Gupta & Anor v Singh & Anor (Ruling)

[2023] VCC 49

IN THE COUNTY COURT OF VICTORIA

AT Melbourne

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

Defamation List

Case No.  CI-21-03860

YOGESH GUPTA	Plaintiff
and
TAX PLANNERS PTY LTD (ACN 124 732 605)	Second Plaintiff
v
PAL SINGH	First Defendant
and
AMEX AUSTRALIA PTY LTD (ACN 118 166 000)	Second Defendant

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JUDGE:	HER HONOUR JUDGE Clayton
WHERE HELD:	Melbourne
DATE OF HEARING:	25 January 2023
DATE OF RULING:	25 January 2023
CASE MAY BE CITED AS:	Gupta & Anor v Singh & Anor (Ruling)
MEDIUM NEUTRAL CITATION:	[2023] VCC 49

RULING
(ex tempore Ruling given 25 January 2023)
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Subject:DEFAMATION – INJUNCTION

Catchwords:              Interlocutory injunction in defamation proceedings – application by plaintiffs for interlocutory injunction restraining defendants from using “confidential information” belonging to the plaintiffs

Legislation Cited:      County Court Civil Procedure Rules 2008, r38.01; Civil Procedure Act 2010 (Vic), s7

Cases Cited:              Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57

Ruling:  Application granted in part.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J Levine	Matrix Legal Pty Ltd
For the Defendants	The first defendant appeared in person

HER HONOUR:

1The plaintiffs seek injunctive relief, asking the Court to restrain the defendants from using confidential information, being a database of client contacts belonging to the plaintiffs.

2The plaintiffs sue the defendants in defamation and for breach of confidence.  Those proceedings have been on foot since September 2021.

3This application arises out of conduct by the first defendant in December 2022 when the first defendant emailed an unknown number of people whom the plaintiffs allege are clients of theirs and whose contact details they allege are only known to the first defendant by reason of a breach of confidentiality.

4The application is made by Summons dated 8 December 2022 supported by an affidavit of the first plaintiff, Mr Gupta.  The plaintiffs also rely on affidavits of Mr Atish Sarda and Mr Mitas Varda.

5The plaintiffs further seek an order requiring the first defendant to deliver a copy of the confidential information to the plaintiffs, and to remove all remaining copies in his possession.

6The issues to be considered in this case are whether the plaintiffs have established a prima facie case, and whether the balance of convenience favours the grant of the injunction.

7In determining whether an injunction should be granted, the Court must also have regard to the overarching obligations pursuant to s7 of the Civil Procedure Act 2010 to ensure the just, efficient and cost effective determination of the real issues in dispute.

Prima facie case

8Whether there is a prima face case does not depend upon a preliminary trial nor does a finding of a prima facie case forecast the result of the ultimate trial or resolve the factual or legal issues in dispute.[1]

[1]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622

9The plaintiff must show a “sufficient likelihood of success” to justify the granting of the injunction.[2] 

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

10This depends on the nature of the rights asserted and the practical consequences likely to flow from the order sought.

The Plaintiffs’ case

11The plaintiffs’ case is that, in 2010, the plaintiffs entered into an agreement with the defendants to create a Customer Relationship Matter (“CRM”) system for the plaintiffs.  The first plaintiff, Mr Gupta, says the defendants had access to all of his customer data of approximately 20,000 customer records.

12Mr Gupta alleges that the CRM did not work as intended.  The plaintiffs and defendants “parted ways” in 2013.  Mr Gupta alleges that at that time, the defendants retained the information about his customers including contact details, and alleges that that information is confidential and not in the public domain.

13Mr Gupta says that on 7 September 2020, Mr Singh sent him an email in the following terms:

“Dear XXX

As I understand that either you are current or had been client of Taxplanners.  Like me you could be victim of Taxplanners/Yogesh Gupta.  He sued me for defamation for calling out his fraud.  When I presented my evidence of over 500 counts of fraud involving millions of dollars, he withdraw his case unconditionally and a comp[l]aint was lodged with victoria police and I believe they are working on it.  I know when and how your money was stolen, in which bank accounts it ended up and what properties Yogesh has bought with that money.  You might be entitled to get your money back or rectify your tax accounts for fraud committed in your name.  In my case it was tens of thousands of dollars.  Please contact me for a free service on #### ### ### [mobile number].  I am registered tax accountant with a glorious corporate history and security clearance from Australian Government which entitles me to work on senistive projects.

Please find attached all the relevant court documentsfor your perusal.

Chu-pta, I have more than 20,000 contacts in my database and even if I can help 5 people I will have full filled my duty towards our community.  I look forward to hear from you on my free service proposal.

Pal.”

