Abrahams v Milburn
[2017] VCC 123
•24 February 2017
Breach
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-14-03271
| EZRA ABRAHAMS PTY LTD (A.C.N. 091 698 958) | Plaintiff |
| v | |
| VANESSA RENEE MILBURN | Defendant |
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JUDGE: | Millane | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24, 25, 27 January 2017 and 2 February 2017 | |
DATE OF RULINGS: | 2 and 24 February 2017 | |
CASE MAY BE CITED AS: | Abrahams v Milburn | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 123 | |
REASONS FOR RULING
(As amended under the Slip Rule on 16 March 2017)
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Subject: Commercial law
Catchwords: Breach of compromise agreement – breach of duty of confidence – whether disclosure and dissemination of confidential information – application to re-open plaintiff’s case to tender documents – submission of no case to answer.
Legislation Cited: Evidence Act 2008; Civil Procedure Act 2010; County Court Civil Procedure Rules 2008
Cases Cited:Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22; Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232; Smith v New South Wales Bar Association [2002] 176 CLR; Goldsmith v Sandilands and Others [2002] HCA 31; Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471; Henning v Lynch [1974] NSWLR 254; Mayne v The MTT (No 1) [1991] TASSC 81; Oakley v Insurance Manufacturers of Australia Pty Ltd [2008] VSC 68; Jones v Dunkel (1959) 101 CLR 298
Ruling: Leave to re-open plaintiff’s case to tender documents refused. Defendant’s submission of no case to answer upheld.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms E. Ruddle | Kliger Partners |
| For the Defendant | Mr I. Upjohn QC with Ms S. Kelly | Mann Lawyers |
HER HONOUR:
Introduction
1 My reasons for dismissing an application to re-open the plaintiff’s case on 2 February 2017 and for subsequently upholding the defendant’s submission of no case to answer on 24 February 2017 are summarised in the paragraphs that follow.
2 The plaintiff company, Ezra Abrahams Pty Ltd, operates a video conferencing business. By a Writ and Statement of Claim filed in the County Court on 8 July 2014, the plaintiff company sought damages, including exemplary and aggravated damages, alternatively equitable compensation, from a former employee, the defendant, Vanessa Renee Milburn. The plaintiff company alleged breach of an agreement made between the parties to compromise (the compromise agreement) an earlier proceeding filed in the Supreme Court of Victoria by the plaintiff company against the defendant on 23 February 2011 and, further or in the alternative, the plaintiff company alleged a breach of a duty of confidence owed by the defendant to maintain the confidence to which she agreed.
3 The Supreme Court proceeding, the subject of the compromise agreement, was defended. In summary, it was alleged that, shortly before resigning, and in breach of her retainer, and, further or in the alternative, in breach of a duty of confidence owed to her employer, the defendant had, without authority, accessed and downloaded computer files containing confidential information belonging to the plaintiff company (the Supreme Court proceeding).[1] In paragraph 5 of the Writ and Statement of Claim filed in the Supreme Court proceeding the confidential information was defined to include the plaintiff company’s customer data, supplier data, job costings and history, Visual Basic Code and operational software. The same meaning of confidential information was used in the compromise agreement and in the County Court proceeding.
[1]Exhibit P1
The County Court proceeding
4 The defendant defended the County Court proceeding. An Amended Defence and Further and Better Particulars were filed on the defendant’s behalf on 24 September 2014 and on 21 May 2015 respectively. A Reply to the Amended Defence was filed on 10 December 2014. The trial commenced on Tuesday 24 January 2017.
Matters not in issue
5 It is convenient to commence by summarising various agreed facts relating to the Supreme Court proceeding, the Offer of Compromise and the sequence of events that followed. These facts provide the context for discussion of the case and conduct pleaded and discussion of the various matters the plaintiff company was required to prove before Ms Ruddle of counsel closed the plaintiff company’s case and the defendant’s counsel, Mr Upjohn QC, notified a submission of no case to answer.
6 The facts summarised below were not in issue, because they were admitted either in the pleadings in the County Court proceeding or in an Agreed Chronology document, handed up by counsel together with an agreed List of Issues for Determination during opening.
7 Notably, the last mentioned documents clarified and narrowed the issues between the parties and helped identify the proofs required of each party, be that through oral or documentary evidence.
8 The facts not in issue, included the following:
Ø Prior to resigning from her employment, on 19 and 22 May 2010 the defendant accessed and downloaded computer files at the premises of the plaintiff company;[2]
[2]The Agreed Chronology and paragraphs 3.1 and 3(b) of the Statement of Claim and the Amended Defence respectively.
Ø On 8 April 2011, the defendant filed and served her defence in the Supreme Court proceeding;
Ø The Offer of Compromise in the Supreme Court proceeding was filed and served on 18 April 2011 (the Offer of Compromise);
Ø The Offer of Compromise contained terms that, among other things, required the defendant, within 14 days of acceptance, to:[3]
[3]Paragraphs 8 of the Statement of Claim and the Amended Defence respectively.
· deliver to the plaintiff company’s solicitors all external devices upon which the confidential information had been installed by her, her servants or agents.
· Delete all copies of the confidential information in her possession, custody and control and serve an affidavit on the plaintiff company’s solicitors “deposing to all copies of the computer files in her possession, custody and control had been deleted (sic).”
· Deliver up to the plaintiff company’s solicitors all printed copies of the confidential information and serve an affidavit upon the plaintiff, deposing that all printed copies of the confidential information in her possession, custody and control had been delivered to the plaintiff company’s solicitors.
· Serve an affidavit on the plaintiff company deposing as to whether she had disclosed or disseminated the confidential information to any person other than the plaintiff company, and if so, the identity of that person and the date, time and circumstances of the disclosure.
· Undertake to the plaintiff company in writing that neither she, her servants and agents or whosoever, would use, disclose or disseminate the confidential information or any part of it.
Ø On 4 May 2011 the defendant’s counsel in the Supreme Court proceeding, Jonathan Korman (the Second Third Party to the County Court proceeding), wrote to the defendant – “by way of a letter attached to an email about a course of action that would permit her to resolve the proceeding and to provide” a business competitor, Whygo Video Conferencing Pty Ltd (the First Third Party to the County Court proceeding), “access to data from the computer files relating to Whygo”;[4]
[4]The Agreed Chronology.
Ø On 5 May 2011 the defendant wrote to Jonathan Korman responding to his letter of 4 May 2011;
Ø On 6 May 2011 Jonathan Korman wrote to two directors of Whygo, Mr Porter and Mr Matthews enclosing a copy of the pleadings in the Supreme Court proceeding;
Ø On 7 May 2011 Jonathan Korman forwarded an email received from Whygo to the defendant;
Ø On 9 May 2011 at 7 AM the defendant and Jonathan Korman met with Mr Porter in Brisbane and were joined by Mr Matthews via Skype;
Ø On 9 May 2011 at 3 PM the defendant accepted the Offer of Compromise in the Supreme Court proceeding;[5]
[5]The Agreed Chronology and paragraphs 6 of the Statement of Claim and the Amended Defence respectively.
Ø On 19 May 2011 at 10 AM the defendant accessed the downloaded computer files and extracted data relating to Whygo on to a USB (stick) and delivered the USB stick to Jonathan Korman;[6]
[6]The Agreed Chronology.
Ø On 19 May 2011 at 4 PM the defendant made an affidavit (the affidavit) and executed the undertaking (the undertaking);[7]
[7]Exhibits P6 and 7 respectively, the Agreed Chronology and paragraphs 9 of the Statement of Claim and the Amended Defence respectively.
