Jackson Power Real Estate Pty Ltd v Jones

[2024] NSWSC 1665

Supreme Court

New South Wales

Medium Neutral Citation:

Jackson Power Real Estate Pty Ltd v Jones [2024] NSWSC 1665

Hearing dates:

1–3 and 18 October 2024

Date of orders:

20 December 2024

Decision date:

20 December 2024

Jurisdiction:

Equity

Before:

Richmond J

Decision:

See [88]-[89]

Catchwords:

EQUITY — Breach of confidence — Concurrent confidentiality obligation in contract

EMPLOYMENT AND INDUSTRIAL LAW — Contract — Breach

EQUITY — Equitable remedies — Injunctions

Legislation Cited:

Corporations Act 2001 (Cth)

Cases Cited:

AEI Insurance Group Pty Ltd v Martin (No 4) [2024] FCA 1110

Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2021] FCA 809

Crown Resorts Ltd v Zantran Pty Ltd (2020) 276 FCR 477; [2020] FCAFC 1

Del Casale v Artedomus (2007) 73 IPR 326; [2007] NSWCA 172

Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281

NP Generations Pty Ltd v Feneley [2001] SASC 185

Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21

Reed Business Information Pty Ltd v Seymour [2010] NSWSC 790

Smart EV Solutions Pty Ltd v Guy [2023] FCA 1580

Smith Kline & French Laboratories (Aust) Ltd v Secretary, Dept of Community Services and Health (1990) 22 FCR 73

Streetscape Projects (Aust) Pty Ltd v City of Sydney (2013) 85 NSWLR 196; [2013] NSWCA 2

Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317

Texts Cited:

JD Heydon et al, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, Lexis Nexi)

JD Heydon, The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Australia)

Category:

Principal judgment

Parties:

Jackson Power Real Estate Pty Ltd (Plaintiff)
Laetitia Jones (Defendant)

Representation:

Counsel:
S Foda (Plaintiff)
J Pokoney (Defendant)

Solicitors:
Peter Mitchell Lawyers (Plaintiff)
Ryan Lawyers (Defendant)

File Number(s):

2022/00161678

Publication restriction:

Nil

JUDGMENT

1. These proceedings concern a dispute between the plaintiff, Jackson Power Real Estate Pty Ltd (Jackson Power), a real estate agency in Avoca Beach, New South Wales and the defendant, Ms Laetitia Jones (Ms Jones or the defendant), a licensed real estate agent and former employee of the plaintiff. Ms Jones was employed by the plaintiff as a senior property manager between 24 December 2021 and early May 2022, before joining a competitor real estate agency. The central allegation of the plaintiff is that Ms Jones breached her contractual, equitable and statutory obligations to maintain the confidentiality of the plaintiff’s rent roll which it had purchased from her former employer for a total price of approximately $880,000 (including GST). By the time of closing submissions, the relief sought by the plaintiff was limited to injunctive relief, with the claim for damages or an account of profits having been dropped.

2. On the commencement of these proceedings by summons on 3 June 2022 the plaintiff obtained an interlocutory injunction ex parte on giving the usual undertaking as to damages which was then varied when the matter next came back before the Equity Duty Judge for directions on 9 June 2022, at which time counsel for both parties appeared. The defendant did not oppose the injunction as varied, which is in the following terms and operates until further order:

1. that the defendant be restrained from soliciting, canvassing or in any way communicating for the direct or indirect purpose of soliciting or canvassing any person or entity who or which was a customer, client or tenant of a customer of the plaintiff at any time between 24 December 2021 and 3 May 2022, including but not limited to via social media;

2. that the defendant be restrained from publishing or communicating to any person or entity any information relating to the business of the plaintiff including but not limited to the plaintiff’s rent roll as acquired by the plaintiff on 24 December 2021, or other “confidential information” of the plaintiff as defined in the Employment Agreement between the plaintiff and the defendant dated 29 September 2021.

Evidence

3. The two directors and shareholders of the plaintiff are Nicole Jackson (Ms Jackson) and Stewart Power (Mr Power), both of whom are licensed real estate agents. Each made three affidavits and was cross examined.

4. The plaintiff also relied on the evidence of three other witnesses: (a) Tennille Mugridge (Ms Mugridge) who controlled the entities which sold the rent roll to the plaintiff; (b) Kerrie Gallen (Ms Gallen), an employee of the plaintiff and the sister of Ms Jackson; and (c) Sarah Guest (Ms Guest), an employee of HIL Australia Pty Ltd, a company which provides administration services to Harcourts’ franchisees, whose role involved providing various computer-related services to those franchisees. Ms Mugridge gave evidence orally and was cross examined. Ms Gallen and Ms Guest were not cross examined.

5. Ms Jones made two affidavits and was cross examined. She also relied on affidavits made by Alicia Beasley, Adelaide McLuckie, Thomas Newlands and Heather Munro who were landlords of rental properties previously managed by Ms Jones. None of them was cross examined.

6. The key witnesses were Ms Jackson, Mr Power and Ms Jones. I formed the view that Mr Power had a good recollection of the key events and sought to give truthful and accurate evidence, making concessions where necessary. I regard him as a reliable and honest witness. I formed the view that Ms Jackson and Ms Jones each sought to give truthful and accurate evidence, but they each gave unresponsive answers in cross examination on several occasions and their strong adverse feelings towards each other may have affected their recollection of key events. Accordingly I have treated their evidence, where it conflicts, with caution, and have given the greatest weight to the evidence of other witnesses, contemporaneous documents, other objective factual surrounding material and the inherent probabilities and improbabilities.

Claims

7. The primary relief sought by the plaintiff by way of the statement of claim (SOC) filed on 7 September 2022 was:

1. An order that the defendant be restrained from soliciting, canvassing or in any way communicating directly or indirectly for the purpose of soliciting or canvassing with any person or entity who or which was a customer, client or tenant of a customer of the plaintiff at any time between 24 December 2021 and 3 May 2022 including but not limited to via social media.

2. An order that the defendant be restrained from publishing or communicating to any person or entity any information relating to the business of the plaintiff including but not limited to the plaintiff's ‘rent roll’ as acquired by the plaintiff on 24 December 2021 from the defendant's former employer or other ‘confidential information’ of the plaintiff as defined in the Employment Agreement between the plaintiff and the defendant dated 29 September 2021.

3. An order that the defendant:

1. deliver up to the plaintiff all property of the plaintiff including any ‘confidential information’ of the plaintiff;

2. disclose to the plaintiff the names and addresses of any persons or entities to whom she has disclosed any ‘confidential information’ of the plaintiff.

4. Damages.

5. An accounting be taken of all amounts received by the defendant during or related to her employment with the plaintiff resulting from her use of the ‘Confidential Information’ of the plaintiff as acquired by her during the period 24 December 2021 to 3 May 2022 and that the defendant pay to the plaintiff the amount of such profit as so determined.

6. Further, in the alternative, an order that an inquiry be held as to the loss and damages suffered by the plaintiff by reason of the defendant's use of the ‘Confidential Information’ of the plaintiff and that the defendant pay the plaintiff the amount of such loss or damage as so determined by the Court.

8. The plaintiff stated in its opening and closing submissions that its main concern is the protection of the information contained in the rent roll it had purchased, and sought the injunctive relief in the terms of prayers (1)-(3) above as its primary remedy. At the close of evidence, the plaintiff made an election for damages over an account of profits (and so prayer (5) fell away), but in closing submissions in reply stated that it did not press its claim for damages (and so prayers (4) and (6) also fell away), leaving only the question of final injunctive relief.

