Screwpile Engineering Pty Ltd v Manning - [2010] WASC 317

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SCREWPILE ENGINEERING PTY LTD -v- MANNING [2010] WASC 317

CORAM: KENNETH MARTIN J

HEARD: 9 SEPTEMBER 2010

DELIVERED : 9 SEPTEMBER 2010

PUBLISHED : 5 NOVEMBER 2010

FILE NO/S: CIV 2423 of 2010

BETWEEN: SCREWPILE ENGINEERING PTY LTD
INSTANT FOUNDATIONS (WA) PTY LTD FOR SCREWPILE ENGINEERING PTY LTD
First Plaintiff
INSTANT FOUNDATIONS (WA) PTY LTD
Second Plaintiff
AND
WAYNE MANNING
First Defendant
STEPHEN DOUGLAS MANNING
Second Defendant
THELMA COYNE
Third Defendant
GARRETT BACICH-HEARN
Fourth Defendant
INSTANT FOUNDATIONS (AUST) PTY LTD
Fifth Defendant

Catchwords:

Urgent injunction - Trade competitors - Asserted proprietary or confidential information misused - Balance of convenience - Threat and urgency not sufficient - Injunction refused

Legislation:

Nil

Result:

Application adjourned

Category: B

Representation:

Counsel:

First Plaintiff                  :     Mr T Coyle
Second Plaintiff             :     Mr W C Zappia
First Defendant              :     Mr G T Peterson
Second Defendant         :     Mr G T Peterson
Third Defendant            :     No appearance
Fourth Defendant           :     Mr P Quinlan
Fifth Defendant              :     No appearance

Solicitors:

First Plaintiff                  :     Lavan Legal
Second Plaintiff             :     Lavan Legal
First Defendant              :     De Vita & Dixon
Second Defendant         :     De Vita & Dixon
Third Defendant            :     No appearance
Fourth Defendant           :     Curwood & Co Pty Ltd
Fifth Defendant              :     No appearance

Case(s) referred to in judgment(s):

Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Australian Broadcasting Corporation v O'Neil [2006] HCA 46; (2006) 227 CLR 57

