Hudson Timber & Hardware Ltd v Bourke
[2002] VSC 519
•2 December 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 8106 of 2002
| HUDSON TIMBER & HARDWARE LTD | Plaintiff |
| v | |
| ANDREW JOHN BOURKE AND ANOTHER | Defendants |
---
JUDGE: | BEACH J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 19 NOVEMBER 2002 | |
DATE OF JUDGMENT: | 2 DECEMBER 2002 | |
CASE MAY BE CITED AS: | HUDSON TIMBER & HARDWARE LTD v. BOURKE & ANOR | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 519 | |
---
CATCHWORDS: Cost Orders in proceeding.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M. Pearce | Norton Gledhill |
| For the First Defendant | Mr A. Swanwick | Goldsmiths |
| For the Second Defendant | Mr A. Panna | Maddocks |
HIS HONOUR:
The only matter I am required by the parties to determine in this proceeding is the appropriate orders to be made as to the costs of the proceeding.
The proceeding is one brought by the plaintiff Hudson Timber & Hardware Ltd against a former employee of that company, the first defendant Andrew John Bourke and Bourke's present employer the second defendant Fowles Auction Group Pty Ltd seeking to restrain them from making use of confidential information of the plaintiff taken by Bourke when he terminated his employment with the plaintiff.
The plaintiff is a company which trades in the timber industry in Victoria, New South Wales and Queensland. It has approximately 250 employees in Victoria and 700 employees in the other two States. Bourke was employed by it or its predecessor from August 1989 until 29 August 2002. From 1 July 2001 Bourke was employed as its Victorian State Manager. On 29 August 2002 Bourke left the employ of the plaintiff and entered the employ of the second defendant.
The second defendant has a number of divisions including its timber division which is the division relevant for present purposes. The timber division operates from premises at South Melbourne and Springvale and has only 17 employees.
During the course of his employment with the plaintiff Bourke was bound by various confidentiality agreements he had entered into with the plaintiff relating to confidential information of the plaintiff such as price lists, customer lists etc.
When Bourke left the employ of the plaintiff he apparently took with him what the plaintiff alleges were copies of confidential debtors ledgers of all the plaintiff's Melbourne branches.
On 7 November 2002 the plaintiff was informed by a former sales executive employed by the second defendant that Bourke had provided a copy of the debtors ledger of the plaintiff's Croydon branch customers to him and another sales executive, with a suggestion that they might enquire whether the debtors listed in the plaintiff's ledger would like to trade with the second defendant.
On Friday 8 November the plaintiff's solicitors wrote lengthy letters of demand to Bourke and the second defendant requiring them, inter alia, to deliver up to the plaintiff's Croydon branch by 5.00 p.m. that same day all confidential material of the plaintiff in their possession together with statutory declarations, in Bourke's case to the effect that he had no further Hudson confidential information in his possession custody or control, and in the second defendant's case to the effect that it had no further Hudson confidential information in its or any of its employee's possession custody or control.
At the request of the second defendant the time stipulated by the plaintiff's solicitors was extended to 11.00 a.m. on Monday 11 November.
In my opinion the events which occurred between Friday 8 November and Tuesday 12 November, which was the date upon which the plaintiff filed its writ and summons seeking injunctive relief in the proceeding, are critical when determining the appropriate costs orders to make in the proceeding.
On Saturday 9 November 2002 Bourke delivered to the plaintiff's Croydon branch all documentation in his possession belonging to the plaintiff.
On Monday 11 November 2002 the second defendant's solicitors faxed a letter to the plaintiff's solicitors the relevant paragraphs of which read:
"Our Ref PGJ:678095
Dear Mr Silver
Fowles Auction Group Pty Ltd (Fowles) and Hudson Timber & Hardware Ltd (Hudson)
We act on behalf of Fowles in connection with this matter.
