Stirling House (Guildford) Pty Ltd v Coghlan
[2005] FCA 1623
•9 NOVEMBER 2005
FEDERAL COURT OF AUSTRALIA
Stirling House (Guildford) Pty Ltd v Coghlan [2005] FCA 1623
COPYRIGHT – practice and procedure – Anton Piller order – claim for interlocutory relief by way of Anton Piller order – alleged unlawful access by respondents to applicant’s computer system – obtaining copy of promotional brochure for sale of corporate hospitality services – supply of brochure to competitor to applicant – former sales manager of applicant supplying brochure – alleged infringement of copyright and breach of duty of confidence – criteria for Anton Piller order not made out in terms of extremely strong prima facie case – sufficient to ground an order for interlocutory relief other than an Anton Piller order
Federal Court Act 1976 (Cth) s 23
Copyright Act 1968 (Cth) s 31(1)(ii), s 36Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88 cited
FRENCH J
9 NOVEMBER 2005
PERTH
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 315 OF 2005
BETWEEN:
STIRLING HOUSE (GUILDFORD) PTY LTD
(ACN 081 876 904)
APPLICANTAND:
MICHAEL PAUL COGHLAN
FIRST RESPONDENTMAXXIMUS PTY LTD
(ACN 090 649 139)
SECOND RESPONDENTJUDGE:
FRENCH J
DATE OF ORDER:
9 NOVEMBER 2005
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
Upon the Applicant undertaking to the Court that it will pay to any party restrained or affected by the restraints imposed by this interlocutory injunction or of any interim continuation thereof, such compensation as the Court may in its discretion consider in the circumstances to be just, such compensation to be assessed by the Court or in accordance with such directions as the Court may make and to be paid in such manner as the Court may direct IT IS ORDERED THAT:
1.Until further order the first and second respondents by themselves, their servants, agents or otherwise be restrained from obtaining or publishing or in any other way dealing with any documents in hard copy or electronic form or otherwise belonging to or originating from the applicant.
2.By 4pm (WST) on 28 November 2005 the respondents deliver up to the solicitors for the applicant all copies of any documents in hard copy or electronic copy or otherwise referred to in the preceding order which are in the possession, power or control of the first or second respondents.
3.Until such time as the said documents are delivered to the solicitors for the applicant pursuant to the preceding order, the first and second respondents preserve those documents and preserve until further order any other documents which directly or indirectly are relevant to the issue of how the first or second respondent came to be in the possession, power or control of the documents referred to in Order 1.
4.The first and second respondents shall by 4pm (WST) on 28 November 2005 file and serve an affidavit setting out the following information:
(a)a descriptive list of each document of the applicant referred to in Order 1 above in the possession, power or control of the first and second respondents at the date of this order;
(b)the name and business place of the recipients of the documents or copies of the documents referred to in Order 1 above;
(c)an explanation of how and when and by what means the first and/or the second respondents came to have the documents referred to in Order 1 above in their possession, power or control.
5.The costs of this application for claim for interlocutory relief be reserved.
6.There be liberty to apply to vary or discharge these orders.
7. A copy of this order together with the reasons for judgment, the application, the statement of claim and supporting affidavits is to be served upon the respondents by service upon them and their solicitors on or before 21 November 2005 at 4pm (EST).
8.The matter is listed for further directions on 5 December 2005 at 9.15am (WST).
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 315 OF 2005
BETWEEN:
STIRLING HOUSE (GUILDFORD) PTY LTD
(ACN 081 876 904)
APPLICANTAND:
MICHAEL PAUL COGHLAN
FIRST RESPONDENTMAXXIMUS PTY LTD
(ACN 090 649 139)
SECOND RESPONDENT
JUDGE:
FRENCH J
DATE:
9 NOVEMBER 2005
PLACE:
PERTH
REASONS FOR JUDGMENT
ON APPLICATION FOR ANTON PILLER ORDERFactual and Procedural Background
Stirling House (Guildford) Pty Ltd (Stirling House) trading as Corporate Sports Australia (Corporate Sports) carries on a business of providing corporate hospitality services at major sporting events in Australia such as the Grand Prix, One Day International Cricket events, the AFL Grand Final and NRL State of Origin and ARU International Rugby Union games. It operates through a sales team which is located mainly in Sydney, but also in other Australian centres. A corporate hospitality package offered by Stirling House may include provision of seating at the particular event, lunch, celebrity guest speakers and live entertainment, company table signage featuring the customer’s logo, official match day programs and mementos, supper, a prize draw and a post match reception and match analysis.