9. The SOC contains allegations that Ms Jones has contravened contractual, equitable and statutory duties of confidentiality in the following ways:

1. the sending of emails from Ms Jones’ work account to a private account, and the alleged ‘utilisation’ by Ms Jones of ‘Confidential Information’: SOC at [40]-[41];

2. Ms Jones’ requests for testimonials from certain landlords: SOC at [42];

3. Ms Jones’ emails to Ms Mugridge about certain properties no longer managed by the plaintiff for the calculation of the sale price adjustment at the conclusion of the ‘Retention Period’: SOC at [43];

4. the supply of one of the plaintiff’s executed agency agreements to Ms Mugridge: SOC at [44];

5. the acquisition by Ms Jones of a $790 commission from a service known as ‘MyConnect’ and failing to account to the plaintiff for it: SOC at [46]; and

6. the alleged ‘malicious and intentional’ damage to the plaintiff’s property or confidential information, said to arise from Ms Jones’ resetting an iPhone to ‘factory settings’ and deleting emails from her work email account: SOC at [52]-[53].

Factual Chronology

10. The plaintiff is a licensed real estate agency trading as Jackson Power Property in Avoca Beach, New South Wales. The plaintiff was incorporated on 21 April 2017 by Ms Jackson and Mr Power, who are the directors, principals and licensees of the plaintiff and are both licensed real estate agents. The plaintiff traded under the name Harcourts Jackson Power Property until September 2023 when the franchise relationship with the Harcourts International brand was terminated.

Purchase of rent roll

11. On 29 September 2021, while still trading as Harcourts, the plaintiff entered into agreements for the purchase of a rent roll from three companies: Snibor Pty Ltd, Mugridge Nominees Pty Ltd and MPM Asset Management Pty Ltd (collectively, the Vendor). The sole director of each Vendor was Ms Mugridge (another real estate agent) and she had operated the rent roll under the business name Home Specialist Property Management. A rent roll refers to a series of tenancy management agreements between a real estate agency and a landlord for the management of the landlord’s rental properties. The rent roll in question contained 161 properties and was purchased by the plaintiff for approximately $880,000 including GST. The purchase agreements provided for the purchase price to be adjusted according to the number of rental managements lost within a four-month ‘Retention Period’ following the transition. The transfer of the rent roll was completed on 23 December 2021 and the Retention Period ultimately expired on 23 April 2022.

12. On and following completion, the Vendor provided to the plaintiff the following documentation:

1. files containing all relevant documents for each property including owner's names, addresses and contact particulars including email addresses, telephone and facsimile numbers (where available), current leases or tenancy agreements;

2. ingoing inspection reports;

3. proof of bond lodgement including details of amount of bond lodged;

4. full tenant history for the current tenants;

5. signed tenancy applications

6. copies of any rent increase notices;

7. applicable letters of attornment;

8. a copy of any notice of termination or any application to the NSW Civil and Administrative Tribunal (NCAT);

9. all keys to the properties (usually comprising three sets);

10. accounting statements for each owner showing the balance of the account at the time of completion.

13. Much of this documentation was stored and shared by the Vendor in electronic format via Google Drive, a cloud-based file hosting service. The Vendor also used another program to store data called PropertyMe. The information contained in the documents was then manually uploaded into the plaintiff’s property management software known as Property Tree. Property Tree is a cloud-based system that is only accessible by a user who has a login that has been issued by the plaintiff, as administrator of its account. Property Tree provides both landlords and tenants with access to relevant information concerning the tenancy, including access to property information, tenancy agreements, financial information and property inspection reports.

14. On 26 November 2021, in accordance with the purchase agreements, Ms Mugridge executed a deed recording that she would not solicit the owners of properties under management or otherwise induce them to cancel their management agreements in favour of any other party. The execution of that deed was witnessed by the defendant, though the defendant did not sign it, or any equivalent deed, herself.

Ms Jones’ employment

15. From May 2010, Ms Jones was employed by the Vendor as a property officer. As part of that role, she was responsible for the day-to-day management of most of the properties on the rent roll. The plaintiff decided to hire Ms Jones to assist with the transition of the properties from the Vendor’s agency to the plaintiff’s agency as she was familiar with the landlords and properties on the roll.

16. An employment agreement was entered into between the plaintiff and Ms Jones dated 29 September 2021, but it was subsequently amended, and Ms Jones did not commence her employment with the plaintiff until 24 December 2021 (the employment agreement). From 24 December 2021 to around 3 or 4 May 2022, Ms Jones was employed by the plaintiff as a senior property manager. In this role, like in her previous role for the Vendor, she was responsible for the day-to-day management of properties on the rent roll, including routine property inspections, liaising with, and reporting to landlords and tenants and arranging of repairs to properties.

17. The relevant terms of the employment agreement between the plaintiff and defendant are as follows. Clause 1.1(e) defines ‘Confidential Information’:

1.    Definitions and Interpretation

1.1 Definitions

…

(e) Confidential Information means all information, except to the extent that it Is generally available to the public (other than due to a breach of this Agreement), of which You become aware or generate in the course of, or in connection with, employment with the Employer, of a commercial, operational, technical, or financial type relating to:

(1) the Employer or a related entity (as that term is used In the Corporations Act 2001) to the Employer; and

(2)  any customer or client of the Employer, and includes, without limitation, each of the following:

A    information which the Employer identifies as confidential;

B    information which a reasonable person in Your position should understand is confidential;

C    trade secrets and intellectual property;

D    agreements, arrangements, or terms of trade with clients, customers and suppliers or prospective clients, customers, or suppliers;

E    names, addresses (including email addresses), phone numbers and all other contact information of sellers, buyers, prospective sellers and buyers, any property owner (including their employees, contractors, and representatives) on whose behalf a property is managed by the Employer;

F    contractual and technical Information including passwords and logins and social media handles/hashtags;

G    marketing plans and marketing and sales techniques including any PowerPoint or other similar presentations prepared on behalf of prospective clients;

H    business plans and forecasts;

I    business systems and procedures;

J    financial records, reports, and accounts;

K    business proposals;

L    manuals;

M   operational manuals

N    details concerning the Employer's business affairs;

O   customer/client lists;

P    customer/client details and records including, but not limited to, all personal and financial information revealed by customers/clients; and

Q    employee Information.

18. Clause 1.1(e) should be read with clause 14 headed ‘Confidential Information’:

14. Confidential Information

14.1   In addition to Item 11.4 of the Reference Schedule You agree that at all times during Your employment with the Employer or after termination of Your employment with the Employer, You will:

(a)   use Confidential Information for the sole purpose of performing Your Duties with the Employer;

(b)   keep confidential all Confidential Information, other than Confidential Information You are required to disclose in the course of Your normal Duties, that is or has become public knowledge (other than as a result of a breach of confidentiality by you), or that You are required by law to disclose;

(c)   immediately notify the Employer of any suspected or actual unauthorised use, copying or disclosure of Confidential Information; and

(d)   provide assistance reasonably requested by the Employer in relation to any proceedings the Employer may take against any person for unauthorised use, copying or disclosure of Confidential Information.

