EMPLOYMENT LAW - implied confidentiality clause - fiduciary duty of confidentiality - whether applicable post-employment - retention of computer with former employer's customer information - whether confidential - whether former employee simply competing or deliberately retained lists with a view to compete.

PRACTICE AND PROCEDURE - application in proceeding - summary dismissal - originating application dismissed in part - facts in dispute - evidence admissible on application - some evidence to support originating application - inappropriate to resolve factual dispute on such application.

EQUITY - application for equitable relief - third party without notice of confidentiality may be restrained - equitable damages - jurisdiction of the Australian Capital Territory Supreme Court - whether such jurisdiction repealed by Australian Capital Territory Supreme Court (Transfer) Act 1992 (Cth) - whether grant of general jurisdiction sufficient.

PRACTICE AND PROCEDURE - pleadings deficient - embarrassing and insufficiently particularised - struck out in part - leave to apply to replead.

PRACTICE AND PROCEDURE - delay - judicial disability - workload of the Court.

Corporations Act 2001 (Cth), s 119

Workplace Relations Act 1996 (Cth), Pt VIA, ss 170VA, 170VC, 170VD, 170VF, 170 WL

Industrial and Employee Relations Act 1994 (SA), s 154

Chancery Amendment Act 1858 (UK) (21 & 22 Vic c 27)

Australian Capital Territory Supreme Court (Transfer) Act 1992 (Cth)

Australian Capital Territory Self-Government Act 1988 (Cth), s 34

Supreme Court Act 1933 (ACT), s 20

Supreme Court Act 1970 (NSW), ss 23, 68

Supreme Court Act 1986 (Vic), s 38

Court Procedures Rules 2006 (ACT), rr 1146, 1147, 1149

Supreme Court Rules 1937 (ACT), O 15 R 1, O 17 R 1

New South Wales Acts Application Ordinance 1985 (Cth), s 3

Fetter J and Mitchell R, "The Legal Complexity of Workplace Regulation and Its Impact upon Functional Flexibility in Australian Workplaces" (2004) 17 Australian Journal of Labour Law 276

Creighton B and Stewart A, Labour Law (4th ed, The Federation Press, 2005)

Dal Pont GE and Chalmers DRC, Equity and Trusts in Australia (3rd ed, Lawbook Co, 2004)

Senate Standing Committee on Regulations and Ordinances, 76th Report, Report Upon a Certain Ordinance of the Australian Capital Territory Disallowed by Effluxion of Time (Commonwealth Government Printer, 1986) (Parliamentary Paper 507 of 1985)

Dey v Victorian Railways Commissioners [1949] HCA 1; (1948) 78 CLR 62

General Steel Industries Inc v Commissioner for Railways (NSW) and Ors [1964] HCA 69; (1964) 112 CLR 125

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

Stergiou & Ors v Citibank Savings Ltd (1998) 148 FLR 244

Republic of Peru v Peruvian Guano Company Ltd (1887) 36 Ch D 489

Castlemaine Perkins Ltd v Queen St Hotels Pty Ltd & Ors [1968] Qd R 501

Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21

Trinity Enterprises Pty Ltd v Drum Services (WA) Pty Ltd & Ors (1992) 7 WAR 587

Kays Holdings Pty Ltd v Nassar (1967) 69 SR (NSW) 231

Spellson v George and Ors (1992) 26 NSWLR 666

Yurong Holdings Pty Ltd v Renella [2005] SAIRC 60

Renella v Yurong Holdings Pty Ltd [2005] SAIRC 26

McLennan v Surveillance Australia Pty Ltd [2005] FCAFC 46; (2005) 142 FCR 105

Hogan v Employment National (Administration) Pty Ltd (2002) 119 IR 59

Hastings v J H Corporate Security Services Pty Ltd [2000] SASC 216

New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd [1974] UKPC 1; [1975] AC 154

Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110

Damevski v Giudice & Ors (2003) 133 FCR 438

Del Casale and Ors v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326

Faccenda Chicken Ltd v Fowler & Ors [1985] 1 All ER 724

Stevenson Jordan and Harrison Ltd v MacDonald and Evans (1952) 69 RPC 10

O'Brien & Ors v Komesaroff [1982] HCA 33; (1982) 150 CLR 310

Peninsular Real Estate Ltd v Harris [1992] 2 NZLR 216

NP Generations Pty Ltd v Feneley [2001] SASC 185; (2001) 80 SASR 151

Moldex Ltd v Recon Pty Ltd [1948] VicLawRp 15; [1948] VLR 59

Printers & Finishers Ltd v Holloway & Ors (No 2) [1964] 3 All ER 731

Malone v Metropolitan Police Commissioner [1979] 1 Ch 344

Barbagallo & Anor v J & F Catelan Pty Ltd & Ors [1986] 1 Qd R 245

Leeds Industrial Co-Operative Society Ltd v Slack [1924] AC 851

Kelly v Apps [2000] FCA 687; (2000) 98 FCR 101

Travini v Starczewski [2009] ACTSC 123

BETWEEN: FINANCIAL INTEGRITY GROUP PTY LIMITED (ACN 098 377 087)

1. Paragraphs 3.b, 3.b.1, 3.b.2, 3.b.3, 4, 8, 9 and 12 of the Amended Statement of Claim be struck out.

2. The words "first defendant in breach of his restraint and further the" and "provide investment and financial advice and services and" in paragraph 10 be struck out.

3. The words "by providing investment and/or insurance and/or financial advice and services and/or" in paragraph 10.a be struck out.

4. That the plaintiff have leave to apply to Justice Refshauge within 28 days or such further time as the Court may allow for leave to amend the Amended Statement of Claim, such application to be accompanied by a draft of the Statement of Claim as it is proposed to be amended.

5. If the plaintiff does not make an application to amend the Statement of Claim in accordance with this order, the balance of the Statement of Claim be struck out on 1 December 2009 and the defendants be entitled to enter judgment with costs.

6. The parties have 7 days within which to file and serve any written submissions as to costs.

1. The law regulating the employment of persons is complex and a mixture of common law and statute. Even with advice, as this case shows, difficulties can arise which might be unforseen to either or both of the parties to an employment relationship.

2. The plaintiff, Financial Integrity Group Pty Limited (Financial Integrity), employed the first defendant, Scott Farmer (Mr Farmer), from 23 November 2004 until 25 April 2007. After his employment with Financial Integrity ceased, Mr Farmer became employed by the second defendant, Bravium Pty Limited (Bravium) and Financial Integrity says that he breached a restraint of trade condition of his employment and improperly used confidential information he had obtained while employed by Financial Integrity when he approached clients of Financial Integrity and provided services to them.

3. Financial Integrity then commenced these proceedings seeking damages or equitable compensation or account of monies received by Mr Farmer and Bravium in breach of the alleged fiduciary duties.

4. Mr Farmer and Bravium have defended the proceedings and now apply for summary judgment saying that the plaintiff's action cannot succeed.

5. The application was brought by Application in Proceedings dated on 19 October 2007 and heard on 20 March 2008. The delay in having it heard was probably caused by the fact that in the last quarter of 2007, this Court had only half its complement of resident judges, and in particular that Connolly J, who had been dealing with the matter, died on 25 September 2007. The delay in delivering judgment is regrettable but due to the workload of the Court.