(sic)

14Mr Gupta interpreted this email as a threat to forward this email to Mr Singh’s 20,000 contacts.

15There is no evidence before the Court that Mr Singh sent this email to anyone other than Mr Gupta in 2020.

16Between 6 and 7 December 2022, Mr Gupta says Mr Singh sent an email to four clients of Mr Gupta’s.  He says more clients may have been contacted but he is only aware of four.  Three of those four clients do not know Mr Singh. 

17On 6 December 2022, Mr Atish Sarda received an email from Mr Singh.   Mr Sarda says he does not know Mr Singh and has never provided any details to him or his company, the second defendant, nor has he ever been a customer of either defendant.

18The email Mr Sarda received from Mr Singh was as follows:

“Dear Atish

Hope all is well at your end.  I take this opportunity to wish you and you[r] loved one Merry Christmas and a very happy new year.

I would like to bring to your attention following 41 counts of fraud (criminal) charges of Yogesh Gupta that he has pleaded guilty to:

●    20 counts of make false documents

●    21 counts of dealing with proceeds of crime.

He was also calling himself Professor of Taxation at Monash University on his Facebook page to promote his fraudulent activities.  Monash University has denied his employment and treats the misuse of its name and academic titles very seriously.

To prevent me from exposing his lies/fraud to you/public he got an intervention order against me by lying to the court about himself and his son’s safety.  Court has disregarded his safety concerns and now I am free to contact anyone.  I can now tell my story about how Yogesh Gupta cheats people that are close to him.  I would like to urge you to get your tax accounts reconciled.  I can help you with it as I am qualified and registered tax agent, free of cost.  You are entitled to get back your money back if there are any discrepancies with your tax returns.  I am a well-known business leader who is the owner of a multinational company in health care.  My linked in profile is: ### [LinkedIn profile]

Also, his Taxplanners tax licence were also terminated by Tax Practitioners Board, and he had to pay penalty of $5000 to Institute of Chartered Accountants as well.  I am happy to email court documents regarding his fraudulent conduct if you which to see them.  Kindly let me know.  He has also sued me for defamation again for exposing him.  He withdrew his case last time, unconditionally, when I provided his evidence of fraud to the County Court.

Regards

Pal.

(M) #### ### ### [mobile number].”

(sic)

(emphasis in original)

19An email from Mr Sarda to Mr Vikas Mishra dated 6 December 2022 was in substantially the same terms.

20The plaintiffs say the Court can draw an inference that Mr Singh obtained the contact details of their four clients from the database of confidential information Mr Singh had access to during the period 2010-2013.

21The plaintiffs say it was always part of the agreement that access to the confidential information was for the purposes of the CRM project and could not be retained after the project was completed.

22The plaintiffs rely on the terms of the Agreement between the parties which stated that the CRM created by the defendants “shall be made exclusively for the client and it will be the intellectual property of the client forever”.

The First Defendant’s case

23Mr Singh says he has not retained or used the plaintiffs’ confidential information.  He says he is not a technical person, his background is as an accountant and businessman.  His expertise in CRM excludes the technical IT skills required.

24He says he never had the plaintiffs’ customer database, and has certainly not retained it.  He says that, over his twenty-seven years in Australia, he has compiled his own database of people and companies.

25He says for many years he worked with and was friends with Mr Gupta.  It is unsurprising that his database overlaps with clients of Mr Gupta.

26He says that, contrary to Mr Sarda’s affidavit, he has met Mr Sarda through Mr Gupta and obtained his contact details from Mr Sarda, not from any confidential information belonging to the plaintiffs.

27He says that, given that he owns his own database, he is entitled to use it to assist his preparation of his case.  If he is able to find more people who were victims of fraud perpetrated by the plaintiffs, that will assist him in his case which relies on a defence of truth.

28He also says he has a sense of community obligation to assist people within his community, and that he is seeking no financial advantage from doing so.

29He submits that the plaintiffs allege he breached his obligations to them in 2013 when he supposedly retained the database, but have taken no steps to contact the police in regards to that.

30In 2015, the second plaintiff, Tax Planners Pty Ltd, brought a claim against the second defendant, Amex Australia Pty Ltd, alleging a breach of the agreement to provide a CRM.  Those breaches included failing to provide progress and updates of the CRM with an existing Software Assistance Program, failing to complete work in a timely fashion, unjust enrichment, stealing and obtaining confidential information and deleting confidential information from the CRM system without consent.

31That proceeding settled in 2017 on the basis that each party bore its own costs and with no admissions made by either side.  Mr Singh says any claim in relation to “stealing” confidential information was settled at that time. 

