Lift Shop Pty Ltd v Lioe
[2023] FedCFamC2G 179
Federal Circuit and Family Court of Australia
(DIVISION 2)
Lift Shop Pty Ltd v Lioe [2023] FedCFamC2G 179
File number(s): SYG 1995 of 2020 Judgment of: JUDGE CAMERON Date of judgment: 9 March 2023 Catchwords: PRACTICE & PROCEDURE – Discovery – Norwich Pharmacal orders made at commencement of proceeding –further analysis sought of existing forensic images made earlier in the proceeding – forensic imaging and analysis sought for previously undisclosed devices – scope and intrusiveness of proposed analysis – confidential information – availability of conventional discovery. Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth) s. 174(2)(b)
Federal Court Rules 2011 (Cth) r.14.01
Cases cited: Dart Industries Inc v David Bryar & Associates Pty Ltd (1997) 38 IPR 389
Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133
Division: General Number of paragraphs: 54 Date of hearing: 19 December 2022 Place: Sydney Counsel for the Applicant: Mr J. Hennessy SC Solicitor for the Applicant: Gilbert & Tobin Counsel for the Second and Third Respondents: Mr A. Gander Solicitor for the Second and Third Respondents: Kerrs Law ORDERS
SYG 1995 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: LIFT SHOP PTY LTD
Applicant
AND: DEVI LIOE
Second Respondent
EASY LIVING HOME ELEVATORS PTY LTD
Third Respondent
order made by:
JUDGE CAMERON
DATE OF ORDER:
9 March 2023
THE COURT ORDERS THAT:
1.Orders 7 and 8 of the orders made on 2 September 2020 be varied to permit the applicant’s independent computer expert, Rodney McKemmish, with the assistance of persons acting under his direction and instruction, to conduct an analysis of the Forensic Images (as defined in order 7(a) of the orders made on 2 September 2020) of the laptop computer produced by the second respondent in accordance with orders made on 24 August 2020 and 2 September 2020, for the purpose of considering the second respondent’s usage of the TeamViewer software to communicate with Handi Nasution.
2.The second and third respondents provide Mr McKemmish with any user names, passwords or other information necessary to conduct the investigation in order 1 of these orders.
3.Subject to the process referred to in order 4 of these orders, Mr McKemmish may disclose to the applicant’s and the second and third respondents’ solicitors and counsel only, the results of his searches conducted pursuant to order 1 of these orders, including for the purposes of preparing a report for this proceeding.
4.Mr McKemmish will first disclose such results to the second and third respondents’ solicitors and counsel for 14 days for the purpose of a check of the results to identify material that may be subject to client legal privilege, or a claim for further or additional confidentiality orders by the relevant respondent, which material will be identified to Mr McKemmish and isolated to facilitate a privilege claim and a confidentiality claim, or either of them, by the relevant respondent.
5.Until further order on this issue, Mr McKemmish and the applicant’s legal representatives are not to disclose to the applicant any report or affidavit prepared by Mr McKemmish pursuant to these orders or any results of any investigations conducted by Mr McKemmish under order 1 of these orders.
6.The applicant’s application in a proceeding filed on 27 October 2022 be otherwise dismissed.
7.The costs of and incidental to the applicant’s application in a proceeding filed on 27 October 2022 be reserved.
8.Until further order on the issue, and on the ground that it is necessary to prevent prejudice to the proper administration of justice, publication or any other form of public disclosure of the materials in Confidential Exhibit DTS-2 and Confidential Exhibit DL-1 be prohibited other than to:
(a)the Court;
(b)the applicant’s and the second and third respondents’ solicitors and counsel; and
(c)other persons with the prior written consent of the applicant, provided such persons have provided signed undertakings in accordance with the confidentiality regime agreed by the parties earlier in this proceeding.
9.The parties have liberty to apply on 3 days’ notice.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Cameron
INTRODUCTION
The applicant (“Lift Shop”) commenced this proceeding on 24 August 2020 by an application which alleged that one of its former employees, the second respondent Ms Lioe, had received from one of its then-employees, the then-first respondent Mr Nasution, confidential information belonging to it. Mr Nasution is no longer a party to the proceeding, as recorded in the orders made on 18 December 2020. However, on 26 July 2022 Ms Lioe’s current employer and Lift Shop’s business competitor, Easy Living Home Elevators Pty Ltd (“ELHE”), was joined as third respondent.
According to the CEO of Lift Shop, Leslie Katz, Lift Shop and ELHE are “commercial enemies” and have litigated against each other in the Federal Court of Australia on three occasions, including an appeal.
