Marble Group Services Pty Ltd v Blenkinsop
[2023] WASC 464
•6 DECEMBER 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MARBLE GROUP SERVICES PTY LTD -v- BLENKINSOP [2023] WASC 464
CORAM: LUNDBERG J
HEARD: 28 NOVEMBER 2023
DELIVERED : 6 DECEMBER 2023
FILE NO/S: CIV 2328 of 2023
BETWEEN: MARBLE GROUP SERVICES PTY LTD
Plaintiff
AND
JAK BLENKINSOP
First Defendant
FETCH RECRUITMENT WA PTY LTD
Second Defendant
Catchwords:
Interlocutory injunction - Restraint of trade - Contract of employment - Former employee of plaintiff working for competitor of the plaintiff - Confidentiality restrictions - Non-solicitation and non-compete restraints - Allegation of breach of s 183 of the Corporations Act 2001 (Cth) and alleged involvement in contravention by new employer - Urgent restraints sought against former employee - Restraints also sought against new employer - Whether serious questions to be tried - Whether balance of convenience favours grant of injunction - Restraints imposed - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 183, s 1317E, s 1317H and s 1324
Result:
Application granted and further directions made
Category: B
Representation:
Counsel:
| Plaintiff | : | J J Flinn |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Hall & Wilcox (Perth) |
| First Defendant | : | In Person |
| Second Defendant | : | In Person |
Case(s) referred to in decision(s):
Armstrong World Industries (Australia) Pty Ltd v Parma [2014] FCA 743; (2014) 101 ACSR 150
Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181
Australian Securities and Investments Commission v Rent 2 Own Cars Australia Pty Ltd [2020] FCA 1312; (2020) 147 ACSR 598
Breen v Williams (1996) 186 CLR 71
Emeco International Pty Ltd v O'Shea [No 2] [2012] WASC 348
Johns v Australian Securities Commission (1993) 178 CLR 408
Lindner v Murdock's Garage (1950) 83 CLR 628
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105
North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust trading as Port Hedland Pilots v Daniel [2023] WASC 73
Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598
Riteway Express Pty Ltd v Clayton (1987) 10 NSWLR 238
Robb v Green [1895] 2 QB 1
Smith v Nomad Modular Building Pty Ltd [2007] WASCA 169
Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110
United Petroleum Australia Pty Ltd v Herbert Smith Freehills (a firm) [2018] VSC 347; (2018) 128 ACSR 324
Workplace Access and Safety Pty Ltd v Mackie [2014] WASC 62
Table of Contents
A. Introduction and summary
B. Evidence on the application
The parties
The contract of employment
The resignation of the first defendant and subsequent events
The recruitment industry and the plaintiff's information
C. Disposition - serious questions to be tried
D. Disposition - balance of convenience
E. Conclusion and orders
ATTACHMENT A Chronology of relevant events
ATTACHMENT B Extracts of clauses in the Contract
LUNDBERG J:
A. Introduction and summary
These reasons relate to an application brought by the plaintiff for urgent restraints to be imposed on the first and second defendants,[1] ahead of a final determination by the court of the claims which are pleaded by the plaintiff.[2] The first defendant is a former employee of the plaintiff. The second defendant is his new employer. The plaintiff and the second defendant both operate businesses in the recruitment industry, and the plaintiff contends they are in direct competition with one another.
[1] Chamber summons dated 27 November 2023.
[2] See the amended writ of summons filed 27 November 2023, which includes a relatively detailed indorsement of claim.
The claims pleaded by the plaintiff against the first defendant are breaches of the employment contract between them (as to the non‑solicitation, non-compete and confidentiality obligations of the contract),[3] and a breach of s 183 of the Corporations Act 2001 (Cth) (Corporations Act) through the alleged improper use of the plaintiff's information.[4] The plaintiff seeks injunctive relief and damages, as well as declarations and compensation orders under s 1317E and s 1317H of the Corporations Act.[5] As against the second defendant, the plaintiff alleges it was involved in the first defendant's contravention of s 183 of the Corporations Act,[6] and seeks injunctive relief together with declarations and compensation orders.[7] There is also an apparent claim against the second defendant based on equitable breach of confidence, although this is less clear from the indorsement.[8] I anticipate the plaintiff's statement of claim will further clarify the claims.
[3] In effect, express negative stipulations in the employment contract.
[4] Indorsement of claim, [11] (non-solicitation), [14] (non-compete) and [15] (confidentiality).
[5] Indorsement of claim, [18(a)], [18(b)], [18(c)], [18(d)], [18(e)] and [18(g)].
[6] Indorsement of claim, [17].
[7] Indorsement of claim, [18(c)], [18(f)] and [18(g)]. I note injunctive relief is available under s 1324(1) and s 1324(4) of the Corporations Act in respect of conduct which constitutes or would constitute a contravention of that Act, such as a breach of s183 thereof or conduct being in any way directly or indirectly knowingly concerned in a contravention.
[8] Indorsement of claim, [15].
The proceedings were filed on Friday, 24 November. The matter was referred to me at that time as the judicial officer assigned to hear urgent civil applications. However, the summons seeking the urgent injunctive relief was not filed until Monday, 27 November after it was pointed out by the court that no interlocutory application had in fact been filed. In seeking the claimed injunctive relief, the plaintiff properly recognised that it was required to demonstrate there was a serious question or questions to be tried and to further demonstrate that the balance of convenience favoured the grant of the restraints which were sought.[9] The plaintiff referred to Twinside Pty Ltd v Venetian Nominees Pty Ltd,[10] Mineralogy Pty Ltd v Sino Iron Pty Ltd[11] and North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust trading as Port Hedland Pilots v Daniel,[12] in this regard.
[9] Plaintiff's submissions [7].
[10] Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110 [7] ‑ [10].
[11] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 [87].
[12] North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust trading as Port Hedland Pilots v Daniel [2023] WASC 73 [37].
As will become apparent, and not without some initial misgivings, I allocated an urgent hearing date for the interlocutory application, being the afternoon of Tuesday, 28 November and heard the application on an urgent basis at that time.
My initial misgivings arose from the delay which preceded the filing of these proceedings in this court. The first defendant's employment with the plaintiff ceased in early August and the plaintiff had been on notice from early September of the first defendant's conduct (which was said to infringe the contractual restraints and other duties owed by the first defendant). I indicated to the plaintiff's solicitors prior to the hearing, through a written communication from my associate on 24 November, that the filing by the plaintiff's solicitors of a certificate of urgency in these circumstances appeared to be somewhat unsatisfactory.
Further, very little notice of the application and the hearing was given to the defendants by the plaintiff although I accept that both defendants had been on notice for many weeks of the plaintiff's underlying concerns (following the dispatch of detailed correspondence from the plaintiff's solicitors on 22 September). Shortly before the hearing, the second defendant emailed the court to request an adjournment.
I reiterated the above concerns during the hearing.[13] I was informed by counsel at the hearing that the plaintiff had been considering its position during this period of delay and, additionally, further time had been needed to confer and properly prepare the proceedings before they could be filed, it being no small step for a party to commence proceedings of this nature.[14]
[13] ts 29 - 32.
[14] ts 31 - 33.
