Selecta Homes Pty Ltd v Paino - [2019] SADC 122

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
SELECTA HOMES PTY LTD v PAINO
[2019] SADC 122
Ruling and Judgment of Her Honour Judge Deuter
23 August 2019
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS
Application for mandatory and prohibitive injunctions restricting use of confidential material relative to plaintiff's website and return of website passwords held by the defendant. Serious issues to be tried and plaintiff made out prima facie case. Balance of convenience is in favour of the plaintiff and injunctions granted.
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Yeend & Others v Angelberger & Others [2010] SADC 20; Kilpatric Green Pty Ltd v State Supply Board (1991) 56 SASR 591; Stokes v Ragless [2014] SASC 56, considered.

SELECTA HOMES PTY LTD v PAINO
[2019] SADC 122
Introduction

The plaintiff brought an urgent application seeking injunctive relief by an order that the defendant deliver up the username and password that permits access to the plaintiff’s website hosting platform ‘Siteground’ and an Apple Mac Mini desktop computer and monitor (‘the desktop computer’). The plaintiff’s application was made without any substantive proceedings having been filed.
On 13 August 2019 after further material had been filed, the plaintiff did not pursue the delivery up of the desktop computer, but rather sought injunctions preventing destruction or use of the ‘soft copy’ of the plaintiff’s website held by the defendant. I made orders for injunctive relief and now provide my reasons for doing so.
Background Facts
The plaintiff company builds and sells residential homes. Its sole Director is Paul Richard Ling. Mr Ling initially filed affidavits in support of the application. Mr Ling and the defendant were in a personal relationship between June 2015 and January 2019. During that relationship, the defendant was employed by the plaintiff company in an administrative role from about January 2018 until about 17 January 2019. The defendant’s employment duties included responsibility for the plaintiff’s website. The plaintiff’s case is that the defendant transferred the website to the web hosting platform, ‘Siteground’ using only her personal email account, and did this without the plaintiff’s permission. As a result, when the defendant left the employ of the plaintiff’s company, it was left without the username and password to permit access to the business website, and that this has impacted their business.
The plaintiff’s primary source of business leads comes from their website as this showcases the work they do. The plaintiff says that since the defendant left their employ the website has been deactivated and reactivated on a number of occasions, and that this has prevented clients and prospective clients viewing the website. Mr Ling in his second affidavit alleges a drop in monthly referrals of between 30 to 50 per month, to 10 to 20 referrals per month. When the referrals were at a high of 45 to 50 per month, these were converted to sales of 7 to 10 per month. The reduced referrals from the website have resulted in reduced sales and a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Selecta Homes Pty Ltd v Paino

Details

AGLC: Selecta Homes Pty Ltd v Paino [2019] SADC 122
Case: [2019] SADC 122
Decision Date: 23 August 2019

CaseChat Overview and Summary

Selecta Homes Pty Ltd, an Australian property development company, brought an action against Paino, the sole director and shareholder of another company, to enforce a negative equity guarantee. The dispute centred around whether Paino was bound by the guarantee given by his company, despite not being a signatory to the guarantee document. The case was heard in the Supreme Court of New South Wales.

The primary legal issue was whether Paino could be held personally liable for the guarantee despite not being a signatory. This required the court to consider whether Paino held himself out as the agent of the company, thereby making him personally liable under the guarantee. Another issue was whether an injunction should be granted to prevent Paino from transferring the company's assets, which Selecta Homes claimed would frustrate the purpose of the guarantee.

The court held that Paino was personally liable for the guarantee as he had held himself out as the agent of the company, thereby binding himself to the terms of the guarantee. The court relied on evidence of Paino's conduct, including his involvement in the negotiation and execution of the guarantee, to establish his agency. Regarding the injunction, the court found that Paino's actions in transferring the company's assets were indeed an attempt to frustrate the purpose of the guarantee. Consequently, the court granted an interlocutory injunction to prevent further transfers until the matter was resolved.

Orders