Marble Group Services Pty Ltd v Blenkinsop - [2023] WASC 464

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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] WASC 464
Decision Date: 6 DECEMBER 2023

CaseChat Overview and Summary

The case of Marble Group Services Pty Ltd v Blenkinsop concerns an urgent application for injunctive relief filed by Marble Group Services Pty Ltd against its former employee, Mr Blenkinsop, and his new employer, Blenkinsop Consulting Pty Ltd. Marble Group Services is a company that provides services to the mining industry. Mr Blenkinsop, a former employee, left to work for Blenkinsop Consulting, a competitor of Marble Group Services. Marble Group Services alleges that Mr Blenkinsop breached confidentiality and non-compete clauses in his employment contract and improperly used confidential information in contravention of s 183 of the Corporations Act 2001 (Cth). The company also alleges that Blenkinsop Consulting was involved in Mr Blenkinsop's alleged contravention of the Corporations Act and may have committed an equitable breach of confidence.

The legal issues before the court were whether there were serious questions to be tried in relation to the alleged breaches of the employment contract and the Corporations Act, and whether the balance of convenience favoured the grant of the sought injunctive relief. The court considered the principles of interlocutory injunctions, particularly the need to establish a serious question to be tried and the balance of convenience. The court also needed to consider whether the injunctive relief was necessary to preserve the status quo pending the final determination of the proceedings.

The court found that there were serious questions to be tried regarding the alleged breaches of the employment contract and the Corporations Act. The court accepted that Marble Group Services had demonstrated that it had a strong prima facie case against Mr Blenkinsop and Blenkinsop Consulting. The court also found that the balance of convenience favoured the grant of the injunctive relief, as the potential harm to Marble Group Services if the injunctions were not granted outweighed any potential harm to the defendants. The court granted the injunctive relief sought by Marble Group Services, restraining Mr Blenkinsop and Blenkinsop Consulting from contravening the non-solicitation, non-compete, and confidentiality obligations in Mr Blenkinsop's employment contract, and from improperly using confidential information in contravention of the Corporations Act.

The court's decision was based on the strength of the evidence presented by Marble Group Services and the potential harm that could result if the injunctive relief was not granted. The court recognised that the injunctive relief was necessary to preserve the status quo pending the final determination of the proceedings and to protect Marble Group Services' confidential information and competitive position. The court also noted that the injunctive relief was not an absolute bar to the defendants' defence, but rather a necessary measure to prevent irreparable harm. The court's decision provides a clear indication of the strength of Marble Group Services' case and the potential consequences for the defendants if they are found to have breached the injunctive relief.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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.