Alanco Australia Pty Ltd v Higgins

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FEDERAL COURT OF AUSTRALIA

Alanco Australia Pty Ltd v Higgins [2010] FCA 1484

Citation: Alanco Australia Pty Ltd v Higgins [2010] FCA 1484
Parties: ALANCO AUSTRALIA PTY LTD ACN 107 954 610 v PAUL HIGGINS, DANIEL JAMES GOLDING, DASCO SALES PTY LTD ABN 96 596 234 852 and OCNALA PTY LTD ACN 092 928 884
File number: WAD 257 of 2010
Judge: MCKERRACHER J
Date of judgment: 23 December 2010
Catchwords: PRACTICE AND PROCEDURE – Anton Pillar orders – application to release solicitors from undertaking not to disclose confidential information to client – general principles – disclosure not necessary at this stage for the conduct of the case
Legislation: Corporations Act 2001 (Cth) ss 181, 182
Federal Court Rules O 25B
Cases cited: Anton Pillar KG v Manufacturing Processes Ltd [1976] Ch 55
Home Office v Harman [1983] 1 AC 280
Kimberley Mineral Holdings Ltd (In Liq) v McEwan [1980] 1 NSWLR 210
Mackay Sugar Co-operative Association Ltd v CSR Ltd (1996) 63 FCR 408
Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34
Pioneer Concrete Services Ltd v Galli [1985] VR 675
Date of hearing: 6 December 2010
Place: Perth
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 49
Counsel for the Plaintiff: P Hannan
Solicitor for the Plaintiff: Foster Nicholson Legal
Counsel for the First Defendant: The First Defendant did not appear
Counsel for the Second and Third Defendants: G Cobby
Solicitor for the Second and Third Defendants: Clifton Tham Pty Ltd
Counsel for the Fourth Defendant: The Fourth Defendant did not appear
Counsel for the Independent Solicitor: S Ivey
Solicitor for the Independent Solicitor: Maxim Litigation Consultants

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 257 of 2010

BETWEEN:

ALANCO AUSTRALIA PTY LTD ACN 107 954 610
Plaintiff

AND:

PAUL HIGGINS
First Defendant

DANIEL JAMES GOLDING
Second Defendant

DASCO SALES PTY LTD ABN 96 596 234 852
Third Defendant

OCNALA PTY LTD ACN 092 928 884
Fourth Defendant

JUDGE:

MCKERRACHER J

DATE OF ORDER:

23 DECEMBER 2010

WHERE MADE:

PERTH

THE COURT ORDERS THAT:

1.The plaintiff’s motion be dismissed. 

2.Costs of the motion are reserved. 

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 257 of 2010

BETWEEN:

ALANCO AUSTRALIA PTY LTD ACN 107 954 610
Plaintiff

AND:

PAUL HIGGINS
First Defendant

DANIEL JAMES GOLDING
Second Defendant

DASCO SALES PTY LTD ABN 96 596 234 852
Third Defendant

OCNALA PTY LTD ACN 092 928 884
Fourth Defendant

JUDGE:

MCKERRACHER J

DATE:

23 DECEMBER 2010

PLACE:

PERTH

REASONS FOR JUDGMENT

INTRODUCTION

  1. In September 2010, I granted the plaintiff (Alanco) on an ex parte basis, search orders.  The orders directed each of the second and third defendants (Mr Golding and Dasco) to permit a nominated search party to enter the…

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Details
Case
[2010] FCA 1484
Decision Date

CaseChat Overview and Summary

In the case of Alanco Australia Pty Ltd v Higgins, Alanco, the plaintiff, sought an interlocutory search order under Order 25 Rule B of the Federal Court Rules against the defendants, Higgins, to inspect and seize documents and other material that were allegedly confidential and in the possession of the defendants. The plaintiff contended that the defendants had misappropriated confidential information relating to the plaintiff’s business, including part numbers, product descriptions, and product categories, which had been emailed to a former employee, Mr Golding, after his employment with Alanco had ended. The defendants, on the other hand, argued that there was no evidence that the material in question was in their possession and that the information was not confidential as it was published by Alanco on the internet.

