BlueScope Steel Limited v Somanchi
[2016] FCA 4
•4 January 2016
FEDERAL COURT OF AUSTRALIA
BlueScope Steel Limited v Somanchi [2016] FCA 4
File number: VID 962 of 2015 Judge: BROMBERG J Date of judgment: 4 January 2016 Catchwords: PRACTICE AND PROCEDURE – ex parte application before the start of proceeding for orders in the nature of a Search Order, and order prohibiting use of certain identified material – allegation of misuse of confidential material by Prospective Respondent, being former employee of Prospective Applicant – strongly arguable case demonstrated – prohibiting order made – order in nature of Search Order not made as sought – order requiring delivering-up of identified material made; issue of inspection deferred to future inter partes hearing. Legislation: Federal Court Rules 2011 (Cth) rr 7.42 and 7.43 Date of hearing: 4 January 2016 Registry: Victoria Division: GENERAL DIVISION National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Category: Catchwords Number of paragraphs: 11 Counsel for the Prospective Applicants: Mr L Merrick Solicitor for the Prospective Applicants: King & Wood Mallesons Counsel for the Prospective Respondent: The Prospective Respondent did not appear ORDERS
VID 962 of 2015
BETWEEN: BLUESCOPE STEEL LIMITED (ACN 000 011 058)
First Prospective ApplicantLYSAGHT BUILDING SOLUTIONS PTY LTD (ACN 103 232 444)
Second Prospective ApplicantAND: CHINNARI SRIDEVI SOMANCHI
Prospective Respondent
JUDGE:
BROMBERG J
DATE OF ORDER:
4 JANUARY 2016
THE COURT ORDERS THAT:
1.The application for this order is made returnable immediately.
2.This order has effect up to and including Friday, 5 February 2016 (Return Date). On the Return Date at 2:15 pm there will be a further hearing in respect of this order before Justice Bromberg.
3.On the giving of 3 hours’ notice in writing to the Prospective Applicants, the Prospective Respondent may apply to the Court at any time to vary or discharge this order; including, if necessary, by telephone to the judge referred to in the immediately preceding paragraph (phone no. 03 8600 3698 or 0413 340 676) or to the Duty Judge (phone no. 0418 538 128).
4.This order must be executed under the supervision of the independent lawyer listed in Schedule A (or his nominated Singapore agent).
DISCLOSURE AND DELIVERY UP
5.The Prospective Respondent is not required to comply with orders 8 and 12 below, until:
a.the Prospective Respondent has been served with copies of this order and any affidavits referred to in Schedule C; and
b.the Prospective Respondent is given an opportunity to read this order and, if the Prospective Respondent so requests, the independent lawyer (or his nominated Singapore agent) explains the terms of this order to her.
6.Before complying with orders 8 and 12 below but prior to the deadline for compliance with those orders, the Prospective Respondent:
a. may seek legal advice;
b. may ask the Court to vary or discharge this order;
c.may gather together any things the subject of paragraph 8(b) which the Prospective Respondent believes may tend to incriminate her or make her liable to a civil penalty and provide them to the independent lawyer in (if the Prospective Respondent wishes) a sealed envelope or container; and
d.may gather together any documents that passed between the Prospective Respondent and her lawyers for the purpose of obtaining legal advice or that are otherwise subject to legal professional privilege or client legal privilege, and provide them to the independent lawyer in (if the Prospective Respondent wishes) a sealed envelope or container.
7.Subject to paragraph 10 and 11 below, the independent lawyer must not permit to be inspected by anyone, including the Prospective Applicants and the Prospective Applicants’ lawyers, any thing provided to the independent lawyer in accordance with these orders and the independent lawyer must deliver those items to the Court at or prior to the hearing on the Return Date.
8.Subject to paragraph 9, on being served with this order, the Prospective Respondent must within 96 hours (4 days):
a.disclose in writing to the independent lawyer the whereabouts of all the Listed Things (as set out in Schedule A) in the Prospective Respondent’s possession, custody, power or control, including all Listed Things held on storage devices located in Australia, in online storage facilities, email accounts or systems (as defined in Schedule A) in which any Listed Things are or may be stored, located or recorded;
b.deliver up (or cause to be delivered-up) to the independent lawyer any storage devices located in Australia on which any Listed Things are or may be stored, located or recorded; and
c.do all things necessary to enable the independent computer experts access to the Listed Things, including enabling access and providing all necessary user names, passwords or other credentials.
9.This paragraph 9 applies if the Prospective Respondent wishes to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that the Prospective Respondent:
a.has committed an offence against or arising under an Australian law or a law of a foreign country; or
b. is liable to a civil penalty.
The Prospective Respondent must:
c.disclose so much of the information required to be disclosed to which no objection is taken; and
d.prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and
e.file and serve on each other party a separate affidavit setting out the basis of the objection.