PLEADINGS
Relevantly, Lift Shop alleges in its further amended statement of claim that:
(a)documents it described as the Confidential Spreadsheet, the Confidential Timesheets, the Confidential Payroll Tax Spreadsheet and the Confidential Management Summary Reports, giving them the omnibus description Lift Shop Copyright Works (together, the Documents):
(i)which contained confidential and sensitive commercial information over which it asserts copyright;
(ii)were sent by Mr Nasution to Ms Lioe who downloaded onto, and/or opened them on, unspecified devices thereby reproducing the whole or a substantial part of one or more of the Documents;
(b)Ms Lioe and Mr Nasution exchanged various WhatsApp messages some of which contained other information confidential to Lift Shop;
(c)Ms Lioe infringed the copyright in one or more of the Documents and her conduct also made her an accessory to Mr Nasution’s manifold alleged breaches of duty to his employer; and
(d)as her employer, ELHE was vicariously liable for Ms Lioe’s alleged breaches of Lift Shop’s copyright, for her conduct as an accessory to Mr Nasution’s breaches of duty and for “her other conduct”.
It is important to note that there is no allegation that any of the information or documents Mr Nasution is alleged to have sent to Ms Lioe was passed on by her to ELHE, the joinder of ELHE being solely based on an allegation that, as her employer, it was vicariously liable for her alleged conduct about which Lift Shop complains.
In her further amended response, Ms Lioe relevantly:
(a)did not admit that the Documents were confidential;
(b)admitted that she received from Mr Nasution:
(i)confidential costing information from Lift Shop’s exclusive supplier;
(ii)the “Site Central” page of the confidential Lift Shop CRM Database;
(iii)confidential Lift Shop banking details;
(iv)confidential Lift Shop human resources information;
(v)the Confidential Management Summary Reports; and
(vi)confidential Lift Shop customer information;
but said that she did so for the sole purpose of assisting Mr Nasution, at his request, with his duties at Lift Shop;
(c)admitted that she exchanged WhatsApp messages with Mr Nasution in relation to various of Lift Shop’s business processes and practices but also said that she had done so for the sole purpose of assisting Mr Nasution with his duties at Lift Shop; and
(d)denied that she had had any intention to, or did, any act in any wrongful manner in relation to Lift Shop.
In its amended response, ELHE pleaded that the conduct alleged against Ms Lioe, if it occurred, was not authorised by it and was outside the scope of her employment with it.
DISCOVERY AND INSPECTION
In its initiating application, Lift Shop sought discovery from Ms Lioe in the form of a Norwich Pharmacal affidavit. On 24 August 2020 responsive orders were made on an ex parte basis, the relevant effect of which was to require Ms Lioe to identify those Respondent’s Storage Devices that on 24 August 2020 were or had been in her possession, custody or control holding Records, which were defined to be:
… any records within any of the Respondents’ possession, custody or control relating to the use of the Confidential Spreadsheet including but not limited to records containing the names, addresses, telephone numbers, and email addresses of individuals to whom any one or more Respondent has supplied, offered to supply, distributed or offered to distribute, or sold or offered to sell the Confidential Spreadsheet, or any copy of that document, or information disclosed in that document…
Respondents’ Storage Devices was a term defined by the orders as:
… any External Storage Devices containing Records within each Respondents’ [sic] possession, custody or control …
External Storage Device was defined as
… any desktop or laptop computer, mobile phone, tablet or electronic storage device …
An injunction also issued on 24 August 2022 which, in broad terms, restrained Mr Nasution and Ms Lioe from taking steps to put any of the Respondents’ Storage Devices, and the information and documents they might hold, beyond reach or recovery, such as by disposing of them or causing them to be destroyed or deleted.
In her affidavit of 3 September 2020, Ms Lioe relevantly said that 5 copies of the Confidential Spreadsheet and copies of weekly timesheets were attached to various emails stored in her personal Hotmail account and that the Respondents’ Storage Devices in her possession, custody or control on 24 August 2020 were:
i. Samsung Galaxy Sl0 … ; and
ii. Lenovo IdeaPad 510-J5IKB, Serial Number …
respectively the Phone and Laptop 1, (together, the Original Devices) both of which were located at her home. She further said that there were no Respondents’ Storage Devices which had been in her possession, custody or control on 24 August 2020, but were no longer.