Having heard submissions from the plaintiff's counsel, and reviewed the evidence presented on the application, I declined to adjourn the matter. Further, I formed the view that the delay on the part of the plaintiff was not such as to disentitle it from interlocutory relief and, indeed, I considered the evidence demonstrated a proper basis for the making of orders granting the restraints sought by the plaintiff - effectively on an interim basis (see orders 2 and 3), upon the provision of a satisfactory undertaking to be given by the plaintiff (see order 1), and subject to an express order permitting the defendants to apply to vary or discharge the injunctions on short notice (see order 4). The orders are extracted in part at [77] below.
I also made orders and associated directions to refer the matter to mediation, for the filing of a statement of claim and to have the matter promptly return to the court for directions. I indicated I would provide brief reasons to explain why I considered the orders sought by the plaintiff were appropriate and should be made. These are my reasons.
B. Evidence on the application
In support of the orders sought, the plaintiff relied upon the affidavit of Mr Lee Corbitt sworn on 27 November 2023 (Corbitt Affidavit),[15] and an outline of submissions.[16] I draw the following background matters from the Corbitt Affidavit but should emphasise that these matters do not represent final findings of fact. Rather, these are matter on which I can be satisfied to the requisite standard for the purposes of this interlocutory application, recognising that the court has not yet heard from the defendants in response and the evidence adduced by the plaintiff remains wholly untested.
[15] The attachments to the Corbitt Affidavit are not named or numbered, but for convenience I will refer to them as Attachments 1 to 17 in the order in which they appear in the index to the affidavit.
[16] Plaintiff's submissions dated 27 November 2023.
As to the broad chronology of this matter, which I have summarised below, the principal events or communications which emerge from the Corbitt Affidavit are set out in point form in the table in Attachment A to these reasons (with references therein being to the Corbitt Affidavit).
The parties
The plaintiff (Marble Recruitment) operates a national recruitment business. It was founded in Perth in July 2006. It provides candidates to businesses in the construction, engineering, manufacturing and mining sectors. Since 2006, Marble Recruitment has placed over 800 candidates within the commercial construction or building sector, with a placement fee for candidates in that sector of approximately $18,000 per candidate. Mr Corbitt is the managing director of Marble Recruitment. He has worked in the recruitment industry for around 24 years.[17]
[17] Corbitt Affidavit [3], [5] - [10].
The second defendant (Fetch Recruitment) also operates a recruitment business, primarily based in Victoria, but it has made a foray into the Western Australian market. Fetch Recruitment has opened an office in Perth, just a few steps away from Marble Recruitment's offices, across the busy intersection of William Street and St Georges Terrace.[18]
[18] Corbitt Affidavit [50] - [51].
The first defendant is a former employee of the plaintiff, having been employed as a Business Development Manager and then a Senior Recruitment Consultant, commencing in around December 2020. He appears to have been a successful employee, generating positive earnings for the business, receiving early promotion, and an increased salary package.[19]
The contract of employment
[19] Corbitt Affidavit [20] - [22] and [34] - [36].
I have set out in Attachment B to these reasons the particular clauses of the first defendant's contract of employment (Contract) upon which the plaintiff relies in support of its relief.[20] The clauses which are emphasised by the plaintiff are:
(a)the Confidentiality Clause;
(b)the Non‑Solicitation Clause; and
(c)the Non‑Compete Clause.
[20] The contract is Attachment 1. The clauses in the Contract are not numbered in the original.
The latter two clauses are in the nature of restraint of trade provisions, which both include cascading temporal limitations ranging from nine months, then to six months, and then to three months. The Non‑Solicitation Clause extends geographically to a 100 km radius from the Perth metropolitan area. The Non‑Compete Clause appears to have a cascading geographical operation, extending to the State of Western Australia and then to the Perth metropolitan area.[21]
[21] The Non-Compete Clause has some drafting errors in it, so far as I can tell. The clause nonetheless makes sense and can be understood.
To put the periods of time mentioned in the Contract in context, the 6‑month restraint would expire on 8 February 2024 and the 9‑month restraint would expire on 8 May 2024.
The resignation of the first defendant and subsequent events
The first defendant resigned from his employment in late July 2023, concluded his employment with the plaintiff on 8 August 2023, and then crossed the Terrace in order to commence with Fetch Recruitment at some later point in August 2023.[22] Thus, the 3‑month time period identified in the Non‑Solicitation and Non‑Compete Clauses would have expired on 8 November 2023, well before these proceedings were commenced.
[22] Corbitt Affidavit [37] - [40], [50].
The plaintiff's managing director deposes that he verbally reminded the first defendant of his contractual obligations prior to his departure from the business.[23] That occurred, he says, on 27 July.
[23] Corbitt Affidavit [38].
In early September, the plaintiff became aware of certain matters which suggested (at least to the plaintiff) that the first defendant was contacting the clients of Marble Recruitment, that the first defendant was using the confidential information of Marble Recruitment, and that the first defendant was engaging in the provision of recruitment services in the commercial construction or building sector. The plaintiff thereupon instructed solicitors to correspond with the defendants and seek undertakings from them. The solicitors first wrote to the defendants on 22 September.[24]
[24] Corbitt Affidavit, Attachments 13 and 14.
Neither of the defendants provided a substantive response to the plaintiff's solicitors.[25] That is highly regrettable. The collective experience of the court is that the opportunity for commercial parties to confer, not only as to the relative strengths and weaknesses of their respective legal positions, but to discuss the associated commercial considerations of a brewing dispute, ahead of the commencement of litigation (and, indeed, to potentially head-off the commencement of litigation), is one not to be ignored and one that may produce benefits for the parties, including the narrowing of issues and reduction of legal costs.
[25] Corbitt Affidavit [73].
As events transpired, the plaintiff became aware of further matters (on 9 October) which reinforced the plaintiff's belief that the first defendant was conducting himself in conflict with the contractual restraints.[26] The plaintiff instructed its solicitors to again press the defendants for a response (on 25 October) and received no substantive answer (only a request for an extension to respond, which was granted by the plaintiff).[27]
[26] Corbitt Affidavit [65], Attachment 12.
[27] Corbitt Affidavit [73], Attachments 15, 16 and 17.
At this point, I will briefly summarise the evidence presented by the plaintiff which it says demonstrates conduct on the part of the first defendant (and the second defendant) which justifies the imposition of the restraints. The nature and quality of this evidence, as will be seen, justified the imposition of restraints upon both defendants of an interlocutory nature, notwithstanding my view that the proceedings could well have been brought on much earlier.
First, there is evidence of direct email communications having been sent by the first defendant in early September to two clients of Marble Recruitment.[28] Those were clients with which the first defendant had formed relationships whilst working for Marble Recruitment (and which I will refer to simply as Client L and Client P). The first defendant was a key contact for these clients whilst at Marble Recruitment, which is evident from the entries which appear in the plaintiff's client relationship management system.[29] Both clients operate in the construction and building sector, and operate businesses within 100 kms of the Perth city.
[28] Corbitt Affidavit [58] - [60], Attachment 7; Corbitt Affidavit [61] - [63], Attachment 9.
[29] Corbitt Affidavit, Attachments 8 and 10.
The approach to Client P by the first defendant is evidenced by an email from the first defendant to a representative of Client P headed 'Candidate Update | Fetch Recruitment'. The email was sent on 4 September. It provides Client P with details of four candidates in the commercial construction or building market who the second defendant is able to place with Client P. The first defendant states within the email:
Not sure if you would have seen that I recently started a new role with Fetch Recruitment …
Fetch are a privately owned Construction & Engineering recruitment specialist based in Melbourne and along with a few colleagues I am helping to establish an office here in Perth.
