Hurd v Zomojo Pty Ltd

Federal Court of Australia|2013-06-13|Before: Kenny J

Counsel for the First to Eighth Applicants: C D Wood

Solicitor for the First to Eighth Applicants: Greenstein & Associates

Counsel for the Respondent: M J Collins SC with Dr M Sharpe

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 287 of 2013

JUDGE: KENNY J DATE OF ORDER: 13 June 2013 WHERE MADE: MELBOURNE

The application for an extension of time and for leave to appeal be dismissed.
The applicants pay the respondent's costs of and incidental to the application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 287 of 2013

JUDGE: KENNY J DATE: 13 June 2013 PLACE: MELBOURNE

INTRODUCTION 1 This is an application for an extension of time and for leave to appeal from orders made on 5 February 2013 by a single judge of the Court. 2 On that date, the trial judge made various orders, including: (1) declaratory orders that the respondent companies hold profits from the sale of certain IT products ('the Products') as constructive trustees for Zomojo Pty Ltd ('Zomojo'); (2) orders for the assignment of rights to the Products from the respondents to Zomojo; (3) the delivery up by the respondents to Zomojo of the Products, product prototypes and records relating to the Products and prototypes (including patents and applications for patents for the Products); and (4) an injunction against the respondents' using or accessing the Products. Her Honour's reasons for judgment are set out in Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458 ('Primary Judgment') and Zomojo Pty Ltd v Hurd (No 3) [2013] FCA 54. 3 The application, which is brought by Matthew Hurd and seven IT companies established by him ('the Companies') is supported by affidavits of: (1) David Greenstein sworn on 10 April 2013; (2) Matthew John Hurd sworn on 10 April 2013; (3) John Barrie Hurd sworn on 10 April 2013; and (4) a further affidavit sworn by Matthew John Hurd on 16 May 2013. The applicants rely on these affidavits, with their annexures. 4 The parties filed written submissions on 16 May 2013. The applicants were represented by counsel, who elaborated on these submissions at the hearing of the application. The respondent was also represented by counsel, who was content to rely on the respondent's written submissions. 5 The substantive dispute arose as a result of what the trial judge found was misconduct by Mr Matthew Hurd in breach of contractual obligations, fiduciary duties and director's duties owed to Zomojo. Zomojo is an IT and trading company which develops technology to exploit high frequency trading ('HFT') strategies, primarily on the Korean Stock Exchange. Zomojo also supplies some of these technologies to other professional traders. From 2005 to January 2011 Mr Matthew Hurd was a director, officer, employee, secretary, and shareholder of Zomojo. In January 2011 he resigned from Zomojo, with effect from 11 February 2011. 6 As set out in the trial judge's reasons of 19 December 2012, the trial judge found that Mr Hurd had, both while at Zomojo and upon his resignation, improperly used the intellectual capital and connections of Zomojo in the start-up of a rival HFT technology venture. Mr Hurd then, so her Honour found, established the Companies to assist in his misconduct at arms length. The Companies and the technologies were, until the proceedings commenced, very successful.

Procedural History 7 Zomojo commenced the primary proceeding against Mr Matthew Hurd and the Companies on 21 December 2011, seeking, amongst other things, declaratory and injunctive relief and compensation. On 13 February 2012, Mr Matthew Hurd and the Companies commenced a cross-claim against Zomojo. 8 A hearing on liability was held on 22 and 26 October 2012 and on 2 November 2012. The hearing on quantum is currently scheduled for 22 to 24 July 2013, although the applicants have expressed doubt about the parties' readiness. 9 To appeal as they wish to do, the applicants require leave to appeal because the orders that they seek to challenge are interlocutory in nature: see Carr v Finance Corporation of Australia (1981) 147 CLR 246 at 248, 256; Brouwer v Titan Corporation (1997) 73 FCR 241 at 242; and Computer Edge Pty Ltd v Apple Computer Inc (1984) 58 ALJR 512. 10 The applicants also require an extension of time in which to bring an application for leave to appeal. The time in which they were able to bring such an application, without an extension, expired on 19 February 2013, that is 14 days after the 5 February 2012 orders were made: see Federal Court Rules 2011 (Cth) ('the Rules'), Rule 35.13(a). Where leave to appeal is required and is not sought within the prescribed time, an order must be sought that compliance with that limitation be dispensed with: see the Rules, Rule 35.14. Although such an order is made in the exercise of a wide discretion, some good reason must be shown to dispense with the requirement to file an application for leave to appeal within time: see, for example, Nguyen v Minister for Immigration and Citizenship [2007] FCAFC 38 at [23].