Ø On 19 May 2011 at 4 PM there was delivery of “USBs, printed documents”, the affidavit and the undertaking to the plaintiff company’s solicitors “in purported compliance with terms of settlement”;[8]
[8]Exhibit P5 and the Agreed Chronology and paragraphs 9 of the Statement of Claim and the Amended Defence respectively.
Ø On 7 June 2011, Whygo filed a proceeding in the Supreme Court against the plaintiff company (the Whygo proceeding);[9]
[9]Paragraph 13 of the Statement of Claim and the Amended Defence respectively.
Ø On 22 June 2011 the defendant made a second affidavit (the second affidavit);[10]
[10]Paragraph 10.4 of the Statement of Claim and the Agreed Chronology.
Ø The Whygo proceeding was settled on 25 June 2012.
9 During opening of the plaintiff company’s case, the Court was informed that the First Third Party, Whygo, had been deregistered and, further, that the claim against the Second Third Party, Mr Korman, had been resolved and discontinued prior to the commencement of the County Court proceeding.
10 As mentioned, the meaning attributed to confidential information in the Supreme Court proceeding was also used in the County Court proceeding.[11]
[11]Paragraphs 3.2 and 3(b) of the Statement of Claim and the Amended Defence respectively.
The case and conducted pleaded
11 It is not necessary to repeat all of the facts pleaded and agreed by the parties. The plaintiff company’s Statement of Claim relevantly pleaded the case and conduct as follows:
10. In the period between 19 May 2011 and 7 June 2011, and despite having given the undertaking to Abrahams Co in the terms set out above, Ms Milburn:
10.1. gave a copy of the confidential information to her then counsel Mr Jonathan Korman;
10.2. asserted to Mr Korman that, by giving the confidential information to him, the confidential information “was no longer her property” and that she “no longer [had] possession, custody or control over it”;
10.3. instructed Mr Korman to give a copy of the confidential information to a company by the name of Whygo Video Conferencing Pty Ltd …; and
10.4. by her then counsel Mr Korman gave a copy of the confidential information to Whygo.
Particulars
As to 10.1-3, the plaintiff relies upon an undated letter from Ms Milburn to Mr Korman, and which contains the information, assertion and instruction set out above. A copy of the letter was exhibited as VRM-2 to an affidavit sworn by Ms Milburn on 22 June 2011 and filed in the Abrahams Co proceeding (second Milburn affidavit). A copy of the letter is in the possession of the solicitors for the plaintiff.
The period of time in which the letter was sent is to be inferred from the admission set out in paragraph 8 of the second Milburn affidavit.
As to 10.4, the plaintiff relies upon the admissions in paragraph 10 of the second Milburn affidavit.
11. The conduct of Ms Milburn in giving the confidential information to Whygo in the manner set out above:
11.1. constituted use, disclosure or dissemination of the confidential information within the meaning of the compromise agreement;
11.2. contravened the undertaking; and
11.3. was a breach of the compromise agreement.
…..
16. The conduct of Ms Milburn (by her then counsel Mr Korman) in disclosing or disseminating the confidential information to Whygo was a cause of Whygo commencing the Whygo proceeding against Abrahams Co.
Particulars
Email from James Matthews, director of Whygo, to Ezra Abrahams, received 8 February 2014 4:46am.
In that email, Mr Matthews wrote inter alia “If it were not for Vanessa [Milburn], Danny [Lanzer] and Jonathan [Korman], I would never have known about what Ezra/Vanessa/whoever were doing and would never have been able to make a claim… [against Abrahams Co].
…..
20. Further or in the alternative, Ms Milburn was subject to a duty to Abrahams Co to maintain the confidence they had agreed as between them and which was set out in the terms of the compromise agreement and specifically the undertaking (duty of confidence).
12 In effect, the defendant admitted the conduct alleged in paragraphs 10 and 11 above, but disputed that she engaged in this conduct between 19 May 2011 and 7 June 2011; or that information supplied by her to Whygo was confidential to the plaintiff company; or that the terms of the compromise agreement prohibited her from doing the acts complained of in paragraphs 10.1 and 10.2 of the Statement of Claim. She denied each and every allegation contained in paragraph 20.
13 Without repeating these paragraphs in full, by paragraphs 10 and 11 of the Amended Defence the defendant alleged that after 6 May 2011 and prior to 19 May 2011 she gave her counsel, Mr Korman “certain documents and computer data, which was information not confidential to the Defendant, but rather information confidential to Whygo and which Abrahams Co had wrongfully and unlawfully obtained from Whygo that also after 6 May 2011 and prior to 19 May 2011 she asserted to Mr Korman of counsel that the said information was now (ie. as at the time of delivery) his property and that she no longer has any possession, custody or control over it, nor would she have any claims against her in respect of his use of such data” and, further alleged, that she authorised Mr Korman to make available to Whygo the information she asserted was confidential to Whygo (the admitted conduct).
14 As mentioned, the defendant did not contest the plaintiff company’s allegation that in June 2011 Whygo commenced proceedings in the Supreme Court or that, in the Whygo proceeding, Whygo relied on the confidential information to allege that the plaintiff company had breached a duty of confidence owed to Whygo.[12]
[12]Paragraphs 13 and 14 of the Statement of Claim and the Amended Defence respectively.
15 However, the defendant did not admit the allegations contained in paragraph 16 of the Statement of Claim and alleged that Whygo’s decision to sue amounted to a novus actus interveniens.
16 Allegations made in the Amended Defence to the effect that, the plaintiff company had engaged in wrongful and unlawful conduct and that the terms of the compromise agreement, prohibiting the defendant from disclosing or disseminating the confidential information were void as against public policy, were denied in the Reply filed on behalf of the plaintiff company.[13]
[13]See particulars subjoined to paragraph 10(a) and paragraphs 23-27 inclusive of the Amended Defence.
17 In summary (and leaving to one side the defendant’s allegations of wrongful and unlawful conduct and any challenge to the efficacy of the compromise agreement), based on: the pleadings and the admitted conduct (as summarised); the facts contained in the Agreed Chronology; the agreed List of Issues for Determination; and the matters on which counsel opened, the plaintiff company’s case for damages for breach of the compromise agreement, alternatively for breach of a duty of confidence owed by the defendant, required the Court to determine on the evidence adduced:
Ø whether in the period between 19 May 2011 and 7 June 2011 the defendant by her counsel, Mr Korman, gave a copy of information to Whygo, and if she did, whether this occurred before or after she gave the undertaking to the plaintiff company at 4 PM on 19 May 2011;
Ø whether the admitted conduct was engaged in after the defendant gave the undertaking;
Ø whether the information was confidential within the meaning of the compromise agreement, and, if it was, whether the defendant’s conduct breached the compromise agreement and/or the undertaking given on 19 May 2011 and, if it did, whether this caused Whygo to commence the Whygo proceeding and, if it did, whether the breach found caused loss or damage to the plaintiff company and, if so, in what amount?
18 Over a two-day period commencing on 24 January 2017, I heard evidence from Ezra Abrahams, the only witness called by the plaintiff company in the County Court proceeding. Various documents (some of which have already been mentioned in passing in the footnotes) were tendered either during evidence-in-chief,[14] cross-examination[15] or re-examination.[16]
[14]Exhibits P1 to P15 inclusive
[15]Exhibits D1 to 13 inclusive
[16]Exhibits P16 and 17
19 Ms Ruddle closed the plaintiff company’s case late in the afternoon on 25 January 2017, following which Mr Upjohn QC sought a short adjournment. At the time counsel indicated that he was considering a submission of no case to answer because there was no evidence of what the defendant gave Mr Korman or of what information Mr Korman gave Whygo and there was no evidence that documents Whygo received from Mr Korman caused Whygo to sue the plaintiff company.
