Grow MF Pty Ltd v Parthy

Case [2023] FCA 442

FEDERAL COURT OF AUSTRALIA

Grow MF Pty Ltd v Parthy [2023] FCA 442  

File number(s): VID 289 of 2023
Judgment of: ROFE J
Date of judgment: 4 May 2023
Date of publication of reasons:  9 May 2023
Catchwords: PRACTICE AND PROCEDURE – interlocutory injunction – application for respondent to restore access to certain technological accounts – serious question to be tried – balance of convenience   
Legislation: Corporations Act 2001 (Cth)
Cases cited:

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57

Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238
Division: General Division
Registry: Victoria
National Practice Area: Intellectual Property
Sub-area: Copyright and Industrial Designs
Number of paragraphs: 42
Date of hearing: 4 May 2023
Counsel for the Applicant: Ms L Davis
Solicitor for the Applicant: SLF Lawyers
Counsel for the Respondent: The respondent appeared in-person

ORDERS

VID 289 of 2023
BETWEEN:

GROW MF PTY LTD

Applicant
AND:

ANINDHA PARTHY

Respondent

ORDER MADE BY:

ROFE J

DATE OF ORDER:

4 MAY 2023

PENAL NOTICE

TO: ANINDHA PARTHY

IF YOU (BEING THE PERSON BOUND BY THIS ORDER):  

(A)      REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED  IN THE ORDER FOR THE DOING OF THE ACT; OR  

 (B)   DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING, 

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT. 

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED. 

THE COURT NOTES THAT:

A.The Applicant gives the usual undertaking as to damages in the form set out in the Usual Undertaking as to Damages Practice Note (GPN-UNDR).

B.Until further order of the Court, the Applicant undertakes not to:

(a)Transfer any of its intellectual property rights in any of the existing content of the Grow Metrics GitHub Account, the Growmetrics Figma Account or the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment); nor

(b)Delete, destroy or modify any of the existing content of the Grow Metrics GitHub Account, the Growmetrics Figma Account, the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment) or Grow MF’s account with Fireflies, other than as part of its usual business (noting that GitHub retains a record of changes to the source code).

THE COURT ORDERS THAT:

2.Within 2 days of this Order, the Respondent:

(a)Restore Mr Sohan Karunaratne’s GitHub account “@sohank88” as an “owner” of the Grow Metrics GitHub Account and notify the Applicant’s lawyers; and

(b)Provide Mr Sohan Karunaratne with access as an administrator to the Growmetrics Figma Account and notify the Applicant’s lawyer; and

(c)Provide the Applicant’s lawyers with a copy of all material held on the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment).

3.Until the hearing and determination of this proceeding or until further order, the Respondent (whether by himself, his employees or agents or otherwise howsoever) be restrained from,…

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AGLC
Grow MF Pty Ltd v Parthy [2023] FCA 442
Case
[2023] FCA 442
Decision Date

CaseChat Overview and Summary

Grow MF Pty Ltd brought an application against Parthy for an interlocutory injunction to restore access to certain technological accounts that had allegedly been locked by Parthy after his resignation. The case was heard by the Federal Court of Australia, which needed to determine whether Grow MF had satisfied the requirements for an interlocutory injunction. The court was required to decide whether Grow MF had a prima facie case and whether the balance of convenience favoured granting the injunction. The court found that Grow MF had demonstrated a prima facie case against Parthy for breaches of his employment agreement, statutory, and equitable duties. Grow MF had also shown that the balance of convenience favoured granting the injunction, as Parthy's actions were preventing Grow MF from conducting its business and causing serious damage to its commercial interests.

The court granted the interlocutory injunction, ordering Parthy to restore access to the technological accounts and refrain from accessing, reproducing, deleting, modifying, or disclosing any material held in those accounts. The court also reserved the costs of the application for interlocutory relief and granted the parties liberty to apply. The decision highlights the importance of balancing the rights of both parties in disputes involving technological accounts and the potential consequences of denying access to critical business resources.

Orders

Orders of the court

2. Within 2 days of this Order, the Respondent:

(a) Restore Mr Sohan Karunaratne’s GitHub account “@sohank88” as an “owner” of the Grow Metrics GitHub Account and notify the Applicant’s lawyers; and

(b) Provide Mr Sohan Karunaratne with access as an administrator to the Growmetrics Figma Account and notify the Applicant’s lawyer; and

(c) Provide the Applicant’s lawyers with a copy of all material held on the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment).

3. Until the hearing and determination of this proceeding or until further order, the Respondent (whether by himself, his employees or agents or otherwise howsoever) be restrained from, without the licence or authority of the Applicant or order from the Court:

(a) accessing using in any manner whatsoever;

(b) reproducing (other than for the purposes of this proceeding);

(c) deleting, destroying, concealing or modifying, or taking any step which is likely to impede the recovery of;

(d) disclosing to any third party (other than legal advisors for the purposes of this proceeding),

the material held in the Grow Metrics GitHub Account, the Growmetrics Figma Account, the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment) and / or the Growmetrics Slack Development Account.