Reason for the delay 11 The applicants' current application for an extension of time and leave to appeal was filed on 17 April 2013. The applicants' failure to make a timely application for leave to appeal must be considered, having regard to the following circumstances. 12 It is common ground that, prior to 21 February 2013, the applicants made a number of attempts to institute an appeal against the 5 February 2013 judgment of the trial judge. The applicants apparently lost the benefit of legal representation on or about 12 February 2013 and did not obtain legal representation again until 13 or 14 March 2013. Their lack of representation apparently contributed to their inability to apply successfully for leave to appeal prior to 21 February 2013: before that date, the Registry would not accept the applicants' proffered documents for filing. On that date, however, an application for leave to appeal and for an extension of time was accepted by the Registry. A supporting affidavit of John Barrie Hurd sworn on 19 February 2013 was filed the same day; and annexed to this affidavit was a document headed 'Draft Notice of Appeal'. I discuss this document hereafter. 13 There were a number of other applications brought by the applicants and accepted for filing on 21 February 2013, namely: an application for an order that the appeal be transferred to the New South Wales Registry of the Court; an application for an order abridging the time for service; and an application for a stay. There were also further supporting affidavits sworn by John Barrie Hurd on 20 February 2013 and 21 February 2013, and three of 26 February 2013, as well as an affidavit of Gregory Stewart Robinson sworn on 20 February 2013. An affidavit in opposition was filed on 26 February 2013. 14 On 25 February 2013, the parties filed written submissions in support of their respective positions. The submissions filed by the applicants were extensive, including documents headed "Applicants' Outline of Submissions - Self Representation" and "Applicants' Outline of Submissions - Leave to Appeal". Each of these submissions was filed on behalf of Mr Matthew Hurd and the Companies. 15 A judge of the Court (Marshall J) heard the matter on 26 February 2013. On that day, his Honour ordered that: 1. Leave is refused to extend the time within which to apply for leave to appeal from the judgment of Gordon J of 5 February 2013. 2. Leave is refused to extend the time within which to apply for leave to rescind orders made by Gordon J on 5 February 2013 with respect to a cross-claim. 3. The applicants for leave pay the respondents' costs of and associated with all interlocutory applications before the Court on 26 February 2013. 16 In reasons for judgment delivered on 1 March 2013 (see Hurd v Zomojo Pty Ltd (No 2) [2013] FCA 146), Marshall J referred to the fact that, on 26 February 2013, he had "refused to extend the time necessary to permit two interlocutory applications … (seeking leave to appeal) to be filed out of time" (at [[2]). His Honour stated (at [3]): The applications were only filed two days late but as each application was bound to fail, there was no utility in permitting an extension of time. 17 Marshall J described (at [3]) one of the applications before him as "one by Mr Matthew Hurd for leave to appeal from the judgment and orders of Gordon J of 19 December 2012 and 5 February 2013 respectively". His Honour said (at [3]-[5]) that: The well established test for whether leave to appeal against an interlocutory decision should be granted was succinctly stated by Buchanan J in Shannon v Commonwealth Bank of Australia [2012] FCA 1378 at [12]. It is: [w]hether the decision is attended with sufficient doubt to warrant its being reconsidered and whether substantial injustice would result if leave to appeal were refused, supposing the decision to be wrong… Senior Counsel for the respondents acknowledged that all issues that Mr Matthew Hurd sought to raise by way of an interlocutory appeal could be ventilated by him in any appeal from final orders made by Gordon J after a further hearing dealing with the question of damages. That hearing is scheduled to be held in July 2013. In any event, after considering the proposed grounds of appeal and the primary judge's reasons for judgment published on 19 December 2012, I was not convinced that her Honour's decision was attended with sufficient doubt to warrant its reconsideration. No substantial injustice to Mr Matthew Hurd would arise as a result of leave to appeal being refused. 18 His Honour also noted (at [6]) that: Mr Matthew Hurd also sought a stay of certain of the orders made by Gordon J which required action by the applicant companies by 4.00 pm on 26 February 2013. 19 His Honour explained his reasons (at [6]) for rejecting this application as follows: [Mr Matthew Hurd] conceded that none of the matters there referred to required him personally to take any step. Consequently, the Court formed the view that there was no utility in granting a stay. In any event, an extension of time for leave to appeal having been refused, there was no jurisdictional basis on which to found the operation of any stay. 20 His Honour concluded (at [7]) that: Mr Matthew Hurd also represented himself and the Hurd Family Superannuation Fund in their interlocutory application to set aside her Honour's dismissal of their cross-claim. Leave was refused to extend the time to file that application. That is an issue which Mr Matthew Hurd and the Fund may seek to advance in any appeal which may be lodged at the conclusion of the primary judge's dealing with the proceeding. 