DH Appointments South Australia Pty Ltd v Jackson
[2020] FCA 866
•18 June 2020
FEDERAL COURT OF AUSTRALIA
DH Appointments South Australia Pty Ltd v Jackson [2020] FCA 866
File number: NSD 278 of 2020 Judge: THAWLEY J Date of judgment: 18 June 2020 Catchwords: CORPORATIONS – improper use of information obtained through employment – injunction granted
CONTRACTS – breach of employment agreement – unauthorised use of confidential information – injunction granted
EQUITY – restraint of unauthorised use of confidential information – injunction granted
Legislation: Corporations Act 2001 (Cth) ss 183, 1324
Federal Court Rules 2011 (Cth) r 10.23
Cases cited: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Coco v A N Clark (Engineers) Ltd [1969] RPC 41
Date of hearing: 18 June 2020 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: Catchwords Number of paragraphs: 22 Counsel for the Applicant: Mr A Cheshire SC Solicitor for the Applicant: Mills Oakley Counsel for the Respondent: Respondent did not appear ORDERS
NSD 278 of 2020 BETWEEN: DH APPOINTMENTS SOUTH AUSTRALIA PTY LTD
Applicant
AND: ADRIANNA JACKSON
Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
18 JUNE 2020
THE COURT ORDERS THAT:
1.The respondent, whether by herself, her servants or agents:
(a)be restrained from using, disseminating, divulging or disclosing to any person or giving access thereto to any person; and
(b)destroy, delete or erase
all information in her possession, custody or control (in whatever form and including any copies) obtained or derived by accessing, viewing, extracting, copying and/or downloading data from:
(i)the email account “[email protected]” or any other email account maintained by any person employed by the applicant or any related entity of the applicant; and
(ii)the Microsoft OneDrive account maintained by the applicant or any related entity of the applicant.
2.The respondent pay the applicant’s costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(revised from transcript)THAWLEY J:
By an originating application filed on 13 March 2020, the applicant sought various orders, including orders: (a) requiring the respondent, Ms Jackson, to deliver up certain information in her possession, custody or control; (b) that she destroy or erase such information as was not capable of delivery up; and (c) that she be restrained from using or disclosing the information. The applicant sought urgent interlocutory relief to similar effect.
Interlocutory relief was granted by the duty judge on 16 March 2020 and has subsequently been extended. It was in place until final determination of the claims for relief. These are the reasons for making orders granting final relief.
On 21 May 2020, an order was made under r 10.23 of the Federal Court Rules 2011 (Cth) that the originating application and orders of the Court made on 16, 19 and 25 March 2020 and 8 and 14 April 2020 and 6 May 2020 be taken to have been served on Ms Jackson on 11 May 2020. Although the evidence reveals that Ms Jackson stated to the applicant’s solicitor that she was seeking legal advice and that her lawyer would contact the applicant’s solicitor, she has not appeared. Ms Jackson was invited to participate in this hearing by email from my Associate. The evidence establishes that Ms Jackson has received emails through the email address which was used.
By an email dated 2 June 2020, the applicant’s solicitor informed Ms Jackson of the orders it would be seeking at the hearing, namely the orders for final relief and an order that Ms Jackson pay the applicant’s costs. The orders for final relief which the applicant seeks are for destruction of the information; it no longer asks for delivery up.
In support of its claim for final relief, the applicant relied upon the following affidavits and exhibits:
(1)Neil Alexander Percy dated 12 March 2020, Exhibit NAP-1 and Confidential Exhibit NAP-2;
(2)Robert Warner dated 12 June 2020;
(3)Cameron Adair dated 17 June 2020.
The facts as disclosed in that evidence may be shortly stated. The applicant operates a business specialising in the recruitment of professional drivers. In January 2017, Ms Jackson and Mr Warner were sponsored by the applicant to migrate to Australia to run the applicant’s Adelaide office. Mr Warner was to be, and became, the branch manager. Ms Jackson was to be, and became, a recruitment consultant. Mr Warner and Ms Jackson were in a domestic relationship at the time.
In March 2019, Ms Jackson left her employment with the applicant to go and work for a competitor.
In about June 2019, the relationship between Ms Jackson and Mr Warner ended, although they continued to live together until about September 2019. Ms Jackson started a relationship with Mr William Clarke. Although not entirely clear, it seems that this relationship is continuing.
The underlying dispute concerns unauthorised access of the applicant’s electronically held information. There are two relevant systems operated by the applicant:
(1)the applicant maintains a cloud-based Microsoft OneDrive file platform on which are stored details relating to the applicant’s business, including personal information relating to its drivers such as proof of identity and contact details. Each of the applicant’s employees can access the information on that system remotely with their own unique user ID (being their email address) and password;
(2)each employee has an email account, consisting of his or her name followed by “@dhappointmentsaustralia.com.au”, which can be accessed remotely using that address and a password.