I will predominantly be looking after the commercial construction market and as such wanted to keep you up to date with candidates I am currently working with:
[Details are then included of four candidates, being a Site Manager, Project Manager, Site Manager and Contract Administrator]
As ever I am happy to talk in more detail about any of the above candidates, or if you are looking for someone with a different set of skills/qualifications, please call me directly on …
The approach to Client L by the first defendant is evidenced by an email from a representative of Client L sent to Mr Corbitt on 4 September.[30] The email states that the representative had 'just received an email from Jak'. The actual email from the first defendant was not adduced in evidence but I reasonably inferred that it concerned matters of a recruitment nature and the provision of information to Client L to encourage Client L to use the second defendant for its recruitment needs. The inference to which I have just referred is based on three matters:
(a)The first matter is that the email from the representative of Client L to Mr Corbitt was sent on 4 September, which is the same date as the email extracted above which was sent by the first defendant to the other client, being Client P. It is reasonably open to infer that the first defendant sent the same or a similar email to Client L on the same day he sent the email to Client P.
(b)The second matter is that the email from Client L goes on to state to Mr Corbitt that 'We aren't looking at the moment, will review staffing around mid Nov is turnover significantly increases'. I infer from this language that the representative of Client L is telling Mr Corbitt, in effect in answer to the approach from the first defendant and his new employer, that Client L is not looking for candidates, thereby heading off the next question which Client L assumed Mr Corbitt might reasonably ask.
(c)The third basis for the inference is that Mr Corbitt had alerted Client L to the first defendant's departure from the plaintiff, by an email on 28 August. That email was adduced in evidence.[31] The email from Client L on 4 September is a direct reply to the earlier email from Mr Corbitt. It is reasonable to infer that Client L was thus informing Mr Corbitt that the first defendant had approach them about recruitment matters, rather than merely about purely personal or non-work matters.
[30] Corbitt Affidavit, Attachment 7.
[31] Corbitt Affidavit, Attachment 7 (page 45).
I will now summarise the second type of evidence adduced by the plaintiff in support of the urgent restraints.
In his affidavit, Mr Corbitt adduced evidence that three email communications had been sent by the first defendant on 1 September, 13 September and then on 9 October to 'test email' addresses (or 'dummy email' addresses) which formed part of the candidate database developed and held by Marble Recruitment.[32] These are unique email addresses. In sending emails to these test email addresses (presumably inadvertently), the first defendant was in effect communicating directly with personnel at Marble Recruitment and signalling directly to his former employer that he was offering recruitment services in the construction and building sector. It is important that I set out the key details of each of the three emails.
[32] Corbitt Affidavit, Attachments 6, 11, and 12.
The first two emails follow a similar style.
The email sent on 1 September was sent to a gmail address for 'mstephens' and is addressed to Benjamin. The subject matter is 'Benjamin update your details and let's find you a new job opportunity'. The email invites the recipient to partake in a survey. The body of the email states:
Hi Benjamin
Our team have plenty of new job opportunities in the WA market you may be interested in.
As you may know the job market is very strong right now and in order to find you the perfect role, we will need your most up-to-date details.
We have a few quick questions (less than 1 minute!) and your answers to these will let us inform you about current jobs that you may be interested in. Simply answer the first question below by clicking on the button!
The second email of this nature, sent on 13 September, was sent to the gmail address for 'clareceburke' and is addressed to 'John'. The email also invites the recipient to partake in a survey. The opening words of the email state:
It is shaping up to be a very busy end to the year within commercial construction and companies are putting teams together now for projects starting in the next few months.
This is a good time to make sure we have your details correct so you do not miss any opportunity.
The third email is headed 'Site Manager Roles | Fit Out Sector'. It was sent on 9 October, again to the gmail address for 'clareceburke' and is addressed to 'John'. The email states:
I am currently looking for Fit Out Site Managers/ Supervisors for a number of positions with reputable commercial builders here in WA.
Given the amount of Fit Out projects currently happening in Perth there is a huge demand for experienced Supervisors and Managers across a range of companies and projects. Please let me know if you are interested in any of the below.
I understand these roles may not be for you, John…So please help me keep our database up to date and let me know what role you would like to hear about, thanks!
[Details are then included of four roles, being a Site Supervisor, Site Manager, Site Manager and Site Supervisor]
If you are interested in having a chat around roles within the fit out industry, please get in touch on…and we can arrange a time to catch up over coffee! (underlining in original)
As explained by counsel for the plaintiff, the sending of emails by the first defendant to test email accounts which form part of the plaintiff's candidate database suggested that the first defendant had taken with him, upon his departure from Marble Recruitment, the candidate database which contains these addresses.[33] I do not need to positively make a finding as to whether the first defendant had taken with him confidential information (including the candidate database), upon his departure from Marble Recruitment. It is sufficient to note, as I will explain below, there is a serious question to be tried in this regard given the evidence presented on this application by the plaintiff
[33] The test email addresses are for employees of the plaintiff. The candidate database held by the plaintiff lists the holder of the 'clareceburke' email as 'John Burke', which explains why those emails were addressed to John, rather than Clarece: Corbitt Affidavit, [56]. I also infer from Mr Corbitt's affidavit that the holder of the 'mstephens' email is 'Benjamin', although this is less clear: Corbitt Affidavit, [57].
The plaintiff was on notice of the conduct of the first defendant which its seeks to impugn in these proceedings from 1 September at the earliest.
The recruitment industry and the plaintiff's information
I will now turn to the evidence presented by the plaintiff as to the recruitment industry more generally and the relevant business information held and protected by the plaintiff.
Mr Corbitt has explained that the recruitment industry is highly competitive and relies on developing and maintaining personal relationships with clients and candidates, and building trust in those relationships. Once relationships are formed, they can however be prone to disruption by competitors. Mr Corbitt's experience is that clients ultimately become familiar with the particular employee of Marble Recruitment who has assisted them to fill vacant roles, and are then likely to return to the same employee for assistance if additional placements are required.[34]
[34] Corbitt Affidavit [12] - [19].
Mr Corbitt refers in his affidavit to having placed over 800 candidates in the commercial building and commercial fit‑out industries over a period of 17 years, working with 327 unique client contacts and 120 unique companies.[35]
[35] Corbitt Affidavit [16], as corrected by counsel during the hearing: ts 4.
In his position within Marble Recruitment, the first defendant has been responsible for identifying and converting new clients, retaining existing client relationships and developing business development campaigns. He initially worked in the cabinet making and fit‑out sectors but broadened that to the commercial building and commercial fit‑out sectors.[36]
[36] Corbitt Affidavit [20], [22].
To perform his role, the first defendant had access to a wide range of confidential information held by the plaintiff, in both electronic and hard‑copy form.[37] This included the client relationship management system called Bullhorn, information on Microsoft Teams, a candidate database, and a customer database.
[37] Corbitt Affidavit [23] - [26].
The Bullhorn system is described by Mr Corbitt as containing confidential information including information about candidates including, but not limited to, curriculum vitae, interview notes, call notes, details of references and reference checks, candidate lists including sector and job title, candidate contact details including email addresses and mobile phone numbers, salary expectations, previous placements and interviews attended. The system is also said to contain information about clients including, but not limited to, names, email addresses, mobile phone numbers, call notes, trading history, previous placements and agreed terms of business.[38]
[38] Corbitt Affidavit [24].