14.2   In addition to Item 11.4 of the Reference Schedule You agree that at all times both during Your employment with the Employer or after the termination of Your employment with the employer, You will not for any reason:

(a)   use Confidential Information to Your own advantage or to the advantage of any other person, firm, or company without the prior written consent of the Employer;

(b)   disclose any Confidential Information to any other person, firm, or company without the prior written consent of the Employer; and

(c)   use or attempt to use any Confidential Information which You may acquire in the course of Your employment for any speculative purposes.

14.3   In addition to Item 11.4 of the Reference Schedule in relation to the restrictions contained in this paragraph 14, You acknowledge that:

(a)   the Employer’s rights under this paragraph 14 are in addition to, and do not derogate from or affect the Employer’s common law rights;

(b)   the restrictions are reasonable and necessary for the protection of the Employer; and

(c)   the remedy of damages may be inadequate to protect the interests of the Employer and the Employer is entitled to seek and obtain injunctive relief, or any other remedy, in any court.

19. Clauses 14.1, 14.2 and 14.3 each refer to item 11.4 of the Reference Schedule which is described as a ‘restraint’ and provides:

Restraint Commencing Date of Agreement

The Employer and Employee ... agree that the Employee is restrained from the Date of Agreement as defined in 1.1 (e) Confidential Information and 14 Confidential Information of this Employment Agreement specifically in regard to those properties set out in Agreements for Sale of Rent Roll, Snibor Pty Ltd ACN 118 606 750 and Jackson Power Real Estate Pty Ltd ACN 617 564 011 and Mugridge Nominees Pty Ltd ACN 602 214 399 ATF The MM Assets Trust and Jackson Power Real Estate Pty Ltd ACN 617 564 011 the schedules of such properties attached to this Employment Agreement and acknowledged (initialled) by the Employee and further regarding such schedules the Employee acknowledges, that as current property manager of those properties mentioned in the aforementioned schedules is aware of the identity (landlord and address) of the same.

20. Annexed to the employment agreement, as Schedule 3, are the two schedules with details of the properties included in the rent roll, which do not include the names and addresses of the landlords but (as noted in item 11.4) this was something within Ms Jones’ knowledge as the former property manager of those properties. Although the commencement date recorded in item 11.4 is 1 November 2021, the commencement date of Ms Jones’ employment with the plaintiff was 24 December 2021 as recorded in item 5.

21. Clause 5 contains the following ‘Undertakings’:

5. Your Undertakings

5.1 You agree during Your employment with the Employer to:

(a)    not during the Term, either directly or indirectly be engaged, concerned, or interested in any business that competes, or could compete with the Employer’s business without the prior written consent of the Employer;

(b)    promptly notify the Employer upon becoming aware of any conflict of interest or potential conflict of interest;

(c)   not accept any payment of any other benefit in money or in kind from any person as an inducement or reward for any act without the prior written approval of the Employer;

(d)    perform Your Duties as directed by the Employer in a diligent, professional and ethical manner and refrain form doing anything that may adversely affect or reflect upon the Employer;

…

(j)   not enter into or sign any agreement or contract on the Employer’s behalf or make any promise or representation on the Employer’s behalf without the Employer’s prior written approval; and

(k)    not publish any material or information on social media that is:

(i)    disparaging, obscene, defamatory, threatening, harassing, discriminatory or hateful to another employee of the Employer of its officers, directors, agents or representatives, its clients, partners, suppliers or contractors; and/or

(ii)    likely to bring the Employer or its officers, directors, employees, agents or representatives, its clients, or contrators into disrepute; and

(l)    not take or publish, in any place, any audio, video or electronic recordings in the workplace or of the Employer, its agents, officers, other employees or clients without first obtaining the prior written consent of the Employer and all other persons who may be recorded.

22. Finally, clause 16 provides for the ‘Termination of Employment’ in the following terms:

16.4    Upon termination of Your employment for any reason, You will immediately return to the Employer all property and information belonging to the Employer. This shall include but not be limited to, past current or prospective customer or client lists, property listings, files, business stationery, work diaries, manuals, business cards, legal documents, keys, books, plans, maps, mobile telephones, sim cards, electronic devices (eg computers, lap top computers, tablet computers, electronic organisers/diaries), clothing, uniforms, credit cards, fuel cards, signs or marks in relation to any property or transaction completed or in the process of completion, or listed with the Employer at the time of termination of employment, and all other goods supplied to You by the Employer.

Ms Jones’ resignation

23. Ms Jones deposed that on or about 21 April 2022, she was approached by a competitor real estate agent, Whiteman Property, and offered a position as a property manager which she accepted on 2 May 2022. In cross examination she gave evidence that the negotiations with Whiteman Property began on Saturday 23 or Sunday 24 April 2022, and she formed the view that she would leave the plaintiff around that time.

24. On 3 May 2022, Ms Jones tendered her resignation verbally to Mr Power and Ms Jackson. Mr Power and Ms Jackson were frustrated by Ms Jones’ departure, as having just purchased the rent roll, the loss of Ms Jones was commercially disadvantageous to their business.

25. Mr Power and Ms Jackson in their affidavits deposed that during the conversation on 3 May, Ms Jones said that ‘All the landlords can follow me if they like’ and if they did so, ‘That’s not my problem, that’s yours and Tennille’s’. Ms Jones denies that she said those words and instead deposes that Ms Jackson said she would ‘take [Ms Jones] for everything’ if even ‘one management goes to Whiteman’. I am satisfied on the balance of probabilities that the words attributed to Ms Jones by Mr Power and Ms Jackson were said by her in this conversation.

26. On the evening of 3 May, Mr Power emailed Ms Jones, copying in Ms Jackson, Mr Brian Whiteman (Ms Jones’ new employer) and Mr Patrick McHugh (their solicitor) stating that:

Dear Laetitia,

Nicole and I were very disappointed to receive your verbal resignation out the front of our office this afternoon.

As mentioned, we are required to and have instructed our Solicitor to prepare suitable letters to be provided to both yourself and Brian Whiteman highlighting the critical nature of the following:

Clause 14. Confidential Information of your Employment Agreement with us dated 29 September 2022 and commencing 24 December 2022 in that, in part summary, you have by way of a legal contract (employment agreement), agreed not for any reason to:

14.2 a. Use any confidential information to your own advantage or to the advantage of any other person, firm or company; b. disclose any confidential information to any other person, firm or company; and c. use or attempt to use any confidential information which you may acquire in the course of your employment or any speculative purposes (pages 13 and 14).

Our solicitor will also outline what is included in the definition of confidential information (pages 4 and 5) of our employment agreement.

In conclusion, our Solicitor will also outline our legal recourse should any breach of our employment agreement generally, and more specifically the use of any confidential information as set out above.

In addition to the above we are also concerned by the existence of your email address [email protected] which has been changed only within the last 2 weeks from [email protected] rendering your desktop computer inaccessible to us.

In this regard we seek your clarification.

Should you have any questions please feel welcome to contact Nicole or I at any time.

27. Mr Whiteman replied by email stating:

Hi Stewart,

I hope you’re well and appreciate your email letting me know.
Please be assured we respect and understand your employment agreement with Laetitia.

We understand the confidentiality of your clients and know Laetitia will also respect your business and our business effects when starting in her new role at Whiteman Property.

I look forward to smooth transition from both sides.

Have a great evening.

28. Mr Power then responded by email at 8:17pm:

Hi Brian

I am sorry I am not as amicable as you.

Should just one management transition we will pursue Laetitia’s restraint by virtue of our employment agreement to the fullest extent.

Please be assured you are not dealing with an amateur or someone who is naïve.