20 On resumption of the hearing at 3:48 PM, Mr Upjohn provided the Court and Ms Ruddle with written submissions and embarked on a submission of no case to answer.
21 Mr Upjohn submitted, among other things, that the appropriate course to follow on this occasion was for the Court to reserve the question of whether or not the submission should be ruled on without requiring an election to be made until the submission of no case to answer was made and answered.
22 Mr Upjohn’s application, including the question of whether or not the defendant should be put to an election before or after hearing submissions, or at all, was adjourned over the Australia Day public holiday, primarily to permit Ms Ruddle to prepare her response to an application made without notice.
The application to re-open the plaintiff company’s case
23 The written submissions handed up before the court adjourned on 25 January 2017, alleged and outlined numerous deficiencies in the evidence called by the plaintiff company to prove the case pleaded and the conduct alleged prior to closing its case. Notably, paragraph 4 identified individual and necessary elements of the plaintiff company’s case the defendant submitted the plaintiff was required to prove (“as a minimum”) to establish a breach of the compromise agreement, and it follows the alleged breach of the alleged duty of confidence. These were that:
a) The defendant gave Mr Korman information after signing the undertaking;[17]
[17]Ms Ruddle’s response to paragraph 4 (a) during the hearing of the submission of no case to answer on 2 February 2017, is discussed shortly in my reasons for upholding the submission.
b) The information the defendant gave to Mr Korman was confidential information within the meaning of the compromise agreement;
c) Mr Korman, acting as the defendant’s agent, gave to Whygo (whether directly, through its solicitors or otherwise) some or all of the information given to him by the defendant;
d) The information given by Mr Korman was confidential information within the meaning of the compromise agreement; and
e) The act by Mr Korman of giving the confidential information to Whygo caused Whygo to commence a proceeding against the plaintiff company.
24 On 27 January 2017, Ms Ruddle sought leave to re-open the plaintiff’s case to adduce further evidence; namely four documents, which had not been tendered before she formally closed the plaintiff’s case. The application to re-open, notified to the defendant on the Australia Day holiday was opposed. Written submissions were handed up by both parties.
25 For the purpose of the application to re-open and, relying on the exception available under section 131.1(2)(i) of the Evidence Act 2008, during the course of the hearing, Mr Upjohn disclosed that, several hours before being notified of the application to re-open, at 11.36 AM on 26 January 2017, the defendant served a letter containing a Calderbank offer. The offer apparently notified a further deficiency in the plaintiff company’s case; namely that the Whygo Writ and Statement of Claim (the Whygo Writ) was not in evidence.
26 At the conclusion of submissions on the application to re-open, I adjourned my decision to 2 February 2017 on the basis that, depending on the outcome of the application, either the proceeding or the submission of no case to answer would proceed immediately after my ruling was handed down.
27 Having heard and dismissed the application to re-open and, later, heard the submissions made on a submission of no case to answer, it was apparent that, subject to the submission that proof of when the defendant gave Mr Korman the information was not a necessary ingredient of the case, Ms Ruddle generally accepted that, as a minimum, the plaintiff company was required to prove through relevant and admissible evidence each of the other matters identified by the defendant in paragraph 4 (as set out above) of the written submissions on a submission of no case to answer.
The documents
28 It is convenient to separate the four documents into two groups. The first group comprised the second affidavit made by the defendant on 22 June 2011 and filed in the Supreme Court proceeding and a copy of the Whygo Writ. Both the making of the second affidavit and the filing of the Whygo Writ were among the agreed facts already mentioned.
29 The second group comprised two documents: an email and attached letter from Jonathan Korman to the defendant and dated 4 May 2011; and an email dated 21 September 2011 from the defendant to solicitors acting for her in the first Supreme Court proceeding, John Alderuccio & others. These documents were said to contain evidence of admissions made by the defendant (for convenience I have referred to these documents as “the admissions documents”).
30 My reasons for refusing the application to re-open the plaintiff company’s case for the purpose of tendering each of the four documents are summarised below.
The principles
31 The applicable principles were not controversial. The authorities cited relevantly:
Ø establish four recognised classes of case in which a court may grant leave to re-open a party’s case, namely where fresh evidence, unavailable and not reasonably discoverable before, becomes known and available; where there has been inadvertent error; where there has been a mistaken apprehension of the facts; and where there has been a mistaken apprehension of the law. The overriding principle is that the court consider whether it is in the interests of justice that leave be granted to the plaintiff company to re-open its case. [18]
[18]Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 per Justice Kenny. Notably, the Court of Appeal in Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232, [25]-[26] cited Justice Kenny’s analysis with approval.
Ø Explain the considerations that apply and how different considerations may apply depending on the stage the trial has reached when the application is made. For instance, in Smith v New South Wales Bar Association four Justices of the High Court said (omitting footnotes):[19]
[19][1992] 176 CLR 256, 266-267, per Justices, Brennan, Dawson, Toohey and Gaudron
If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to enquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending upon whether the case is simply one in which the hearing is complete, or one in which reasons for the judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may be a useful guide as to the manner in which the discretion to re-open should be exercised.…
Not every case involving error will invite further evidence: it will depend entirely on the issue that is opened up. If the issue is one that invites further evidence, then, prima facie and subject to the ordinary rules of evidence, that evidence should be allowed. We say prime facie because there may be situations in which the particular evidence involved would cause embarrassment or prejudice such that, in the circumstances, it would be unfair to allow it.
Ø Provide guidance on the correct approach to an application to re-open. In Goldsmithv Sandilandsand Others,[20] a personal injuries case, the High Court dismissed an appeal against a refusal to grant the appellant leave to re-open his case to call evidence in rebuttal. The plaintiff company relied on the approach recommended, by His Honour, Kirby J, albeit in a dissenting judgment (omitting footnotes):[21]
[20][2002] HCA 31; 190 ALR 370
[21]Ibid at 385
[58] The guiding principle for the grant or refusal of leave to call evidence in response to the evidence of another party, where this is sought by a party, is, ultimately what the justice of the case – including procedural fairness – requires. That principle should not become unduly entangled in precedence or procedural rules.
[59] Whilst efficiency and economy in the conduct of civil trials are important requirements of the contemporary trial process, those objectives are valid only as they contribute to just outcomes. Once the trial process is underway, rigidity should be avoided, certainly at a time before the evidence has been closed and before the decision foreshadowed or announced. To exclude relevant evidence during a trial, in response to evidence tendered by another party in its case, simply because it could, or should, have been adduced earlier may, in particular circumstances, deny the party tendering such evidence the fair opportunity to present its case. It may render that party unjustly hostage to the defective perception, imagination and industry of its legal representatives. This is why a large discretion is reserved to the trial judge in civil trials to admit or reject evidence in rebuttal or reply.
Ø Confirm that all the circumstances of the case should be weighed in the exercise of a court’s discretion to grant or refuse an application. For instance, in Urban Transport Authority of NSW v Nweiser,[22] a damages case involving a deliberate decision not to call a witness before closing the employer’s case, the Court of Appeal noted that all factors in the case favoured the grant of the application: “the appellant would, if the application had been granted, have gained no tactical advantage and the respondent would not have been prejudiced in any way. All that had relevantly occurred was that the appellant had sought to call the evidence some time after it had formally closed its case rather than before it had done so.” [23]
[22](1992) 28 NSWLR 471
[23]Ibid, per Clarke JA at 476
32 Decisions involving applications in the civil jurisdiction to re-open after a party had closed their case and after notification of a submission of no case to answer, are few in number.
