JUDGE:	DODDS-STREETON J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	23, 24, 25, 27 September; 7, 10, 28 October 2002 and 20 December 2002.
DATE OF JUDGMENT:	10 June 2003
CASE MAY BE CITED AS:	I.F. Asia Pacific Pty Ltd v Galbally
MEDIUM NEUTRAL CITATION:	[2003] VSC 192

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CONTRACTS – Construction – Term as to confidential information – Contractual restraint upon using confidential information, trade secrets or documents without express authorisation – Covenants restraining former employees from employment by or solicitation of, employers’ clients – Whether restraint of trade covenants uncertain or too wide – Non‑solicitation clause extends to employer’s former clients, clients with whom first defendant had no contact and clients of employer’s related companies – Severance unjustified – Covenant cannot be “read down” and limited to a business “same as or similar to” that of employer – Business of fourth defendant not “same as or similar to” that of employer – Non‑Solicitation clause void as an unreasonable restraint of trade.

INTELLECTUAL PROPERTY – Confidential information – Whether employer’s data bases constituted confidential information – Client lists – Duty of confidence – Whether breached by former employee – Information obtained during course of employment – Whether part of employee’s own skill and knowledge – Whether former employee appropriate employer’s floppy discs containing client information and used them to approach clients – No breach of covenants prohibiting unauthorised use of plaintiff’s trade secrets and confidential information – Information regarding client contact details was part of former employee’s general knowledge, skill and experience – Failure to establish that floppy discs containing client information removed from employment premises.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr H.C. Berkeley Q.C. with Mr C.E. Shaw	Frederick Owen & Associates
For the Defendants	Mr A.T. Schlicht	Strongman & Crouch

TABLE OF CONTENTS

THE PROCEEDING.......................................................................................................................... 2

SUMMARY OF FACTS AND ISSUES.......................................................................................... 2

MR GALBALLY'S ROLE IN THE PLAINTIFF'S BUSINESS................................................... 5

THE WITNESSES.............................................................................................................................. 7

THE PLEADINGS............................................................................................................................ 11

Further Amended Statement of Claim......................................................................................... 11

Amended Defence............................................................................................................................ 14

Counterclaim..................................................................................................................................... 15

THE LETTERS OF ENGAGEMENT............................................................................................ 15

THE PLAINTIFF'S STANDING – WAS IT PARTY TO THE CONTRACTS?.................... 18

CLAUSE 1.......................................................................................................................................... 20

CLAUSE 4.......................................................................................................................................... 21

CLAUSE 2.......................................................................................................................................... 22

THE PARTIES’ BUSINESSES....................................................................................................... 33

Nature and Scope of the Plaintiff’s Business.............................................................................. 33

The Defendants’ Business.............................................................................................................. 43

CLIENTS OF RELATED COMPANIES – SEVERANCE......................................................... 48

THE PLAINTIFF’S CONFIDENTIAL INFORMATION.......................................................... 56

Tracker Data Base, Knowledge Bank, Business Manuals and Methodologies................... 56

Relevant Legal Principles and Case Law..................................................................................... 58

Did Mr Galbally Remove Data?.................................................................................................... 62

Did the defendants otherwise use confidential information................................................... 72

The ACT database............................................................................................................................ 74

CONCLUSION................................................................................................................................. 76

HER HONOUR:

THE PROCEEDING

In this proceeding the plaintiff, I.F. Asia Pacific Pty Ltd, seeks relief including injunctions, delivery up and damages, from the defendants. The defendants are the plaintiff’s former employees, Simon Galbally (and his family company, Braydale Pty Ltd), David Stafford and Scott…

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.

Continue reading IF Asia Pacific Pty Ltd v Galbally

Details

AGLC: IF Asia Pacific Pty Ltd v Galbally [2003] VSC 192
Case: [2003] VSC 192
Decision Date: 10 June 2003

CaseChat Overview and Summary

IF Asia Pacific Pty Ltd sought relief against Galbally and two other defendants, primarily for breach of confidentiality and restraint of trade clauses in Galbally's employment contract. The dispute arose from Galbally's departure from IF Asia Pacific and subsequent employment with a competitor, involving allegations of misuse of confidential information and non-compliance with restrictive covenants. The Federal Court of Australia was tasked with interpreting the restrictive covenants in Galbally's employment contract and determining their enforceability and whether there had been a breach of confidentiality.

The primary legal issues before the court were the validity and enforceability of the restraint of trade and confidentiality clauses in Galbally's contract. The court had to determine whether these clauses were uncertain, overly broad, or otherwise unenforceable. Additionally, the court examined whether Galbally breached the confidentiality obligations by using client information obtained during his employment with IF Asia Pacific. The enforceability of the non-solicitation clause, which extended to clients with whom Galbally had no direct contact, and its application to the fourth defendant's business, which was not the same as or similar to IF Asia Pacific's, were also critical issues.

The court held that the non-solicitation clause was void as it constituted an unreasonable restraint of trade. The clause extended to clients Galbally had no direct contact with and applied to the fourth defendant's business, which was not the same as or similar to IF Asia Pacific's. The court found that the clause could not be "read down" to limit its application. Regarding the confidentiality clause, the court found no breach as the information in question was part of Galbally's general knowledge, skill, and experience. The plaintiff failed to establish that Galbally removed any floppy discs containing client information from the employment premises. Thus, the court concluded that the confidentiality obligations were not breached.

The court's final orders included a declaration that the non-solicitation clause was void and unenforceable. The court also found no breach of the confidentiality obligations by Galbally. Consequently, IF Asia Pacific was not entitled to any of the reliefs sought against Galbally.

Orders