FEDERAL COURT OF AUSTRALIA
Agility CIS Ltd v White (No 2) [2022] FCA 293
File number(s): VID 195 of 2021 Judgment of: ANDERSON J Date of judgment: 29 March 2022 Catchwords: PRACTICE AND PROCEDURE – further application pursuant to rr 16.21 and 26.01 of the Federal Court Rules 2011 (Cth) and s 31A(2) of the Federal Court of Australia Act 1976 (Cth) to strike out and/or give summary judgment in relation to parts of the applicants’ amended statement of claim – where the applicant alleges a misuse of confidential information – where the applicant has failed to articulate the misuse with sufficient precision – where the applicants’ claims in their current form are speculative in nature – application to strike out pleadings pursuant to r 16.21 of the Federal Court Rules 2011 allowed Legislation: Federal Court Act 1976 (Cth)
Federal Court Rules 2011 (Cth)
Cases cited: Agility CIS Ltd v White [2021] FCA 1145
Australian Competition and Consumer Commission v Pauls Ltd [1999] FCA 1750
CA Inc v ISI Pty Ltd (2012) 95 IPR 424
Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2021] FCA 809; 160 IPR 362
Creative Brands Pty Ltd v Franklin [2001] VSC 338
Gurnett v Macquarie Stevedoring Co Pty Ltd (1955) 75 WN (NSW) 261
IPC Global Pty Ltd v Pavetest Pty Ltd (2012) 122 IPR 445
Jones v Dunkel (1959) 101 CLR 298
Liberty Financial Pty Ltd v Scott (No 4) (2005) 11 VR 629
Lynx Engineering Consultants Pty Ltd v The ANI Corporation Ltd (No 2) [2009] FCA 363
Meridian VAT Reclaim Australia Pty Ltd v Agius [2006] VSC 503
Niven v Grant (1903) 29 VLR 102
ObjectiVision Pty Ltd v Visionsearch Pty Ltd [2014] FCA 1087
Pioneer Concrete Services Limited v Galli (1985) VR 675
University of Sydney v ObjectiVision Pty Ltd [2019] FCA 1625; 148 IPR 1
Division: General Division Registry: Victoria National Practice Area: Employment and Industrial Relations Number of paragraphs: 37 Date of hearing: 23 March 2022 Counsel for the Applicants: Mr L Merrick Solicitor for the Applicants: Corrs Chambers Westgarth Counsel for the Respondents: Mr S Rebikoff Solicitor for the Respondents: Clyde & Co ORDERS
VID 195 of 2021 BETWEEN: AGILITY CIS LTD (and another named in the schedule)
First Applicant
AND: LEE WHITE (and others named in the schedule)
First Respondent
ORDER MADE BY:
ANDERSON J
DATE OF ORDER:
29 MARCH 2022
THE COURT ORDERS THAT:
1.The Applicants’ Amended Statement of Claim dated 30 November 2021 be struck out pursuant to r 16.21 of the Federal Court Rules 2011.
2.Leave is granted for the Applicants to re-plead their Statement of Claim by 4.00 p.m. on 2 May 2022 or such other time as may be agreed by the parties.
3.The Applicants pay the Respondents’ costs of the application on a lump sum basis to be agreed or in default of agreement in such lump sum as determined by a Registrar of…
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- AGLC
- Agility CIS Ltd v White (No 2) [2022] FCA 293
- Case
- [2022] FCA 293
- Decision Date
CaseChat Overview and Summary
The Court was required to decide whether the applicants' amended statement of claim should be struck out in its entirety or in part, and whether summary judgment should be given in favour of the respondents. The Court found that the applicants had failed to identify the alleged confidential information with sufficient precision, and that the amended pleading was inconsistent with the particulars provided in the confidential annexure. The Court held that the applicants' claims were speculative in nature, and that it was not possible to know, with the required precision, the source code or those parts of the source code that were said to comprise the confidential information. The Court found that the applicants' amended statement of claim was defective and must be struck out.