You would not have promised Laetitia such an exorbitant salary unless you thought you could fund it by her transgressing from the restraints in her employment agreement including purporting landlords have contacted her.

Please be crystal clear you and Laetitia have been have been [sic] put on notice.

29. The following morning, on 4 May 2022, Ms Jones attended the offices of Jackson Power. After a brief conversation with Mr Power and Ms Jackson, Ms Jones handed over her iPhone and key and was escorted from the premises. She did not return.

30. Later the same day, Ms Jones emailed the plaintiff a written notice of resignation. Mr Power responded attaching a letter outlining Ms Jones’ alleged misconduct which he stated they would have investigated by Fair Trading. This issue concerned an incident occurring during an inspection of one of the rental properties managed by Ms Jones concerning the discovery of a ‘sex toy’ owned by the tenant. While there was evidence concerning this incident and the dispute between the parties which followed it, it is not in my view relevant to the issues in this case and will not be dealt with here except to note that it contributed to the tension between the parties regarding the termination of the defendant’s employment with the plaintiff. Mr Power also sent an email noting that they were having activity on Ms Jones’ desktop computer investigated.

31. There is some dispute as to whether Ms Jones’ employment ceased on 3 May or 4 May, and whether the termination of her employment could be characterised as a resignation or summary dismissal. However, nothing appears to turn on which of the two dates was the effective end date of her employment, nor the reason for it ending.

32. Ms Jones accessed the Property Tree software on the morning of 4 May at 7:51am. In cross-examination, Ms Jones deposed that she accessed the Property Tree software while responding to a call from a plumber requesting payment of an invoice rendered by him for one of the properties she was managing for the plaintiff (T211). I accept her evidence on this as it is consistent with a telephone call log confirming that she did have a telephone conversation around that time that morning.

33. Ms Jones contends that she expected that there would be one weeks’ notice between her resignation and the end date of her employment (as stipulated in the employment agreement), during which time she would conduct her duties and prepare a handover. Ultimately, there was no formal handover because her employment ceased when she was escorted from Jackson Power’s office for May 2022 as noted above.

34. On 5 May 2023, the plaintiff’s solicitor requested the defendant ‘immediately return to our client any information so accessed on any media you have retained and destroy the information and any copies.’ On 11 May 2022, the plaintiff sought undertakings from the defendant and Whiteman Property in relation to restraining the use of the information on the rental roll, but these undertakings were not provided. The undertakings sought were as follows:

1. I warrant that I have returned to Jackson Power Real Estate Pty Ltd all confidential information that has been in my possession, custody or control.

2. I have not retained any confidential information belonging to Jackson Power Real Estate Pty Ltd in my possession, custody or control except as otherwise disclosed herein.

3. I will destroy or any confidential information sent or stored electronically including confidential information sent from any email that I used during my employment with Jackson Power Real Estate Pty Ltd to my personal email account or accounts, or copies stored on any cloud storage service or data storage device, (such as but not limited, to a DVD, external portable hard drive, memory stick or mobile phone) or otherwise removed or taken from Jackson Power Real Estate Pty Ltd by any means and at any time.

4. I will not rely on or use any confidential information that I have retained in my memory.

5. I will immediately inform Jackson Power Real Estate Pty Ltd if I have already used or disclosed any information the property of Jackson Power Real Estate Pty Ltd:

(i) to any other person or entity for any purpose and will provide their name and contact details; and

(ii) I will inform any such person that the information or property of Jackson Power Real Estate Pty Ltd is to be returned to Jackson Power Real Estate Pty Ltd or destroyed and must not be used or disclosed any way.

6. I shall upon return of the original signed copy of these Undertakings also deliver to Peter Mitchell, Solicitor, of PO Box 8262 Tumbi Umbi NSW 2261, all and any property of Jackson Property Real Estate Pty Ltd including but not limited to confidential information whether stored or held in electronic form or in paper or in or on a data storage device or otherwise which is in my possession, custody or control.

35. The expression ‘confidential information’ is defined in the same terms as in the employment agreement.

36. On 3 June 2022, the plaintiff commenced these proceedings by summons.

Relevant principles

37. Absent a valid contractual restraint, an employer is not entitled to protection from competition from a former employee and hence cannot prevent the former employee from canvassing the customers of the former employer whose names and addresses he or she has learned during the course of the period of employment: Del Casale v Artedomus (2007) 73 IPR 326; [2007] NSWCA 172 at [77], and cases there cited: see JD Heydon, The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Australia) at p 111.

38. In the present case there is no contractual restraint on competition by the defendant post-termination of her employment. Rather the plaintiff relies on obligations of confidentiality created by the employment agreement, equitable principle, and s 183 of the Corporations Act 2001 (Cth) (Corporations Act).

39. The principles relating to the enforceability of a contractual restraint on the use of confidential information were summarised by Ball J in Reed Business Information Pty Ltd v Seymour [2010] NSWSC 790 at [36]-[39]:

[36] There is no doubt that an obligation can be imposed by contract to keep information confidential and that that obligation can extend to cover subject matter which is not protected by an equitable duty of confidence: see Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317; John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995. Contractual obligations of that type are treated as restraints of trade. Consequently, they are unenforceable unless they are reasonable. The reasonableness of a restraint is to be judged at the time the restraint is imposed: Woolworths v Olson [2004] NSWCA 372. It is to be judged having regard to the interests of the parties and the interests of the public. The party who asserts a restraint bears the onus of proving that it does no more than provide adequate protection to that party’s legitimate business interests: Buckley v Tutty (1971) 125 CLR 353 at 376; Linwar Securities Pty Ltd v Christopher Savage [2006] NSWSC 786 at [25]–[26] per Nicolas J; Harlow Property Consultants Pty Ltd v Byford [2005] NSWSC 658 at [24]–[25] per White J. However, the onus is on the party who asserts that the restraint is not in the interests of the public to prove that fact: Attorney General of Australia v Adelaide Steamship Co Ltd [1913] AC 781 at 797; Stacks Taree Pty Ltd v Marshall (No 2) [2010] NSWSC 77 at [43] per McDougall J. In determining whether a restraint is reasonable the court should consider what is necessary to protect the legitimate interests of the person asserting the restraint in the circumstances of the case. In the case of a restraint on the disclosure of information, those circumstances include (a) the extent to which the information is known outside the business; (b) the skill and effort expired to collect the information; (c) the extent to which the information is treated as confidential by the employer; (d) the value of the information to competitors; (e) the ease or difficulty with which the information can be duplicated by others; (f) whether it was made known to the employee that the information was confidential; and (g) whether the usages and practices in the industry support the claim of confidentiality: see Wright v Gaswell Pty Ltd (1991) 22 NSWLR 317 at 334 per Kirby P; Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 at [40] per Hodgson JA referring to R Dean, The Law of Trade Secrets and Personal Secrets, (2002) 2nd ed at 190. A court should not too readily substitute its own view of what is confidential for the one that the parties have defined and agreed: Woolworths Ltd v Olson [2004] NSWCA 372 at [39]; John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 955 at [21] per Brereton J.

[37] Subsection 4(1) of the Restraints of Trade Act 1976 (NSW) provides:

A restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not.

Subsection 4(3) provides that, if a restraint is unenforceable, the court may order that “the restraint be, as regards its application to the applicant, altogether invalid or valid to such extent only (not exceeding the extent to which the restraint is not against public policy) as the Court thinks fit”. The order takes effect from a date specified by the court. That date cannot be earlier than the date of the order.

[38] In Orton v Melman [1981] 1 NSWLR 583 at 587, McLelland J described the operation of s 4 in these terms:

In my opinion where the court is to determine, in relation to a
restraint to which s 4(1) applies whether (having regard to public
policy) the restraint is enforceable in respect of an alleged breach (or
threatened breach), it is proper first to determine whether the alleged
breach (independently of public policy considerations) does or will
infringe the terms of the restraint properly construed, and if so, then to
determine whether the restraint, so far as it applies to that breach, is
contrary to public policy. If the restraint, so far as it applies to that breach, is not contrary to public policy then by force of s 4(1) the restraint is to that extent valid, subject always of course to any order which may be made under s 4(3).

[39] In applying this approach, the court determines the extent to which the restraint is valid having regard to the actual circumstances of the case. The extent of the validity of the restraint is not to be determined by reference to hypothetical possibilities: Orton v Melman [1981] 1 NSWLR 583 at 587–8, quoted with approval in Woolworths Ltd v Olson [2004] NSWCA 372 at [43]. Although the operation of s 4 does not depend on concepts of severability, it does not permit the court to rewrite the restraint: Wright v Gaswell Pty Ltd (1991) 22 NSWLR 317 at 329 per Gleeson CJ.

40. The contract in the present case contains express obligations regarding the plaintiff’s confidential information in cl 14, cl 16.4 and item 11.4 of the reference schedule set out earlier. Relevantly for present purposes, these provisions imposed the following obligations on the defendant:

1. an obligation during the employment to keep confidential all ‘confidential information’ (as defined) and to use that information for the sole purpose of performing her duties with the plaintiff (cl 14.1);

2. an obligation during the employment not to use any of the ‘confidential information’ (as defined) to her own advantage or that of any other person, or disclose it to any other person, without the plaintiffs consent (cl 14.2);

3. the same obligations as in (1) and (2) expressed to continue indefinitely after termination of her employment (cl 14.1 and cl 14.2);

4. an obligation to return to the plaintiff or property and information belonging to the plaintiff on termination of the employment (cl 16.4);

5. the ‘restraint’ in relation to the rent roll referred to in item 11.4 of the reference schedule.

41. In relation to the last of these, item 11.4 of the reference schedule is poorly drafted. It states relevantly two things: first, that the defendant is ‘restrained … as defined in 1.1 (e) Confidential Information and 14 Confidential Information of this Employment Agreement specifically in regard to those properties set out in [the purchase agreements] the schedules of such property is attached to this Employment Agreement and acknowledged (initialled) by the Employee’; and second, that the defendant ‘acknowledges that as current property manager of those properties mentioned in the… Schedules is aware of the identity (landlord and address) of the same’.

42. Properly construed, item 11.4 does not itself impose a restraint on the defendant. Rather, it makes clear that the two schedules of the properties attached to the employment agreement (which are the two schedules attached to the purchase agreements setting out the properties in the rent roll) and the names and addresses of the landlords of those properties, are ‘Confidential Information’ to which the obligations in cl 14 apply, with the consequence that the restraints in cl 14 apply to all of that information.

43. Independently of contract, there is an equitable obligation of confidence ‘not to disclose or use information other than for the purpose for which it was communicated if the nature of the information and the circumstances in which it was communicated call for that confidence to be respected by reference to notions of conscience’: Crown Resorts Ltd v Zantran Pty Ltd (2020) 276 FCR 477; [2020] FCAFC 1 at [25] (and cases there cited). The elements which need to be made out in order to establish a breach of the equitable obligation of confidence are: (a) the information must be identified with specificity; (b) it must have the necessary quality of confidence: (c) it must have been received in circumstances importing an obligation of confidence; and (d) there must be an actual or threatened misuse of the information without consent: Smith Kline & French Laboratories (Aust) Ltd v Secretary, Dept of Community Services and Health (1990) 22 FCR 73 at 87; Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21 at [38]-[39].

41. In relation to the second requirement regarding the necessary quality of confidence, this is a question of fact having regard to a range of factors including: (a) the extent to which the information is known outside the business; (b) the extent to which the trade secret was known by employees and others involved in the plaintiff’s business; (c) the extent of measures taken to guard the secrecy of the information; (d) the value of the information to the plaintiffs and their competitors; (e) the amount of effort or money expended by the plaintiffs in developing the information; (f) the ease or difficulty with which the information could be properly acquired or duplicated; (g) whether it was plainly made known to the employee that the material was by the employer as confidential; (h) the fact that the usages and practices of the industry support the assertions of confidentiality; (i) the fact that the employee has been permitted to share the information only by reason of his or her seniority or high responsibility; (j) that the owner believes these things to be true and that belief is reasonable; (k) the greater the extent to which the ‘confidential’ material is habitually handled by an employee, the greater the obligation of the confidentiality imposed; (l) that the information can be readily identified: Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 334 ; Del Casale at [40].

42. In my opinion, the information contained in the schedules annexed to the employment agreement, together with the names and addresses of the landlords for the properties set out in the schedules which was separately recorded in the Property Tree data base, has the necessary quality of confidence to constitute confidential information the purposes of the equitable principle. This did not appear to be in dispute at the hearing. In particular, the information relating to the rent roll stored electronically on the Property Tree system was guarded by password protection; it had been purchased at a significant cost to the plaintiff; it would be of significant value to a competitor as the information as to the rental properties, owners details and management fee arrangements was not generally known; and its confidentiality was made known to the defendant through item 4 of her employment agreement. In relation to factor (h), it has been recognised in a number of cases that a rent roll is confidential information: see eg NP Generations Pty Ltd v Feneley [2001] SASC 185 at [11].

43. The rent roll also meets the first and third requirements referred to at [43] above, being identified with specificity and received by the defendant in circumstances importing an obligation of confidence, given item 11.4 of the reference schedule in the employment agreement. The only remaining issue for the availability of the injunction is whether there has been an actual or threatened misuse of the information without the plaintiff’s consent.

44. In circumstances where there is both a contractual obligation and an equitable obligation of confidence, generally equity will not intervene if there is an adequate remedy at law: Del Casale at [118]; Streetscape Projects (Aust) Pty Ltd v City of Sydney (2013) 85 NSWLR 196; [2013] NSWCA 2 at [150]; Gold & Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281 at [96]-[97]; Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2021] FCA 809 at [312]; JD Heydon et al, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5^th Ed Lexis Nexis 2015) at [42-050].

45. The third obligation relied on by the plaintiff is contained in s 183(1) of the Corporations Act which provides:

A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:

(a) gain an advantage for themselves or someone else; or

(b) cause detriment to the corporation.

Parties’ submissions

49. The plaintiff submitted that each of the six alleged contraventions involved a breach by the defendant of her obligation to maintain the confidentiality of the plaintiff’s confidential information and it was open to the Court to conclude that the information was acquired for the defendant’s own purposes, given that her work email gave her access to the information on the plaintiff’s systems so that there was no need for her to send any such information to her private email address. The particular concern was the transmission of information included in the rent roll to the defendant’s private email address and onto her personal hard drive. The rent roll is confidential information of significant commercial value to the plaintiff, for which it paid a significant sum of money, which it seeks to protect from its competitors.