21 Also on 26 February 2013, Marshall J: … refuse[d] to grant dispensation to Mr John Hurd to represent the applicant companies in their application for leave to appeal from the judgment of Gordon J of 5 February 2013 in Zomojo Pty Ltd v Hurd (No 3) [2013] FCA 54. 22 In reasons for judgment (see Hurd v Zomojo [2013] FCA 145) on 1 March 2013, his Honour further stated (at [1]-[9]): Rule 4.01(2) of the Federal Court Rules 2011 provides that a corporation may not proceed in the Court without a lawyer. This rule may be dispensed with in the Court's discretion. However, the Court will not dispense with the rule, unless the company that seeks to act otherwise than by a lawyer demonstrates a "sufficient reason" to be permitted to do so; see Ecopave Australia Holdings Pty Ltd v Adbri Masonry Group Pty Ltd [2012] FCA 1156 at [4] and the authorities there cited. On 26 February 2013, the Court heard an application by Mr John Hurd for dispensation to represent the second to eighth applicants for the purpose of interlocutory applications advanced by those companies on that day. The Court refused that application. What follows are its reasons for so doing. Together with the first applicant, Mr Matthew Hurd, the applicant companies sought leave to appeal from the judgment of Gordon J published on 19 December 2012 and the orders made on 5 February 2013 to give effect to that judgment. They also sought a stay of aspects of the 5 February orders and an extension of time in which to bring the application for leave to appeal. On 19 December 2012, the primary judge published a lengthy and comprehensive judgment dealing with the application by the current first respondent, Zomojo Pty Ltd, for orders directed against several parties including the current applicant parties. The topics traversed in the judgment are complex. Any appeal from her Honour's orders requires the care and consideration that only a qualified legal practitioner can bring to such matters. Mr John Hurd prepared the application for leave to appeal and the other interlocutory applications. He said that, as a chartered accountant for over 40 years, he had appeared before administrative tribunals in taxation matters. He contended that he should be given leave to appear for the applicant companies. He claimed prior exposure to court procedures and a level of intelligence sufficient to advance his arguments. He conceded, however, that he was "very weak…in the finer points" of procedure. The sole ground on which Mr John Hurd contended that he should be given dispensation to represent the applicant companies was that the companies were impecunious and unable to afford legal representation. ... There was insufficient evidence before the Court to make out the impecuniosity ground relied on by Mr Hurd. In any event, from the manner of Mr John Hurd's conduct of the application for dispensation, it is evident that he would have great difficulty in properly and effectively advancing the application for leave to appeal. The Court considered that the interests of justice would not be served by departure from the usual rule that a corporation is to be represented by a lawyer. That is especially so, bearing in mind the legal and factual complexities involved in the proceeding. … No sufficient reason was advanced to convince the Court to exercise its discretion to dispense with the requirements of r 4.01(2). As a consequence, and for all the foregoing reasons, the application was refused. 23 After Marshall J declined their applications, the applicants obtained legal representation, including counsel, in an attempt to institute an appeal against the judgment of trial judge. After being twice rejected by the Registry (on 15 and 21 March 2013), the current application was accepted for filing on 16 April 2013. 24 Precisely why the applicants failed to have their documents accepted for filing is unclear. At the hearing, Mr Wood, who appeared for the applicants, asserted that: They … were rejected essentially on the ground that Marshall J had already determined the issue of whether or not there should be leave or an extension of time … As I noted at the hearing, there was no evidence before me to support this assertion. There is nothing in the affidavit of Mr Greenstein, to which I was referred, which would justify this assertion. The fact remains, however, that the applicants did attempt, in some way or other, to file the relevant documents in March 2013. 25 Another reason given by the applicants for their failure to apply in a timely manner for an extension of time was an alleged misunderstanding as to the nature of the orders that they sought to contest. This suggested reason appears, for example, in the 10 April 2013 affidavit of Matthew Hurd and the 10 April 2013 affidavit of John Hurd. This reason would not, however, fully explain the delay, particularly with respect to the orders that were known to be interlocutory in nature. 26 In any event, the application ultimately was made to me in the capacity of duty judge on 17 May 2013. Bearing in mind the history of the matter, including the applicants' lack of representation, numerous attempts to file relevant documents and their failure, for whatever reason, to have the Registry accept them, I would extend time to enable the applicants to institute an appeal against the trial judge's judgment of 5 February 2013, if (and only if) I was persuaded that the earlier applications determined by Marshall J were not a complete impediment to this application and that leave to appeal ought otherwise be granted. 27 For the reasons stated below, amongst other things, I am not satisfied that leave to appeal should be granted.