33 Cases in the criminal jurisdictions have, nonetheless, informed the development of the principles applied when considering an application to re-open in civil jurisdictions around Australia. Henning v Lynch[24] is one such case, which has since been cited or approved by other courts.[25]
[24][1974] 2 N.S.W.L.R. 254
[25]See, for example, Inspector-GeneralvBradshaw and Urban Transport op. cit.
34 Ms Ruddle submitted the circumstances of Henning, a criminal prosecution before a single justice sitting in the Supreme Court of New South Wales, were analogous to her client’s application. Henning involved prosecution of a driver for a drink driving offence and an appeal against a decision to refuse the prosecution’s application to re-open its case to tender admissible evidence - a statutory certificate - after the defence submitted there was no case to answer. Here Jeffrey J treated the failure to tender the certificate as a technical defect in the evidence for the prosecution stating (footnotes omitted): “The applicable principle is one which in the circumstances obtaining here strongly favours the reopening of the prosecution case: where the defendant’s case has not been gone into and there is ready to be tendered some additional evidence which by accident, mistake or want of foresight has not been tendered before the prosecution case is closed, it is – to use the words of Cave J in Hargraves v Hilliam… “a very fit and proper thing to allow the evidence to be given unless there is some very good reason”.”[26]
[26]Ibid at 259
35 Notably, Henning did not involve a finding of prejudice to the defendant.
36 As it turned out, during the course of hearing the plaintiff company’s application to re-open, counsel for the defendant located a decision of a single judge sitting in the Supreme Court of Tasmania in a civil case, Mayne v The MTT (No 1).[27] Ms Ruddle also relied on this decision.
[27][1991] TASSC 81; A65/1991
37 In Mayne, the application to re-open was made after a submission of no case to answer and after the defendant elected to call no evidence. The defendant alleged it would suffer prejudice as a result of having made the election and having sent away uncalled a witness from Queensland.
38 Clearly the decision to grant the application to re-open was informed by the circumstances of that case, which included consideration of what, if any, steps could be taken to overcome prejudice to the defendant. The judge concluded that, provided the defendant was no longer bound by its election, the justice of the case still required granting of the application because the defendant would then be free to call any evidence it wished to. His Honour also noted that the conduct of the defendant’s case, prior to making its election and the submission of no case to answer, had not been affected by the absence of the evidence the plaintiff sought to call.
39 Based on the High Court’s discussion in Smith of considerations that might apply, it was submitted by Mr Upjohn that, the primary consideration when determining where the interests of justice lie in the present case should be that of embarrassment or prejudice to the defendant.
40 The point to be made at this juncture is that, the significance of embarrassment or prejudice (if any) in determining where the interests of justice lie, will likely vary depending on the circumstances of the case. In the present case, the application to re-open the plaintiff company’s case was made after a submission of no case to answer was notified but before the hearing had been completed.
41 The provisions of the Victorian Civil Procedure Act 2010 and the rules of civil procedure also required consideration. Firstly, the overarching purpose of the Civil Procedure Act is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute in this proceeding. Section 9 of the Act relevantly empowers the Court to make any order or give any direction in this proceeding to further the overarching purpose by having regard to, among other objects, the just determination of the proceeding and the efficient conduct of the business of the Court. Section 49(1) further empowers the Court to give any direction or make any order it considers appropriate to further the overarching purpose in relation to the conduct of the hearing in this proceeding.
42 Secondly, the rules of civil procedure require each party to file and serve a court book and, other than with the leave of the Court or by consent, the rules preclude tender in evidence at trial a document, a copy of which the party was required to include in a court book of the party but which the party had not included.[28]
[28]County Court Civil Procedure Rules 2008, Order 34A.29
43 On 9 December 2014 consent orders were made directing, among other things, that the parties to the County Court proceeding prepare (either jointly or separately) Court Books to be filed with the Judge’s Associate at the commencement of the trial.
44 Court Books were exchanged and filed. However, the second affidavit and the Whygo Writ were never included in the plaintiff company’s Court Book.
The reasons for not tendering each of the documents – the plaintiff company’s submissions
45 Ms Ruddle explained that she had forgotten to tender the second affidavit and the Whygo Writ before closing the plaintiff’s case. Ms Ruddle said that it had always been her intention to include these documents in the Court Book and tender them as part of the plaintiff company’s case. It seems, however, that both documents were overlooked when Ms Ruddle settled the content of the plaintiff’s Court Book before travelling overseas over the Christmas break; they were overlooked again when, on returning from leave, on Monday 23 January 2017, Ms Ruddle reviewed the content of the Court Book and, without objection from the defendant, made additions to the plaintiff company’s Court Book; and they were overlooked during the hearing of the plaintiff company’s case over a two day period.
46 Ms Ruddle variously attributed the omission of the documents from the Court Book to her being focussed on more controversial correspondence when preparing the Court Book and to her being distracted by other matters, despite having, she said, noted the absence of the second affidavit and the Whygo Writ from the Court Book, on reviewing its content on the morning of Monday 23 January 2017.
47 The admissions documents were included in the plaintiff company’s Court Book. Ms Ruddle sought to tender these documents pursuant to section 81 of the Evidence Act 2008. It was not disputed that the documents were admissible under this provision as documents containing evidence of admissions by the defendant adverse to her interest in the outcome of the proceeding.
48 Ms Ruddle informed the Court that she had intended to “lead those documents through the defendant.” Counsel had not, however, anticipated the making of a submission of no case to answer and, due to want of foresight, not any tactical decision, Ms Ruddle said she failed to tender the documents pursuant to section 81.
49 As I understood the explanation given, Counsel had never previously encountered a submission of no case to answer when appearing in a civil proceeding. Consequently, Ms Ruddle had not contemplated this eventuality and had not apprehended at all the potential predicament for her client should she fail to call relevant and admissible evidence of matters the plaintiff company carried the burden of proving before closing its case. Ms Ruddle’s decision to defer leading this documentary evidence until cross-examination of the defendant, nonetheless, involved making a strategic choice about how and when to lead the evidence contained in each document to best effect.
50 In summary, both in written and oral submissions Ms Ruddle identified various matters she submitted indicated that the interests of justice would be best served by granting the plaintiff company’s application:
Ø the plaintiff company ought not be disadvantaged by errors of counsel.
Ø The defendant was not taken by surprise or prejudiced in any way by the admission of the documents.
Ø The second affidavit and the Whygo Writ were referred to in the plaintiff company’s pleadings; they were discovered by the plaintiff company and referred to in an affidavit of documents sworn on 14 August 2015; and they were referred to in the Agreed Chronology.
Ø The admissions documents were discovered by the defendant and were relevant and admissible documents.
Ø The application to re-open was made at an early stage before the defendant had called any evidence in her case and before the making of submissions in response to the submission of no case to answer. Any additional cross examination of the plaintiff company’s witness required by the defence could be undertaken.
Ø The stage at which the application to re-open was made did not impact on the finality of this litigation.
Ø Any delay caused by re-opening the plaintiff company’s case was minimal.
Ø The scope of the leave sought was “confined and directly connected to a correction of an error by counsel.”
Ø The documents to be tendered did not alter the case put by the plaintiff company and related directly to the issues pleaded and opened on.
Ø Permitting the plaintiff company to re-open its case and tender relevant and admissible documents was consistent with the overarching purpose of the Civil Procedure Act in promoting resolution of the real issues in dispute.
51 As my discussion of the defendant’s submissions below shows, when considered individually or collectively, the matters advanced on behalf of the plaintiff company did not adequately address the nature and degree of any prejudice the defendant would likely suffer were the Court to grant the leave sought.
