Plus One International Pty Ltd v Ching (No 3)

[2020] NSWSC 1598

Supreme Court

New South Wales

Medium Neutral Citation:

Plus One International Pty Ltd v Ching (No 3) [2020] NSWSC 1598

Hearing dates:

25 – 27 August 2020

Date of orders:

13 November 2020

Decision date:

13 November 2020

Jurisdiction:

Equity

Before:

Hallen J

Decision:

The Court:

(1) Directs the parties, within 14 days, to undertake the calculations which will give effect to these reasons for judgment and to provide the Court with draft short minutes of order which reflect the matters of quantum about which they are agreed and those in dispute.

(2) Directs the parties to attempt to agree on an order as to costs.

(3) Directs that if the parties are unable to agree on draft short minutes of order, or are unable to agree on costs, then, within 7 days thereafter, their respective draft short minutes of order, and short submissions, of no more than 3 pages, as to the differences between them, in hard and soft copy, are to be provided to the Court.

Catchwords:

EMPLOYMENT AND INDUSTRIAL LAW – Contract – Breach of contract by use of what was said to be confidential information – Where no written contract of employment – Where Defendants alleged to have taken confidential documents and client contacts – Where Defendants alleged to have established a competing business using the confidential information as a “springboard” – Whether Defendants breached implied duties of fidelity and confidentiality – Whether Plaintiffs entitled to an injunction

EQUITY – Breach of confidence – Conduct constituting breach – Where Defendants alleged to have taken confidential information and client contacts – Where Defendants alleged to have established a competing business using confidential information as a “springboard” – Whether equitable duty persists where an equivalent contractual duty exists – Whether Defendants breached their equitable obligation – Whether Plaintiffs entitled to an injunction or account of profits

EQUITY – Fiduciary duties – Fiduciary relationships – Employee and employer – Conflict of interest and duty – Where Defendants’ position low in the hierarchy of the Plaintiffs’ business – Whether fiduciary duty arises

CORPORATIONS – Employees – Duties – Duty not to use position as employee improperly – Duty not to use information improperly – Whether information required to be “confidential” – Whether Defendants contravened provisions of the Act

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 21, 60

Corporations Act 2001 (Cth), ss 9, 180, 181, 182, 183, 184, 185, 1317E, 1317H, 1317J

Education Services for Overseas Students Act 2000 (Cth)

Evidence Act 1995 (NSW), s 140

Uniform Civil Procedure Rules 2005 (NSW), rr 14.27, 21.2, 23.8, 25.19, 31.3, 31.10, 34.1

Cases Cited:

Adler v Australian Securities and Investments Commission (2003) 179 FLR 1; [2003] NSWCA 131

AG Australia Holdings Limited v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170

Agricultural Land Management Ltd v Jackson (No 2) (2014) 48 WAR 1; [2014] WASC 102

AIIB Pty Limited v Beard [2009] NSWSC 1001

Amway Corporation v Eurway International Limited [1973] FSR 213

Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited (2018) 265 CLR 1; [2018] HCA 43

Andrews Advertising Pty Ltd v Andrews (2014) 99 ACSR 164; [2014] NSWSC 318

Antony Leslie John Woodings as liquidator of the Bell Group Ltd and the Bell Group Finance Pty Ltd v WA Glendinning and Associates Pty Ltd [2019] WASC 54

Arnold v Forsythe [2012] NSWCA 18

ASIC v Rich (2006) 235 ALR 587; [2006] NSWSC 826

ASIC v Somerville (2009) 77 NSWLR 110; [2009] NSWSC 934

Australian Securities & Investments Commission v Lewski (2018) 266 CLR 173; [2018] HCA 63

Automotive Dealer Administration Services Pty Ltd v Kulik [2010] VSC 293

Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341

Bigsby v Dickinson (1876) 4 Ch D 24

Birtchnell v Equity Trustees, Executors and Agency Company Limited (1929) 42 CLR 384; [1929] HCA 24

Blatch v Archer (1774) 98 ER 969

Blyth Chemical Limited v Bushnell (1933) 49 CLR 66; [1933] HCA 8

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

Byrne v Australian Airlines Limited (1995) 185 CLR 410; [1995] HCA 24

Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136

Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd [2018] NSWCA 213

Champions Ride Days Pty Ltd v McFarlane [2019] QDC 236

Chew v The Queen (1992) 173 CLR 626; [1992] HCA 18

Clear Wealth Pty Ltd v Kwong (No 2) [2012] NSWSC 1233

Coco v AN Clark (Engineers) Ltd [1969] RPC 41

Colbeam Palmer Limited v Stock Affiliates Pty Limited (1968) 122 CLR 25

Coles Supermarkets Australia Pty Ltd v FKP Limited [2008] FCA 1915

Commissioner for Corporate Affairs v Green [1978] VR 505

Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32

Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64; [1991] HCA 54

Concut Pty Ltd v Worrell (2000) 176 ALR 693; [2000] HCA 64

Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434; [1987] FCA 266

Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1; [2016] HCA 26

Deeson Heavy Haulage Pty Ltd v Cox (2009) 82 IPR 521; [2009] QSC 277

Del Casale v Artedomus (Aust) Pty Limited (2007) 73 IPR 326; [2007] NSWCA 172

Dentown Pty Ltd v PWI Group Pty Ltd as trustee of The Australia No 1 Group Trust (2019) 141 ACSR 330; [2019] NSWSC 1032

Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited (No 2) [2011] FCA 509

Digital Pulse Pty Limited v Harris (2002) 166 FLR 421; [2002] NSWSC 33

EagleBurgmann Australia Pty Ltd v Leabeater (2012) 219 IR 449; [2012] NSWSC 573

Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724

Faccenda Chicken Ltd v Fowler [1987] Ch 117

Face It Ltd v Luk [2019] HKCFI 1416

First Conferences Services Ltd v Bracchi [2009] EWHC 2176 (Ch)

Forkserve Pty Limited v Jack (2001) 19 ACLC 299; [2000] NSWSC 1064

Forkserve Pty Ltd v Pacchiarotta (2000) 50 IPR 74; [2000] NSWSC 979

Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306

Freedom Motors Australia Pty Limited v Vaupotic [2003] NSWSC 506

Fulton v Fulton [2014] NSWSC 619

Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd [2007] FCA 1621

Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (2009) 81 IPR 1; [2009] FCAFC 2

Gold and Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281

Hart Security Australia Pty Ltd v Boucousis (2016) 339 ALR 659; [2016] NSWCA 307

Helensburgh Property Management Pty Ltd v Brady [2015] NSWSC 1861

Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64

Huang v Union Standard International Group Pty Ltd [2020] NSWSC 400

Hydrocool Pty Limited v Hepburn (No 4) (2011) 279 ALR 646; [2011] FCA 495

In the matter of Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789

IPC Global Pty Ltd v Pavetest Pty Ltd (No 4) (2017) 124 IPR 101; [2017] FCA 260

Isaac v Dargan Financial Pty Ltd atf The Dargan Financial Discretionary Trust (2018) 98 NSWLR 343; [2018] NSWCA 163

J & E Vella Pty Ltd v Hobson [2020] NSWCA 188

James v Faddoul [2006] NSWSC 1330

JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237

John Fairfax Publications Pty Limited v Birt [2006] NSWSC 995

John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451

Jones v Dunkel (1959) 101 CLR 298

KRM (Vic) Pty Ltd v Classicbet Pty Ltd [2019] NSWSC 1773

Landmark Underwriting Agency Pty Ltd v Kilborn [2006] NSWSC 1108

Leica Geosystems Pty Ltd v Koudstaal (No 3) (2014) 109 IPR 1; [2014] FCA 1129

Liberty Financial Pty Ltd v Scott (No 2) (2005) 11 VR 629; [2005] VSC 26

Lifeplan Australia Friendly Society Ltd v Woff (2016) 259 IR 384; [2016] FCA 248

LM Investment Management Ltd (receiver apptd) (in liq) v Drake [2019] QSC 281

LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74

Longden v Kenalda Nominees Pty Ltd [2003] VSCA 128

Lord Ashburton v Pape [1913] 2 Ch 469

Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674

Manildra Laboratories v Campbell [2009] NSWSC 987

Mastec Australia Pty Ltd v Trident Plastics (SA) Pty Ltd (No 3) [2018] FCA 99

Masterton Homes Pty Ltd v Palm Assets Pty Ltd (2009) 261 ALR 382; [2009] NSWCA 234

Megerditchian v Khatchadourian [2020] NSWCA 229

Mudgee Dolomite & Lime Pty Ltd v Murdoch; In the matter of Mudgee Dolomite & Lime Pty Ltd [2020] NSWSC 1510

Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1

Norris v Kandiah [2007] NSWSC 1296

Nottingham University v Fishel [2000] IRLR 471; [2000] EWHC 2221 (QB)

NRMA v Geeson (2001) 40 ACSR 1; [2001] NSWCA 343

Nuera (Australia) Pty Ltd v Bain [2005] NSWSC 24

O’Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 33

Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21

Paino v Paino (2008) 40 Fam LR 96; [2008] NSWCA 276

Papas v Co [2018] NSWSC 1404

Peninsular Real Estate Ltd v Harris [1992] 2 NZLR 216

Phillips v Robab Pty Limited (2014) 110 IPR 184; [2014] NSWSC 1520

Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31

Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10

Plus One International Pty Ltd v Ching [2020] NSWSC 939

PMSI Group v Wilson [2003] NSWSC 263

Prestige Lifting Services Pty Ltd v Williams (2015) 333 ALR 674; [2015] FCA 1063

QBE Management Services (UK) Ltd v Dymoke [2012] EWHC 80 (QB)

R v Byrnes (1995) 183 CLR 501; [1995] HCA 1

Re Octaviar Limited (receivers and managers appointed) (in liq) [2012] NSWSC 1027

Robb v Green [1895] 2 QB 315

Roger Bullivant Ltd v Ellis [1987] IRLR 491

Rosetex Company Pty Ltd v Licata (1994) 12 ACSR 779

Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413; [1948] 65 RPC 203

Sangha v Baxter (2009) 52 MVR 492; [2009] NSWCA 78

SBA Music Pty Ltd v Hall (No 3) [2015] FCA 1079

Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275

Smartways Logistics Holdings Pty Ltd v O’Sullivan [2020] NSWSC 189

Smith Kline & French Laboratories (Aust) Limited v Secretary, Department of Community Services and Health (1990) 22 FCR 73

State of New South Wales v Hunt (2014) 86 NSWLR 226; [2014] NSWCA 47

Stokes v Ragless [2019] SASCFC 31

Streetscape Projects (Australia) Pty Ltd v City of Sydney (2013) 295 ALR 760; [2013] NSWCA 2

SWM Financial Services Pty Ltd v Lloyd [2011] NSWSC 1108

Termite Resources NL (in liq) v Meadows (No 2) (2019) 370 ALR 191; [2019] FCA 354

Terrapin Ltd v Builders’ Supply Co (Hayes) Ltd [1967] RPC 375

The Change Group International PLC v City Exchange Mart Pty Ltd [2013] FCA 1048

The Owners Strata Plan SP 69567 v Baseline Constructions Pty Ltd [2012] NSWSC 502

United Petroleum Australia Pty Ltd v Herbert Smith Freehills (a firm) (2018) 128 ACSR 324; [2018] VSC 347

United States Surgical Corporation v Hospital Products International Pty Ltd [1983] 2 NSWLR 157

University of Western Australia v Gray (2009) 179 FCR 346; [2009] FCAFC 116

Vanguard Financial Planners Pty Ltd v Ale (2018) 354 ALR 711; [2018] NSWSC 314

Vasco Investment Managers Limited v Morgan Stanley Australia Limited (2014) 108 IPR 52; [2014] VSC 455

Vestergaard Frandsen A/S v Bestnet Europe Limited [2013] 1 WLR 1556; [2013] UKSC 31

Victoria University of Technology v Wilson [2004] VSC 33

Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) (2011) 297 ALR 56; [2011] FCA 1123

Weldon & Co v Harbinson [2000] NSWSC 272

Woolworths Ltd v Olson (2004) 184 FLR 121; [2004] NSWSC 849

Zomojo Pty Ltd v Hurd (No 2) (2012) 299 ALR 621; [2012] FCA 1458

Texts Cited:

G E Dal Point, Equity and Trusts in Australia (7th ed, 2019, Lawbook Co)

G E Dal Pont, Law of Confidentiality (2014, LexisNexis)

J D Heydon, Cross on Evidence (2020, LexisNexis)

J D Heydon, Heydon on Contract (2019, Lawbook Co)

J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th ed, 2015, LexisNexis)

R P Austin and I M Ramsay, Ford, Austin & Ramsay’s Principles of Corporations Law (2020, LexisNexis)

R P Austin, H A J Ford and I M Ramsay, Company Directors: Principles of Law & Corporate Governance (2005, LexisNexis)

Category:

Principal judgment

Parties:

Plus One International Pty Ltd trading as Plus One Advisory and Plus One Education (First Plaintiff)
Plus One Migration Pty Ltd (Second Plaintiff)
(Paris) Yiu Tung Ching (First Defendant)
(Joy) Jieyi Lu (Second Defendant)

Representation:

Counsel:
D Dinnen (Plaintiffs)
A E Hopkins (Defendants)

Solicitors:
Comasters Law Firm & Notary Public (Plaintiffs)
Juris Cor Legal (Defendants)

File Number(s):

2018/00387905

Judgment

Introduction

1. HIS HONOUR: These proceedings involve claims by two companies for what is said to have been the improper taking, and use, of confidential information, by two former employees, whilst still employed, and thereafter, contrary to their unwritten contracts of employment. There were a multitude of issues litigated including the employers’ assertion that the employees’ conduct constituted breaches of confidence, a breach of the implied terms of their employment contracts, a breach of fiduciary duties, and a breach of their civil obligations, as employees, under ss 182 and 183 of the Corporations Act 2001 (Cth). The companies relied upon equitable and statutory remedies that were said to be available to them as a result of the taking, and the use of, that information. They sought an injunction, as well as other remedies, including an account of profits and damages for breach of contract in respect of the breaches, from each of the employees.

2. This was not a case in which the enforcement of restraint of trade provisions was, or could have been, sought. There was no restraint of trade binding the employees following termination of his, or her, employment with the employers. There was no such claim made in the pleadings and it was not suggested that any such term could be implied into the unwritten contracts of employment. It was also not a case in which any interlocutory relief had been sought at the time the companies learned of the matters about which each now complains.

3. The matter was heard, for three days, commencing on 25 August 2020. For the most part, it was a live hearing. However, belatedly, on the day before the hearing was to commence, the Court was informed that one of the Plaintiffs’ witnesses had recently had a baby, and as she was required for cross-examination, her evidence was sought to be given using Microsoft Teams. The legal representatives, and the Court, co-operated in finding a time that was suitable to that witness so that her involvement would not interrupt her attending to the needs of her newborn baby.

4. Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 31.3 provides that if the court so orders, evidence and submissions may be received by telephone, video link or other form of communication. At the commencement of the hearing, without opposition from the Defendants, the Court made the following direction (Tcpt, 25 August 2020, p 2(32–38)):

“The Court, of its own motion, directs, pursuant to s 5B of the Evidence (Audio and Audio-Visual Links) Act 1998 (NSW), that the Plaintiffs’ witness, Yin Teang Siew, also known as Charlotte Siew, shall give evidence by audio-visual link from a place within Australia, other than Court Room No 2 Hospital Road, Sydney.”

5. Having now concluded that part of the hearing, my view that the cross-examination could be undertaken fairly, in a forensically sound, thorough, and just, manner was confirmed. I am also satisfied that notwithstanding the circumstances, there was an effective cross-examination. No complaint was made about the manner in which the cross-examination was conducted.

6. The matter did not conclude within the three days and it was necessary to limit the oral submissions. However, directions were made to enable any further submissions, considered to be necessary, to be made in writing. Counsel provided the further written submissions, which were very detailed and which have been of assistance.

7. The proceedings focussed, significantly, on which, if any, of the Plaintiffs’ clients had become clients of the Defendants. In what is written below, I have referred to those clients by their initials, in order to preserve their privacy.

The Claims

8. The Plaintiffs commenced the proceedings by Statement of Claim filed on 17 December 2018. The Defendants did not file a Defence until 11 March 2019, and only after the Plaintiffs had applied for default judgment. There was no Cross-Claim filed, at any time, by either, or both, of the Defendants.

9. In the Statement of Claim, the Plaintiffs asserted that both of the Defendants, in the course of their employment, had access to confidential information created by, and belonging to, the Plaintiffs, and that they had wrongfully used that confidential information in circumstances where each ought to have appreciated that it was confidential.

10. In his written opening submissions, counsel for the Defendants pointed out that because there was no written contract of employment “it is difficult for the Court to ascertain critical issues such as which of the plaintiffs employed [Mr Ching], what the precise nature of his role was, the nature of the employment relationship, and what the terms of the relationship were”. He repeated that submission in respect of the second Defendant. However, as the case progressed, nothing else was said in support of this submission.

11. Neither party pleaded, or led any evidence, as to what terms of employment, if any, had been agreed. Indeed, the role played by each of the Defendants in the business of one, or both, of the Plaintiffs was completely undocumented, and remained somewhat opaque. It was not suggested, however, by any of the parties, that any post-employment restrictive covenants had been agreed.

12. However, as earlier referred to, as part of their case, the Plaintiffs relied upon the duties of employees implied into a contract of employment at common law and also under ss 182 to 183 of the Corporations Act. They also asserted that each of the Defendants owed to them, as employers, equitable duties of confidence, and fiduciary duties, which the Defendants had breached.

13. An allegation that former employees have stolen confidential information is of the “utmost seriousness” — as a matter of fairness, the identification of the alleged confidential information “must be in more than general terms”: Liberty Financial Pty Ltd v Scott (No 2) (2005) 11 VR 629 at 634 [13]; [2005] VSC 26 at [13] (Harper J). As will be read, on the evidence advanced by the Plaintiffs, it is clear that access to all of the Confidential Information, as defined, was not granted to either, or both, of the Defendants. It will be necessary to return to this aspect later in these reasons.

14. Thus, there is a requirement in this type of case, that the alleged confidential information be identified with precision: O’Brien v Komesaroff (1982) 150 CLR 310 at 326–328 (Mason J, Murphy, Aickin, Wilson and Brennan JJ agreeing); [1982] HCA 33; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443 (Gummow J, albeit in dissent in the result); [1987] FCA 266.

15. In the Statement of Claim, at par 10, the Plaintiffs identified the information that was defined the “Confidential Information” used for the purposes of providing advisory and consultancy services in education and migration, as:

“For the purpose of providing advisory and consultancy services in education and migration, the Plaintiffs collected, collated and owned the following confidential information:

a. Client lists: electronic records containing some or all of the following

information:

i. Name of the client;

ii. Phone number of the client;

iii. WeChat identifying number of the client;

iv. Offer letter from education provider;

v. Passport;

vi. Electronic confirmation of enrolment (eCOE);

vii. Academic transcripts and qualifications certificates/diplomas;

viii. Education Course application forms;

ix. Referral leads from client;

x. Visa records including:

- Visa Grant Notification to client;

- Visa expiry date;

- Overseas student health cover (OSHC) policy;

- family members details (including: Full name, Date of Birth and whereabout [sic]);

- previous education background;

- employment history;

- personal health declaration;

- Character declaration;

- travel history; and

- financial statements.

b. Client lists: physical records containing a hard copy of each set of records identified above at 10(a) for each client;

c. Outsourcing and Supplier lists: electronic records containing the following information:

i. Name;

ii. Contact details;

iii. Pricing and fees structure as negotiated; and

iv. Insurance details

d. Electronic precedents: electronic templates containing the following information:

i. Acknowledgement letters;

ii. Visa submission statements; and

iii. Course placement statements.”

16. The Plaintiffs also pleaded that their business relied heavily on client leads and referrals from previous clients. They asserted that the Confidential Information, including the referral leads from previous clients, was valuable information, which, if released, or accessed, outside their business, would permit competitors to anticipate, and understand, each client’s education and visa requirements, with the consequence that those competitors would be able to identify target clients and client leads, provide relevant contact details, and timing, for those competitors to undercut the Plaintiffs’ pricing structure. Presumably, it was this matter that made the client contact details important.

17. In par 19 of the Statement of Claim, the Plaintiffs asserted that they “provided access to the Confidential Information to each of the Defendants for the sole purpose of fulfilling their duties as employees”.

18. The Plaintiffs sought an order that the Defendants “return to the Plaintiffs all of the Plaintiffs’ Confidential Information remaining in their possession or control”; they sought an “injunction to restrain the Defendants and their servants or agents, from using the Plaintiffs’ Confidential Information for any purpose, and from contacting, or communicating, with the individuals named in the Confidential Information, or providing them with services”. They also sought an account of profits, damages, interest and costs.

19. In their Defence, the Defendants pleaded that they did not know, and could not admit, the collection, or retention, of the information asserted by the Plaintiffs to be confidential. They denied that the Confidential Information was not in the public domain, or otherwise unavailable outside the Plaintiffs’ business. They asserted that, on occasions, Danniel Bo Lin Lee, also known as Danniel Lee (Mr Lee), the sole director of one of the Plaintiffs would “request the Defendants to bring their cases home to work on”. They asserted that they had not been instructed “not to copy the required Confidential Information to complete the cases” and, in the case, of the second Defendant, that Mr Lee “knew the Second Defendant required the alleged Confidential Information to complete her task and impliedly authorised her to take the confidential information home to perform the task”. They also disputed the improper use of any confidential information.

20. (Again, it is clear that the reference to Confidential Information must have been to such parts of the Confidential Information, as defined, to which they had access.)

21. In their Defence, the Defendants also stated that they “admit paragraph 19 of the Claim and say that the Defendants do not know the login and password of the Google Drive”. They also pleaded that the Plaintiffs’ business relied upon, and obtained, “leads and [referrals] from the network of the agents or staff”.

22. Counsel for the Defendants also relied, in submissions, on an apparent concession made by counsel for the Plaintiffs at Tcpt, 27 August 2020, p 314(18–41):

“I’m asking you about the proof that the defendants had all of the confidential information that is asserted in paragraph 10 [of the Statement of Claim] … could you identify where in the evidence they have what is identified as confidential information in the pleadings. You have to establish your case in accordance with the pleadings. Could you try to help me with that information.

DINNEN: Your Honour, the plaintiffs cannot identify the confidential information stolen by the defendants.”

23. Counsel for the Plaintiffs, apparently by way of explanation, then added “[b]ecause the defendants have not disclosed that to the plaintiffs”. For reasons to which I shall return, the explanation is not an adequate one.

24. Although the Defendants did not file, or serve, any Cross-Claim, in their Defence, they made a claim for commission ($11,400), which was said to be due to one of them. It was asserted that “[i]f the First Defendant is found liable to pay any monies pursuant to the Plaintiffs’ claim (which is denied), then he says that he is entitled to a set-off in the sum of $11,400”.

25. Counsel for the Defendants placed reliance on the Civil Procedure Act 2005 (NSW), s 21(1), which permits a defendant, if there are mutual debts between a plaintiff and a defendant in any proceedings, by way of defence, to set off, against a plaintiff’s claim, any debt that is owed by the plaintiff to the defendant and that was due and payable at the time the defence of set-off was filed, whether or not the mutual debts are different in nature: Tcpt, 25 August 2020, p 28(48) – p 29(12).

26. Despite all of the other disputed issues of fact, it was common ground that each of the Defendants owed a duty of confidence to the Plaintiffs and that they were subject to implied obligations, as part of the employment contract with the Plaintiffs, to protect and maintain the confidentiality of the Plaintiffs’ confidential information, not to use that information other than in the legitimate exercise of their duties as employees of the Plaintiffs and to return all confidential information to the Plaintiffs on ceasing employment with the Plaintiffs.

27. It was also common ground that if the Plaintiffs had provided the Defendants with access to any confidential information, it was for the sole purpose of the Defendants carrying out their duties as employees of the Plaintiffs.

28. At this early stage, it should be noted that although counsel for the Plaintiffs stated in her opening that “these proceedings have been brought primarily to injunct the defendants from continuing to use, or benefit from, any of the confidential information that they obtained whilst employed by the plaintiffs” (Tcpt, 25 August 2020, p 40(43–47)), at no time prior to the hearing, had the Plaintiffs sought an interlocutory injunction in the terms sought in the Statement of Claim or otherwise. The final hearing occurred about three weeks before the two year anniversary of the Defendants leaving the employ of the Plaintiffs.

29. Nor had the Plaintiffs, at any time, sought an Anton Piller order, which is “an order which the Court makes in personam, against the defendant … directing the defendant to permit identified people to enter the defendant’s premises, and to carry out the activities of searching for, and retaining the items which are identified”: PMSI Group v Wilson [2003] NSWSC 263 at [7] (Campbell J); UCPR, r 25.19. (I accept that such an order is one which the Court makes only in exceptional circumstances because of its invasive nature.)

30. Nor had the Plaintiffs sought any order for discovery under r 21.2 of the UCPR or, as often happens in these types of case, an order permitting the computers, or any other electronic storage devices, including the mobile phones, belonging to, or used by, the Defendants, inspected, and copied, by a forensic expert, in order to ascertain whether any of the information said to be confidential to the Plaintiffs’ business, had been stored on any of them, under r 23.8 of the UCPR: Automotive Dealer Administration Services Pty Ltd v Kulik [2010] VSC 293; and by way of other example, Huang v Union Standard International Group Pty Ltd [2020] NSWSC 400. In order to avoid other information, said to be confidential to the Plaintiffs, being disclosed, the appointment of an expert for that purpose could have been sought: James v Faddoul [2006] NSWSC 1330 at [8] (Brereton J).

31. Nor had the Plaintiffs sought an order for expert evidence going to the inspection of their own Google drive for the forensic purpose of establishing the dates when, and the circumstances in which, the Defendants caused any information or electronic folders contained thereon to be copied.

32. To have done so may have provided the answer to the question posed concerning what information had truly been obtained from sources which the law would regard as confidential. Such expert evidence, also, may well have resulted in the ascertainment of facts which corroborated the case of one side or the other.

33. Nor had the Plaintiffs made any attempt made to demonstrate, in relation to any student, the courses undertaken by that student. There was no evidence of the duration of contact between that student and either Plaintiff. The frequency with which students would refer potential clients to either Plaintiff was also not the subject of any evidence. For example, there was no evidence that showed how many of the total students assisted by either Plaintiff in any given year were referred to the Plaintiffs by existing clients.

34. These are matters that the Court must consider in determining whether the Plaintiffs had established their case made against the Defendants and the nature of the discretionary relief, if any, that should be granted.

The Issues

35. At the Court’s request, the legal representatives of the parties provided the following agreed Statement of Issues:

1. Whether the Plaintiff’s ‘Confidential Information’ was/is confidential.

2. Whether the Defendants’ conduct amounts to:

3. Breach/es of confidence;

(2)   Breach/es of their fiduciary duties to the Plaintiffs;

(3)    …

1. Breach/es of Corporations Act 2001 civil obligations, specifically ss 181-183

2. If the Court does find any such breaches, whether and to what extent remedies sought are appropriate.”

   36. Whilst the Statement of Issues was agreed, there is a need to comment, briefly, on the issues in the proceedings.

   37. First, the Statement of Issues referred to s 181 of the Corporations Act, and asked whether it had been breached. In spite of that issue being “agreed”, it is not one that is open on the facts. The Plaintiffs’ claim is described in the introduction to the Statement of Claim as one in “Equity, Fiduciary Duties, ss 180–183 of the Corporations Act 2001 (Cth)” (adding, as well, s 180). The duty to exercise powers and discharge duties in good faith and for a proper purpose, as contained in s 181, applies only to “[a] director or other officer of a corporation”. (The same can be said of the duty of care and diligence expressed in s 180.)

   38. It was not, and could not be, suggested on the evidence, that either of the Defendants was a “director or other officer” of one, or both, of the Plaintiffs. Relevantly, neither was a person (i) who made, or participated in making, decisions that affected the whole, or a substantial part, of the business of the Plaintiffs; or (ii) who had the capacity to affect significantly the Plaintiffs’ financial standing; or (iii) in accordance with whose instructions or wishes the directors of the corporation were accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation): Corporations Act, s 9 (definition of “officer”).

   39. Perhaps, counsel for the Plaintiffs appreciated the problem, as in her written submissions she only pressed for declarations of contravention of ss 182(1) and 183(1). In the circumstances, it is only necessary to address whether ss 182–183 of the Corporations Act were contravened. (Section 185 of the Corporations Act provides that ss 180–184 have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office (or employment) in relation to a corporation and those sections do not prevent civil proceedings being commenced for breach of such a duty or liability.)

   40. Second, in respect of the last paragraph of the Statement of Issues, by way of example, the Plaintiffs would need to establish a causal relationship between the damages, or equitable compensation, sought, and the Defendants’ alleged breach of their contractual or equitable duties: J D Heydon, Heydon on Contract (2019, Lawbook Co) at 937 [26.140].

   41. The Plaintiffs would also need to establish that, but for the alleged breaches, the Plaintiffs would have earned profits from the persons referred to: J & E Vella Pty Ltd v Hobson [2020] NSWCA 188 at [40] (The Court). There was scant evidence of these matters, including evidence going to the damages said to have been suffered. The evidence that was led was only referable to the payments made by the 17 persons said to be clients of the Plaintiffs (to whom I shall return later). Otherwise, it is difficult to glean what damage, if any, the Plaintiffs suffered.

   42. There was an additional issue, not agreed by the Defendants beyond what was pleaded in the Statement of Claim at par [18(b)], which was:

“Whether the Defendants’ conduct amounts to breach/es of [an] implied contract.”

43. The implied contract referred to was, in the case of each Defendant, his, or her, employment contract with one, or both, of the Plaintiffs. The Defendants admitted that they were subject to implied obligations as part of those contracts. However, they contended that those obligations were restricted to those implied by law.

44. Finally, although not specifically identified as an issue, the question of the set-off, raised by the Defendants, to which reference has earlier been made, also needs to be considered.

The Factual Framework

45. With that somewhat lengthy introduction, I turn to the facts of the case that I am satisfied have been established.

46. Broadly speaking, I was satisfied that part of the account that each of the witnesses gave in relation to his, or her, actions, and the events that had occurred, was accurate and credible. However, there were other parts of the evidence which, in my view, clearly demonstrated that the Court was not told the whole, or even most, of the story and that other parts thereof were simply not plausible.

47. I shall deal, first, with the following facts as established, either by admissions in the pleadings, by evidence not the subject of dispute, or by evidence that I accept as truthful. Only some parts of the mosaic of facts can be stated under that umbrella.

48. The Plaintiffs, Plus One International Pty Ltd (to which I shall refer as POI) and Plus One Migration Pty Ltd (to which I shall refer as POM), or together, as the Plaintiffs, were jointly engaged in the provision of advisory and consultancy services in education and migration, principally to international students. POI traded as “Plus One Advisory” and “Plus One Education”.

49. Each of the Plaintiffs is a corporation registered in New South Wales. Their business was conducted from premises situated at Sussex Street, in the central business district of Sydney.

50. POI was registered in New South Wales in November 2014. It is an Australian proprietary company limited by shares. It has 100 issued ordinary shares with a share capital of $1,000, which shares are beneficially owned by Yin Teang Siew, also known as Charlotte Siew (Ms Siew).

51. POM was registered in New South Wales in September 2016. It is an Australian proprietary company limited by shares. It has 100 issued ordinary shares with a share capital of $100, which shares are beneficially owned by Mr Lee. Mr Lee was the Director of Operations and the Manager of the Plaintiffs’ business.

52. At all relevant times, the sole director of POM was Mr Lee. At all relevant times, the director of POI was Ms Siew. Ms Siew described herself as the Director of Operations of POI.

53. Although not specifically disclosed in the evidence, the Court was informed from the Bar table, without objection, that “[Mr Lee and Ms Siew] are husband and wife; they’re business partners”: Tcpt, 25 August 2020, p 42(35–36). Each gave evidence and was cross-examined. As stated, it was Ms Siew who gave her oral evidence by audio-visual means.

54. In November 2016, the first Defendant, Yiu Tung Ching (Mr Ching), also known as “Paris”, began working for one, or both, of the Plaintiffs. Mr Lee and Mr Ching both stated that POI employed him: Affidavit, Danniel Bo Lin Lee, 19 August 2019 at par 4; Affidavit, (Paris) Yiu Tung Ching, 17 October 2019 at par 7.

55. Whilst there is a dispute about the scope of the role, and the duties, of Mr Ching, because of the absence of a written contract of employment, and because he only admitted being employed as a marketing officer, it appears that his duties included those of an education counsellor and marketing officer. He would prepare and collate clients’ student applications for college, clients’ visa applications, students’ insurance applications; would promote and market the Plaintiffs’ business to its target audience; and would train new staff.

56. In about April 2017, the second Defendant, Jieyi Lu (Ms Lu), also known as “Joy”, who is Mr Ching’s partner, also began working for one, or both, of the Plaintiffs. Whilst there is a dispute about her role in the business, the Defence asserting that she had no official title and job scope, there is no dispute that it included, at least, preparing and collating client’s student applications for colleges, and making visa, and student insurance applications.

57. It appears that, for at least some time, Mr Ching had received a fortnightly wage of $942.14: Tcpt, 26 August 2020, p 204(30–46). Whilst Ms Lu acknowledged that she received a fortnightly salary also, she was uncertain of the precise amount of her salary. There was some evidence that during 2018 her salary was typically $928 per fortnight: Tcpt, 26 August 2020, p 114(10–35).

58. Employees of the Plaintiffs, including Mr Ching, were also entitled to commission for referring prospective clients to the Plaintiffs. An employee was entitled to $300 for referring a client enrolling in a VET (Vocational Education Training) course and $600 for a client enrolling in a Bachelor degree or higher qualification. If, however, the prospective client had been referred to the employee by an existing client, then the employee was only entitled to $50. The remaining $250 was paid to the existing client who had facilitated the introduction.

59. As has been stated, there was no written contract of employment between the Plaintiffs, or either of them, and either, or both, of the Defendants. Mr Lee confirmed that neither of the Defendants had signed a written employment contract. In addition, neither of the Defendants had provided any written letter of resignation, when each of them left the employ of the Plaintiffs.

60. I am satisfied that, whatever was the role of each of the Defendants in the operation of the Plaintiffs’ business, neither was employed in a managerial, or strategic, role with either Plaintiff. However, each of the Defendants had some personal contact with the clients with whom he, or she, dealt as evidenced by the WeChat contact details to which reference will next be made. For the same reason, there was some element in the employee-student relationship which caused the relevant client to contact him, or her, to the exclusion of Mr Lee or Ms Siew.

61. Because it was referred to as an important aspect of the case, it is necessary to refer to what was described by counsel for the Defendants as the “WeChat App”. As I understand it, it is a software application and, predominantly, a Chinese social media platform, which enables instant text messaging, hold-to-talk voice messaging, broadcast (one-to-many) messaging, video calls and conferencing.

62. WeChat, if not the primary, was, at least, a frequent, means, of communication between the Plaintiffs’ employees and the clients. Other means of communication with clients included by telephone, email, or using WhatsApp (another communication app).

45. The Plaintiffs’ employees were not given a business mobile phone, or mobile phone number, referable only to the Plaintiffs’ business. An employee, including each of the Defendants, would use his, or her, personal mobile phone in the course of the work being done as an employee, and would communicate with clients of the Plaintiffs using the WeChat application on his, or her, personal mobile phone.

46. There was no evidence that one, or other, of the Plaintiffs paid for the mobile phone, or other, charges of each of the Defendants.

47. A client would contact an employee using the employee’s personal mobile phone number, or his, or her, personal WeChat ID. One consequence of this practice was that Mr Lee was not, automatically, privy to conversations that occurred between the Plaintiffs’ employees and the clients. Unless he was added to a “group chat”, or he himself started a group chat, clients would communicate with an employee directly: Tcpt, 25 August 2020, p 61(42–46). In this way, it may have been possible for one of the Defendants to form a personal relationship, or at least a rapport, with the client.

48. Mr Lee accepted, in cross-examination, that the Plaintiffs’ client list did not contain the WeChat contact details of clients. Those details remained with the employee who was dealing with that particular client. Unless the employee, including each of the Defendants, provided Mr Lee with the WeChat details, he (or anyone else employed by the Plaintiffs) would not be able to contact the client directly: Tcpt, 25 August 2020, p 61(48) – p 62(20), p 62(40) – p 63(09). Indeed, the only people who would know whether the WeChat contacts on the mobile phone of each of the Defendants were clients, potential clients, or personal associates of either of the Plaintiffs, would be likely to be the Defendants: Tcpt, 25 August 2020, p 64(44) – p 65(01).

49. It would also seem that the number of WeChat contacts possessed by each employee would vary. As will be read below, Mr Ching possessed a large number, about 361, WeChat contacts of the Plaintiffs’ clients. Ms Lu denied that it was her usual practice to add contacts of the Plaintiffs’ clients to her WeChat contacts on her mobile phone. She would only do so when Mr Lee asked her to, which was said to be on about ten occasions: Tcpt, 26 August 2020, p 122(11–19).

50. The Plaintiffs retained files and records relevant to their business in both hard, and soft, copy. Any physical copies of files and documents were kept, securely, at the Plaintiffs’ business premises. Electronic copies of files and documents were, by and large, stored in the Plaintiffs’ Google Drive. (As I understand it, Google Drive is a file storage and synchronization service that enables a user to store files (data) on its servers, synchronize files across devices, and share files.)

51. The Plaintiffs kept two separate Google Drives, or as stated in the written submissions, kept two separate sections of one Google Drive. The first, the subject of these proceedings, was described as the “student” or “client” Google Drive. This was the Drive containing the details of clients and related documents.

52. Mr Lee outlined that this section contained the following information on it, namely, a processing folder that contained all of the clients’ private information, and clients’ visa information; an institutional information folder containing marketing materials from educational institutions, application forms, and some information regarding pricing; and miscellaneous folders that contained company templates such as acknowledgement templates, and a template on how employees should issue a reply in certain circumstances: Tcpt, 25 August 2020, p 78(03–18).

53. The other Google Drive, or section of the Google Drive, stored, amongst other things, information relating to the finances of the Plaintiffs. It also included, for example, the contracts that had been entered into between one, other, or both, of the Plaintiffs and the educational institutions with which each did business. Mr Lee made it clear that no other person, apart from Ms Siew, had access to that Drive.

54. Each Google Drive, or section thereof, was password protected. Only Mr Lee and Ms Siew possessed the password for both sections. There was evidence of one occasion when another employee of the Plaintiffs possessed a temporary password for 24 hours in order to set up some new computers: Affidavit, Arniawan, 19 August 2019 at pars 5–6. However, it was not suggested that either of the Defendants had possession of either password, at any time.

55. The Plaintiffs’ employees, including each of the Defendants, required access to clients’ files and documents in order to complete various tasks. To facilitate this access, Mr Lee and Ms Siew would share, with the employees, certain folders in the “student” or “client” section of the Google Drive. Access to these shared folders was only possible on the computers located at the Plaintiffs’ business premises, as those were the only ones on which the password for access was pre-set.

56. There was, initially, some dispute about whether, and to what extent, the Defendants were permitted, or instructed, to take work (including the client or student files from the Google Drive) home with them. Ultimately, Mr Lee accepted, in cross-examination, that employees did perform some work from home, although these occasions were “rare”. On such occasions, the employees were provided with the information they needed either on an external drive (such as a USB), in an email, or as a hard copy. His evidence was that he would trust his employees to return the information they had taken: Tcpt, 25 August 2020, p 78(26) – p 79(13).

57. Nothing much turns on the regularity of the work performed at home, or the manner in which information needed was obtained, as there was no dispute that any access to files, and to documents, provided to each of the Defendants was for the sole purpose of allowing him, and her, to fulfil his, and her, duties as an employee.

58. On 16 May 2018,  Mr Ching registered in New South Wales a business under the entity name “Ching, Yiu Tung” as an “Individual/Sole Trader” and received an official Australian Business Number (ABN). On 20 May 2018, Ms Lu registered the business name “JP International Consultancy” with ASIC as associated with that ABN.

59. On 24 May 2018, Mr Ching opened a bank account (ending 9252) with the Commonwealth Bank of Australia, which was held in his name trading as JP International Consultancy: Exs P1/20; P2/8.

60. On 17 July 2018, the Defendants opened another two accounts, in Mr Ching’s name, trading as JP International Consultancy (ending 1104 and 1083): Ex P2/2, 5. There was some evidence that the account ending 1083 was the trust account of the business: Tcpt, 26 August 2020, p 109(07–22).

61. Between late July 2018 and 13 September 2018, the Defendants (through JP International Consultancy) began to enter into agreements with educational institutions. It appears that these agreements allowed the Defendants to act as agents for the institutions when dealing with current, or prospective, students. The following agreements were entered into:

1. Sunshine Coast International College on 23 July 2018 (Exs P4/4–5; P12; Tcpt, 26 August 2020, p 138(40) – p 139(21));

2. Australian Vocational Training Institute on 3 August 2018 (Ex P9/6–7);

3. Training Masters on 4 September 2018 (Ex P8/4–5); and

4. Australian Ideal College on 13 September 2018 (Ex P5/3–4).

80. At least by 19 July 2018, the Defendants had set up a dedicated accounts email address for JP International Consultancy: Ex P12/23–24. (I observe that the document is dated 19 July 2017. Ms Lu was unable to recall if this was an error: Tcpt, 26 August 2020, p 142(22–26). However, I infer from the surrounding circumstances, that the year meant to be recorded was 2018.)

81. On 21 July 2018, the Defendants provided JP International Consultancy’s bank account details to Sunshine Coast International College: Ex P12/13; Tcpt, 26 August 2020, p 139(23–25).

82. In July 2018, the Defendants saw an advertisement for a lease on office space on Sussex Street in Sydney. Ms Lu gave evidence that she was attracted to the space due its location and the “very cheap” rent. Notably, the space was within a city block of the Plaintiffs’ business premises.

83. Ms Lu prepared a Commercial Tenancy Application for the premises. On that application, which was undated, Ms Lu listed the company name as “JP International Consultancy” and the type of business as “Education & Migration Consultancy”: Ex P10/4. (In cross-examination, on this topic, Ms Lu’s evidence was equivocal and contradictory. She went back and forth between accepting that the form was correct and denying its accuracy: Tcpt, 26 August 2020, p 136(44) – p 138(20).)

84. On 26 July 2018, Mr Ching, as principal of JP International Consultancy, entered into a license agreement for the occupation of that office space (although the agreement was witnessed on 27 July): Ex P10. The keys for premises were collected by Mr Ching on 1 August 2018: Ex P10/5.

85. In late July 2018, the Defendants began paying incidental expenses for JP International Consultancy’s offices, including for an internet connection: Ex P1/22; Tcpt, 26 August 2020, p 226(26–28). The Defendants paid the first rental payment ($4,546.34) on 27 July 2018: Tcpt, 26 August 2020, p 226(16–24); Ex P2/15.

86. Mr Ching accepted that, by 27 July, he and Ms Lu had set up JP International Consultancy and that it operated as an education consultancy: Tcpt, 26 August 2020, p 227(17–50).

87. By 2 August 2018, the Defendants had set up a dedicated administrative email address for their business: Ex P9/8.

88. On 4 August 2018, the Defendants began paying for a subscription with Google: Ex P1/22. Mr Ching was unable to recall whether this was for Google Drive storage, for email, or for some other Google product: Tcpt, 26 August 2020, p 226(30) – p 227(15).

89. On 8 August 2020, the Defendants physically entered occupation of the premises.

90. On about 20 August 2018, a conversation occurred between Mr Lee and Mr Ching. The precise terms of the conversation were in dispute. However, it was accepted by each that Mr Ching communicated his intention to Mr Lee to resign from the Plaintiffs’ business, so it was said, having received an offer of employment from a factory in China.

91. (It is clear that the reason given to Mr Lee by Mr Ching was no more than a subterfuge. There is no evidence of any such offer in fact having been made.)

92. By 3 September 2018, JP International Consultancy had a landline telephone number, for the property rented.

93. There was some dispute about when, precisely, the Defendants began contacting prospective clients and when they began providing education consulting services to them. The Plaintiffs tendered a Training Masters’ International Student Enrolment Form for WX dated 31 August 2018: Ex P8/3–3B. Nothing on the form itself indicates that it was completed by one, or both, of the Defendants. Further, as identified above, the Defendants only entered into an agent agreement with Training Masters on 4 September 2018. However, it seems likely that one or both of the Defendants prepared the application form dated 31 August 2018 as there is a payment made by a student, WX, into JP International Consultancy’s bank account (ending 1083) dated 17 September 2018: Ex P2/14. There does not appear to be any explanation for the payment having been made on 17 September 2018 other than that it was for services rendered at, or prior to, that date.

94. Also on 3 September 2018, JP International Consultancy received a payment from AHM (the private health insurance provider): Ex P1/23. It was accepted, in cross-examination, that this payment was a referral fee for obtaining students’ international health insurance: Tcpt, 26 August 2020, p 225(18–34).

95. Mr Ching accepted that he was applying for health insurance for international students on behalf of JP International Consultancy whilst he was employed by the Plaintiffs.

96. In August, or early September, 2018, the Defendants began receiving payments from at least one student for enrolment fees: Ex P1/58; Ex P2/15. An “Application Form for Enrolment” for JZ, a student, for Australian Ideal College, signed by JZ, on 3 September 2018, bears a stamp for JP International Consultancy containing its ABN, the Sussex Street address and landline telephone number. (It is unclear, but may be inferred, that the stamp was placed on the document on 3 September 2018: Ex P5/7.)

97. An ASIC Current Extract dated 8 October 2018 showed that the address for service of JP International Consultancy was an address in Sussex Street, Sydney. Ms Lu accepted that, by then, the Defendants had met with clients, or prospective clients, in the offices of JP International Consultancy. She also accepted that the Defendants had started making applications to educational institutions and health insurance providers on behalf of students by then: Tcpt, 26 August 2020, p 178(42) – p 179(15).

98. The employment of both Defendants ceased on about 13 September 2018. It was common ground that the Defendants met with Mr Lee and Ms Siew, at a bar, after work. Again, the precise terms of the conversation that occurred were in dispute. The Defendants told Mr Lee and Ms Siew that they wished to resign in order to commence the JP International Consultancy business, which, they admitted, had already been registered. The Defendants also stated that they had rented premises across the road from the Plaintiffs’ premises.

99. On Mr Ching’s account of the conversation, Mr Lee voiced no opposition to the Defendants starting their own business. Indeed, Mr Lee said that they could co-operate in the future. Ms Lu gave similar evidence of the conversation. Both maintained their version of events in cross-examination: Tcpt, 26 August 2020, p 180(04–25), p 233(41) – p 234(16).

100. Neither Mr Lee nor Ms Siew gave evidence of that part of the conversation having occurred, and neither was cross-examined on the topic.

101. The resignation of each Defendant became effective on 14 September 2018.

102. Despite Mr Ching’s protestations to the contrary, there can be little dispute that the business commenced by the Defendants was the same type of business as that being conducted by Plaintiffs: Tcpt, 26 August 2020, p 228(13) – p 231(46). Both businesses involved dealing with overseas students, predominantly, if not only, from China; and both required communication with, and referral to, the same, or similar, educational institutions to obtain student visas for their clients.

103. I am satisfied, following the cross-examination of each of the Defendants, and otherwise, that the Defendants, or one of them, had copied, or retained, what were described as “WeChat Personal Contact” details prior to ceasing employment with the Plaintiffs. In addition, Mr Ching admitted that he had retained some of the files on his personal laptop at home and did not tell Mr Lee that he done so. This included Plus One files which were then used by JP International Consultancy: Tcpt, 26 August 2020, p 235(10–14), p 238(38–46). He also admitted that whilst he had returned the hard copy files, he had retained the electronic files: Tcpt, 26 August 2020, p 235(26) – p 236(20). He did not tell Mr Lee that he had done so.

104. Ms Lu also admitted that she did not delete any of her WeChat contacts: Tcpt, 26 August 2020, p 182(18–22), p 183(04–05).

105. On 15 September 2018, Mr Ching visited the Plaintiffs’ office. There he met Mr Lee and he passed back to Mr Lee, at least some WeChat contacts of the Plaintiffs’ clients. Messages between Mr Ching and Mr Lee on this date show that some 81 contacts were passed back. Nine of those appear to be duplicates of other contacts. It follows that Mr Ching identified, and passed back, 72 contacts to the Plaintiffs.

106. It is clear from a comparison with Ex P11 (a confidential exhibit containing the Plaintiffs’ client list), that each of those 72 contacts was a client of the Plaintiffs.

107. Whilst Mr Ching identified, and passed back those contact details, he did not delete the contact details from his WeChat account. However, there was a dispute about whether Mr Lee had, in fact, requested that he do so.

108. In the days following that exchange, Mr Lee became increasingly concerned that Mr Ching had not handed back all of the Plaintiffs’ clients’ information: Affidavit, Danniel Bo Lin Lee, 19 August 2019 at pars 26–29. Consequently, he arranged another meeting at the Plaintiffs’ offices.

109. On 26 September 2018, Mr Lee, Mr Ching and Ms Lu met at the Plaintiffs’ offices. The precise scope and content of the meeting, and what was said thereat, remained in dispute at the hearing. In substance, however, Mr Lee drew attention to six clients, or potential clients, of the Plaintiffs, who he suspected had been approached by the Defendants. Mr Lee demanded that the Defendants send a message to all of the Plaintiffs’ former clients, the identity of whom was known to the Defendants, informing each that Mr Ching and Ms Lu were no longer employed by the Plaintiffs.

110. Mr Ching then drafted, and sent a message, in the Chinese language, to 414 of his WeChat contacts. A translated version of that message, in the following form, was annexed to Mr Ching’s affidavit:

“Hello, I am Paris. I have resigned myself from Plus One Advisory. I am no longer in the employ of that company. I do not have any relationship with Plus One. Now, Joy and I myself have opened a company. Its name is [JP] International Consultancy. If there’s anything, feel free to continue to come and see me. However, the cases will be deal with by JP International Consultancy. Thank you all for your understanding.”

111. In the afternoon of the same day, Mr Lee and Mr Ching had a further conversation by telephone. Following the conversation, Mr Ching sent the WeChat contacts for two referred clients, KCT and MZ, to Mr Lee.

112. Later in the evening of the same day, the Defendants returned to the Plaintiffs’ offices. Mr Ching sent Mr Lee a copy of the message that had been sent to the WeChat contacts and a list of the contacts to whom the message had been sent. That list of contacts formed annexure “K” to Mr Lee’s affidavit affirmed 19 August 2019 (whilst a version, with the names in alphabetical order, later became Ex P17).

113. Mr Ching accepted that each of the names in Annexure “K” represented contacts that he had obtained during his employment with the Plaintiffs: Tcpt, 27 August 2020, p 280(39) – p 281(08), 287(25–26). Yet, despite his acceptance of that assertion, an actual examination of Ex P17 reveals that the message was sent to 412 contacts, of which only about 361 appear to be clients of the Plaintiffs (as shown in Ex P11, the Plaintiffs’ confidential client list).

114. Having received a copy of the message and the list of recipients. Mr Lee also asked for the WeChat contacts and associated documents of two further persons being XEF and KTL. It was unclear who these two persons were. They were not shown as clients of the Plaintiffs (as they did not appear in Ex P11). Nonetheless, Mr Ching provided the contacts and documents to Mr Lee.

115. Thereafter, the dispute between the parties seemed to escalate. Mr Lee became increasingly concerned about the Defendants having retained the Plaintiffs’ clients. Another meeting was arranged for 28 September 2018, this time at the offices of JP International Consultancy. Once again, the precise conversations that occurred were in dispute.

116. Mr Lee demanded that both Defendants return all WeChat contacts of the Plaintiffs’ clients and added that it was their “last chance” to do so. He made a further demand, on this occasion, that the Defendants delete the contacts from their personal WeChat accounts and demanded that the Defendants show him JP International Consultancy’s business emails and bank transactions.

117. A private conversation then occurred between Mr Lee and Mr Ching away from the others. Each gave conflicting accounts of what was said. Mr Lee gave evidence that Mr Ching pleaded with him to allow the Defendants to keep all of the WeChat contacts. Mr Lee refused this request. Conversely, on Mr Ching’s account, Mr Lee had agreed to Mr Ching keeping his “friends’ contact details and the contact details of the students in [his] List”. Mr Ching maintained his version of the conversation in cross-examination: Tcpt, 27 August 2020, p 286(26–28).

111. Mr Lee and Ms Siew returned to JP International Consultancy’s offices that afternoon. At that time, Mr Ching acceded to Mr Lee’s demand to see the business’ emails. Photographs appear to show Mr Lee looking at a computer screen (which was JP International Consultancy’s business computer): Ex D3. Regrettably, none of those photographs were shown to Mr Lee during cross-examination.

112. The basis of the tender, so it was said by counsel for the Defendants at Tcpt, 27 August 2020, p 292(13–14), was:

“It just simply shows that Danniel was at least taking an active role in the process.”

120. It is appropriate, at this point, to digress from the narrative, to mention a submission made by counsel for the Plaintiffs in her written closing submissions headed “Procedural fairness issues”.

121. Counsel for the Plaintiffs submitted that the tender of six exhibits (Exs D3–D8) over objection was:

“at the very least - a denial of procedural fairness because the introduction of these documents in re-examination of the First Defendant denied the Plaintiffs the opportunity to cross examine the witness on those documents. The Plaintiff was also unable, considering their introduction on the final day of the hearing in circumstances where there was limited time available, to obtain and file any evidence in reply. The Plaintiffs were unable to test the veracity of their origin or determine their context as they purported to consist of single screenshots of WeChat conversations which, in all probability, went beyond the single screenshot tendered.”

122. She added:

“This denial of procedural fairness is not curable by affording the Plaintiffs to ‘put a case in reply’, as suggested by the Court, in circumstances where such a case in reply would likely require subpoenas and further evidence. The Court should not have accepted the tender of Exhibits D3 – D8 over the Plaintiff’s objections in the circumstances. As it has done so, the Court should be wary of affording any weight to the evidence and submissions made by the Defendants in relation to these documents.”

123. To consider the submission made, it is necessary to say something about the relevant exhibits, which were not extensive.

124. Ex D4 was a screenshot of WeChat conversations between Mr Ching and LC in September 2016, that is to say, before Mr Ching commenced employment with the Plaintiffs, or one of them: Tcpt, 27 August 2020, p 298(01) – p 299(01). Similarly, Ex D6 was a screenshot of WeChat conversations between Mr Ching and WC in September 2016, that is to say, before Mr Ching commenced employment with the Plaintiffs, or one of them: Tcpt, 27 August 2020, p 299(45) – p 300(15).

125. Ex D5 was a screenshot of WeChat conversations dated 1 and 2 October 2018 between YHK and Mr Ching, the content of which suggests that YHK, who was a client of one, or both, of the Plaintiffs, followed the first Defendant to JP International Consultancy, not because of anything other than that he was unhappy with the service provided by the Plaintiffs: Tcpt, 27 August 2020, p 299(25–30).

126. Ex D7 was a screenshot of WeChat conversations occurring throughout October and November 2018 between JS and Mr Ching. The conversation shows JS adding Mr Ching as a friend on WeChat in October 2018, that is, after the termination of his employment with the Plaintiffs, or one of them. It then shows JS making an enquiry, in November 2018, about where Mr Ching now worked: Tcpt, 27 August 2020, p 300(17–31).

127. Ex D8 was a screenshot of WeChat conversations dated 10 and 11 October 2018 between YH and Mr Ching. The screenshot shows YH messaging Mr Ching on 10 October 2018, and Mr Ching replying, asking who YH was. YH then enquired of Mr Ching how much he charged for his services: Tcpt, 27 August 2020, p 302(45) – p 303(04).

128. At the time Mr Ching identified the three photographs that formed Ex D3, Ms Dinnen objected to the tender saying:

“DINNEN: Objection, your Honour. He seems to be leading some evidence-in-chief here that doesn’t actually arise from the cross-examination.

HIS HONOUR: I’m sorry, I thought it did arise. You were at pains to say that certain things hadn’t been done, I assume this is going to show that they had been done.

DINNEN: I said that, the evidence was that some records were dealt with, not all. This evidence doesn’t go anywhere, it can’t go anywhere to show that all of the records were examined.”

129. No submission had been made, at the time of the objection, that “a case in reply would likely require subpoenas”.

130. Whilst it is true that the exhibits were admitted over counsel’s objection, she had objected to the tender, for the most part, upon the basis that she had not been given an opportunity to cross-examine either of the Defendants on any of those documents, and that she had not previously seen those documents.

131. Whilst it was not suggested that the documents the subject of tender had been provided to the legal representatives of the Plaintiffs prior to the hearing, (in accordance with UCPR r 31.10(1)), in relation to each of Ex D4 and Ex D6, it is highly unlikely that either Mr Lee, or Ms Siew, would have been able to give evidence about the assertion that the two persons had been friends of Mr Ching prior to the commencement of his employment with one, or both, of the Plaintiffs.

132. In relation to Exs D3, D5, D7 and D8, and implicitly in relation to Exs D4 and D6, counsel was given the opportunity to present a case in reply. In this way, Mr Lee would have had the opportunity to squarely confront the proposition that the photographs depicted what was suggested by Mr Ching, and to respond to the contents of the WeChat conversations (if he was able to).

133. As importantly, initially, counsel sought leave to recall Mr Lee in reply (which, had it been done, presumably, would have avoided the part of the complaint that further evidence was required). Mr Lee was not, at the time that the issue arose, present in Court, and was at his home in Miranda. It was suggested that the documents tendered could be photographed and sent to him “within two minutes via email or via messenger”: Tcpt, 27 August 2020, p 304(01–41). Therefore, it was suggested that Mr Lee could be recalled at 2:00 p.m., and that, in the meantime, counsel could begin her submissions.

134. It was then ascertained that Mr Lee had some family commitments that made it difficult for him to leave his home to return to Court. It was then suggested, and I agreed, that his evidence in reply could be given by way of Microsoft Teams. Over the luncheon adjournment, my Associate, at my request, sent a Microsoft Teams invitation to the relevant persons to enable the evidence to be given.

135. About 20 minutes later, the Court received an email from the solicitors for the Plaintiffs in the following terms:

“Dear Associate,

We are instructed that the Plaintiff does not need to put on any evidence in reply.” (emphasis in original)

136. I also remember the purpose of the tender of the Exhibits, namely to show “that Danniel was, at least, taking an active role in the process”. Overall, I do not think that there was any real dispute that he and Ms Siew were (as will be demonstrated by what follows when returning to the narrative). Accordingly, the Court effectively excused the Defendants from complying with the provisions of UCPR r 31.10(1).

137. Consequently, the case proceeded, after the long adjournment, with the submissions made by Ms Dinnen and Mr Hopkins.

138. Where a plaintiff has been taken by surprise by matters arising out of a defendant’s case, there may be a proper occasion for a case in reply: see Bigsby v Dickinson (1876) 4 Ch D 24 at 26–28 (James LJ). The evidence in reply is given to answer any evidence that may have been called by that party’s opponents. Evidence in reply, normally, must be confined to rebutting the other party’s case rather than merely confirming the evidence of a party.

139. The principles governing what evidence may be called in reply are well understood and are set out in J D Heydon, Cross on Evidence (2020, LexisNexis) at [17720]. See also, in the context of civil penalty proceedings, ASIC v Rich (2006) 235 ALR 587 at 593 [18]; [2006] NSWSC 826 at [18] (Austin J).

140. The judicial obligation relating to procedural fairness is concerned with a reasonable opportunity to present, or meet, a case. It is essentially practical. The concern of the law is to avoid practical injustice. As was written in Stokes v Ragless [2019] SASCFC 31 at [18] (Lovell J, Blue and Parker JJ agreeing):

“Fairness is not an abstract concept and the concern of the law is to avoid a practical injustice. It must be remembered that procedural fairness requires only that a party be given ‘a reasonable opportunity to present his case’ and not that a tribunal ensure ‘that a party takes the best advantage of the opportunity to which he is entitled’. A relevant enquiry is whether a party or his legal representative should reasonably have apprehended that the issue was or might become a live issue.”

