Berg Engineering Pty Ltd v Tivity Solutions Pty Ltd

Case [2019] QSC 68

SUPREME COURT OF QUEENSLAND

CITATION:

Berg Engineering Pty Ltd  v Tivity Solutions Pty Ltd & Ors [2019] QSC 68

PARTIES:

BERG ENGINEERING PTY LTD ACN 050 400 505

(Plaintiff)

v
TIVITY SOLUTIONS PTY LTD ACN 623 215 092

(First Defendant)

AND

BEN NATHAN GABLONSKI

(Second Defendant)

AND

CRAIG VINCENT BOLAND

(Third Defendant)

FILE NO/S:

BS No 4730 of 2018

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

26 March 2019

DELIVERED AT:

Brisbane

HEARING DATE:

14 February 2019

JUDGE:

Jackson J

ORDER:

The order of the Court is that:

1.    The search order made on 20 September 2018 is set aside and the things and documents seized that are in the custody of the independent solicitor are to be returned to the defendants’ solicitors.

2.    The independent solicitor and any computer forensic expert he has retained are discharged.

3.    The independent expert be permitted to keep the relevant copy or copies of the data used by him to produce the reports provided to the independent solicitor, on condition that those copies are not used by him or further disclosed to the plaintiff or plaintiff’s solicitors, and he is not to make further reports in the proceeding without an order of the court authorising the same.

CATCHWORDS:

EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – EX PARTE APPLICATIONS – NON-DISCLOSURE OR MISREPRESENTATION – where search order granted ex parte – where defendants apply for discharge of search order on the basis of material non-disclosure – whether plaintiff failed to make full and frank disclosure – whether search order should be discharged on the basis of material non-disclosure – whether documents produced from execution of search order are a sufficient reason to refuse the application to set aside search order on the ground of material non-disclosure

Australian Consumer Law, ss 18 and 29.

Civil Proceedings Act 2011 (Qld), s 9.

Constitution of Queensland 2001 (Qld), s 58.

Supreme Court of Queensland Act 1991 (Qld), s 45 and 46.

Uniform Civil Procedure Rules 1999 (Qld), r 11, r 261B, r 112 and Chapter 8, Part 2, Division 3.

Gee, Commercial Injunctions, 6 ed (2016).
Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s: Equity Doctrine and Remedies, 5 ed (2014).

Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55, considered

Aristocrat Technologies Australia Pty Ltd v Allam (2016) 327 ALR 595, considered

Australian Football League & ors v Hard On Sport & Ors [2012] VSC 475, cited

Booker McConnell plc v Plascow & ors [1985] RPC 425, cited

Brags Electrics Pty Ltd v Gregory [2010] NSWSC 1205, cited

Brink’s Mat Pty Ltd v Elcombe [1988] 1 WLR 1350, cited

Cameron v Cole (1944) 68 CLR 571, cited

Director of Public Prosecutions (DPP) (Cth) v Kamal (2011) 248 FLR 64, cited

Dormeuil Freres S.A. v Nicolian International (Textiles) Ltd [1988] 1 WLR 1362, cited

Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd [2017] NSWCA 53

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Details
AGLC
Berg Engineering Pty Ltd v Tivity Solutions Pty Ltd [2019] QSC 68
Case
[2019] QSC 68
Decision Date

CaseChat Overview and Summary

Berg Engineering Pty Ltd brought an ex parte application for a search order to be made pursuant to section 26 of the Supreme Court Act 1998 (Qld) in respect of documents held by Tivity Solutions Pty Ltd. Berg Engineering applied for the search order on the basis that it suspected the defendants of disclosing or intending to disclose confidential information or trade secrets of the plaintiff. Tivity Solutions applied to discharge the search order on the basis of material non-disclosure. The key legal issue was whether the search order should be discharged because of the plaintiff's material non-disclosure. The court considered the circumstances in which the search order was made and whether the plaintiff had made full and frank disclosure to the court. The court held that the plaintiff had failed to make full and frank disclosure to the court and that the search order should be discharged on that basis. The court found that the plaintiff had not disclosed that it had already obtained the documents from a third party and that the plaintiff had failed to disclose that the defendants had already disclosed the information to the public. The court held that the plaintiff's failure to disclose these facts amounted to material non-disclosure and that the search order should be discharged. The court also found that the documents produced from the execution of the search order were not a sufficient reason to refuse the application to set aside the search order on the ground of material non-disclosure. The court held that the defendants were entitled to have the search order discharged and that the things and documents seized that were in the custody of the independent solicitor were to be returned to the defendants’ solicitors. The court further held that the independent solicitor and any computer forensic expert he had retained were discharged and that the independent expert was permitted to keep the relevant copy or copies of the data used by him to produce the reports provided to the independent solicitor, on condition that those copies were not used by him or further disclosed to the plaintiff or plaintiff’s solicitors, and he was not to make further reports in the proceeding without an order of the court authorising the same.

Orders

Orders of the court

The order of the Court is that:

1. The search order made on 20 September 2018 is set aside and the things and documents seized that are in the custody of the independent solicitor are to be returned to the defendants’ solicitors.

2. The independent solicitor and any computer forensic expert he has retained are discharged.

3. The independent expert be permitted to keep the relevant copy or copies of the data used by him to produce the reports provided to the independent solicitor, on condition that those copies are not used by him or further disclosed to the plaintiff or plaintiff’s solicitors, and he is not to make further reports in the proceeding without an order of the court authorising the same.

Background

Background to the litigation

To decide this application, it is necessary to describe the proceeding and the circumstances leading up to the search order, its execution and the subsequent application to set it aside in some detail. Background The plaintiff is an Australian engineering company established 45 years ago that provides engineering design and manufacturing services. It manufactures or repairs products including pumps and rotatable assets and has technical engineering capability in precision machining, large capacity machining, valve asset management, pump asset management, gearbox asset management, specialist fabrication, exotic welding and exotic hard facing. It has centres of operation in Brisbane and in Gladstone and alleges that it has had operations in New Caledonia and Indonesia, although the defendants say that the latter offices are closed. It supplies services and manufactures products to resource and industrial companies including a number of major mining companies and construction companies. The plaintiff employed the third defendant as an engineering manager and the second defendant as its group sales manager, both based in Brisbane. In each case, the employment was under a written contract for a period of approximately five years. On 10 November 2017, the plaintiff terminated the third defendant’s employment. He says that he was unfairly dismissed and peremptorily marched out of the building. On 22 December 2017, the second defendant terminated his employment with the plaintiff on the ground of an alleged repudiation by the plaintiff in failing to pay him his entitlement to bonuses on his remuneration. On 8 January 2018, the second defendant started a proceeding in the District Court at Brisbane claiming the alleged amounts of the unpaid bonuses. In January or February 2018, the second and third defendant combined to start the business of the first defendant, including publishing a brochure on a website of the first defendant. The brochure made representations, inter alia, as to the first defendant’s client experience. On 2 May 2018, the plaintiff started this proceeding by originating application claiming a large variety of final relief by way of injunctions under statute and in equity, damages under statute, damages at common law, equitable compensation and other relief. On 8 June 2018, the court:(a)granted an interlocutory injunction restraining the defendants from publishing the part of the brochure containing the alleged client experience as misleading or deceptive or likely to mislead or deceive;[1](b)ordered the proceeding to continue as if started by claim; and(c)directed that the statement of claim be filed and served by 29 June 2018.[1] Australian Consumer Law, ss 18, 29(1)(d), (g) or (h). On 16 August 2018, the plaintiff filed the statement of claim. On 24 August 2018, the court ordered that the second defendant’s District Court claim be transferred to the Supreme Court and be continued in this proceeding by way of counterclaim and ordered that the parties make disclosure by lists of documents by 22 October 2018.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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