Financial Integrity Group Limited v Farmer and Bravium Pty Limited [2009] ACTSC 143

Financial Integrity Group Limited v Farmer and Bravium Pty Limited [2009] ACTSC 143 - ACTSC 2009 case summary — Zoe

[77]

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]

[93]

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.

...

[94]

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.

[160]

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.
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.
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.
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.

At a glance

Court

Decision date

Before

Source

Judgment (226 paragraphs)

Financial Integrity Group Limited v Farmer and Bravium Pty Limited [2009] ACTSC 143 (27 October 2009)

Parties

Legislation Cited (40)

Cases Cited (17)