10.Prior to the Return Date, the Prospective Respondent or the Prospective Respondent’s lawyer or representative shall be entitled, in the presence of the independent lawyer, to inspect any thing delivered up in compliance with paragraph 8 and to:
a. make copies of the same; and
b.provide the independent lawyer with a signed list of things which are claimed to be privileged or confidential and which the Prospective Respondent claims ought not to be inspected by the Prospective Applicants.
11.On the instructions of the independent lawyer, the independent computer experts listed in Schedule A may:
a.without making any inspection of the material therein contained, make a digital copy of any online storage facilities, online email accounts or online systems in which Listed Things are or may be stored, located or recorded.
12.Subject to paragraphs 4, 5, 6 and 13, the Prospective Respondent must, within 96 hours (4 days) of being served with this order, file and serve an affidavit setting out the name and address of every person to whom the Prospective Respondent has supplied, or offered to supply, any Listed Thing and the details of the dates and quantities of every such supply and offer.
13.This paragraph 13 applies if the Prospective Respondent wishes to object to complying with paragraph 12 on the grounds that some or all of the information required to be disclosed may tend to prove that the Prospective Respondent:
a.has committed an offence against or arising under an Australian law or a law of a foreign country; or
b. is liable to a civil penalty.
The Prospective Respondent must:
c.disclose so much of the information required to be disclosed to which no objection is taken; and
d.prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and
e.file and serve on each other party a separate affidavit setting out the basis of the objection.
14.This order may not be executed at the same time as a search warrant (or similar process) is executed by the police or by a regulatory authority.
PROHIBITED ACTS
15.Until 4:30 pm on the Return Date (or such further time as the Court may allow), the Prospective Respondent (whether by herself, her employees, agents or otherwise howsoever) is restrained from (save for the purposes of obtaining legal advice in relation to the subject matter of this proceeding) using in any manner whatsoever, copying, transmitting or transferring any of the Listed Things other than as required in these Orders, or from deleting, destroying or in any way altering any record or copy of the Listed Things in the possession, power, custody or control of the Prospective Respondent.
OTHER MATTERS
16.The Prospective Applicants serve the urgent application and supporting affidavits on the Prospective Respondent in accordance with order 17 by 5 pm on 8 January 2016.
17.The Prospective Applicants be given leave under Rule 10.43(2) to serve the urgent application and supporting affidavits, this order and any Originating Application and Statement of Claim subsequently filed, on the Prospective Respondent in Singapore, in accordance with the law of Singapore.
18.Costs reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Schedule A
In this list:
(a) storage device means any hardware including:
(i) any computers with accessible hard drives;
(ii) mobile phones and digital devices without accessible hard drives (for example tablet devices such as iPads);
(iii) removable storage devices including CDs/DVDs, USB flash drives, USB hard drives and SD Media cards;
(iv) server computers; and
(vi) any other electronic storage devices;
(b)online storage facilities means online storage facilities or file sharing platforms including:
(i)cloud based resources (for example Dropbox or Gmail); and
(ii)cloud based servers (for example virtual servers running software in Amazon Cloud); and
(c)email accounts means any email accounts operated by the Prospective Respondent.
Listed Things
1.Any documents (including electronic files) containing or consisting of the following terms:
(a) “ePurlin”;
(b) “SmartlinkSetup551”;
(c) “Peter Barreca”;
(d) “Sri_Back_Up”;
(e) “VSSwork”;
(f) “VSSwork/SmartShed/MDIParent.designer.cs”;
(g) “Smartshed”;
(h) “3D drawing module”;
(i) “Licence program”, and
(j) “My Passport”;
whether in hard copy or stored on any storage device, in any online storage facilities and / or in any email accounts.
2.Any documents containing or consisting of the term “.lnk” created on:
(a)29 June 2015; or
(b)22 October 2015,
whether in hard copy or stored on any storage device, in any online storage facilities and / or in any email accounts.
3.Any Microsoft Visual SourceSafe (VSS) repositories of source code.
4.Any software packages used in respect of the Prospective Applicants’ business, including source code, including the following packages:
(a) Supracadd
(b) CompoFloor
(c) ePurlin
(d) Quikafloor
(e) LicenceGenerator
(f) LICENCE
(g) Peb
(h) SmartShed,
and component elements of any of those software packages, including those known as:
(i) 3DFrame
(j) DBEdit
(k) Include
(l) Reporter
(m) Split
(n) BSLTemplates
(o) GRAPHICAPP
(p) 3DVIEWER
(q) ANALYSISFILE
(r) BSLUtility
(s) ARCFILE
(t) LTREPORTER
(u) LTDrawings.
