Webster Signs Pty Ltd v Nicolaou & Ors

[2007] NSWSC 704

CITATION:	Webster Signs Pty Ltd v Nicolaou & Ors [2007] NSWSC 704
HEARING DATE(S):	25 June 2007
JUDGMENT DATE :	25 June 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	25 June 2007
DECISION:	Injunction refused.
CATCHWORDS:	INTERLOCUTORY INJUNCTION – Whether evidence sufficient to demonstrate serious question to be tried – whether balance of convenience favours injunction.
PARTIES:	Webster Signs Pty Ltd – Plaintiff Anthony Nicolaou – First Defendant Van International Pty Ltd – Second Defendant Tanvic Group Pty Ltd – Third Defendant
FILE NUMBER(S):	SC 3307/07
COUNSEL:	Ms K.M. Richardson – Plaintiff W.J. van Ede (Sol) – Defendants
SOLICITORS:	Henry Davis York – Plaintiff E.H. Tebbutt & Sons – Defendants

3307/07 Webster Signs Pty Ltd v Nicolaou & Ors

JUDGMENT – Ex tempore
25 June, 2007

1    The Plaintiff has commenced proceedings against the First Defendant and companies controlled by him seeking orders permanently restraining the Defendants from making use of confidential information said to be within the Defendants' possession. The Plaintiff also seeks orders restraining the Defendants from providing services to a major competitor of the Plaintiff. 2    The Plaintiff's case, reduced to its simplest elements, is that the First Defendant, Mr Nicolaou, was engaged by it as a consultant in its business for some years, in the course of which he became aware of confidential pricing information and other confidential information relating to the Plaintiff's business which, unless restrained, he now will use for the benefit of the Plaintiff's competitor. 3    When the matter first came before the Court ex parte on 22 June I gave leave to serve on short notice and the matter was stood over until today. The parties have been in discussions as to some sort of temporary accommodation and a number of matters have been agreed, but there is one matter upon which they cannot agree. 4    The Defendants are willing to give undertakings in relation to activities concerning a number of specified clients or former clients of the Plaintiff, but they are not willing to give undertakings in relation to any proposed dealings which the First Defendant or the Plaintiff's competitor may have with the Australian Rugby Union (“ARU”). 5    Accordingly, in the absence of any agreement, Ms Richardson of Counsel, who appears for the Plaintiff, has this afternoon sought an interlocutory injunction restraining the Defendants from dealing with the ARU or using information said to be confidential for the benefit of the Plaintiff's competitor in its dealings with the ARU. 6    There are a number of difficulties confronting the Plaintiff in the bringing of this application this afternoon. Many of them may well be to do with the fact that the application has been brought on urgently and there was not sufficient time for the Plaintiff to prepare its case as adequately as it may have wished. However, it seems to me there is such doubt about the existence of a serious question to be tried and also as to the balance of convenience in relation to the dealings or possible dealings between the defendant and the ARU that I do not feel able to grant the injunction as sought this afternoon. 7    I will only refer very briefly to those difficulties because the matter may come back to me very shortly in the Duty Judge's list and at that time, no doubt, with more evidence. The difficulties I see at the moment are these. 8    The relationship between the Plaintiff and Mr Nicolaou seems to have been via a consultancy agreement between the Plaintiff and Mr Nicolaou's company, Van International Pty Ltd. There is in evidence a consultancy agreement between those two companies. Accordingly, there is no direct contractual relationship between the Plaintiff and Mr Nicolaou. 9    Further, the contract between the Plaintiff and Mr Nicolaou's company requires Mr Nicolaou's company to keep the confidential information confidential, but does not purport to extend to any sort of warranty or agreement on the part of the company to procure Mr Nicolaou to keep such matters confidential. 10    That observation is by no means an end of the matter in terms of the relationship between Mr Nicolaou himself and the Plaintiff but, in the absence of pleadings, I would require some formulation of the basis of the Plaintiff's claim against Mr Nicolaou personally, as it is said to arise out of the contract. At the moment no such contract seems to be in evidence. 11    The Plaintiff also relies on a fiduciary relationship by Mr Nicolaou to the Plaintiff but again, the facts and circumstances upon which that fiduciary relationship arises need to be articulated, and that has not yet occurred. 12    There is a non-competition clause in the consultancy agreement between the Plaintiff and Mr Nicolaou's company, but it does not go so far as to prevent Mr Nicolaou's company from approaching or dealing with any person or company which has been a client of the Plaintiff in the specified period. It simply proscribes Mr Nicolaou's company from engaging in any activities both of a private nature which may be in conflict both directly and indirectly with the company. The extent and reach of such a covenant is debatable. 13    The last observation is in the context of the very scant and vague evidence concerning the relationship between the Plaintiff and the ARU, the subject matter of this afternoon's limited application. The only evidence as to the relationship between the Plaintiff and the ARU is in an affidavit provided by the Plaintiff's solicitor today, on information and belief. In that affidavit Mr Gorry says that the Plaintiff's director has informed him that:
“The ARU has been the recipient of the services of the Plaintiff for some time since around 2004 and that the Plaintiff considers the ARU to be a client".

The affidavit continues, saying that Mr Gorry understands that, during the time that Mr Nicolaou was an employee and consultant of the Plaintiff, he was very much the public face of the Plaintiff and had contact with the ARU as part of his role with the Plaintiff. The affidavit continues:
“Mr Nicolaou is fully aware of the pricing and other tender structures and arrangements employed by the Plaintiff in situations like those imposed by the ARU tender".
14    This evidence is quite vague and imprecise. I am not satisfied that a prima facie case is demonstrated that Mr Nicolaou is in fact in possession or likely to be in possession of confidential information directly pertaining to the contract which has been put out for tender by the ARU. It is quite possible that he does have such information, but I am not yet provided with sufficient evidence for me to conclude that there is a serious question to be tried on that issue. 15    However, the major stumbling block to the grant of an injunction this afternoon seems to me to be that the Plaintiff has not demonstrated that the balance of convenience favours the grant of an interlocutory injunction, even for such a short space of time. The ARU has put a contract out for tender for which both the Plaintiff and the company for which Mr Nicolaou now works are competing. That tender closes in early July. The Plaintiff does not want Mr Nicolaou to contribute whatever confidential information he has for the benefit of his employer in the tender process. 16    Ms Richardson says that tomorrow she will have an affidavit from the Plaintiff's director explaining with greater particularity the relationship between the Plaintiff and the ARU and the nature of the information possessed by Mr Nicolaou which the Plaintiff seeks to prevent Mr Nicolaou using. The fact that I have declined to grant an injunction this evening does not, of course, preclude the Plaintiff from applying tomorrow at 10am or at any other time to renew its application for an injunction when it has evidence better supporting its claim. 17    At the moment I do not see that the Plaintiff is likely to suffer irremediable prejudice by the refusal of the Court to grant an injunction between now and when the Plaintiff appears tomorrow. The reality of the situation is, it seems to me, that if Mr Nicolaou had anything to tell his employer which is of use in the tendering process for the ARU contract, it is likely that he has already done so. 18    I do not wish to speculate or prejudge an issue, but I feel that I must decline the application because the evidence as to a serious question to be tried and as to the balance of convenience is at this stage too scanty to justify relief.
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