Eurekly Limited v Crimson Consulting Limited

[2019] NZHC 2674

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-002696

[2019] NZHC 2674

BETWEEN

EUREKLY LIMITED

Plaintiff

AND

CRIMSON CONSULTING LIMITED

First Defendant

NATALIA ROZOVA

Second Defendant

Hearing:	26 August 2019
Appearances:	W R Potter and B S Rorrison for the Plaintiff T J P Bowler for the Defendants
Judgment:	23 October 2019

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 23 October 2019 at 10.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Meredith Connell, Auckland Neilsons, Auckland

EUREKLY LTD v CRIMSON CONSULTING LTD [2019] NZHC 2674 [23 October 2019]

[1]        This judgment concerns an ongoing dispute as to the proper jurisdiction for this proceeding.

[2]        The proceeding was commenced in December 2018. Instead of filing a statement of defence to the plaintiff's statement of claim the defendants filed an appearance and objection to jurisdiction under r 5.49(5) of the High Court Rules 2016 and applied to dismiss the proceeding as not being within this Court's jurisdiction but rather within the Employment Relations Authority's exclusive jurisdiction. Subsequently, the plaintiff filed an application to set aside the objection to jurisdiction (the protest).

[3]        When first made, the protest appeared to be in respect of the entire claim made by the plaintiff against both defendants. But it is now agreed the protest is made only by the second defendant, Ms Rozova; and only in respect of two of three causes of action alleged against her. She wants those causes of action dealt with by the Employment Relations Authority. The first defendant supports her in that.

[4]The plaintiff contends the entire claim comes within this Court’s jurisdiction.

[5]        For the reasons following in this judgment, I am persuaded that the plaintiff’s application to set aside the protest must be granted and the protest set aside.1

Eurekly’s claim

[6]        The proceeding has arisen from a proposed joint venture that did not go ahead. In the aftermath of failed negotiations, the intended joint venturers, the plaintiff and the first defendant, became embroiled in a serious dispute; and the plaintiff, Eurekly Limited, commenced this proceeding. In its statement of claim pleads various causes

1      Other interlocutory applications have also been filed. The fixture on 26 August 2019 was initially allocated for the hearing of five interlocutory applications. Following discussion with counsel it was agreed that it was appropriate to hear and to determine one matter. This is the challenge to jurisdiction arising from the notice of protest to jurisdiction.

of action against the first defendant, Crimson Consulting Limited, and the second defendant, Ms Rozova, which I will turn to presently.2

[7]        The backdrop to the dispute, as Eurekly sees it, is set out at some length in the statement of claim. Briefly summarised, it says:

(a)It is an education start-up company that was developing an online platform connecting students with tutors for one-to-one tutoring services and grew out of an investment body called Clarke Group Management Ltd, operating out of the same offices. Ms Rozova, who now works for Crimson, an education consulting company, was an employee of Clarke Group primarily involved in project managing the Eurekly start-up. She acted as Head of Product for Eurekly.

(b)The joint venture negotiations commenced in July 2018 and on

31 July 2018 and the two companies entered into a mutual confidentiality agreement. Under that agreement Eurekly and its staff provided Crimson with confidential information.

(c)The proposed basis for the joint venture was that Crimson would invest in Eurekly in exchange for part-ownership of Eurekly's business and on 19 August 2018 the chief executive officers of both entities reached agreement in principle regarding terms. On 28 August 2018 Crimson presented Eurekly with a letter of offer regarding the joint venture, subject to certain conditions.

(d)But in mid-October 2018 Crimson informed Eurekly that it could not proceed with the joint venture because Crimson's board had not approved the transaction. Crimson then set about acquiring the core of Eurekly's business by other means. Ms Rozova facilitated Crimson by providing it with Eurekly's confidential information. She also breached a fiduciary duty to Eurekly, in several ways, including operating her

2      The plaintiff filed an amended statement of claim at my direction on 30 August 2019. Brief memoranda were also filed as directed. The amended claim does not differ in substance from the original statement of claim and there has been no need to reconvene the hearing.

own "side venture", an education technology project without Eurekly's knowledge or consent.

(e)On 4 November 2018 Eurekly requested Crimson to destroy or return all confidential information provided by Eurekly, as required under the confidentiality agreement. On 1 December 2018 Crimson advised that it had deleted all the confidential information. That in fact was untrue.