Are the applications that came before Marshall J an impediment to this application? 28 At the outset of the hearing, I indicated to Mr Wood that I entertained doubts about whether the applicants' current application should be entertained in view of Marshall J's determination of the applicants' earlier applications. 29 The appellate jurisdiction of this Court is conferred by s 24 of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act'). In particular, s 24(1)(a) provides that the Court has jurisdiction to hear an appeal from the judgment of a single judge of the Court exercising its original jurisdiction. This provision is subject to s 24(1A), which provides that an appeal may not be brought against an interlocutory judgment of this kind "unless the Court or a Judge gives leave to appeal". 30 Section 25(2) of the Federal Court Act provides that certain applications, including an application for leave to appeal or for an extension of time within which to appeal "must be heard and determined by a single Judge unless … a Judge directs that the application be heard and determined by a Full Court; or … the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers it appropriate for it to hear and determine the application". 31 As these provisions of the Federal Court Act indicate and the authorities establish, applications for leave to appeal or extensions of time within which to appeal are heard and determined in exercise of the Court's appellate jurisdiction: see, for example, Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424 ('Thomas Borthwick') at 431. The Full Court has held that the effect of s 24(1A) and earlier versions of s 25(2) is that there is no appeal from the decision of a single judge refusing (or granting) leave: see Reid v Nairn (1985) 60 ALR 419 at 421, 426; and Thomas Borthwick at 43. This proposition has been repeatedly affirmed and applied: see, for example, Bahonko v Sterjov [2007] FCA 1717 at [55]. An appeal from the refusal of a single judge to grant leave is incompetent. 32 As the Court in Thomas Borthwick explained at 431: Prior to the amendments to ss 24 and 25 appeals from interlocutory judgments of single judges of this Court and from interlocutory judgments of Supreme Courts lay as of right to this Court constituted by a Full Court. Parliament perceived the need to change this. Parties could, as they sometimes did in practice, bring a string of appeals from interlocutory judgments of a single judge given in the course of a trial. Such appeals delayed and interfered with the proper conduct of the trial and hampered the proper administration of justice. The purpose of the amendments is plain from the text of the amendments themselves when considered in light of the mischief to be cured. The amendments are intended to have the result that appeals from interlocutory judgments may be brought to this Court only by leave once and only once. No appeal lies from that decision whether as of right or by leave. (Emphasis added.) 33 The Full Court has held that the same provisions mean that there is also no appeal from the refusal of a single judge to grant an extension of time in which to appeal: see Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 ('Wati') at 548. Such an appeal is incompetent. The power in s 24(1A) of the Federal Court involves "a true alternative and not a progressive choice": Wati at 548. The same reasoning would apply to an application for an extension of time in which to bring an application for leave to appeal. 34 It was not open to the applicants in the present circumstances to make a second application for leave to appeal if an earlier leave application by them had been refused. Nor was it open to them to make a second application for an extension of time if an earlier extension of time application by them had been refused. 35 This is confirmed by Hamod v New South Wales (2002)188 ALR 659 ('Hamod'), where the Court said at 663 [15]: Mr Hamod made to us what might, on one view, have amounted to an oral application for an extension of time to apply for leave to appeal and for leave to appeal. In view of the fact his previous application for such an extension of time was refused by Katz J, the question arises whether a further application can be made. Section 24(1A) and s 25(2) of the Federal Court Act make it clear that only one application for leave to appeal can be made… This is because the consideration of an application for leave to appeal is an exercise of the Court's appellate jurisdiction and the Court cannot hear an appeal from its own decision on an appeal. Section s 25(2)(b) of the Federal Court Act makes it clear that an "application for an extension of time within which to institute an appeal to the Court" also invokes the appellate jurisdiction of the Court. (Emphasis added.) 36 The general rule that only one application can be made follows from the fact that there is no appeal against a refusal of leave to appeal, or against a refusal of an extension of time to appeal or apply for leave to appeal. This is because, in most cases, the second application will be tantamount to an appeal and ought not to be entertained for the reasons already stated. 37 It is unnecessary in the present case to decide whether or not an application for an extension of time to appeal, or to apply for leave to appeal, might be renewed in the event that the circumstances had materially altered, upon the basis that, by reason of these altered circumstances, the second application was not tantamount to an appeal but was in fact a new application. The applicants did not refer to any circumstances that would raise this question. 38 It is convenient to note here that Mr Wood challenged the authority of Hamod and also sought to confine that which it decided. For the reasons explained at the hearing, I would reject Mr Wood's submissions in this regard. It is apparent from the foregoing that Hamod is consistent with well-established Full Court authority. I note that, in this regard, the applicants' reference to Carr v Finance Corporation of Australia (1981) 147 CLR 246 and Hall v Nominal Defendant (1966) 117 CLR 423 failed to support their argument since both cases were concerned with applications in the original, rather than the appellate, jurisdiction of State Supreme Courts. 39 As already noted, on 26 February this year, Marshall J refused applications for an extension of time and, implicitly, for leave to appeal. The authorities to which reference has just been made indicate that it was not open to make second applications for an extension of time or for leave to appeal if previous applications have been heard and determined. 40 The applicants argued, however, that Marshall J decided a different application from that which was currently before the Court. First, it was said that most of the orders the subject of the current application were not the subject of any prior application to this Court. Secondly, it was said that Marshall J did not deal with the Companies' application because his Honour declined to dispense with the requirement that they proceed by a lawyer. 