The first aspect of the case concerns unauthorised access of the applicant’s OneDrive information. On 15 February 2020, the applicant was alerted to the fact that 8,521 data files had been accessed on its OneDrive system from a new and unknown IP address. An analysis of this access revealed that between 9.15 am on 14 February 2020 and 8.32 am on 15 February 2020:
(1)the OneDrive system was accessed using Ms Jackson’s email address and therefore presumably the associated password;
(2)8,521 files were downloaded in the sense of being able to be viewed;
(3)23 files were in fact viewed, being the files in Confidential Exhibit NAP-2.
Ms Jackson’s access to the OneDrive system was stopped on 15 February 2020. The result of this is that the downloaded files are no longer able to be accessed or viewed and nor are the 23 files which were in fact viewed. However, the information in those 23 files which had been viewed may have been retained. For example, the information may have been recorded on a different document or copies may have been made, such as by taking a screenshot.
I infer from the evidence that Ms Jackson used, or permitted or assisted another person to use, the information Ms Jackson had obtained during her employment with the applicant as to the existence and content of the OneDrive system and her log-in details to access information on the OneDrive.
The second aspect of the case concerns unauthorised access of Mr Warner’s email account. In the course of his employment with the applicant, Mr Warner received emails from candidates applying for employment. These emails typically included personal information such as proof of identity and bank account details.
Two such prospective employees who sent such emails to Mr Warner were Ms Bernadette Matthews and Ms Rebecca Colmer.
Between 24 and 26 February 2020, Mr Warner was notified by Ms Matthews and Ms Colmer that their personal details (which were in the information provided to Mr Warner) had been used that month without their consent in an attempt to obtain finance. In the case of Ms Matthews, the telephone number used on the application had the same last three numbers as the telephone number of Ms Jackson’s new partner, Mr Clarke. In the case of Ms Matthews, it appears that finance may in fact have been obtained by some person because she has received a letter from a collection service.
I infer from the evidence, including the coincidence of the timing with the unauthorised access to the OneDrive system and of the telephone numbers, that Ms Jackson used, or permitted Mr Clarke to use, the information Ms Jackson had obtained during her employment with the applicant as to the existence and content of the email system and her former partner’s log-in details to access and obtain information.
Sections 183 and 1324 of the Corporations Act 2001 (Cth) provide a basis for the relief sought. Section 183 provides:
A person who obtains information because they are, or have been … [an] employee of a corporation must not improperly use the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
This provision is not limited to confidential information. An injunction can be granted pursuant to s 1324 of the Corporations Act to restrain breaches of an obligation of confidentiality or for unauthorised use of information.
Further, by cl 18 of Ms Jackson’s contract of employment with the applicant, which continues to operate after the termination of her employment, Ms Jackson agreed not to use Confidential Information in an unauthorised way. Clause 18 is in the following terms:
18 CONFIDENTIALITY
(a) You acknowledge that the Group continually obtains and develops valuable trade secrets and Confidential Information concerning its business, business relationships and financial affairs that may be obtained or become known to you during your Employment.
(b) You agree that all such trade secrets and Confidential Information is, and shall remain, the Group’s exclusive property.
(c) You undertake that, during and after the Employment, except in the proper course of the Duties or as permitted by the Company, you will not divulge to any person or use any trade secret or any Confidential Information.
(d) You undertake that you will, during the period of the Employment, use your best endeavours to prevent the unauthorised publication, use, or disclosure of any trade secret or Confidential Information.
(e) Your obligations under this clause 18 survive the termination of the Employment.
The applicant relied principally on paragraphs (c) and (e) of cl 18. The definition of “Confidential Information” is:
Confidential Information means information that:
(a)is by its nature confidential;
(b)is designated by a party as confidential; or
(c)the receiving party knows or ought to know is confidential.
(d)In the case of the Company, Confidential Information includes information concerning:
(i)the business, financial arrangements or position of the Group;
(ii)any of the dealings, transactions, operations or affairs of the business of the Group;
(iii)members, customers and clients of the business of the Group; or
(iv)any Group know-how or procedural documentation used in the provision of Group services.
An equitable remedy is also available. Ms Jackson has come into possession of confidential information as a result of her employment, knows the information to be confidential and is under a duty not to use the information, when not authorised to do so, for personal benefit or to publish it to third parties,: Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 47, per Megarry J, cited by Gleeson CJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 222 [30]. If detriment to the applicant is required for the equitable remedy to be granted, which I doubt, it is present. In those circumstances a court of equity would restrain the unauthorised use of the information and order the information to be delivered up or destroyed.
The Court is satisfied it is appropriate to make the orders sought by the applicant.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley. Associate:
Dated: 24 June 2020
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