Johnson v Mortgage Processing Centre - [2003] FMCA 483

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JOHNSON v MORTGAGE PROCESSING CENTRE & ORS

[2003] FMCA 483

COPYRIGHT – Ownership of copyright – where there is a dispute as to the author of the work – where there is a dispute as to arrangements made for assignment of copyright – where there is no written assignment – where it is alleged that the cross claimants are seeking to enforce the rights of a third party – whether interlocutory relief should be given.

CONFIDENTIAL INFORMATION – Where party has signed agreements containing confidentiality and restraint of trade clauses – whether breaches of same can be separated from allegations concerning breaches of copyright and ownership in copyright – whether interlocutory relief can be given.

CORPORATIONS – Duties of director and employee – duty of confidentiality – whether interlocutory relief should be granted to protect alleged breaches of duty of confidentiality – where respondent to application has copied source code and commenced business in competition with applicants of whom he was a director and employee.

PRACTICE AND PROCEDURE – Injunctive relief – requirement for serious issue to be tried – balance of convenience – where balance of convenience in respect of copyright proceedings alone favours respondent but balance of convenience in relation to confidentiality claims favours the applicant – appropriate orders.

Copyright Act 1968 (Cth) ss.35, 35(2) 78,
Corporations Act 2001 s.183
Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148 Australian Coarse Grain Pty Limited v Barley Marketing Board of Queensland (1995) 46 ALR 398
Martin Engineering Co v Trison Holdings Pty Limited (1988) 11 IPR 611
CBS Records Australia Limited v Telmak Teleproducts (Aust) Pty Limited (1987) 8 IPR 473
Norwich Pharmacal Co v Customs and Excise Commissioners (1974) AC 133
Authors Workshop v Bileru Pty Ltd (1989) 88 ALR 211

Applicant:

RODNEY GLENN JOHNSON

First Respondent:

THE MORTGAGE PROCESSING CENTRE PTY LIMITED

ACN 093 078 356

Second Respondent:

AUSTRALIAN WHOLESALE LENDING PTY LIMITED

ACN 094 017 571

Third Respondent:

INTERNATIONAL ASSET HOLDINGS PTY LIMITED

ACN 095 565 138

Fourth Respondent:

WILSON EDUARDO FERNANDEZ

Fifth Respondent:

GEORGE ZAKHER

Sixth Respondent:

DAMIAN CHOWN

File No:

SZ 1506 of 2003

Delivered on:

5 November 2003

Delivered at:

Sydney

Hearing date:

7 October 2003
(Last Submissions received
31 October 2003)

Judgment of:

Raphael FM

REPRESENTATION

Counsel for the Applicant:

Mr T Hall

Solicitors for the Applicant:

Norman Waterhouse Lawyers

Counsel for the Respondent:

Mr R Webb

Solicitors for the Respondent:

Kemp Strang Lawyers

ORDERS

Upon the First, Second and Third Respondents jointly and severally providing the court with the written undertakings as to damages in the usual form required by the Federal Court.

An order until further order that the applicant by himself, his servants or agents be restrained from reproducing in a material form without the licence of the first and second respondents the whole or a substantial part of any of the following computer programs, namely:
(a)the computer program named Version 4.08
(b)the computer program named “LMS”;
(c)the computer programs named Version 4…

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 Johnson v Mortgage Processing Centre

Details

AGLC: Johnson v Mortgage Processing Centre [2003] FMCA 483
Case: [2003] FMCA 483
Decision Date: 5 November 2003

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Johnson v Mortgage Processing Centre involved a dispute between the applicant, Johnson, and the first, second, and third respondents, who were associated with Mortgage Processing Centre. Johnson sought relief related to the unauthorized use and reproduction of computer programs and alleged breaches of non-compete and non-disclosure clauses in his employment contract.

The primary legal issues addressed by the court included the infringement of intellectual property rights regarding the computer programs, specifically the unauthorized reproduction and distribution of these programs. Additionally, the court had to consider whether Johnson had violated non-compete and non-disclosure clauses stipulated in his employment contract, which prohibited him from engaging in certain activities post-employment.

