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[2021] FCA 484
Federal Court of Australia
2021-05-05
Rangiah J
Original judgment source is linked above.
PENAL NOTICE TO: BRETT JOHN COLLINS IF YOU (BEING THE PERSON BOUND BY THIS ORDER): (A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR (B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO, YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT. ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
TO: BRETT JOHN COLLINS This is a 'search order' made against you on 5 May 2021 by Justice Rangiah at a hearing without notice to you after the Court was given the undertakings set out in Schedule B to this order and after the Court read the affidavits listed in Schedule C to this order.
INTRODUCTION
NAME AND ADDRESS OF APPLICANT'S LAWYERS The Applicant's lawyers are: EMA Legal Level 6, 33 Franklin Street, Adelaide SA 5000 Contact: John Love, Partner Tel: (08) 8213 3333 or 0429 446 101 (after hours) Email: john.love@emalegal.com.au
RANGIAH J: 1 The applicant has made an ex parte application for a search order against the respondent pursuant to r 7.42 of the Federal Court Rules 2011 (Cth). The order would allow, inter alia, a search party to enter the respondent's residential premises and remove electronic devices containing what is alleged to be confidential information belonging to the applicant. 2 The applicant conducts a business, involving the manufacturing and distribution of fence and gate fittings, throughout Australia. The respondent was employed by the applicant for some 16 years, and was the applicant's most senior employee in Queensland for some nine years, until his resignation in March 2021. 3 The applicant alleges that the respondent was asked to provide the applicant with information including customer history and contact details before he left his employment, but that he failed to do so. The applicant alleges that the respondent conducted business using a mobile phone and, although the respondent returned a mobile phone which he said had been issued to him by the applicant, the phone he returned was in fact a different phone. It is alleged that the information stored on the phone that was returned had been wiped. It is alleged that the respondent admitted that he had uploaded customer information from his mobile phone onto his personal iCloud account, linked to his personal Apple account. 4 The applicant alleges that the respondent has never provided the applicant with the customer information and other information that the applicant had requested, and alleges that the confidential information possessed by the respondent includes the applicant's pricing structures and profit margins. The applicant also alleges that a number of its customers have been contacted by the respondent since he resigned, raising the inference that he may be working for a rival business. The applicant asserts that this inference is reinforced by its sales having dropped by some 25 per cent since the end of March, this being out of line with its sales performance in other States. 5 Rule 7.43 of the Federal Court Rules provides: 7.43 Requirements for grant of search order The Court may make a search order if the Court is satisfied that: (a) an applicant seeking the order has a strong prima facie case on an accrued cause of action; and (b) the potential or actual loss or damage to the applicant will be serious if the search order is not made; and (c) there is sufficient evidence in relation to a respondent that: (i) the respondent possesses important evidentiary material; and (ii) there is a real possibility that the respondent might destroy such material or cause it to be unavailable for use in evidence in a proceeding or anticipated proceeding before the Court. 6 The applicant submits that it has causes of action against the respondent for breach of the employment contract, breach of s 183(1) of the Corporations Act 2001 (Cth), equitable breach of confidence and breach of fiduciary obligations. I accept that the applicant has demonstrated a strong prima facie case in respect of each of these causes of action, although it must be borne in mind that the respondent has not yet had an opportunity to make submissions. 7 I accept that the actual and potential loss to the applicant is and will be serious if a search order is not made. I take into account the magnitude of the drop in sales volume since the resignation of the respondent. 8 I am satisfied that there is sufficient evidence that the respondent possesses important evidentiary material, and that there is a real possibility that the respondent might destroy it or cause it to be unavailable for use in evidence in the anticipated proceeding if a search order is not made. 9 I am satisfied that a search order should be made. I have heard submissions as to the appropriate form of the order and have had regard to rr 7.45 and 7.46 of the Federal Court Rules and the Search Orders Practice Note (GPN-SRCH), in particular. While I indicated that I was not prepared to make an order which left the term "confidential information" undefined, I am satisfied that the redrafted order now appropriately defines and limits the scope of that expression. 10 The matter will be made returnable before the Court in one week. 11 I will make orders in terms of the amended draft. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rangiah.
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