The defendant’s submissions
52 The defendant submitted that the interests of justice favoured refusal of the application to re-open to adduce additional evidence Mr Upjohn characterised as “new evidence”. Counsel emphasised the need to balance the consequences to the plaintiff company of the errors of its counsel (“being held hostage” to errors by legal representatives) against the prejudice to the defendant (the “innocent” party), who had crafted and conducted her defence in response to the failure to tender each document.
53 The defendant did not challenge Ms Ruddle’s explanation, firstly, that, despite her intention to do so, she had overlooked adding the second affidavit and the Whygo Writ to the Court Book and tendering each document; and, secondly, that she had intended to lead evidence of the admissions contained in the admissions documents but had deferred this step until cross-examination of the defendant and, in the process, had not anticipated the making of a submission of no case to answer by the defendant.
54 The defendant, nonetheless, made the salient point that, until notification of a submission of no case to answer and receipt of the defendant’s written submissions, the plaintiff company appeared not to have been alive to the evidentiary deficiencies it sought to correct through the tender of additional evidence. In short, I have accepted that the defendant’s oral and written submissions on 25 January 2017 outlining the basis of a submission of no case to answer; not to mention the written notification on 26 January 2017 of the failure to tender the Whygo Writ, at the very least caused the plaintiff company to re-evaluate the evidence called and, in so doing the legal team identified the need to tender the documents in question to meet outstanding evidentiary deficiencies.
55 Furthermore, allowing for the matters addressed in Ms Ruddle’s submission, the defendant submitted (in my view correctly) that, firstly, the reason for not tendering the second affidavit and the Whygo Writ established, not one, but a series of oversights culminating in a failure to tender each document before the plaintiff company’s case was closed, before the submission of no case to answer was raised and outlined in some detail in the defendant’s written submissions and before service of the letter containing the Calderbank offer. This was not, Mr Upjohn submitted, an instance of “mere” inadvertence. Rather, as Ms Ruddle later conceded, until being notified of evidentiary deficiencies in the plaintiff company’s case, the conduct of the plaintiff company’s case demonstrated a persistent failure by counsel (but not, she said, the plaintiff company’s legal team), before and during the trial, to identify the second affidavit or the Whygo Writ as documents that ought be tendered.
56 Secondly, the reason given for not tendering the admissions documents before closing the plaintiff company’s case reflected a deliberate forensic decision about how Ms Ruddle would seek to admit this evidence. One consequence of this decision was that the defendant was able to make a submission of no case to answer without the admissions documents being before the Court. Were the plaintiff company to obtain leave to tender this evidence via a different mechanism (so the submission went) the defendant would be deprived of a tactical advantage gained as a result of a deliberate choice made by Ms Ruddle, not inadvertence.
57 These were matters that required consideration and were considered when determining where the interests of justice lie.
58 The defendant submitted that granting leave to re-open to tender any or all of the documents would secure a tactical advantage to the plaintiff company and would result in prejudice to the defendant that could not be cured by orders for costs, adjournment or retrial.
59 Importantly, I could not be satisfied that the submission that the defendant would not suffer any prejudice were the plaintiff company permitted to re-open its case to tender each document could be sustained. Indeed, after weighing the various considerations advanced by each party, I concluded that it would be unfair to allow the plaintiff company to re-open to tender the additional documents.
60 Paragraphs 25 to 38 inclusive of the written submissions articulated the defendant’s submission on prejudice, the reasons why this was incurable and the tactical advantage that would accrue to the plaintiff company were the application granted. The written and oral submissions are summarised and discussed in the paragraphs that follow.
61 Firstly, the application to re-open was intended to cure multiple weaknesses in the plaintiff company’s evidentiary case after the defendant had shown her hand by revealing these weaknesses in a written submission of no case to answer (and I interpolate here, after being notified of a further deficiency in the evidentiary case in the letter containing the Calderbank offer).
62 Secondly, forensic decisions were made by counsel, before and as the proceeding progressed over two days, about: what subject matter should be covered in cross examination of Mr Abrahams; what documentary evidence should be tendered, in particular, Exhibit D7, which comprised three pages of screenshots of the Whygo database; and whether to take objection to evidence adduced from the witness, in particular, the decision of counsel not to object to the tender of exhibit P17. The latter was a redacted document, tendered during re-examination as a “Copy of document discovered by Mr Korman containing code information authored by Ezra Abrahams”.
63 The spreadsheets comprising Exhibit D7 were labelled NAP-1, NAP-2 and NAP-4. Exhibit D8 comprised a copy of a Whygo invoice dated 3 November 2008.
64 Mr Abrahams gave evidence-in-chief to the effect that, when he accessed the Whygo website on-line he was taken through to the “backend” and to all of Whygo’s customer data without the necessity of logging-on or entering a password. He said he had written a “script” (the code) and that this code downloaded, tabulated and sorted records from the Whygo website into useful information.
65 Under cross-examination, among other things, Mr Abrahams indicated that:
Ø he had created a Microsoft database and called it the “Whygo Database”;
Ø he had created tools which enabled him to look at data such as Whygo invoices and make the data usable. When shown an unredacted version of Exhibit P17, Mr Abrahams identified parts of the document as copies of the code he wrote and used to download and interpret data;
Ø some files were stored whereas others contained information useful to interrogating that data, as for instance, the data relating to the identity of Whygo customers;
Ø he had used his program (I understood this to reference the code) to automatically calculate the integers as shown on NAP-2 and to provide the information shown on NAP-4;
Ø the copy of the Whygo invoice dated 3 November 2008, discovered by Mr Korman and shown to him was available by clicking on a PDF link on a Google search.
66 Other than when particulars of downloaded data set out on page 5 of the Whygo Writ were shown to me during the course of Mr Upjohn’s submissions, the content of the Whygo Writ was never in evidence. Mr Upjohn said he crafted cross-examination and proceeded on the basis that this document was not likely to be tendered. I have no reason to doubt that, as counsel said, he would not have cross-examined the witness on the spreadsheet evidence contained in Exhibit D7 had the Whygo Writ, the plaintiff company sought to tender, been in evidence.
67 Furthermore, I have accepted that, as Mr Upjohn submitted, were the plaintiff company permitted to re-open and tender the Whygo Writ, in combination, Exhibit P17 and the spreadsheet in Exhibit D7 could strengthen the chain of causation between the defendant’s disclosure of information and Whygo’s decision to sue.
68 Based on the pleadings, the contested matters and the evidence called, I have also accepted that, as claimed, Mr Upjohn had been faced with a dilemma about how he should conduct cross-examination of Mr Abrahams. In short, it is unlikely that counsel would have tendered Exhibit D7 or traversed in cross-examination of Mr Abrahams, matters relating to the screen shots or the copy Whygo invoice, had the Whygo Writ been in evidence.
69 Thirdly, I have accepted that admission into evidence of the documents would potentially expose the defendant to cross examination where, as Mr Upjohn submitted, the defendant’s written submission had provided an analysis of the weaknesses in the plaintiff company’s case and, to adopt counsel’s words: “a roadmap of contentious issues about which it must elicit evidence from Ms Milburn if it is to succeed.” Furthermore, I have accepted that, in circumstances where the plaintiff company failed to cover this territory during its own case, I could not conclude that the plaintiff company would have done so in any event.
70 Fourthly, the plaintiff company was bound by the conduct of its case and the defendant was entitled, as she did, to make tactical and strategic decisions based on that conduct. In this regard, I have accepted that, as claimed, the defendant prepared for trial on the basis of the documents contained in plaintiff company’s Court Book; cross-examination was crafted on the basis of these documents and Mr Abrahams’ evidence-in-chief; counsel had already prepared a detailed application in writing containing a submission of no case to answer; and the defendant had been ready to be put to her election when Ms Ruddle closed the plaintiff company’s case.