[8]        In the claim Eurekly particularises the allegations making up this narrative. As against Ms Rosova it pleads the terms of the contractor agreement under which Ms Rozova was employed by Clarke Group to work on Eurekly, which included a requirement that she not disclose any confidential information relating to it or its project or works without written approval, subject to certain exceptions; and it says she was party to its confidential information as she:

(a)managed the development of the software and/or website for [Eurekly’s] service platform;

(b)had a supervisory function over [Eurekly’s] design team and developers;

(c)had access to [Eurekly’s] key intellectual property and trade secrets in relation to its software and service platform;

(d)gained intimate knowledge of [Eurekly’s] business, including the structure and workings of its software and service platform and the computer code that underlies it;

(e)was aware that much of the current value of [Eurekly’s] business lies in its software and/or website, and that she and [Eurekly’s] developers hold much of the institutional knowledge needed to complete their development; and

(f)was responsible for preparing contractor agreements that govern the engagement of [Eurekly’s] Chief Technology Officer (CTO) and developers, and for ensuring the contractor agreements were executed.3

[9]        Eurekly alleges further that Ms Rozova aided in Crimson's efforts to appropriate the core of its business by providing information, that is its confidential information, including the contact details of Eurekly's CTO and/or one of its developers; information about remuneration rates of the CTO and developers at

3      This is taken directly from the statement of claim.

Eurekly; and technical information about Eurekly's product. It says that after she had commenced working for Crimson, she caused Eurekly's CTO to provide her with confidential information about Eurekly's business via an end-to-end encrypted communications application called Telegram.

[10]      In relation to Crimson, Eurekly says Crimson went about acquiring the core of its business by:

(a)recruiting Ms Rozova, who had knowledge of its trade secrets, intellectual property and institutional knowledge regarding its business; and

(b)taking steps to recruit Eurekly’s Chief Technology Officer (CTO) and developers, who also had knowledge of Eurekly’s trade secrets, intellectual property and institutional knowledge regarding its business;

(c)offering employment to Ms Rozova prior to 1 November - which she accepted, finishing work at Clarke Group on 29 October 2018 and starting with Crimson on or about 5 November - and recruiting the CTO   and   developers   by   online    communications    beginning  26 November; and

(d)recruiting key staff as a means of acquiring the benefits of the joint venture without the venture going ahead, with the recruited staff's technological and institutional knowledge providing Crimson the means to replicate Eurekly’s business internally.

[11]       In respect to Ms Rosova’s alleged side venture Eurekly pleads that, during her employment at Clarke Group, she developed an education technology application called School App, engaging Eurekly’s CTO and two developers working on the Eurekly project to undertake work on the App. It alleges that the endeavour was a conflict of interest between its business and Ms Rozova’s interests, given the App was an education technology product potentially in competition with its own business and

created by the same technical staff as Eurekly’s product. It claims Ms Rozova failed to disclose the School App venture or any conflict of interest to Eurekly.

[12]      I pause to note that the defendants dispute the substance of Eurekly’s claims. But it is unnecessary, in the context of the disputed protest as to jurisdiction, to set out the disputed matters in detail.

The causes of action

[13]Eurekly has a total of four causes of action. These are against:

(a)Crimson for breach of contract; and

(b)Ms Rozova for:

(i)breach of confidence.

(ii)breach of fiduciary duty.

(iii)inducing breach of contract.

[14]      It is agreed that the third cause of action against Ms Rozova is a claim in tort that does not depend on Ms Rozova’s previous employment with Eurekly. It is beyond argument that it is appropriately heard in the High Court. It essentially pleads that while working for Crimson, Ms Rozova knew Eurekly’s CTO was subject to a contractor’s agreement, and deliberately induced the CTO’s breach of that contract by causing him to provide her confidential information.

[15]      The first cause of action subject to protest – breach of confidence – is on the basis that the information Ms Rosova provided Crimson in the course of its efforts to acquire the core of Eurekly’s business was confidential to Eurekly, and imparted or obtained in circumstances importing an equitable (or, alternatively, sui generis) obligation to maintain that confidentiality. The losses pleaded against Ms Rozova are of lost productivity, the cost of procuring replacement staff, the loss of trade secrets and institutional knowledge, business disruption and damages to the development of

its software and service platform. Eurekly pleads that the efforts by Crimson to acquire the core of its business risk extinguishing its value entirely. It seeks damages in an amount to be particularised up to $10 million, being the estimated value of its business and costs.