6. The application was supported by an affidavit of Mr Farmer made on 15 October 2007.

7. Financial Integrity relied on affidavits filed in support of an Application in Proceedings of 28 August 2007 for interim orders which were made by Connolly J on that day and then continued on 31 August 2007. With the agreement of all parties, I discharged those orders on 20 March 2008.

8. The affidavits on which the plaintiff relied included an affidavit of Jason Hedlund, the Managing Director of Financial Integrity, made on 27 August 2007, to which were exhibited, inter alia, two documents purporting to be the employment agreements under which Mr Farmer had been employed.

9. In addition, I received two affidavits of persons, Aaron Downey and Drew Miller, each of whom described himself as "a partner of the Plaintiff" even though there was no evidence of a partnership or of what such partnership comprised. I also read an affidavit of Marcus Walsh, an employee of Financial Integrity.

10. During the proceedings, Mr F J Purnell SC, counsel for Financial Integrity, initially sought leave to amend the Statement of Claim. Subsequently, he expressly withdrew that application.

11. This application is brought under r 1147 of the Court Procedures Rules 2006 (ACT) (the Rules). Although most applications for summary judgment are brought by plaintiffs under r 1146, the leading cases on summary judgment applications, Dey v Victorian Railways Commissioners [1949] HCA 1; (1948) 78 CLR 62; General Steel Industries Inc v C ommissioner for Railways (NSW) and Ors [1964] HCA 69; (1964) 112 CLR 125, are in fact both cases where defendants sought summary judgment against the plaintiff.

12. The principles on which such applications are determined are generally not in doubt. The applicants, in this case, Mr Farmer and Bravium, face a very high threshold. The test to be applied was expressed by Dixon J in Dey v Victorian Railways Commissioners (at 91) as being reserved for "exercise as to actions that are absolutely hopeless".

13. In General Steel Industries Inc v Commissioner for Railways (NSW) and Ors, Barwick CJ said (at 129-30) in a passage since quoted many times:

I have examined the case law on the subject, to some of which I was referred in argument and to which I append a list of references. There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r 18, were the suggested source of authority to deal summarily with the claim in question. It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense".

At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so as to speak apparent at a glance".

As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J (as he then was) sums up a number of authorities in Dey v Victorian Railways Commissioners where he says: "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process." Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. [footnotes omitted]

14. These passages have been referred to in many cases over the years and there is not much to be gained from referring to the many applications to which they have been put.

15. It is, however, useful to refer to make some additional comments. For example, it is clear that the application must address the substance of the claim made and not merely the expression of it: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 (at 536); Stergiou & Ors v Citibank Savings Ltd (1998) 148 FLR 244 (at 249). As Chitty J said in Republic of Peru v Peruvian Guano Company Ltd (1887) 36 Ch D 489 (at 496):

Under the new rule the pleading will not be struck out unless it is demurrable and something worse than demurrable. If, notwithstanding defects in the pleading, which would have been fatal on a demurrer, the Court sees that a substantial case is presented the Court should, I think, decline to strike out that pleading; but when the pleading discloses a case which the Court is satisfied will not succeed, then it should strike it out and put a summary end to the litigation.

16. For this purpose, I note that the pleading the subject of an application includes any particulars properly provided, whether in the pleading or separately: Castlemaine Perkins Ltd v Queen St Hotels Pty Ltd & Ors [1968] Qd R 501 (at 507).

17. Mr Purnell SC in his written submissions stated that evidence was not admissible on the application. That is not so and has never been so. Indeed, a plaintiff seeking summary judgment was always required to file an affidavit deposing to a belief that the defendant had no defence to the claim: Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21 (at 23).

18. The requirement for an affidavit or affidavits is preserved in r 1149 of the Rules; indeed, the rule makes a supporting affidavit mandatory unless the court grants leave. It is, however, no longer required that the applicant depose to a belief that the defendant has no defence as was required under O 15 R 1 of the Supreme Court Rules 1937 (ACT). The defendant, however, was always at liberty to show a good defence on the merits (O 17 R 1) and still may (r 1147(2)(b)).

19. It is clear, however, that the use of these affidavits is not designed to encourage, or perhaps even permit, the court to adjudicate on matters of fact. The rules themselves do not permit the deponents of affidavits to be cross-examined without leave (r 1149(4)) and such leave will not readily be granted: Trinity Enterprises Pty Ltd v Drum Services (WA) Pty Ltd & Ors (1992) 7 WAR 587. No deponent of any affidavit received by me in this application was cross-examined. The courts have made it clear that it is inappropriate to proceed to summary judgment where there is a conflict on matters of fact: Kays Holdings Pty Ltd v Nassar (1967) 69 SR (NSW) 231 (at 242) per Sugerman JA (with whom Jacobs JA agreed); Spellson v George and Ors (1992) 26 NSWLR 666 (at 678).

20. That does not mean, however, that complex questions of law might not be raised and resolved in a summary judgment application. As Dixon J said (at 91) in Dey v Victorian Railways Commissioners:

The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious.

See also per Barwick CJ (at 130) in General Steel Industries Inc v Commissioner for Railways (NSW) and Ors: set out above (at [13]).

21. Bearing these principles in mind, I now turn to the facts of this case.

22. Financial Integrity is a company registered under the Corporations Act 2001 (Cth) (see s 119 of that Act) and is thus incorporated and entitled to sue in its corporate name. The company's business is financial planning, providing investment and insurance advice to a range of clients.

23. Mr Farmer was employed by Financial Integrity on 23 November 2004 as a financial advisor. His duties included servicing of and provision of financial advice to clients of Financial Integrity. He signed a document on 23 November 2004 (the first Document) which was apparently intended to set out the terms of his employment.

24. The first Document was described on the front page as an "Australian Workplace Agreement" and was said to be an "Agreement under section 170VF Australian Workplace Relations Act (Cth) [sic] 1996".

25. It contained detailed provisions in relation to confidential information and post-employment restrictions. These were set out in cll 29 and 31 of the first Document as follows:

29 Confidential Information

29.1 "Confidential Information" means any of the following information which is obtained by you in the course of or as a result of your employment:

(a) information which is marked "Confidential" or which is described or treated by us as confidential;

(b) information of a business-sensitive nature; and

(c) trade secrets.

9.2 Without limiting the generality of the above, the following specific information is Confidential Information:

(a) the names and addresses of our customers and clients;

(b) the terms upon which we contract or provide services to these customers and clients;

(c) our business plans and forecasts;

(d) personal details of any of our employees or of their contracts;

(e) the terms upon which we engage employees and contractors including fees, commissions and remuneration packages; and

(f) our training procedures, techniques and publications.

29.3 Confidential Information is not limited only to our information, but also includes information of our Related Bodies Corporate, clients, contractors, and employees.

29.4 Confidential Information does not include information which is readily available to the general public.

29.5 You must not use or disclose Confidential Information during or after your employment except in the following circumstances:

(a) we have given you our prior written consent following your request; or

(b) in the proper course of performing the duties of the Position that you hold and for the benefit of FIG; or

(c) to the extent required by law.

29.6 You must immediately notify us if you suspect that Confidential Information has been improperly used or disclosed by anyone else.

