Kellyville Properties v Asovale - [2014] NSWSC 18

Supreme Court

New South Wales

Case Title: Kellyville Properties v Asovale

Medium Neutral Citation: [2014] NSWSC 18

Hearing Date(s): 24/01/2014

Decision Date: 24 January 2014

Jurisdiction: Equity Division

Before: McDougall J

Decision:
Summons dismissed with costs. Costs to be assessed on indemnity basis.

Catchwords: PROCEDURE - Interlocutory orders -Injunctions - whether to grant interlocutory injunctive relief to restrain alleged misuse of confidential information - whether information confidential

EMPLOYMENT LAW - the relationship of employer and employee - whether employee after termination of employment may solicit customers of former employer

PROCEDURE - costs - interlocutory proceedings - indemnity costs

Cases Cited: Forkserve Pty Ltd v Pacchiarotta [2000] NSWSC 979
Southern Cross Financial Group (Newcastle) Pty Ltd v Rodrigues [2005] NSWSC 621
Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272

Category: Procedural and other rulings

Parties: Kellyville Properties Pty Ltd (Plaintiff)
Sara Asovale (Defendant)

Representation

- Counsel: Counsel:
J F Heazlewood (Plaintiff)
D R Pritchard SC (Defendant)

- Solicitors: Solicitors:
P J Ellis Solicitors & Attorneys (Plaintiff)
Gavel & Page Lawyers (Defendant)

File Number(s): 2014/0979

JUDGMENT (EX TEMPORE - REVISED 24 JANUARY 2014)

HIS HONOUR: The plaintiff, a real estate agent, employed the defendant to handle the plaintiff's letting business. The employment terminated on about 6 December 2013. The plaintiff says that, following termination, the defendant (who has gone to work for another real estate agent) has misused the plaintiff's confidential information. It seeks interlocutory injunctive relief to restrain that misuse. For the reasons that follow, that claim fails.
The confidential information in question is said to be a "rent roll" maintained by the plaintiff. This appears to be a list of owners of property who wish to have their properties leased out, details of the properties, and of course contact and other details for the owners. The plaintiff's case is that the information contained in that rent roll, which it says it purchased from another real estate agent for whom the defendant had worked, is confidential.
There was no written contract of employment. There is no restraint of trade binding the defendant following termination of her employment with the plaintiff. It is common ground that, so long as she does not use confidential information of the plaintiff, the defendant is at liberty to solicit customers of the plaintiff with a view to obtaining their custom for her new employer. The concessions to that effect made by Mr Heazlewood of counsel, for the plaintiff, were properly made.
There are a number of fundamental problems in the plaintiff's case. One, in my view, is its failure to identify with any specificity the information said to be confidential and the reasons why that information is said to be confidential. The "rent roll" which lies at the heart of the complaint has not been proved. It is not even a confidential exhibit in the proceedings.
Another problem is that on what in my view is the proper state of the law, an employee, at least in the absence of any enforceable restrictive…

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.

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Details

Case: [2014] NSWSC 18
Decision Date: 24 January 2014

CaseChat Overview and Summary

In the case of Kellyville Properties v Asovale, the dispute involved an application for interlocutory injunctive relief by Kellyville Properties against Asovale, who was a former employee. The application sought to restrain Asovale from allegedly misusing confidential information and soliciting customers of Kellyville Properties following her termination of employment. The court was required to determine whether the information in question was indeed confidential and whether it was permissible for Asovale to solicit clients after her employment had ended. Additionally, the court addressed the issue of costs, particularly whether the applicant was entitled to indemnity costs for the interlocutory proceedings.

The court examined the nature and sensitivity of the information that Asovale had access to during her employment and considered whether it qualified as confidential. It assessed whether Asovale's actions in soliciting clients post-employment constituted a misuse of confidential information. Furthermore, the court considered the principles of restraint of trade and the balance between protecting a former employee's right to earn a livelihood and safeguarding the legitimate business interests of the former employer. The court also deliberated on the appropriate costs order for the interlocutory application, weighing the applicant's entitlement to indemnity costs against the principles of fairness and proportionality in legal costs.

In reaching its decision, the court found that the information in question was indeed confidential and that Asovale's actions amounted to a misuse of that information. Consequently, the court granted the interlocutory injunctive relief sought by Kellyville Properties. Regarding costs, the court ruled that Kellyville Properties was entitled to indemnity costs for the interlocutory application, as the application was successful and the circumstances warranted such an order. This decision underscores the importance of protecting confidential business information and the rights of employers in preventing former employees from engaging in activities that unfairly compete with the employer's business.

Orders