Until March 2005 Michael Coghlan was employed by Corporate Sports as a sales manager operating from a sales office in Canberra which is now closed. In that role, it is said by Stirling House, that he had full knowledge of its sales processes and procedures with regard to the promotion of sporting events. He also had detailed knowledge of and access to the computer systems operated by the company.
On 23 August 2005 Mr Philip Moyle, General Manager Events for Stirling House, completed a draft promotional brochure which he had designed and prepared advertising a cricket game between Australia and the ICC World XI which was scheduled to take place at the Telstra Dome on 7 October 2005. The brochure was based on a pro forma template supplied by Telstra Dome. Mr Moyle said, in an affidavit sworn in these proceedings, that he created the brochure using the layout and form of the template as a guide. He did this in order to meet the requirements of Telstra Dome who were the organisers of the event and wanted the marketing of it to follow a uniform format. Although he followed the general format most of the wording and some of the graphic components were devised by him. After he prepared the brochure Mr Moyle saved it in a portable document format (PDF) on the hard drive of his computer in his office in Perth at about 3pm on 23 August 2005.
Shortly after saving the document in PDF form Mr Moyle transmitted it by email to Mr Adam King of Global Stadium Events Pty Ltd (Global Stadium) at his personal email address. Although Global Stadium is a separate company from Stirling House, they operate in a close working relationship. He did not transmit the brochure to anybody other than Adam King nor to anybody else by email within Stirling House. The document, he claimed, had not been released or disclosed to anyone outside the West Perth office of Stirling House.
In an affidavit sworn for a proposed pre-action discovery proceeding in the Supreme Court of Western Australia Mr King deposed that he had received the email from Mr Moyle and the draft brochure attached to it. He had not passed on or disclosed the brochure to any person or in any way voluntarily parted with possession of it. The brochure had at all times been kept by him by being saved on the hard drive of his computer which is situated at his office at Telstra Stadium.
On or about 26 August 2005 Mr Moyle was told by his Managing Director, Mr Paul Nash, that the brochure which he had prepared was in the possession of a competitor company, Match Point (Australia) Pty Ltd (Match Point). Stirling House then instructed solicitors who began to make inquiries on how the brochure came to be in the possession of Match Point. A history of these inquiries and investigations was set out in an affidavit sworn by Mr Moyle in the proposed Supreme Court pre-action discovery proceedings which were to be brought against Match Point.
The solicitors for Stirling House wrote to the managing director of Match Point on 26 August 2005 asserting their client’s belief that Match Point had acquired the brochure by unlawful means. They requested that Match Point give discovery of all documents which might assist Stirling house in making a decision whether or not to commence proceedings against it. Match Point responded on 26 August with a number of queries to which the solicitors responded on 29 August.
On 2 September 2005 Match Point sent a fax to Telstra Dome, Stirling House and to the solicitors in which it said:
‘The “brochure” … had been received by a Match Point sales agent from The Avery Dennison Corporation on or before 23rd August.
On 23rd August Match Point requested confirmation from Jeremy Hunt at Telstra Dome that Global Stadium Events were official agents of Telstra Dome for the Johnnie Walker Series at an approved sale price of $950 per person. Match Point forwarded the “brochure” to Telstra Dome at their request. The “brochure” in question was displaying the logos and marks of both Telstra Dome and the Johnnie Walker Super Series Australia 2005.
We had previously received a similar Global Stadium Events “brochure” on or before 8th July (attached “brochure” marked No 3).’
The letter was signed by Match Point’s managing director Mr Neil Cunningham.
The Stirling House solicitors sent another fax to Match Point on 2 September 2005 noting that Match Point had not provided the requested documents. In particular Stirling House sought documents relating to the alleged communication between Avery Dennison and Match Point’s agent and/or between Match Point’s agent and Match Point. The solicitors also noted that on their instructions the brochure, a copy of which was provided by Corporate Sports, was only created in Perth on the afternoon of 23 August 2005 and transmitted later that day to Global Stadium Events in Sydney.