29.7 You are required to take all reasonable steps to prevent the unauthorised disclosure or use of Confidential Information to any other party.

29.8 You are required to execute all other confidentiality agreements which may be required from time to time which are designed to protect Confidential Information which we believe on reasonable grounds has come to your attention.

29.9 You must not copy or remove from our premises any Document which contains Confidential Information without our prior consent.

...

31.1 You acknowledge that your remuneration under this Agreement incorporates consideration for the restraints in this clause 31.

31.2 You agree that you are restrained from directly or indirectly:

(a) consulting with or advising any person who or which was a customer of you or us;

(b) engaging in any business of providing any services to any person with whom you have had any contact or dealt with in the course of your employment and who at any time during the continuance of your employment was a client or customer of you or us nor will you attempt to do any of those things or induce (or attempt to induce) any other person to do any of those things;

(c) engaging in any business or providing any services to any person who or which was a client or customer of FIG notified to you in writing nor will you attempt to do any of these things or induce or attempt to induce any other person to do any of these things; or

(d) either on your own account or for or with any other person soliciting, interfering with or endeavouring to entice away from us, any person who was an employee during the continuance of your employment or encourage any other person to do so.

31.3 The restraint pursuant to clause 31.2 operates during each of the following periods:

(a) the period of three years from the date of termination of your employment;

(b) the period of two years from the date of termination of your employment; and

(c) the period of one year from the date of termination of your employment.

31.4 The restraint pursuant to clause 31.2 insofar as it relates to:

(a) any of the activities set out in clause 31.2 is separate, distinct and severable from any other activity set out in clause 31.2; and

(b) any periods referred to in clause 31.3 is separate, distinct and severable from any other period set out in clause 31.3,

and should any of the activities or periods referred to in clause 31.2 or 31.3 be or become invalid or unenforceable that shall not affect the validity or enforceability of any of the other activities or periods.

31.5 You agree that the restraints contained in this Agreement are reasonable and necessary for the protection of our business.

26. Mr Purnell SC also referred to cl 32 which was in the following terms:

32 Conflict of interest

32.1 You are free to obtain additional income through other employment or business venture provided that:

(a) your work performance with us is not affected;

(b) no conflict of interest occurs in your role with our business;

(c) our objectives are not disadvantaged;

(d) our resources are not used in your venture; and

(e) you do not use time for which you will receive a benefit from or are paid by us to further your own interests.

If any doubt exists regarding the above points, the onus is on you to inform us in writing of the nature of the venture.

There was, however, no evidence before me as to whether Mr Farmer did engage in other employment or business ventures when employed by Financial Integrity.

27. The first Document was said to come into effect on the date of offer of employment but subject to certification by the Office of the Employment Advocate. That is to say, cl 4.1 was in the following terms:

This Agreement will come into effect on the date that you are offered employment under this Agreement with us subject to its certification by the Office of the Employment Advocate (OEA).

28. The Managing Director of Financial Integrity, Mr Jason Hedlund, deposed in his affidavit that the first Document was not certified by the Office of the Employment Advocate as Financial Integrity received legal advice that it was not required to have the agreement certified to make it enforceable. Thus, it would appear that, in its terms, it did not come into effect.

29. It was further admitted by Financial Integrity that no filing receipt from the Office of the Employment Advocate or approval notice issued by that Office was in existence in respect of the first Document.

30. Mr Farmer carried out the duties that were set out in the first Document and was also paid remuneration and other benefits that were set out in it.

31. For reasons that were not explained to me, a further document was executed by Financial Integrity and Mr Farmer on 9 December 2005 (the second Document). That was a similar document. It had a provision, cl 4.1, identical to that in the first Document. It also had provisions relating to confidential information, post-employment restrictions and conflict of interest. So far as I could tell the provisions were the same as in the first Document. It was also described as an Australian Workplace Agreement in the same way as the first Document. It was also admitted that it had not been submitted to the Office of the Employment Advocate and that neither a filing receipt or approved notice existed in respect of it. I will refer to the first Document and the second Document together in these reasons as the two Documents.

32. Mr Farmer resigned his employment on 11 April 2007 and ceased employment on 25 April 2007.

33. It appears that on 8 March 2007, Mr Farmer had registered, and therefore incorporated, Bravium and became its director and its only director. That company, it appears, also engages in financial planning.

34. It appears that some time after Mr Farmer left the employment of Financial Integrity, he contacted a number of clients to whom Financial Integrity had provided financial services while he was an employee of Financial Integrity and transferred their business to Bravium.

35. There was then, unsurprisingly, correspondence between the parties, and later through their solicitors, in which Financial Integrity sought to restrain Mr Farmer from approaching its clients and seeking to restrict his activities in accordance with the terms of the two Documents. That effort clearly failed and, as a result, these proceedings were commenced.

36. In the Amended Statement of Claim, Financial Integrity pleaded that Mr Farmer was employed for the period referred to above (at [2]) under two written contracts. It identified the contracts as those signed by Mr Farmer, being the two Documents, called Australian Workplace Agreements. It then referred to the obligations under them, which it pleaded that he had breached. As a result, Financial Integrity claimed "damages and/or equitable compensation and/or an account of monies received by the first defendant or second defendant in beach [sic] of the said fiduciary relationship and/or said fiduciary duties" and interest.

37. Mr Farmer filed a Defence in which he admitted being employed but denied that any fiduciary duties arising as a result of the employment relationship continued after the termination of the employment. He further denied that the two Documents, which did contain post-employment restraints, were enforceable on the basis that they had not been filed with and approved by the Office of the Employment Advocate.

38. So far as the confidential information is concerned, Mr Farmer denied that he had misused any confidential information and denied that any information he had used was subject to a post-employment restraint of the kind that was claimed by Financial Integrity.

39. There were, then, two principal issues that were joined between the parties:

1. whether the two Documents, being the two Australian Workplace Agreements purporting to be employment contracts between the parties, were valid and enforceable; and

2. whether following the termination of his employment with Financial Integrity, Mr Farmer was subject to a restraint with respect to confidential information.

41. As I have set out above, each of the two Documents was entitled "Australian Workplace Agreement" and was referred to as an "Agreement under s 170VF Australian Workplace Relations Act [sic] (Cth) 1996". Clauses 3 and 4 in them are relevant and I set them out below:

3 Title

3.1 This Australian Workplace Agreement ("Agreement") will be known as the 'Financial Integrity Group Agreement'.

4.1 This Agreement will come into effect on the date that you are offered employment under this Agreement with us subject to its certification by the Office of the Employment Advocate (OEA).

4.2 This Agreement shall remain in force unless:

(a) your employment is terminated in accordance with the provisions of this Agreement by either party; or

(b) this Agreement is replaced with another Australian Workplace Agreement (AWA).

4.3 The provisions of this Agreement that address confidential information, intellectual property and post employment restraint will continue to be enforceable at common law regardless of the termination of your employment or of this Agreement.

42. Further, cl 5.1(a) in them refers to an intention to achieve the objectives in relation to discrimination set out in the Workplace Relations Act 1996 (Cth).

43. The Workplace Relations Act 1996 (Cth) sets out relevant provisions in relation to such agreements. In the first place, s 170VF provides:

(1) An employer and employee may make a written agreement, called an Australian workplace agreement, that deals with matters pertaining to the relationship between an employer and an employee;

(2) The AWA may be made before commencement of the employment.

