Directed Electronics OE Pty Ltd v Gridtraq Australia Pty Ltd - [2023] FCAFC 149

FEDERAL COURT OF AUSTRALIA
Directed Electronics OE Pty Ltd v Gridtraq Australia Pty Ltd [2023] FCAFC 149

Appeal from: Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404

File number: VID 230 of 2023

Judgment of: PERRAM, DOWNES AND BUTTON JJ

Date of judgment: 6 September 2023

Catchwords:
PRACTICE AND PROCEDURE – appeal from decision of trial judge in proceedings where former employees colluded with suppliers to misappropriate Appellant’s business – whether trial judge erred in dismissing proceedings against Respondents – where Appellant submitted that findings made against Respondents sufficient to constitute copyright infringement and use of confidential information – whether allegations of copyright infringement and misuse of confidential information below made only in the context of larger scheme of misappropriation

Legislation: Copyright Act 1968 (Cth) s 115(4)

Cases cited: Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404

Division: General Division

Registry: Victoria

National Practice Area: Intellectual Property

Sub-area: Copyright and Industrial Designs

Number of paragraphs: 14

Date of hearing: 25 August 2023

Counsel for the Appellant: Mr C Golvan KC and Ms N Hickey

Solicitor for the Appellant: K & L Gates

Counsel for the Respondents: Mr A Ryan SC and Mr M Fleming

Solicitor for the Respondents: Moray & Agnew Lawyers

ORDERS

VID 230 of 2023

BETWEEN:
DIRECTED ELECTRONICS OE PTY LTD (ACN 130 647 737)

Appellant

AND:
GRIDTRAQ AUSTRALIA PTY LTD (ACN 154 515 394)

First Respondent

WEBHOUSE SOFTWARE SOLUTIONS PTY LTD (ACN 152 567 416)

Second Respondent

QUANTAM TELEMATICS PTY LTD (ACN 159 485 051)

Third Respondent

ORDER MADE BY:

PERRAM, DOWNES AND BUTTON JJ

DATE OF ORDER:

6 SEPTEMBER 2023

THE COURT ORDERS THAT:
1.The appeal be dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
THE COURT:

This is an appeal from a judgment given on 24 November 2022 which resolved complex allegations of breach of fiduciary duty, breach of confidence and infringement of copyright against multiple sets of parties: Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404. The Appellant also appeals from orders made on 14 March 2023 which gave effect to the trial judge’s reasons insofar as they concerned the Appellant’s claims against the Respondents to this appeal. The trial took place in Melbourne over about nine weeks and was made more complicated by the COVID-19 pandemic and the need to take evidence from witnesses in South Korea via interpreters. The reasons for judgment are 4,003 paragraphs long. Largely, the Applicant (‘Directed Electronics’) was successful against most of the parties it pursued with the trial judge accepting its basic allegation that two of its former employees had colluded with one of its suppliers to misappropriate its business.
At trial, Directed Electronics pursued a wide-ranging case against three sets of respondents: (a) two of its former employees and an entity associated with them (‘the Employee Parties’); (b) its…

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: [2023] FCAFC 149
Decision Date: 6 September 2023

CaseChat Overview and Summary

Directed Electronics OE Pty Ltd sought to appeal a decision of the trial judge in a case where former employees and suppliers had conspired to misappropriate its business. The court was tasked with determining whether the trial judge erred in dismissing the proceedings against Gridtraq Australia Pty Ltd and other respondents. Directed Electronics argued that the findings against the respondents were sufficient to constitute copyright infringement and misuse of confidential information, and that these allegations were part of a larger scheme of misappropriation.

The court examined whether the allegations of copyright infringement and misuse of confidential information were adequately considered in the context of the broader scheme of misappropriation. The court found that the arguments presented by Directed Electronics were inconsistent with their conduct at the trial, as they did not raise the issue of a separate case requiring a remedies hearing. The court concluded that the trial judge could not be expected to detect a case that was never mentioned or pleaded during the trial. Consequently, the court found that the appeal was without merit.

In its decision, the court emphasised that the appeal was dependent on the success of other grounds which had already been dismissed. The court ruled that the appeal should be dismissed with costs, highlighting the inconsistency in Directed Electronics' arguments and the failure to properly raise the issue of a separate case requiring a remedies hearing.

ORDERS:
1. The appeal be dismissed with costs.

Orders

Orders of the court

1. The appeal be dismissed with costs.

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

The trial judge then made the orders giving effect to these conclusions on 14 March 2023. The failure of counsel for Directed Electronics to indicate at this hearing that the proceeding should not be dismissed because there was still a case which existed which needed a remedies hearing is entirely inconsistent with the argument which has taken up a day of this Court’s time.Conclusions The case now pursued was not pleaded, run or mentioned in Directed Electronics’ explicit submissions at trial as to what would occur at the remedies hearing. It was not suggested to the trial judge that he ought not to dismiss the proceeding against the Gridtraq Parties because this separate case had been run and required a remedies hearing. No doubt, the reason for this is that the trial judge would have been incredulous at such a contention. The suggestion that the trial judge erred in failing to detect a case not ever mentioned to his Honour is hopeless. Directed Electronics’ complaint before this Court about the costs order below was wholly dependent on the success of its other grounds of appeal, and consequently must also fail. The appeal is bereft of merit and should be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Appeal from:	Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404
File number:	VID 230 of 2023
Judgment of:	PERRAM, DOWNES AND BUTTON JJ
Date of judgment:	6 September 2023
Catchwords:	PRACTICE AND PROCEDURE – appeal from decision of trial judge in proceedings where former employees colluded with suppliers to misappropriate Appellant’s business – whether trial judge erred in dismissing proceedings against Respondents – where Appellant submitted that findings made against Respondents sufficient to constitute copyright infringement and use of confidential information – whether allegations of copyright infringement and misuse of confidential information below made only in the context of larger scheme of misappropriation
Legislation:	Copyright Act 1968 (Cth) s 115(4)
Cases cited:	Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404
Division:	General Division
Registry:	Victoria
National Practice Area:	Intellectual Property
Sub-area:	Copyright and Industrial Designs
Number of paragraphs:	14
Date of hearing:	25 August 2023
Counsel for the Appellant:	Mr C Golvan KC and Ms N Hickey
Solicitor for the Appellant:	K & L Gates
Counsel for the Respondents:	Mr A Ryan SC and Mr M Fleming
Solicitor for the Respondents:	Moray & Agnew Lawyers

ORDER MADE BY:	PERRAM, DOWNES AND BUTTON JJ
DATE OF ORDER:	6 SEPTEMBER 2023