The Microsoft Teams system used by the plaintiff's employees was also described by Mr Corbitt as containing confidential information. He explained that the system includes tailored interview and reference check questions for particular job titles, tailored job descriptions and specifications for particular job titles, and approximately 35 client profile documents, containing company information such as key contacts, project types, commercial preferences, relationship nuances and history, terms of business and marketing/promotional strategies.[39]
[39] Corbitt Affidavit [25].
In order to safeguard its confidential information, the plaintiff makes use of a number of mechanisms including password protection, two factor authentication, discrete user logins for computer systems and limited access to files between teams.[40] Mr Corbitt has deposed that the employees of the plaintiff with access to confidential information (like the first defendant) are required to sign a contract of employment which contains provisions dealing with confidential information and intellectual property.[41]
[40] Corbitt Affidavit [27].
[41] Corbitt Affidavit [28].
Mr Corbitt explains in his affidavit that this information is, by its own character, highly confidential and highly valuable.[42] He deposes that 'any business development employee such as the first defendant would be expected to understand the value of that highly confidential information and keep it secure and prevent unauthorised access either by themselves or by another employee'.[43] Further, in relation to the importance of this information, Mr Corbitt has deposed that:
[30]… If it is disclosed to a competitor it would enable a competitor to gain an understanding of Marble Recruitment's business relationships, including both clients and candidates, built over 17 years, and provide an opportunity for a competitor to attempt to destabilise these relationships.
[31]Over the course of his employment with Marble Recruitment, the First Defendant also developed knowledge about the recruitment market in Perth, particularly in relation to the sectors that Marble Recruitment services, as it was his job to identify leads and conduct sales activities.
[32]The First Defendant developed customer relationships for Marble Recruitment for almost 3 years during his service with Marble Recruitment.
[33]Due to a colleague undertaking an extended period of parental leave, the First Defendant was also provided with the opportunity to continue and develop existing client relationships, strengthening his personal network within the commercial building and commercial fit-out industries.
C. Disposition - serious questions to be tried
[42] Corbitt Affidavit [29] and [30].
[43] Corbitt Affidavit [29].
As I have earlier noted, the plaintiff recognised that, to secure the claimed injunctive relief, it was required to demonstrate there was a serious question or questions to be tried and to further demonstrate that the balance of convenience favoured the grant of the restraints which were sought. Allied to this, the plaintiff must demonstrate that damages are not an adequate remedy for the alleged breaches and contraventions in respect of which it complains.
As to the first issue, whether there are serious questions to be tried, the plaintiff submitted that it was not necessary for the court to be persuaded that it was more probable than not that the plaintiff would succeed at trial. I accept that. The burden is not that high. It would be sufficient for the plaintiff to demonstrate there is a sufficient likelihood of success to justify the preservation of the status quo pending the trial.
I formed the view at the conclusion of the hearing of the matter that there were serious questions to be tried as to several aspects of the plaintiff's claims (as against both defendants). I will address these matters first.
The conclusions I have reached are based solely on the untested evidence of the plaintiff at this stage. Closer analysis of these matters will be required at trial, following discovery and the other interlocutory processes available to the parties, to evaluate how the plaintiff treated this information within its business, how the plaintiff has sought to protect the information, and the degree to which the information is publicly available (although the mere fact that the information is also available from public sources does not necessarily disentitle it from protection). Further, closer analysis will be required of the nature of the plaintiff's and second defendant's businesses, and the extent to which they operate in particular markets or sectors, and the services which have been offered by the first defendant since joining the second defendant. Allied to all of this, the court does not yet have any explanation from the defendants as to the serious allegations which have been made by the plaintiff.
It is nonetheless open to say at this stage that I am satisfied there is a serious question to be tried whether the candidate and client databases developed and held by the plaintiff, and the associated information regarding those candidates and clients which is stored in Bullhorn and Microsoft Teams, fall within the types of information protected by the Confidentiality Clause in the Contract. This type of information does not patently strike me as mere know‑how picked up by an employee in the course of their employment, which might then be regarded as available for use by an employee upon the departure. The information has a more direct connection with the employer's business model and its operations.
Further, I am satisfied there is a serious question to be tried that this information has the necessary quality of confidence that it would be protected in equity, quite apart from the obligations within the Contract.[44] In this latter respect, I observe that the plaintiff alleges in the indorsement of claim that:
… the first defendant used or disclosed the plaintiff's confidential information as described in paragraph 8 during the course of his employment with the second defendant, to the defendants' benefit and without the consent of the plaintiff.[45]
[44] Robb v Green [1895] 2 QB 1; Riteway Express Pty Ltd v Clayton (1987) 10 NSWLR 238.
[45] Indorsement of claim, [15].
Although not clear, I take this to be an allegation directed to a breach of the equitable duty of confidence on the part of the defendants and, at least, includes a general law claim against the second defendant concerning the receipt of confidential information.[46] The focus of the claims against the second defendant is otherwise confined to its involvement in the first defendant's contravention of s 183 of the Corporations Act, in reliance on s 183(2) and s 79 of the Corporations Act. Whilst at least initially the plaintiff did not seek to rely on the equitable duty of confidence and the claims under s 183 in support of the interlocutory restraints which were sought, that position was developed and refined during the course of the hearing.[47]
[46] See, for example, Breen v Williams (1996) 186 CLR 71 and Johns v Australian Securities Commission (1993) 178 CLR 408.
[47] ts 11 and 37 - 38.
At this stage, it is also open to conclude that there is a serious question to be tried as to whether the first defendant took with him, upon his departure from Marble Recruitment, the candidate database (and the client database) developed by the plaintiff, containing the lists of the plaintiff's candidates and clients, in order to use that information as a springboard to the development of the second defendant's entry into the Western Australian market. I make no factual finding in this regard. That will need to await a final trial of the matter.
Allied to this, there is a serious question to be tried as to whether the first defendant has facilitated or permitted this information being used by the second defendant, his new employer, which is evidenced by the communications sent by the first defendant to clients and candidates of the plaintiff through communications branded as part of the second defendant's business. These are emails which appear to be quite formal parts of the second defendant's operations, inviting recipients to take surveys through embedded links. I am comfortably satisfied there is a serious question to be tried in due course as to whether the information and details as to the recipients of those emails now forms part of the broader business information which is held by the second defendant as part of its business (following the arrival of the first defendant). Indeed, one of the emails sent by the first defendant refers to the second defendant's database of information:
So help me keep our database up to date …[48]
[48] See the email sent on 9 October referred to at [32] above.