71 What steps, if any, could be taken to cure the likely embarrassment or prejudice to the defendant were the application to re-open to be granted?
72 The defendant submitted, in my view with good reason, that an award of costs, even on an indemnity basis, could not remedy the prejudice she would suffer should she lose the forensic and tactical advantages gained so far. Indeed, I have accepted that, as claimed, the granting of the application to re-open would likely confer a tactical advantage on the plaintiff company, which would not be adequately addressed by Ms Ruddle’s suggestion that Mr Abrahams be made available for further cross examination or, that counsel for the plaintiff company be replaced by counsel who was not privy to the content of the defendant’s submissions.
73 This is not to deny that, despite the indication given in the course of hearing the application to re-open that it was “highly unlikely” that Mr Upjohn’s client would elect to call evidence, the defendant had not been put to her election before the conclusion of the application to re-open.
74 The point that needs to be made at this juncture is that, an award of costs and/or the ordering of a new trial with or without different counsel (if taken, this course would also give rise to significant delay) was unlikely to achieve a timely and cost-effective resolution of the real issues in this dispute and, as was also submitted, would likely cast a heavy burden on an individual defendant who, as it happens, does not reside in Victoria.
75 On 2 February 2017, I dismissed the plaintiff company’s application. At Ms Ruddle’s request, I stood the matter down for a short time.
76 On resumption of the hearing it was agreed with the parties that I would proceed to hear the submission of no case to answer and publish my reasons for dismissing the plaintiff company’s application to re-open at the same time as my decision on the defendant’s submission of no case to answer.
The submission of no case to answer
77 Ms Ruddle took instructions and informed the Court that she would not make submissions in response to the defendant’s submission of no case to answer. Ms Ruddle indicated she was content for Mr Upjohn to hand up the defendant’s amended submission (the amended submission) and to proceed with his application.
78 Mr Upjohn confirmed that the defendant would not seek to call evidence should the submission of no case to answer fail.
The principles
79 The following principles were summarised and explained by His Honour, Justice Kaye in OakleyvInsurance Manufacturers of AustraliaPtyLtd (omitting footnotes):[29]
[29][2008] VSC 68; BC 200801715 [3].
1. Where a no case submission is made in a trial by jury, the role of the judges to determine whether, on the view of the evidence most favourable to the party against whom such a submission has been made (“the respondent party”), the jury could (not would) find in favour of the respondent party.
2. The test which is applicable, where a judge is sitting without a jury, is less stringent. In such a case the judge may uphold a no case submission, notwithstanding that the evidence, on the view most favourable to the respondent party, could support a judgment in favour of the respondent party.
3. In such a case the judge may perform an assessment of the quality of the evidence which has been called on behalf of the respondent party. In some cases, such an assessment may involve the judge evaluating the credit of witnesses from whom such evidence has been called.
4. In determining a no case submission, the judge is entitled to draw inferences from the evidence.
5. On a no case submission, the judge cannot draw an inference against the party making the submission (“the moving party”) based on the absence of evidence from that party.
6. Although the judge, sitting alone, may assess the quality of the evidence in determining a no case submission, nonetheless the test which is to be applied by the judge, at that stage, is different to the test which the judge would apply in determining the ultimate outcome of the case, at the conclusion of the trial. Notwithstanding that the judge, in determining the no case submission, may assess the quality of the evidence, nonetheless the test remains whether, on the evidence so assessed, the judge “could” (not would) find for the respondent party on the evidence so far led. In such a case, the judge would only find against the respondent party if the evidence, so far adduced, is so unsatisfactory or inherently unreliable or equivocal that he were to conclude that he could not be reasonably satisfied of the case made by the respondent party on the evidence thus far adduced.
80 Was the evidence sufficient to debar the defendant from obtaining judgment without having to answer that evidence?
81 The relevant evidence, as it stood at the close of the plaintiff company’s case, comprised the admissions made in the Amended Defence; the oral evidence of Mr Abrahams, the Agreed Chronology and the Exhibits identified in the amended submission as Exhibits P1 to 7 and P16 and 17 and D1 to 5 and D7 and D8.
82 As noted by counsel, Exhibits P8 to 15, D6 and D9 to 13 inclusive did not bear, either directly or indirectly, on the matters pleaded, about which it was submitted the plaintiff company was required to call evidence before closing its case.
83 The case pleaded required the plaintiff company to prove that the defendant engaged in the conduct alleged in paragraphs 10.1 to 10.4 inclusive of the Statement of Claim in the period between 19 May 2011 and 7 June 2011, after she gave the undertaking to the plaintiff company.
84 I do not propose to repeat each of the matters the defendant submitted the plaintiff company was required to prove (as a minimum) in paragraph 4(a) to (e) inclusive of the defendant’s amended submission.
85 It was submitted that, whilst there was some evidence that the defendant gave Mr Korman confidential information in April 2011,[30] of itself this evidence was insufficient to discharge the burden of proof carried by the plaintiff company. Otherwise, so the submission went, there was no evidence that the defendant gave Mr Korman information after signing the undated undertaking;[31] or that Mr Korman acting as the defendant’s agent gave to Whygo some or all of the information given to him by the defendant; or that information Mr Korman gave to Whygo was confidential within the meaning of the compromise agreement; or that the act of Mr Korman in giving confidential information to Whygo caused Whygo to commence a proceeding against the plaintiff company.
[30]See, for example, Exhibit P6, comprising a copy of the affidavit sworn by the defendant on 19 May 2011.
[31]Exhibit P7.
86 As mentioned, Ms Ruddle did respond at hearing by rejecting the assertion made in paragraph 4(a) of the amended submission that the plaintiff company was required to prove that the defendant “gave Mr Korman information after signing an undertaking”.[32]
[32]Paragraph 4(a) of the defendant’s amended submission.
87 Ms Ruddle submitted that, despite the pleading contained in paragraph 10.1 of the Statement of Claim, proof that the defendant gave Mr Korman information after signing the undertaking was not a necessary ingredient of her client’s case (“it is not the case that it is fatal to the plaintiff’s case that the court not be able to make a finding as to when Ms Milburn gave Mr Korman the evidence”).[33] All that was required, so the response went, was that Mr Korman, acting as the defendant’s agent passed that information to Whygo after the undertaking had been signed. Ms Ruddle, nonetheless, conceded that the plaintiff company could not prove this conduct, without the second affidavit, to which the particulars subjoined to paragraph 10.4 of the Statement of Claim referred, being in evidence.
[33]Transcript (TN) 301.
88 The conduct pleaded alleged a sequence of acts by the defendant (or her agent, Mr Korman), which it was said constituted a breach of the compromise agreement and that such breach had caused the plaintiff company loss and damage.
89 As my discussion of the defendant’s submissions below shows, the matters that were essential to proving the breach and any link between the breach and the decision by Whygo to sue the plaintiff company’s case very much depended on the extent of any admissions made, the agreed facts and the sufficiency of the evidence called before the plaintiff’s case was closed. Analysis of what was required and of the evidence as a whole was not straightforward.
90 That said, where, as in this case, the parties had agreed beforehand that the undertaking was executed by the defendant and delivered to the plaintiff company’s lawyers at 4 PM on 19 May 2011, proof was required that, as pleaded, “having given the undertaking” to the plaintiff company, the defendant, whether by herself or though the agency of Mr Korman, passed copies of the confidential information (as defined) to Whygo in the period alleged.
91 If, as submitted, evidence of when the defendant gave the confidential information to Mr Korman was not essential to proving the plaintiff company’s case, the concession made by counsel in her response, nonetheless, provided justification for concluding that on the evidence so far led I could not find for the plaintiff company.
