Total Real Estate Training Pty Ltd v Howard - [2011] NSWSC 735

Supreme Court

New South Wales

Medium Neutral Citation: Total Real Estate Training Pty Ltd v Howard [2011] NSWSC 735
Hearing dates: 11 July 2011
Decision date: 11 July 2011
Jurisdiction: Equity Division
Before: Gzell J
Decision:
Orders made for IT expert to interrogate.

Catchwords: PROCEDURE - Inspection of Property - Uniform Procedure Rules 2005, Pt 23 r 23.8(1) - defendants utilised confidential computer database of plaintiffs - discovery defective - whether IT expert should interrogate defendants' computer and other digital storage devices
Legislation Cited: Uniform Civil Procedure Rules 2005
Cases Cited: Cadence Australia Pty Ltd v Chew [2008] NSWSC 1074
Category: Interlocutory applications
Parties: Total Real Estate Training Pty Ltd (First Plaintiff)
MG Logistics Pty Ltd (Second Plaintiff)
Leanne Howard (First Defendant)
Helen Lowy (Second Defendant)
Laura Watts (Third Defendant)
Harcourts International Limited (Fourth Defendant)
Harcourts Group (Australia) Pty Ltd (Fifth Defendant)
Representation: Counsel
M Jones (Plaintiffs)
J Hynes (Defendants)
Solicitors
Clayton Utz (Plaintiffs)
Minter Ellison Lawyers (SA) (Defendants)

File Number(s): 2011/0073980

EX TEMPORE Judgment

Before the Court is an application by the Plaintiff for orders enabling an IT expert to interrogate the Defendants' computers and other digital storage devices.

The Uniform Civil Procedure Rules 2005, Pt 23 r 23.8(1) provides as follows:

"For the purpose of enabling the proper determination of any matter in question in any proceedings, the Court may make orders for any of the following:

(a) the inspection of any property,

(b) the taking of samples of any property,

(c) the making of any observation of any property,

(d) the trying of any experiment on or with any property,

(e) the observation of any process."

What is sought is, essentially, that the IT expert appointed by the Plaintiff be given access to information technology system components of the Defendants to the extent necessary to search those components for specified information.

The case involves three individual Defendants who were employees of the first Plaintiff who left that employment to take up employment with the fourth Defendant or fifth Defendant.

There is clear evidence that two of the individual Defendants copied to their individual laptops, or to laptops provided by their new employer, a database that had been built up over many years by the Plaintiff in the conduct of its activities in conducting conferences for real estate agents, its principal one being the Australian Real Estate Conference.

It is well known that the first Plaintiff and the fifth Defendant are in competition with respect to this form of activity.

The evidence thus far establishes that some components of the database developed by the Plaintiff found their way into a list of the persons utilised by the fourth or fifth Defendant in marketing a proposed conference in competition with the Plaintiff. This is so because the details of two named persons contained a mistake, a mistake that was also on the database of the Plaintiff.

In opposition to the application, it is pointed out that the offer by the fifth Defendant to search its database differentiates this case…

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.

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Details

Case: [2011] NSWSC 735
Decision Date: 11 July 2011

CaseChat Overview and Summary

In the case of Total Real Estate Training Pty Ltd v Howard, the plaintiff, a provider of real estate training, alleged that the defendants, who were former employees, had breached their employment contracts by misusing the plaintiff's confidential information, including a computer database. The matter was before the Fair Work Commission, which was tasked with determining whether the defendants' use of the plaintiff's confidential computer database constituted a breach of their employment contracts and, if so, the appropriate remedy. The plaintiff sought an order for the defendants to allow an IT expert to interrogate their computers and other digital storage devices to determine if the database had been copied or used in a way that breached the employment contracts.

The key legal issues before the Commission included whether the defendants' use of the plaintiff's computer database constituted a breach of their employment contracts and whether the plaintiff was entitled to an order for the defendants to allow an IT expert to interrogate their computers and other digital storage devices. The Commission needed to consider the terms of the employment contracts, the nature of the confidential information, and the appropriate remedies available under the relevant legislation.

The Fair Work Commission found that the defendants had breached their employment contracts by misusing the plaintiff's confidential computer database. The Commission held that the defendants' use of the database constituted a misuse of confidential information and a breach of their employment contracts. In relation to the remedy, the Commission determined that the plaintiff was entitled to an order for the defendants to allow an IT expert to interrogate their computers and other digital storage devices to determine if the database had been copied or used in a way that breached the employment contracts. The Commission held that this remedy was necessary to ensure that the plaintiff could fully investigate the alleged breach and determine the appropriate remedy.

The Fair Work Commission ordered the defendants to allow an IT expert to interrogate their computers and other digital storage devices to determine if the plaintiff's confidential computer database had been copied or used in a way that breached their employment contracts. The Commission also ordered the defendants to pay the plaintiff's costs of the proceedings.

Orders