50. The plaintiff also submitted that the restraints in prayers 1 and 2 of the SOC (set out at [7](1) and (2) above) are reasonable and necessary in the circumstances, and fall within the approved parameters of the test noted in AEI Insurance Group Pty Ltd v Martin (No 4) [2024] FCA 1110 at [238]-[242]. Employees and directors generally understand that they are not entitled to take from the company with which they were previously associated information that is of a confidential nature: Smart EV Solutions Pty Ltd v Guy [2023] FCA 1580 at [35]. In this case, the defendant’s obligations were made explicit when she entered into the employment agreement, in light of the definition of ‘confidential information’ clause 1.1 (e), clause 14, clause 16.4 and item 11.4 of the reference schedule. The defendant was warned or had notice of the rights that she is alleged to have infringed, such that it can be said that she embarked on the conduct the subject of these proceedings with her ‘eyes wide open’: Smart EV Solutions at [35]. The restraints sought are very narrow and are tailored for the protection sought by the plaintiff. Indeed, the reasonableness of the restraints is demonstrated by comparison with the employment contracts which applied to the defendant while working with Ms Mugridge and now with Whiteman Property.

51. The defendant submitted that the plaintiff has not established any of the alleged contraventions identified in the SOC and had failed to make good any of its claims against her, and the proceedings should therefore be dismissed with costs.

52. As a result of the way the parties argued the matter at the hearing, only two issues arise: (1) whether the plaintiff has established that the alleged contraventions referred to at [9] above occurred; (2) if so, whether the injunctive relief sought should be granted.

Alleged contraventions of the obligation of confidence

53. As noted above, the SOC alleges contraventions by the defendant of her contractual, equitable and statutory duties of confidentiality falling into six categories which will now be addressed in turn.

Alleged contravention (1)

54. The first alleged contravention concerns emails sent by the defendant from her work email account during the period from 23 February 2022 to late April 2022. The relevant emails are identified in the particulars to SOC at [40]. They can conveniently be dealt with in groups by reference to their subject matter.

55. The first group comprises a series of emails in the period from 16 February to 13 April 2022 which passed between Ms Mugridge and the defendant. On 16 February 2022 Ms Mugridge provided access to the defendant to a Google Drive folder entitled ‘no longer manage’. In late May 2022 (after the defendant had ceased work for the plaintiff) Ms Jackson obtained access to that Google Drive folder and became aware that it contained Council rate notices, water rate notices and other bills relating to properties in the rent roll which had been transferred by the Vendor to the plaintiff (T167.9).

56. The defendant responded to Ms Mugridge by an email on 16 February 2022 stating ‘Can you share this one with’ and then set out her personal email address (which was a Gmail account). I infer from the evidence of the defendant in cross examination that this did occur. The defendant said in cross examination that she made this request because there were ‘issues’ in accessing the Google drive folders maintained by Ms Mugridge without a Gmail account. This evidence was unsatisfactory for several reasons. First, Ms Jackson gave evidence, on which she was not cross examined, that she was able to access Google drive folders sent to her by Ms Mugridge and did so despite using her work email account which is not a Gmail account. Second, the so-called ‘issues’ in accessing a Google Drive without a Gmail account were not established by any evidence before the court and the existence of such issues is contradicted by Ms Jackson’s evidence. Third, Ms Mugridge continued to send emails to the defendant using her work email account despite these so-called ‘issues’ and at no stage did the defendant say in her emails to Ms Mugridge that she should only send them to the defendant’s personal email account rather than her work email account due to any such issues. At its highest, the evidence was that it was slightly easier to access a Google Drive with a Gmail account than without.

57. The defendant’s explanation for why she requested that the Google Drive be shared with a Gmail account is contradicted by her email to Ms Mugridge of 23 February 2022, responding to an email from Ms Mugridge of 18 February 2022 sharing a Google Drive folder entitled ‘Harcourts (New)’ sent to the defendant’s work email account. This Google Drive folder included additional properties that were added to the rent roll between December 2021 and 18 February 2022 and additional documents that should have been forwarded in December 2021 to the plaintiff in relation to the first tranche of the rent roll but found later (T144.8 and T184.38). The defendant responded to this email on 23 February 2022 stating: ‘Can you please also share this with email [defendant’s gmail account] so I can save to my drive and share etc’. I infer that the ‘drive’ is the defendant’s personal hard drive. Indeed, the tenor of the email correspondence is that she was able to access the Google Drive from her work email account, but preferred to receive it to her Gmail account so that she could ‘save to my drive and share’. Again I infer that Ms Mugridge did forward the Google Drive to the defendants Gmail account as had been requested.

58. The documents including both Google Drives formed part of the confidential information (as defined in the employment agreement) of the plaintiff.

59. Ms Jackson deposed that while the defendant was employed by the plaintiff, she saw the defendant with a black external hard drive plugged into her computer on several occasions and this was corroborated by Ms Gallen who deposed to observing the defendant pulling a cord attached to a black external hard drive from the white Lenovo computer which the defendant used and put the drive into her bag beside her desk. Ms Gallen formed the impression that the defendant was uncomfortable that she had seen this.

60. The defendant acknowledged in her affidavit of 15 May 2023 that she did have a hard drive which had stored on it documents acquired over her 12 years in property management and that she used this hard drive from time to time. She deposed that she had ‘disposed’ of it ‘as per the “Undertakings” emailed to me prior to legal proceedings being taken against me’ and in cross examination said that what she meant by this was that she ‘threw it in the bin’ (T177.29). I find this evidence difficult to accept. First, the ‘undertakings’ referred to (set out earlier in these reasons) which she never in fact gave, did not require her to destroy her personal hard drive. Second, it is implausible that she would destroy an external hard drive by throwing it in the bin when she had held it for over 12 years for the purposes of her property management activities before and after her employment by the plaintiff, and it is likely to have included material not relevant to her dispute with the plaintiff. In any event, I am satisfied on the evidence, and I find, that the defendant did transfer to her personal hard drive confidential information relating to the rent roll managed by her as an employee of the plaintiff during her employment with the plaintiff which she took away when that employment ceased.

61. On 13 April 2022, there was an email exchange between the defendant and Ms Mugridge in which the defendant provided details of properties included in the rent roll which, for one reason or another, either had ceased to be under management or were likely soon to cease to be under management. The defendant’s explanation for these emails was that they were relevant to the calculation of the retention sum and were provided by her to Ms Mugridge for that purpose. I accept that explanation. In my view, providing that information to Ms Mugridge is properly seen as part of her role as a senior property manager of the plaintiff, which included responsibility to ‘manage and develop portfolio relationships and properties’. She had, in my view, authority to receive communications from Ms Mugridge as to properties in the rent roll taken over by the plaintiff from the Vendor; it was incidental to her role to inform Ms Mugridge of any rental property ceasing to be included in the rent roll, particularly as this would benefit the plaintiff through the calculation of the retention sum.

62. However, also included in this email exchange on 13 April 2022 is an email from Ms Mugridge asking the defendant to provide ‘details’ of a property at North Avoca which did not form part of the rent roll purchased by the plaintiff from the Vendor, to which the defendant responded by email stating ‘leased for six months at $755.00; moved in 31/03/2022’ and then (in response to the question from Ms Mugridge ‘fees same as the agreement we have?’) she sent an email stating ‘Yep all the same. I’ll attach MAA’ to which was attached a copy of the rental management agreement entered into by the plaintiff with the owner of that property. No explanation was provided by the defendant for making this document available to Ms Mugridge and, by doing so, the defendant breached cl 14.2 (b) of her employment agreement.