92 Subject to the comments made in the paragraphs that follow and without repeating these in detail, I have accepted that the submissions made on behalf of the defendant identified multiple deficiencies in the plaintiff’s company’s proofs due to the absence of direct evidence or evidence available through the drawing of inferences at the close of the plaintiff company’s case. This does not mean that I accepted the amended submissions in their entirety.
93 The conduct pleaded was:
a) giving a copy of confidential information (as defined) to Mr Korman;[34]
[34]Paragraph 10.1.
b) asserting to Mr Korman that, by giving the confidential information (as defined) to him the information was no longer her property and was no longer in her possession, custody or control;[35]
[35]Paragraph 10.2.
c) authorising Mr Korman to provide a copy of the confidential information (as defined) to Whygo;[36] and
[36]Paragraph 10.3.
d) by Mr Korman providing a copy of the confidential information (as defined) to Whygo.[37]
[37]Paragraph 10.4.
Proof of the date and time of the giving of the undertaking
94 The date and time of the giving the undated undertaking tendered through Mr Abrahams in evidence-in-chief was an essential fact.
95 The admitted conduct in the Amended Defence and the admissions made in the affidavit,[38] did not assist the plaintiff company in this regard, as the admitted conduct was alleged to have occurred before 19 May 2011.
[38]To the effect that the defendant provided confidential information to Mr Korman on 7 April 2011.
96 The Agreed Chronology placed the execution and delivery of the undertaking at 4 PM on 19 May 2011. As mentioned, I proceeded on the basis that the undertaking was executed on the date and at the time agreed by the parties, although I was not able to conclude from the evidence that confidential information, as defined, was disclosed or disseminated by the defendant to Mr Korman or by the defendant or through the agency of Mr Korman to Whygo after 4 PM on 19 May 2011.
Proof of the defendant engaging in the conduct alleged between 19 May 2011 and 7 June 2011, after the giving of the undertaking
The giving of a copy of confidential information (as defined) to Mr Korman.
97 The evidence bearing on proof of the giving of confidential information to Mr Korman comprised admissions made in the affidavit and the Amended Defence.
98 As such, the admissions made by the defendant and the documentary evidence did not establish, either directly or indirectly, that the defendant engaged in the alleged conduct in the period alleged or that the information given to Mr Korman was confidential information, as defined.
99 As to the admissions made, the affidavit (sworn on 19 May 2011 in the Supreme Court proceeding), admitted certain conduct in relation to the disclosure of and dissemination of confidential information on 7 April 2011, prior to the making of the Offer of Compromise. By paragraphs 3 and 6h of the affidavit, the defendant relevantly stated:[39]
[39]Exhibit P6.
3. As required by clause 1 of the Offer, I have delivered up to the plaintiff all external devices upon which the confidential information was installed by myself, servants or agents in my possession, custody and control, as defined in the plaintiff’s statement of claim dated 23 February 2011 and filed with the writ (“Confidential Information”).
….
6. ….
h. On 7th April 2011, at sometime between 11 am and 3 pm, I provided (through my legal advisers) the Confidential Information to my barrister, Jonathan Korman. The circumstances of the disclosure were as follows:
I. Obtaining legal advice to defend myself against allegations made against me and legal action taken against me by Mr Abrahams in the Supreme Court.
II. Preparation of my Defence in these proceedings.
100 Accordingly, the Confidential Information to which the affidavit referred was that defined in the Statement of Claim filed in the Supreme Court proceeding. Whereas, the admissions made in the Amended Defence referred to information given to Mr Korman after 6 May 2011 and prior to 19 May 2011 (“certain documents and computer data”), which the defendant alleged was confidential to Whygo, not the plaintiff company and had been wrongfully and unlawfully obtained by the plaintiff company.
101 Other than the being described in the affidavit as the “Confidential Information” (as generally defined in the Statement of Claim filed in the Supreme Court proceeding), there was no direct or indirect evidence of what this or the information to which the Amended Defence referred comprised. Furthermore, the evidence did not provide a sound basis from which to infer that the “Confidential Information” given to Mr Korman on 7 April 2011 or, for that matter, the information given to Mr Korman after 6 May 2011 and prior to 19 May 2011 was disclosed or disseminated to Whygo in the period alleged and after execution of the undertaking.
102 As to the documentary evidence, the source of the information contained in Exhibits D7 and D8 (as described earlier), which had been obtained from documents discovered by Mr Korman in the Third Party proceeding, was not established through the evidence called. Furthermore, there was no sound basis from which to infer that the information given by the defendant to Mr Korman at any time had included the documents in D7 and D8, about which Mr Abrahams was cross-examined.
Asserting to Mr Korman that, by giving the confidential information (as defined) to him the information was no longer her property and was no longer in her possession custody or control
103 The defendant has admitted that after 6 May 2011 and prior to 19 May 2011 she gave to Mr Korman certain documents and computer data confidential to Whygo, which she asserted to Mr Korman at the time of delivery was “his property and that she no longer (had) possession, custody or control over it, …”.[40]
[40]Amended Defence, paragraph 10(a).
104 Importantly, the evidence called did not establish, either directly or indirectly, that the defendant engaged in the conduct alleged after 19 May 2011.
Authorising Mr Korman to provide a copy of the confidential information (as defined) to Whygo
105 As mentioned, the affidavit relevantly deposed to disclosure of the existence of the Confidential Information but not of the passing of this or any other information to Whygo. In this regard, paragraph 6j of the affidavit stated:[41]
[41]ibid.
j. On 6th May 2011 at approximately 9:55 AM, I disclosed (through my legal advisers) the existence of the Confidential Information but did not reveal any actual part of it to Mr Ian Porter and Mr James Matthews. The circumstances of the disclosure were as follows:
i. Ian Porter and James Matthews are senior personnel at Whygo.
ii. Mr Korman, acting on my behalf, arranged the taking of witness statements from them
iii. Mr Korman disclosed the existence of the Confidential Information to them.
iv. I instructed Mr Korman that he was permitted to make available parts of the Whygo data to Whygo. This included all details that I believed had been downloaded from Whygo’s computer system by Mr Abrahams.
v. I did not authorise Mr Korman to provide Whygo with computer files that were confidential to Mr Abrahams or his company. Therefore I only provided Whygo access to the information I believed had been downloaded from their own computers, that is their own company information. Any information that was once held by Mr Korman in relation to the Video Conferencing Centre – CMA has been destroyed.
106 More recently in the Amended Defence, the defendant admitted that after 6 May 2011 and prior to 19 May 2011, she authorised Mr Korman to make the information (certain documents and computer data confidential to Whygo, available to Whygo.
107 The information so authorised was not in evidence, nor was there evidence that this information was confidential information, as defined.
Through her counsel, Mr Korman, provided a copy of the confidential information (as defined) to Whygo.
108 The evidence called, including the affidavit and the documentary evidence did not establish, either directly or indirectly, that Mr Korman provided to Whygo (whether through its solicitors or otherwise), some or all of the information given to him by the defendant.
109 As to the assessment of the quality and sufficiency of the evidence called in this regard, the defendant also relied (as she was entitled to) on the failure of the plaintiff company to call witnesses who could give direct evidence of contested facts, such as evidence of what information and when information (if any) had been copied by Mr Korman to Whygo.
110 As mentioned, the Court was informed that the Third Party proceeding was no longer before the Court because Whygo had been deregistered and the proceeding against Mr Korman had been resolved and discontinued. The Court file also confirmed that on 19 January 2017 leave was granted to the defendant to issue a subpoena to James Matthews, who has been identified in the materials before the Court as an officer of Whygo during the relevant period. For reasons that were never explained, the court record shows that the subpoenae issued to attend to give evidence was withdrawn the day before the proceeding commenced on 24 January 2017.