The Court granted the respondents' application to strike out the applicants' amended statement of claim in its entirety, and ordered that the applicants be given leave to re-plead their statement of claim by a specified date. The Court also ordered that the applicants pay the respondents' costs of the application on a lump sum basis. The Court held that the applicants' claims were speculative in nature, and that it was not possible to know, with the required precision, the source code or those parts of the source code that were said to comprise the confidential information. The Court found that the applicants' amended statement of claim was defective and must be struck out.
Orders
Orders of the court
1. The Applicants’ Amended Statement of Claim dated 30 November 2021 be struck out pursuant to r 16.21 of the Federal Court Rules 2011.
2. Leave is granted for the Applicants to re-plead their Statement of Claim by 4.00 p.m. on 2 May 2022 or such other time as may be agreed by the parties.
3. The Applicants pay the Respondents’ costs of the application on a lump sum basis to be agreed or in default of agreement in such lump sum as determined by a Registrar of this Court.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
With these principles in mind, together with the principles referred to by the parties in their written submissions, which were not in dispute, I turn to consider the strike out application.CONSIDERATION The amendments which were made by the Applicants to paragraph 8(b) of the ASOC, in which they defined the alleged confidential information as “comprising the source code of ORION and its supporting applications” together with the particulars subjoined to that paragraph contained in Confidential Annexure A, fails to identify the alleged confidential information with sufficient precision to enable the Court to identify what is sought to be protected. Confidential Annexure A contains “a description of the components of the ORION source code” comprising various elements and forms of the source code. No particulars of the source code are provided. The pleading at paragraph 8(b) of the ASOC is also inconsistent with the particulars provided in Confidential Annexure A. As a consequence, it is not possible to know, with the required precision, the source code or those parts of the source code that are said to comprise the confidential information. The confidential information as defined in paragraph 8(b) of the ASOC pleads that the whole of the corpus of the source code of ORION and its supporting applications are the confidential information which is sought to be protected. Paragraph 17(a) of the ASOC pleads misuse of parts of the ORION source code and, in particular, the Stored Procedures and the algorithms that they embody as described in Confidential Annexure A. It is apparent from paragraph 5 of Confidential Annexure A that the Applicants do not claim that it is the whole of the ORION source code that has been allegedly misused. The source code for the applications stored on the “fat client” is said to comprise about 15% of the source code of ORION but the Applicants do not allege that this aspect of the ORION source code has been misused by the Respondents. The Applicants identify one aspect of the source code that they accept has not been misused, but do not specify which part or parts of the remaining source code has been allegedly misused. The ASOC does not identify which “Stored Procedures” were allegedly misused by the Respondents. The ASOC does not identify how it is said that the Respondents misused those “Stored Procedures” in the development of CORE. The inconsistency which exists between paragraph 8(a) of the ASOC (alleging the confidential information comprising the whole of the corpus of the source code of ORION and its supporting applications) and Confidential Annexure A (which refers to part or parts of the source code albeit without any precision) demonstrates why the amended pleading is defective and must be struck out. The inconsistency between paragraph 8(b) of the ASOC and Confidential Annexure A is also demonstrated by the Applicants' solicitors' email dated 28 January 2022 responding to the Respondents' solicitors' letter of complaint dated 20 December 2021: Wearne affidavit at NJW-3. In that letter, the Respondents' solicitors state: You appear to assert in your letter that our clients in effect maintain a claim in relation to the entirety of ORION's source code. However, this is not so. The PowerBuilder PowerScript code represents a substantial portion (approximately 15%) of ORION's source code. Our clients do not allege misuse of this code, as is expressly noted in paragraph 5 of Confidential Annexure A to the Amended Statement of Claim.In our clients ' view, the further identification of the specific Stored Procedures (and Triggers and Functions) misused by your clients is a matter for evidence and these allegations may in any event be further particularised following the completion of discovery.