HALLIDAY & NICHOLAS v CORSIATTO

Court of Appeal (NSW)|2001-06-20|Before: Spigelman CJ, Handley JA, Heydon JA, Windeyer J

Reported Decision : [2001] 11 ANZ Ins Cas 61-505 [2001] ACL Rep 185 NSW 23

CITATION : HALLIDAY & NICHOLAS v CORSIATTO [2001] NSWCA 188 FILE NUMBER(S) : CA 40648/99 HEARING DATE(S) : 20 June 2001 JUDGMENT DATE : 29 August 2001

HALLIDAY & NICHOLAS INSURANCE BROKERS PTY LTD H & N (NOMINEES) PTY LTD AND PARTIES : HALNIC NOMINEES PTY LTD v STEVEN CORSIATTO and DHB & ASSOCIATES PTY LTD JUDGMENT OF : Spigelman CJ at 1; Handley JA at 2; Heydon JA at 47

Appellants - B A M Connell COUNSEL : Respondents - P W Neil SC/M K Condon Michael Garvin, Solicitor for 1st respondent, Steven Corsiatto Appellants - Shaw McDonald SOLICITORS : Respondent 1 - Uther Webster & Evans Respondent 2 - Leys Law Firm CATCHWORDS : FIDUCIARY DUTY - breach of duty - account of profits - period required to account for - allowance for fiduciary's time and expenses - CONFIDENTIAL information - commercial information - agency - liability of principal - ACCOUNT OF PROFITS - period required to account for - permissible deductions LEGISLATION CITED : Insurance (Agents and Brokers) Act 1984 Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641 Robb v Green [1895] 2 QB 1 at 18-19 Warman International Ltd v Dwyer (1995) 182 CLR 544 Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514 Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 Ex parte Aston Investments Pty Ltd v Hall (1959) 60 SR (NSW) 620 CASES CITED: Argyll v Argyll [1967] 1 Ch 302, 333 Talbot v General TV Corp Pty Limited [1980] VR 224 G v Day [1982] 1 NSWLR 24 Malone v Metropolitan Police Commissioner [1979] Ch 344 Blackburn, Low & Co v Vigors (1887) 12 App Cas 531 Peter Pan Manufacturing Corporation v Corsets Silhouette Ltd [1964] 1 WLR 96 Talbot v General TV Corp Pty Limited [1980] VR 224 Dart Industries Inc v Decor Corporation Pty Limited (1993) 179 CLR 101 DECISION : Appeal allowed. Orders made

CA 40648/99 ED 4114/96 SPIGELMAN CJ HANDLEY JA HEYDON JA

HALLIDAY & NICHOLAS INSURANCE BROKERS PTY LIMITED & ORS v STEVEN CORSIATTO & ORS FIDUCIARY DUTY - breach of duty - account of profits - period required to account for - allowance for fiduciary's time and expenses

CONFIDENTIAL information - commercial information - agency - liability of principal

ACCOUNT OF PROFITS - period required to account for - permissible deductions

The first respondent, Corsiatto, left the employment of the first appellant, Halliday & Nicholas Brokers Pty Limited (H & N), to act as a sub-broker for the insurance brokers DHB & Associates (DHB), the second respondent. Corsiatto committed a breach of fiduciary duty while employed by H & N and was liable to account for profits derived from lists he used to canvas his former clients. The second respondent benefited from this misuse of the appellant's confidential information and was required to account for its profits. The trial Judge held that Corsiatto was bound to account for profits for the period of six months after he left the appellant's service. On appeal H & N argued that the account of profits should have been ordered for a period of 12-18 months. HELD, allowing the appeal: (1) The customer lists prepared by Corsiatto contained confidential information: Robb v Green [1895] 2 QB 1; (2) Corsiatto derived a commercial advantage from his possession of the client lists in breach of his fiduciary duty but most of the benefits did not accrue during the six months period ordered by the trial Judge. The appeal succeeded on this point and the account was extended to cover a 12 month period; (3) Corsiatto was entitled to a proper allowance for his time, trouble and expertise lest H & N be unjustly enriched; (4) DHB, by their agent Corsiatto, made use of H & N's confidential information. The authority of Corsiatto in conducting part of the business of DHB as its sub-broker attracted the principle in Blackburn, Low & Co v Vigors (1887) App Cas 531 and it did not matter that the directors of DHB were not personally aware of Corsiatto's misuse of H & N's confidential information. (5) The account against DHB should be for a period of 12 months. ORDERS (1) Appeal allowed; (2) Order that an account be taken of the profits made by the defendant Corsiatto on commissions paid to DHB by insurers, or allowed by insurers in account, in respect of insurances taken out or renewed between 10 April and 9 October 1997 for former clients of H & N; (3) Orders 2 and 3 made by the Equity Division set aside in so far as they operated in favour of DHB; (4) Order that an account be taken of the profits made by the defendant DHB from commissions paid to it by insurers, or allowed by insurers in account, in respect of insurances taken out or renewed between 10 October 1996 and 9 October 1997 for former clients of the appellants; (5) Order that DHB pay the plaintiffs' costs of the claim against it incurred to date in the Equity Division; (6) Order that the proceedings be remitted to the Equity Division for the taking of the accounts in accordance with the judgment of this Court and for further proceedings consequent thereon; (7) The first respondent Corsiatto to pay 1/3 and the second respondent DHB to pay 2/3 of the appellants' costs of the appeal; (8) Each respondent is, if qualified, to receive a certificate under the Suitors Fund Act. THE SUPREME COURT