KENNETH MARTIN J: This is an edited version of reasons for decision delivered extempore on 9 September 2010.
An application for an urgent interlocutory injunction was brought by the first and second plaintiffs against five defendants. The first defendant, Mr Wayne Manning, is a former employee recently departed from the first plaintiff. But the first and second plaintiffs are related corporations and the nature of their activities is such that Mr Wayne Manning would have had access to the information and workings associated with the business of the second plaintiff, as well as the first plaintiff.
The second defendant, Mr Stephen Manning, is Mr Wayne Manning's brother. He was at one point, up to 2005, possibly 2004, an employee of possibly the second plaintiff, but has been employed elsewhere now for some time. The Manning brothers are represented in this application.
The third defendant, Thelma Coyne, is, I am told, the partner of the first defendant. She is not represented today. I find that on the evidence submitted there is absolutely no case, even for interim injunctive relief, against her - so there will be no orders as against the third defendant.
The fourth defendant was represented by counsel. Mr Garrett Bacich‑Hearn is an installer of screw pilings in Western Australia and perhaps elsewhere.
The fifth defendant was not represented. It is an organisation which manufactures screw pilings and would seem to be an organisation akin to the manufacturing operations of the first plaintiff.
I am not persuaded to make any orders as against the fifth defendant on the basis that the materials do not disclose any basis for concern about its activities either. So I confine myself then to the three defendant parties that are represented.
Applying the test for interlocutory relief explained by the High Court in Australian Broadcasting Corporation v O'Neil [2006] HCA 46; (2006) 227 CLR 57 (ABC) by Gleeson CJ and Crennan J, as well as in the joint reasons of Gummow and Hayne JJ, essentially the court first needs to be satisfied that there is an argument, a serious question to be tried, sometimes referred to as a prima facie case.
The second limb of the test is the balance of convenience - which means the appropriateness of the court intervening on a temporary basis before trial, accepting that no factual findings of a final nature are made - the court nevertheless intervening to preserve the status quo. The basis of this application, which was brought at 4 o'clock this afternoon on papers filed today, is such that the defendants have had no opportunity to file responding materials.
There have been certain indications by defendants' counsel appearing in circumstances of urgency as to their client's negotiating position. But there has been no opportunity for them to be heard in terms of putting their respective cases, in substantive answer to the case brought by the plaintiffs. The plaintiffs rely upon quite a lot of information, primarily in the affidavit of Stephen Mark Lewenhoff sworn today, to which there is a series of confidential attachments appended.
There was also an unexecuted second affidavit of Mr Lewenhoff relied on - which deals with some hearsay communications of today from Mr Hovey. Mr Hovey is a subcontractor/installer for the first plaintiff and a competitor of the fourth defendant. There is an undertaking by the plaintiffs to file the second affidavit by Mr Lewenhoff in the terms of what I was provided as the unsworn copy this afternoon.
There are also two affidavits sworn by Mr Matthew William Clarke, both of today, that are relied upon. The first contains passing correspondence. The second contains a company search and an email from Mr Lewenhoff of today.
In the prevailing circumstances of an application for an urgent interim injunction, the High Court tests concerning the serious question and the balance of convenience in ABC are of a governing importance. But the question of the imminence of the threat is what commands the court's possible urgent intervention. This factor and the urgency of that threat today form a central focus in the court's considerations.
In the present case, I have received considerable evidence about stage 1 of work done at the Curtin Detention Centre under construction at Derby WA, and it would appear, and I am summarising very loosely of course, that having done stage 1 of that work the first plaintiff was in line to do further work in stages 2 and 3 and submitted a tender. But, to its surprise, the first plaintiff was not successful in terms of receiving that work on stages 2 and 3 on its tender.
This disappointment of the plaintiffs arises in circumstances where the first defendant has recently resigned and departed. Certain adverse inferences, concerns or suspicions are expressed liberally by Mr Lewenhoff, particularly from about par 106 and following in his first, lengthy affidavit. Distilled down to their essence, however, the basis for concern hinges around an email which the first defendant forwarded to his home email address. This is contained within the affidavit at page 97, and is an email of 5 August 2010, sent to Thelma Coyne at [email protected].
Some images were sent as attachments to that email. It is said that these are photographs that show proprietary and confidential information of the first plaintiff, particularly in terms of a device or tool which, when used by an installer of a screw piling device, allows that work to be done very speedily and efficiently - thereby providing an extreme competitive advantage to the first plaintiff in doing this work.
Mr Lewenhoff's affidavit gives an indication of the large scale of its client base, the considerable number of enquiries that are made to it on a regular basis, and the work that it gets. It says that part of its competitive advantage in the marketplace is its own highly proprietary and confidential information which allows it to use screw piling devices in a way that gives it a most competitive edge in terms of efficiency and rate of installation.
It is said therefore by the plaintiffs that I ought to infer the gravest inferences of dishonesty against the first defendant, by reason of his dispatch of photographs of that installation tool to the home email address. Further, it is put that this alleged misconduct fortifies other concerns over disappearing photographs that were on his desk, then certain hearsay communications he received, which culminated in the surprise loss of the installation work tendered for at the Curtin Detention Centre (which Mr Lewenhoff refers to in his affidavit).
I am cognisant, however, in terms of the key considerations of threat and urgency, that to the extent that any expressed concern is about the plaintiffs' loss of the work at the Curtin Detention Centre, that this horse has now bolted out the barn door in respect of work actually lost, and to be done by someone else.
The real question then is whether at 5.55 pm on Thursday evening there is an imminent threat established about any of the defendants, particularly the first and second defendants, further dealing with proprietary information associated with the plaintiffs' screw piling device, in such a way that warrants the court at this time granting urgent restraints (indeed mandatory orders) against disclosure, as a part of the interlocutory relief identified in the plaintiffs' chamber summons.
I am not persuaded that there is now shown a sufficient threat at this point in time, or a sufficiently urgent threat that is identified and shown to be applicable in terms of a looming serious business risk to the plaintiff. The concerns and fears that presently trouble Mr Lewenhoff, as identified in his affidavit, are just that, ie, concerns and fears. There is a lack of tangible evidence, putting aside the Derby Detention Centre, in terms of the looming loss of any other particular contract, that presents as imminent to warrant the court's urgent intervention by restraint, or indeed by way of the mandatory disclosure orders which are sought.
I reach this position on a basis that at this point I also recognise that the defendants have not had any real opportunity to file their own answering material. Indeed, I would assess that they have not had an opportunity to sufficiently liaise with the plaintiffs in terms of even offering undertakings about what they may hold or do not have, and what they are prepared to do or not do, in terms of alleviating any legitimate concerns that the plaintiffs may express.
I am also heavily influenced by the fact that the law, from a policy perspective, encourages healthy and fair competition between trade rivals. The law would not, on the basis of a mere expressed fear or concern, lightly injunct a business competitor for engaging in healthy and robust competition - in the absence of a strong evidentiary basis to support its intervention.
Whether the bounds of healthy or robust competition have been transgressed here by unfair dealing or an abuse of confidential information is a matter about which, it seems to me, there should be a fair opportunity for the defendants to make their answering submissions, so that a more considered evaluation, unhurried and unrushed, may be made by the court hearing the evidence from all sides.
I say that particularly in circumstances where I do not yet detect a particular business risk or threat, or indeed the tangible consideration of urgency, in terms of some looming event that is going to stop or damage the plaintiffs from engaging in business and continuing to tender for work.
Of course, all interlocutory injunctions are based upon the facts that apply to them at any particular point in time. As the High Court observed in Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, an interlocutory application for injunctive relief may always be renewed based on new facts.
It seems to me, in all these circumstances, that considerations going to the minimal looming threat, minimal urgency, need to protect and encourage fair competition, coupled to the relatively threadbare nature of the plaintiffs' affidavit materials, which are at this time, based largely on expressed concerns or beliefs, rather than tangible evidence (which I accept is a product of the urgency with which this application is brought), do not surmount the legal thresholds for the grant of urgent interim interlocutory relief at this point.
On that basis, I decline to make any of the orders that the plaintiffs seek on their chamber summons. But, I would not dismiss the chamber summons. It seems to me that what is required are some programming directions after conferral, so that the parties can have an opportunity to consider their positions, coolly in the cold light of day.
It seems to me that I should make an order that the matter be entered into my CMC list. But, I should give the parties the opportunity to confer from the point of view of submitting a minute of agreed directions and some time should be allowed for that to occur.