5.Any documents not listed in paragraphs 1 - 4 relating to, or containing information regarding, the following aspects of Prospective Applicants’ business:
(a)software (including source codes and modules) concerning product testing, analysis and design;
(b)strategy, planning and development documents relating to software (including source codes and modules) concerning product testing, analysis and design;
(c)information relating to product testing, analysis and design; and
(d)data (including data sets) generated from product testing, analysis and design,
whether in hard copy or stored on any storage device, in any online storage facilities and or in any email accounts.
6.Any documents attaching or forwarding any of the documents referred to in paragraphs 1 – 5 above, whether in hard copy or stored on any storage device, in any online storage facilities and or in any email accounts.
7.Any documents that record or refer to the disclosure by the Prospective Respondent to any third party of information regarding the following aspects of applicant’s business:
(a)software (including source codes and modules) concerning product testing, analysis and design;
(b)strategy, planning and development documents relating to software (including source codes and modules) concerning product testing, analysis and design;
(c)information relating to product testing, analysis and design; and
(d)data (including data sets) generated from product testing, analysis and design,
whether in hard copy or stored on any storage device, in any online storage facilities and or in any email accounts.
8.Any storage device containing copies of any of the items listed above, including the storage device with the unique volume serial number “64d14da0”.
The Independent Lawyer
Joel Masterson and Lesley Naik, Cornwall Stodart, Level 10, 114 William Street, Melbourne, Victoria, 3000, and their nominated agent in Singapore, Luo Qinghui of Rajah & Tann.
The Independent Computer Experts
(a)Nigel Carson, a Partner in the Forensic Technology team of KordaMentha, Level 5, Chifley Tower, 2 Chifley Square, Sydney, New South Wales, 2000;
(b)Tim Myers, a Director in the Forensic Technology team of KordaMentha; and
(c)Marko llic, a team member in the Forensic Technology team of KordaMentha.
Schedule B – Undertakings given to the Court
Undertakings given to the Court by the Prospective Applicants
1.The Prospective Applicants undertake to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
2.The Prospective Applicants undertake to file and serve an Originating Application and a Statement of Claim against the Prospective Respondent by 18 January 2016.
Undertakings given to the Court by the Prospective Applicants’ lawyer
1.The Prospective Applicants’ lawyer will pay the reasonable costs and disbursements of the independent lawyer and of the independent computer expert.
2.The Prospective Applicants’ lawyer will serve on the Prospective Respondent copies of the following documents:
(a)this order;
(b)the application for this order for hearing on the Return Date;
(c)the following material in so far as it was relied on by the applicant at the hearing when the order was made:
(i)affidavits (or draft affidavits);
(ii)exhibits capable of being copied (other than confidential exhibits);
(iii)any written submission; and
(iv)any other document that was provided to the Court.
(d)a transcript of the hearing held on 4 January 2016; and
(e)the originating process, or, if none was filed, any draft originating process produced to the Court.
3.The Prospective Applicants’ lawyer will make its best endeavours to inform the judge hearing the related proceeding in the High Court of the Republic of Singapore of the terms of these orders and the substance of the reasons for judgment given.
4.The Prospective Applicants’ lawyer will answer to the best of the lawyer’s ability any question as to whether a particular thing is a Listed Thing.
5.The Prospective Applicants’ lawyer will use best endeavours to follow all directions of the independent lawyer.
Undertakings given to the Court by the independent lawyer
1.The independent lawyer will (either personally or through his nominated Singapore agent):-
(a)offer to explain the terms and effect of the order to the person served with the order and, if the offer is accepted, do so; and
(b)inform the respondent of his or her right to take legal advice.
2.The independent lawyer will retain custody of all things delivered up by the Prospective Respondent pursuant to this order until delivery to the Court or further order of the Court.
3.The independent lawyer will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding.
Undertakings given to the Court by the independent computer expert
1.The independent computer expert will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding.
2.The independent computer expert will use best endeavours to follow all directions of the independent lawyer.
3.The independent computer expert will take directory listings and forensic copies of files contained on cloud storage services operated by the Prospective Respondent and will not disclose any of those files to any other person except as may be permitted by the Court.
Schedule C – Affidavits relied on
No.
Name of deponent
Date of affidavit
1.
Scott Andrew Mann
14 December 2015
2.
Scott Andrew Mann
29 December 2015
3.
Scott John Perks
18 December 2015
4.
Nigel Carson
21 December 2015
5.
Mark Gerard Crimmins
21 December 2015
6.
Matthew Guy Swinn
31 December 2015
7.
Scott John Perks (unsworn)
8.
