Cadence Australia Pty Ltd v Chew

[2008] NSWSC 1074

CITATION:	Cadence Australia Pty Ltd v Chew [2008] NSWSC 1074 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	16 and 19 September 2008
JUDGMENT DATE :	19 September 2008
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Access granted to permit inspection of contents of computer.
CATCHWORDS:	PROCEDURE [104] - Supreme Court procedure - Procedure under Rules of Court - Medical examination, inspection of property, etc - Whether denial by party that computer contains any relevant material conclusive.
LEGISLATION CITED:	Civil Procedure Act 2005 s 68 Uniform Civil Procedure Rules 2005 r 23.8(1)
CATEGORY:	Procedural and other rulings
CASES CITED:	Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 520 Sony Music Entertainment (Australia) Ltd v University of Tasmania (2003) 198 ALR 367
PARTIES:	Cadence Australia Pty Limited (P) Simon Chew (D)
FILE NUMBER(S):	SC 4524/08
COUNSEL:	M J Moir (P) R E Dubler SC (D)
SOLICITORS:	BCP Lawyers & Consultants (P) Hegarty & Elmgreen Lawyers (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

FRIDAY, 19 SEPTEMBER 2008

4524/08 CADENCE AUSTRALIA PTY LIMITED v SIMON CHEW

JUDGMENT

1 HIS HONOUR: This is an application under s 68 of the Civil Procedure Act 2005 for the production to the Court of a laptop computer on which the defendant has conducted his business affairs and affairs generally since leaving the plaintiff’s employ. The case against him is that he has committed breaches of restraints contained in his employment contract. The plaintiff’s case against him, as it appears to date, is very thin. I need not go into the details as to why this is so, but they have been outlined by Mr Dubler, of Senior Counsel for the defendant, in the course of the hearing before me and, in my view, correctly so. The thinness of the case is emphasised by the fact that no interlocutory relief is at present in force in the plaintiff’s favour.

2 The plaintiff seeks, upon production of the computer, to have it examined to see whether or not it contains any material that would be relevant to a determination of the questions arising in these proceedings. I express the last proposition in the terms I have because r 23.8(1) of the Uniform Civil Procedure Rules 2005 expresses the purpose for which orders may be made under that rule as follows:

“… the purpose of enabling the proper determination of any matter in question in any proceedings.”

3 Mr Dubler has earnestly and with considerable citation of authority, suggested that there is some other, or threshold, criterion that an applicant for an order under r 23.8 must satisfy. He puts it in various ways but they are, in general terms, to the effect that it must be established that there is more than a mere possibility of the computer in this case containing documents that are material to the proceedings and he says that the material before me negatives the possibility of the existence of such documents.

4 There are a number of things to be said about that. The individual provisions of the rules should be construed in accordance with their words. The criterion for enlivening r 23.8(1) is as I have set out. No other criterion is stipulated by that rule. I have asked Mr Dubler whether he can produce any authority to the effect that such a threshold question arises in relation to that rule. He has not been able to do so. The cases that he has referred me to are largely cases on applications for further discovery after discovery has been given, where there is no doubt that there is a principle that there must be evidence that indicates the existence of documents not discovered for further discovery to be granted: eg, Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 520; Sony Music Entertainment (Australia) Ltd v University of Tasmania (2003) 198 ALR 367. There is a particular reason, of course, for that rule. It is that, to give some finality and minimise the costs of proceedings, the affidavit of discovery, or list of documents as it now is, ought generally be regarded as final. For that presumption to be subverted there must be evidence pointing to the existence of material that has not been discovered. There is no such consideration in relation to r 23.8. As I have said, no case has been referred to me that prescribes any criterion for the exercise of jurisdiction under that rule otherwise than by the simple application of the words of the rule itself.

5 In fact it is not quite right to say, as is explicit or implicit in Mr Dubler’s submissions, that, on the material available, production of the contents of the laptop computer is irrelevant to the proceedings. The defendant has printed out and produced, as Mr Dubler himself has emphasised in his submissions, various items from within the computer in answer to a notice to produce documents. That notice to produce was not met with the answer that, without some evidence that there was something in the computer that was relevant, production could simply be denied. What the defendant did in relation to that process was to produce documents. The defendant has also produced evidence on this application that there are no documents other than the documents already produced in the computer that could have any materiality. He has sworn that his conduct has not been in breach of the restraints and, in effect, that no documents exist that could demonstrate otherwise.

6 Thus the defendant has proceeded on the basis that there was materiality, or potential materiality, in some of the material in the computer. What he now says is that the plaintiff should be prepared to take his word that there is nothing else there. That proposition, as I have already indicated, is something that may be operative if what we were dealing with was discovery and further discovery, but it is not.

7 In relation to an examination of the contents of this computer, in my view, the defendant having produced some material from the computer, the plaintiff is not bound to accept the defendant’s word that there is no other relevant material, rather than seeking to examine the contents of the computer. In those circumstances, prima facie there is a basis for the computer being produced to the Court and an order being made for inspection of the contents of the computer.

8 I have emphasised throughout the conduct of the application to Mr Dubler and to Mr Harding, who appears for a business associate of the defendant who has confidential material in the computer, that there is no chance that I shall, in satisfaction of this application, permit the computer material to be “ransacked”. using the colourful word employed by Mr Dubler and, indeed, appearing in some of the authorities.

9 The plaintiff and the defendant are competitors in business and people engaged in the plaintiff’s business ought not be entitled to see confidential material in the computer, whether of a business nature or, indeed, of a personal nature. The same is true of Mr Harding’s client. It being engaged, in general terms, in the same sort of business, it should be protected from having its business material seen by representatives of the plaintiff.

10 There are various ways around this. Some of them are referred to in some of the authorities that Mr Dubler has taken me to. What, in general terms, should be done is that a computer expert should be informed of the type of material that would be relevant to the determination of the questions in this case and be permitted to inspect the material in the computer to ascertain, and perhaps copy, the material that apparently answers that description. Any material that was copied could be shown to the defendant first, so that he could object to its production on the ground that these documents were not material or on any other valid ground that he may have.

11 The other thing that must be protected is that it would seem that this computer is fairly constantly in use by the defendant for both business and personal purposes. However, there is no material before me that would suggest that examination by an expert along the lines indicated by me would disrupt the material. There is nothing in the evidence to suggest, in any event, that the contents of the computer are so great that an insurance copy could not be taken by the defendant before the computer is produced to the Court and there is no evidence that the contents are so great that any extensive period would be necessary for the examination by the expert.

12 The parties should now confer to see if an arrangement can be come to for an examination by a suitable expert of the contents of the computer carried out in the way that least incommodes the defendant and protects his confidential information of a business or personal nature and protects confidential business information of Mr Harding’s client.

13 I ask that the parties attempt to work out a regime without further intervention of the Court. If, however, the Court’s intervention is necessary it will be provided.

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28/10/2008 - Change to section number of Civil Procedure Act 2005 - Paragraph(s) Legislation Cited and [1]