The assertion made by the plaintiff in these proceedings, as I understand it, is that the improper use of its information by the first defendant under s 183 arises from the use of information in breach of his contractual obligations.[49] Importantly, s 183 does not require proof that the information is confidential - the focus is on how the information was acquired.[50] The issue is to be judged objectively. As already noted, the second defendant's asserted liability in this regard arises through s 183(2) and s 79 of the Corporations Act, which will require that the plaintiff demonstrate at trial that the second defendant intentionally participated in the contravention of the provision. The second defendant need not be shown to have known that the facts amounted to a contravention, but actual knowledge of the essential elements of the contravention by the first defendant must be shown.[51] On the evidence adduced on this interlocutory application, a conclusion can be reached that there is a serious question to be tried having regard to the inferences to be drawn from the following matters in particular:
(a)the recruitment of the first defendant by the second defendant prior to its foray into the Western Australian market;
(b)the senior role and experience of the first defendant;
(c)the experience of the second defendant as a business operating in the recruitment market;
(d)the content of the emails dispatched in September by the first defendant to clients and candidates using the email system of the second defendant (sent on 1, 4 and 13 September);
(e)the content of the letter from the plaintiff's solicitors to the first defendant including the allegations set out therein (which was copied to the second defendant and so came to the knowledge and notice of the second defendant) on 22 September;
(f)the content of the letter from those same solicitors sent directly to the second defendant on 22 September;
(g) the content of the email dispatched in October by the first defendant using the email system of the second defendant (sent on 9 October, after receipt of the correspondence from the solicitors); and
(h)the failure by either defendant to provide any response to the plaintiff, much less to outline any defence or rejection of the allegations.
[49] Armstrong World Industries (Australia) Pty Ltd v Parma [2014] FCA 743; (2014) 101 ACSR 150 [34].
[50] Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598 [534] ‑ [544]; United Petroleum Australia Pty Ltd v Herbert Smith Freehills (a firm) [2018] VSC 347; (2018) 128 ACSR 324 [649].
[51] Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181 [397] ‑ [405]; Australian Securities and Investments Commission v Rent 2 Own Cars Australia Pty Ltd [2020] FCA 1312; (2020) 147 ACSR 598 [269].
Further, there is a serious question to be tried as to whether the first defendant has sought to solicit or entice away from the plaintiff's business clients and candidates of the plaintiff, through the dispatch of the emails to which I have referred above. Additionally, there is a serious question to be tried as to whether the first defendant is engaged (and has been since some date in August) in direct competition with the plaintiff, in the same market or sector in which he previously operated whilst working at the plaintiff. The evidence I have outlined in these reasons at [24] ‑ [32] above, as to the several emails sent by the first defendant and the content of those emails, provides the foundation for my conclusions in this regard.
I recognise that there are some hurdles facing the plaintiff to demonstrate the validity of the restraint clauses in the Contract. The plaintiff embraced these hurdles in its submissions and made submissions as to why the court could be satisfied at this stage that the restraints were at least arguably valid, referring to the well‑known lines of cases in this regard, including Lindner v Murdock's Garage;[52] Smith v Nomad Modular Building Pty Ltd;[53] Emeco International Pty Ltd v O'Shea [No 2][54] and Workplace Access and Safety Pty Ltd v Mackie.[55] As explained within the plaintiff's submissions, the applicable and orthodox principles are:[56]
(a)the restraint must be reasonable, in reference to the interests of the both the parties and of the public, such that it affords adequate protection to the party in whose favour it is imposed, without being injurious to the public;
(b)the onus of proof is on the plaintiff to show that the restraint of trade clause in the employment contract is reasonable as between the parties;
(c)the question of reasonableness is determined at the date of the employment contract, although subsequent developments can be considered to determine whether the agreement was reasonable to make at the date of contract, having in mind the best estimate that the parties could make for the future;
(d)a restraint is reasonable in relation to the restraining party if it is necessary for the adequate protection of a legitimate interest of that party and reasonable in relation to the party restrained if it preserves the fullest liberty of action consistent with that protection; and
(e)the legitimate interests about which a restraint is commonly justified is customer connection and confidential information, and a restraint may be justified as protecting more than one legitimate interest.
[52] Lindner v Murdock's Garage (1950) 83 CLR 628.
[53] Smith v Nomad Modular Building Pty Ltd [2007] WASCA 169.
[54] Emeco International Pty Ltd v O'Shea [No 2] [2012] WASC 348.
[55] Workplace Access and Safety Pty Ltd v Mackie [2014] WASC 62.
[56] Plaintiff's submissions [10].
At this stage, I am satisfied there is a serious question to be tried that the plaintiff had a legitimate interest in protecting its confidential information as to its clients and candidates, given the competitive nature of the industry within which it operates.[57] In many respects, the operation of a recruitment business appears to be quite dependent on knowledge of potential clients and candidates, their employment histories, their preferences, and their needs. There is at least a serious question to be tried, in the context of the plaintiff's business and this contract of employment, that restraints up to six months and perhaps beyond are valid.[58] I have had regard to Mr Corbitt's detailed affidavit in this regard, and his explanation of the recruitment business and the operations of the plaintiff itself.[59]
[57] Lindner v Murdock's Garage (633) (Latham CJ).
[58] Noting that the three-month period identified in the Contract had already expired before the current proceedings were commenced. The evidence of Mr Corbitt is that it will take the business around nine months to consolidate its relationship with clients and candidates with whom the first defendant was introduced and with whom the first defendant developed relationships whilst working for the plaintiff: Corbitt Affidavit [45] - [49].
[59] Corbitt Affidavit [11] - [33].
I should note that, as I indicated during the hearing, I found the Non‑Compete Clause in the Contract difficult to immediately follow, but consider it is at least arguable that the clause operates as a cascading geographical restraint (extending to the State and then to the Perth metropolitan area). The provision makes sense when read in the way explained by the plaintiff's counsel. I also recognise that the clause is confined in its operation to specific recruitment markets in which the first defendant operated whilst working for the plaintiff in the preceding year, so I can accept at this stage that the clause has been drafted in a manner which is directed, at least arguably, to protect the legitimate interests of the plaintiff. Whether these clauses can be sustained as being valid at trial will obviously require closer analysis in due course.
Another feature of this matter which supported the interlocutory conclusions I have reached is the fact these businesses operate within the recruitment industry and the first defendant has some experience in that area. Why does this matter? The first defendant, as a person working within the recruitment industry, can reasonably be regarded in my view as being aware of the nature and purpose of contractual restraints. More so than employees without his type of experience. I am therefore fortified in granting the interlocutory restraints by the fact that the first defendant agreed to various acknowledgements in the Contract, as to the reasonableness of the restraints and the time, money and effort expended by the plaintiff in developing its business, among other things. These acknowledgments should be seen against the backdrop of his experience and knowledge. Of course, contractual acknowledgements of this nature should never be regarded as merely perfunctory or little more than legalese. That would be to ignore the effect of contractual language. But in the present case, with an employee having a particular set of skills and knowledge, I consider it appropriate to place a degree of weight on the acknowledgments he gave to the plaintiff when he signed his contract in May 2021, and to take those acknowledgements into account in assessing the validity and reasonableness of these restraints at this interlocutory stage.
Further, as a recruitment business itself, the second defendant can reasonably be taken to have a good understanding of the value of recruiting an employee with knowledge of a particular market in which a business is seeking to enter (such as the market for placing employees in the commercial, construction and infrastructure sector in Western Australia). I believe I can safely infer from the nature of its business that the second defendant will have a good awareness of the use of restraints in employment contracts and the risks which arise when onboarding new employees from competitor businesses. These matters provide a degree of support to the satisfaction I have reached as to the claims against the second defendant itself (as to its alleged involvement in the first defendant's misuse of information and its alleged receipt and use of confidential information from the first defendant), which I will further comment on below.