63. The second group of emails comprises three emails sent by the defendant from her work email account to her personal Gmail account containing a Dropbox link for photographs of three rental properties managed by the plaintiff. These photographs were organised by the defendant on behalf of the property owners, and paid for by them, for the purposes of being used to market the rental properties on websites such as realestate.com. Her evidence was that she did so with a view to using some of the photographs on posts on her social media although she did not in fact access any of them because she left the employment of the plaintiff shortly afterwards. I deal with social media posts below.

64. The third group of emails comprises four emails sent by the defendant from her work email account to her personal Gmail account on 26 April 2022. These comprised: (a) one email containing notes regarding a number of the properties which she managed for the plaintiff; (b) two emails which forwarded an email previously sent to her by Mr Power identifying two properties for inclusion in a ‘hit list’ of ‘potential landlords to build [a] relationship with and follow up’; and (c) one email forwarding an email from Ms Heather Munro advising that she and her partner wished to put their unit on the market and asking questions including ‘is there a real estate agent you would recommend to list with? I had the impression, after speaking with the owner, that Harcourts is more focused towards managing rental properties.’

65. The defendant’s explanation for each of these emails was that they were sent to her personal email to enable her to prepare a ‘handover memo’. Given that she was, on 26 April, in negotiations with Whiteman Property to take a position with that agency, and received a formal offer on the next day, I accept this as the explanation for the first and last of these emails. It does not provide an explanation for the two emails regarding the ‘hit list’. She said in cross examination that the reason for sending these emails to her personal email was ‘to see what the status of those properties were so then when I did the handover to Stewart and Nicole I could give them an update on both of those properties as to where they were at.’ In view of the evidence of Mr Power as to how the properties on the ‘hit list’ were identified, which was essentially from public databases, I do not consider that either email contained confidential information either as defined in the employment agreement or within the equitable duty of confidence.

66. Finally, there is an email of 22 April 2022 from a property owner to the defendant’s work email account notifying a desire to terminate the management agreement with Harcourts when the tenant vacated the property on 15 May 2022, which went on to thank the defendant for the ‘great job’ which she had done in managing the property for the last 6.5 years. The defendant forwarded this to her personal Gmail account on the same day. She explained in cross-examination that she did this because she wanted to use the part of the email which thanked her for her management of the property as a testimonial in her social media platforms. I accept this evidence. I deal with the use by the defendant of testimonial material on the social media platforms below. I do not regard this particular email as involving a relevant breach of her confidentiality obligations.

Alleged contravention (2)

67. This allegation relates to the requests made by the defendant by email to three landlords (two of whom owned properties managed by the plaintiff and one did not) for testimonials. The replies were included in her social media pages (including on Facebook and Instagram) which appear not to have referred to her role as an employee of the plaintiff. The allegation here is that the defendant used the confidential information of the plaintiff’s clients (their names and contact details) to obtain testimonials for her own personal benefit.

68. The employment agreement recognises that she will use social media and merely precludes her from publishing information on social media which disparages the plaintiff and did not go on to require her to use it to promote her role as an employee of the plaintiff (cl 5.1(k)). Ms Jackson candidly accepted in cross examination that all real estate professionals use social media to promote themselves. I am not satisfied that any of these testimonials involved a breach by the defendant of the employment agreement. While the landlords were clients of the plaintiff and hence their contact details were ‘confidential information’ (as defined in cl 1.1 (e) of the employment agreement), it cannot be said that she used that information for her personal advantage (which would be a breach of cl 14.2). As an employee of the plaintiff at the time, she was advancing the interests of the plaintiff by using testimonials on her social media pages as the only capacity which she acted as a property manager was as an employee of the plaintiff.

Alleged contraventions (3) and (4)

69. Both of these allegations concern the group of emails passing between the defendant and Ms Mugridge on 13 April 2022 referred to at [61]-[62] above. The allegation is that in these emails the defendant, in breach of her obligations of confidentiality, provided confidential information of the plaintiff to Ms Mugridge, which is a repeat of the same allegation already addressed in those paragraphs. I have accepted the contention that the communication by email on 13 April 2022 of details of a rental property at North Avoca, including the management agreement, was a breach of cl 14.2(b) of the employment agreement.

Alleged contravention (5)

70. The fifth alleged contravention concerns the establishment by the defendant in January 2022 of an account with a company called MyConnect Holdings Pty Ltd (MyConnect) which provides utility connection services such as electricity, gas, telephone, pay-TV and truck hire for tenants. In cross examination, the defendant explained that the ‘MyConnect’ service did not relate to a particular property, but rather was a service made available to tenants if they elected to utilise it. There is a dispute as to whether the defendant had authority from the plaintiff to establish this account but ultimately nothing turns on this for the purposes of these proceedings as the use of the service did not involve the use of any confidential information of the plaintiff other than for the purpose of the plaintiff’s business.

70. The defendant received a commission of $790 from MyConnect which she refunded to MyConnect in June 2022 at which time the plaintiff received a commission of the same amount.

71. While I accept that the defendant was in error in accepting the commission from MyConnect without disclosing it to the plaintiff, she has since refunded that commission and hence there is no loss suffered by the plaintiff. In any event, I am not satisfied that there was any breach by her of her obligations of confidentiality in relation to the MyConnect service.

Alleged contravention (6)

73. The sixth allegation is stated in the SOC as being the ‘malicious and intentional’ damage to the plaintiff’s property by resetting the iPhone provided to her ‘to its factory default settings before returning it to the plaintiff’ and deleting ‘all emails from her office email account’.

74. The evidence does not establish that the iPhone had been ‘reset’ to its factory settings. Ms Jackson deposed in her affidavit of 24 February 2023 that when she looked at the iPhone on 4 May 2022, she ‘could see that the contacts had been deleted as had all images taken of property inspections and property damage. No text messages remained. Texts are often used to communicate with tenants and tradespeople. In all, there was nothing left on the phone.’ However, in an earlier affidavit she prepared on 1 June 2022 for the purposes of the interlocutory relief claimed in the summons, her evidence was that she ‘could see many of the contacts for landlords, tenants and tradespeople have been deleted as had all images taken of property inspections and property damage. No text messages remained. Texts are often used to communicate with tenants and tradespeople. In all, there was very little history left on the phone’ (emphasis added).

75. When Ms Jackson was cross-examined on these differences in her recollection recorded in the two affidavits she was unable to explain them. The defendant denied deleting anything from her iPhone before she handed it to Ms Jackson. It is clear from Ms Jackson’s evidence that the iPhone has not been accessed since 4 May 2022. Given the unsatisfactory nature of the plaintiff’s evidence regarding the content of the iPhone when it was handed over on 4 May 2022 and the failure of the plaintiff to lead any evidence of a forensic expert in relation to the iPhone, the court is not in a position to make any finding as to the extent to which, if at all, information was deleted from the iPhone.

76. However, I am satisfied on the evidence that the defendant did delete emails from her work email account, including the emails referred to when dealing with alleged contravention (1) above. Ms Jackson deposed that when she logged into the defendant’s office computer she found that the inbox, deleted items, archive, sent and recoverable items folders were all empty. The evidence of Ms Guest, an employee of a service company for Harcourts’ franchisees whose role is to provide various computer related services to those franchisees, was that she had received a request on 12 May 2022 from the plaintiff to recover deleted emails from the defendant’s work email account. Ms Guest deposed that she used her administrator privileges to access and restore the recoverable items folder associated with that email account on that day and found a number of emails had been actively deleted. Ms Guest was not cross examined. Ms Jackson’s evidence is that Ms Guest restored the recoverable items folder on 12 May 2022 and the deleted emails included the emails the subject of alleged contravention (1) dealt with above.