32Mr Singh relies on a letter from Ms Lifeng Zhang, the former domestic partner of Mr Gupta and a director of Tax Planners Pty Ltd, who says Mr Singh contacted her in 2013 to get a list of Tax Planner’s customers, which she refused to provide.  Mr Singh says if he had retained a copy of the plaintiffs’ database he would have had no need to seek that information from Ms Zhang.

33I note here that Mr Singh provided his evidence by way of a document entitled “Submissions” which was in the form of an unsworn affidavit, with annexures.  He noted that he had not had time to “swear/affirm [the] submission” but would do that if required after the hearing.

Findings

34I am satisfied that the plaintiffs have a prima facie case. 

35The burden rests on the plaintiffs to establish that the second defendant has used their confidential information.

36The Court can infer that, as a consequence of the agreement between the plaintiffs and the second defendant in 2010, the first defendant had and retained access to the plaintiffs’ customer contact details. 

37The Agreement between the parties sets out the Statement of Work to be undertaken by the second defendant.   This included the creation of a number of software platforms which, amongst other things, would allow for automatic billing, access for all clients of the plaintiffs to their taxation returns and activity statements, and to create details for jobs completed, work in progress and so on.

38It is difficult to imagine that these platforms could be created without access to the customer database containing customer details, or that the work could be completed without the customer details being entered into the software platforms so as to ensure they functioned as required.

39Whilst the evidence does not conclusively establish that Mr Singh had access to the database, there is a strong inference that he would have done so. 

40The evidence also establishes a prima facie case that the information was confidential.  The terms of the agreement made it clear that the CRM was for the benefit only of the plaintiffs.

41There is evidence that Mr Singh has contacted three people with whom he has no relationship, each of whom is a client of the plaintiffs.  There is a contest on the evidence between Mr Sarda and Mr Singh which it is not possible to resolve at this stage. There is an inference open that Mr Singh knows that these people, including Mr Sarda, are clients of the plaintiffs and has their contact details as a result of information he obtained whilst working for the plaintiffs.  I make no finding as to whether he obtained, downloaded or retained a copy of the database at that time.  The evidence fails to establish a prima facie case that this has occurred.  However, there is at least an inference open that Mr Singh obtained that information in circumstances where he owed a duty of confidentiality to the plaintiffs.

42I am satisfied that there is a prima facie case for the plaintiffs.

Balance of convenience

43In determining where the balance of convenience lies, consideration must be given to the interests of the persons potentially affected if the order is made.

44The plaintiffs’ case is that they will be potentially significantly affected if the order is not made.  Mr Singh will continue to email clients of theirs, causing damage to their respective reputations and potential financial losses.  Damages are an insufficient remedy as they may not be recoverable, and they might be difficult to quantify.

45Mr Singh’s case is that he will be impeded in the preparation of his case by being unable to identify additional people from whom he might be able to obtain evidence that would assist his defence of truth. 

46I am satisfied that the balance of convenience does permit the injunctive relief sought because the evidence establishes that:

(a)   Mr Singh already has ten witnesses he will call to support his defence of truth and there is no evidence that his continued ability to send emails of this kind will assist his case, or that an inability to send such emails would have a detrimental impact on his case;

(b)   it is apparent from the evidence and Mr Singh’s own submissions that in the absence of an injunction, he will continue to send emails in an attempt to bolster his case;

(c)   damages are an insufficient remedy as the plaintiffs may suffer harm which cannot be quantified or which is unknowable.  They cannot know to whom Mr Singh has or will send the emails;

(d)   There is no requirement for the plaintiffs to give an undertaking as to damages.  There is no evidence that Mr Singh will incur any financial loss arising from the injunction.

Orders

47For these reasons, I will order that the application is granted in part.  The defendants are to be restrained from contacting clients or former clients of the plaintiffs using information they obtained, or would reasonably be considered to have been able to obtain, during the period 2010 to 2013, or from otherwise using such information.

48It is, of course, open to Mr Singh to make an application that the injunction be lifted and to put on evidence supporting such an application.  In the absence of such an application, the injunction will remain in place until the final resolution of the proceeding.

49I am not satisfied that the evidence establishes that Mr Singh has retained a copy, or has in his possession a copy, of the database, and therefore will not make orders in the terms sought at paragraph 2 of the Summons.

50The costs of this application are costs in the proceeding.

Orders of the Court

(1)The defendants are restrained from contacting the clients or former clients of the plaintiffs using information they obtained, or would reasonably be considered to have been able to obtain, during the period 2010-2013, or from otherwise using such information, until the determination of the proceeding, or further order of the Court.

(2)The date for the first defendant to file his amended defence is extended to 1 March 2023 at 4.00pm.

(3)The directions hearing listed for 1 February 2023 is vacated and the matter is listed for a further directions hearing on 27 March 2023.

(4)Costs of the application are in the proceeding.

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