Australian Billboard Connections Pty Ltd v Jansen
[2001] VSC 471
•29 November 2001
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 8272 of 2001
| AUSTRALIAN BILLBOARD CONNECTIONS PTY LTD | Plaintiff |
| v. | |
| RICHARD JANSEN | Defendant |
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JUDGE: | Beach, J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 November 2001 | |
DATE OF JUDGMENT: | 29 November 2001 | |
CASE MAY BE CITED AS: | Australian Billboard Connections Pty Ltd v Jansen | |
MEDIUM NEUTRAL CITATION: | [2001] VSC 471 | |
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CATCHWORDS:
Interlocutory injunction – Former employee entering employ of competitor – Employee soliciting former employer’s clients – Alleged misuse of confidential information – No serious issues to be tried.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Burchardt | Stedman Cameron |
| For the Defendant | Mr A. Larrikin | W. J. Gilbert & Co. |
HIS HONOUR:
The plaintiff, Australian Billboard Connections Pty Ltd, is a company which is in the business of designing, creating and providing advertising billboards for real estate firms, both in Victoria and generally around the whole of Australia.
On 1 July 1998 the defendant, Richard Jansen, entered into a contract of employment with the plaintiff as the plaintiff's Victorian State Sales Manager.
The defendant purported to resign his employment from the plaintiff by giving four weeks' notice of the same on 4 November last, however, by notice of 6 November he then terminated his employment. The defendant then entered the employ of a competitor of the plaintiff called Printco (Vic) Pty Ltd.
The plaintiff alleges that since the defendant terminated his employment he has attempted to solicit the business of clients of the plaintiff for his new employer and has used confidential material of the plaintiff to enable him to do so.
At all events on 9 November an urgent ex parte application was made to McDonald, J. by counsel for the plaintiff seeking injunctive relief in the matter. On that day His Honour ordered, inter alia, that until 4 p.m. on Wednesday 14 November 2001 or further order Richard Jansen be restrained from:
"(a) disclosing or using for his or any other person's advantage (other than the Plaintiff) information received by him in confidence during, in the course of or as a result of his employment with the Plaintiff
(b)soliciting business for himself or any other person with each of the persons or businesses set out in the list annexed to this order and marked 'A', being customers and/or clients of the Plaintiff.
(c) seeking to induce any employee of the Plaintiff to cease their employment with the Plaintiff.".
His Honour then adjourned the further hearing of the application until 14 November.
In due course the matter came before me on 14 November and at that time I ordered that it be further adjourned until yesterday.
I now have before me an application by the plaintiff seeking the following orders:
1.Until the Trial of the proceeding or further Order the Defendant be restrained from:
(a) disclosing or using for his or any other person's advantage (other than the Plaintiff) information received by him in confidence during, in the course of or as a result of his employment with the Plaintiff.
(b) soliciting business for himself or any other person with each of the persons or businesses set out in the list annexed to this order and marked "A", being customers and/or clients of the Plaintiff.
(c) seeking to induce any employee of the Plaintiff to cease their employment with the Plaintiff.
2.That the Defendant be ordered to return to the Plaintiff all property in his possession, care or control that is property of the Plaintiff, including but not limited to any price lists of the Plaintiff, any lists of clients of the Plaintiff, any lists of regional managers and/or agents of the Plaintiff.
3.The Defendant be ordered to verify on Affidavit that he has not communicated to and/or given to any third party any price lists of the Plaintiff, any client lists of the Plaintiff or any lists of regional managers and/or agents of the Plaintiff.
The defendant through his counsel has given undertakings that he will not seek to induce any employee of the plaintiff to cease their employment with the plaintiff and that he will return to the plaintiff's solicitor all property in his possession, care or control that is property of the plaintiff.
The plaintiff does not now pursue the relief sought in paragraph 3. Accordingly, I am only required to determine the issues raised by paragraphs 1 (a) and (b).
It is to be remembered that there is a clear difference between customer information available to an ex-employee and that which is the ex-employer's trade secrets. The matter is dealt with by Dr Robert Dean in his work on The Law of Trade Secrets. At p.213 the author says:
"The principles upon which the courts distinguish between customer information available to an ex-employee and that which is the ex-employer's trade secret have been enunciated many times. They are predicated upon a conflict between two policy considerations. The first is that the court seeks to uphold contracts between contracting parties and the obligations of confidentiality which have expressly or impliedly been undertaken. The second is that the court 'seeks to respect the rights of servants to advance their chosen trade and profession ... promote their own private interest by changing their employment and also to promote the public interest by better use of the servant's personal aptitudes, experience and skill'.