[16]      The  second  cause  of  action  subject  to   protest  is   on  the  basis   that   Ms Rozova’s relationship with Eurekly placed her under a fiduciary duty which she breached. Eurekly pleads that it entrusted her with its intangible property, including confidential information, and with jobs to be performed – including acting as its agent in the recruitment of technical staff, negotiations of contracts with those staff and management of those staff and as its representative in discussions with Crimson about Eurekly’s business for the proposed joint venture. It says she undertook to act – and placed herself in a position where she was obliged to act – in its interests and not to engage in actions in conflict with them.4 It further pleads that she breached her fiduciary duty through her “defection to the first defendant as part of a common plan for the first defendant to acquire the core of the plaintiff’s business and her subsequent assistance in that plan”; and through her engagement in School App, which created a conflict between Ms Rozova and Eurekly without Eurekly’s informed consent.

[17]      The related losses Eurekly pleads include lost productivity, business disruption and loss of loyalty. It seeks an account of profits.

Law

[18]     Under r 5.49(6) of the High Court Rules, the Court hearing an application to set aside an appearance and objection to jurisdiction, must:

(a)        if it is satisfied that it has no jurisdiction to hear and determine the proceeding, dismiss the proceeding; and

(b)        if it does not dismiss the proceeding under paragraph (a), set aside the appearance.

4 Eurekly appears to also allege some duty of general loyalty.

[19]       It is usual for protests to the Court’s jurisdiction to be determined on the affidavit evidence.5

[20]      The protest is based primarily on s 161(1) of the Employment Relations Act 2000, which grants the Employment Relations Authority exclusive jurisdiction to hear and determine claims involving an employment relationship problem.

[21]     The Authority is established by s 156. Section 157 sets out the role of the Authority, which “is an investigative body that has the role of resolving employment relationship problems by establishing the facts and making a determination according to the substantial merits of the case, without regard to technicalities.” In other words, the Authority is the body charged with resolving disputes in an employment context.

[22]Section 161 sets out the exclusive jurisdiction of the Authority:

161 Jurisdiction

(1) The Authority has exclusive jurisdiction to make determinations about employment relationship problems generally, including—

(b)     matters related to a breach of an employment agreement:

…

(r)any other action (being an action that is not directly within the jurisdiction of the court) arising from or related to the employment relationship or related to the interpretation of this Act (other than an action founded on tort):

…

(3)  Except as provided in this Act, no court has jurisdiction in relation to any matter that, under subsection (1), is within the exclusive jurisdiction of the Authority.

[23]      The leading appellate authority on the exclusive jurisdiction of the Authority is JP Morgan Chase Bank NA v Lewis.6 The Court of Appeal stated that an employment relationship problem “must be one that directly and essentially concerns

5      Stone v Newman (2002) 16 PRNZ 77(CA) at [25]; and McGechan on Procedure (online loose- leaf, Thomson Reuters) at [HR5.49.09].

6      JP Morgan Chase Bank NA v Lewis [2015] NZCA 225, [2015] 3 NZLR 618.

the employment relationship”.7 The category does not include causes of action with origins in the employment relationship if the existence of the employment relationship is not a necessary component of the cause of action – the problem “must be one that directly and essentially concerns the employment relationship.”8

[24]      The Court principally drew on two decisions of the High Court. The first was the comments of Panckhurst J in Pain Management Systems (NZ) Ltd v McCallum, which clarify the difference between the “essence” and “origins” of a claim:9

… it is important to distinguish between a claim which may have its origins in an employment relationship on the one hand, and a claim the essence of which is related to or arises from the employment relationship of the parties on the other. Is the issue in a particular claim an employment relationship one, or is the subject-matter of the claim some right or interest which is not directly employment related at all? …

[25]      The second decision quoted was that of the Full Court of the High Court     in BDM Grange Ltd v Parker, which emphasised the “essential character” of the cause of action:10

[…] We express our essential agreement, at greater length, with the analysis of Panckhurst J [in Pain Management Systems] that “relating to” in the definition of “employment relationship problem” must be read in a limited way to mean any cause of action, the essential character to which is to be found entirely within the employment relationship itself. This would not encompass claims arising from tortious conduct even if arising between an employer and employee, since the relationship merely provides the factual setting for the cause of action; the duty arises independently.

[26]      My task in dealing with this application is to determine whether Eurekly’s two claims against Ms Rozova are fundamentally, or in their very essence, to do with an employment relationship problem.

