Why the order requiring disclosure from Schlam was made
23 On the face of things, the three criteria I have described above were satisfied. As I have said, it was not in dispute that Austin had established there must be an arguable case that wrongs have been carried out by an 'ultimate wrongdoer', namely Ms Podulova.
24 It also appeared to me that the order was necessary for Austin to bring legal proceedings and to seek redress for the alleged wrongdoing: Austin has a legitimate interest in bringing whatever proceedings it can to restrain any further misuse or dissemination of its confidential and copyrighted information, or if that fails, to obtain compensation or potentially an account of profits for any misuse. Austin has provided confidential examples of Austin's information which was among the files which Ms Podulova has copied or retained, and it included detailed technical drawings of parts and products it designs and manufactures, sales and pricing information, client tender information and other communications with customers. It is easy to see why it would be of grave concern to Austin if a competitor or a customer were to have access to some of that information.
25 It is also easy to see that Austin cannot very well bring such proceedings unless it knows who might have had that access, that is, what Ms Podulova has done with the information. Some of the Schlam respondents may have the information. Mr McKemmish's evidence summarised above means that is not mere speculation. But at present what information (if any) and how much Schlam has is unknown. Schlam itself may not know without conducting further investigations. Austin has foreshadowed its intention to seek orders to enable Mr McKemmish to inspect likely repositories of Austin's information that are in Ms Podulova's or Schlam's control. Without in any sense pre-empting the outcome of that application, the disclosure orders made on 1 May 2023 are a necessary prior step to obtaining such orders.
26 It also appeared to me that the third condition, that Schlam was involved in the wrongdoing in a way which distinguishes it from being a mere witness, was also satisfied. It was employing the alleged 'ultimate wrongdoer' and many of the alleged wrongs took place during the period of her employment and, it can be inferred, possibly in the course of it (even if that was without Schlam's knowledge or approval). Specifically, there was reason to believe that Austin's information may have been transferred to a Schlam server or used in files located on that server. Even if no one at Schlam other than Ms Podulova knew about that, it is enough to mean that Schlam is 'mixed up' in the alleged wrongs and so is not a 'mere witness'.
27 As for the exercise of the discretion, there were good reasons to require Schlam to provide information about what has taken place, even acknowledging that Ms Podulova had also been ordered to do so (with her consent). She is a person who has allegedly committed wrongs involving some deception and dishonesty and if, as Schlam maintains, it had no knowing involvement in those wrongs, its evidence as to what has occurred may be valuable to compare with and supplement hers.
28 It is also relevant that Ms Podulova says that the external USB device which appears on the evidence to have been used the most in the alleged unauthorised copying of Austin's information has been destroyed. If that is true, then there will be no way that Austin can use the device to try to reconstruct what has been done with the information on it. It may be that the only way it can identify whether the information has gone further is to inquire as to whether it has been further copied or otherwise transferred to Schlam's network or devices.
29 Austin also submitted, and I accept, that if it were required to wait for trial or, at least, discovery and inspection and possibly expert evidence in the normal course, that may be too late for it to prevent Austin's information from being further disseminated or used. Experience shows how quickly digital information can be copied and disseminated, and to force Austin to wait months or more to find out what has become of the information is to expose it to a serious risk of losing any control over it. For that reason I considered that making the disclosure orders now was necessary, in the sense discussed above, to prevent probable irreparable damage to Austin, and so necessary for its long-term protection.
30 Schlam nevertheless opposed the orders on two bases. The first, it was submitted, that the evidence did not establish on a prima facie basis that confidential information had passed to Schlam. Counsel sought in that regard to distinguish Computershare on the basis that there, the defendants were all alleged wrongdoers whereas here, Schlam is not. However it appeared to me that while Computershare is not on all fours with this case, it is still relevantly similar. As in Computershare, in this case there is unchallenged and unrebutted evidence, provided at an interlocutory stage, of misuse of confidential information. In both cases, the plaintiff/applicant needs to identify the actual information used and its manner of use and who has had access to it, and there is reason to think that the information will be within the knowledge of the relevant defendants/respondents. As in Computershare, if Austin is compelled to wait too long to find out what information has been misused and who has obtained it, it may be too late.
31 I do accept, as counsel for Schlam submitted, that Computershare is different to this case because, as mentioned, the defendants in that case were all alleged wrongdoers. Warren J therefore put more emphasis on their decision not to deny the allegations than would be suitable here, where there is presently no allegation that Schlam was knowingly involved in Ms Podulova's alleged wrongs. But even allowing for that difference, the lack of any evidence contradicting the evidence adduced by Austin, and the need to find out what has been done with relevant information, mean that Computershare provides useful guidance.
32 As for the evidence specific to this case, counsel for Schlam pointed out that Mr McKemmish's report states only that there is a reasonable probability that Austin's information could have been copied to Schlam's SharePoint server or used in documents on it, which counsel submitted puts it no higher than, 'it could have'. Against that, counsel submitted, on review of Schlam's systems, Schlam has not identified that any of Austin's information has been provided to it.
33 I did not accept that these submissions provided good grounds not to make the orders sought, for two reasons. First, Mr McKemmish's opinion needs to be read as a whole. He is saying, not just in a speculative way that transfer of Austin's information to Schlam could have happened, but that there is a reasonable probability that it did. That evidence needs to be assessed in the interlocutory, and necessarily preliminary, context in which it is adduced, as well as the context that the very point of the orders sought is to obtain more information about these matters. I need not repeat what I have said on that subject above.