44. Section 170VA defines an AWA (which is defined in s 4 to mean an Australian Workplace Agreement) to mean also a proposed Australian Workplace Agreement. Thus, the fact that a document which may become an Australian Workplace Agreement has not been signed by both parties or has not approved by the Office of the Employment Advocate does not render it beyond the provisions of Part VID, being ss 170VA to 170 WL.

45. I am, therefore, satisfied that the two Documents are Australian Workplace Agreements for the purposes of the Act.

46. The provisions of the Workplace Relations Act 1996 (Cth) became very important to determine whether the two Documents have any effect. Section 170VC of that Act is important. It provides:

An AWA is of no effect unless at least one of the following applies at the time when the AWA is filed:

(a) the employer is a constitutional corporation;

(b) the employer is the Commonwealth;

(c) the employee's primary workplace is in a Territory;

(d) the employer is a waterside employer, the employer is a waterside worker and the employee's employment is in connection constitutional trade or commerce;

(e) the employee is a maritime employee and the employee's employment is in connection with the constitutional trade or commerce;

(f) the employee is a flight crew officer and the employee's employment is in connection with constitutional trade or commerce.

The two Documents clearly meet criterion (c) and possibly (a), Financial Integrity probably being a trading or financial corporation formed within the Commonwealth.

47. Finally, and for these proceedings most importantly, s 170VD provides:

An AWA or ancillary document has effect as provided by this Part and not otherwise. In particular

(a) an AWA for a new employee has no effect before a filing receipt is issued for the AWA; and

(b) an AWA for an existing employee has no effect before an approval notice is issued for the AWA.

48. As noted above (at [29] and [31]), it was agreed between the parties that neither an approval notice nor a filing receipt had been issued in respect of either of the documents referred to.

49. As a result, the two Documents must, in my view, be of no effect. That is to say, as a matter of statute law, they can be given no effect.

50. I am reinforced in my view by the decision of a specialist tribunal, the South Australian Industrial Relations Court in Yurong Holdings Pty Ltd v Renella [2005] SAIRC 60 where his McCusker J dismissed an appeal from Industrial Magistrate Ardlie (Renella v Yurong Holdings Pty Ltd [2005] SAIRC 26) who had held that an Australian Workplace Agreement was of no effect where there was no filing receipt, even though it was claimed that the receipt may have gone astray in the post and where the employer had lodged and had received approval for 20 other Australian Workplace Agreements. His Honour upheld that finding, even though, he noted, the proceedings were governed by s 154 of the Industrial and Employee Relations Act 1994 (SA) which provides:

154.(1) In exercising its jurisdiction, the Court or the Commission:

(a) is governed in matters of procedure and substance by equity, good conscience, and the substantial merits of the case, without regard to technicalities, legal forms or the practice of courts; and

(b) is not bound by evidentiary rules and practices but may, subject to subsection (2), inform itself as it thinks appropriate.

(2) the Court and the Commission must observe the rules of natural justice.

51. Similarly, but to slightly different effect, is McLennan v Surveillance Australia Pty Ltd [2005] FCAFC 46; (2005) 142 FCR 105, where the Full Court of the Federal Court of Australia held that an ancillary document, which purported to make an agreement collateral to an approved Australian Workplace Agreement, but which had not itself been approved as a variation, was void. The Court's analysis of the statutory effect on the document there under consideration (at [48] to [56]) is apposite here and I gratefully rely on it. While in a slightly different context, it confirms the clear intention of the Act to ensure that such agreements are only valid and effective if the appropriate procedures are followed. That did not happen in this case and renders the two Documents unenforceable and, in the words of the statute, "of no effect".

52. That does not mean that there was no employment relationship between Mr Farmer and Financial Integrity. There clearly was. Indeed, that would be so independently even if the two Documents had been valid, enforceable and effective Australian Workplace Agreements.

53. As was said in McLennan v Surveillance Australia Pty Ltd by Black CJ and Moore J (at 123):

In any event, it might be expected that an AWA will not deal with all aspects of the employment relationship and leave some room for the operation of terms implied by the common law as could have been the case in relation to comprehensive industry awards made under the Act in an earlier form: see the observations of Wilson J in Ansett Transport Industries (Operations) Pty Ltd v Wardley [1980] HCA 8; (1980) 142 CLR 237 at 287 but compare the observations of Mason, Brennan and Deane JJ in Metal Trades Industry Association v Amalgamated Metal Workers' and Shipwrights' Union [1983] HCA 28; (1983) 152 CLR 632 at 649. That said, the parties may endeavour to create an entire employment agreement and exclude terms which might otherwise have been implied by law: see the observations of McHugh and Gummow JJ in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 450. On one view that is what the respondent and the appellant sought to achieve in the present matter with cl 1.4.2 set out at [13].

The second uncertainty concerning the operation of Pt VID is the relationship between an AWA and the contract of employment. A related question is the effect of the statutory scheme in Pt VID on the capacity of the parties to an AWA to reach agreement, with immediate binding and enforceable legal effect, on matters relating to the employment relationship. Part VID does not appear to address, at least explicitly, the effect of an AWA on contractual arrangements between the parties to an AWA. Obviously if the contractual terms are embodied in an AWA, this issue does not arise. If, however, the agreement which becomes the AWA addresses only some aspects of the employment relationship, questions may arise about its effect on other aspects of the employment relationship dealt with, either expressly or impliedly (as a matter of fact or law), by the contract of employment and, in particular, contractual terms agreed to after the AWA came into force.

Accordingly, if Div 6 is silent on the effect of an AWA on the common law (and, in particular, contractual provisions made and enforceable under the common law) it can be assumed an AWA does not derogate from contractual terms concerning rights and obligations not dealt with by the AWA whether agreed to before the AWA was entered into or after.

55. The complexity of these issues has been commented on in a valuable article by Fetter J and Mitchell R, "The Legal Complexity of Workplace Regulation and Its Impact upon Functional Flexibility in Australian Workplaces" (2004) 17 Australian Journal of Labour Law 276. The authors comment (at 284) on the interaction between the contract of employment and regulation external to that contract. Their research showed that, of the 500 Australian Workplace Agreements they surveyed, "almost all incorporated or otherwise recognised some other instrument or regulation" (at 289). These included written terms, letters of offer and company policies, even when not directly referred to in the Australian Workplace Agreement itself.

56. As can be seen from these extracts, the relationship between an employment contract and an Australian Workplace Agreement is not entirely clear. In Creighton B and Stewart A, Labour Law (4th ed, The Federation Press, 2005), the authors note that the existence of an employment relationship is a prerequisite to the creation of an Australian Workplace Agreement and is, therefore, presupposed (at 249, 315-6). This is consistent with other authority, where, in Hogan v Employment National (Administration) Pty Ltd (2002) 119 IR 59 (at 116-7), it was held that the terms of the Australian Workplace Agreement had apparently not become part of the terms of the employment contract between the parties.

57. On the other hand, in Hastings v J H Corporate Security Services Pty Ltd [2000] SASC 216, Debelle J noted without comment (at [4]) that "it was common ground that, when employed by IRW, the plaintiff's contract of employment was an Australian workplace agreement." His Honour was, however, there not asked to consider that issue.

