Hurd v Zomojo Pty Ltd

[2015] FCAFC 147

Federal Court of Australia (Full Court)|2015-10-21|Before: Gordon J, Jessup J, Beach JJ

View original source

At a glance

Source facts

Court

Federal Court of Australia (Full Court)

Decision date

2015-10-21

Before

Gordon J, Jessup J, Beach JJ

Source

Original judgment source is linked above.

Judgment (26 paragraphs)

[1]

THE COURT: 1 Matthew Hurd (Hurd) has applied for an extension of time within which to appeal the judgment of Gordon J, the subject of orders made on 5 February 2013 on the question of liability, and the judgment of Jessup J, the subject of orders made on 6 May, 9 May and 5 June 2014 on the question of quantum and other relief. Hurd, together with other entities, was a respondent to the proceeding below. Hurd has also sought leave to appeal such decisions, although we do not consider such leave to be necessary given that final orders have now been made. 2 Zomojo Pty Ltd (Zomojo), the present respondent, was the applicant in the proceedings below. We will shortly explain the nature of the claims made by Zomojo, the proceedings and their history. 3 In summary, we would grant to Hurd an extension of time within which to appeal such judgments and orders, but dismiss that appeal. 4 Hurd has also applied for an order that a writ of certiorari be issued quashing such judgments and orders. We will explain later the context for that application. Given that such an application is required to be dealt with in the Court's original jurisdiction, the Chief Justice has given a direction under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) that we exercise the Court's original jurisdiction to deal with that application. We have exercised that jurisdiction and would dismiss that application for reasons that we will later explain.

[2]

[3]

(a) The proceedings before Gordon J - Principal claims 6 Zomojo was involved in high frequency trading (HFT) primarily on the Korean Stock Exchange (KRX) using proprietary technology it developed in house. As her Honour explained, HFT is a broad term encompassing various quantitatively derived, computer driven and high volume trading strategies where equities and derivatives are traded based on small perceived mis-pricings over short, intra-day periods of time. 7 Zomojo's involvement in HFT had various dimensions. It engaged in: (a) developing, marketing and supplying low latency market gateway products and services for use by professional traders in equity and like markets (Zomojo's Gateways), principally for use on the KRX; the concept of "latency" in the context of electronic systems refers to a systemic time delay in terms of data communication or receipt and its actioning; (b) trading in equity and like markets by using and exploiting the low latency of Zomojo's Gateways and proprietary trading engine (Zomojo's Trading), again principally on the KRX; (c) developing proprietary low latency hardware and software products, including its own firmware for third party network interface cards (NICs), and later its own NICs, called the Z1 and Z10 (Zomojo's NICs), and a communication and scheduling framework called the Ion framework (Ion); and (d) developing, marketing and supplying an alternative trading system (ATS) for equity and like markets that utilised software and hardware to achieve minimum latency (Zomojo's ATS). 8 Hurd, the first respondent in the proceeding below, was a director, an employee, the company secretary and a shareholder of Zomojo from its incorporation on 3 June 2005 until early 2011. Under a service agreement Hurd signed with Zomojo on 2 December 2005 (the service agreement), Hurd was appointed as a co-managing director of Zomojo and was required to diligently perform specified duties, to devote the whole of his time and attention during normal business hours to the performance of those duties, at all times to use his best endeavours to promote Zomojo's interests and to avoid any involvement or interest in any other business or occupation which materially interfered with the performance of those duties or competed in any respect with the business of Zomojo. Hurd was also Zomojo's key decision maker with respect to the technological direction of Zomojo. Under the service agreement, he was required to make prompt and full disclosure to Zomojo of the evolution and discovery of any invention. 9 In summary, her Honour found misconduct by Hurd in breach of contractual obligations, fiduciary duties and director's duties owed to Zomojo. 10 Her Honour found that 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. Hurd established various companies to assist in his misconduct. 11 Zomojo's claims against Hurd involved alleged: (a) breaches of cll 3.1, 3.3, 3.4 and 3.5 of the service agreement, s 181(1) of the Corporations Act 2001 (Cth) and Hurd's fiduciary duties; (b) breaches of cl 10 of the service agreement; (c) breaches of cl 9 of the service agreement, s 183(1) of the Corporations Act and Hurd's fiduciary duties; (d) breaches of cl 12.1(b) of the service agreement; and (e) breaches of cl 12.1(c) of the service agreement. 12 Zomojo's claims against each of the corporate respondents included claims divided into two categories: (a) a knowing assistance claim against all of the corporate respondents in respect of Hurd's breaches of his fiduciary duties; and (b) a claim against Zeptonics Pty Ltd (Zeptonics), MD Hammer Pty Ltd (MD Hammer) and Zepto Markets Pty Ltd for inducing Hurd to breach cl 12 of the service agreement. 13 Zomojo sought declarations, injunctions and damages. 14 Her Honour found that Hurd had breached the service agreement in various respects, including: (a) cl 3.1, by failing to diligently perform the services whilst he was engaged in marketing and sales activities in respect of OptiCast (an optical splitter device used to achieve low latency in data replication) and the Crosswise ATS (a low latency exchange platform for equity and like markets); (b) cl 3.3, by failing to devote the whole of his time and attention to the performance of the services during normal business hours and at such other times as were reasonably necessary in respect of Newedge Canada Inc (Newedge); (c) cl 3.4, by failing to use his best endeavours to promote the interests of Zomojo and promoting the interests of Zeptonics and/or Crosswise Pty Ltd (Crosswise) in preference to the interests of Zomojo; and (d) cl 3.5, by being directly involved in another business (Zeptonics and Crosswise) which interfered with Hurd's performance of the services and competed with the business of Zomojo. 15 Further, her Honour found various breaches of fiduciary duty in relation to: (a) the failure to refer the Newedge opportunity on or about 14 September 2010 to Zomojo; (b) developing the device that became OptiCast (and ultimately ZeptoLink, an evolution of OptiCast, namely a low latency electronic device used to forward data); and (c) the preparatory activity that led to fundraising of the Crosswise ATS up to 11 January 2011. 16 In the result, her Honour held that Zomojo was entitled to various injunctions to the effect that: (a) Hurd assign, or procure the assignment of, each of OptiCast, ZeptoLink, ZeptoNIC (a low latency network interface card), ZeptoAccess KRX (direct market access gateway software with negative latency for use on the KRX) and the Crosswise ATS to Zomojo; (b) Hurd deliver up to Zomojo, or to procure the delivery up to Zomojo of, all prototypes and parts of prototypes, and products or parts of products, in his possession, power or control or in the possession, power or control of any of the corporate respondents, relating to or based on Opticast, ZeptoLink, ZeptoNIC, ZeptoAccess KRX and the Crosswise ATS; and (c) Hurd deliver up to Zomojo, or to procure the delivery up to Zomojo of, all documents (including electronic documents and files) in his possession, power or control or in the possession, power or control of any of the corporate respondents, that recorded or referred to any of the prototypes or products known as or based on Opticast, ZeptoLink, ZeptoNIC, ZeptoAccess KRX and the Crosswise ATS. 17 Her Honour also found that Zomojo was entitled to damages. But the quantification of those damages was to be determined at a separate hearing. Ultimately, Jessup J dealt with that phase of the proceeding as we will later explain. 18 Her Honour made adverse findings against Hurd both as to his credibility and his underlying conduct the subject of the substantive allegations made by Zomojo (Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458). For example, her Honour found at [4] to [7]: 4 From no later than September 2010, Hurd set out on a covert course of conduct that was nothing more than a flagrant and deplorable attempt to appropriate benefits for himself which were properly those of his employer. In Hurd's own words, his conduct from late 2010 onwards was not "flattering" and was disreputable. 5 Hurd's conduct was blatant, deliberate and done by him knowing that what he was doing was wrong. Hurd was a most unsatisfactory witness. Except for admissions against his interests, I cannot and do not accept his evidence unless, and only to the extent that, his evidence was corroborated by independent contemporaneous evidence. 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. Hurd gave evidence he thought would advance his case as he saw it. Why? Because Hurd was, and remained, focussed on securing for himself an advantage over Zomojo whilst consciously disregarding his legal and ethical obligations. He "adapted" his evidence accordingly. Hurd said in evidence that he thought a description of his conduct during this period as "reprehensible" was "harsh". It was not harsh. Hurd's conduct was dishonest. He showed no remorse, just bitterness. 6 Hurd's conduct needs to be addressed by reference to two time periods: 1. up to and including 11 February 2011, when his resignation as an employee of Zomojo took effect; and 2. the period after his resignation took effect on 11 February 2011. 7 Did Hurd breach the Service Agreement, one or more of ss 181(1) and 183(1) of the Corporations Act 2001 (Cth) (the Corporations Act) and his duties of fidelity and good faith to Zomojo? The answer is yes. It will be necessary to deal with each period separately. The facts relevant to each period are, of course, to some extent interconnected but the applicable legal framework is different. 19 Further, her Honour found at [173]: Hurd's conduct was reprehensible. As noted earlier, except for admissions against his interests, I cannot and do not accept his evidence unless, and only to the extent that, his evidence was corroborated by independent contemporaneous evidence. He was neither a person of truth nor of integrity. In that context, the following additional facts and matters are relevant: 1. during the course of his evidence, Hurd admitted on no less than 26 occasions that what he wrote or said was false, a lie or both. However, as noted at [5] above, that evidence itself had problems. Hurd gave evidence he thought would advance his case as he saw it. Hurd was, and remained, focussed on securing for himself an advantage over Zomojo whilst consciously disregarding his legal and ethical obligations. He "adapted" his evidence accordingly; 2. Hurd filed on behalf of Zeptoip Pty Ltd (Zeptoip) a patent application that was based upon Zomojo's speculative transmission and transmit fragmentation techniques, which he knew about only because he had been employed by Zomojo as its co-managing director; 3. Hurd continued to access Zomojo's online Commonwealth Bank account records long after he ceased to be employed by Zomojo, and after the commencement of these proceedings; and 4. Hurd established a complex structure including some seven different companies and, after the commencement of these proceedings, arranged for the transfer of his shareholdings in those companies to the corporate trustee of a trust of which he is a beneficiary. The only conclusion to be drawn was that Hurd's strategy was to make it as difficult as possible for Zomojo to obtain relief in respect of his misconduct, a strategy that he embarked on no later than early February 2011: see [145] above. 20 And in her principal findings against Hurd, her Honour concluded at [305]: If the clock had stopped at the close of 11 February 2011, the position reached would have been: 1. in relation to the diversion of the Newedge opportunity, Hurd breached his fiduciary duties, ss 181(1) and 183(1) of the Corporations Act and cll 3.1, 3.3, 3.4 and 3.5 of the Service Agreement: see [226]-[233] above; 2. in relation to the development and marketing of OptiCast (which became ZeptoLink), Hurd breached his fiduciary duties, ss 181(1) and 183(1) of the Corporations Act and cll 3.1, 3.3, 3.4, 3.5 and 10 of the Service Agreement: see [237]-[240], [243]-[251], [252]-[260] and [304] above. Hurd had not however breached cl 9 of the Service Agreement because there was no evidence of which of the components of confidential information Hurd utilised in inventing OptiCast: see [241], [242] and [261] above. Hurd was obliged to assign OptiCast (which became ZeptoLink) to Zomojo; 3. in relation to the Crosswise ATS, Hurd breached his fiduciary duties, ss 181(1) and 183(1) of the Corporations Act and cll 3.1, 3.3, 3.4, 3.5, 9 and 10 of the Service Agreement: see [264]-[276] and [304] above. Hurd was obliged to assign the Crosswise ATS to Zomojo; 4. in relation to ZeptoNIC, Hurd breached his fiduciary duties, ss 181(1) and 183(1) of the Corporations Act and cll 3.4, 3.5, 9 and 10 of the Service Agreement: see [296], [298], [301] and [304] above. Hurd was obliged to assign ZeptoNIC to Zomojo; 5. in relation to ZeptoAccess KRX, Hurd breached his fiduciary duties, ss 181(1) and 183(1) of the Corporations Act and cll 3.4, 3.5, 9 and 10 of the Service Agreement: see [296], [298], [303] and [304] above. Hurd was obliged to assign ZeptoAccess KRX to Zomojo; and 6. ZeptoMUX (see [288]-[290] and [300] above) and ZeptoSwitch (see [292] and [302] above) were not in existence and, to the extent relevant, Zomojo failed to establish that either device used or incorporated Zomojo's "confidential information". 21 Moreover, her Honour concluded at [351]: Arising only from the conduct after 11 February 2011, the position is: 1. in relation to the development and marketing of OptiCast (which became ZeptoLink), Hurd breached his fiduciary duties and s 183(1) of the Corporations Act: see [309] above. Hurd did not however breach cl 9 of the Service Agreement because there was no evidence of which of the components of confidential information Hurd utilised in inventing OptiCast: see [308]-[309] above. 2. in relation to the Crosswise ATS, Hurd breached his fiduciary duties, s 183(1) of the Corporations Act and cl 9 of the Service Agreement: see [310]-[311] above; 3. in relation to ZeptoNIC, Hurd breached his fiduciary duties, s 183(1) of the Corporations Act and cl 9 of the Service Agreement: see [318]-[319] above; 4. in relation to ZeptoAccess KRX, Hurd breached his fiduciary duties, s 183(1) of the Corporations Act and cl 9 of the Service Agreement: see [321]-[325] above; 5. in relation to his dealings with Newham, Snowdon and Fitzpatrick, Hurd breached cl 12.1(b) of the Service Agreement: see [326]-[342] above; and 6. in relation to the SunGard and Leading Agreements, Hurd breached cl 12.1(c) of the Service Agreement: see [343]-[350] above.

[4]

(b) Hurd's oppression claim 22 Hurd and others had filed a cross-claim. The cross-claim included an oppression claim. In that context the cross-claim made the following allegations: Hurd, via his nominees (Jolene (Tas) Pty Ltd and Hurd Family Superannuation Fund (HFSF)), had purchased shares in Zomojo pursuant to the service agreement and Zomojo employee option plan. The service agreement provided that Zomojo could purchase such shares on cessation of employment for an amount equal to five times Zomojo's pre-tax profit in the previous financial year. On 30 June 2011, the board of Zomojo resolved to purchase such shares for $458,000 and transfer them to Zomojo's nominee (Zomojo Staff Holdings Pty Ltd). The amount Zomojo paid for the shares was less than the value of the shares as at 30 June 2010 and as at 30 June 2011. Further, the amount was based on a pre-tax profit figure that deducted research and development costs incurred in the year ending 30 June 2010, which costs were significantly higher than the year before or the year after, but such costs were not included as a capitalised asset. Accordingly, it was alleged that the resolutions passed by Zomojo were oppressive. Alternatively, it was said that in the circumstances the Zomojo employee share ownership plan (under which the shares could be purchased by Zomojo on the basis of a formula being five times the previous financial year's pre-tax profit divided by the total number of shares on issue, and multiplied by the number of shares being sold) and exercising the right to purchase Hurd's shares thereunder, was oppressive. 23 Her Honour dealt with the cross-claim at [506] to [512] in the following terms: 506 Hurd, Jolene and the HFSF submitted that Zomojo acted oppressively by passing the resolutions of 30 June 2011 that had the effect of causing the Hurd Shares to be transferred to Zomojo Staff Holdings for $458,025. They further contended that cl 4.7(b) of the Plan Information Booklet was itself oppressive. 507 Section 232 of the Corporations Act provides that the Court may make an order under s 233 if the conduct of a company's affairs is oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member or members whether in that capacity or in any other capacity. Section 53 of the Corporations Act defines the "affairs" of a company. 508 Whether conduct is unfair or oppressive is assessed objectively through the eyes of a commercial bystander: Aqua-Max Pty Ltd v MT Associates Pty Ltd (2001) 3 VR 473 at [54]; Wayde v NSW Rugby League Ltd (1985) 180 CLR 459; Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 and Endoline Pty Ltd v Drapac [2012] VSC 156 at [272]. The Court will look at the issue of oppression by considering the impact on the oppressed, not the intention of the alleged oppressor: M Dalley & C Pty Ltd; Re (1968) 1 ACLR 489. 509 If the conduct is so unfair that reasonable directors would not have thought it fair, then relief will be granted. The conduct is considered in its context and separate instances of conduct may, cumulatively, constitute oppression: Aqua-Max at [61] and Endoline at [272]. Although relief for oppression is based in the Corporations Act, equitable considerations have a role to play in determining whether relief should be granted. 510 Hurd submitted that the "starting point for the oppression claim is the overwhelming evidence that the sale of Mr Hurd's shares was substantially below value". In support of that contention, Hurd further submitted that: There is no evidence that Mr Hurd agreed to the oppression. He never signed the Information Booklet. The draft by Dr Brash had a discussion of a fairer formula. The formula in the Service Agreement is in different terms. It cannot be said that Mr Hurd knowingly sacrificed his rights (as was the case in Re Terri Co Pty Ltd (1987) 12 ACLR 457; 6 ACLC 402). If the Deloitte figures were right, 2009/2010 was an unusually low profit year. Alternatively, the cross claimants assert that the ESOP itself was an act of oppression. If the ESOP was allowed to operate in the way that the Zomojo [sic] alleges, it is an instrument of oppression. There is an obvious cross-over with the rectification suit because equity should not facilitate the oppression by further reducing the amount payable to Mr Hurd. 511 That submission is rejected. There was no oppression. Zomojo applied cl 4.7 of the Plan Information Booklet according to its terms. Hurd had notice of it: see [443] above. It caused Zomojo Staff Holdings to acquire the Hurd Shares for fair value, being the value arrived at by applying the "Plan valuation formula", based upon a pre-tax profit figure determined by an independent and reputable firm, Deloitte. It gave Hurd 14 days' advance notice of its intentions. It applied cl 4.7 despite the fact that, as the facts have emerged, Hurd was a bad leaver within the meaning of cl 4.7(b) of the Plan Information Booklet. 512 Hurd's contentions are rejected.

[9]

(g) The proceedings before Jessup J - Quantum 35 Jessup J dealt with the question of quantum and other relief flowing from the decision of Gordon J, including the damages to which Zomojo was entitled as against Hurd in consequence of the findings made by Gordon J. 36 As we have said, one of the orders made by Gordon J on 5 February 2013 was that: Nunc pro tunc, the hearing of the proceeding be split between liability (including all of the cross claim) and quantum. 37 Zomojo's claim for damages against Hurd had two components. First, Zomojo claimed the value of the time which Hurd devoted to his other business interests whilst he was still employed by Zomojo in the period to 11 February 2011. This claim arose under cl 3 of Hurd's service agreement. Second, Zomojo claimed out of pocket losses arising from the need to engage a recruitment agency to replace the staff to whom Hurd, in breach of that agreement, offered other employment. 38 On 6 May 2014, Jessup J made a declaration and various orders (Zomojo Pty Ltd v Hurd (No 4) [2014] FCA 441) including the following which it is necessary to set out in order to appreciate one of Hurd's arguments before us: THE COURT DECLARES THAT: 1. Each of the patent applications identified in the first column hereunder records or refers to, and concerns the technology or techniques employed in, the Product (within the meaning of Order 12 made by the court on 5 February 2013) correspondingly identified in the second column hereunder. Patent applications Products P0001AU - A Method and a System for Sending an Electronic Message Zepto Access KRX P0001PCT - A Method and a System for Sending an Electronic Message Zepto Access KRX P0003AU - [No title in text provided] ZeptoLink CrossWise ATS P0003US - A Networking Device and a Method for Networking ZeptoLink CrossWise ATS P0007US - Managing Risk Associated with Trading Zepto Access KRX ZeptoNIC P0022AU - A Processor and a Method for Processing a Received Order Zepto Access KRX CrossWise ATS P0023AU - A System and a Method for Reducing Latency Zepto Access KRX CrossWise ATS P0023US - A System and a Method for Reducing Latency Zepto Access KRX CrossWise ATS P0025AU - A System and a Method for Reducing Latency Zepto Access KRX CrossWise ATS

[11]

PRESENT APPLICATION 40 On 18 June 2014 Hurd filed an application for an extension of time within which to appeal the various orders and judgment of Gordon J of 5 February 2013 and Jessup J of 6 May 2014. As is apparent, final orders were not made until 6 May 2014 with other consequential orders thereafter. As is also apparent, it has always been Hurd's intention to challenge the decision of Gordon J. Hurd's explanation for the delays is set out in his affidavits sworn on 16 June 2014 and 31 July 2014 and involves, allegedly, various dealings and communications or miscommunications with the Victorian Registry of this Court. It is neither productive nor necessary to descend into the detail of his assertions or to make findings thereon. 41 We would grant the extension of time in circumstances where: (a) Hurd was only out of time by a relatively short period; (b) Hurd has explained the delay; (c) Zomojo is not prejudiced by any delay; (d) It has always been apparent that Hurd has sought to challenge the decision of Gordon J, as is apparent from various unsuccessful applications for leave to appeal that we have detailed above. 42 Normally on applications of this type, and notwithstanding the circumstances set out in the previous paragraph, the Court before granting an extension of time would need to be satisfied that the applicant had raised reasonably arguable grounds of appeal. 43 In the present and unusual circumstances of this case, it is preferable to review the merits of each of the grounds of appeal raised by granting the extension of time and proceeding to deal with the merits of each ground. 44 Hurd filed with his application for an extension of time a draft notice of appeal raising 45 grounds of appeal. However, on 8 September 2014, Hurd filed a new draft notice of appeal raising 21 grounds of appeal. We will grant an extension of time within which to appeal as to those grounds, notwithstanding that many of the grounds are expressed at a level of generality and diffuseness that is not helpful (for example grounds 5 to 8). It should be said that in argument before us, Hurd focused on various key complaints which we will identify and address shortly. 45 Further, by an interlocutory application filed on 12 January 2015, Hurd also sought to adduce fresh evidence on the appeal being principally his affidavit sworn on 5 January 2015 with numerous annexures. Hurd also filed further affidavits sworn on 10 February 2015 and 2 March 2015 concerning Hurd's s 78B notice and service of various material on the Commonwealth and States' attorneys-general. Such affidavits can be put to one side for the moment; the s 78B notice related to Hurd's application for Constitutional writs. 46 There was little satisfactory evidence concerning the justification for putting forward such new evidence at this late stage. Some of it would have been available at trial. Further, much of it is also in a less than suitable form if not inadmissible as impermissible hearsay. If we were just considering whether to grant leave to rely on this material under s 27 of the Federal Court of Australia Act 1976 (Cth), we would have refused that leave in relation to a large part thereof. But strictly, given that an application for a Constitutional writ has been filed, it is more appropriate and convenient that we receive that material. But its weight is another matter. Further, given that this new material ultimately goes nowhere, it is more convenient to assume its admissibility for present purposes rather than to linger further on such questions. Finally, given the inappropriate form of many of the assertions made by Hurd in his 5 January 2015 affidavit, we may entertain an application for a non-publication order as to various parts thereof.

[12]

STANDING 47 One major difficulty for Hurd on this appeal has been one of a lack of standing. The corporate respondents below are not parties to the present application/appeal. Moreover, they are in liquidation. Yet the principal relief granted by Gordon J was to the effect that the technology held and exploited by the corporate respondents in essence was to be transferred to Zomojo. Moreover, part of the relief (declarations) granted by Jessup J only concerned the corporate respondents. 48 There is a further dimension to the problem. Hurd also challenges how her Honour disposed of the cross-claim on the oppression case. But Jolene (Tas) Pty Ltd and the Hurd Family Superannuation Fund (the trustees of which were Hurd jointly with his wife, Carolyn Lisa Hurd) were the relevant cross-claimants on the oppression case. They were the parties that had the legal entitlement to pursue the oppression claim as shareholders in Zomojo. Hurd has asserted that Jolene and the Fund held such shares as nominee for him. The orders dismissing the oppression claim affected Jolene and the Fund, although it can be accepted that he was a co-trustee of the Fund and also had a beneficial interest in the shares held by both Jolene and the Fund. Hurd filed an interlocutory application dated 18 June 2014 seeking leave to represent both Jolene and the Fund in the present challenges. But that application was refused by Middleton J on 1 August 2014. In summary, Hurd has a difficulty in pursuing an appeal in relation to the orders dismissing the oppression claim. 49 Hurd has sought to circumvent the problem of his lack of standing by bringing an application for the issue of a Constitutional writ. But one difficulty with that position is that many of the grounds of appeal could not be described as jurisdictional errors. 50 But whatever the characterisation, none of the asserted grounds of appeal are made out in any event as we will now discuss. Further, to the extent that any of the asserted errors could also be categorised as jurisdictional errors, they are not established. Accordingly, we do not need to linger further on questions of characterisation.

[14]