111 Where, as in this case, it was likely that Mr Korman and/or an officer of Whygo could have given direct and admissible evidence of contested facts, absent an explanation for not calling these witnesses, I was invited to and did infer that the evidence of Mr Korman and/or of an officer of Whygo would not have assisted the plaintiff company’s case in establishing what information and when information (if any) had been copied by Mr Korman to Whygo.[42]
[42]See the rule in JonesvDunkel (1959) 101 CLR 298.
Proof that the information provided by Mr Korman to Whygo was confidential information, as defined by the compromise agreement
112 Even if the plaintiff company had been able to establish, either directly or indirectly, that, in the period alleged, Mr Korman gave to Whygo some or all of the information given to him by the defendant (either before or after the defendant agreed she gave the undertaking), the plaintiff company was still required to prove that this information was confidential information, as defined.
113 As mentioned, the meaning of “the confidential information” was contained in paragraph 5 of the Statement of Claim filed by the plaintiff company in the Supreme Court proceeding. The same definition was used in the compromise agreement and, as submitted, required that the information was:
Ø contained in a computer file downloaded by the defendant;
Ø from the plaintiff company;
Ø belonged to the plaintiff company; and
Ø was sensitive and confidential; and
Ø was of a general nature which fell within one of the categories enumerated in the Statement of Claim filed in the Supreme Court.
114 Essentially, the plaintiff company was required to adduce evidence that showed:
Ø what information was contained in the computer data/files downloaded by the defendant;
Ø the information downloaded by the defendant was within any of the five categories enumerated in paragraph 5 of the Statement of Claim filed in the Supreme Court;
Ø the information given to Mr Korman was confidential information such that it was sensitive and confidential and was of a general nature that fell within one of the five enumerated categories.
115 The amended submission referred to extracts from the Defence filed on behalf of the defendant in the Supreme Court proceeding. This document was not one of the documents tendered from the Court Book before the plaintiff company’s case was closed. Leaving this document to one side for the moment, it was apparent from the evidence called and from the matters agreed by the parties, that there was no evidence of what the information was that the defendant accessed and downloaded from computer files at the plaintiff company’s premises, save for:
Ø the general reference in the affidavit to delivering up “Confidential Information” as defined in the statement of claim filed in the Supreme Court proceeding;
Ø Mr Abrahams’ evidence-in-chief through which he indicated he had become aware that the defendant had copied “some” data from the plaintiff company’s computers;[43] and
[43]TN 72.
Ø Mr Abrahams’ evidence in re-examination to the effect that Exhibit P17 contained a copy of the code authored by him, which had been taken from the plaintiff company’s computer on 19 and 21 May 2010.[44]
[44]TN 201-203.
116 Additionally, there was no evidence:
Ø that either directly or indirectly linked the defendant to the provision of the screenshots or copy invoice contained in Exhibits D7 and D8 respectively, as discovered by Mr Korman; or
Ø that showed that the information contained in Exhibits D7 and D8 belonged to the plaintiff company or that this was information accessed and downloaded by the defendant.
117 Absent evidence of the information downloaded and evidence that the information accessed and downloaded was sensitive and confidential to the plaintiff company (save for the copy of the code contained in Exhibit P17, to which Mr Abrahams’ evidence referred) there was no direct or indirect evidence from which to conclude that the information the defendant downloaded was confidential information as that term was defined in the Statement of Claim in the Supreme Court proceeding and similarly defined in the compromise agreement and the County Court proceeding.
118 Importantly, accepting for the moment that the code was information confidential to the plaintiff company, there was no evidence that this was information given to Mr Korman by the defendant and, if it was, that he provided this information to Whygo in the period alleged or at all.
Proof of causation – that the act of giving confidential information to Whygo caused Whygo to commence the Whygo proceeding
119 The plaintiff company was required to prove that disclosure of confidential information, as defined, was a cause of Whygo commencing the Whygo proceeding. As submitted, proof of causation was an essential to establishing breach of the compromise agreement by the defendant.
120 It was common ground that the Whygo proceeding was commenced in June 2011. By her Amended Defence the defendant admitted that the Whygo proceeding had alleged that the plaintiff company breached a duty of confidence owed to Whygo and that Whygo had relied upon the confidential information as a foundation for claims based on breach of confidence, unlawful interference with a trade or business and conversion.
121 I found no sufficient basis in the admissions made in the Amended Defence at paragraphs 13 and 14; in the matters agreed by the parties in the Agreed Chronology or in the documentary evidence from which to infer that the Whygo proceeding was commenced because Mr Korman disclosed or disseminated to Whygo allegedly confidential information.
122 On the other hand, there was evidence to the effect that information obtained from a customer had prompted Whygo to seek legal advice in the latter part of 2010. The email communications exchanged by Mr Abrahams and James Matthews of Whygo between 8 and 11 October 2010 inclusive, indicate that this communication had come about after a Whygo customer, the DPP, notified Whygo that Mr Abrahams had accessed information, the customer considered private and confidential information, via the Whygo booking system. Having been so notified, on 8 October 2010, among other things, Mr Matthews informed Mr Abrahams that Whygo was “aware” that he had gained access to the DPP’s private and confidential information via the Whygo booking system (and had “evidence to this fact”) and that Whygo intended to obtain legal advice.[45]
[45]Exhibits D1 and D2.
123 Exhibits D3 comprised a copy of a letter sent by the plaintiff company’s solicitors, Weinberg Lawyers, to Mr Matthews on 19 October 2010 seeking to resolve the data security dispute through the execution of a Deed of Release. Exhibit D4 comprised a draft Deed of Release and Exhibit D5 comprised a copy letter dated 3 February 2011 (and enclosures) from Weinberg Lawyers to Whygo’s solicitor, from the content of which it can be readily inferred that the data security dispute between the companies, both generally and as it related to the customer, the DPP, had not resolved.
124 Mr Abrahams’ evidence did not address the content of the Whygo Writ or Statement of Claim at all.
125 This was a further occasion on which, as noted earlier, an officer of Whygo could have given direct and admissible evidence of contested facts. Absent an explanation for not calling such a witness, I was invited to and did infer that the evidence of an officer of Whygo would not have assisted the plaintiff’s case on the issue of causation.[46]
[46]See the rule in JonesvDunkel op. cit.
126 In short, even if the plaintiff company passed the hurdle of showing that, in the period alleged, the defendant through her agent gave confidential information, as defined, to Whygo, there was no direct oral or documentary evidence of causation.
127 For the sake of completeness, I note that, whilst the amended submission also relied on the terms of settlement entered into in the Whygo proceeding between the plaintiff company and Whygo, as far as I could tell from the material before me, these terms were never disclosed, either in the pleadings or by the evidence called. This matter notwithstanding, I could not be satisfied that the evidence, such as it was, provided a reliable basis for concluding that Mr Korman gave confidential information, as defined, to Whygo in the period alleged, or at all, or that disclosure or dissemination of confidential information to Whygo was a cause of Whygo commencing the proceeding.
128 It was not contested that the failure to establish any of the essential elements of the breach of the compromise agreement also meant that plaintiff company could not make good the alleged breach of an alleged duty of confidence.
129 In all, I could not find that the evidence so far led in respect to the alleged breach of the compromise agreement, alternatively, the alleged breach of a duty of confidence owed by the defendant to the plaintiff company was sufficient to debar the defendant from obtaining judgment without having to answer the evidence adduced against her.
130 The defendant has no case to answer. The proceeding is dismissed.
131 I will hear from the parties on the making of orders.
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