58. Mr Purnell SC submitted that, while the two Documents could have no effect in accordance with the legislation, there was an employment contract and the terms of the employment agreement were to be found in the two Documents. That might have some validity were the provisions of the Workplace Relations Act 1996 (Cth) merely to the effect that the two Documents were given additional, special or separate force or effect when approved by the Office of the Employment Advocate. That is, however, not the position; the two Documents have "no effect" before the conditions in s 170VD are met. In my view, that means I cannot look at the two Documents for any purpose, for to do so would, contrary to the Act, give an effect to them.

59. Employment contracts are often created in less than perfect circumstances and the courts have not been slow to recognise them even where they and their terms are to be determined from a complex of conversations and conduct. Thus, for example, the courts will identify a contract notwithstanding difficulties in analysing the transaction in terms of offer and acceptance. See New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd [1974] UKPC 1; [1975] AC 154 (at 167). See also per McHugh JA (at 11,117-18) (Hope and Mahoney JJA concurring) in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110. These principles apply to employment contracts: Damevski v Giudice & Ors (2003) 133 FCR 438 (at 447, 453-5).

60. I do not have enough information to identify the terms of the employment agreement between Mr Farmer and Financial Integrity, but can say, for example, that the rates of pay would likely be discernible from the pay actually received and the work required from the work actually done. In addition, those common law terms implied into every employment contract, such as fidelity to one's employer, would be part of the agreement. There would, it seems to me, be no real legal difficulty, though perhaps some factual challenges, in identifying the terms of the employment agreement between Financial Integrity and Mr Farmer without relying on the Australian Workplace Agreements.

61. It is clear, however, that the terms of the employment relationship could not be determined by any reference to the two Documents.

62. Insofar as, therefore, there were special terms to be found in those Australian Workplace Agreements but which were neither implied by law nor identifiable from conversation or conduct, separate from discussion about or negotiations towards the making or execution of the two Documents, these cannot be included in the employment agreement for that would give an effect to the two Documents. The terms would have to be found quite independently. In my view, when the statute says "no effect", it means just that, no effect.

63. Accordingly, I find that the two Documents, being Australian Workplace Agreements, were of no effect because of s 170VD of the Workplace Relations Act 1996 (Cth) and that, as a result, Financial Integrity cannot rely on them or their terms for any purposes in these proceedings.

The employment agreement - implied terms and equitable obligations

64. Financial Integrity submitted additionally that if I found, as I have, that the two Documents were of no effect and Financial Integrity could not rely on them, then I should find that the terms of the employment agreement between Financial Integrity and Mr Farmer included an implied term to the same effect as cll 29 and 31 in the two Documents. Of course, on my finding, I cannot have any reference to those clauses for that purpose.

65. Mr Purnell SC submitted that equity implied such terms into employment contracts. It is not necessary for me to consider every term implied into an employment contract. The Statement of Claim relates only to certain terms. It is appropriate to set out the claims made in it. They are as follows:

3.a. By reason of the employment relationship there was a fiduciary relationship between the plaintiff and the first defendant at the time of the said employment relationship and continuing after termination of that said relationship.

3.b. Pursuant to the said fiduciary relationship the first defendant owed the plaintiff fiduciary duties.

3.b.1. To at all time [sic] act in the best interests of the plaintiff.

3.b.2. Not to prefer the interest [sic] of the first defendant to the interests of the plaintiff.

3.b.3. Not to breach the said fiduciary duties by taking away clients of the plaintiff and/or by using the plaintiff's confidential information and/or consulting with or advising customers or clients of the plaintiff and/or providing services to the customers or clients of the plaintiff and/or engaging in any business with the customers or clients of the plaintiff and/or by attempts to do any of the things mentioned in this sub-paragraph.

66. As can be seen, these terms are said to be implied not by virtue of the two Documents, but by virtue of the relationship itself; that is, they are said to be implied terms or as equitable obligations imposed at law.

67. The confidential information referred to in par 3.b.3 was then referred to in further paragraphs as follows:

1. The first defendant signed two employment contracts with the plaintiff, firstly on 23 November 2004 and secondly on 9 December 2005, and an essential term was a post employment restraint of 12 months and a confidentiality clause.
2. The plaintiff has developed client lists, investment strategies, and other valuable commercial and intellectual property in order to best meet the needs of its clients and provide them with the best possible service.
3. In the course of its business, the plaintiff collects information relating to its client details including personal and financial information, investment information and other sensitive commercial and personal and private information which has significant commercial value to the plaintiff and needs to be treated in confidence both to preserve its commercial value and in order to protect the privacy of its clients.
4. Pursuant to his contract of employment the first defendant had access and accessed sensitive commercial information belonging to the plaintiff to enable him to provide investment and financial planning services to clients of the plaintiff.
5. Pursuant to the terms of his Employment Contract the first defendant was obliged to deal with such information in strict confidence.

68. The following may be noted about these provisions:

(a) Paragraph 4 clearly refers to the two Documents which I have held to be of no effect. The paragraph, however, refers to them as "employment contracts", without the first letters capitalised. This distinguishes them probably from the reference in par 3.a to the "employment relationship" but presumably refers to the same documents mentioned as the "Employment Contract" (though the first letters are capitalised, as one would expect if it were a defined term) in par 8. Whether this is the "contract of employment" referred to in par 7 is unclear.

(b) There is no allegation that the information or other material referred to in par 5 is confidential or a trade secret.

(c) Paragraph 7, by using the term "contract of employment" is arguably referring to the common law contract, though it may simply be a carelessness of drafting and actually referring back to par 4. Nevertheless, it can be readily accepted, as I do, that the common law agreement would have permitted Mr Farmer to have access to such material.

(d) Paragraph 8 can only realistically refer to the two Documents (presumably the one current at any relevant point of time) referred to in par 4. It cannot, therefore, be operative. Some particulars of par 8 were provided by letter subsequently, listing five persons said to be clients of Financial Integrity at the time Mr Farmer was employed and whose business Mr Farmer sought to have transferred to Bravium.

69. The relevant paragraphs of the Statement of Claim continues as follows:

1. Sometime after the first defendant commenced employment with the second defendant. The first defendant in breach of his restraint and further the first and second defendant improperly used the confidential information belonging to the plaintiff, obtained by the first defendant whilst employed by the plaintiff, to have directly or indirectly approach [sic] clients of the plaintiff, provide investment and financial advice and services and solicit clients of the plaintiff to the second defendant.

10.a. Sometime after the first defendant commenced employment with the second defendant the first defendant breached the fiduciary relationship and the fiduciary duties owed by the first defendant to the plaintiff by directly or indirectly approaching clients of the plaintiff by providing investment and/or insurance and/or financial advice and services and/or soliciting clients of the plaintiff.

70. The following is to be noted about these paragraphs:

(e) While par 10 relies principally on the two Documents, which I have found have no effect, it could arguably be apt to raise an issue were I to find that an obligation of confidence in relation to the relevant material was imposed by equity (or implied into the employment agreement) and continued following the termination of the agreement. The paragraph is, however, devoid of particulars which are necessary to determine the allegation.

(f) There are no particulars provided, either in the Statement of Claim or independently (and none were apparently sought) of the allegations in par 10.a, though I am satisfied I can use the particulars provided to par 8 as to the clients approached.

71. The issue then is as to whether, absent reliance on the two Documents pleaded in par 4, there is, at law, a cause of action as pleaded by reference to the common law contract.

72. The position has been most helpfully described by Hodgson JA (with whom McColl JA agreed) in Del Casale and Ors v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326 where (at 333-4) his Honour said:

1. In the first place, it is clear that a contract of employment generally includes an implied term imposing a duty of good faith on the employee, and that this turn [sic] carries with it an obligation on the employee not to divulge confidential information or to use it in a way that could be detrimental to the employer: Robb v Green [1895] 2 QB 315. The content of this duty will vary according to the position of the employee: generally, more senior employees, having access to more confidential information, will be subject to greater restraint than more junior employees.
2. If this obligation is breached during employment, for example by copying customer lists or even deliberately memorising them so that they can be used after the employment comes to an end, that breach of contract may justify the grant of relief when the employee seeks to use that information after the employment has come to an end. There is no suggestion in this case that the claimants obtained confidential information, during their employment, in breach of this implied term.
3. There is authority for the proposition that this implied term imposing a duty of good faith continues to operate after the employment comes to an end, albeit in a more restricted way: Faccenda Chicken Limited v Fowler [1987] Ch 117 at 136. I am doubtful that this is so as a general rule, at least in so far as it suggests there may be a remedy in contract that goes beyond such remedy as may be available on the basis of general equitable principles of confidentiality. It is clear that there can be terms of an employment contract that continue to operate after the employment comes to an end; but generally that will be because they are express terms which so provide. Implied terms may also operate in that way if the nature of the employment is such as to clearly require a term operating after the end of employment, as could be the case where a person is employed as an in-house professional adviser to whom confidential information is given for the purpose of obtaining professional advice, such as legal advice. Apart from such special cases, in my opinion the difficulty illustrated by the Faccenda Chicken case of determining the extent of any obligation of confidentiality, extending after the end of employment, counts against such obligation being implied, either as an incident of the relationship or a matter of business efficacy.
4. In my opinion, generally questions concerning an employee's obligation of confidentiality after employment has come to an end, in the absence of an express contract dealing with the matter, are best dealt with as part of the general law concerning confidentiality of information, both because it is very doubtful what, if any, term can be implied into a contract, and also because it is very unlikely that relief obtainable pursuant to any such implied term would go beyond relief obtainable on general equitable principles.

73. To the same effect was what fell from Campbell JA (with whom McColl JA also agreed) when his Honour said (at 341-2):

1. There is an implied term in any contract of employment whereby the employee

... shall honestly and faithfully serve his master; that he shall not abuse his confidence in matters pertaining to his service, and that he shall, by all reasonable means in his power, protect his master's interests in respect to matters confided to him in the course of his service: Robb v Green [1895] 2 QB 1 at 10-11.

1. That obligation "lasts until the last hour of his service" (Robb v Green) [1895] 2 QB 1 at 14), and it is a breach of it for the employee to copy customer lists, or memorise them, while the service is on foot, with a view to dealing with those people on his or her own account once the service is over: Robb v Green [1895] 2 QB 1 at 10-11, 14-15; affirmed Robb v Green [1895] 2 QB 315; Kirchner v Gruban [1909] 1 Ch 413 at 422. But unless restrained by an express term of a contract, an employee who leaves his employment may lawfully set up a business of the same nature as that carried on by his or her former employer, in the same locality, and canvass the same customers whose names and addresses he or she has learned, bona fide accidentally, during the period of his service: In Re Irish, Irish v Irish (1888) 40 Ch D 49; Robb v Green [1895] 2 QB 1 at 13; Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd and Others (1930) 31 SR (NSW) 347 at 354-6 (Harvey CJ in Eq); Faccenda Chicken Ltd v Fowler [1987] 1 Ch 117 at 136; Riteway Express Pty Ltd v Clayton (1987) 10 NSWLR 238 at 240 (McLelland J); Weldon & Co Services Pty ltd v Harbinson [2000] NSWSC 272 at [68]- [72] (Bryson J).

74. It is important in this area of the law to distinguish between the various levels of confidentiality of knowledge and restraint. The seminal analysis is that of Goulding J in Faccenda Chicken Ltd v Fowler & Ors [1985] 1 All ER 724 where (at 731-2) his Honour described three categories of information as follows:

First there is information which, because of its trivial character or its easy accessibility from public sources of information, cannot be regarded by reasonable persons or by the law as confidential at all. The servant is at liberty to impart it during his service or afterwards to anyone he pleases, even his master's competitor. An example might be a published patent specification well known to people in the industry concerned. This class of information, however, must not be extended too readily ...

Second, there is information which the servant must treat as confidential, either because he is expressly told it is confidential, or because from its character it obviously is so, but which once learned necessarily remains in the servant's head and becomes part of his own skill and knowledge applied in the course of his master's business. So long as the employment continues, he cannot otherwise use or disclose such information without infidelity and therefore breach of contract. But when he is no longer in the same service, the law allows him to use his full skill and knowledge for his own benefit in competition with his former master; and ... there seems to be no established distinction between the use of such information where its possessor trades as a principal, and where he enters the employment of a new master, even though the latter case involves disclosure and not mere personal use of the information. If an employer wants to protect information of this kind, he can do so by an express stipulation restraining the servant from competing with him (within reasonable limits of time and space) after the termination of his employment ...

Third, however, there are, to my mind, specific trade secrets so confidential that, even though they may necessarily have been learned by heart and even though the servant may have left the service, they cannot lawfully be used for anyone's benefit but the master's".

75. The second category is sometimes described as "know-how": Stevenson Jordan and Harrison Ltd v MacDonald and Evans (1952) 69 RPC 10 (at 12); O'Brien & Ors v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 (at 328). The use of know-how can be the subject of an express contractual restraint post-employment and is, if confidential in nature, subject to an implied restraint during the period of employment, but otherwise not subject to any restraint at all.

76. Here, the pleading alleges that the breach was occasioned by Mr Farmer "directly or indirectly approaching clients of [Financial Integrity] by providing investment and/or insurance and/or financial advice and services and/or soliciting clients of [Financial Integrity]".

77. The problem with this allegation is that none of the allegations of breach refers to information that would be restricted in use or disclosure after the termination of employment without much more, either by description of the kind of material it was, or the circumstances of its disclosure to Mr Farmer in the absence of an express contractual restraint.

78. As to the details of the clients, the passages I have cited from Del Casale & Ors v Artedonus (Aust) Pty Ltd are clear. As was said by Tipping J in Peninsular Real Estate Ltd v Harris [1992] 2 NZLR 216 (at 220):

In my judgment the essential point is this. An ex-employee who, without a list or deliberate memorisation, happens to recall that somebody is a customer or client of his former employer is ordinarily allowed to approach that person to do business in competition with his former employer. What the ex-employee may not do is deliberately to copy, take away or memorise lists of customers or the like to facilitate his competition with his former employer. To that extent, with respect, I do not entirely agree ... that the difficulty is not in relation to the ex-employee's knowledge of the names and addresses of the former employer's customers.