We refer to your letter of 8 November 2002 and advise as follows:
1.It is correct to say that our client employed Mr Andrew Bourke as the Manager of our client's South Melbourne timber operation. Our client had no knowledge at the time of employing Mr Bourke of the conduct which you allege was undertaken by Mr Bourke in breach of obligations which he may have had to your client arising out of his employment. Our client is not privy to the details of Mr Bourke's employment with Hudson, nor of any acknowledgment by Mr Bourke of obligations as to confidentiality.
2.Subsequent to receiving your letter, it has come to our client's attention that copies had been made of an aged trial balance sheet. These have been returned by courier to your client's premises at Croydon as requested by you. We confirm that our client does not hold any other documents and has not retained any copies of such documents. We are also instructed that, of his own volition, Mr Bourke returned the original copies of the documents to your client's office on 9 November 2002.
Our client denies any wrong doing on its part and denies that any conduct on the part of our client has caused your client loss and damage."
On the following day the plaintiff filed its writ and summons in the proceeding.
When the plaintiff's summons finally came before me for hearing and determination on Tuesday 19 November, counsel for the plaintiff informed me that in the light of the affidavit material filed by the defendants following service of the writ upon them, the plaintiff did not propose to proceed with the proceeding and sought orders that both the writ and summons be dismissed.
The plaintiff contended that despite the actions of Bourke on 9 November and the content of the letter of the second defendant's solicitors of 11 November, because the defendants had not to that time provided the plaintiff with declarations to the effect that they no longer had in their possession any documentation the property of the plaintiff, the plaintiff was entitled to file its writ in the proceeding and maintain its action until such time as they did. In that situation it is entitled to its costs of the proceeding against both defendants.
The defendants on the other hand contend that the plaintiff acted too hastily in filing its writ and that in the circumstances they should have their costs of the proceeding.
For convenience, I deal firstly with the order (if any) which should be made in relation to the claim against the second defendant.
In the letter of 11 November 2002 the second defendant's solicitors stated that the second defendant knew nothing of the confidentiality agreements between the plaintiff and Bourke, that it was only following receipt of the plaintiff's solicitors' letter of 8 November that it ascertained that it had in its possession documentation of the plaintiff, that the documentation was returned to the plaintiff as required by the plaintiff, and that it did not hold any other documents of the plaintiff and had not retained any copies of the documents.
In my opinion the plaintiff acted not only prematurely but unjustifiably in instituting a proceeding against the second defendant at the time it did. If it was so vital for the plaintiff that it receive a sworn declaration from the second defendant, its solicitors should have contacted the second defendant's solicitors after they received the letter of 11 November, told them that the letter of itself was insufficient, and insisted that an appropriate declaration be provided. There is nothing to suggest that such a declaration would not have been provided.
In my opinion the second defendant is entitled to an order against the plaintiff for its costs of the proceeding.
The situation concerning Bourke, however, is totally different. His behaviour in taking or retaining the plaintiff's documentation in the first place was unjustified, as was his behaviour in seeking to have employees of the second defendant make use of it. Further he should have advised the plaintiff or its solicitors at the time the documentation was returned to the plaintiff's Croydon branch that he would provide an appropriate declaration. In my opinion the plaintiff was justified in instituting its proceeding against Bourke at the time it did.
In the circumstances I consider that Bourke should pay the plaintiff's costs of the proceeding insofar as the proceeding relates to him.
I should add that I make no orders as to the parties' costs of 14 November. I am unable to satisfactorily determine who was responsible for the fact that the matter could not proceed that day.
The following are the formal orders of the Court.
1.I order that the plaintiff's summons of 12 November 2002 and the proceeding as such be dismissed.
2.I order that the first defendant pay the plaintiff's costs of the proceeding insofar as the proceeding relates to him including any reserved costs but excluding the costs of 14 November.
3.I order that the plaintiff pay the second defendant's costs of the proceeding including any reserved costs but excluding the costs of 14 November.
---
0
0
0