34 The second reason I did not accept the submission is that it was not supported by persuasive evidence. The statements that Austin had performed a review of its systems and had not found anything were made in two solicitors' letters, which were annexed to the affidavits of a solicitor who did not attest to the truth of anything in them. While the letters were in evidence without any qualification as to the use that could be made of them, I put little weight on them when neither the solicitors, nor anyone from Schlam, has gone under oath or affirmation to confirm what the letters say. As will be seen, Austin has adduced evidence suggesting that in some respects at least, the letters may be incorrect.
35 I therefore did not accept the follow up submission that this is not a case where further tracing of Austin's information is required. In my view Mr McKemmish's essentially uncontradicted evidence provides sufficient basis to think that Austin's information may have found its way to Schlam (unknowingly or otherwise), so as to make it in the interests of justice to require Schlam to provide information that will help trace what has happened to it.
36 The second basis on which Schlam opposed the orders sought was that it had cooperated and voluntarily provided the information already, in the solicitors' letters just mentioned. The first letter, dated 28 April 2023, identified Ms Podulova's employer and gave some details of the 'comprehensive review' referred to in the earlier solicitors' letter of 24 February 2023. The second letter, dated 30 April 2023, gave details of: devices that Schlam had given Ms Podulova (such as a laptop and smartphone); Schlam networks to which she had had access; and relevant user, email and cloud storage accounts. It also said that Schlam was unable to provide the details of any external storage devices that Ms Podulova may have connected to any of Schlam's computers, other devices or network, because 'Windows does not, by default, log events relating to external storage devices connected via USB. Any event logs that were created by such devices being connected would no longer exist due to the passage of time'.
37 Austin submitted that, despite those letters, it was still appropriate to order Schlam to provide the information sought in the orders, on affidavit. It emphasised three points. The first was that the letter of 28 April 2023 said that Schlam had made inquiries urgently and that they were still ongoing. The second point relied on evidence from Mr McKemmish in an affidavit he swore on 1 May 2023, that it was incorrect to suggest that Schlam's computers, operating on Microsoft Windows, could not be investigated to find out the details of storage devices that Ms Podulova had connected to those computers, other devices and networks, and to say that event logs would no longer exist due to the passage of time. The third point was that, in Austin's submission, the details given of the 'comprehensive review' showed that it was inadequate. All of these matters, Austin submitted, gave reason to believe that, given a little more time and the additional incentive to be correct that comes with having to provide information on affidavit, Schlam may produce better and more accurate information.
38 I accepted that submission. The first point requires little amplification. If Schlam's inquiries were conducted urgently that could, with the best will in the world, affect the reliability of the outcome. If they are ongoing then they may be incomplete.
39 As to the second point, Mr McKemmish's affidavit did make it good. He gave details of how the Microsoft Windows operating system records events relating to the connection of storage devices to a computer in multiple locations, and of the type of information recorded. Further, the expert report annexed to Mr McKemmish's first affidavit provides ample and detailed illustrations of the kinds of evidence and inferences that can be extracted from that information as found on one computer, ENG39, so it is unclear why Schlam instructed its solicitors that such information would not be logged on its devices and network. Mr McKemmish's expert opinion was also that, contrary to the instructions provided by Schlam, event logs can typically be retrieved going back months, depending on the use made of the computer or other device during the intervening period.
40 As for the third point about the 'comprehensive review' which Schlam said it had conducted, the description of the review given in the solicitors' letter of 28 April 2023 did not instil confidence that the review had indeed been comprehensive. Only the files and folders in a OneDrive folder assigned to Ms Podulova were reviewed, without any evidence as to why she would not have used other folders on Schlam's system (noting that Mr McKemmish's evidence suggested that she had used a SharePoint server, which may not be the same as OneDrive). The review was conducted by keyword searching for the word 'Austin', but it is not clear whether that was a search of the file names or the data within the files. It is said that if there was a file with a name that was not clearly identified as 'Payload' (that is, the name of Ms Podulova's employer within the Schlam group, Payload Industries Pty Ltd) then the file was opened and inspected. But that does not address the concern raised in Mr McKemmish's report that Ms Podulova may have copied Austin's information into Schlam's documents, including potentially 'Payload' documents.
41 For those reasons I was persuaded that it is necessary to have Schlam disclose the required information on affidavit, and to give two further weeks for the making of that affidavit, both of which measures would provide a better opportunity to ensure that the information provided is accurate and complete. Schlam submitted that the affidavit should be provided by the Commercial and Contracts Manager at Payload Industries Pty Ltd because he was the person who carried out the 'comprehensive review'. But Austin submitted that it should be a director, noting that there was evidence that one person, Ryan Schlam, is a director of each of the corporate respondents. Senior counsel for Austin expressed no concern about the possibility that this would mean that the director would be giving hearsay evidence in the affidavit. I was persuaded that it was appropriate for the affidavit to be provided by someone with the seniority of a director, and also that it be given by a person (or persons) with authority to make it on behalf of each of the corporate respondents, not just Payload Industries Pty Ltd.
42 Importantly, Schlam made no submission that it would be oppressive or otherwise prejudicial to make that requirement, or that complying with the orders generally would impose any prejudice that could not be compensated with costs. It is open to the Court to order that an innocent party be reimbursed for the expenses of complying with a Norwich Pharmacal order. Nevertheless I considered that here, it was appropriate to wait until more was known about Schlam's potential involvement in the alleged wrongs before making a determination about that, so costs were reserved.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson.