FEDERAL COURT OF AUSTRALIA
Rauland Australia Pty Ltd v Johnson (No 1) [2019] FCA 1174
File number: NSD 480 of 2019 Judge: STEWART J Date of judgment: 1 August 2019 Catchwords: PRACTICE AND PROCEDURE – application to strike out part of applicant’s statement of claim – whether part of applicant’s statement of claim likely to cause prejudice, embarrassment or delay in the proceeding – application dismissed Legislation: Copyright Act 1968 (Cth) s 115
Corporations Act 2001 (Cth) ss 183, 1317H
Federal Court of Australia Act 1976 (Cth) s 37M
Federal Court Rules 2011 (Cth) r 16.21(1)(d)
Cases cited: Australian Building and Construction Commissioner v Molina [2017] FCA 1501
Australian Competition and Consumer Commission (ACCC) v Pauls Ltd [1999] FCA 1750; (2000) ATPR 41-747
Bartlett v Swan Television and Radio Broadcasters Pty Ltd [1995] FCA 638; ATPR 41-434
Comcare v John Holland Rail Pty Ltd (No 4) [2011] FCA 253; 210 IR 65
Qualify Me Pty Ltd v Get Qualified Australia Pty Ltd [2016] FCA 192
Radisch v McDonald [2010] FCA 762; 198 IR 244
Spiteri v Nine Network Australia Pty Ltd [2008] FCA 905
Takemoto v Moody’s Investors Service Pty Limited [2014] FCA 1081
Date of hearing: 26 June 2019 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Category: Catchwords Number of paragraphs: 52 Counsel for the Applicant: S Prince SC with T Wong Solicitor for the Applicant: Workplace Law Pty Ltd Counsel for the Second Respondent: T Brennan with S McIntosh Solicitor for the Second Respondent: Norton White Lawyers ORDERS
NSD 480 of 2019 BETWEEN: RAULAND AUSTRALIA PTY LTD (ACN 056 360 653)
Applicant
AND: MS FIONA JEAN JOHNSON
First Respondent
HILLS LIMITED (ACN 007 573 417)
Second Respondent
IN THE INTERLOCUTORY APPLICATION:
BETWEEN: HILLS LIMITED (ACN 007 573 417)
Applicant
AND: RAULAND AUSTRALIA PTY LTD (ACN 056 360 653)
Respondent
JUDGE:
STEWART J
DATE OF ORDER:
1 AUGUST 2019
THE COURT ORDERS THAT:
1.The second respondent’s interlocutory application filed on 15 May 2019 is dismissed.
2.Costs are reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
STEWART J:
Introduction
This judgment is on an interlocutory application brought by the second respondent (Hills Ltd) against the applicant (Rauland Australia Pty Ltd) in which it seeks to strike out paragraph 15 of the amended statement of claim filed on 30 May 2019. The first respondent is Ms Johnson who used to be employed by Rauland and is now employed by Hills. Ms Johnson has played no part in the interlocutory application.
The interlocutory application was filed on 15 May 2019 before the statement of claim was amended, but the amendments did not satisfy Hills so the application is to be taken as directed at the amended statement of claim rather than the statement of claim at which it was originally directed.
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- AGLC
- Rauland Australia Pty Ltd v Johnson (No 1) [2019] FCA 1174
- Case
- [2019] FCA 1174
- Decision Date
CaseChat Overview and Summary
The court found that, as long as the pleading of the breach of confidence cause of action was restricted to the Rauland Documents, there would be no prejudice. The court reasoned that if the pleading was broadened to include other documents, it would not result in any relevant prejudice. The court held that the allegations in paragraph 15 of the statement of claim were not necessary for the relief sought by Rauland and were therefore immaterial. However, the court concluded that the prejudice did not arise as long as the pleading of the breach of confidence cause of action was restricted to the Rauland Documents. The court dismissed the interlocutory application and reserved all questions of costs at that stage.
The court's reasoning was based on the principle that allegations in a statement of claim must be relevant and material to the relief sought. The court found that the allegations in paragraph 15 were not necessary for the relief sought by Rauland and were therefore immaterial. However, the court held that the prejudice did not arise as long as the pleading of the breach of confidence cause of action was restricted to the Rauland Documents. The court dismissed the interlocutory application filed by Hills on 15 May 2019 and reserved all questions of costs at that stage.
Orders
Orders of the court
1. The second respondent’s interlocutory application filed on 15 May 2019 is dismissed.
2. Costs are reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Third, it asserts that Ms Johnson breached s 183 of the Corporations Act 2001 (Cth) by making improper use of the Employment Information (i.e. the backup of her Microsoft Outlook email account created on 21 September 2017) for the advantage of herself and/or Hills by reason of which Rauland has suffered and continues to suffer loss and damage. (Paragraphs 31-32.) Fourth, it asserts that Ms Johnson infringed Rauland’s copyright in documents contained within the “Confidential [sic: read Employment] Information” by reason of which she and/or Hills obtained an advantage, benefit or gain entitling Rauland to an account of profits under s 115(2) or s 115(3) of the Copyright Act. (Paragraphs 33-35.) The following is then averred against Hills: Conduct of Hills36.By reason of the matters alleged in [8]-[16] and [22]-[25], Hills were knowingly concerned in the breach of the Confidentiality Obligation by Ms Johnson.37.By reason of the matters alleged in the preceding paragraph, Rauland has suffered and continues to suffer loss and damage.ParticularsParticulars to be provided following discovery.38.Further, or in the alternative, by reason of the matters alleged in [22]-[25] Hills, by being involved in the contravention, breached section 183 of the Corporations Act 2001 (Cth).39.For reason of Hills' breach of section 183 of the Corporations Act 2001 (Cth), Rauland has suffered and continues to suffer loss and damage.ParticularsParticulars to be provided following discovery.Hills’ objection to paragraph 15 In oral submissions, Mr Brennan referred to a letter from Hills’ solicitors to Rauland’s solicitors which set out the complaint with regard to paragraph 15 of the statement of claim. The letter put the complaint as follows:The allegations made in paragraphs 15 and 16 of the Statement of Claim can only be material to your client’s claims for relief to the extent that they are allegations concerning the Rauland Documents or any document which was the immediate source of any Rauland Document. Mr Brennan explained that the complaint was thus as to the materiality of the allegations in paragraph 15 to the relief sought in the proceeding. He submitted, which appears to be correct and not in dispute, that the allegations in subparagraphs (a) and (b) of paragraph 15 relate only to the copyright cause of action. In that regard, Mr Brennan submitted that there is no allegation in the amended statement of claim of the use of any document within the Employment Information other than the Rauland Documents (i.e. the three attachments to the email of 4 June 2018) by Ms Johnson or Hills so as to cause Rauland loss or Ms Johnson or Hills profit or gain so as to justify damages, an account of profit or any other relief sought in the originating application. Mr Prince of senior counsel, who appeared with Ms Wong of counsel for Rauland, submitted that that was not correct because merely the copying of the information constituted a use of it by Ms Johnson. There was some debate, with reference to the authorities, whether that is correct, but I need not resolve that. That is because paragraph 33 of the amended statement of claim, which is within the paragraphs that plead the breach of copyright cause of action, avers that Ms Johnson infringed Rauland’s copyright in documents contained within the Employment Information, and paragraph 34 avers that by reason of that infringement Ms Johnson has by herself and/or for the benefit of Hills obtained an advantage, benefit or gain.