The solicitors said in their letter that Stirling House had been orally notified by Mr Bayliss of Match Point on 2 September that the brochure had been provided to Match Point by Mr Michael Coghlan. The solicitors said they were instructed to advise that if Match Point made full and frank disclosure to their client showing when Mr Coghlan provided it with the brochure their client would refrain from applying for orders against Match Point and focus its attention on Mr Coghlan.
On 5 September 2005 Mr Cunningham responded saying that he had received a communication from Mr Coghlan ‘… that he is happy for us to confirm the Global Stadium Events “brochure” was provided to Match Point by him’. The letter also stated that Mr Coghlan was acting as an independent agent operating under the trading name ‘MaXXimus’. The solicitors replied on 6 September 2005 saying that they had still not been provided with the requested documents. They wrote again on 8 September 2005 noting that there had been no response.
In the event the pre-action discovery application was not proceeded with as there was subsequently what Mr Moyle described as ‘belated cooperation’ from Match Point. He exhibited letters to his affidavit indicating this. One of the exhibited documents, a letter dated 15 September 2005 from Match Point, commented on a draft affidavit prepared for the pre-action discovery proceedings. Mr Cunningham who wrote the letter attached to it copies of emails received from Mr Coghlan at MaXXimus which were said to demonstrate that the relevant brochures were forwarded to Match Point and that they originally came from a company called Avery Dennison.
One of the emails was apparently sent by Michael Coghlan to Mark Bayliss at Match Point on Tuesday, 23 August 2005 at 5.02pm with the message ‘New one for you!’. This email evidently attached the brochure in issue. It was forwarded on by Mr Bayliss to Mr Cunningham. A second email purported to show a transmission from George Theodoropoulos at Avery Dennison on 23 August 2005 at 15:07:26. The purported message in the email was:
‘RE: One Day International - ICC Super Series, Melbourne, Oct 2005
This is the package I mentioned.
George’This was forwarded by Mr Coghlan to Mr Bayliss on Tuesday, 30 August 2005 at 5.41pm.
In a letter to the managing director of Match Point dated 27 September 2005, the solicitors for Stirling House informed Match Point that they had been in touch with Avery Dennison who denied ever having seen the brochure at the time alleged or that the covering email was ever sent by them. A copy of a letter from Avery Dennison’s legal department dated 23 September 2005 was attached. The solicitors also noted that the covering email was purportedly transmitted along with the brochure by Avery Dennison at 3.07pm EST. The brochure had only been created in Perth at about 3pm WST which would have been 5pm EST. The solicitors asserted that the covering email produced by Match Point was a fraudulent document created after the event in an attempt to try and justify the manner in which the brochure came to be in the possession of Match Point and/or its agent. By way of response Mr Cunningham said that Match Point could not comment on whether any of the documents was fraudulent. It could only advise what it had received and what had been sent.
The solicitors wrote to Mr Theodoropoulos at Avery Dennison on 19 September 2005 attaching the brochure and the emails. On 23 September 2005 group counsel for Avery Dennison sent a fax to the solicitors in which she stated the following:
‘(1)We have checked through our systems and have found that we do not have any records of the purported e-mail being sent by George Theodoropoulos to Mr Michael Coghlan on Tuesday 23 August 2005 at 15:07:26.
(2)Mr Theodoropoulos has also confirmed that until he received the letter of 19 September 2005 from you, he had never seen both the abovementioned e-mail and the Brochure.
(3)Mr Theodoropoulos has indicated that he has been approached by Mr Coghlan on several occasion but has ever done business with him.’ (sic)
The solicitors then wrote to Mr Coghlan on 14 October 2005. They alleged in their letter that they had clear evidence strongly suggesting that he had obtained access via the Internet to a document which was the property of and confidential to Stirling House, that he had done so at about 3pm (WST) on 23 August 2005 and did so either on his own behalf or in the operation of his business known as MaXXimus. The solicitors also alleged that he had transmitted the document to Match Point by email and that his intention in doing so was to ‘interfere with contractual relations between our client and its customers’. They alleged that in an attempt to cover up his unlawful access to the document he had attempted to implicate Mr Theodoropoulos of Avery Dennison by falsely claiming that the document was provided to him by that company. The solicitors sought a full explanation within seven days of the date of the letter as to how the brochure came to be in his possession and his justification for the provision of it to Match Point.