141. Counsel for the Plaintiffs was given a reasonable opportunity to lead evidence to meet this aspect of the Defendants’ case, and to have Mr Lee give evidence in reply. Indeed, arrangements were made to facilitate that opportunity. It was not suggested, when it was given, that the opportunity could not, or would not, be availed of. Then, no explanation was given for not taking up the opportunity and the Plaintiffs were not deprived of anything.

142. Ordinarily, there can be no denial of procedural fairness where a deliberate forensic decision is made to not call evidence in reply when given an opportunity to do so. The adversarial system of justice involves making forensic decisions. In this case, such a decision appears to have been made by the legal representatives of the Plaintiffs.

143. The Court does not know whether any evidence, given on behalf of the Plaintiffs, would possibly have made any difference. It can only infer, since counsel chose not to call the evidence in reply, that it would not have. There was no procedural unfairness.

144. In any event, I shall address the complaint made, by reminding myself that Mr Lee, during cross-examination, did not have the opportunity to respond to the Exhibits because he had not been shown them. In that way, if there is any unfairness, it can be mitigated to the point of extinction.

145. Returning then, to the narrative, in addition to examining the business’ emails, Mr Lee and Ms Siew repeated their demand that the Defendants delete the WeChat contacts. Interestingly, their demand appeared to narrow from what it had been previously. Where it had previously been to delete the WeChat contacts of all of the Plaintiffs’ clients, Mr Lee’s demand, made that afternoon, was in the following terms:

“Me: This is the list of students that was handled by you and Joy. You must delete their contacts and pass the contacts back to me.”

146. Whether or not that narrowing was intentional, it was, on the Plaintiffs’ evidence, what was communicated to the Defendants.

147. Mr Ching disputed Mr Lee’s account of what had occurred. Mr Ching maintained that Mr Lee had accepted that the Defendants were able to retain the WeChat contacts of their personal friends and the clients with whom they had dealt whilst employed by the Plaintiffs: Affidavit, (Paris) Yiu Tung Ching, 17 October 2019 at par 57.

148. Irrespective of what was said, there was no dispute that Mr Ching then deleted some of his WeChat contacts. Mr Lee was unable to recall whether he saw the Defendants delete all of the contacts: Tcpt, 25 August 2020, p 79(50) – p 80(49). Mr Ching stated that he had deleted the WeChat contact for each of the 414 contacts to whom he had sent his message, although he accepted that he had provided no proof of his having done so: Tcpt, 27 August 2020, p 288(42–50). It was unclear how many of the contacts he deleted.

149. Ms Lu accepted that she did not delete any WeChat contacts of the Plaintiffs’ clients after leaving their employ: Tcpt, 26 August 2020, p 187(25–39). She considered that Mr Lee’s demands for deletion were only addressed to Mr Ching. However, it was put to her, in light of her view of events (Tcpt, 26 August 2020, p 182(47–48)):

“Q. So you think you were entitled to keep your WeChat contacts?

A. Not true.”

150. As has been stated, it was unclear how many WeChat contacts Ms Lu possessed. It had only been established that she had entered contacts into her personal mobile phone, at Mr Lee’s request, on ten occasions: Tcpt, 26 August 2020, p 122(11–19).

151. Returning to the events of 28 September 2018, Mr Lee also obtained a copy of some, but not all, of the documents on Mr Ching’s computer which had been copied onto an external hard drive: Tcpt, 26 August 2020, p 189(24–47). There was some confusion about whether it was Mr Ching or Mr Lee who copied the documents onto the external hard drive. Ultimately, it matters little who copied the documents.

152. More important, is the information that was copied. Upon examining the external hard drive, Mr Lee realised that some of the documents in the Defendants’ possession had been taken from the Plaintiffs’ client Google Drive: Affidavit, Danniel Bo Lin Lee, 19 August 2019 at pars 54–55.

153. In his affidavit, Mr Lee annexed (Annexure “Q”) a copy of a screenshot showing files said to have been found in the Plaintiffs’ client folder for CCK. It was Mr Lee’s evidence that some of the files that were copied onto the external hard drive were identical to the documents found in that client folder.

154. Other than Annexure “Q”, which Mr Lee asserted was taken from it, there was no evidence of what the external hard drive otherwise contained. Surprisingly, the Plaintiffs did not tender an index of the documents contained on the external hard drive, or otherwise provide evidence of details of its contents. Nor did they tender any expert evidence that analysed the external hard drive for the purpose of determining its contents.

155. Consequently, it remained unclear the extent to which the Defendants had copied documents from the client Google Drive.

156. Nevertheless, the concern led to a further meeting at JP International Consultancy’s offices on 1 October 2018. Mr Lee, Ms Siew, Mr Ching and Ms Lu were all in attendance at this meeting.

157. There are slight differences in the accounts of the Plaintiffs’ witnesses and the Defendants. Those differences aside, the Defendants admitted, on that occasion, to Mr Lee, to having copied certain documents from the client Google Drive: see also, Tcpt, 27 August 2020, p 289(01–24). That evidence is consistent with the admission contained in the pleadings.

158. Mr Ching’s position was that the copying of documents was limited to documents relating to clients with whom he, or Ms Lu, had dealt during their employment with the Plaintiffs. In cross-examination, Mr Ching explained that on the occasions he had worked from home, he would not return any of the files that he had taken with him. This, it seems, was his reason why the documents remained on his personal laptop.

159. Ms Lu’s account was in similar terms. Whilst accepting that she had not informed Mr Lee, at the time of her resignation, that she had copied files from the client section of the Google Drive, she stated that Mr Lee was aware that she had taken documents to work on from home: Tcpt, 26 August 2020, p 183(12) – p 184(16).

160. It was her evidence, therefore, that the “relevant files” that she copied were only those files that she had required when working from home: Tcpt, 26 August 2020, p 190(18) – p 191(14).

161. The issue in this aspect of the case was the lack of evidence of what documents, precisely, the Defendants had copied. Aside from one admission by Mr Ching that he had copied documents relating to KHT, he denied, otherwise, that he had selected clients to take with him to JP International Consultancy and that he had copied their files: Tcpt, 27 August 2020, p 263(47) – p 264(02), p 279(37) – p 280(31).

162. There was some additional confusion regarding the Plaintiffs’ client spreadsheet contained in the Google Drive. Mr Ching denied that he could have taken, or copied, the spreadsheet through any number of means including copying the spreadsheet to a USB drive; printing a hard copy; or capturing a screenshot of the spreadsheet when it was open on his computer. That denial notwithstanding, Mr Ching admitted that he possessed some of the information described by Mr Lee in par 11 of his affidavit affirmed 19 August 2019. The information described in par 11 is contained in the client spreadsheet.

163. The Defendants pleaded in the Defence, at par 23, that, following the meeting on 1 October 2018 and the demands of Mr Lee and Ms Siew, they returned any confidential information that they had and deleted any records from their computer. There was little evidence to support these assertions. Mr Ching gave some evidence in his affidavit of having returned the documents for two clients of the Plaintiffs: CYW and ECN. In cross-examination, Mr Ching asserted that he had deleted any information that he had on the computer in front of Mr Lee: Tcpt, 26 August 2020, p 238(14–32); Tcpt, 27 August 2020, p 289(19–47).

164. Nothing had been said by Mr Lee, in his affidavit, regarding those matters. The assertions were not put to him in cross-examination. However, he was cross-examined on his supervision of the deletion of the WeChat contacts: Tcpt, 25 August 2020, p 79(50) – p 81(05).

165. It is useful to refer, specifically, to his evidence.

“Q. And that information which you've described as student passports, student personal details, et cetera, that is not part of what one would expect to find on the WeChat contacts?

A. Yes, sometimes the students will send their passport or - visa details or visa copy through the WeChat conversation. That's the reason why I ask them to delete the WeChat contact from their own WeChat.

Q. You ask them to do that?

A. Yes.

Q. Were you present when it was actually done?

A. No, I didn't see them deleting some of the contacts. They claimed they had deleted. Your Honour, can I refer to - at the beginning they came to my office, they say they claim that they delete it, but I'm not remember that whether I present on 28 September in their office whether they delete that contract in front of me, I have to refer back to the details; but on the 15 they came to my office, they did not delete it in front of me.

…

Q. Mr Lee, so that I’m clear, you did supervise, or at least on your own evidence, some of the deletion, is that correct, you’re [sic] concern was that everything hadn’t been deleted?

A. Yeah, I guess - I need to refer, as I say, on the 28th of September I think we went to JP International and we agree some part of deletion and transfer back the - the data.

Q. You were present when there was - you at least saw to some deletion?

A. Yeah. This saw some deletions from that.

Q. And your concern is that there was still some other stuff that wasn't deleted?

A. Yes, because obviously they had been told, we had been told that they did it, but, and somehow we found out that they still in touch with certain, some of the, the clients. So I was shocked as well.”

166. On 2 October 2018, Mr Ching met with Mr Lee at the Plaintiffs’ offices to discuss the payment of referral fees. Mr Ching requested Mr Lee to pay what were said to be outstanding fees for clients that Mr Ching had referred to the Plaintiffs during his employment.

167. In the Defence, it was asserted that referral fees for 44 clients (amounting to $11,400) remained outstanding.

168. There was also evidence that Mr Ching had returned six clients to the Plaintiffs. This began with Ms Siew sending a WeChat message to Mr Ching on 2 October 2018. She asked that he send her all of the invoices JP International Consultancy had issued in relation to six students, being WX, KCT, CCK, THW, ECN and CYW.

169. Mr Ching sent Ms Siew five invoices (given that CYW had not provided him with any commission).

170. The next day, POI issued invoices to JP International Consultancy for the amount of commission received for those five clients. A further invoice was issued by POM directly to the sixth client, CYW. Those invoices were duly paid: Affidavit, (Paris) Yiu Tung Ching, 17 October 2019 at pars 75, 79.

579. Recently, in Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited (2018) 265 CLR 1; [2018] HCA 43, the High Court had occasion to consider the remedy of an account of profits. Gageler J, delivering a separate judgment, wrote at [75], relevantly to the present case:

“The equitable remedy of account is a personal order. The order operates to require that a defendant pay to a plaintiff the monetary value of a benefit or gain to the defendant. Although commonly referred to as an ‘account of profits’, there is no reason why a benefit or gain to be made the subject of an account must answer the description of a ‘profit’ in conventional accounting terms. Nor is there any reason why that benefit or gain must answer the description of ‘property’ or must have sufficient certainty as to be capable of forming the subject matter of a trust. The benefit or gain can be expectant or contingent. Indeed, it is commonplace that a benefit or gain the subject of an account might encompass an ongoing business. And it is commonplace that the benefit or gain to be made the subject of an order to account might extend to the whole of the ongoing business or be limited to a part of the business identified by reference to both a specified scope of commercial activities and a specified period of commercial activities which need not be confined to a past period but may be a period which extends into the future.”

580. In this case, as has been stated, the Plaintiffs seek an account of profits of the entirety of the Defendants’ business, including all future profits. True it is that an account of profits may include as yet unrealised profits: Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited at [24] (Kiefel CJ, Keane and Edelman JJ).

581. In Vasco Investment Managers Limited v Morgan Stanley Australia Limited, Vickery J noted, at [303]:

“Although an account of profits, like other equitable remedies, is said to be discretionary, it is granted or withheld according to settled principles. It may be inappropriate and inequitable to compel the defendant to account for the whole of the profit derived by its breach of equitable duty. Where a significant proportion of the profits have been generated by the defendant’s skill, efforts, property, resources and capital, it may be appropriate to allow the defendant a proportion of the profits, depending on the circumstances. Although a defendant’s liability to account is not governed by the doctrine of unjust enrichment, the liability of a defendant to account for profits should not be transformed into a vehicle for the unjust enrichment of the plaintiff. But it is for the defendant to establish that it would be inequitable to order an account of the entire profits.”

582. Black J, recently, had occasion to consider the remedy in Mudgee Dolomite & Lime Pty Ltd v Murdoch; In the matter of Mudgee Dolomite & Lime Pty Ltd [2020] NSWSC 1510. His Honour wrote at [170]–[173], albeit in relation to a claim for breach of fiduciary duty:

“Turning now to the claim for an account of profits, in Warman International Ltd v Dwyer above, in dealing with claims for breach of fiduciary duty arising from the appropriation of part of a company’s business, the High Court held that Warman was entitled to elect between an account of profits for a specified period and equitable compensation for loss. The Court there noted (at 560) that the scope of an account of profits depends on factors including the nature of the property, the relevant powers and obligations of the fiduciary and the relationship between the profit made and those powers and obligations; that (at 560-561) an account of profits of a business may be appropriate where they are acquired by the fiduciary within the scope of his or her fiduciary responsibilities, but it may be inappropriate to require a fiduciary to account for the whole of the profit over an indefinite period; the defendant bears the onus of establishing any claim that it is inequitable that it should be required to account for the entire profits; and (at 565) the extent of an account of profits will depend on what was acquired in consequence of the fiduciary’s breach of duty and the extent of the plaintiff’s loss may also be relevant. Importantly, an account of profits is available even if the principal has not suffered loss by reason of the breach of duty, because it would not have been in a position to take account of the opportunity: Regal (Hastings) Ltd v Gulliver above; Industrial Development Consultants Pty Ltd v Cooley [1972] 1 WLR 443.

Mr Bedrossian refers to the observations of Beech J in EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd (No 3) above at [434], that the plaintiff seeking an account of profits:

‘must show that the profit was derived by reason of the fiduciary’s position or his taking advantage of opportunity or knowledge derived from it;

liability to account does not depend upon the plaintiff having suffered any loss;

and it is generally irrelevant that the principal could not have earned the profit claimed from the fiduciary.’

In Gunasegaram v Blue Visions Management Pty Ltd [2018] NSWCA 179 at [267], the Court noted that the circumstances in which an account of profits may be available have been variously formulated as where the relevant profits were ‘attributable to the breach’ or ‘obtained by the infringement’ or where the benefit flowed in breach of the duty or by reason of the breach. In Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 360 ALR 1; (2018) 130 ACSR 359; [2018] HCA 43, the majority of the High Court held that a third party was liable for the full value of a business that it acquired in circumstances that amounted to knowing participation in two senior employees’ dishonest breach of fiduciary duty and not only for the profits derived from it over a limited period.

In Schmidt v AHRKalimpa Pty Ltd [2020] VSCA 193 at [185], [188]-[189], the Court of Appeal of the Supreme Court of Victoria in turn summarised the principles applicable in assessing compensation and allowing an account of profits as follows:

‘In accordance with the ‘cardinal principle’ of equity, ‘the remedy must be fashioned to fit the nature of the case and the particular facts’. As to the method of assessing equitable compensation, it has been said that this will vary according to the nature of the fiduciary obligation whose breach is to be redressed. Equitable compensation is often calculated by reference to the loss suffered by the innocent party. However, in some cases, it may be appropriate to compensate the claimant by reference to the profits earned or gain made by the person who committed the breach of fiduciary duty. …

In the context of an account of profits, it has been said that in determining the remedy for a breach of fiduciary duty, the claimant should not obtain a windfall or be unjustly enriched. Further, a breaching fiduciary may be able to establish that some profit or benefit is beyond the scope of liability for which he or she should account, such as where the profit or benefit has no reasonable connection to the wrongdoing. However, once a causal link to the profit or benefit claimed is established, the onus is on the errant fiduciary to show that he or she should not account for the full value of the profit or benefit …’”

Statutory Remedies

583. In the Statement of Claim, the Plaintiffs did not plead, or particularise, any statutory remedy under the Corporations Act.

584. In her written opening, counsel for the Plaintiffs sought a declaration of contravention pursuant to s 1317E of the Corporations Act, sub-s (1) of which is in the following terms:

“If a Court is satisfied that a person has contravened a civil penalty provision, the Court must make a declaration of contravention.”

585. However, by the operation of s 1317J, only ASIC has standing to apply for a declaration of contravention: Corporations Act, ss 1317J(1), 1317J(4).

586. It follows that the only order that the Plaintiffs have standing to seek, although not pleaded, or referred to in the written opening submissions, was a compensation order pursuant to s 1317H.

587. Section 1317H(1) is in the following terms:

A Court may order a person to compensate a corporation, registered scheme or notified foreign passport fund for damage suffered by the corporation, scheme or fund if:

(a) the person has contravened a corporation/scheme civil penalty provision in relation to the corporation, scheme or fund; and

(b) the damage resulted from the contravention.

The order must specify the amount of the compensation.

588. Section 1317H(2), relevantly, provides:

In determining the damage suffered by the corporation, scheme or fund for the purposes of making a compensation order, include profits made by any person resulting from the contravention or the offence.

589. As a preliminary matter, the Plaintiffs have standing to apply for a compensation order: Corporations Act, s 1317J(2). Further, both ss 182(1) and 183(1) are civil penalty provisions.

590. Section 1317H(1)(b) mandates that the damage must have “resulted from” the contravention. It is well established that the test of causation that those words require should not be equated with that required for equitable compensation. In Adler v Australian Securities and Investments Commission (2003) 179 FLR 1 at 156 [709]; [2003] NSWCA 131 at [709], Giles JA (Mason P and Beazley JA agreeing) concluded:

“In my opinion, the words ‘resulted from’ in s 1317H are words by which, in their natural meaning, only the damage which as a matter of fact was caused by the contravention can be the subject of an order for compensation. Like the word ‘by’ in s 82 of the Trade Practices Act 1974 (C’th) (see Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at [38]-[42]), they should be given their ordinary meaning of requiring a causal connection between the damage and the contravening conduct, free from the strictures of analogy with equitable claims against fiduciaries.”

591. The onus in establishing that causal link rests on the Plaintiffs: KRM (Vic) Pty Ltd v Classicbet Pty Ltd [2019] NSWSC 1773 at [84] (Rein J).

592. Other decisions have applied common law notions of causation to s 1317H. This includes the application of “common sense” to questions of causation: see, for example, Termite Resources NL (in liq) v Meadows (No 2) (2019) 370 ALR 191 at 328 [729]; [2019] FCA 354 at [729] (White J); Hydrocool Pty Limited v Hepburn (No 4) (2011) 279 ALR 646 at 716 [476]; [2011] FCA 495 at [476] (Siopis J).

593. However, the cautionary notes expressed by Edelman J (as his Honour then was) and Jackson J on the appropriateness of “common sense” as a legal norm should be remembered: Agricultural Land Management Ltd v Jackson (No 2) (2014) 48 WAR 1 at 74–75 [392]–[394]; [2014] WASC 102 at [392]–[394] (Edelman J); LM Investment Management Ltd (receiver apptd) (in liq) v Drake [2019] QSC 281 at [145]–[147] (Jackson J).

Evidence as to Damage

594. There could be, and was, no dispute that the Plaintiffs had the onus of establishing both the fact, and the amount, of loss suffered: Commonwealth of Australia v Amann Aviation Pty Limited (1991) 174 CLR 64 at 80 (Mason CJ and Dawson J); [1991] HCA 54. Generally, mere difficulty does not relieve a court from estimating damages as best it can: see the review of authorities in JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 at 241–246 (Brooking J); see also Paino v Paino (2008) 40 Fam LR 96 at 113 [76]; [2008] NSWCA 276 at [76] (Hodgson and McColl JJA).

595. However, as Hayne J explained in Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257 at 266 [37]–[38]; [2003] HCA 10, in the case of a claim for damages for breach of contract, at [37]–[38]:

“Placer undoubtedly bore the burden of proving not only that it had suffered damages as a result of Thiess Contractors’ breach of contract, but also the amount of the loss it had sustained. It goes without saying that it had to prove these matters on the balance of probabilities and with as much precision as the subject matter reasonably permitted.

It may be that, in at least some cases, it is necessary or desirable to distinguish between a case where a plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence. In the former kind of case it may be that estimation, if not guesswork, may be necessary in assessing the damages to be allowed. References to mere difficulty in estimating damages not relieving a court from the responsibility of estimating them as best it can may find their most apt application in cases of the former rather than the latter kind …” (emphasis in original) (citations omitted)

596. Thus, there is a difference between cases where a plaintiff cannot adduce precise evidence of loss and those where the plaintiff was able to do so, but did not.

597. In Longden v Kenalda Nominees Pty Ltd [2003] VSCA 128, Chernov JA (Buchanan JA agreeing) wrote at [33]:

“Thus, it is for the plaintiff to prove both the fact of loss arising from the defendant’s breach and the amount of the loss. Moreover, the plaintiff is required to establish both matters with as much certainty and particularity as is reasonable in the circumstances. Consequently, where a plaintiff could have produced evidence of loss but has simply failed to do so, it ordinarily means that it has failed to prove its case on damages (so that, where the claim is based on breach of contract, the plaintiff would only recover nominal damages). There are, of course, situations where a plaintiff cannot adduce precise evidence of the amount of loss, in which case the court will do its best in that regard and will estimate the damages and, where appropriate, will engage in a certain amount of guesswork.” (emphasis in original) (citations omitted)

598. Furthermore, where damages are uncertain because of a lack of evidence, difficulties of assessment are in general resolved against the party who could or should have provided the evidence: LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74 at [12] (Hodgson JA).

599. Counsel for the Plaintiffs referred to evidence of damage in an annexure to her closing submissions, which included an updated copy of the aide memoire of the 17 clients. The annexure referred to payments in the bank statements. Subject to what is set out below, the payments referred to appear to be a correct summary of the bank records.

600. In assessing the damage suffered by the Plaintiffs, I have had regard to the aide memoire, the evidence of the entries in the bank statements referred to therein, the cross-examination, and any submissions made by either counsel. I have not, however, undertaken an independent examination of the bank records to which the Court’s attention was not taken through the witnesses in cross-examination. Nor have I done so where the reference to those bank statements was not referred to in submissions.

601. I should also observe that the Plaintiffs did not seek that the question of damages be resolved after the determination of liability by a separate assessment of damages hearing.

602. The aide memoire identified, in relation to the 17 clients, 34 different payments in JP International Consultancy’s bank records. In total, the amount said to have been paid to the Defendants, by those 17 clients, was $44,793.30.

603. However, that is not the end of the matter in relation to ascertaining damages. It is to be remembered that six clients were returned by the Defendants to the Plaintiffs. As was averred to above, POI issued a number of invoices to the Defendants to recoup the commission received by them in respect of five of those six clients. In all cases, bar one, POI sent an invoice for a greater amount than the amount received by the Defendants (except for WX, where the amount invoiced equalled the amount received). Those invoices were duly repaid by Mr Ching to the Plaintiffs: Affidavit, (Paris) Yiu Tung Ching, 17 October 2019 at par 79, annexure S, a matter on which he was not cross-examined.

604. There was some suggestion, in cross-examination, that Mr Ching had received, and not returned, funds received from private health insurers in respect of those students: Tcpt, 26 August 2020, p 222(37) – p 225(02). He was taken to some entries in the bank statements showing payments from private health insurers and he agreed that it was likely that they were referable to four of the returned clients. These amounts did not make their way into the aide memoire, nor were they the subject of any submissions.

605. It follows that any loss suffered by the Plaintiffs in respect of those five clients has already been recovered. The payments attributed to those clients total $3,675. There is, therefore, at its highest, an amount of $41,118.30 being the loss alleged to have been suffered by the Plaintiffs.

606. In addition, counsel for the Defendants made some submissions at the conclusion of the hearing in respect of particular amounts. It should be observed that he (and the Court and counsel for the Plaintiffs) were using the original aide memoire at this time, not the updated annexure in the Plaintiffs’ counsel’s written closing.

607. Counsel submitted that the Defendants had refunded any commission paid to them by WqC. He directed the Court to three entries in the bank statements (Ex P1/59–60): a credit to the account of $675.20 on 28 September 2018, a debit from the account of $1,640.00 on 1 October 2018 and a further credit of $964.80 on 3 October 2018. The first two of those payments were included in the aide memoire.

608. He made a similar submission in respect of the payments made by JZ. On 26 September 2018, JZ made a payment of $1,700.00 into JP International Consultancy’s account ending 1104: Ex P1/58. On 26 February 2019, an amount of $1,700.00 was transferred from that account into JP International Consultancy’s account ending 9252. From there, an identical payment was made to JZ described in the statement as “refund”: Ex P1/34. Mr Ching gave evidence that he had provided JZ with a refund because his application to an educational institution was unsuccessful: Tcpt, 27 August 2020, p 271(19–36). Two of those payments of $1,700 were included in the aide memoire.

609. However even if all of those payments were, indeed, refunds, that does not necessarily change the position. The mere fact that the Defendants have not received any gain does not mean that the Plaintiffs have not suffered any loss.

610. Another issue arose with two payments made to JP International Consultancy on behalf of the client ZW. Two amounts of $11,600 and $2,840 were paid into JP International Consultancy’s account on 25 February 2019: Ex P2/54. Mr Ching gave evidence that these amounts were paid as the tuition fees for ZW and were not, therefore, commission paid by the client: Tcpt, 27 August 2020, p 266(06–34).

611. It is difficult to confirm whether this is so. Certainly, the $11,600 was transferred out of JP International Consultancy’s account on 26 February 2019. However, the identity of the recipient was not made clear on the evidence.

612. As for the other payment of $2,840, two payments were made out of JP International Consultancy’s account on 26 February 2019 ($1,768.80 and $1,071.20) which total that amount. As counsel for the Plaintiffs rightly pointed out, the $1,071.20 was transferred to another account held by the Defendants where it appears to have remained. Mr Ching gave evidence that the $1,768.80 was transferred to the educational institution: Tcpt, 27 August 2020, p 266(50) – p 267(08). Mr Ching was not cross-examined on these entries and there is no reason to reject his evidence on this topic, especially as there are transfers out of those amounts in the bank records.

613. The tuition fees represent a slightly different issue to the amounts received by the Defendants, but then refunded. Whereas the refunded amounts may be indicative of the loss suffered by the Plaintiffs (that is, the commission they could have received but for the breach), on no view can the receipt of tuition fees reflect any loss suffered. If the Plaintiffs had retained ZW, they would not have received any benefit from those moneys. They would have, as the Defendants did, received the tuition fees and duly transferred them to the relevant educational institution.

598. A final issue arises with the payment said to have been made to MYN. It appears that the payment referred to was actually a debit from the account of JP International Consultancy: Ex P1/39. Accounting for that leaves the total loss claimable as $27,199.50.

599. As stated, the first Defendant claimed a set-off in the amount of $11,400 reflecting, it was said, the unpaid commission for 44 students referred by the first Defendant to the Plaintiffs. Whilst the Plaintiffs did not file a Reply, they are taken to have denied the allegation of the debt: UCPR, r 14.27.

600. In support of this claim, Mr Ching annexed to his affidavit affirmed 17 October 2019, a list of 128 client names that, he claimed, he had referred to the Plaintiffs. Of those 128 clients, Mr Ching asserted that he had not received the commission to which he was entitled in respect of 44 of them.

601. It is not apparent, on the face of that annexure, who the 44 clients are, and in respect of whom, commission, allegedly, has not been paid. Nor was there anything in the body of Mr Ching’s affidavit that explained how the annexure was to be read.

602. Ultimately, Mr Ching’s evidence rose to no more than a bare assertion that moneys were owed. Mr Ching was not cross-examined on his evidence in relation to the amounts alleging owing.

603. Furthermore, Mr Lee never proffered an express denial that the moneys were owed. Rather, his evidence was to the effect that (Tcpt, 25 August 2020, p 70(08–16):

“Q. You didn't promise him that? So why haven't you paid the referral fees yet, Mr Lee?

A. Because I said to him that I need to establish how much he entitle for because he want to claim the $300 from me, which $250 might not be his. So I told him that I need to establish how much you can be claim. So he deny.

Q. Haven't you done that in the last two years?

A. No, I need - this question I need to ask check with my records so I don't remember what I have done two years ago.”

620. Mr Lee asserted that he had undertaken some investigation into the matter, but admitted that he had not detailed the nature or result of those investigations in his evidence. It is difficult to accept his evidence in this regard.

621. Counsel for the Defendants in his closing submissions relied, in respect of the claim for set-off, on s 21 of the Civil Procedure Act. Section 21(1) provides:

If there are mutual debts between a plaintiff and a defendant in any proceedings, the defendant may, by way of defence, set off against the plaintiff’s claim any debt that is owed by the plaintiff to the defendant and that was due and payable at the time the defence of set-off was filed, whether or not the mutual debts are different in nature.

622. For the purposes of s 21, “debt” means any liquidated claim: Civil Procedure Act, s 21(6).

623. Importantly, s 21 requires that there be “mutual debts between a plaintiff and a defendant”. The claim by the Plaintiffs for damages for breach of contract is plainly an unliquidated claim and, therefore, falls outside the definition of “debt” in s 21(6): see Arnold v Forsythe [2012] NSWCA 18 at [44]–[47] (Sackville AJA, McColl and Young JJA agreeing).

624. In those circumstances, the right of set-off under s 21 is not available to the first Defendant.

625. The first Defendant did not purport to rely on any other right of set-off at law or in equity. In all the circumstances, I am not satisfied that a right of set-off presently exists.

626. Whilst, therefore, the amount cannot strictly be claimed as a set-off against the award of damages in the Plaintiffs’ favour, I urge the parties in attempting to reach agreement on the quantum (as discussed below) to have regard to s 60 of the Civil Procedure Act and consider the inclusion of the $11,400, or some part of it, by way of compromise, in any discussions, in order to avoid further litigation, in the Local Court, for this amount.

Evidence as to Profit gained

627. In this case, I have been unable to find, in the Plaintiffs’ evidence, any causal link between the misuse of any confidential information and any profits derived as a result of that conduct by the Defendants. To the extent that they have derived any profit, it must be limited to that part of the amount of $44,793.30 claimed by counsel for the Plaintiffs can be shown to be profits received by the Defendants.

628. By way of a preliminary calculation, accepting that the Defendants already accounted for the $3,675 received in respect of the five returned clients; that $5,715.20, being what had been received was refunded to the clients in various circumstances; that $13,368.80 was not commission received by the Defendants, but rather tuition fees passed onto the educational institutions; and that $550 for MYN was an error in the calculations, that leaves only $21,484.30 as may be regarded as gross profit.

629. Again, doing the best I can, that is the amount, subject to what is said below, by way of profit that should be recovered by them in the alternative.

Conclusion

630. I shall allow the parties an opportunity to consider the calculations, and, if possible reach agreement on the amounts as they are modest. If agreement cannot be reached, it will be necessary to consider how to deal with the quantum.

631. On balance, despite the submissions made by counsel for the Plaintiffs, I am not satisfied that an injunction to restrain the Defendants from providing the individuals named in the Client List with education or migration services is appropriate.

632. In part, that is due to the failure of the Plaintiffs to establish that the Defendants have retained in their possession of documents that were taken from the client Google Drive.

633. However, more importantly, I remain unsatisfied that an injunction is an appropriate remedy, bearing in mind the passing of two years since the Defendants left the employ of the Plaintiffs. The authorities on “springboard injunctions” make it plain that such injunctions are not to be of indefinite duration.

634. In the circumstances, after this length of time, it would not be appropriate to restrain the Defendants from dealing with any of those individuals.

635. However, it is appropriate, in my opinion, to order, by way of mandatory injunction, that the Defendants, within 14 days of the making of the orders, return any WeChat contacts of the Plaintiffs’ clients that remain in their possession without retaining a copy thereof.

636. The Plaintiffs have also established that breaches of contract have occurred. Both in respect of the breaches of the duty of fidelity in soliciting those six clients prior to the termination of their employment, and the breach of the duty of confidentiality in the retention and use (or threatened use) of the WeChat contacts.

637. Consequently, the Plaintiffs are entitled to damages for those breaches of contract. I have referred to the evidence of the damage suffered above, and the evidence available as to the quantum of a damages order.

638. On the question of costs, subject to any evidence of matters that may be relevant, such as an offer of compromise, or a Calderbank offer, in view of the result of the case and the lack of evidence on many of the claims made, my present tentative view is that there should be no order as to costs of either party, to the intent that each party is to bear its, his or her, own costs, respectively, of the proceedings.

639. Subject to hearing from the parties, each has had only partial success, and in the case of the Plaintiffs, the success is economically tiny.

Summary of conclusions

640. In summary, and for the assistance of the parties, the principal findings of the Court are:

1. In respect of the WeChat contacts:

1. The WeChat contacts of the Plaintiffs’ clients were confidential information belonging to the Plaintiffs.

2. That confidential information was imparted to the Defendants, in their capacity as employees, in circumstances importing an obligation of confidence.

3. Both Defendants retained the WeChat contacts following the cessation of their employment. Mr Ching deleted some, but not all, of the contacts in his possession. Ms Lu did not delete any of the WeChat contacts she possessed.

4. I would not, as a matter of discretion grant a permanent injunction in the terms that the Plaintiffs seek, even though I am satisfied that there remains a potential risk of misuse of any such information. An order for the return of the WeChat contacts, and the supervised deletion of those contacts on any device on which they may be stored, will minimise the potential for any misuse, more than two years after the Defendants have ceased to be employees of the Plaintiffs.

2. In respect of the documents on the client Google Drive:

1. The documents contained on the Google Drive, apart from the documents and material relating generally to the educational institutions, were confidential information belonging to the Plaintiffs.

2. That confidential information, and the access thereto, was imparted to the Defendants in circumstances importing an obligation of confidence.

3. There was insufficient evidence to conclude that the Defendants retained or copied any of those documents during or following their employment with the Plaintiffs.

4. It follows that no actual or threatened misuse of the information was demonstrated.

3. In respect of the Defendants’ conduct in establishing JP International Consultancy:

1. The Defendants established JP International Consultancy prior to the cessation of their employment with the Plaintiffs.

2. JP International Consultancy was, plainly, in competition with the Plaintiffs.

3. For the most part, the steps that the Defendants undertook were merely preparatory.

4. In respect of the six clients that the Defendants contacted and engaged prior to the termination of their employment, they were in breach of the implied duties forming part of their contracts of employment.

4. In respect of the causes of action pleaded:

1. The Defendants breached their contractual duty of confidence through retaining the WeChat contacts. It is unnecessary in those circumstances to consider whether the equitable duty was breached.

2. The Defendants contravened ss 182–183 of the Corporations Act. It is clear that, on an objective viewpoint having regard to the standards reasonably expected of employees in the Defendants’ position, that their conduct in retaining the WeChat contacts was improper. The use of their positions, and the information, respectively, was to their advantage.

3. The Plaintiffs have not proved that the Defendants breached any duty as regards the documents and material contained in the Google Drive.

4. The Plaintiffs have not established that the Defendants owed fiduciary duties to the Plaintiffs. It follows that no breach of those duties has been made out.

5. In respect of the remedies sought:

1. The Plaintiffs are entitled to an award of damages for the breaches of contract. The quantum of which, hopefully, is to be agreed.

2. The Plaintiffs have also established that an injunction for the return of the WeChat contacts is appropriate in all the circumstances.

3. Having failed to establish that the Defendants possess any of the documents from the client Google Drive, it is inappropriate to grant an injunction in relation to that material.

4. Furthermore, I decline to exercise my discretion to grant an injunction precluding the Defendants from contacting, or providing services to, any of the Plaintiffs’ clients into perpetuity. This is so given that two years have passed since the events in question and where damages provide an adequate remedy for the breach of contract.

5. The Plaintiffs have also failed to establish that an account of profits is available, or appropriate, in the circumstances. Absent a breach of an equitable duty or obligation, an account of profits is unavailable. Even if such a breach had been proven, the Plaintiffs have failed to demonstrate what profit gained by the Defendants was attributable to the breach.

Orders

641. The Court:

1. Directs the parties, within 14 days, to undertake the calculations which will give effect to these reasons for judgment and to provide the Court with draft short minutes of order which reflect the matters of quantum matters about which they are agreed and those in dispute.

2. Directs the parties to attempt to agree on an order as to costs.

3. Directs that if the parties are unable to agree on draft short minutes of order, or are unable to agree on costs, then, within 7 days thereafter, their respective draft short minutes of order, and short submissions, of no more than 3 pages, as to the differences between them, in hard and soft copy, are to be provided to the Court.

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Decision last updated: 13 November 2020