Pathfinder Systems Australia Pty Ltd v Austact Pty Ltd

CITATION:	Pathfinder Systems Australia Pty Ltd v Austact Pty Ltd [2006] NSWSC 892
HEARING DATE(S):	23 August 2006
JUDGMENT DATE :	23 August 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	08/23/2006
DECISION:	Notice of Motion dismissed.
CATCHWORDS:	RESTRAINT OF TRADE – INTERLOCUTORY INJUNCTION – whether plaintiff showed serious question to be tried that former employee using confidential information to solicit customers of plaintiff.
CASES CITED:	Wessex Dairies Ltd v Smith [1935] 2 KB 80
PARTIES:	Pathfinder Systems Australia Pty Ltd – Plaintiff Austact Pty Ltd – First Defendant Ronald Frederick Walters – Second Defendant
FILE NUMBER(S):	SC 4329/06
COUNSEL:	Ms M. Fraser – Plaintiff L.V. Gyles – Defendants
SOLICITORS:	Ledlin Partners – Plaintiff David Hand – Defendants

1    By Notice of Motion served on short notice, the Plaintiff seeks two interlocutory injunctions against the Defendants. The First Defendant is a company which employs the Second Defendant, Mr Walters, in a business which is competitive with the business of the Plaintiff. Mr Walters was, until fairly recently, an employee of the Plaintiff who was engaged in the task, amongst other things, of preparing quotations given by the Plaintiff to potential customers. 2    The Plaintiff and Mr Walters entered into a contract of employment in October 2004 which contains a clause in which Mr Walters undertakes to keep confidential any:
“… confidential information concerning the business, the financial arrangements, the intellectual property or position of the Plaintiff, or any dealings, transactions or affairs of the business of the Plaintiff, or of any customers of the Plaintiff."

There is no covenant in the employment contract restraining Mr Walters from competing with the Plaintiff.

3    The Plaintiff seeks the following orders on an interlocutory basis:

“4. The defendants be restrained until further order from, by themselves, their servants and agents, approaching or soliciting or endeavouring to solicit away from the plaintiff any customer of the plaintiff listed in Annexure B to the affidavit of Ronnie Zahra sworn 17 August 2006.

5. The defendants deliver up to the plaintiff within 14 days any documents, including copies stored on any personal, laptop, notebook or other computer, hard disc drive, floppy disc, compact disc, digital versatile disc, or other device capable of storing or recording data or information by mechanical or electronic means in the possession or control of the defendants or either of them, which documents comprise or include confidential information of the plaintiff including customer lists, contact details, and quotations given by the plaintiff to customers listed in Annexure B to the affidavit of Ronnie Zahra sworn 17 August 2006.”
4    Mr Gyles of Counsel, who appears for the Defendants, submits to an order in terms of paragraph 5 without admissions. Mr Gyles says that the Defendants are content to submit to such an order because there are, in fact, no documents in existence falling within the description in paragraph 5. 5    The debate which has occurred before me has been concerned with whether an injunction in terms of paragraph…