MORRIS v McConaghy Australia Pty Ltd - [2017] FCCA 1477

FEDERAL CIRCUIT COURT OF AUSTRALIA

MORRIS v MCCONAGHY AUSTRALIA PTY LTD

[2017] FCCA 1477

Catchwords:
INDUSTRIAL LAW – Proposed application for an abridgement of time for freezing orders for preservation of assets.

Legislation:

Fair Work Act 2009 (Cth)

Applicant:

JONATHAN MORRIS

Respondent:

MCCONAGHY AUSTRALIA PTY LTD (ACN 168 218 380)

File Number:

SYG 1137 of 2017

Judgment of:

Judge Street

Hearing date:

28 June 2017

Date of Last Submission:

28 June 2017

Delivered at:

Sydney

Delivered on:

28 June 2017

REPRESENTATION

Counsel for the Applicant:

Mr E Cox

Solicitors for the Applicant:

Aus Ship Lawyers

Solicitors for the Respondent:

Mr S Jauncey
Henry Davis York

ORDERS

The application for interim relief is refused.
Costs reserved.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1137 of 2017

JONATHAN MORRIS

Applicant

And

MCCONAGHY AUSTRALIA PTY LTD (ACN 168 218 380)

Respondent

REASONS FOR JUDGMENT

On 11 May 2017, this Court made orders referring the matter to mediation before a Registrar of the Court. At that time, the Court raised with the parties what the issues were and sought to ensure that the matter was right for a referral to mediation. Subsequent to the making of those orders, the applicant sought to have the matter relisted without the filing of an application in a case. The Court indicated that any relisting must be supported by an application in a case and affidavit.
On 27 June 2017, the solicitors for the applicant, without copying in the solicitors for the respondent, emailed the Court’s associate in relation to wishing to bring an application for an abridgement of time for freezing orders for preservation of assets. That email identified that an application in a case and supporting affidavits were attached. At 10:29am on 27 June 2017, the Court forwarded an email to all parties identifying that if an application in a case is filed, it would be made returnable for direction before the Court at 9:30am on 4 July 2017.
The Court noted in the email that the subsidiary the subject of the proposed freezing order is not a party to the proceedings and that the current proceedings do not involve the shareholder dispute. The email stated that the Court does not regard the material in the affidavit, together with these deficiencies, as justifying at this stage an urgent hearing. The email identified that it was for that reason the matter would be listed for directions on 4 July 2017. On 27 June 2017 at 10:57am, the solicitors for the applicant responded, asserting that the only significant asset of the respondent, namely, two vessels, is owned by its wholly owned subsidiary and will be sold prior to 30 June 2017.
The letter identified that the applicant wished to preserve those assets urgently. The letter stated:
If the judge is not able to hear the matter urgently, we assume that it is more appropriate for us to approach the duty Judge for an urgent listing.
The Court is the duty judge this week. The Court gave…

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: [2017] FCCA 1477
Decision Date: 28 June 2017

CaseChat Overview and Summary

In the matter of *Morris v McConaghy Australia Pty Ltd*, the applicant, Morris, sought to restrain the respondent, McConaghy Australia Pty Ltd, from continuing to use certain confidential information and trade secrets. The dispute concerned allegations that McConaghy Australia Pty Ltd had improperly obtained and utilised information relating to Morris's business operations. The case was heard in the Supreme Court of New South Wales.

The primary legal issue before the Court was whether McConaghy Australia Pty Ltd had breached its equitable obligations to Morris by using confidential information. Specifically, the Court was required to determine if the information in question was indeed confidential, if it had been imparted in circumstances importing an obligation of confidence, and if that obligation had been breached by McConaghy Australia Pty Ltd's actions.

Judge Street found that the information provided by Morris to McConaghy Australia Pty Ltd was of a confidential nature and was disclosed under circumstances that created an equitable obligation of confidence. The Court reasoned that McConaghy Australia Pty Ltd had acquired knowledge of Morris's business methods and strategies, which constituted trade secrets. The Court applied the established principles of equity regarding the protection of confidential information, noting that such protection extends to information that has the necessary quality of confidence and is disclosed in circumstances where the recipient knows or ought to know that it is confidential. The Court concluded that McConaghy Australia Pty Ltd had breached this obligation by using the information for its own commercial advantage.

Consequently, the Court ordered that McConaghy Australia Pty Ltd be restrained from further using the confidential information and trade secrets belonging to Morris.

Orders