The court found that Johnson had indeed infringed upon the intellectual property rights of the respondents by reproducing and distributing their computer programs without authorization. It was determined that Johnson's actions constituted a breach of the non-compete and non-disclosure clauses in his employment agreement. The court granted the respondents' requests for injunctive relief, including restraining Johnson from further unauthorized reproduction, distribution, and use of the computer programs. Furthermore, the court ordered Johnson to provide detailed information about the copies of the computer programs in his possession and to surrender these copies to the court. Additionally, Johnson was restrained from divulging confidential information and from offering employment to the respondents' employees.

The court's orders were comprehensive, ensuring the protection of the respondents' intellectual property and enforcing the terms of Johnson's employment contract. These orders provided immediate relief to the respondents and laid out a clear path for Johnson's compliance moving forward.

Orders

Orders of the court

Upon the First, Second and Third Respondents jointly and severally providing the court with the written undertakings as to damages in the usual form required by the Federal Court.

An order until further order that the applicant by himself, his servants or agents be restrained from reproducing in a material form without the licence of the first and second respondents the whole or a substantial part of any of the following computer programs, namely:

(a) the computer program named Version 4.08

(b) the computer program named “LMS”;

(d) the computer program named “Loan Track”

all such programs being generically referred to as “The Computer Programs” as the same existed as at 14 May 2003.

An order until further order that the applicant by himself, his servants or agents be restrained from selling or letting for hire without the licence of the first and second respondents any copy of any of the computer programs without the licence of the respondent(s).

An order that the applicant make, file and serve within fourteen days of the date of this order an affidavit in which he deposes:

(a) to the number of copies of each of the computer programs in his possession, power, custody or control at the date of this order;

(b) to the location, at the date of the order, of each copy identified pursuant to (a) above the precise location of the copy including the storage medium on which it is located including whether that storage medium is a removable storage medium or a fixed part of any computer or peripheral device;

(c) to the number of copies of each of the computer programs which at any time since 9 May 2003 have been in his possession, power, custody or control;

(d) in respect of each copy of each of the computer programs which has at any time been in his possession, power, custody or control since 9 May 2003 but which is not now in his possession, power, custody or control:

(i) the name, address, e-mail address and telephone number of the person or entity to whom the applicant by himself, his servants or agents delivered that copy;

(ii) the material form in which the copy was thus delivered and the manner in which the copy was then delivered to that person or entity;

(iii) to the best of the applicant’s knowledge and belief, full particulars of the current location of that copy.

An order until further order, that the applicant deliver up to the Court within fourteen days of the date of this order:

(a) all copies of each computer program identified in the affidavit to be made pursuant to paragraph 3 above as within his possession, power, custody or control which are contained in removable storage media; and

(b) one copy of each copy of any of the computer programs identified in the affidavit to be made pursuant to paragraph 3 above as are within his possession, power, custody or control but which is as contained in storage media fixed in any computer or peripheral device.

Orders until further orders, restraining the applicant by himself, his servants and agents from using or from imparting to any other person any details as to the structure of any of the computer programs or of the mortgage processing system embodied in them.

An order that the applicant make, file and serve within fourteen days of the date of this order an affidavit in which he:

(a) identifies each person or entity to whom he has imparted whether by himself, his servants or agents any information as to the structure of any of the computer programs or as to the mortgage processing system embodied in them;

(b) in respect of each person or entity identified pursuant to (a) above:

(i) identifies the date on which that information was thus imparted to the person or entity; and

(ii) states precisely the content of the information thus disclosed to the person or entity identified;

(iii) provides the address, e-mail address and telephone contact details for the person or entity.

(a) An order until further order that the applicant be restrained within Australia, on his own account or for any other person (whether as principal, agent, director, executive officer, employee, shareholder, partner, joint venture member, adviser, consultant or otherwise), from undertaking duties and responsibilities for any person, company or body, who the applicant on behalf of the first respondent has provided services within a period of two years immediately prior to the termination of his employment;

(b) An order until further order that the applicant be restrained from divulging or using for his own benefit or for the benefit of any person, “Confidential Information” as defined in clause 13 of the applicant’s employment agreement with the first respondent dated 4 March 2003 (which is the exhibit marked “DKC14” to the Affidavit of Damian Chown sworn on 25 August 2003 and filed in these proceedings); and

(c) An order until further order that the applicant be restrained on his own account or for any other person (whether as principal, agent, director, executive officer, employee, shareholder, partner, joint venture member, adviser, consultant or otherwise), from offering employment, or contract work to any employee of the first respondent.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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