The court was required to determine whether the plaintiff had made out a case for the grant of an interlocutory search order. The court considered whether the evidence presented by the plaintiff was sufficient to warrant the grant of such an order, particularly in light of the defendants’ arguments that the information was not confidential and that there was no evidence that the material was in their possession. The court also had to consider the principles governing the grant of an interlocutory search order, including the requirement that such an order should only be made in exceptional circumstances, where there was a real risk of destruction of evidence and where the inspection would not cause undue harm to the defendants.

The court held that the plaintiff had not made out a case for the grant of an interlocutory search order. The court found that there was no evidence that the defendants possessed the material in question, and that the plaintiff had not established that the information was confidential. The court emphasised that the grant of an interlocutory search order was an exceptional remedy and should only be made where there was a real risk of destruction of evidence and where the inspection would not cause undue harm to the defendants. The court held that the plaintiff had not satisfied these requirements and therefore the application for an interlocutory search order was dismissed.

The court also noted that the plaintiff should have acted with due circumspection in enforcing the order and should have given the defendants an opportunity to consider it and consult their own solicitor before seeking to enforce it. The court further held that if the defendants had refused permission to enter or inspect, the plaintiff should have accepted that refusal and brought it to the notice of the court afterwards, if necessary on an application to commit.

Orders

Orders of the court

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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

The defendants also contend there is no evidence that the ‘screen shots’ were ever in the possession of Dasco. Alanco relies on the confidentiality of its part numbers, product description similar to those of Alanco and product categories and classes similar to those of Alanco and the fact that the email from Mr Golding containing that information was in existence by 1 February 2010, more than a month after Mr Golding had ceased employment with Alanco. The defendants contend that none of that material is confidential. Alanco publishes its part numbers, product descriptions, classes and categories on the internet. Mr Golding created that system in the first place. CONSIDERATION O 25B FCR is modelled upon the well known principles in Anton Pillar. That brief and with respect, clear decision of the Court of Appeal is cited frequently. Lord Denning MR there reinforced that it is obvious that such an order can only be justified in the most exceptional circumstances. Lord Denning said (at 58):Let me say at once that no court in this land has any power to issue a search warrant to enter a man's house so as to see if there are papers or documents there which are of an incriminating nature, whether libels or infringements of copyright or anything else of the kind. No constable or bailiff can knock at the door and demand entry so as to inspect papers or documents. The householder can shut the door in his face and say, 'Get out'. That was established in the leading case of Entick v Carrington. None of us would wish to whittle down that principle in the slightest. But the order sought in this case is not a search warrant. It does not authorise the plaintiffs' solicitors or anyone else to enter the defendants' premises against their will. It does not authorise the breaking down of any doors, nor the slipping in by a back door, nor getting in by an open door or window. It only authorises entry and inspection by the permission of the defendants. The plaintiffs must get the defendants' permission. But it does do this: it brings pressure on the defendants to give permission. It does more. It actually orders them to give permission—with, I suppose, the result that if they do not give permission, they are guilty of contempt of court.…It seems to me that such an order can be made by a judge ex parte, but it should only be made where it is essential that the plaintiff should have inspection so that justice can be done between the parties; and when, if the defendant were forewarned, there is a grave danger that vital evidence will be destroyed, that papers will be burnt or lost or hidden, or taken beyond the jurisdiction, and so the ends of justice be defeated; and when the inspection would do no real harm to the defendant or his case.Nevertheless, in the enforcement of this order, the plaintiffs must act with due circumspection. On the service of it, the plaintiffs should be attended by their solicitor, who is an officer of the court. They should give the defendants an opportunity of considering it and of consulting their own solicitor. If the defendants wish to apply to discharge the order as having been improperly obtained, they must be allowed to do so. If the defendants refused permission to enter or to inspect, the plaintiffs must not force their way in. They must accept that refusal, and bring it to the notice of the court afterwards, if need be on application to commit.