The difficulty really stems from how the ex-employee retains or is able to call up his knowledge of the former employer's customers. Genuine unaided memory is one thing; copying either on paper or in the mind lists or other customer data is quite another. Obviously there may in the individual case be difficulties of proof but that in my judgment is the fundamental distinction.

79. In this case, there is no allegation in the pleading of a list being prepared or taken surreptitiously by Mr Farmer. That would justify the claim: NP Generations Pty Ltd v Feneley [2001] SASC 185; (2001) 80 SASR 151 (at 155).

80. Indeed, Debelle J in that case set out (at 156) the following principles which his Honour noted are well settled:

1. In the absence of a valid restraint of trade clause, a former employer cannot prevent a former employee from simply competing: Stenhouse Australia Ltd v Phillips [1973] UKPC 1; [1974] AC 391 at 400.
2. As a general rule, a former employer cannot, therefore, prevent a former employee from contacting or even soliciting clients or customers of the former employer: Stenhouse; Faccenda Chicken.
3. An employee after ceasing employment may not use confidential information obtained in the course of that employment for the purpose of competing with his or her former employer or indeed in any other way detrimental to the former employer's interests: Faccenda Chicken per Neill LJ at 136 para 4.

81. Here there is no allegation of improper appropriation of a customer list, a necessary ingredient in showing the actionable use of the material. This is perhaps reinforced by the relatively small list of five clients particularised by Financial Integrity as the clients approached allegedly in breach of Mr Farmer's contractual (but invalid) or equitable obligations.

82. Much of the evidence of Financial Integrity seems to suggest no wholesale canvassing of clients such as may be the consequence of a stolen list of clients. For example, in the affidavit of Mr Walsh appears the following paragraphs:

1. On 22 August 2007, I received a telephone call from Scott Farmer the first defendant. We discussed the recent transfer of two clients from the plaintiff to him.
2. During that discussion, Scott Farmer said to me words of the effect "I have spoken to the two clients in question and that they have requested that I taken them over as clients."
3. Scott Farmer then said "What was I supposed to do? Turn them away?" I said to him, "Yes, you have an obligation to tell them to speak to me should they require any assistance."
4. I then said to Scott Farmer "have you spoken to any other of my clients?" [sic] He told me "another half dozen of [sic] so would most likely be transferring their service to me."

83. There is indeed an implication in this evidence, if not more, that the clients approached Mr Farmer, possibly when they knew he had left the employ of Financial Integrity.

84. Similarly, in the affidavit of Mr Miller, after Mr Farmer initially lied about a client's approach, apparently on her instructions, the following appears:

1. I then asked the First Defendant words to the effect "Are there any other clients on my list that you are targeting?"
2. The First Defendant replied words to the effect "No there are not."

85. The affidavit of Mr Downey was to similar effect, if somewhat less culpable of Mr Farmer. He deposed:

1. The First Defendant said to me words to the effect "I'm calling you because you are the only one who I haven't heard from in the last couple of days".
2. I replied words to the effect "That's because I'm the only one you haven't pinched a client from in the last couple of days."

1. The First Defendant said words to the effect "Basically Drew [Miller] and Marcus [Walsh] were calling to question me over a couple of client transfers. I would hate to lose Drew's friendship over a $100,000.00 client."
2. I replied words to the effect "I would expect that as long as it is a one off, isolated incident and there are no others, I don't think it will create any further waves."
3. The First Defendant then said words to the effect "There are a couple more".

86. The affidavit of Mr Hedlund, however, contained some more troubling material. He deposed:

1. During his employment the first defendant owned a laptop computer which contained a complete list of all clients of the firm, contact numbers, fund balance. The first defendant retained this information in his laptop computer when he ceased employment.

87. This evidence is quite slim. It is not clear how Mr Hedlund knows that the information was retained; there is no information as to how it was collected and in what circumstances; it is not clear whether the clients of Financial Integrity who were the subject of the particulars of those canvassed and transferred to Bravium were only clients serviced by Mr Farmer as an employee of Financial Integrity or were contacted because of the list; there is no suggestion that if Mr Farmer knew the list was on the laptop he took steps to secure the allegedly confidential information when he knew he was leaving Financial Integrity.

88. Nevertheless, there is some evidence to suggest that there may be a breach of a duty of confidence as suggested by the cases I have cited. This does negative the assertion in the written submissions of Mr I M Neil SC, who appeared for Mr Farmer and Bravium, that:

In fact, there is nothing to support any suggestion that the first defendant [Mr Farmer] has done anything more than make use of any unaided recollection that he might have of the names and addresses of his former employer's customers ...

89. As I have noted above, a summary judgment application is not the occasion for resolution of a dispute as to facts. In the light of this material, despite its slim probative value at this stage, there is sufficient evidence to leave alive a residue of the claim by Financial Integrity against Mr Farmer on this ground.

90. As to the balance of the pleaded allegation, the provision of investment, insurance or financial advice appears, without more, to be centrally within the notion of know-how for a financial adviser. Without more pleading of a very particular kind, there is no apparent cause of action here.

91. The evidence does not suggest any information of a confidential kind that has been used by Mr Farmer or Bravium. On this ground, there is no reasonable cause of action so far pleaded.

92. Bravium appears barely in the pleadings. It is mentioned in four paragraphs of the Amended Statement of Claim. There is no pleading as to its corporate status, an essential part of any cause of action: Moldex Ltd v Recon Pty Ltd [1948] VicLawRp 15; [1948] VLR 59 (at 60).

93. There is no allegation in the Amended Statement of Claim of any basis on which Bravium might be liable to Financial Integrity. Nothing was suggested in argument.

94. On the other hand, as Cross J said in Printers & Finishers Ltd v Holloway & Ors (No 2) [1964] 3 All ER 731 (at 737):

... the case of Prince Albert v Strange [1849] EngR 255; (1849) 1 Mac & G 25 shows that an injunction may be granted against someone who has acquired - or may acquire - information to which he was not entitled without notice of any breach of duty on the part of the men through whom he obtained it.

95. This was refined by Megarry VC where (at 361) in Malone v Metropolitan Police Commissioner (No 2) [1979] 1 Ch 344, his Lordship explained the principle thus (at 361):

If A makes a confidential communication to B, then A may not only restrain B from divulging or using the confidence, but also may restrain C from divulging or using it if C has acquired it from B, even if he acquired it without notice of any impropriety ... In such cases it seems plain that however innocent the acquisition of the knowledge, what will be restrained is the use or disclosure of it after notice of the impropriety.

96. The pleading does not squarely raise the issue and would need amendment, but there is some evidence to suggest that Bravium has acquired knowledge of the confidential information, if that is what it is, as Mr Hedlund deposed that:

(1) Mr Farmer told Mr Hedlund that "Ian and I might go out and set up our own business".

(2) Later, around 11 April 2007, Mr Farmer told Mr Hedlund, "I am starting my own financial planning business".

(d) In the same conversation, Mr Farmer said the name of his business would be Bravium.

97. Further, a company search of the records held at the Australian Securities and Investment Commission shows that Mr Farmer is the only director of Bravium, which was registered on 8 March 2007, and that the principal place of business is the residential address of Mr Farmer.

98. One matter that may need attention but which was not subject to argument and on which I cannot, therefore, make a finding, is the question of the remedy sought by Financial Integrity.