Matthew Guy Swinn
4 January 2016
NAME AND ADDRESS OF PROSPECTIVE APPLICANTS’ LAWYERS
The Prospective Applicants’ lawyers are:
King & Wood Mallesons
Att: Matthew Swinn, Partner
Level 50 Bourke Place, 600 Bourke Street, Melbourne, Victoria, 3000
Tel: +61 3 9643 4389
Email: [email protected]
After hours: +61 411 349 242
REASONS FOR JUDGMENT
BROMBERG J:
This is an application for urgent relief made pursuant to an Urgent Application Before the Start of Proceeding dated 31 December 2015. In support of their application, the Prospective Applicants rely upon the affidavits identified in Schedule C of the orders I propose to make. The application has been made on an ex parte basis and I have not had the benefit of any evidence or submissions from the Prospective Respondent. The findings expressed herein are necessarily preliminary and made only for the purpose of addressing the interim relief being sought.
The Prospective Applicants (collectively BlueScope) produce and supply steel products. BlueScope owns specific intellectual property, including proprietary software (and an extensive library of data which underpins it), which has been developed for the purpose of increasing the efficiency of BlueScope’s product design, compliance, certification and manufacturing processes (BlueScope IP).
I am satisfied, on the evidence before me, that the BlueScope IP is confidential information of very substantial commercial value to BlueScope, which has enabled BlueScope to achieve significant efficiencies. I am also satisfied that if the BlueScope IP came into the hands of BlueScope’s competitors, BlueScope may face a real risk of significant loss or damage.
The Prospective Respondent (Ms Somanchi) was an employee of BlueScope for some 12 years and was involved in the development of the BlueScope IP. Her contract of employment required her to treat BlueScope’s confidential information as confidential and to return to BlueScope, upon the cessation of her employment, any confidential information or other BlueScope property held by her. Ms Somanchi’s employment with BlueScope was terminated on 29 June 2015. In about November of 2015, Ms Somanchi relocated to Singapore and there took up a position as Innovation Manager of NS BlueScope Limited (NS BlueScope). NS BlueScope is a joint venture of the First Prospective Applicant and a Japanese corporation.
I am satisfied, on the evidence currently before me, that there is a strongly arguable case that:
(i)When Ms Somanchi left BlueScope’s employment she took with her some of the BlueScope IP;
(ii)Ms Somanchi has accessed some of the BlueScope IP since leaving her employment with BlueScope, including in the performance of her work for NS BlueScope in Singapore; and
(iii)Neither the taking of the BlueScope IP or the access to it made by Ms Somanchi was authorised by BlueScope.
Accordingly, I am satisfied that there is a strong prima facie case that Ms Somanchi has breached her contract of employment with BlueScope. There is also a basis for concluding that BlueScope may have an arguable case based upon an infringement of its copyright and breach of confidence.
BlueScope seeks an order that, until the return date, Ms Somanchi be restrained from (i) making any use of any BlueScope IP in her possession; and (ii) destroying or in any way altering that material. I am satisfied that it is appropriate that an order to that effect be made.
Additionally, BlueScope seeks orders which are said to be necessary to avoid the possibility of Ms Somanchi destroying or concealing evidence as to the extent of any BlueScope IP in her possession, and as to the use made by her of that material. The orders initially sought by BlueScope, which are set out in the Urgent Application, are wide. They are said to be largely based upon the rationale for the kind of relief that may be granted in relation to an application for a Search Order, made pursuant to r 7.42 of the Federal Court Rules 2011 (Cth). That rule provides:
The Court may make an order (a search order), in any proceeding or in anticipation of any proceeding in the Court, with or without notice to the respondent, for the purpose of securing or preserving evidence and requiring a respondent to permit persons to enter premises for the purpose of securing the preservation of evidence that is, or may be, relevant to an issue in the proceeding or anticipated proceeding.
Note: Without notice is defined in the Dictionary.Rule 7.43 provides:
The Court may make a search order if the Court is satisfied that:
(a)an applicant seeking the order has a strong prima facie case on an accrued cause of action; and
(b)the potential or actual loss or damage to the applicant will be serious if the search order is not made; and
(c) there is sufficient evidence in relation to a respondent that:
(i) the respondent possesses important evidentiary material; and
(ii)there is a real possibility that the respondent might destroy such material or cause it to be unavailable for use in evidence in a proceeding or anticipated proceeding before the Court.
I am not satisfied that, at this time, orders to the full extent of those initially sought by BlueScope should be granted. In particular, I am not satisfied that, in order to protect the legitimate interests of BlueScope, it is necessary, prior to an inter partes hearing, to make orders permitting inspection of the material which the orders I propose to make will require Ms Somanchi to deliver or produce to the independent lawyer referred to in those orders. Whilst I am not currently satisfied that there is a real risk that Ms Somanchi will either destroy or conceal material, the orders I propose to make will properly balance the respective interests of the parties until that issue can be more properly addressed at the inter partes hearing, which I will list for 2.15 pm on 5 February 2016.
Finally, I note that the orders I will make include an order that Ms Somanchi may, on giving due notice to BlueScope, approach the Court seeking the variation or discharge of those orders.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate:
Dated: 6 January 2016
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