On 2 September 2020, the Court relevantly ordered Ms Lioe to deliver up any Respondents’ Storage Devices (in her possession) to Lift Shop’s independent computer expert, Mr McKemmish, who was authorised by those orders to:
7 …
(a)make a forensic image of each of the Respondent’s Storage Devices (the Forensic Image); and
(b)identify only the Records contained in the Forensic Image, with the specific direction that he not identify and report on any item that is not the Records within the Forensic Image; and
(c)otherwise undertake non-destructive testing of the Forensic Image for the purpose of investigating the Respondents’ conduct in relation to the Confidential Spreadsheet.
After inspecting the forensic images of the Original Devices taken under the orders of 2 September 2020, Mr McKemmish provided a report dated 17 September 2020. In it he stated that:
(a)documents responsive to the search criteria had been identified;
(b)there was no indication that external USB storage devices had been attached to Laptop 1 or of documents having been copied to a USB storage device;
(c)the existence of a DropBox account had been identified but it had not been possible to determine whether the cached copy of it on Laptop 1 was a complete copy of all the files stored in the cloud, for which access to the online DropBox account would be necessary;
(d)the accessing of a Google Drive account was also identified but without access to that account it was not possible to determine whether it contained documents responsive to the search criteria; and
(e)the existence of a Gmail account had been identified but it had not been possible to determine whether the copies of Gmail emails Mr McKemmish had was a complete set of all emails in that account, for which access to the Gmail account would be necessary.
Mr McKemmish deposed that he did not undertake any broader analysis of the devices, such as a Standard Forensic Analysis, which he described as:
… analysis of the [devices] and their use to identify activity which is not captured by the definition of Records [ie Records] in order 9(b) of the 24 August 2020 orders.
He had earlier deposed that standard computer forensic techniques include:
(a) the use of forensic software packages such as EnCase, Forensic Toolkit, Nuix, Winhex, Helix, Autopsy, Axiom, Belkasoft, Cellebrite, XRY, and Oxygen;
(b) reconstructing from electronic information user activity concerning the use of computer programs or computer data files; and
(c) the use of "data-mining" tools to identify patterns or trends in data.
On 22 February 2022 the orders of 2 September 2020 were varied to provide for the forensic images that had been made pursuant to those orders to be searched further, for the following additional records (Additional Records):
1.Records (including, but not limited to, messages, database references, images, files and associated data, whether deleted or not) referring or relating to communications between Handi Nasution and Devi Lioe (including but not limited to use of internet-based communication applications such as WhatsApp, WeChat, Facebook Messenger, Skype, Microsoft Teams, Instagram, iMessage, Signal, Viber, Line, Getcontact, and Telegram) and any user IDs, Phone numbers or accounts associated with them from 1 January 2015.
2.Records (including incoming and outgoing call and message logs, whether deleted or not) relating to communications between Handi Nasution and Devi Lioe and any user IDs, Phone numbers or accounts associated with them from 1 January 2015.
3.Records relating to any transfer or communication of any document or communication referring or relating to Lift Shop confidential information, including those pleaded in paragraphs 19, 30 to 35, and 37 to 47 of Lift Shop’s Statement of Claim dated 19 November 2020, to Easy Living Home Elevators Pty Ltd and any of its employees, agents, officers or representatives, including via any cloud-based storage service such as Google Drive, iCloud, Microsoft One Drive and DropBox
Mr McKemmish deposed that he inspected the forensic images again by reference to the 22 February 2022 orders’ expanded search parameters.
In its amended response to the further amended statement of claim, ELHE pleaded, amongst other things, that it had provided Ms Lioe with a computer for work purposes. In their 28 September 2022 letter to Lift Shop’s solicitors, the respondents’ solicitors also stated:
Ms Lioe also uses a laptop computer for the purpose of her employment with ELHE. We are instructed that the laptop does not contain and never has contained any Records within the meaning of that term in order 9(b) of the Orders, and therefore does not fall within the definition of Respondent’s [sic] Storage Devices in order 9(d).
I accept that Lift Shop had, until then, been unaware of existence of the computer or the laptop, respectively the Desktop and Laptop 2 (together, the Subsequent Devices).
APPLICATION IN A PROCEEDING
Lift Shop filed an application in a proceeding dated 26 October 2022 which sought the following:
1.Orders 7 and 8 of the Orders of Judge Baird made on 2 September 2020 be varied to permit the Applicant’s independent computer expert, Mr Rodney McKemmish, with the assistance of persons acting under his direction and instruction, to conduct a standard forensic analysis of the Forensic Images (as defined in Order 7(a) of the orders made on 2 September 2020).