An ex-employee is entitled to approach the ex-employer's customers so long as:
(i) those customer's names are not trade secrets;
(ii)the employee is not in breach of a valid restraint of trade clause;
(iii)the employee does not do so by using lists dishonestly removed from the ex-employer or as a consequence of deliberately and dishonestly memorising the ex-employer's clients' names."
The author cites with approval the decision of Harvey, C.J. in Ormonoid Roofing & Asphalts Ltd v. Bitumenoids Ltd[1]. I quote:
"Where an employee in the course of his employment and for the purposes of his employment has obtained ... particulars of customers which have become stored up in his mind as a necessary consequence of the way in which his master employed him, there is no justification in the absence of an express contract, for preventing him making use of that knowledge."
[1](1930) 31 S.R. (N.S.W.) 347 at 354
The defendant's account of his activities since he commenced employment with Printco is dealt with in his affidavit of 23 November 2001, sworn and filed in opposition to the plaintiff's application.
The paragraphs relevant for present purposes are paragraphs 11, 13 and 14.
"11.Following my resignation I approached Neil Slater of Printco Pty Ltd to ascertain whether they had any employment opportunities. Printco is one of the four major real estate advertising companies in Victoria and has the biggest share of business in Melbourne. It has approximately 45 per cent of the total real estate advertising products in Victoria. All four major companies, Printco Pty Ltd, Briner Signs, Insight and the Plaintiff are known to all real estate agents and no exclusive agreement exists to my knowledge between any of the companies and the real estate industry. Real estate agents tend to contact the companies on the basis of the product they wish to produce. At the foot of each advertising board is a logo of the company which produces the board displayed. Real estate agents generally want the most up to date form of board eg: The wrap around board produced by Printco and which is not produced by the Plaintiff.
13.I say that the list of agents compiled by the Plaintiff is not by any nature exclusive. The list is a listing of agents that can be extracted from the Yellow Pages directory and agents booklets and are similar to the list used by my present employer, Printco Pty Ltd, although Plaintiff's list is not as comprehensive. I deny that I have any pricing lists belonging to the Plaintiff as those records were left with the Plaintiff at the time of my termination.
14.I have not approached or had discussions with any employee of the Plaintiff since 9 November 2001 save for a telephone call to Mr Kevin Hall on 12 November 2001 when I became aware of the proceedings issued. The purpose of my call to Mr Hall was to enquire whether there were any personal messages left at the Plaintiff's for me."
Having considered this matter overnight, I am not persuaded that it is strongly arguable that the defendant has misused confidential information the property of the plaintiff. As counsel for the defendant pointed out during the course of his submissions, the estate agents who used the plaintiff's services are not the exclusive clients of the plaintiff. They may choose to use the services of the plaintiff as they see fit.
As the defendant pointed out in his affidavit, the plaintiff's list of agents is similar to the list used by the defendant's present employer, although the defendant's employer's list is more comprehensive.
The defendant's knowledge of the identity of those agents who may regularly use the services of the plaintiff cannot, in my view, be categorised as confidential information. Price lists, on the other hand, may well be determined by a court to contain confidential information. It is not for me on the hearing of an interlocutory application to make any determination in the matter, that would depend on the content of the actual price lists. However, the defendant has sworn on oath that he does not have any pricing lists of the plaintiff's, as those lists were left with the plaintiff at the time he terminated his employment. Again, determination of that dispute must await the trial of the proceeding.
It is clear from paragraph 17 of the defendant's affidavit that he is now engaged in selling many products on behalf of his present employer, products which the plaintiff does not itself produce. I do not consider that the court would be justified in interfering with his conduct in that regard.
In any event, contrary to the view expressed by Tipping, J. in Peninsular Real Estate Ltd v. Harris[2], in my opinion if the plaintiff did establish at trial that it has suffered loss as a result of any unlawful activity on behalf of the plaintiff, and any such loss could be established by comparison of its gross takings between the date the defendant terminated his employment and trial with the takings for a similar period prior to the date on which the defendant terminated his employment, then it would be adequately compensated by an appropriate award of damages.
[2][1992] 2 N.Z.L.R. 216
It follows, therefore, I am not satisfied that it is appropriate in this case to grant further injunctive relief in the matter. Accordingly, the plaintiff's summons filed in the court on 12 November will be dismissed with costs to be taxed and paid by the plaintiff.
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