4. Costs of the Applicant’s application for interlocutory relief be reserved.

5. The parties have liberty to apply.

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

Background

Background to the litigation

While considering the respondent’s opposition to the injunction sought, I remain cognisant of his status as a self-represented litigant. However, Mr Parthy has not provided any basis for restraining Grow MF’s access to those technological accounts. BACKGROUND The applicant operates the Grow MF business by offering services contained on the GrowMetrics application to clients. The current version is called GrowMOFO 2.5 (which Mr Parthy refers to as GrowMOFO 2.0 Stable). Grow MF is developing a new version of the application, referred to as GrowMetrics 3.0. To develop and maintain the GrowMetrics application, Grow MF has accounts on various technological applications. On my understanding, the technological applications can be explained as follows. The GrowMetrics application is operated by underlying source code. That source code is created, maintained, developed and stored on GitHub, a third party source code repository. Prior to 28 April 2023, the applicant contends Mr Parthy and Mr Karunaratne were both “owners” of the GitHub account. When that code is ready to be deployed, it is “pushed” from GitHub to what the applicant refers to as the “GrowMetrics production environment”. The respondent refers to the production environment as the “GrowMetrics QA environment”. Mr Parthy submits this account was set up in his personal account on Google domains and Netlify. He does not appear to dispute that it was set up in his role as Grow MF’s Chief Technology Officer. Prior to 28 April 2023, three people had access to the GrowMetrics production environment (or QA environment): Mr Karunaratne, Mr Parthy and Adrian Sabic (a product manager at Grow MF). This account was accessed through an organisation username and password (meaning one single username and password). For further development and testing of “high fidelity” prototypes, Grow MF uses Figma. The parties are agreed that GrowMetric’s Figma account was set up by Mr Parthy in his role as Chief Technology Officer and as such he became an “administrator”. Mr Karunaratne understood that he was also an administrator prior to 28 April 2023. Administrators have permissions to give or revoke access to Grow MF staff. Whether Grow MF had reimbursed Mr Parthy for the costs associated with Grow MF’s Figma account was a matter in issue between the parties. It is these three technological accounts that the applicant alleges Mr Parthy has locked the applicant out of access. The applicant characterises Mr Parthy’s conduct, which occurred after Mr Parthy resigned on 24 April 2023 but while he was still working for Grow MF, as follows: •Removed Mr Karunaratne as “owner” of the GrowMetrics GitHub Account and Mr Karunaratne’s access altogether; •Removed access for all Grow MF staff (other than potentially Ms Melanie Lim) to critical parts of the GrowMetrics GitHub Account including the parts housing the source code for GrowMOFO 2.5 and Growmetrics 3.0 and otherwise limit their ability to perform certain functions; •Removed Mr Karunaratne as “administrator” of the GrowMetrics Figma Account and his access altogether; •Removed access for all Grow MF staff (other than potentially Ms Melanie Lim) to the GrowMetrics Figma Account; •Changed the password for the GrowMetrics Development Environment and not disclose the new password to Grow MF; and•Mr Parthy may have also moved the GrowMetrics Development Environment from Grow MF’s Amazon Web Services.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

I accept that Mr Parthy may have a potential cross-claim in the circumstances, however, as I discuss below, this does not give rise to any right to restrain Grow MF from accessing certain technological accounts created for the purposes of the business, and without access to which, causes Grow MF damage. Consideration The principles applicable to the application for an interlocutory injunction are well established: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, at [19] (per Gleeson CJ and Crennan J) and at [65]-[72] (per Gummow and Hayne JJ); Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238, at [44]-[74] (per Dowsett, Foster and Yates JJ). The applicant must show that they have a prima facie case, and that the balance of convenience favours the injunction being granted: O’Neill at [19]. I have determined the applicant satisfies these requirements. The applicant submits it has a strong prima facie case against Mr Parthy, at least on the breaches of his employment agreement and in breach of his statutory and equitable duties. Mr Parthy submitted the intellectual property rights to the Figma account are his alone. Conversely, the applicant contended a number of other Grow MF staff also contribute to Figma, as well as each of the other systems. At a provisional level, I am satisfied the evidence shows that Mr Parthy owed certain duties to Grow MF under the Corporations Act 2001 (Cth), pursuant to his employment agreement and in equity, and has, in breach of those duties, removed Grow MF’s access to the GrowMetrics accounts and has refused to restore that access. I am also satisfied that the balance of convenience weighs against the respondent. Mr Parthy is no longer employed at Grow MF yet has unauthorised control over the copyright works and confidential information of Grow MF. The applicant submits the evidence demonstrates that the removal of access to the GrowMetrics account is preventing Grow MF from conducting its business, including servicing clients’ needs, finalising the development of a new and approved application, and promoting the product to new customers. I am satisfied Grow MF’s commercial interests, including its continued business operations, are at serious risk if Mr Parthy continues to prevent Grow MF from accessing the GrowMetrics accounts. Further, Grow MF is spending resources on staff and overheads that are not able to be properly utilised. I accept that it will be difficult to identify the impact on Grow MF’s business, for example in relation to client retention, in order to remedy this harm completely. Mr Parthy has been on notice of Grow MF’s complaint since Friday 28 April 2023, and despite repeated requests has refused to restore access. Grow MF has acted promptly in bringing this application before the Court. Although appreciating Mr Parthy may have a potential claim as to his alleged intellectual property rights in GrowMOFO 3.0 and his potential equity share in Grow MF, his affidavit does not identify any prejudice to him or any legitimate reason he has to restrain access to the GrowMetrics accounts.