Artcraft Pty Ltd v Passingham - [2022] VSC 20

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

EMPLOYMENT AND INDUSTRIAL LIST

S ECI 2021 04819

ARTCRAFT PTY LTD (ACN 004 399 462)	Plaintiff
v
WARREN PASSINGHAM	Defendant

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JUDGE:	John Dixon J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 January 2022
DATE OF RULING:	31 January 2022 (delivered ex tempore, revised 2 February 2022)
CASE MAY BE CITED AS:	Artcraft Pty Ltd v Passingham
MEDIUM NEUTRAL CITATION:	[2022] VSC 20

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PRACTICE AND PROCEDURE – Injunction – Costs – Ex parte interlocutory application to require defendant to destroy confidential information gained from employment with plaintiff – Application unsuccessful – Whether indemnity costs should be ordered in favour of successful defendant in light of plaintiff’s failure to make full and frank disclosure – Whether costs should be taxed immediately – Unsatisfactory conduct enabling that relief includes conduct that may compromise the due administration of justice – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.20.1.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Anast (solicitor)	Allied Legal
For the Defendant	Mr M Seelig	Destra Law

HIS HONOUR:

By summons in this proceeding, the plaintiff initially sought an urgent ex parte injunction for the return or destruction of confidential information (found in email communications) that it alleged had been taken by the defendant from his employment with the plaintiff, or alternatively, restraining the defendant from using, disseminating, disclosing or sharing with any third party, that confidential information.

That ex parte application initially came before Riordan J on Wednesday, 22 December 2021, and his Honour declined to grant the application. The application has returned before the court as an application for an interlocutory injunction on notice to the defendant.

The transcript of his Honour's exchange with Mr Talt Anast, of the plaintiff’s solicitors who appeared then and now for the plaintiff, Artcraft Pty Ltd (‘Artcraft’), explained his Honour’s reasons. I note his Honour was concerned that there may well be an explanation for the defendant sending the relevant documents to his personal email address; for example, that this was for the legitimate purpose of discharging his employment duties and did not amount to a breach of the terms of the employment agreement. Critically, Mr Anast told the court that there had not been a response to the plaintiff’s solicitor’s (Allied Legal’s) letter to the defendant on 7 December 2021, setting out its allegations against him. That letter, intemperate in its tone and possibly lacking a proper basis for a number of allegations, was copied to his new employer, De Neefe Signs Pty Ltd (‘De Neefe’).

In the context of questioning the notion that service of the application would put the defendant on notice of it, with adverse consequences for the plaintiff’s case, his Honour noted that Allied Legal had already written to the defendant about this matter. Mr Anast answered:

Yes, we wanted to, you know, give him the benefit of the doubt, and the opportunity to, you know, undertake to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Artcraft Pty Ltd v Passingham

Details

AGLC: Artcraft Pty Ltd v Passingham [2022] VSC 20
Case: [2022] VSC 20
Decision Date: 31 January 2022 (delivered ex tempore, revised 2 February 2022)

CaseChat Overview and Summary

Artcraft Pty Ltd sought an injunction against Passingham to prevent him from using confidential information he gained while employed by Artcraft. The matter was heard in the Supreme Court of Victoria. The primary issue was whether the defendant should be required to destroy the confidential information he had obtained and, if so, whether indemnity costs should be ordered against the plaintiff due to their failure to make full and frank disclosure. A secondary issue was whether the costs should be taxed immediately in light of the unsatisfactory conduct by the plaintiff.

The Court found that the plaintiff had not made full and frank disclosure, which impacted their ability to succeed in the application for an injunction. The Court emphasised the importance of full disclosure in proceedings and considered the impact of the plaintiff's conduct on the due administration of justice. Given the unsatisfactory conduct of the plaintiff, the Court found that indemnity costs were appropriate. The Court also considered whether the costs should be taxed immediately, acknowledging that such relief could be granted if the conduct was sufficiently serious to warrant it. Ultimately, the Court decided that the costs should be taxed immediately due to the nature of the plaintiff's conduct.

The Court granted an order for indemnity costs against the plaintiff and directed that the costs be taxed immediately. The Court emphasised that such orders were not to be made lightly and were reserved for cases where the conduct of a party was sufficiently serious to warrant it. The Court made it clear that the order for costs was not intended to punish the plaintiff but to ensure that the due administration of justice was not compromised by their conduct. The Court's decision serves as a reminder of the importance of full disclosure and the potential consequences of failing to comply with procedural requirements in legal proceedings.

Orders