Rauland Australia Pty Ltd v Johnson (No 2)

Link copied
Case Copied 25 min read

FEDERAL COURT OF AUSTRALIA

Rauland Australia Pty Ltd v Johnson (No 2) [2019] FCA 1175

File number: NSD 480 of 2019
Judge: STEWART J
Date of judgment: 1 August 2019
Catchwords: PRACTICE AND PROCEDURE – search order – access to seized documents in subsequent proceeding – access to documents should follow discovery – application dismissed  
Legislation:

Federal Court Rules 2001 (Cth) rr 7.42, 7.43, 20.23

Federal Court of Australia Act 1976 (Cth) ss 37M, 37P

Cases cited:

Findex Group Ltd v iiNet Ltd [2018] NSWSC 1567

Findex Group Ltd v McKay [2019] NSWCA 93

Lamond (No 4) [2017] FCA 820

Metso Minerals (Australia) Ltd v Kalra (No 3) [2008] FCA 1201

Metso Minerals (Australia) Ltd v Kalra [2009] FCAFC 57

Microsoft Corporation v Goodview Electronics Pty Ltd [1999] FCA 754; 46 IPR 159

Rauland Pty Ltd v Johnson (No 1) [2019] FCA 1174
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: 63
Counsel for the Applicant: S Prince SC with T Wong
Solicitor for the Applicant: Workplace Law Pty Ltd
Counsel for the First Respondent: C Harris SC
Solicitor for the First Respondent: Kennedys (Australasia)
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 JOHNSON

First Respondent

HILLS LIMITED T/AS HILLS HEALTH SOLUTIONS (ACN 007 573 417)

Second Respondent

JUDGE:

STEWART J

DATE OF ORDER:

1 AUGUST 2019

THE COURT ORDERS THAT:

1.The applicant’s interlocutory application filed on 1 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

  1. This judgment concerns an interlocutory application brought by the applicant in the principal proceedings (Rauland Australia Pty Ltd) against the first and second respondents, Ms Johnson and Hills Ltd, respectively.  The nature of the claims made in the principal proceedings by the applicant against the respondents is set out in my reasons for judgment in another interlocutory application, by the second respondent against the applicant, which are delivered at the same time as these reasons for judgment: Rauland Pty Ltd v Johnson (No 1) [2019] FCA 1174. These reasons for judgment assume familiarity with the other reasons for judgment.

  2. In the present interlocutory application Rauland seeks orders directed at an independent computer expert appointed by it (Mr Khoury) being given access to a number of forensic images that were made of devices that were seized from Ms Johnson, and an email account of Ms Johnson that was accessed, pursuant to search orders that were made late last year and before the present proceeding was commenced.  The orders envisage the expert being able to search the images of the devices and the email account for documents (or information in the form of…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Rauland Australia Pty Ltd v Johnson (No 2) and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2019] FCA 1175
Decision Date

CaseChat Overview and Summary

Rauland Australia Pty Ltd brought an application against Johnson in relation to access to seized documents following the execution of search orders in a prior proceeding. The Federal Court was required to determine whether the applicant was entitled to access to the seized documents at a time prior to the completion of discovery in the subsequent proceeding. The court held that the purpose of search orders is to preserve evidence and that the extraordinary jurisdiction should not be subverted to a mere investigative tool. Access to the seized documents should follow the discovery process, and the application for access prior to discovery was dismissed.

The court emphasised that the principal purpose of a search order is to preserve evidence, implying that the preserved evidence may only be made available for use in evidence in the event that the respondent does not otherwise make it available. The court cited Microsoft Corporation v Goodview Electronics Pty Ltd, where Branson J cautioned against allowing search orders to be abused and noted that the preserved evidence will be made available to a party requiring it in order to make it available in the proceeding if it is not otherwise produced. The court held that access to the seized documents will not necessarily be granted at a stage prior to discovery, and the application for such access was dismissed.

The final orders of the court were that the applicant's interlocutory application filed on 1 May 2019 is dismissed and that costs are reserved. The entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The applicant’s interlocutory application filed on 1 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

The “Listed Things” referred to in the proposed orders are, as will be seen, a “.pst” file that had been created on 21 September 2018 and which is referred to in more detail at [18] below, and any document or thing that is derived from or re-created using the “.pst” file including four identified PDF (portable document format) files and any related metadata. The “Employment Information” is the contents of the “.pst” file.Background On 15 October 2018, Rauland sought urgent ex parte search orders against Ms Johnson in a proceeding under a different case number, namely NSD1913/2018. The search orders were sought on the basis of an affidavit deposed by Mr Gomes which, relevantly, included the following allegations. Mr Gomes is the managing director of Rauland. Rauland provides integrated communication solutions to various healthcare organisations in Australia and New Zealand. Its business is to provide the design, product development, manufacture, supply, installation, servicing and support of technological communication solutions to those healthcare organisations. The services provided by Rauland are in large part subject to tender processes instigated by corporate clients. Such tender processes can take up to 3-4 years depending on the scope of the work needed. Hills is one of Rauland’s key competitors in one of its lines of business. Ms Johnson was employed by Rauland as its manager of corporate accounts from 22 February 2015 to 4 October 2017. Her primary duties and responsibilities included selling Rauland’s products and services, building long-term relationships with customers and partners, developing strategic high level influencing relationships with prospective and existing clients and building and maintaining an engaged workforce. On 3 October 2017, Ms Johnson resigned from her employment with Rauland with effect from the following day, 4 October 2017. At that time she advised that she intended to take a holiday and would not be commencing new employment in the immediate future. In about mid-March 2018, Mr Gomes learnt that Ms Johnson had commenced employment with Hills. Mr Gomes said that Ms Johnson’s employment agreement contained a number of post-employment restraints and obligations, including that until 12 months after the termination of her employment she was not to carry on, or be engaged in, or own an interest in, an entity engaged in or involved in any business or undertaking of a like or similar kind to Rauland’s, or any business or undertaking which competes with any aspect of Rauland’s business. During Ms Johnson’s employment with Rauland, she had direct and immediate access to a significant amount of its confidential information. Moreover, she was directly involved in the creation of a significant amount of Rauland’s commercially sensitive information, such as tender proposals. At the time of her resignation, she was critically involved in two identified tender proposals that were in progress.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

With regard to the timing, it was submitted that access to the relevant documents should be sought, first, as part of the process of discovery which has not yet taken place. Insofar as the purpose of search orders is concerned, it was emphasised that the search order power is extraordinary and should only be exercised where evidence may be destroyed, and that it should not be exercised merely for a discovery purpose, or as an investigative tool.Consideration There can be little doubt that the purpose of a search order is to secure or preserve evidence. In that regard, r 7.42 of the FCR provides as follows:The Court may make an order (a search order), in any proceeding or in anticipation of any proceeding in the Court, with or without notice to the respondent, for the purpose of securing or preserving evidence and requiring a respondent to permit persons to enter premises for the purpose of securing the preservation of evidence that is, or may be, relevant to an issue in the proceeding or anticipated proceeding. Rule 7.43(c)(ii) provides that one of the matters on which the Court must be satisfied in making a search order is that “there is a real possibility that the respondent might destroy such material, or cause it to be unavailable for use in evidence in a proceeding or anticipated proceeding before the Court”. That requirement also reveals that the principal purpose of a search order is to preserve the evidence, and it implies that that which is preserved may only be made available for use in evidence in the event that the respondent does not otherwise make it available. In Microsoft Corporation v Goodview Electronics Pty Ltd [1999] FCA 754; 46 IPR 159, Branson J (at [26]) said that the Court “must … be careful to avoid the extraordinary jurisdiction of the Court to make [a search] order from being subverted to a mere investigative tool for applicants or indeed, from being used for any purpose other than the preservation of vital evidence pending the hearing and determination of a proceeding”. That was said in the context of whether or not the Court should make search orders, which is materially different to the context of a party seeking access to seized material after the execution of search orders that were properly made. It is nevertheless an authoritative statement as to the purpose of search orders and is serves as a caution against allowing search orders to be abused. The fact that a search order preserves evidence for use in a proceeding in due course bears with it the unavoidable implication that there are circumstances in which the preserved evidence will be made available to a party requiring it in order to then make it available in the proceeding; were it otherwise, there would be no purpose to making search orders. It is therefore not the case that a search order will only serve the purpose of preserving evidence, always insulating that evidence from use in the subsequent proceeding. If the evidence is not otherwise produced in the proceeding, there will be a need to access that which was preserved so that it can be adduced in the proceeding. There may also be a need to access what was preserved in order to ascertain whether what has been produced pursuant to, say, discovery procedures is all that had to be produced. But none of that means that access will necessarily be granted at a stage prior to discovery.