Mr Coghlan then instructed solicitors, Maurice Blackburn Cashman who wrote to the solicitors for Stirling House on 21 October 2005. They said that he vigorously denied that he had illegally obtained access via the Internet to any document which was the property of Stirling House. They made the point that the document in question was a general promotional brochure intended for dissemination to members of the public including their client to promote a cricket sporting event. They pointed out that the brochure bore the name ‘Global Stadium Events’. The letter of 14 October 2005 had referred to a possible theft of intellectual property but failed to advise the precise nature of the intellectual property interest claimed by Stirling House.
The solicitors for Stirling House responded to this letter on 24 October 2005. They asserted, inter alia, that Mr Coghlan was in possession of all he needed to enable him to offer an explanation of how he lawfully came to be in possession of the document. There was no further response to that facsimile.
The Present Proceedings
Stirling House commenced proceedings in this Court against Michael Coghlan and his company, MaXXimus, on 7 November 2005. Stirling House claimed relief in the following terms:
‘1.Delivery up of all brochures and other documents belonging to, originating from or copied from, the Applicant;
2.An injunction preventing each of the first and second respondents from further obtaining, publishing or otherwise dealing with any of the documents belonging to or originating from the Applicant;
3.Damages;
4.Alternatively an account of the profit made by the first and second respondents;
5.Interest on the sums claimed at such rate as the Court thinks just.’
Interlocutory relief was claimed by way of an Anton Piller order.
The statement of claim filed in support of the application was spare. After identification of the parties it asserted that:
‘4.The Applicant is the owner of copyright in various promotional documents and brochures created by it from time to time.’
Then it was said that Mr Coghlan on his own behalf and on behalf of MaXXimus:
‘…obtained and published documents and brochures of which the Applicant owns the copyright.’
Particulars in support of the latter plea alleged the creation of the brochure by Mr Moyle and that Mr Coghlan ‘… without authority somehow obtained access to that document and transmitted it by email to Match Point (Australia) Pty Ltd’. It was further alleged in the statement of claim that by his unauthorised access to and publication of the document Mr Coghlan was in breach of ‘… an obligation of confidence owed to Stirling House or of an implied duty of fidelity and good faith owed by a former employee’.
The Claim for Interlocutory Relief
The claim for interlocutory relief by way of an Anton Piller order was brought before this Court yesterday on an ex parte basis. Stirling House seeks an order under which Mr Coghlan and his company would be required to permit a group of up to six persons to enter his offices in the Australian Capital Territory. He would be required to permit them to search for, inspect, test and examine, copy, photograph or videotape all electronic equipment and computers, software, files, papers or any documents relating to materials or documents originating from the applicant or the means by which they were obtained. It would also require him to allow the applicant’s representatives to remove into the possession and safety of the applicant’s solicitors and/or the applicant’s computer expert all or any electronic equipment computers, forensic disc, images or other data copies, files, papers or any documents relating to materials or documents originating from the applicant or the means by which those things were obtained.
The persons to be so empowered by the order would comprise:
‘(a)not more than three (3) representatives of the applicant which will include two (2) computer experts;
(b)not more than two (2) partners or employees of the applicant’s solicitors Hammond King Touyz or appointed agents;
(c)a solicitor other than a member of Hammond King Touyz (“independent solicitor”).’
The Court is empowered by s 23 of the Federal Court Act 1976 (Cth) to make an Anton Piller order. However such orders are exceptional and established criteria for their grant require that:
(a) There must be an extremely strong prima facie case.
(b) The damage, potential or actual, must be very serious for the applicant; and(c)There must be clear evidence that the respondents have in their possession incriminating documents or things and that there is a real possibility that they may destroy such material before any application inter partes can be made.
These criteria are accepted by Stirling House in its submissions in support of the grant of such an order.
The causes of action relied upon by Stirling House are somewhat elusive. They are said to be ‘breach of copyright’ and ‘breach of confidence’.