2.The Respondents deliver up to the Applicant’s independent computer expert, Mr Rodney McKemmish, the computers referred to in paragraph 13(b) of the Third Respondent’s Response dated 31 August 2022 and the Respondents’ letter dated 28 September 2022 (Lioe’s Desktop and Lioe’s Laptop 2) and Mr McKemmish be permitted to make a forensic image of each of Lioe’s Desktop and Lioe’s Laptop 2 (the Further Forensic Images).
3.Orders 7 and 8 of the Orders of Judge Baird made on 2 September 2020 be further varied to permit the Applicant’s independent computer expert Mr Rodney McKemmish, with the assistance of persons acting under his direction and instruction, to conduct a standard forensic analysis of the Further Forensic Images.
4.The Respondents provide access to the Google Drive account referred to in paragraph 6(e) of the report prepared by the Applicant’s independent computer expert Mr Rodney McKemmish dated 15 October 2020 titled ‘Forensic examination of devices provided by Devi Lioe’ (Lioe’s Google Drive Account).
5.The Applicant’s independent computer expert Mr Rodney McKemmish be permitted to, with the assistance of persons acting under his direction and instruction, conduct a standard forensic analysis of Lioe’s Google Drive Account.
6.The Applicant’s independent computer expert Mr Rodney McKemmish will first disclose such results to the respective Respondents' solicitors and Counsel for 3 days for the purpose of a check of the results to ensure that material that may be subject to client legal privilege will be identified to the expert and isolated to facilitate a privilege claim by the relevant Respondent.
7.Each Respondent provide the Applicant’s independent computer expert Mr Rodney McKemmish with any user names, passwords or other information necessary to conduct the standard forensic analysis.
8.The Applicant’s independent computer expert Mr Rodney McKemmish be permitted to prepare a report or affidavit in respect of the results of his analysis conducted by him under paragraphs 1, 3 and 5, for use in the proceedings and provide a copy of that report to the legal representatives of the Applicant and the Second and Third Respondents.
9.Until further order, the Applicant’s legal representative not disclose to the Applicant any report or affidavit prepared by the Applicant’s independent computer expert Mr Rodney McKemmish pursuant to these orders.
The application did not seek to define “standard forensic analysis” and appears to have relied on Mr McKemmish’s description quoted earlier.
LEGISLATION AND RULES
The present application does not make clear what Lift Shop says is the source of the Court’s power to make the orders sought. In addresses, the respondents suggested that Lift Shop relied on r.14.01 of the Federal Court Rules 2011 (Cth) and Lift Shop did not express disagreement. That rule relevantly states:
14.01 Order for inspection etc of property
(1) A party may apply to the Court for an order:
(a) for any of the following:
(i) inspection of any property;
(ii) taking a sample of any property;
(iii) making an observation of any property;
(iv) trying an experiment on or with any property;
(v) observation of a process;
(vi)copying, transcription or production of a document or other material, data or information (however stored or recorded); …
…
Section 174(2)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides that the rules of the Federal Court are to apply in this Court, that is to say the Federal Circuit and Family Court of Australia (Division 2), to the extent that this Court’s rules may be insufficient which, for present purposes, I am prepared to accept they are. Rule 14.01 will be applied in this case.
The operation of r.14.01 is not limited to inspecting the property of parties to the proceeding and extends to the property of non-parties, such as Mr Nasution. However, Mr Nasution has not been served with the present interlocutory application and so it would not be appropriate to make orders directed at him or his property. Any orders that may be made will not involve Mr Nasution.
EVIDENCE
Applicant
Michael Williams
Lift Shop’s solicitor, Mr Williams, deposed in his affidavit of 31 October 2022 that pursuant to the orders made on 24 August 2020 and 22 February 2022, Mr McKemmish had undertaken searches of, relevantly, the Original Devices. Mr Williams stated that the Subsequent Devices had not been disclosed by Ms Lioe in her affidavit sworn 3 September 2020 and had not been imaged or searched by Mr McKemmish.
Mr Williams deposed that ELHE denied being vicariously liable for Ms Lioe’s alleged conduct which, he argued in his affidavit, meant that what conduct had been within the scope of her employment was a key issue in the case and that:
… Analysis of her use of the devices and what connections they had to her work devices is highly relevant to meeting the case Ms Lioe and ELHE bring, namely that her actions were not relevant to her employment.