CA 40648/99 ED 4114/96 SPIGELMAN CJ HANDLEY JA HEYDON JA

HALLIDAY & NICHOLAS INSURANCE BROKERS PTY LIMITED & ORS v STEVEN CORSIATTO & ORS JUDGMENT

1 SPIGELMAN CJ: I agree with Heydon JA that the matters discussed in paras 37 and 40 of the judgment of Handley JA do not need to be decided in this case. Subject to that qualification, I agree with the reasons of Handley JA and the orders his Honour proposes. 2 HANDLEY JA: This is an appeal by Halliday & Nicholas Insurance Brokers Pty Limited (H & N) from the decision of Windeyer J in a breach of fiduciary duty and confidential information case. The first respondent (Corsiatto) is a former account executive who was employed by the appellant and associated companies from 1981 until 8 October 1996. Immediately before he left he had been looking after about 20% of their business. The second respondent DHB & Associates Pty Limited (DHB) are insurance brokers who engaged Corsiatto as a sub-broker to work under their licence after he left H & N. They agreed to split the brokerage earned by Corsiatto, DHB to retain 20% with Corsiatto to receive the balance. 3 Windeyer J found that Corsiatto had committed a breach of fiduciary duty while employed by H & N and was liable to account for certain profits. He dismissed H & N's claim for equitable relief against DHB. H & N have appealed seeking additional relief against Corsiatto and reversal of the orders in favour of DHB. 4 The Judge found that Corsiatto had been in a fiduciary relationship with H & N while employed by them. During September 1996 he was thinking of leaving their employment to work as an employee or sub-broker for another firm. On 30 September, with the assistance of a Mr Timothy Rodwell, the son of his de facto wife, he produced lists of the clients of H & N for whom he was responsible (Blue 1/175, 3/607, 3/620, Black 99). One of his purposes in doing so was to equip himself to send letters to those clients after he had left H & N. The first version of list "A" had information concerning 215 clients, the second 222, and list "B" 212. 5 The Judge rejected Corsiatto's evidence about the preparation of these lists and found that he made substantial use of material from H & N files made available to him because of his employment. He found that the information in these files was confidential to H & N. 6 On 8 October Corsiatto gave notice and by arrangement with H & N he was allowed to leave their employment at the end of that day. He then proceeded to the offices of DHB where he reached an agreement with the directors that he would work from its offices as a sub-broker under the arrangement for splitting the brokerage previously referred to. 7 Corsiatto sent circular letters to approximately half of the H & N clients for whom he had been responsible. The letters in evidence were hand dated 9 October. The form of the letter was approved by Mr Beveridge of DHB before it was sent out. Corsiatto followed up his letter by contacting most if not all of his former clients and succeeded in obtaining appointments from many of them nominating DHB as their broker. This enabled DHB through Corsiatto to obtain details of their insurance arrangements from their current insurers. In due course he negotiated renewals and additional policies for these clients and as a result substantial brokerage income flowed to DHB and Corsiatto. 8 The Judge found that Corsiatto had acted in breach of his fiduciary duty to H & N by compiling the lists of clients from the records of H & N and using them to canvas his former clients. He further found:

… all this did was to save Corsiatto time as I think it quite clear that over a period of time with the expenditure of some amount of effort he would have been able to compile his own list from memory, road maps, telephone books and the like, and of course many of the clients might have sought out Corsiatto themselves. 9 The Judge held that Corsiatto was bound to account to H & N for profits obtained as a result of his breach of fiduciary duty for the period of six months after he left their service, which expired on 9 April 1997. He ordered Corsiatto to account to H & N for all profits earned from commissions paid to DHB by insurers of former H & N clients in respect of insurances taken out or renewed up to that date. In the alternative H & N, if it so elected, was entitled to equitable compensation. H & N elected to take an account of profits. The parties later agreed that the appropriate figure was $12,000 and the Judge made an order for payment of this sum. H & N's claim against DHB was dismissed. 10 DHB knew that Corsiatto would approach clients of H & N but the Judge found that H & N had not established that DHB knew that Corsiatto had committed a breach of fiduciary duty in order to do this. In particular he found that H & N had failed to establish that DHB knew that the lists of former clients Corsiatto was using had been obtained by a breach of his fiduciary duty. Corsiatto's activities provoked protests and complaints from H & N which led the directors of DHB to question Corsiatto but they accepted his claim that he had not taken any confidential material. 11 Nevertheless, as the Judge said, it was perfectly obvious to the directors that benefits were flowing to DHB through the insurances of former H & N clients as a result of Corsiatto's activities. 12 H & N's case in this Court was refined during argument and against Corsiatto it became limited to a claim that the account of profits should have been ordered for a period of 12-18 months. In the same way its case against DHB became limited to its alleged misuse of confidential information of H & N. 13 The first issue to be considered must be that raised by DHB, in its notice of contention, that the Judge erred in finding that any of the information, in the lists produced by Corsiatto with the help of Mr Rodwell, was confidential. What appears to be the latest list contained the names, postal addresses and telephone numbers of the clients and in most cases the given names of the contact person. What appeared to be earlier lists contained less information. List B (3/620) for example did not disclose the postcodes, telephone numbers or given names for the contact persons for more than half the clients on the list, and in a small number of cases had no address at all. 14 Mr P Neil SC, who appeared for DHB, relied on the Judge's finding, quoted in para 7 of these reasons, that all that Corsiatto achieved by producing a list of clients from the records of H & N was a saving of time. He submitted that since the separate items of information were either in Corsiatto's memory or in public records it was not confidential and there was no basis for holding DHB liable to H & N. 15 Corsiatto did not file a notice of contention or a cross-appeal, but if DHB's contention point were to be upheld, the Court would have to give serious consideration to exercising its powers under SCR Pt 51 r 22 to give Corsiatto the benefit of the decision. 16 Acceptance of the Judge's findings quoted in para 7 does not make good the contention point. In business time is worth money and it was important, perhaps vital, for Corsiatto to get access to his former clients at H & N without any delay. He expected, as he stated in his circular letter, that H & N would also seek to contact those clients. If they got to the clients first he might be unable to attract their business to DHB and himself. 17 Possession of the customer lists enabled him to write to all the former clients immediately, and to follow up his letters without delay. The fact that he and Mr Rodwell went to the trouble of obtaining these lists, and surreptitiously, establishes both their importance to himself and their confidential nature. In doing so Corsiatto provided "a reliable and expert opinion on the question". Compare Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641 at 657 per Dixon and McTiernan JJ. 18 The question is covered by long standing authority in Robb v Green [1895] 2 QB 1 at 18-19 where Hawkins J said:

He (defendant's counsel) contends that the order-book of the plaintiff contained no more information than might be acquired by reference to directories and such-like publications; … This to a considerable extent may be true, but it is not so altogether. The order-book contains collected together the names and addresses of purchasers … No directory would give this information in this collection … The names of all the customers are collected together in the order-book in a manner not to be found in any other book or paper to which the defendant had access. To him therefore the possession of a copy of the order-book would be peculiarly valuable. He would be saved the expense and delay of searches, such as would be necessary to enable him to compile such a list for himself. Practically, to bring all those names together, even though singly each may appear in some directory or other, would be almost impossible … By making a copy of the order-book the defendant was able to canvas at once each of his master's customers without trouble or expense and … he looked upon the list in that light … It is the compilation which made the book and the list so valuable to the defendant and facilitated his endeavours to entice his master's customers to the detriment of the latter. 19 An appeal to the Court of Appeal was dismissed ([1895] 2 QB 315), but it seems there was no challenge to the finding that the order-book was confidential information of the employer entitled to protection in a court of justice. The contention point must therefore be rejected. 20 The Judge limited the account against Corsiatto to the period of 6 months because he considered that any injunction to restrain his misuse of the confidential information would have been limited to such a period. Even if this were the case, and it might be noted that in Robb v Green a perpetual injunction was granted to restrain misuse of confidential information, in my judgment it does not follow that an account of profits should be limited to the same period. 21 The principles which govern an account of profits against a fiduciary were considered in Warman International Ltd v Dwyer (1995) 182 CLR 544 (Warman). At 558-9 the Court, in its joint judgment, said:

What is necessary however is to determine as accurately as possible the true measure of the profit or benefit obtained by the fiduciary in breach of his duty … It is necessary to keep steadily in mind the cardinal principle of equity that the remedy must be fashioned to fit the nature of a case and the particular facts. 22 At 561 the Court said:

In the case of a business it may well be inappropriate and inequitable to compel the errant fiduciary to account for the whole of the profit of his conduct of the business or his exploitation of the principal's goodwill over an indefinite period of time … It is for the defendant to establish that it is inequitable to order an account of the entire profits. 23 The trial Judge found that the brokerage received by DHB for the year ended 30 June 1997 was in the order of $21,000, and for the year ended 30 June 1998 in the order of $80,000. A lot of insurances become due on or about 30 June and brokerage is only paid or allowed in account by the insurance company after the premium has been received from the client. This explained the relatively small amount received for brokerage for the period between October 1996 and June 1997. 24 The Judge limited the account of profits he ordered to the period up to 9 April 1997. In doing so he allowed Corsiatto to retain the profits from the business of former clients of H & N whose renewals fell due on or about 30 June. In excluding this period from the account the Judge, with respect, failed to fashion the remedy to fit the particular facts, and in particular failed to order Corsiatto to account for "the true measure of the profit or benefit obtained by [him] in breach of his duty". 25 There was evidence that lists of the clients of insurance brokers or sub brokers were a tradeable commodity (Black 36) and Mr Connell informed the Court, without objection, that in the industry they are sold for 12-18 months' brokerage income (compare Blue 2/422). Immediately before his resignation Corsiatto was looking after approximately 450 clients of H & N (Blue 1/2). His lists covered between 210 and 220 clients but by April 1997 only 62 had signed letters of appointment in favour of DHB and Corsiatto (Blue 1/8). 26 Corsiatto had the onus of establishing that it would be inequitable to order an account against him on any particular basis. His conduct in September and October 1996 demonstrates how important it was for him to be able to get to the clients before H & N did. He was only able to get in first because he had obtained a springboard in the form of these lists of clients in breach of his fiduciary duty. Even with his illicit short cut he was only able to detach 62 clients from H & N. It is not difficult to infer that he would have been even less successful if he had been obliged to construct a list of his former clients in his own time and from his own resources. In my judgment the appeal succeeds on this point and the account should be extended to cover a period of 12 months expiring on 9 October 1997. 27 The Judge, in his reasons for judgment, did not specify the basis on which the account of profits against Corsiatto should be taken, and he was not asked to give further directions for this purpose because the parties were able to agree on the figure. An account of profits against a fiduciary, as its description implies, is based on the receipts of the defendant, not the losses of the plaintiff. See Warman at 559. H & N elected to take an account of profits rather than equitable compensation for the 6 months period ordered by the Judge. This election was binding. See Warman at 459 and Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1996] AC 514. H & N's success on this part of the appeal does not entitle it to reopen its election. 28 This Court is not in a position to take the account in a summary way on the information before us, and we were not asked to do so. However we should give directions as to the basis on which the account is to be taken. In Warman the Court said at 562:

Whether it is appropriate to allow an errant fiduciary a proportion of profits or to make an allowance in respect of skill, expertise and other expenses is a matter of judgment which will depend on the facts of the given case. However as a general rule … a court will not apportion profits in the absence of an antecedent arrangement for profit-sharing but will make allowance for skill, expertise and other expenses. 29 Corsiatto must be charged with his gross receipts based on 80% of the brokerage received by DHB for business he transacted under their licence in respect of former clients of H & N. The question is what allowances should be made on the expense side of the account. It appears from the evidence that he had no overhead office expenses for rent, office telephone, typing, accounting or postage as these were covered by DHB. However there is the question of his time, trouble and expertise. If Corsiatto had remained with H & N and continued to service these clients for their benefit he would have been remunerated by them, presumably on the basis of a salary and allowances, and perhaps a share of profits. 30 If Corsiatto is to be compelled to account for his profits, without any allowance for his time, trouble and expertise, H & N would be better off for the period of the account than they would have been if he had remained in their service. They would be unjustly enriched. Corsiatto in my judgment is entitled to a proper allowance for his time, trouble and expertise, and prima facie the appropriate rate would be his basic remuneration at H & N immediately before he left their employment without any allowances or share of profits. H & N should be at liberty when the account is taken to contend for a different result, if so advised, but at their risk as to costs. Corsiatto may have had some incidental or overhead expenses of a minor nature which were not met by DHB, but they should be ignored in taking the account as "what will be required on the inquiry … will not be mathematical exactness but only a reasonable approximation" (Warman at 558). 31 The issue on H & N's appeal against the dismissal of its claim against DHB turns on the use, if any, that DHB made of the information, its relationship with Corsiatto, and the extent of its knowledge of the rights of H & N. DHB was not responsible for the breaches of fiduciary duty committed by Corsiatto. It knew however that Corsiatto intended to canvas former clients and its directors approved the letter he sent out. However H & N failed to establish that at that stage DHB knew or suspected that Corsiatto had wrongfully obtained lists of his clients which he intended to use. 32 The general principle applicable to confidential information is that stated in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 by Lord Greene MR at 213:

If a defendant is proved to have used confidential information, directly or indirectly obtained from a plaintiff, without the consent, express or implied, of the plaintiff, he will be guilty of an infringement of the plaintiff 's rights. 33 The question is whether use of the information by Corsiatto was use by DHB. As a general rule he who does an act through another is deemed in law to do it himself. See Ex parte Aston Investments Pty Ltd v Hall (1959) 60 SR (NSW) 620, 626. 34 DHB was registered as a general insurance broker under the Insurance (Agents and Brokers) Act 1984. Corsiatto was not a registered broker and was prohibited by s 19 from carrying on business as an insurance broker. It was not suggested or established that he was an employee of DHB. As a sub-broker he was not carrying on business on his own account. He was carrying on part of DHB's business as its independent contractor and agent and under its licence. 35 Corsiatto canvassed his former clients for their business when he followed up his letters, or when the clients telephoned him. He did this on behalf of DHB as the letters of appointment demonstrate (Blue 5/1160). This was no accident because he was not a registered broker and had to seek their business on behalf of DHB. 36 It follows therefore that DHB, by their agent Corsiatto, made use of H & N's confidential information to obtain new business for DHB. 37 Liability for misuse of confidential information is not confined to persons who owed the duty of confidence to the plaintiff but extends to third parties who receive and use the information. Thus an injunction may be granted against third parties to restrain further publication or use of the information (Argyll v Argyll [1967] 1 Ch 302, 333) even if they originally received the information innocently (Talbot v General TV Corp Pty Limited [1980] VR 224, 239-40; and G v Day [1982] 1 NSWLR 24, 34-5). It is not necessary to consider whether the defence of bona fide purchaser for value without notice is available because DHB did not raise it. As Megarry V-C said in Malone v Metropolitan Police Commissioner [1979] Ch 344, 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. 38 DHB are strictly not a third party for present purposes because Corsiatto was their agent, and used the confidential information in the course of carrying on part of its business as their sub-broker. His authority to act on their behalf in acquiring business was unfettered although some controls were exercised over other parts of his activities. The directors of DHB opened his mail and required outgoing letters and invoices to be typed. Corsiatto met them at 4 o'clock on a Friday afternoon for business discussions when Corsiatto's clients and their insurance requirements would be discussed. The authority of Corsiatto in conducting part of the business of DHB as its sub-broker attracts the principle stated by Lord Halsbury in Blackburn, Low & Co v Vigors (1887) 12 App Cas 531, 537-8:

… some agents so far represent the principal that in all respects their acts and intentions and their knowledge may truly be said to be the acts, intentions and knowledge of the principal. Other agents may have so limited and narrow an authority both in fact and in the common understanding of their form of employment that it would be quite inaccurate to say that such an agent's knowledge or intentions are the knowledge or intentions of his principal … Where the employment of the agent is such that in respect of a particular matter in question he really does represent the principal, the formula that the knowledge of the agent is his knowledge is I think correct. 39 Accordingly it does not matter that the directors were not personally aware of Corsiatto's misuse of H & N's confidential information because DHB is bound by his knowledge and acts within the scope of his agency. 40 The power of a court of equity to award equitable compensation or an account of profits against third parties cannot be narrower than its power to grant an injunction. See Peter Pan Manufacturing Corporation v Corsets Silhouette Ltd [1964] 1 WLR 96, 107 and Talbot v General TV Corp Pty Limited [1980] VR 224, 243. 41 DHB received the brokerage paid or allowed by the insurers with whom Corsiatto placed his clients' business, retained 20% for their own benefit, and paid Corsiatto the balance. After the Court had reserved its judgment we were informed by Mr Connell, counsel for H & N, by memorandum dated 20 June, that the agreed amount due to H & N from Corsiatto under the account ordered by the Judge had been paid. 42 DHB was not bound by the order made by the trial Judge and was not a party to the negotiations which led to the agreement on the amount. The account against DHB should be for the 12 months expiring on 9 October 1997. It could only receive its share of the brokerage because of Mr Corsiatto's efforts and expertise, and in taking the account it must be allowed the 80% share paid to Corsiatto as a proper allowance. 43 Corsiatto used DHB's premises, staff, business equipment and facilities in the course of and for the purposes of his activities as its sub-broker. There is no evidence that he was charged for these services, or for out-of-pocket expenses such as postage and 'phone calls. However if it is proved that an account of these direct expenses was kept as between Corsiatto and DHB during this 12 months period, and that DHB was reimbursed or allowed in account for the amounts shown to be due to it, they would be a proper expense item in Corsiatto's account. If no such account was kept at the time, these expenses should be ignored in taking the account against DHB on the principle, already referred to, that "what will be required on the enquiry … will not be mathematic exactness but only a reasonable approximation" (Warman at 558). 44 An allowance to DHB for its general overheads raises different issues. In Dart Industries Inc v Decor Corporation Pty Limited (1993) 179 CLR 101, which concerned an account of profits against a patent infringer, the Court said at 114-5:

… if … the overheads involved were costs which would have been incurred in any event, then it would not be appropriate to attribute the overheads to the infringing product. Otherwise the defendant would be in a better position than it would have been in had it not infringed. It is not relevant that the product could not have been manufactured and sold without these overheads … The equitable principle of an account of profits is not to compensate the plaintiff, nor to fix a fair price for the infringing product, but to prevent the unjust enrichment of the defendant. Of course further possibilities may in some cases be open on the evidence. Overhead costs might have been increased by the manufacture and sale of the infringing product, or overhead costs might have been reduced had the infringing product not been produced. In either case it may be appropriate to attribute the difference in overhead costs to the infringing product. 45 Thus if DHB because, and only because, it had engaged Corsiatto as its sub-broker, employed additional staff, leased additional space or incurred other additional overhead expenses, then those additional overhead expenses should be allowed in taking the account. However if its overhead expenses would have been incurred in any event, then in accordance with the principles stated above, no part of those expenses can be allowed. 46 In my opinion the following orders should be made: (1) Appeal allowed; (2) Order that an account be taken of the profits made by the defendant Corsiatto on commissions paid to DHB by insurers, or allowed by insurers in account, in respect of insurances taken out or renewed between 10 April and 9 October 1997 for former clients of H & N; (3) Orders 2 and 3 made by the Equity Division set aside in so far as they operated in favour of DHB; (4) Order that an account be taken of the profits made by the defendant DHB from commissions paid to it by insurers, or allowed by insurers in account, in respect of insurances taken out or renewed between 10 October 1996 and 9 October 1997 for former clients of the appellants; (5) Order that DHB pay the plaintiffs' costs of the claim against it incurred to date in the Equity Division; (6) Order that the proceedings be remitted to the Equity Division for the taking of the accounts in accordance with the judgment of this Court and for further proceedings consequent thereon; (7) The first respondent Corsiatto to pay 1/3 and the second respondent DHB to pay 2/3 of the appellants' costs of the appeal; (8) Each respondent is, if qualified, to receive a certificate under the Suitors Fund Act. 47 HEYDON JA: I agree with the orders proposed by Handley JA. I also agree with the reasons he advances for them, except that I would reserve for another occasion consideration of the issues discussed in 37 and 40. Those paragraphs discuss a difficult question, namely the liability of third parties for using confidential information. It is not necessary to consider that question in this case.

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