(a) Bias (Grounds 3 and 4) 52 Hurd's principal complaint was that her Honour's decision should be set aside on the grounds of apprehended bias; it seems to us that his submission also descended to an assertion of actual bias, but it is sufficient for us to address the matter in terms of apprehended bias. 53 In terms of her Honour's decision, the asserted foundations for the apprehended bias claim were said to arise from her Honour's: (a) "associations with parties related to both Zomojo, acquaintances of Zomojo and Zomojo's legal representatives"; (b) "errors and patterns of bias in decisions, comments, judgments and orders". 54 As to the basis identified in [53(b)] above, and as will be apparent later, we do not consider that her Honour made any "errors" of the type identified. Moreover, any such "errors" per se would not have disclosed any lack of impartiality. As to the other aspect identified in [53(b)], the assertion of "patterns of bias" lacks substance and ought not to have been made. Further, to the extent that Hurd relies upon the demeanour of her Honour or various comments made during the course of the trial, in our opinion the examples given demonstrate no more than a standard but robust approach to trial management. 55 For completeness, after her Honour's February 2013 orders, Hurd raised the issue of a lack of impartiality by an interlocutory application dated 27 February 2013. The matter was referred to Jessup J to deal with quantum questions, but without any acceptance of the assertions made by Hurd in that interlocutory application; indeed her Honour communicated to the parties that she rejected the assertions. 56 The principal basis identified in [53(a)] above for the apprehended bias claim was said to arise from various associations allegedly between her Honour and Zomojo's "acquaintances" or legal representatives or persons associated therewith. 57 These alleged direct and indirect associations were detailed in Hurd's affidavit of 5 January 2015 at [2] to [27] with voluminous annexures, which for the most part were copies of downloaded material from the internet. 58 We do not intend to set out in these reasons the disjointed, confused and, at times, inappropriately described asserted associations set out in that affidavit or in Hurd's written submissions in chief at [46] and [47]. 59 We would make several observations. 60 First, many of the asserted associations, even assuming that they were made out on the evidence, were remote, indirect and sought to be established by multiple links. 61 Second, even accepting for the sake of the argument that such links were made good, they went nowhere. They did not touch and concern the litigation. The various links arose in an entirely separate context. 62 It is to be recalled that in order to establish apprehended bias by association, two steps are involved (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [8] per Gleeson CJ, McHugh, Gummow and Hayne JJ and Isbester v Knox City Council (2015) 320 ALR 432; [2015] HCA 20 at [21] per Kiefel, Bell, Keane and Nettle JJ, albeit a case dealing with a non-curial setting and involving interest rather than association). There must be: (a) an identification of what it is said might lead a judge to decide a case other than on its legal and factual merits; and (b) an articulation of the logical connection between such matters and the "feared deviation from the course of deciding the case on its merits". 63 In our opinion, on any view of the tendentious and misconceived material filed by Hurd, no reasonable argument has been advanced by Hurd to establish that second step. 64 Hurd has not established any apparent lack of impartiality on the part of her Honour. 65 But Hurd did not restrain himself in his unfounded allegations to just the position concerning her Honour. He has also asserted that "unknown parties serving the Victorian Registry" of this Court engaged in apprehended bias. 66 In this context, various disjointed, untested and largely scandalous assertions were made in his affidavit sworn 5 January 2015 at [42] to [47]. It is not appropriate to repeat them here. We are not satisfied that any factual basis supporting such allegations is made good. But in any event, the assertions, even if made good, have no relevant legal consequence. They do not touch and concern the decisions or orders of Gordon J or Jessup J. Such alleged acts or omissions of Registry officers had no relevant connection to their decision making. The factual foundation is not made good and the asserted legal consequence is misconceived. 67 In summary, grounds 3 and 4 are not made out. It also follows that the application for the issue of a Constitutional writ, to the extent that its asserted foundation is actual or apprehended bias also fails. 68 We should say something further concerning such an application and its context. As we have said, none of the corporate respondents below are parties to this application/appeal. They are in liquidation. Hurd has no authority to act on their behalf. Hurd has no standing to appeal against such orders which affect the corporate respondents but not Hurd. In order to get around that standing question, Hurd has made the present application for Constitutional writs. But the application is contrived and possibly amounts to an abuse of process (see Meagher v Stephenson (1993) 30 NSWLR 736 at 739). Moreover, various other standing issues, questions of delay and form issues arise; the application is not in a proper form for a s 39B application and the corporate respondents who would be affected by any orders are not parties. Further, in the exercise of discretion, a writ of certiorari is most unlikely to issue where there is a right of appeal; Hurd and the relevant corporate respondents possessed such a right. But we do not need to linger on such matters. As we have said, the essential foundation for that application fails in any event. 69 We note that there are other bases for this application in addition to apprehended bias. We will address such other matters in our discussion of the other grounds of appeal.

[15]

