subject to a claim of privilege.
CONCLUSION
60 For the aforementioned reasons, I was satisfied that the interlocutory injunction should be granted and the applicants’ proposed orders should be largely allowed, save for some amendments which are outlined above.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Meagher. |
Associate:
