Smiths Detection (Australia) Pty Ltd v Basham - [2020] NSWSC 500

Supreme Court

New South Wales

Medium Neutral Citation: Smiths Detection (Australia) Pty Ltd v Basham [2020] NSWSC 500
Hearing dates: 10, 12 March 2020
Date of orders: 29 April 2020
Decision date: 23 April 2020
Jurisdiction: Equity
Before: Rein J
Decision:
See [38] and [52]

Catchwords: CIVIL PROCEDURE – Pleadings – Striking out – Where plaintiff company sued former employee (first defendant) alleging that he took the plaintiff’s confidential information and gave it to his new employer, a rival group of companies (second to fourth defendants) – The present hearing concerned the plaintiff’s motion to strike out the defendants’ defences on grounds that the first defendant allegedly deleted the confidential information (held on USB sticks) which he is said to have taken from the plaintiff, thereby causing impairment to the case the plaintiff aims to prove – Where the corporate defendants, upon being told by the plaintiff of its allegations against the first defendant, took steps that included: immediately suspending the first defendant and specifically instructing him to preserve all documents he may have taken from the plaintiff and not delete any of them, and, a week or so later, the corporate defendants terminated his employment and redeployed another of their employees (with whom the first defendant had had contact) to an unrelated part of the business – Held: the plaintiff’s strike out motion was rejected and the defendants’ defences should not be struck out because, in relation to the corporate defendants, they should not, in all the circumstances, be deprived of the opportunity to contend that they are not to be held responsible for the first defendant’s conduct and, further, in relation to all defendants, because it was not established on the evidence that the first defendant succeeded in permanently deleting any of the documents on his USBs (or that if he had permanently deleted some, that the plaintiff could not reproduce those documents in some way), and therefore the plaintiff had not established that its case was impaired by the first defendant’s actions.
Legislation Cited: Evidence Act 1995 (NSW)
Cases Cited: Cactus Imaging Pty Ltd v Peters [2006] NSWSC 717; (2006) 71 NSWLR 9
Clark v State of New South Wales [2006] NSWSC 673; (2006) 66 NSWLR 640
Deatons Pty Ltd v Flew [1949] HCA 60; (1949) 79 CLR 370
Littlewoods Organisation Ltd v Harris [1977] 1 WLR 1472; [1978] 1 All ER 1026
Mirus Australia Pty Ltd v Gage [2017] NSWSC 1046
Moody Kiddell & Partners Pty Ltd v Arkell [2013] FCA 1066
New South Wales v Lepore [2003] HCA 4; (2003) 212 CLR 511
Palavi v Radio 2UE Sydney Pty Ltd [2011] NSWCA 264
Red Bull Australia Pty Ltd v Stacey [2011] NSWSC 1212; (2011) 214 IR 299
Texts Cited: Nil
Category: Procedural and other rulings
Parties: Smiths Detection (Australia) Pty Ltd (Plaintiff/Applicant)
Mr Scott Basham (First Defendant/Respondent)
Rapiscan Australia Pty Ltd (Second Defendant/Respondent)
Rapiscan Systems Pte Ltd (Third Defendant/Respondent)
SX Technologies Pty Ltd (Fourth Defendant/Respondent)
Representation:
Counsel:
Mr 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 Smiths Detection (Australia) Pty Ltd v Basham

Details

AGLC: Smiths Detection (Australia) Pty Ltd v Basham [2020] NSWSC 500
Case: [2020] NSWSC 500
Decision Date: 23 April 2020

CaseChat Overview and Summary

Smiths Detection (Australia) Pty Ltd sued its former employee, Basham, and three other companies for allegedly misappropriating confidential information. The plaintiff sought to strike out the defendants' defences, claiming that Basham deleted the confidential information, causing harm to the plaintiff's case. The corporate defendants had suspended Basham and instructed him to preserve the documents, but later terminated his employment. The court was required to determine whether the plaintiff's case was impaired by the deletion of the information and whether the corporate defendants' defences should be struck out.

The court held that the plaintiff's motion to strike out the defences should be rejected. The court found that the corporate defendants should not be deprived of the opportunity to argue that they were not responsible for Basham's actions. Additionally, the court found that it was not established that Basham had permanently deleted any of the documents on his USBs, or that if he had, the plaintiff could not reproduce those documents in some way. Therefore, the plaintiff had not established that its case was impaired by Basham's actions.

As a result, the court ruled that the defendants' defences should not be struck out. The plaintiff had not shown that its case was irreparably damaged by the alleged deletion of the information, and the corporate defendants were entitled to contest their liability for Basham's actions. The court's decision highlights the importance of preserving evidence in cases involving alleged misappropriation of confidential information and the need for courts to carefully consider the circumstances of each case when deciding whether to strike out defences.

Orders