Assessment

[27]      The core of Ms Rozova’s argument is that the essence of Eurekly’s first two causes of action against her are employment relationship problems. Counsel submits

7 At [95].

8 At [95].

9      Pain Management Systems (NZ) Ltd v McCallum HC Christchurch CP72/01, 14 August 2001 at [22]; quoted in JP Morgan, above n 4, at [96].

10     BDM Grange v Parker [2006] 1 NZLR 353 (HC) at [66]; quoted in JP Morgan, above n 4, at [98].

that they arose while she was effectively an employee of Eurekly, and that they are directly and essentially concerned with the employment relationship. As such, he submits, they are based on Ms Rozova’s alleged breaches of the express and/or implied terms of her individual employment agreement and her post-employment obligations

– which is squarely within the Authority’s exclusive jurisdiction.

[28]      Conversely, Eurekly contends that the very nature of its claims is such that its relationship with Ms Rozova provides a setting for the breaches it alleges but does not determine their “essential character”. Its causes of action are framed in equity and sui generis breach of confidence, which it argues are distinct from employment relationship problems, bringing them outside of the Authority’s exclusive jurisdiction.

[29]      Both parties made quite substantial submissions directed towards whether  Ms Rozova was factually an employee of Eurekly or not, with a view to bolstering their cases as to whether this is an employment relationship problem. Under ss 6(5) and 161(c) the authority to determine whether someone is an employee falls within the employment jurisdiction. However, I do not consider the Authority or Employment Court is required to resolve the question of Ms Rozova’s “true” employment status for Eurekly’s claims to be heard in this Court. This is because my finding turns on the nature of the causes of action themselves, rather than on whether Ms Rozova was an employee of Eurekly for the Act’s purposes.

[30]      Counsel for Ms Rozova argues in favour of an expansive reading of the Authority’s exclusive jurisdiction, which looks more to the factual substance of the claim between the parties than how it was pleaded. That reading appears to have been adopted by Brewer J in the context of tort in FMV v TZB, where he considered that the fact that an applicant had pleaded her case in tort (regarding an unsafe work environment) rather than suing for breaches of her individual employment agreement did not displace the Authority’s exclusive jurisdiction:11

[25] I am satisfied FMV’s claim is wholly dependent on the existence of a relationship between an employee and employer and is therefore not subject to the exception for tort in s 161(1)(r). This is because the entire claim is founded upon the employer/employee relationship between TZB and FMV.18

11     FMV v TZB [2018] NZHC 1131.

Absent this relationship, the claim falls down. It is not merely background as counsel for FMV contends, but rather colours the whole picture.

[31]      That decision was upheld on appeal.12 The Supreme Court recently granted leave for a further appeal, which could theoretically change or clarify the position.13

[32]      Counsel for Ms Rozova submits that, on this expansive view, Eurekly pleading its claims in equity and breach of confidence is insufficient to remove those claims from the Authority’s exclusive jurisdiction. Such pleading would merely be dressing up the fundamental nature of the dispute, which is rooted in the employment relationship.

[33]      However, counsel for Eurekly was able to point me to two factually analogous cases of this Court, in which this Court was found to have jurisdiction over the Authority. Neither of those cases has been overturned, or substantively criticised at an appellate level.

[34]      The first is PropertyIQ NZ Ltd v Vicelich, which predates the Court of Appeal’s decision in JP Morgan.14 That case turned on whether the Authority had exclusive jurisdiction to determine proceedings in which a plaintiff company alleged that a former employee and her company had unlawfully acquired its confidential information. The fact situation was similar to this one:

[4]        The first defendant (Ms Vicelich) was an employee of PropertyIQ. Later, for a brief period of time, either she or the second defendant, Data Insight Limited (Data Insight), was contracted by PropertyIQ to perform services for it. Ms Vicelich is the sole director of Data Insight and she holds half the shares in that company.

[5]        The confidential information that Ms Vicelich obtained from PropertyIQ was largely obtained while she was employed by the company. Both defendants contend, therefore, that the allegations that PropertyIQ make arise from, or are directly related to the employment relationship that then existed; hence, pursuant to s 161(1)(r) of the Employment Relations Act 2000, they fall within the exclusive jurisdiction of the Employment Relations Authority. So this Court has no authority to hear and determine the application.

