Champions Ride Days Pty Ltd v McFarlane - [2019] QDC 236

DISTRICT COURT OF QUEENSLAND

CITATION:

Champions Ride Days Pty Ltd v McFarlane & Anor [2019] QDC 236

PARTIES:

CHAMPIONS RIDE DAYS PTY LTD

ACN 106 662 462
(plaintiff)

v

JOSHUA PAUL McFARLANE
(first defendant)

RECREATION AND COMPETITIVE EVENTS RESOURCES & SERVICES PTY LTD
ACN 098 088 610

(second defendant)

FILE NO/S:

27 of 2018 (Beenleigh Registry)

DIVISION:

Civil

PROCEEDING:

Trial

DELIVERED ON:

29 November 2019

DELIVERED AT:

Brisbane

HEARING DATE:

11, 12 and 13 November 2019

JUDGE:

Barlow QC DCJ

ORDER:

See appendix

CATCHWORDS:

DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT – REMOTENESS AND CAUSATION – LOSS OF PROFITS – where plaintiff claims unauthorised use of confidential information by first defendant enabled second defendant to enter into contracts for the supply of goods and services that the plaintiff would have otherwise supplied – where defendants contend the loss of contracts for the supply of goods and services by the plaintiff was due to unrelated issues – whether loss suffered by plaintiff – whether loss suffered due to breach of contact

EQUITY – EQUITABLE REMEDIES – EQUITABLE COMPENSATION – where equitable duties owed by the defendants to the plaintiff – whether equitable compensation is available

INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – INFORMATION PROTECTED – where first defendant had signed a “Confidentiality Agreement” with the plaintiff – whether information was confidential

INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – OBLIGATION OF CONFIDENTIALITY – whether defendants owed obligations of confidentiality to plaintiff – whether defendants breached obligations of confidentiality

INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – USE OF INFORMATION – where first defendant sent confidential information to second defendant – whether second defendant used the information to enter into contracts for supply of goods or services

INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – REMEDIES – EQUITABLE COMPENSATION OR ACCOUNTS OF PROFITS – where plaintiff elected for equitable compensation – whether equitable compensation is available

DAMAGES – GENERAL PRINCIPLES – NOMINAL DAMAGES – where defendants contended no actual loss was suffered by the plaintiff – whether nominal damages available – whether nominal damages sufficient

Coco v A N Clark (Engineers) Ltd (1968) 1A IPR 587, applied

Data Access Corporation v Powerflex Services Pty Ltd, Powerflex Corporation Pty Ltd & Bennett (1996) 63 FCR 336, considered

Giller v Procopets (No 2) (2008) 24 VR 1, applied

Jones v Dunkel (1959) 101 CLR 298, applied

Link 2 Pty Ltd v Ezystay Systems Pty Ltd [2016] NSWCA 317, applied

Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1948] 65 RPC 203, considered

Seager v Copydex Ltd [1967] 2 All ER 718, applied

Seager v Copydex Ltd (No 2) [1969] 2 All ER 415, considered

Talbot v General Television Corporation Pty Ltd [1980] VR 224, applied

Wheatley v Bell [1982] 2 NSWLR 544, applied

COUNSEL:

B Vass for the plaintiff

M Wilson for the first defendant (direct brief)

AJ Greinke for the second defendant

SOLICITORS:

McMillan Criminal Law for the plaintiff

Cranston McEachern Lawyers for the second defendant

Introduction

The…

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.

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Details

Case: [2019] QDC 236
Decision Date: 29 November 2019

CaseChat Overview and Summary

In the case of Champions Ride Days Pty Ltd v McFarlane, the primary dispute concerned the alleged unauthorised use of confidential information by the first defendant, which enabled the second defendant to enter into contracts for the supply of goods and services that the plaintiff would have otherwise supplied. The court was tasked with determining whether the plaintiff had suffered a loss due to the breach of contract and whether this loss was a direct consequence of the breach. The court was also called upon to assess the availability of equitable compensation for the alleged breach of equitable duties and the obligations of confidentiality under the Confidentiality Agreement.

The legal issues that the court had to decide included the determination of the measure and remoteness of damages in the context of breach of contract, the nature and extent of the loss suffered by the plaintiff, and whether the loss was caused by the breach of contract. Additionally, the court had to consider whether the loss of profits was a direct result of the defendants' actions and whether the loss was too remote to be recoverable. The court also examined whether the defendants owed equitable duties to the plaintiff and if so, whether equitable compensation was an appropriate remedy. Furthermore, the court needed to determine if the information in question was protected and confidential under the Confidentiality Agreement and if the defendants had breached their obligations of confidentiality.