41 The applicants drew attention to the fact that a draft notice of appeal annexed to an affidavit sworn by John Hurd on 19 February 2013, which was before Marshall J, sought different orders from the orders set out in the draft notice of appeal before me. Mr Wood argued, in substance, that this reflected the applicants' misunderstanding at the time that not all the "important" orders made on 5 February 2013 were interlocutory and that they had an appeal as of right in relation to some of them. 42 I accept that the orders sought in the two draft notices of appeal differ. This does not, however, conclude this limb of the applicants' argument. 43 First, I note that, in the draft notice of appeal before Marshall J, the applicants also sought "[s]uch orders as the Court believes appropriate". 44 Second, the documents filed prior to the hearing before Marshall J showed that all the current applicants (that is, Mr Hurd and the Companies) desired to make applications for extension of time and leave to appeal in respect of the trial judge's judgment of 5 February 2013. The applications for an extension of time and for leave to appeal, both filed on 21 February 2013, were filed on behalf of "Hurd and Others (Applicants)". A draft notice of appeal annexed to the affidavit sworn by John Hurd on 19 February 2013 and "filed in support of application for interlocutory orders sworn on the 19th Day of February 2013" (and before Marshall J) was said to be filed on behalf of "Matthew Hurd and Others - Appellants" and expressly stated that the appeal was "from the whole of the judgment and all of the orders of the Federal Court". The affidavit sworn by John Hurd was said to filed on behalf of the "Matthew Hurd and Others - Appellants". 45 Third, the draft notice of appeal before Marshall J proceeded, by its grounds of appeal, to challenge the whole of the judgment and many of the orders numbered 4 to 30 made by the trial judge. For example, Ground 2 alleged that "Gordon J erred by confusing the issues between fiduciary duty and the matters related to the products which has resulted in an incorrect application of the law". Ground 6 alleged that the trial judge had "[e]rred in holding that Hurd's breach of fiduciary duty extended to holding profits of ZeptoLink as constructive trustee for Zomojo". Ground 13 claimed that the trial judge "[e]rred in finding that the products were a violation of Zomojo's rights". These grounds would, if made out, undermine most of the orders made by the trial judge. 46 Fourth, there were submissions filed immediately prior to the hearing before Marshall J in the name of "Matthew Hurd & others (Applicants)". These included submissions filed in support of leave to appeal that were not only wide-ranging and detailed but apparently covered much of the ground that the applicants sought to cover in the current application before me. 47 The result is that, whilst I accept that the orders sought in the draft notices of appeal before Marshall J and me differed, nonetheless, on both occasions the applicants contemplated an appeal against the whole of the 5 February 2013 judgment of the trial judge; and there was substantial overlap in the proposed grounds of appeal in both draft notices of appeal and in the submissions filed by the applicants before Marshall J and before me. 48 The orders made by Marshall J on 26 February 2013 addressed the extension of time issue. Yet, in refusing the extension of time, his Honour impliedly refused the leave to appeal application in so far as it was before him (see below), as in fact his Honour's reasons for judgment confirm. These reasons briefly addressed the applications for leave to extend time and for leave to appeal: see Hurd v Zomojo Pty Ltd (No 2) [2013] FCA 146 at [2]. 49 For these reasons, I conclude that, if Marshall J in fact heard and determined the applications for an extension of time and for leave to appeal made by all applicants, then the weight of authority would prevent these applicants from bringing a second application for an extension of time and leave to appeal. 50 The critical question is, therefore, whether Marshall J in fact heard and determined the applications for an extension of time and for leave to appeal made by all the applicants or only as made by Mr Matthew Hurd. The applicants maintained that his Honour did not consider and determine any application made on behalf of the Companies because he refused to grant leave for them to proceed at the hearing, represented by Mr John Hurd. 51 Having regard to Marshall J's reasons set out in Hurd v Zomojo Pty Ltd (No 2) [2013] FCA 146 and Hurd v Zomojo [2013] FCA 145, I accept that his Honour did not consider and determine any application for an extension of time or for leave to appeal made on behalf of the Companies. Mr Matthew Hurd's statement in paragraph 36 of his 10 April 2013 affidavit that "no time extension application for the leave to appeal nor to the leave to appeal application itself nor any other application was considered by Marshall J" is correct in so far as it relates to the Companies, although incorrect in so far as it relates to him. 52 Had his Honour treated the interests of Mr Matthew Hurd and the Companies as effectively the same, it might have been said that the failure to decide the applications in so far as they were brought by the Companies was merely a formality and that these applications were, in substance, heard and determined. This was not, however, how his Honour treated the matter. Thus, at paragraph 37 of his 10 April 2013 affidavit, Mr Matthew Hurd said: Marshall J then looked to whether I as the individual Respondent could make a case for overturning the orders on an appeal from myself. Marshall J asked me if I could affect the orders. I put to him that I clearly couldn't affect the orders mentioning the corporate Respondents directly. It was discussed back and forth between Marshall J and me, concerning the other orders, and particularly whether I could affect them as an individual. It was put to me by Marshall J that I could have no effect on the Orders as they only related to the corporate Respondents. During that hearing, I conceded that the orders only related to the corporate respondents. I read the orders as requiring authority from the corporate Respondents to act and I was not an officer nor an employee of the corporate respondents and had no such authority. 53 The passages from Marshall J's reasons for judgment set out at [17] and [18] above also show that his Honour did not consider that he was deciding the applications in so far as they were made by the Companies. This is reflected in the fact that his Honour referred to the application as "one by Mr Matthew Hurd". 54 In these circumstances, it seems to me that, whilst Mr Matthew Hurd cannot bring a second application for an extension of time and leave to appeal, the Companies may be able to bring the application since, so far as they were concerned, there has in fact been no ruling on an application by them for an extension of time and leave to appeal. In view of this, I propose to consider the Companies' application for leave to appeal on the assumed footing that Marshall J did not decide their previous application and that, in this event, it is open to the Companies to apply to the Court again. For the reasons set out below, even on this footing, I would not grant leave to appeal.