[6]        PropertyIQ contends that Ms Vicelich owes it fiduciary obligations, as  well  as  being liable  for  breach  of  confidence  and  that  Ms Vicelich’s

12     FMV v TZB [2019] NZCA 282.

13     FMV v TZB [2019] NZSC 108.

14     PropertyIQ NZ Ltd v Vicelich [2012] NZHC 2016, (2012) 9 NZELR 614.

potential liability under these causes of action is unaffected by s 161(1)(r). PropertyIQ also contends that part of its claim is against Ms Vicelich as an independent contractor, as well as the company over which she has control; thus, the inclusion of these claims bring the proceeding within the jurisdiction of this Court, as such claims cannot be brought before the Employment Relations Authority.

[35]      Justice Duffy found that the High Court did have jurisdiction.15 This was based partly on distinguishing situations where an employee misuses confidential information while remaining in the employment relationship from situations where an employee misuses confidential information after the relationship has come to an end.16 Her Honour commented:

[14]      More importantly, I have difficulty seeing how the circumstance of a disloyal employee, who appropriates his or her employer’s confidential information for a personal benefit, who then leaves this employment and prepares to, or actually sets to making use of the confidential information to the detriment of the former employer can fit within the scheme and purpose of the Employment Relations Act. The overall impression I have of the Act’s scheme and purpose is that it is focused on current employer/employee relations and the termination of those relations where the termination has occurred in an unlawful manner.

[15]      When an employee takes an employer’s confidential information for his or her own benefit, two results may follow. The first is that the employee remains in the employment relationship but by some means misuses the confidential information. Since the employee is still subject to the authority of the employer, it would be open to the employer to take steps under the Employment Relations Act to bring the misconduct to an end. But even then, such action would only be useful if the confidential information had not been disclosed to other persons who were outside the employment relationship. For if this had occurred and the employer wanted to prevent those persons from also misusing its confidential information, the employer would be faced with the jurisdictional void that was identified by Keane J in Transnet NZ Ltd. It would make no sense, given the procedural and evidential differences between the Employment Relations Authority and courts of general jurisdiction if, in such circumstances, the employer were obliged to bring proceedings against the employee under the Employment Relations Act, but to proceed before this Court against the third party recipients of the confidential information. Thus, I consider that in this circumstance, whether the employer can seek the help of a court of general jurisdiction will turn on whether the breach of confidence involves defendants who are outside the employment relationship.

[16]      The second result is where the confidential information is obtained during the course of the employment relationship but the employer does not discover this until after the relationship has come to an end and the former employee is either about to or has begun taking steps to use the confidential information for his or her own benefit, either directly or indirectly through the

15 At [13].

16     At [14]–[16].

auspices of another entity, such as a registered company in which the former employee has an interest. In this circumstance, I consider that the entirety of the former employee’s conduct can form the basis of a claim in this Court, irrespective of whether there are other defendants who have always been outside the employment relationship. This is because the Employment Relations Act provides no remedies for an employer faced with this conduct. I note that in SSC & B Lintas New Zealand Ltd v Murphy [1986] 2 NZLR 436 (HC) at 455, Prichard J said that an employee’s obligation of fidelity ended with the employment relationship. There is nothing in the Employment Relations Act that leads me to conclude that it has changed matters and that the statutory obligations that Act imposes on employees survive the lawful termination of the employment relationship.

[36]      The second case is Ecostore Co Ltd v Worth, which was decided by Gilbert J subsequent to the Court of Appeal’s decision in JP Morgan.17 Ecostore involved a development chemist who had stored confidential information belonging to her former employer on her personal laptop during her employment, and had since been employed in a similar capacity by a direct competitor.18 Her first employer sought an injunction preventing her from using the confidential information, advancing causes of action, in breach of confidence, conversion and breach of copyright.19 The background allegations in the pleadings referred to terms restricting the use of confidential information in the employment agreements.20

[37]      His Honour adopted the approach taken by Duffy J in PropertyIQ and ruled that the High Court could hear the case.21 Among his reasons was the fact that there was no ongoing employment relationship to be supported (which was the principal object of the Act), and there was no employment right or interest at stake.22 Gilbert J characterised the rights relied on as:23

Ecostore’s right in equity to enforce a duty of confidence in respect of its confidential information; its property rights enforceable through the tort of conversion: and its rights as a copyright owner conferred under the Copyright Act 1984. None of these rights depend for their existence on the employment agreement. The employment agreement merely provides the factual setting for the causes of action which rely on duties that arise independently of that agreement.