He went on to say that Mr McKemmish’s searches of the Original Devices had been limited to looking for specific documents or types of documents and that he had not investigated how the devices had been used or whether they had been used for purposes connected with Ms Lioe’s employment or during her work hours. He deposed that how and when the devices had been used was directly relevant to Lift Shop’s allegation of vicarious liability which, he asserted:
… can only be determined if Mr McKemmish is permitted to undertake a standard forensic analysis of the images of the devices.
Mr Williams also referred to evidence that Ms Lioe had had remote access to Mr Nasution’s computer through a program called TeamViewer. That particular complaint need not be considered further as the respondents have indicated that they would be willing to consent to an order in the following terms:
Orders 7 and 8 of the Orders of Judge Baird made on 2 September 2020 be varied to permit the Applicant’s independent computer expert, Mr Rodney McKemmish, with the assistance of persons acting under his direction and instruction, to conduct an analysis of the Forensic Images (as defined in Order 7(a) of the orders made on 2 September 2020) of the laptop computer produced by the Second Respondent in accordance with orders made 24 August 2020 and 2 September 2020, for the purpose of considering the Second Respondent’s usage of the TeamViewer software to communicate with the First Respondent.
Mr Williams also referred to evidence that Mr McKemmish had identified the presence of Google Drive on Laptop 1 and had been denied access to it on the basis that it was a work-related storage service. Mr Williams deposed that as ELHE’s case was that Ms Lioe had had no reason to use her own devices for her work but nevertheless Google Drive was found on Laptop 1, the use to which Ms Lioe had put Google Drive was very relevant to the allegation that ELHE was vicariously liable for her alleged breaches of Lift Shop’s copyright, for her conduct as an accessory to Mr Nasution’s breaches of duty and for “her other conduct”.
Mr Williams deposed that:
(a)the contents of the Subsequent Devices had not been imaged or analysed and, had their existence been disclosed earlier than it was, Lift Shop would have sought orders for their imaging when orders were made earlier in the proceeding;
(b)for the reasons given in relation to the Original Device, the Subsequent Devices should also undergo Standard Forensic Analysis; and
(c)ELHE’s solicitors’ allegation in correspondence with Lift Shop’s solicitors that the Desktop had at all times been in ELHE’s, rather than Ms Lioe’s, possession, custody or control, and so not within the ambit of the 2 September 2020 orders, was a contention that ought to be investigated.
An affidavit sworn by Mr Williams on 6 December 2021 was also read.
Rodney McKemmish
Additionally to those portions of his affidavit of 25 October 2022 summarised earlier in these reasons, Mr McKemmish stated that the first step of his investigation process had been to create forensic images of the Original Devices and of devices produced by Mr Nasution. He described that process in the following terms:
… A forensic image is a bit for bit copy of the contents, both current and deleted, of a hard drive or storage device. Essentially, this creates an exact representation of the source hard drive. The forensic copy is made in such a way, using standard techniques, that its authenticity can be verified …
Mr McKemmish’s first searches of those images were limited to identifying Records on the various devices and investigating the conduct of Mr Nasution and Ms Lioe in relation to the Confidential Spreadsheet.
As noted earlier, pursuant to the orders made on 22 February 2022, Mr McKemmish undertook further searches of the images of the devices in respect of the following records including and additional to the Records (Additional Records).
1. Records (including, but not limited to, messages, database references, images, files and associated data, whether deleted or not) referring or relating to communications between Handi Nasution and Devi Lioe (including but not limited to use of internet-based communication applications such as WhatsApp, WeChat, Facebook Messenger, Skype, Microsoft Teams, Instagram, iMessage, Signal, Viber, Line, Getcontact, and Telegram) and any user IDs, phone numbers or accounts associated with them from 1 January 2015.
2. Records (including incoming and outgoing call and message logs, whether deleted or not) relating to communications between Handi Nasution and Devi Lioe and any user IDs, phone numbers or accounts associated with them from 1 January 2015.
3. Records relating to any transfer or communication of any document or communication referring or relating to Lift Shop confidential information, including those pleaded in paragraphs 19, 30 to 35, and 37 to 47 of Lift Shop’s Statement of Claim dated 19 November 2020, to Easy Living Home Elevators Pty Ltd and any of its employees, agents, officers or representatives, including via any cloud-based storage service such as Google Drive, iCloud, Microsoft One Drive and DropBox.