The Companies' application for leave to appeal 55 In respect of a grant of leave to appeal from an interlocutory judgment, the two-part test is well-established. Leave should be granted if: (1) in all the circumstances the decision is attended with sufficient doubt to warrant being reconsidered by an appellate court; and (2) substantial injustice would result if leave were refused supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 ('Décor') at 398-399. 56 For the reasons I am about to state, I do not consider that the decision is attended by sufficient doubt to warrant it being considered by an appellate court at this stage of the proceeding. 57 At the hearing, Mr Wood explained that the proposed appeal centred particularly on the trial judge's finding that one of the Products known as ZeptoLink was developed in breach of Mr Hurd's fiduciary duty to Zomojo. Mr Wood explained that: … the real nub of the appeal that my clients seek leave to bring is that there was something different about Zeptolink. It wasn't the same as Opticast. There was something different. Her Honour made no findings about what that different thing was and no findings about whether that different thing involved work that was done in breach of fiduciary duties … And the nub of the submission is: it's not just a question of findings of fact. 58 Mr Wood argued that the trial judge's treatment of the ZeptoLink evidence disclosed a number of appellable errors. 59 The first such error was said to be that trial judge "reversed the onus of proof" carried by Zomojo in holding that ZeptoLink was developed in breach of Mr Hurd's fiduciary duties. Mr Wood submitted that, when the trial judge refused, without independent contemporaneous corroborative evidence, to accept Mr Hurd's evidence that: (a) he did not devise ZeptoLink while employed by Zomojo; and (b) Opticast and ZeptoLink were dissimilar, her Honour imposed an impermissible burden on Mr Hurd to "disprove" the allegations made against him. 60 The trial judge's reasons for judgment do not appear to me to justify Mr Wood's assertion that her Honour reversed the onus of proof. It is true that her Honour refused to accept Mr Matthew Hurd's evidence "unless and only to the extent [it was] corroborated by independent contemporaneous evidence": Primary Judgment at [5]. Her Honour's reasons for this were clearly stated at paragraphs 5 and 203 of the Primary Judgment, where her Honour said that: Hurd was a most unsatisfactory witness. … During the course of his evidence, he admitted on no less than 26 occasions that what he wrote or said was false, a lie or both. But that evidence itself had problems. Hurd's admission that something was false or a lie was itself, often false. [at [5]] Here, none of the Respondents adduced evidence concerning the design sequence that led to the development of any of their products. Mere assertion that development of a product occurred in or about [x] is insufficient. [at [203]] On this application, the applicants did not contend that it was not open to her Honour to make this assessment of Mr Hurd's evidence or that her Honour was incorrect about the design sequence evidence. 61 The basis of her Honour's finding that ZetoLink was developed in breach of fiduciary duty was based on her Honour's assessment that there was affirmative evidence establishing, to the requisite degree, that Mr Hurd had acted in breach of his fiduciary duties; and that this evidence withstood Mr Hurd's assertions to the contrary: see [253] to [260] of the Primary Judgment. Whilst her Honour's finding entailed a rejection of Mr Matthew Hurd's evidence concerning the development and nature of ZeptoLink, the rejection of his evidence did not mean that her Honour had reversed the onus of proof. The applicants have not advanced any tenable basis to support their submission that her Honour made an error of this kind. 62 Secondly, Mr Wood submitted that there were significant flaws in the way the trial judge treated the remainder of the evidence on ZeptoLink. These flaws were so significant, Mr Wood submitted, that "when the evidence is examined, it is incapable of supporting the conclusion that her Honour reached". In particular, Mr Wood submitted that her Honour had "ignored" the evidence of Dr Chapman that whereas OptiCast split one signal optically, splitting was effected electronically in the case of Zeptolink. At the hearing, Mr Wood developed this submission to the effect that "her Honour did not take into account the concessions of the applicant's witnesses in the court below". Effectively, this submission expanded the argument to include the evidence of Associate Professor Leong, who agreed that Zeptolink and OptiCast were different as described by Dr Chapman. Particular emphasis was placed on the omission from the judgment of Associate Professor Leong's agreement with the proposition