Marel Australia Pty Ltd v Buckmaster

Case [2024] QSC 218

SUPREME COURT OF QUEENSLAND

CITATION:

Marel Australia Pty Ltd v Buckmaster [2024] QSC 218

PARTIES:

MAREL AUSTRALIA PTY LTD
(applicant)

v
MICHAEL BUCKMASTER

(respondent)

FILE NO:

5900 of 2024

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:


Supreme Court at Brisbane

DELIVERED ON:

19 September 2024

DELIVERED AT:

Brisbane

HEARING DATE:

29 May 2024

JUDGE:

Martin SJA

ORDERS:

1.    by 4:00pm on 30 September 2024, the respondent is to serve an affidavit on the applicant:

(a)   stating, in respect of any Marel Confidential Information:

(i)     any person or persons to whom he has disclosed Marel Confidential Information;

(ii)     the Marel Confidential Information he has disclosed to that person or persons;

(iii)    the means by which he communicated the Marel Confidential Information to that person or persons; and

(iv)    the date or dates on which he communicated the Marel Confidential Information to that person or persons;

(b)   stating his knowledge about the present location of the following devices (Devices):

(i)     VendorCo ProductCode USB Device;

(ii)     WD My Passport 259D USB Device;

(iii)    Seagate Expansion HDD SCSI Disk Device; and

(iv)    Verbatim STORE N GO USB Device; and

(c)   exhibiting, to the extent that any of the Devices remain in his possession and control, a file list identifying the files stored on each of the Devices remaining in his possession and control as at 10 May 2024.

2.    subject to further order, until the hearing and determination of the originating application, the respondent be restrained from disclosing Marel Confidential Information to any other person;

3.    costs of the interlocutory relief be reserved; and

4.    the originating application be adjourned to a date to be fixed for review.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – DISCOVERY OF DOCUMENTS – PRELIMINARY DISCOVERY – where the applicant is a capital goods supplier to the foods industry – where the respondent was, until 22 January 2024, an employee of the applicant responsible for, among other things, selling the applicant’s complex food processing solutions – where the respondent gave notice of his resignation and the applicant learned that he was going to work for a competitor – where the applicant alleges that the respondent attempted to transfer the applicant’s confidential information to his new employer, that the respondent retained the applicant’s confidential information, and that the respondent had not been candid in his post-employment disclosures – where the applicant seeks, by way of interlocutory relief, orders requiring the respondent to provide an affidavit setting out his dealings with the applicant’s confidential information – where the applicant identifies the source of the power to make such orders as the decision of the House of Lords in Norwich Pharmacal and of Justice Warren in Computershare – whether the applicant is entitled to the information discovery as sought

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – PRODUCTION AND INSPECTION OF DOCUMENTS – GROUNDS FOR RESISTING…

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Details
AGLC
Marel Australia Pty Ltd v Buckmaster [2024] QSC 218
Case
[2024] QSC 218
Decision Date

CaseChat Overview and Summary

In the matter of Marel Australia Pty Ltd v Buckmaster, the applicant sought interlocutory relief to obtain information from the respondent, an ex-employee, who had resigned and was set to work for a competitor. The applicant alleged that the respondent had attempted to transfer confidential information to the new employer, had retained this information, and had not been candid about his post-employment disclosures. The respondent claimed privilege on the basis that responding to the inquiries might expose him to a civil penalty under section 183 of the Corporations Act 2001. The court had to determine whether the applicant was entitled to the information sought.

The court identified that the applicant's entitlement to information discovery was based on the principles established in the Norwich Pharmacal decision and Justice Warren's ruling in Computershare. The Norwich Pharmacal decision held that where a person unknowingly becomes involved in the tortious acts of others, they have a duty to assist the wronged party by providing full information. This principle was extended to information discovery by some cases, which suggested that the scope of preliminary discovery under the general law could include information discovery. The court needed to consider whether these principles applied to the case at hand and whether the respondent's claim of privilege was valid.

The court found that the respondent's employment agreement contained specific clauses regarding confidentiality, non-competition, non-solicitation, and the assignment of intellectual property, which obligated him to maintain the confidentiality of the company's information. The applicant alleged that the respondent attempted to transfer confidential information to a competitor, retained this information, and was not candid about his post-employment disclosures. The court examined the respondent's claim of privilege based on the potential exposure to a civil penalty under the Corporations Act. The court had to determine if the respondent's concerns were sufficient to warrant a privilege claim and whether this privilege outweighed the applicant's need for information.

The court ordered that by 4:00pm on 30 September 2024, the respondent must serve an affidavit on the applicant detailing any disclosure of Marel confidential information, the means and dates of such disclosure, and his knowledge of the present location of specific devices. The respondent was also required to exhibit a file list of the files stored on any devices still in his possession as of 10 May 2024. Additionally, the court restrained the respondent from disclosing any Marel confidential information to any other person until the hearing and determination of the originating application. The costs of the interlocutory relief were reserved, and the originating application was adjourned for review.

Orders

Orders of the court

1. by 4:00pm on 30 September 2024, the respondent is to serve an affidavit on the applicant:

(a) stating, in respect of any Marel Confidential Information:

(i) any person or persons to whom he has disclosed Marel Confidential Information;

(ii) the Marel Confidential Information he has disclosed to that person or persons;

(iii) the means by which he communicated the Marel Confidential Information to that person or persons; and

(iv) the date or dates on which he communicated the Marel Confidential Information to that person or persons;

(b) stating his knowledge about the present location of the following devices (Devices):

(i) VendorCo ProductCode USB Device;

(ii) WD My Passport 259D USB Device;

(iii) Seagate Expansion HDD SCSI Disk Device; and

(iv) Verbatim STORE N GO USB Device; and

(c) exhibiting, to the extent that any of the Devices remain in his possession and control, a file list identifying the files stored on each of the Devices remaining in his possession and control as at 10 May 2024.

