Ezystay Systems Pty Ltd v Link 2 Pty Ltd

Ezystay Systems Pty Ltd sued Link 2 Pty Ltd for, among other things, the alleged breach of confidentiality obligations and fiduciary duties. Ezystay alleged that Link 2, which was founded by a former director of Ezystay, had used confidential business information to compete with Ezystay in the hospitality management software market. The Federal Circuit Court of Australia was required to determine the meaning of specific clauses in a deed terminating the relationship between the parties, as well as the nature of any confidential information and whether it had been misused.

The court examined the deed and found that it did not impose an obligation to return hard copies and delete electronic copies of documents that had been created by copying parts of other documents. The court held that the plaintiffs' business manuals and other documents were confidential, but the software and software manual were not. Despite the software and manual not being confidential, the court found that Link 2 had used information derived from the plaintiffs' software to develop their own competing software. The court found that the former director of Ezystay had breached their statutory and fiduciary duties by using confidential information to set up a competing business.

The court found in favour of Ezystay on the breach of confidentiality and fiduciary duties claims and awarded Ezystay damages and an injunction. The court ordered Link 2 to return all confidential information and to cease using any software that incorporated Ezystay's confidential information.