that the Zeptolink device was very different from a regenerative tap. 63 This second submission is again not borne out by the trial judge's reasons for judgment, which clearly show that the evidence was not ignored. At paragraph 260 of the Primary Judgment, her Honour explicitly acknowledges the evidence given by these witnesses, stating that "Chapman and Associate Professor Phillip Leong gave evidence about the two devices." Her Honour expressly recognised that Mr Chapman's evidence was that the devices split the signal differently. Further, her Honour noted that Zeptolink possessed a flexible mapping functionality that OptiCast did not, but that, as Mr Chapman described, this development was simply a "by-product" of the switch to electronic splitting. After noting this evidence, however, her Honour concluded (at [260]): Despite these differences, I find that ZeptoLink was an evolution of OptiCast for the purposes of cl 10 of the Service Agreement and that it should be assigned to Zomojo. 64 In substance, the trial judge was not persuaded that the evidence of Mr Chapman and Associate Professor Leong established that ZeptoLink was sufficiently distinct from OptiCast to diminish the weight of the other evidence that led her to hold that Mr Matthew Hurd developed ZeptoLink in breach of his fiduciary obligations to Zomojo. This does not mean, as Mr Wood argued, that the significance or substance of their evidence was ignored. Instead, as is apparent from paragraphs [252]-[262] of the Primary Judgment, what her Honour did was evaluate the evidence of two witnesses, in light of the other evidence regarding ZeptoLink. 65 Mr Wood made a third submission about the ZeptoLink evidence, which was in essence that, even if the trial judge correctly characterised Zeptolink as a second generation or 'evolution' of OptiCast, this did not mean that it was developed in breach of fiduciary duty. In support of this proposition, Mr Wood submitted: …even if her Honour was right to say 'it is impermissible for Mr Hurd to merely deny the allegation' and that that evidence should somehow be rejected, it still fell to the applicant to prove its case to the Briginshaw standard and this means proving that every component, every bit of the Zeptolink device was developed in breach of fiduciary duty. 66 Broadly speaking, Briginshaw v Briginshaw (1938) 60 CLR 336 ('Briginshaw') requires that "the affirmative of the allegation is made out to the reasonable satisfaction of the tribunal", acknowledging that serious allegations "should not be produced by inexact proofs, indefinite testimony, or indirect inferences": Briginshaw at 362. As Dixon J expressly cautioned in Briginshaw at 363, however, "the nature of the issue necessarily affects the process by which reasonable satisfaction is attained". 67 I am not persuaded that a prescription of the kind advanced by Mr Wood can be drawn from Briginshaw. I was not referred to any authority in support of the proposition for which Mr Wood contended, that the proper application of Briginshaw meant that the alleged breach of fiduciary duty must be proved against "every component, every bit" of the device in question. Mr Wood's submissions in this regard failed to satisfy me that her Honour's findings were, on this account, attended by sufficient doubt to justify appellate reconsideration. 68 In this connection, I observe too that her Honour's reasons for judgment specifically noted that "none of the Respondents adduced evidence concerning the design sequence that led to the development of any of their products": Primary Judgment at [203]. Further, as her Honour said at [258]: I accept that two devices may possess similar qualities while still functioning in different ways. In the end, understanding the way each device achieved the common aim … is unnecessary. It was unnecessary, so her Honour held, because there was other contemporaneous evidence, namely, the email Snowdon sent to Advantage PCB of 25 May 2011, which contained a description that her Honour accepted as accurate and consistent with Mr Hurd's own admissions of the connections between OptiCast and ZeptoLink: see Primary Judgment at [259]. It is also relevant in this connection to note her Honour's findings at [308]-[309], although Mr Wood made no reference to them in argument. 69 In light of the foregoing, there is nothing in this part of her Honour's analysis that would persuade me that there was sufficient doubt in her Honour's analysis at this point to satisfy the first limb of the test in Décor. 70 Finally, in oral submissions, Mr Wood submitted: If her Honour was right that the fiduciary duty could continue after Mr Hurd stopped being a director then I have a further hurdle because it may be that whenever this further step was done in the evolution, as I'm describing it, it might have fallen within the period in which the duty was owed. In my respectful submission, a Full Court would have little cause for pause in saying that her Honour was wrong in finding that the fiduciary duty might continue. In this regard, Mr Wood specifically criticised her Honour's reliance on Cook v Deeks [1916] 1 AC 554 (Cook v Deeks). 