(emphasis added)
Mr McKemmish deposed that although his further forensic analysis conducted under the orders made on 22 February 2022 had been limited to searching for the Additional Records and he had not been able to perform a Standard Forensic Analysis, he had been able to extract:
(a)Instant messenger communications between Ms Lioe, Mr Nasution and in some cases other parties on assorted messaging platforms including Facebook Messenger and WhatsApp;
(b) Emails between Ms Lioe and Mr Nasution; and
(c) Assorted images and videos which were included in the above messages and emails.
The extracted files were detailed in an exhibit referred to in Mr McKemmish’s affidavit. The exhibit comprised two Excel spreadsheets, one entitled “Devi Chats” which detailed thousands of chats, calls, missed calls, instant messages, emails and images, and another entitled “Handi Devi” which also contained thousands of chats, calls, missed calls, instant messages, emails and images.
It is to be recalled that Mr McKemmish’s expert report dated 17 September 2020 stated that there was no indication that external USB storage devices had been attached to Laptop 1 or of documents having been copied to a USB storage device.
Other affidavits
Lift Shop also relied on the affidavits of its CEO, Mr Katz and of Darrell Santos, its human resources administrator, both affirmed 24 August 2020 and filed in support of the initiating application. A further affidavit affirmed by Mr Katz on 30 March 2021 was also read.
Respondents
Ms Lioe
Ms Lioe deposed in her first affidavit, sworn 3 September 2020 and giving discovery, that she had been employed as an accountant at ELHE since April 2018 having previously been employed by Lift Shop from 2007 to 2017, first as an office assistant and then as an accountant, and had worked there with Mr Nasution. As recorded earlier, she disclosed that she was in possession of the Original Devices, 5 soft copies of the Confidential Spreadsheet and 2 copies of Lift Shop employee weekly timesheets.
In her second affidavit, sworn 26 April 2021 and filed in support of her defence, Ms Lioe described some of her experiences as an employee at Lift Shop. She deposed that she went to work at ELHE about 11 months after leaving Lift Shop, having had time out of the workforce for the birth of a child and having worked elsewhere in the meantime. She referred to Robert Pizzie, Managing Director of ELHE and deposed:
Since starting at Easy Living, at no point in time has Robert Pizzie or any other employee of Easy Living asked me a question about Lift Shop, nor have I discussed anything relating to Lift Shop with any employee of Easy Living, except for informing Robert Pizzie of the existence of these proceedings.
Ms Lioe also described her relationship with Mr Nasution and deposed that in the period May 2017 to February 2020, using WhatsApp, he had asked her questions and sent her screenshots so that she might assist him doing accounting-related work at Lift Shop. She deposed that she had never shared those messages with anyone else, including ELHE. On 4 June 2020 Mr Nasution sent her pages of the Confidential Spreadsheet which she deleted not long afterwards. Ms Lioe deposed that she had never shared the Confidential Spreadsheet or its contents with anyone other than with Lift Shop when they had a meeting with her on 25 August 2020. Mr Nasution sent Ms Lioe the Confidential Timesheets on 18 September 2018 but she deposed that she had no recollection of having opened them and that she had not shared the Confidential Timesheets or their contents with anyone, including ELHE.
Ms Lioe also deposed in her second affidavit that it was her usual practice after receiving a WhatsApp message from Mr Naustion with a work-related question to delete the message once she had dealt with it. She said that she usually deleted her WhatsApp messages every few days.
In her third affidavit, sworn 30 November 2022 and filed in response to the present interlocutory application, Ms Lioe deposed that she and Mr Nasution had been friends before and after they worked together at Lift Shop. She said that in her role at ELHE she had had had access to the Desktop, which she had used from the beginning of her employment, and which had always been located in ELHE’s offices, and Laptop 2, the use of which she was given in about March 2020 and which she occasionally used when working from home. She deposed that she had never used the Desktop or Laptop 2 when assisting Mr Nasution and that they had never contained any Records. She also deposed that the Desktop had always been in ELHE’s possession, custody or control, not hers and that:
… at the time of signing my Norwich Pharmacal Affidavit, I was of the knowledge and belief, and still am of the knowledge and belief, that the ELHE Desktop and ELHE Laptop did not fall within the definition of Respondent's Storage Devices under order 9(d) of the Orders. For those reasons, I did not provide a description of the ELHE Desktop or the ELHE Laptop devices in my Norwich Pharmacal Affidavit.
Ms Lioe also addressed the issue of Google Drive having been found on Laptop 1 and of Mr McKemmish having been told that it was a work-related storage service, saying that she had only ever used Google Drive for her work for ELHE, which used it as its central file management system. She deposed that she had used Google Drive in that context when working at home on Laptop 1 before being provided with Laptop 2.