17     Ecostore Co Ltd v Worth [2017] NZHC 1480, (2017) 15 NZELR 93.

18     At [1]–[2].

19 At [3].

20 At [4].

21 At [23].

22 At [24].

23     At [25]; and Employment Relations Act 2000, s 3(a).

[38]      How the claims had been pleaded – relying not on the employment agreement but on equitable and property rights that go beyond the agreement – was therefore at least somewhat determinative of whether the dispute was fundamentally an employment relationship problem.24

[39]      Counsel for Ms Rozova suggested that the approach in PropertyIQ (and therefore also the approach in Ecostore) has been distinguished by the Court of Appeal’s focus on the “essence” of the claim in JP Morgan, an approach counsel says is evident in the recent decision of this Court in Porteous v National Mutual Life Association of Australasia.25

[40]      Porteous involved multiple causes of action against an insurance company relating to an insurance policy it provided, and one cause of action against the former employer through which the employee was insured.26 Associate Judge Andrew struck out the cause of action against the former employer, which was based on the breach of an implied term in the employment agreement (that the employer had to keep the employee advised of limitation for the insurance policy and the consequences of termination) because it was bound to that agreement and did not arise independently.27 The Judge accepted that requiring that the claim against the employer be brought separately was less than ideal in practical terms, requiring two separate hearings regarding substantially the same events, but he considered that outcome was mandated by s 131’s exclusive approach to jurisdiction.28

[41]      Counsel for Ms Rozova submits that the outcome in Porteous suggests that these two claims should be moved to the Authority regardless of various policy arguments Eurekly made regarding convenience. Counsel also suggested that, given the exclusivity of the Authority’s jurisdiction, the fact that Crimson is also a named defendant in these proceedings is not relevant to the decision as to jurisdiction.

24     At [27]–[28].

25     Porteous v National Mutual Life Association of Australasia [2018] NZHC 2056.

26     At [28]–[29].

27     At [23]–[25].

28 At [31].

[42]      I consider that the facts of the present case closely align with those of both PropertyIQ and Ecostore. I consider the reasoning in those cases applicable to this one, and the same outcome to be the right one – the case proceeding in the High Court.

[43]      First, Ms Rozova is no longer an employee of Clarke Group. There is no longer an employment relationship to be supported.

[44]      Second, Eurekly is not bringing its claims for breaches of an employment agreement. Ms Rozova is accused of, among other things, breaching a duty of confidence and a fiduciary duty. While those duties overlap somewhat with her employment contracts, such duties are legally capable of taking on life of their own. Eurekly has pleaded on the basis that they have taken on such life, by framing its claims in equity or sui generis breach of confidence, rather than as breaches of the employment agreement. Its pleadings under each cause of action do not rely on the employment agreements. The employment agreements only feature in the provisions laying out the background context. The remedies sought are also not all available in the Authority.

[45]      Applying the reasoning of both PropertyIQ and Ecostore to the circumstances, this is a case where the opportunities for breach arose in the context of an employment relationship, but employment is not at its essence. To use the language of the Court in BDM Grange, the “essential character” of the causes of action is in equity, not employment.

[46]      I am not persuaded that Porteous supports a different outcome. In Porteous the allegedly breached duty was to keep the employee abreast of details as to the insurance policy they received through employment. Whether that duty existed required scrutinising both whether such a duty generally exists in an employment relationship and the implied terms of the specific agreement.29 Those questions are closely tied to the employment context.

[47]      By contrast, a duty of confidence can arise in relation to confidential information however imparted. The same is true of fiduciary duties, which can arise

29 At [15].

in relation to the alleged fiduciary’s specific position without reference to the employment agreement.   Given the difference between the character of the claims,   I consider the fact that Crimson is also a named defendant in these proceedings is at least somewhat indicative that the claims are not an employment matter. I do not consider that either JP Morgan or Porteous have made the plaintiff’s position untenable as a matter of law.

[48]      For these reasons I consider that this Court’s general jurisdiction to deal with Eurekly’s claims in equity and breach of confidence is not displaced by the exclusive jurisdiction of the Authority.

Result

[49]      The application to set aside the notice of appearance and objection to jurisdiction is granted. The appearance and objection are set aside.

[50]      As costs will follow the event under the statutory regime, I make an order that the plaintiff is entitled to costs against the defendants on a 2B basis, along with disbursements to be fixed by the Registrar. The defendants are joint and severally liable for their payment.30 Eurekly is not however entitled to costs for the amending of its statement of claim.31

Associate Judge Sargisson

30     High Court Rules 2016, r 14.14.

31     Rule 7.77(8).