Similar themes were highlighted by Edelman J in Emeco International Pty Ltd v O'Shea [No 2], in relation to the role of a business development manager who obtains the trust of a client including knowledge of confidential issues particular to the client.[60]
[60] Emeco International Pty Ltd v O'Shea [No 2] [85] and [119].
I would stress again that the defendants have not yet had the opportunity to respond or refute these matters in this court (although I take into account the defendants failed to respond to the plaintiff's assertions to this effect, which assertions were made over two months ago in the correspondence sent to the defendants by the plaintiff's solicitors).
In summary, I was satisfied at the conclusion of the hearing on 28 November that there were serious questions to be tried as to the following matters:
(a)whether the first defendant was acting in breach of the Confidentiality Clause in his Contract with the plaintiff;
(b)whether the first defendant was acting in breach of s 183 of the Corporations Act, in the sense that as an employee of the plaintiff he obtained the information of the plaintiff and is now improperly using that information to gain an advantage for himself or the second defendant, or is causing detriment to the plaintiff;
(c)whether the Non‑Solicitation Clause in the Contract with the plaintiff was valid and whether the first defendant was acting in breach of the restrictions in that clause;
(d)whether the Non‑Compete Clause in the Contract with the plaintiff was valid and whether the first defendant was acting in breach of the restrictions in that clause;[61] and
(e)whether the second defendant had sufficient knowledge of the confidentiality obligations owed by the first defendant and an involvement in the alleged breach by the first defendant of s 183 of the Corporations Act (most particularly after receipt of the correspondence from the plaintiff's solicitors on 22 September).
[61] Having regard to the written submissions advanced by the Plaintiff: Plaintiff's submissions [42] - [43].
During the course of the hearing on 28 November, I raised with the plaintiff's counsel the basis on which the restraints were sought against the second defendant. As already noted, the plaintiff seeks those restraints based on the second defendant's involvement in the alleged breach of s 183 of the Corporations Act by the first defendant. At this early stage, my assessment was that the claims against the second defendant are not as strong as those against the first defendant, but the existence of a serious question to be tried in this regard was certainly open.
Further, by 22 September, the second defendant was on notice through the letter from the plaintiff's solicitors, of the plaintiff's concerns regarding the first defendant and (in broad terms) the obligations he owed to the plaintiff. The letter from the plaintiff's solicitors to the second defendant attached a copy of the more detailed letter sent directly to the first defendant. As I have mentioned, neither defendant responded to the concerns of the plaintiff, either to refute the allegations or, in the case of the first defendant, to proffer suitable undertakings. The letter addressed to the second defendant included the following passages:
Our client has no interest in preventing [the first defendant] from working within the industry, however, he is unable to work for a business in competition with Marble with the same geographical areas, with the same clients. As noted in the letter to [the first defendant], our client is concerned that [the first defendant] has, or will, disclose our client's confidential information in furtherance of the business of Fetch Recruitment.
Please be aware that at the present time our client does not suggest that your company has induced [the first defendant] to act contrary to his contractual or statutory obligations. We suspect that [the first defendant] has not disclosed the full detail (or any detail) to you in relation to his post-employment obligations or the source of various recruitment leads he has generated. We have written to you today to bring these matters to your attention, and now that we have done so, our client trusts that you will act appropriately in order to avoid exposing Fetch Recruitment to claims by our client.[62]
[62] Corbitt Affidavit, Attachment 14.
The letter to the second defendant is, in my respectful view, a measured and conciliatory letter designed to put the second defendant on notice of the plaintiff's concerns. It is not vitriolic or intemperate. It alerts the second defendant to a perceived, and potentially serious, problem. A response from the second defendant, or some engagement from that entity or its lawyers, may have headed off this litigation at the pass, or avoided the need for urgent relief to be sought at least.
In any event, the receipt of the letter by the second defendant alerted it to the existence of post‑contractual restraints to which its new employee, the first defendant, was subject. The letter also put it on notice of the allegation that the first defendant had misused confidential information and had been contacting individuals listed in the plaintiff's database.[63]
[63] Assuming in favour of the second defendant that it was not already aware of those matters.
On my assessment, the allegations advanced by the plaintiff call for an explanation from the first defendant (and the second defendant), who are both acutely well‑placed to provide direct accounts to explain whether the first defendant used the plaintiff's information to enable him to dispatch the various emails to their recipients. The legal onus of proof will remain on the plaintiff, of course.
D. Disposition - balance of convenience
In my view, the balance of convenience favoured the imposition of restraints on both the defendants.
As I have mentioned, I harboured some concerns as to the delay in commencing these proceedings on the part of the plaintiff (and whether that delay was disentitling). That said, the delay did not suggest that the plaintiff sat on its hands at all. The evidence indicates that it took steps to seek legal advice and attempted, without success, to resolve its immediate concerns by seeking undertakings from the first defendant on two occasions. In the circumstances, I ultimately formed the view that any delay was outweighed by the evidence before the court which disclosed (at least on an interlocutory assessment) the importance of the plaintiff's business information and the risk of irreparable damage which may be caused to the plaintiff if the defendants were allowed to continue unrestrained until trial.
In weighing the balance of convenience factors, I have given consideration to the primary scenarios which may play out in this matter. If, at trial, the plaintiff's claims are not upheld but restraints are imposed, the defendants will have the undertaking as to damages to call upon. In this regard, the plaintiff is a business of substance and the undertaking will enable the defendants to seek appropriate financial protection arising from the restraints which have been (wrongly, in that scenario) imposed by the court.
However, in contrast, if the plaintiff's claims are upheld at trial in circumstances in which urgent injunctive relief has been refused, my assessment is that the plaintiff's claims for damages against the defendants would represent something of a hollow victory, given the second defendant would (in that scenario) have been able to position itself in the local market through the use of the plaintiff's information and in defiance of the contractual and other obligations owed by the first defendant to the plaintiff. Mr Corbitt deposed that he was unable to presently determine the full extent of the damage that his business stands to suffer.[64] I accept that as a reasonable position at this stage, given he does not yet know the full extent of the first defendant's conduct since August and has received no response from either defendant to explain matters.
[64] Corbitt Affidavit [80].
Counsel for the plaintiff relied on the following passages from Edelman J's decision in Emeco International Pty Ltd v O'Shea [No 2], as to the adequacy of damages, which I consider have relevance and application to the present circumstance:[65]
[20]It has often been said, in the context of injunctive relief for apprehended breach of a restrictive covenant that 'where what is involved is the enforcement by injunction of a contractual negative stipulation, it is a rare case in which relief will be declined on the basis that damages are a sufficient remedy': Cerilian Pty Ltd v Graham Fraser [2008] NSWSC 1016 [10] (Brereton J); John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 [45] (Brereton J); Willis Australia Group Services Pty Ltd v Griggs [2012] NSWSC 659 [129] - [130] (Ward J).
[21]The reasons why damages are often inadequate in these cases includes (i) the difficulty of detection of breaches of the obligations; (ii) the difficulty of establishing causation between any loss of business with customers and any actions of the ex-employee; and (iii) the difficulty of the calculation of the quantum of any damage arising from loss of business: Huhtamaki Australia Ltd v Botha [2004] NSWSC 386 [17] (Hamilton J).
[65] Emeco International Pty Ltd v O'Shea [No 2] [20] and [21].