99. Ordinarily, the remedy for breach of confidence is an injunction. Damages at common law are not available.

100. Until Lord Cairns' Act (Chancery Amendment Act) 1858 (UK) (21 & 22 Vic c 27) courts of equity were unable to award damages. That Act changed the position and permitted courts to award damages where the court had power to grant an injunction or to order specific performance.

101. Every State and Territory in Australia enacted provisions which were similar to Lord Cairns' Act, and gave superior courts the power to award equitable damages. See Dal Pont GE, Chalmers DRC, Equity and Trusts in Australia (3rd ed, Lawbook Co, 2004) (p 898). Queensland repealed the provision but it was held to have nevertheless survived: Barbagallo & Anor v J & F Catelan Pty Ltd & Ors [1986] 1 Qd R 245.

102. In the Territory, the enactment was through the adoption of s 9 of the Equity Act 1901 (NSW) though s 11 of the Seat of Government Supreme Court Act 1933 (Cth) which provides:

1. (1) Subject to this Act, in all matters arising under any law of the Territory, and generally in relation to the Territory, the Supreme Court shall have -

(a) the same original jurisdiction, both civil and criminal, as immediately before the first day of January, One thousand nine hundred and eleven, the Supreme Court of the State of New South Wales had in relation to that State; and

(b) such jurisdiction, both civil and criminal, and whether original or otherwise, as is from time to time vested in the Supreme Court by Ordinances made by the Governor-General; and

(c) jurisdiction, with such exceptions and subject to such conditions as are provided by Ordinance, to hear and determine appeals from all judgments, convictions, orders, and sentences of inferior Courts having jurisdiction in the Territory.

103. When the Supreme Court was transferred to the responsibility of the Territory (Australian Capital Territory Supreme Court (Transfer) Act 1992 (Cth) (the Transfer Act)) this Act became an enactment (Australian Capital Territory Self-Government Act 1988 (Cth) s 34) and became entitled Supreme Court Act 1933 (ACT). The Transfer Act repealed and renumbered this section to provide:

20 Jurisdiction and powers of Supreme Court

(1) The court has the following jurisdiction:

(a) all original and appellate jurisdiction that is necessary to administer justice in the Territory;

(b) jurisdiction conferred by a Commonwealth Act or a law of the Territory.

(2) Unless it is required to do so by or under a Commonwealth Act or a law of the Territory, the court is not bound to exercise its powers if it has concurrent jurisdiction with another court or tribunal.

104. The reason for the change was a little opaque. The Explanatory Memorandum to the Transfer Act, as so often occurs, was hardly informative. It stated (by reference to the section prior to it being renumbered, but with the same content):

1. Section 11 is repealed and replaced. The effect of new subsection 11(1)(a) is to confer a general jurisdiction to administer justice in the Territory on the Supreme Court in respect of the exercise of its jurisdiction subject to any Act or law of the Territory.

105. This repeal may have inadvertently repealed the jurisdiction of the Court in respect of the jurisdiction given under Lord Cairns Act. A repeal of the relevant provisions in Queensland did not repeal the jurisdiction because it was accompanied by a proviso that the repeal should not affect "any jurisdiction or principle or rule of law or equity - established by ... by or under" any of the repealed enactments: Barbagallo & Anor v J & F Catelan Pty Ltd & Ors (at 250-1). See to the same effect Leeds Industrial Co-Operative Society Ltd v Slack [1924] AC 851 (at 861-2). No such proviso was included in the Transfer Act.

106. It may be that a broad and expansive view of s 20 of the Supreme Court Act 1933 (ACT) would somehow give jurisdiction to award equitable damages despite the repeal of the empowering provisions. This was an approach perhaps taken in Kelly v Apps [2000] FCA 687; (2000) 98 FCR 101, though I and others have criticised that decision: Travini v Starczewski [2009] ACTSC 123 (at [66]).

107. In this context, I note that other jurisdictions have not relied on grants of general jurisdiction to ensure that their Supreme Courts have power under Lord Cairns' Act (or its successors) to award equitable damages. Thus, s 23 of the Supreme Court Act 1970 (NSW) and s 85(1) of the Constitution Act 1975 (Vic) are in relevantly identical terms to s 20 of the Supreme Court Act 1933 (ACT) but both legislatures have included specific provisions retaining the Lord Cairns' Act provision: s 68 Supreme Court Act 1970 (NSW) and s 38 Supreme Court Act 1986 (Vic). These would not be necessary if the wide general jurisdiction provision was sufficient. It seems to me there is real doubt about whether s 20 of the Supreme Court Act 1933 (ACT) is sufficient to grant this jurisdiction.

108. The final avenue of consideration I followed was to ascertain whether s 9 of the Equity Act 1901 (NSW) might still be in force and supply what might be a lacuna. This Act was, however, repealed by the New South Wales Acts Application Ordinance 1985 (Cth) s 3. That Ordinance, however, was disallowed as a result of the effluxion of time following the tabling of a disallowance motion. See Senate Standing Committee on Regulations and Ordinances, 76th Report, Report Upon a Certain Ordinance of the Australian Capital Territory Disallowed by Effluxion of Time (Commonwealth Government Printer, 1986) (Parliamentary Paper 507 of 1985). The Committee concluded that despite the disallowance, it was quite likely that the repealed Acts had not been revived and were repealed.

109. As there has been no substantive argument on this issue, I do not make a finding, but attention needs to be given to this issue if the matter proceeds to a hearing.

110. In the circumstances, I am not prepared to enter summary judgment against Financial Integrity. Though the material before me does not disclose a strong case against the defendants, it is just sufficient to permit it to go to trial, but only on the basis of any implied contractual term of confidence or equitable duty of confidence, which the alleged taking of the list by Mr Farmer, if proved, might breach.

111. The pleadings, so far as they rely on the two Documents, either directly or indirectly, must be struck out and I shall do so.

112. In addition, pars 3.b, 3.b.1, 3.b.2 and 3.b.3 are embarrassing in that they describe a fiduciary relationship that subsists during the currency of employment but that is not relevant to these proceedings. Insofar as they might be implied, because of paragraph 3.a, to subsist beyond the termination of the employment relationship, I find that they do not represent the law or, in the case of par 3.b.3, are too broadly stated.

113. Although Mr Purnell SC expressly withdrew his application for leave to amend, it would be unjust not to permit Financial Integrity to amend, but by application.

114. I am satisfied that, after striking out the paragraphs which I propose to do, the balance of the Amended Statement of Claim does not then disclose a complete cause of action, though this could arguably be rectified by amendment. Thus, by not striking out certain paragraphs, I do not intend to be taken to imply that the remaining provisions may not need amendment or at least supplementation.

115. No amendment, however, will be allowed that makes any reference to the two Documents.

116. As to costs, while Mr Farmer has not been successful in securing summary judgment, he has achieved success on a substantial part of the claim by Financial Integrity and on the issue which was by far the larger part of the hearing. I shall hear the parties on costs but my inclination, though not concluded view, is that Financial Integrity should pay the costs of Mr Farmer and Bravium.

I certify that the preceding one-hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.

Counsel for the defendant: Mr I M Neil SC, Mr L Ferdandez

Solicitor for the defendant: Williams Love & Nicol Lawyers