2. subject to further order, until the hearing and determination of the originating application, the respondent be restrained from disclosing Marel Confidential Information to any other person;

3. costs of the interlocutory relief be reserved; and

4. the originating application be adjourned to a date to be fixed for review.

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

He also relies on his privilege against exposure to the civil penalty which can follow from a breach of s 183 of the Corporations Act 2001.The Norwich Pharmacal and Computershare decisions The Norwich Pharmacal case concerned an infringement of a chemical patent. The owner of the patent sought to obtain the names and addresses of persons who had been involved in the alleged breach of the relevant patent. The House of Lords held that where a person, even innocently, became involved in the tortious acts of another that person was under a duty to give full information by way of discovery and disclosing the identity of the relevant wrongdoers. In Hooper v Kirella Pty Ltd[4] the Full Court of the Federal Court said this about Norwich Pharmacal:“[26] In Norwich Pharmacal, the House of Lords upheld an order made at first instance requiring the Customs and Excise Commissioners to provide the names and addresses of importers of a chemical compound of which Norwich held the patent. Lord Reid identified the “very reasonable principle” established by the authorities as follows (at 175):‘… if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.’The requirement that the person be “mixed up” in the tortious acts of others was said to flow from the so-called “mere witness” rule, which historically has been thought to prevent a court ordering discovery against a mere witness. See also at 180-1, per Lord Morris; at 188, per Viscount Dilhorne; at 197, per Lord Cross.” (emphasis added)[4](1996) 96 FCR 1. The Full Court was considering the court’s power in equity with respect to preliminary discovery, as distinct from the powers it had under the Federal Court Rules. The Court went on to say:“[28] In McLean,[5] Young J expressed (at 645) the view that the principle in Norwich Pharmacal was limited to identity discovery. As such, it was of limited value in New South Wales because the Supreme Court Rules made provision for identity discovery in broad terms (Pt 3, r 1, which is in similar terms to FCR, O 15A, r 3). The same view was expressed by Sheppard J in The “Alley Cat” at 139. Other cases suggest, however, that the scope of preliminary discovery under the general law may not be so limited and may extend to information discovery: Mercantile Group AG v Aiyela [1994] QB 366 at 374-375, per Hoffmann LJ (referred to with apparent approval by Gummow J in Breen v Williams (1996) 186 CLR 71 at 120); P v T Ltd [1997] 1 WLR 1309; [1997] 4 All ER 200 (Sir Richard Scott V-C); Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 445-446, per Gummow J.” (emphasis added)[5]McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623.

Ratio Decidendi

Legal Principle Established

The conditions of Mr Buckmaster’s employment include at cl 9.1(g) that:“In consideration for employment under this agreement, you agree to:…(g)comply with the obligations of confidentiality, non-competition, non-solicitation and assignment of intellectual property specified in this agreement”. Clauses 17.1(a) and 17.3, included under the heading ‘Confidential Information and Company Property’, provide:“17.1During your employment, you will have access to the Company’s Confidential Information and property. You acknowledge that:(a)Confidential Information includes all trade and business secrets; financial information; any information which the Company or Related Companies tells you is confidential or a reasonable person would consider is confidential and which, if disclosed to third parties, could or might loss or damage [sic] to the Company or Related Companies; client, customer and personnel information; procedures, systems and documents (in whatever form, however stored, and including copies and extracts) relating to the affairs and business that contribute to the sustainable competitive advantages of the Company and Related Companies;…17.3You must take all reasonable precautions to prevent any unauthorised disclosure of Confidential Information, including the following precautions:(a)storing all Confidential Information safely and securely;(b)except with the prior written authority of the Company, you must not remove any Confidential Information from the premises at which it is stored except where it is necessary to do so for the sole purpose of providing services to the Company;(c)You must immediately notify the Company in writing of any actual, threatened or suspected unauthorised disclosure of any Confidential Information; and(d)You must take all reasonable measures to minimise any unauthorised dissemination of any Confidential Information which is in any way related to or resulting from an act or failure to act by you.” Clause 18.1, included under the heading ‘Confidentiality’, provides:“18.1You agree that during your employment and after the termination of your employment, you will not use or disclose to anyone any Confidential Information, and will use your best endeavours to prevent unauthorised use or disclosure of the Confidential Information by third parties, except in the proper course of your duties, or if required by law.” Clauses 23.1 and 23.2, included under the heading ‘Policies’, provide:“23.1You will read all of the Company’s policies, as amended from time to time.23.2You will at all times comply with the terms of all of the Company’s policies (howsoever named) as varied from time to time, and abide by all of the Company’s procedures and professional service standards.” Marel created a number of internal policies. Of them, the following are relevant:(a)An email policy, which lists under the heading “Don’ts”: (i)“Send internal/ confidential information to people who should not have access to this”; (ii)“Use email for personal use (e.g., personal travel, school newsletters etc.)”; (iii)“Forward emails from Marel mailbox to an external mailbox”.(b)An information classification guide, which under cl 5.1 establishes various classifications ranging from public information to internal, then confidential, then restricted. It provides for how information in each category should be handled throughout its ‘lifecycle’ from creation, to usage, storage, transmission, and disposal. Appendix B to that policy includes a table identifying the four data classifications and the company data types which fall into each, alongside various example of types of information which may be confidential or restricted;(c)An internet policy, which lists under the heading “Don’ts”: “Share company internal/ confidential information on the internet”; and(d)A policy concerning portable USB data devices.What does Marel allege that Mr Buckmaster did?