The court found that the plaintiff had indeed suffered a loss due to the unauthorised use of confidential information by the first defendant, which facilitated the second defendant's entry into contracts for the supply of goods and services. The court held that the loss was a direct consequence of the breach of contract and not due to unrelated issues. The court held that the plaintiff was entitled to equitable compensation for the breach of the equitable duties owed by the defendants. The court also determined that the information was protected and confidential under the Confidentiality Agreement and that the defendants had breached their obligations of confidentiality by disclosing the information to the second defendant. The court found that equitable compensation was an appropriate remedy in this case, as the plaintiff had elected for it instead of an account of profits. The court also concluded that the plaintiff was entitled to nominal damages, as the defendants had contended that no actual loss was suffered by the plaintiff.

The court ordered that the first defendant pay equitable compensation to the plaintiff and that the second defendant pay nominal damages to the plaintiff. The court also ordered that the first and second defendants pay the plaintiff's costs of the proceedings.

Orders

Orders of the court

See appendix

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Champions Ride Days Pty Ltd v McFarlane & Anor [2019] QDC 236
PARTIES:	CHAMPIONS RIDE DAYS PTY LTD ACN 106 662 462 (plaintiff) v JOSHUA PAUL McFARLANE (first defendant) RECREATION AND COMPETITIVE EVENTS RESOURCES & SERVICES PTY LTD ACN 098 088 610 (second defendant)
FILE NO/S:	27 of 2018 (Beenleigh Registry)
DIVISION:	Civil
PROCEEDING:	Trial
DELIVERED ON:	29 November 2019
DELIVERED AT:	Brisbane
HEARING DATE:	11, 12 and 13 November 2019
JUDGE:	Barlow QC DCJ
ORDER:	See appendix
CATCHWORDS:	DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT – REMOTENESS AND CAUSATION – LOSS OF PROFITS – where plaintiff claims unauthorised use of confidential information by first defendant enabled second defendant to enter into contracts for the supply of goods and services that the plaintiff would have otherwise supplied – where defendants contend the loss of contracts for the supply of goods and services by the plaintiff was due to unrelated issues – whether loss suffered by plaintiff – whether loss suffered due to breach of contact EQUITY – EQUITABLE REMEDIES – EQUITABLE COMPENSATION – where equitable duties owed by the defendants to the plaintiff – whether equitable compensation is available INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – INFORMATION PROTECTED – where first defendant had signed a “Confidentiality Agreement” with the plaintiff – whether information was confidential INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – OBLIGATION OF CONFIDENTIALITY – whether defendants owed obligations of confidentiality to plaintiff – whether defendants breached obligations of confidentiality INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – USE OF INFORMATION – where first defendant sent confidential information to second defendant – whether second defendant used the information to enter into contracts for supply of goods or services INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – REMEDIES – EQUITABLE COMPENSATION OR ACCOUNTS OF PROFITS – where plaintiff elected for equitable compensation – whether equitable compensation is available DAMAGES – GENERAL PRINCIPLES – NOMINAL DAMAGES – where defendants contended no actual loss was suffered by the plaintiff – whether nominal damages available – whether nominal damages sufficient Coco v A N Clark (Engineers) Ltd (1968) 1A IPR 587, applied Data Access Corporation v Powerflex Services Pty Ltd, Powerflex Corporation Pty Ltd & Bennett (1996) 63 FCR 336, considered Giller v Procopets (No 2) (2008) 24 VR 1, applied Jones v Dunkel (1959) 101 CLR 298, applied Link 2 Pty Ltd v Ezystay Systems Pty Ltd [2016] NSWCA 317, applied Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1948] 65 RPC 203, considered Seager v Copydex Ltd [1967] 2 All ER 718, applied Seager v Copydex Ltd (No 2) [1969] 2 All ER 415, considered Talbot v General Television Corporation Pty Ltd [1980] VR 224, applied Wheatley v Bell [1982] 2 NSWLR 544, applied
COUNSEL:	B Vass for the plaintiff M Wilson for the first defendant (direct brief) AJ Greinke for the second defendant
SOLICITORS:	McMillan Criminal Law for the plaintiff Cranston McEachern Lawyers for the second defendant