Mr Pizzie
Mr Pizzie is the chief executive officer of ELHE and affirmed an affidavit on 30 November 2022 in which he deposed that:
(a)for the purpose of performing her duties at ELHE, Ms Lioe had been provided with the Desktop and Laptop 2;
(b)the Desktop is located at ELHE's office and has remained there at all times since it was assigned to Ms Lioe;
(c)Laptop 2 was provided to Ms Lioe at the start of the COVID-19 pandemic for her exclusive use so she could work from home. He said that Ms Lioe has exclusive use of Laptop 2 and that it is stored with her at all times; and
(d)ELHE uses Google Drive, which is a cloud-based program, as its central file and document management system and it stores information and documents belonging to ELHE that are confidential, sensitive and of commercial value to ELHE. He deposed to being concerned that if Lift Shop were to be given access to any of ELHE’s devices, systems or software it could use the information they contain to cause ELHE irreparable damage and to provide Lift Shop with a commercial advantage. He explained how such consequences could arise if Lift Shop knew the information on its devices.
CONSIDERATION
Lift Shop’s position was encapsulated in the following paragraph of its written submissions:
… as a result of Lioe and ELHE’s pleas and their evidence, it has become necessary for a standard forensic analysis to be conducted [of the Desktop, of Laptop 2, of the Google Drive account and of the forensic images already taken of the Phone and Laptop 1], because:
(a) there is new evidence and information that Lioe and ELHE have only recently disclosed in the proceedings, which was not previously known to Lift Shop, including in relation to the existence of additional devices;
(b) the recent joinder of ELHE, and subsequent filing of its pleadings, introduced new and substantive issues in the case relevant to Lift Shop’s claims;
(c) without conducting the standard forensic analysis requested, Lift Shop cannot otherwise obtain information concerning the use of the devices and what connections they had to her work devices through any other means including discovery or as permitted under existing orders made by the Court; and
(d) if the orders sought by Lift Shop’s Interlocutory Application are not made, Lift Shop would not be in a position to address the evidence and substantive issues Ms Lioe and ELHE bring that are highly relevant to their case and Lift Shop’s claim, and consequently, Lift Shop would be seriously prejudiced. [13]
Subsequent Devices
It is convenient to deal first with the Subsequent Devices.
In seeking access to the Subsequent Devices, Lift Shop submitted that they should have been disclosed in Ms Lioe’s first affidavit, giving discovery, and argued that if they had been, an order for their inspection would have been sought as had been the case in relation to the Original Devices.
As recorded earlier in these reasons, Ms Lioe deposed that the Subsequent Devices were not in her possession, custody or control as they were in ELHE’s possession, custody and control. In contrast Mr Pizzie deposed that although the Desktop never left ELHE’s premises, Laptop 2 was “stored” with Ms Lioe at all times.
I accept from that evidence that Ms Lioe would be able to produce Laptop 2 as it is in her possession, custody or control and ought to have discovered it if it otherwise fell within the terms of the 24 August 2020 orders. However, I also accept that she would not be able to produce the Desktop for inspection as it is not in her possession, custody or control, which is a different thing from being able to use it for her work, something that Lift Shop raised in submissions. Lift Shop also submitted that Ms Lioe’s evidence that the Subsequent Devices were in ELHE’s possession, not hers, was difficult to reconcile with other evidence she gave that she used an individual login and password to access the devices, but I see no such difficulty. Steps taken to maintain the confidentiality of information on devices provided by an employer to an employee for their work is of no particular materiality to the question of who has power, custody or control of and over those devices.
In relation to whether the Subsequent Devices otherwise fell within the terms of the 24 August 2020 orders, Ms Lioe deposed in her third affidavit that they do not hold any Records, in which case they did not have to be listed in her first affidavit. Her affidavit evidence more generally on the subject was that she had never shared the information Mr Nasution had sent to her. Lift Shop argued in its written submissions that it was not in a position to know whether the Subsequent Devices held any Records and that the devices ought to be produced for inspection so imaging and analysis of them could determine whether or not they did. However, it did not identify why Ms Lioe’s affidavit giving discovery in response to the Norwich Pharmacal order, or her affidavit responding to the present interlocutory application, should be disbelieved. In particular, nothing Mr McKemmish has said in his affidavit, even after having had access to the communications and records detailed in the Excel spreadsheets, would suggest that Ms Lioe’s evidence was inaccurate. In that regard, a non-exhaustive review of the “Handi Devi” spreadsheet suggests that Ms Lioe’s WhatsApp activity was associated with a particular mobile phone number, presumably the Phone, rather than another phone number or an IP address.