77. The defendant accepted in her affidavit that she had deleted emails that she had sent from her work email address to her personal email address, and deposed that ‘the emails were sent from my business email address to my personal email address to facilitate the performance of my duties for Harcourts’ and that she was aware that those emails have been recovered from the contents of Ms Guest’s affidavit.

78. Mr Pokoney submitted for the defendant in closing submissions that the Court could not be satisfied that the defendant’s email archive had been cleared as alleged by the plaintiff because Ms Jackson had deposed in paragraph 66 of her affidavit of 24 February 2023 that she was ‘aware that the last email in the defendants archive folder was dated 5 April 2022 at 9.39 am’. I reject this submission. It was put to Ms Jackson in cross examination that there was an inconsistency between that statement and her evidence in the same affidavit that the deleted items, archive and sent folders were empty. However, there was no inconsistency between the two statements because at the time she swore this affidavit on 24 February 2023, the relevant folders had been restored by the efforts of Ms Guest and paragraph 66 of her affidavit is speaking to the time which she made the affidavit rather than when she first sought to access the defendant’s office computer, which was around 5 May 2022, at which time the relevant folders were empty.

79. The deletion of emails from the defendant’s work email account was a breach of clause 16.4 of the employment agreement. I infer that she did so because she wished to hide from the plaintiff the fact that she had sent emails form her work account to her personal account as well as the other emails referred to in relation to alleged contravention (1). The reason she wished to hide that fact was the potential for a breach by her of cl 14.2 of the employment agreement which I am satisfied in at least one case did occur for the reasons given above.

Whether injunctive relief should be granted

80. For the reasons given above I have concluded that rent roll acquired by the plaintiff from the vendors is confidential information of the plaintiff for which it is entitled to protection by way of injunctive relief against the defendant either to restrain a breach of cl 14.2 of the employment agreement or a breach of her equitable duty of confidence. Focusing on the latter, I have concluded earlier in these reasons that the rent roll meets the first three requirements for equitable relief. I am satisfied on the evidence that there has been an actual misuse by the defendant of this confidential information without the plaintiff’s consent and there is a sufficient threat of further misuse to justify a perpetual injunction.

81. First, the defendant downloaded information relating to the rent roll to her personal hard drive and her explanation as to what happened to that hard drive is unsatisfactory. Second, she destroyed emails in her work email account in breach of her employment agreement and her explanation for why she did so is unsatisfactory. Third, she disclosed a confidential document relating to the rent roll to Ms Mugridge (one of the plaintiff’s rental management agreements) which was unauthorised and has not been explained. Fourth, not only did she not give the undertakings sought by the plaintiff in relation to the use of its confidential information set out at [34] above, she also did not respond to that request at all. Had she done so, there is a reasonable prospect that this litigation would not have progressed to hearing. I regard the undertakings sought as reasonable and entirely consistent with the defendant’s contractual obligations under her employment agreement. The failure to provide the undertakings creates the impression that the defendant does not accept the seriousness of the contractual obligation to maintain the confidentiality of the rent roll.

82. I will now address each category of injunctive relief sought, set out at [7](1)-(3) above.

83. The first (set out at [7(1)]) is an injunction to restrain the defendant from ‘soliciting, canvassing or in any way communicating for the purpose of soliciting or canvassing’ a customer, client or tenant of a customer of the plaintiff during the period while she was employed by the plaintiff. The plaintiff is not entitled to an injunction of this kind. As noted earlier, the employment agreement does not contain a post-employment restraint on the defendant competing with the plaintiff. Had it done so, the question would have arisen whether, and to what extent, such a restraint was enforceable under the principles relating to restraints of trade, summarised by Ball J in Reed Business Information in the passage quoted at [39] above. The reliance placed by the plaintiff on the observations of Thawley J in AEI Insurance at [238]-[242] is misplaced as they were directed to the non-complete clause in the employment contract at issue in that case. There is no such clause in the defendant’s employment agreement.

84. The second category (set out at [7(2)]) is in my view too broad in so far as it applies to all ‘confidential information’ (as defined in the employment agreement). Some of that information will not be protected by the equitable duty of confidence and to that extent, will be a restraint of trade to which the principles referred to by Ball J in Reed Business Information set out at [39] above would apply. It is now nearly 18 months since the defendant left the employment of the plaintiff and there would be a real issue as to whether a continued restraint in relation to information which is not confidential information for the purposes of the equitable duty would be reasonable. Bearing in mind that the focus of the plaintiff’s submissions was on protecting its rent roll (including the names and contact details of the landlords within it), it is appropriate that the injunctive relief be limited to that category of confidential information. As the rent roll is protected by the equitable duty of confidence, it is not necessary to consider whether a restraint on its misuse is a restraint of trade.

85. In my view the appropriate form of injunction is an order that the defendant be restrained from using, copying, showing or communicating to any person or entity any of the contents of any rent roll or list of landlords and rental properties of those landlords kept by the plaintiff (including but not limited to the plaintiff's ‘rent roll’ acquired by the plaintiff on 24 December 2021 from the defendant's former employer).

86. The third category (set out at [7(3)] above) seeks an order for (a) the delivery of property of the plaintiff including any ‘confidential information’ of the plaintiff, and (b) disclosure to the plaintiff of the names and addresses of any persons or entities to whom the defendant has disclosed any ‘confidential information’ of the plaintiff. In relation to (a), there is no suggestion in the evidence that the plaintiff has retained any property of the plaintiff. In so far as (a) is directed to the confidential information itself it is not appropriate. Aside from the fact that the better view is that confidential information the subject of the equitable duty of confidence is not ‘property’ (JD Heydon et al, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5^th Ed Lexis Nexis 2015) at [42-130]), the scope of the definition of ‘confidential information’ in the employment agreement extends beyond anything which would be the subject of that equitable duty, and the case at hearing was directed to the rent roll. I will make a more limited form of order directed at return of physical copies of the rent roll and the destruction of electronic copies of it. In relation to (b) I will make an order requiring the defendant to provide an affidavit disclosing the names and addresses of the persons to whom she has disclosed the rent roll.

87. In light of the limited injunctive relief to be granted, the interlocutory injunctions granted on 3 June 2022 (as varied on 9 June 2022) will be vacated.

Conclusion

88. For the above reasons, the court will make the following orders:

1. An order that the defendant be restrained from using, copying, showing or communicating to any person or entity any of the contents of any rent roll or list of landlords and rental properties of those landlords kept by the plaintiff (including but not limited to the plaintiff's ‘rent roll’ acquired by the plaintiff on around 24 December 2021 from the defendant's former employer) (the Confidential Information).

2. An order that the defendant (a) deliver up to the plaintiff within 30 days all physical copies of the Confidential Information in her possession, custody or control and (b) permanently destroys all electronic copies of the Confidential Information in her possession, custody or control.

3. An order that the defendant file and serve within 30 days an affidavit setting out (a) the names and addresses of any persons or entities to whom she has disclosed any of the Confidential Information and (b) the steps taken by her to comply with order 2(b).

4. Order 7 made on 3 June 2022 (as varied on 9 June 2022) is vacated.

89. The parties wish to be heard on costs. I will give the parties leave to provide to my associate within 30 days a timetable for the making of submissions on the question of costs, which is to be determined on the papers unless any party requires an oral hearing.

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Decision last updated: 20 December 2024