No infringement of copyright is identified on the written submissions put on behalf of Stirling House. It is said that the brochure was an original literary work for the purposes of the Copyright Act 1968 (Cth) (the Act) and so much may be accepted for the moment. Beyond that however, it is not said how Mr Coghlan or his company infringed copyright in the brochure. It was submitted by counsel, upon questioning, that the supply of the brochure to Match Point constituted publication in infringement of the relevant copyright.
In the case of a literary work, copyright is the exclusive right to do a number of things in relation to it one of which is (s 31(1)(ii) of the Act):
‘to publish the work’
Section 36 of the Act provides that:
‘(1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.’
It may be that the transmission by email of the brochure to a third party could involve reproduction amounting to infringement but this was not argued. Nor was it pleaded. Nor, indeed, was infringement by way of publication pleaded. In the context of s 31(1) of the Act the High Court has held that the words ‘to publish’ mean to make public that which has not previously made public in the copyright territory – Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88.
In my opinion the case as pleaded and explained on affidavit does not make a strong prima facie case for infringement of Stirling House’s copyright in the brochure.
In relation to the alleged asserted cause of action in breach of confidence, counsel for the applicant submitted that there are three elements:
(a) the information itself must have the necessary quality of confidence about it;
(b)the information must have been imparted in circumstances purporting an obligation of confidence; and
(c)there must be an unauthorised use of that information to the detriment of the party communicating it.
It was submitted that the brochure was a draft promotional brochure provided only to Mr King at a related company and clearly not something which was public property or public knowledge and not intended to be provided to a competitor.
It was submitted that the clear inference from the evidence is that the brochure was not lawfully obtained. The timing of the obtaining of the brochure the same afternoon after it was created by Mr Moyle supports, it was said, an inference that it was somehow obtained electronically by Mr Coghlan. This, it was submitted, was sufficient to meet the circumstances importing an obligation of confidence. Passing the brochure on to Match Point, a competitor of the applicant led, it was submitted, to an unauthorised use to the detriment of the applicant.
The quality and duration of the confidentiality of the brochure and the way in which its supply to Match Point could lead to damage to the applicant did not emerge from the affidavit evidence. It is plain that the brochure was intended to be made public for the purpose of marketing corporate hospitality packages. It was therefore not going to remain confidential for very long. It seems unlikely that it would simply have been copied and used by a competitor. Such a use would have been immediately obvious. The format of the brochure was not confidential to Stirling House as it was based upon a template provided by Telstra Dome. The only suggestion that was made from the bar table as to the way in which the brochure could have been misused was to provide information as to the proposed pricing of the applicant’s package to a competitor in a way that might disadvantage the applicant. This was not pleaded expressly albeit it is at least plausible. It was not the subject of evidence which might enable any confident judgment to be made about the sensitivity of pricing information and therefore a judgment as to the period of its confidentiality and the damage which the applicant might suffer by its disclosure to a competitor.
In my opinion, the first condition for the grant of an Anton Piller order, namely that there must be a very strong prima facie case, is not made out on the materials put before me. Nor am I satisfied that on the basis of the materials relating to the obtaining of the relevant brochure that an inference can be drawn that absent the Anton Piller order the applicant would suffer serious damage.
The evidence does support a seriously arguable case that Mr Coghlan obtained unauthorised access to information held electronically by Stirling House. If he did obtain such access, it is unlikely to have been lawful. Moreover there is enough to indicate an arguable case of misuse of that information which, so far as it related to pricing, was at least for a time likely to have been confidential. That case is sufficient, in my opinion, to support the grant of the lesser interlocutory relief claimed by the applicant. On the materials before me at present the balance of convenience favours the grant of that relief. It will however be open to the respondents to apply on short notice to vary or discharge the orders.
I propose to refuse the claim for an Anton Piller order. As indicated however to counsel for the applicant, I am prepared to grant interlocutory injunctive relief in the alternative form sought by Stirling House. This is on the basis that there is an arguable case of misuse of confidential information and a balance of convenience in favour of the grant of the relief sought. It is subject to the usual undertaking as to damages which has been offered by Stirling House and, as indicated, liberty to the respondents to apply to vary or discharge it.
I certify that the preceding thirty five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. Associate:
Dated: 9 November 2005
Counsel for the Applicant: Mr MF Holler Solicitor for the Applicant: Hammond King Touyz Date of Hearing: 8 November 2005 Date of Judgment: 9 November 2005
0
2
0