There is, in my view, a high risk of damage to the plaintiff's business in the lead up to trial which will not be adequately compensable in monetary terms in the event the plaintiff succeeds. The first defendant has had intimate knowledge of the candidates and clients of the plaintiff over the past three or more years, and I can see from the communications which the first defendant has sent in September and October that this information may have enabled him to target business opportunities to the detriment of the plaintiff's business. His email communications carry a personal touch, which build on his prior relationships developed whilst at Marble Recruitment.
On the plaintiff's case, the second defendant will have been able to steal a march on the plaintiff and establish itself in a particular sector in Western Australia using the confidential information acquired by the first defendant, arguably in breach of his obligations.
As to the detriment or inconvenience to the defendants, the restraints sought do not preclude the first defendant earning a living over the coming weeks or months. Rather, the first defendant will be unable to use the confidential information of the plaintiff and will be prevented from providing services in a particular sector, and in respect of certain clients and candidates. The restraints do not stop the first defendant from continuing his employment with the second defendant, and will only operate to limit the second defendant's business in certain respects in the lead up to trial (by reference to the use of the information of the plaintiff).
Weighing all of these matters together, I formed the view that the balance of convenience strongly favoured the imposition of restraints on the defendants, coupled with the opportunity for the defendants to apply to vary or discharge the restraints, and with the court making appropriate accommodation to have the action listed for an expedited trial in the new year.
E. Conclusion and orders
For the foregoing reasons, I made the following substantive orders on 28 November, in addition to orders concerning the referral of the matter to mediation, the filing of a statement of claim, and to bring the matter back before the court for further directions on 5 December, as well as reserving the costs of the hearing:
Undertaking as to damages
1.By 9.00am on Wednesday, 29 November 2023 the plaintiff is to file a signed undertaking as to damages, to the satisfaction of the Court, that it will pay to any party restrained or affected by the restraints imposed by interlocutory orders 2 and 3 below, such compensation as the Court may in its discretion consider in the circumstances to be just, such compensation to be assessed by the Court or in accordance with such directions as the Court may make, and to be paid in such a manner as the Court may direct.[66]
[66] Order 1 was subsequently extended to 12.00 noon on 29 November 2023.
Restraints
2.Pending the hearing and determination of these proceedings, or until further order, the first defendant be restrained from:
(a)soliciting or attempting to solicit from the plaintiff's business any candidates, clients or customers of the plaintiff as of 8 August 2023 who are located within a 100km radius from Perth;
(b)enticing away or attempting to entice away from the plaintiff's business any clients or customers of the plaintiff as of 8 August 2023 who are located within a 100km radius from Perth;
(c)providing or seeking to provide recruitment services for or on behalf of the second defendant to candidates, customers or clients in the commercial building sector, who are located within the State of Western Australia;
(d)using or disclosing any information obtained by the first defendant from the plaintiff that consists of or contains:
(i)the names, addresses, telephone numbers, email addresses, employee details, previous candidate placements, terms of business, candidate preferences, or financial information of the plaintiff's clients and customers, that is not otherwise publicly available; and
(ii)the names, addresses, telephone numbers, email addresses, personal information, employment history, candidate preferences, references, or financial information of candidates registered with the plaintiff.
3.Pending the hearing and determination of these proceedings, or until further order, the second defendant be restrained from using or disclosing any information obtained by it from or on behalf of the first defendant that consists of or contains:
(a)the names, addresses, telephone numbers, email addresses, employee details, previous candidate placements, terms of business, candidate preferences, or financial information of the plaintiff's clients and customers, that is not otherwise publicly available; and
(b)the names, addresses, telephone numbers, email addresses, personal information, employment history, candidate preferences, references, or financial information of candidates registered with the plaintiff.
4.The parties have leave to apply to vary or discharge the injunctions granted pursuant to orders 2 and 3 above, upon giving at least 2 business days' notice to each other of their intention to do so
ATTACHMENT A
Chronology of relevant events
| DATE | EVENTS AS EXPLAINED BY THE PLAINTIFF |
| Events prior to 2023 | |
| July 2006 | Marble Recruitment commences operation as a recruitment agency in Perth: [5] |
| 1 Dec 2020 | First defendant commences his employment with Marble Group Pty Ltd as a Business Development Manager: [20] |
| 31 May 2021 | First defendant's employment is transferred to Marble Recruitment, an associated entity of Marble Group Pty Ltd as a Business Development Manager: [21] |
| Events in 2023 | |
| 27 April | First defendant was promoted to a role with the plaintiff as a Senior Recruitment Consultant: [34] - [36] |
| 27 July | First defendant verbally informs the plaintiff that he intends to resign and confirms his resignation in an email: [37] - [39]; Attachment 3 |
| 8 August | First defendant's employment with the plaintiff concludes: [40] |
| August | First defendant commences employment with the second defendant, which operates a recruitment business: [50] |
| 1 September | First defendant sends first email to a test email account established by the plaintiff, addressed to Mark Stephens: [57]; Attachment 6 |
| 4 September | Plaintiff informed by Client L that the first defendant had approached that client. Client L had been a client of the plaintiff since September 2022. Client L is located in Malaga. The first defendant had been a key contact for Client L whilst at the plaintiff: [58] - [60]; Attachment 7 |
| 4 September | Plaintiff informed by Client P that the first defendant had approached that client. Client P had been a client of the plaintiff since August 2022. Client P is located in Balcatta. The first defendant was a key contact for Client P whilst at the plaintiff: [61] - [63]; Attachment 9 |
| 13 September | First defendant sends second email to a test email account established by the plaintiff, addressed to John Burke: [64]; Attachment 11 |
| 22 September | Plaintiff's solicitors (FCB Workplace Law, North Sydney) send demand letter to first defendant seeking undertakings: [70] - [71]; Attachment 13 |
| 22 September | Plaintiff's solicitors send letter to second defendant drawing their demands to the attention of the second defendant and attaching a copy of the demand letter sent to the first defendant: [70] and [72]; Attachment 14 |
| 9 October | First defendant sends third email to a test email account established by the plaintiff, addressed to John Burke: [65]; Attachment 12 |
| 25 October | Plaintiff's solicitors send second demand letter to first defendant seeking undertakings: [73]; Attachment 15 |
| 31 October | Email response from the first defendant to the plaintiff's solicitors seeking extension of time to respond: [74]; Attachment 16 |
| 1 November | Plaintiff's solicitors send email to first defendant allowing extension to 5.00pm on 2 November 2023: [75]; Attachment 17 |
| 24 November | Proceedings filed in the Supreme Court of Western Australia |
| 28 November | Urgent hearing of the plaintiff's interlocutory summons |
ATTACHMENT B
Extracts of clauses in the Contract
The Employer
Marble Group Services Pty Ltd ("the Employer', "Us", "Our", "We" etc…) is the employer. Reference(s) to your obligations to the employer includes obligations to related entities.
…
Confidentiality
Confidential information includes but is not limited to the following:
■Client/Contacts/ Candidate lists and related information;
■Client/Contacts/ Candidate searches and related information;
■Information of Client/Contacts/ Candidate divulged to you during the course of any assignment with a client
■Supplier lists and related information;
■Staff lists and related information;
■Intellectual Property;
■Any and all documentation (whether electronic or hardcopy);
■Any and all information accessed on the Intranet;
■Processes and business models;
■Computer programmes;
■Any and all access passwords computer files/ computer systems and online tools provided to you by The Employer;
■Financial results and figures;
■Pricing and costing;
■Information relating to marketing, including future promotions;
■Strategic Information.