For those reasons, I conclude that the absence of the Subsequent Devices from Ms Lioe’s first, Norwich Pharmacal, affidavit did not amount to a failure to give necessary discovery in accordance with the 24 August 2020 orders and is not itself a reason to order their production at this point.
The same facts weigh against the likelihood of the Subsequent Devices holding or having held any of the Documents particularised in the further amended statement of claim.
Standard forensic analysis
What exactly a Standard Forensic Analysis is, is not clear. It is concerned with “activity” but that is a very wide concept and much broader and intrusive into irrelevant communications than the present dispute would appear to warrant, particularly as its lack of clarity is also likely to lead to disputes over the proper scope of any scrutiny permitted by reference to it. Given the investigations which have already taken place pursuant to the wide terms of the orders of 22 February 2022, and the absence of a precise and suitably confined definition of Standard Forensic Analysis, which I do not accept Mr McKemmish’s quoted definition to be, ordering further inspection by reference to that term would not be appropriate.
Discretionary considerations
The issues underlying the present application are whether Ms Lioe received Documents from Mr Nasution that have not been uncovered yet and whether any of the Documents she did in fact receive found their way to the Subsequent Devices.
Even if I had reached a different conclusion on the appropriateness of ordering the Standard Forensic Analysis sought by Lift Shop, I am not persuaded in relation to the Original Devices that the investigations made pursuant to the second iteration of the earlier orders for their inspection have not been sufficient. Two inspections have already taken place, the second being much broader than the first. That seems enough in circumstances where any suspicion that Ms Lioe sent one or more known or unknown Documents to ELHE, or saved such documents on the Subsequent Devices, is contradicted by evidence presently available to the Court.
In any event, it was not made clear how Ms Lioe’s communications with Mr Nasution by means of the Original Devices fell within any of the duties of her role as financial accountant at ELHE as particularised in the further amended statement of claim. In those circumstances it is difficult to see how the plea that ELHE has ratified Ms Lioe’s conduct, and so is liable on a vicarious basis, has any material conduct to which it can attach.
Further, although at the commencement of this proceeding it was considered appropriate to order the production of the Original Devices so that they and the information they contained might be secured and investigated on an urgent basis, it was not suggested in support of the present application that delivery up of the Subsequent Devices was a matter of any urgency, or that their contents had to be secured: see Dart Industries Inc v David Bryar & Associates Pty Ltd (1997) 38 IPR 389 at 417-418. In relation to the latter issue, in the absence of evidence that casts doubt on Ms Lioe’s statement that she did not use the Subsequent Devices to assist Mr Nasution, her deletion of his WhatsApp messages from her Phone is insufficient basis to justify the Subsequent Devices being inspected in the manner sought by Lift Shop. Moreover, nothing else was advanced to support a conclusion that records might have been deleted and an investigation by Mr McKemmish needed to recover evidence of them. No sufficiently persuasive reason has been advanced to explain why the fair resolution of the proceeding requires those devices to be inspected in the manner sought when other processes, such as verified particular discovery, are available.
The same conclusion applies in connection with ELHE’s confidentiality concerns. I accept that if Lift Shop’s proposal were implemented, commercial information of a highly confidential nature belonging to ELHE would be amongst the material made available for inspection. I also accept ELHE’s submission that there is a risk of irreparable commercial harm to its business if, in particular, information on its Google Drive became known outside its business. In that regard it has not been suggested that the Google Drive to which Mr McKemmish was not given access was not ELHE’s account, rather than one belonging to Ms Lioe, and I will proceed on the basis that it was ELHE’s account. In circumstances where no persuasive reason has been advanced to fear for the security of any information relevant to this proceeding which further inspection of the Original Devices might reveal, I am not satisfied that the balance of interests favours Lift Shop, even by way of its expert, being given access to information that is not relevant to this proceeding but which is confidential to ELHE. Again, other processes are available for the discovery of relevant documents.
CONCLUSION
I do not agree that further, unfocussed investigations of the Original Devices should be permitted, although a search in relation to TeamViewer according to the conditions set out in the orders made on 24 August 2020 and 2 September 2020 will be. I am also unpersuaded that there is a need to submit the Subsequent Devices for forensic investigation.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 9 March 2023
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