71 Her Honour referred to Cook v Deeks at [208] of the Primary Judgment in support of the proposition that: For directors, fiduciary obligations may continue subsequent to the termination of the relationship that initiated them. The reference to this authority appears under the heading "Legal Framework" and is unexceptional. The reference appears before her Honour begins her analysis of the facts in the case. 72 In making these submissions regarding Cook v Deeks, Mr Wood failed to refer to her Honour's discussion of the continuing obligation of fidelity in relation to the evolution of ZeptoLink at [308] to [309] in her analysis of liability. Under the heading 'Breach of Hurd's Fiduciary Duties' (above [304]), and the sub-heading 'Development and marketing of OptiCast, ZeptoCast and then Zeptolink' (above [30]), her Honour stated, at [308] and [309], that: After 11 February 2011, Hurd set about further developing and marketing OptiCast - a product that became known as ZeptoCast and then Zeptolink. So, for example, after 11 February, Hurd not only continued to design and develop, but was in fact marketing Zeptolink: see [155] above. That conduct continued: see [158], [160], [164], [254] and [256]-[259]. That conduct was, and remained, in breach of the fiduciary duties Hurd continued to owe to Zomojo and s 183(1) of the Corporations Act: Spotless Group Ltd v Blanco Catering Pty Ltd (2011) 93 IPR 235 at [27] … 73 In these paragraphs, her Honour sets outs her finding that Zeptolink was dependent for its evolution on the design of OptiCast; and that this conduct was, in consequence, in breach of a continuing obligation of fidelity to Zomojo because it was an evolution. Her Honour supported this analysis by reference to Spotless Group Ltd v Blanco Catering Pty Ltd (2011) 93 IPR 235 ('Spotless Group') at 242 [27]. 74 Perusal of Spotless Group indicates that her reliance on it as authority was well-founded. As Mansfield J said in that case at 242 [27]: The entitlement of an employee to use information obtained in the course of employment after leaving that employment will depend upon the nature of the information, and the manner in which it is obtained by the employee. The general rule is that, after the employment relationship has ended, a former employee may use know-how obtained in the course of the prior employment. He may not, however, use information of a confidential nature. The situation is different if the information in question, even though it is not strictly speaking confidential information of the employer, is deliberately taken or copied by the employee while the employment relationship persists for use after the employment relationship ceased: Faccenda Chicken Ltd v Fowler [1987] Ch 117 at 136. In that case, a former employee was prevented from using the employer's know-how or non-confidential information that might otherwise have been available for use after termination of the employment relationship, because the information and the advantage that flowed from it was obtained through dishonesty. In such a case, the wide duty of fidelity was said to survive the termination of the contract of employment so that equity will prevent the employee from enjoying the fruits of such conduct. (Emphasis added.) The fiduciary duty in the present case continued, so her Honour held, exactly for the reasons put by Mansfield J in the passage set out above. 75 Consequently, even if the exact quality of the ZeptoLink evolution remained unidentified, her Honour found that the evolution itself was in breach of the continuing fiduciary duty that Mr Matthew Hurd owed to Zomojo because it was built on the information that Mr Hurd had dishonestly sourced from the OptiCast device. This finding was, so far as I can discern from what has been put before me on this application, clearly open on the evidence and the authorities. 76 To the extent that it was open to the Companies to renew their application for leave to appeal, I would refuse leave to appeal on the basis that the judgment of the trial judge is not, in the circumstances, attended with sufficient doubt to warrant being reconsidered by an appellate court. It is unnecessary to consider the second limb of the test in Décor. Since I would not grant leave to appeal, I would not grant an extension of time in which to bring an application for leave to appeal.

DISPOSITION 77 For the reasons stated, I would dismiss the application for an extension of time and leave to appeal, with costs. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

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