You acknowledge that as an employee of the Employer you have both a contractual and ethical duty to keep the affairs of the Employer's work practices confidential.
You acknowledge that:
■The property of the Employer includes all trade and business secrets and other confidential information relating to the affairs or business of the Employer or any person with whom you come into contact as a result of this Agreement, or by reason of their employment with the Employer, whether or not the same were originally supplied by the Employer, including the confidential information;
■The confidential information has been and will be acquired by the Employer at the Employer's initiative and expense; and
■The Employer has spent and will spend effort and money in establishing and maintaining its client and candidate base, employee skills and the confidential information.
You agree that it is reasonable to enter into the promises contained in this Agreement, and that you will at all times, even after the termination of your employment:
■Keep the confidential information strictly confidential and will not use or disclose it to any person other than in the proper course of the employment or as required by law; and
■Take reasonable steps to prevent the unauthorised use or disclosure of any confidential information by a third party.
You also acknowledge and agree that you will not prevent access by the Employer or its related entities to the confidential information by the use of passwords or any other means. All confidential information remains the property of the Employer or its related entities and will not leave the premises of the Employer or its related entities without the written permission of a Director of the Employer, except as required in the performance of your duties.
You acknowledge and agree that:
■Damages may be inadequate compensation for breach of your obligations contained in this clause and subject to the Court's discretion, the Employer may seek specific performance or may seek to restrain, by an injunction or similar remedy, any conduct or threatened conduct which is or will be in breach of this clause, in addition to any other remedy it may wish to pursue;
■You will fully indemnify the Employer in respect of any loss, damage, claims, liability, cost and expenses, of any kind, suffered or incurred by the Employer as a result of your breach of this clause, in any way, including, but not limited to, any disclosure by you of any confidential information to any person(s), other than authorised under this Agreement.
…
Non-Solicitation
You acknowledge that we have and continue to expend significant amounts of time, money and effort in developing and maintaining Our business. In consideration of your remuneration, skills and experience in performing your role, and in order to reasonably protect Our business and its staff you agree and acknowledge that during the term of your employment (and for the periods after it set out below and in the areas of nonsolicitation set out below), you must not on your own account or jointly or on behalf of any other person, institution, or corporation, or other body as a Director, Secretary, Manager, Employee, Independent contractor, Partner, Joint venturer, Agent, Shareholder or otherwise or by means of an agent, independent contractor or employee or any other person, corporation, or entity:
■solicit candidates, temporary employees, clients, customers, agents, suppliers, or contractors from Our business; or
■entice away from Our business any clients or customers, or suppliers of Our business, or such other persons related to Our business which We business may nominate from time to time.
Following are the periods after your employment ceases referred to above:
·Nine (9) months from the day immediately following the date your employment ceases, or if that period is determined to be unenforceable then;
·Six (6) months from the day immediately following the date your employment ceases, or if that period is determined to be unenforceable then;
·Three (3) months from the day immediately following the date your employment ceases.
The area of your Non-solicitation referred to above is a 100km radius of the closest major metropolitan area you are working in.
…
Not Induce Breach
You acknowledge that We have and continue to expend significant amounts of time, money and effort in developing and maintaining Our business. In consideration of your remuneration, skills and experience in performing your role, and in order to reasonably protect Our business and its staff you agree and acknowledge that during the term of your employment (and for the periods after it set out below and in the areas of nonsolicitation set out below), you must not, on your own account, or jointly or on behalf of any other person, institution, or corporation, or other body as a Director, Secretary, Manager, Employee, Independent contractor, Partner, Joint venturer, Agent, Shareholder or otherwise or by means of an agent, independent contractor or employee or any other person, corporation, or entity induce or attempt to induce any Directors, Secretaries, candidates, clients, customers, agents, managers, employees, contractors, suppliers or agents of Our business to:
■breach their contract with Our business; or
■accept employment or engagement as an independent contractor or engagement in any other capacity with any other firm, institution, person, company or body that operates in the same area of business as Our business.
Following are the periods after your employment ceases referred to above:
·Nine (9) months from the day immediately following the date your employment ceases, or if that period is determined to be unenforceable then;
·Six (6) months from the day immediately following the date your employment ceases, or if that period is determined to be unenforceable then;
·Three (3) months from the day immediately following the date your employment ceases.
The area of your Non-solicitation referred to above is a 100km radius of the closest major metropolitan area you are working in.
…
Entering into Competition
You acknowledge that We have and continue to expend significant amounts of time, money and effort in developing and maintaining Our business. In consideration of your remunerations, skills and experience in performing your role, and in order to reasonably protect Our business and its staff you agree and acknowledge that you will not, for a period of:
■Nine (9) months after termination of the agreement; or if found by a court to be unreasonable;
■Six (6) months after termination of the agreement; or if found by a court to be unreasonable;
■Three (3) months after the termination of the agreement,
■be engaged, be engaged, concerned or interested, directly or indirectly with any organisation that is in direct competition with Our business in the capacity of Recruitment Consultant or like position wherein that role will cause you to be involved in the specific recruitment markets that you performed services for us (either active recruitment or supervision of other recruiters) within the 12 months prior to your termination, within the state of Wa [sic].
■be engaged, concerned or interested, directly or indirectly with any organisation that is in direct competition with Our business in the capacity of Recruitment Consultant or like position wherein that role will cause you to be involved in the specific recruitment markets that you performed services for us (either active recruitment or supervision of other recruiters) within the 12 months prior to your termination, within the Perth metropolitan area.
Reasonableness
The parties agree that the restraints referred to in this Agreement are reasonable in the circumstances and necessary for Our protection having regard to the significant amounts of time, money and effort spent in developing and maintaining Our business and the fact that You have been introduced to confidential and sensitive information as a result of your employment with Us.
The restraints are also reasonable as you have access to Our clients, suppliers and business contacts and will be developing close professional relationships with those clients, suppliers and business contacts on Our behalf and will have an intimate knowledge about those clients, suppliers and business contacts. For avoidance of doubt the parties agree that the restraints referred to above encompass the use of electronic communication tools, such as but not limited to functions known as 'social media' (e.g. Facebook, Twitter, LinkedIn).
Injunction & Specific Performance
You acknowledge that we may suffer substantial damage as a result of the breach in any way, whether voluntarily or otherwise, of any of the Confidential Information, Not Induce Breach, Non-Solicitation or No Compete Clauses of this contract
You acknowledge that damages may not be a sufficient remedy for us for any breach of these clauses and that We shall be entitled to specific performance or injunctive relief (as appropriate) as a remedy for any breach or threatened breach by you, in addition to any other remedies available at law or in equity to Us.
…
Continuing Obligations
The expiration or termination of this Agreement, however it arises will not affect the provisions of this agreement as are expressed to operate or have effect after termination of this agreement and will be without prejudice to any right of action already accrued to either party in respect of any breach of this Agreement by the other party.
Independent Advice, No Inducement
You acknowledge that you have read and understood the offer of employment and accept the offer of employment and all of the terms and outlined in the agreement. You have obtained any advice that you felt was necessary prior to accepting this offer and have entered into this agreement of your own free will and without any inducement or representations.
…
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IHN
Associate to the Honourable Justice Lundberg
6 DECEMBER 2023
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