(b) Procedure concerning dismissal of cross-claim 70 Hurd has asserted that her Honour was in error and acted without procedural fairness in dismissing the cross-claim after the first stage hearing. This asserted error is not expressly raised in the proposed notice of appeal, although it cannot be said that it is not covered by some of the generally expressed grounds. 71 As we have said, her Honour dismissed the cross-claim on the basis that such an order inevitably flowed from her findings on liability. 72 It is appropriate to set out the procedural sequence before dealing further with Hurd's criticisms. As to that: (a) On 23 October 2012, her Honour ordered that "the issues in paragraphs 6 to 16 inclusive of the further amended statement of cross-claim and the corresponding paragraphs of the amended defence to cross-claim, will be heard separately and as part of the hearing on quantum". (b) Nevertheless, it was contemplated that at the first stage trial there would be various liability issues that were also relevant to the cross-claim to be dealt with. And in the result, her Honour made various findings. (c) After her Honour's first stage reasons were published, her Honour made a further order on 19 December 2012 that the parties were: "directed to confer and to bring in orders to give effect to these reasons for judgment and orders for the future management of the proceeding. If the parties are unable to reach agreement, each party should file and serve a minute of proposed orders and a two page submission addressing the area(s) of dispute". (d) According to the affidavit of Barbara Bell, a lawyer from Corrs who was acting for Zomojo, sworn 3 March 2015, on 31 January 2013, two sets of draft orders were sent to her Honour's associate. One set was Zomojo's proposed orders. It did not contain orders dealing with the cross-claim. It did, however, provide for a hearing on quantum, but only on the principal claims rather than the cross-claim. The second set of draft orders submitted to her Honour was the set of orders proposed by the respondents below (including Hurd). It was a marked up set of Zomojo's proposed orders. It proposed amended orders, including proposed order 15 which read: "The cross claim be dismissed". (e) Thus, it was Hurd and the other respondents that proposed that the cross-claim be dismissed. The appropriateness of such an order was not disputed by Zomojo. (f) Further, on 31 January 2013, written submissions were forwarded to her Honour prepared by counsel for the respondents below dealing with the matters in dispute concerning the proposed orders. But there was no dispute concerning the appropriateness of an order dismissing the cross-claim. (g) There were no other submissions made on the subject to her Honour prior to her Honour making the 5 February 2013 orders. 73 The chronology of events discloses a number of matters. First, whatever may have been the position before trial or during the hearing concerning how the cross-claim was to be dealt with, as matters developed given her Honour's principal findings, both parties considered that an order for dismissal of the cross-claim was appropriate given her Honour's principal findings. No party submitted otherwise. Indeed the respondents below proffered such an order to her Honour. Second, as the chronology discloses, the respondents below were given every opportunity to submit to her Honour that her principal findings did not justify a dismissal of the cross-claim or should be revisited in the light of the orders made prior to trial on the question of how the cross-claim should be dealt with. No such submission was ever made, and even though the respondents below were represented by both counsel and a major law firm. Hurd's assertion that the respondents below had no choice but to agree to such an order is not credible; the respondents had an opportunity to object but chose not to do so. 74 Hurd's written submissions refer to this aspect as "[t]he most troubling matter" and "I don't think I've heard of anything much more procedurally wrong or against natural justice". The submissions are misconceived and divorced from the reality of what occurred. 75 In terms of specifics, Hurd has asserted that he has been denied the opportunity to advance evidence concerning accounting questions relevant to the valuation of the shares held by Jolene and the Fund. Of course, that is a matter for Jolene and the Fund to have raised, but they are not parties before us (save that Hurd is a co-trustee of the Fund) and nor has Hurd leave to represent them. But there is a more fundamental difficulty. Her Honour found against the oppression claim on the basis (see at [511]) that Zomojo had applied clause 4.7 of the Plan Information Booklet according to its terms, of which Hurd had notice (see at [443]). In such circumstances the claim failed because there was not, on that finding, any conduct which was oppressive to, unfairly prejudicial to, or unfairly discriminatory against Jolene or the Fund. At its highest for Hurd, there were only accounting issues outstanding. But as to that, Mr Sincock of Deloitte gave evidence and counsel for the respondents below did not after her Honour's ruling in December 2012 suggest that he wanted to lead further evidence, whatever may have been said during the trial (T 518). But even if there were separate accounting issues outstanding, that did not deny the no oppression finding. In any event, as we have said earlier, no point was raised by the solicitors or counsel on this aspect at any time prior to her Honour's orders of 5 February 2013. 76 Moreover, and as we have said, these were issues to be raised by Jolene (Tas) Pty Ltd and the Hurd Family Superannuation Fund. 77 No error is established and nor is any ground established for the issue of any Constitutional writ.

[16]

(c) Assignment of patent applications 78 It is said that the combination of Gordon J's and Jessup J's orders resulted in the transfer of patent applications that did not concern intellectual property the subject of infringing behaviour found by her Honour. This issue also relates to ground 15 which we discuss later. 79 In Jessup J's declaration in his orders of 6 May 2014, he precisely linked the patent applications and technology with the Product within the meaning of order 12 made by Gordon J on 5 February 2013 who had made orders to accord with her reasons. We are not satisfied that any of the corporate respondents' technology that was truly its own was inadvertently picked up by the orders and declarations made. In any event, that is a point for the corporate respondents to make, but they are not parties to the present appeal. But in any event, Jessup J's declaration of 6 May 2014 was adequately supported by the evidence of Associate Professor Leong. 80 Hurd now belatedly makes complaint concerning the accuracy of Associate Professor Philip Leong's second expert report dated 17 July 2013; see for example Hurd's reply submissions at [12] and [13]. The second Leong report was tendered in evidence in the proceedings before Jessup J by Zomojo; Dr Leong had also given earlier evidence before her Honour (see for example at [260]). Dr Leong was asked to express an opinion as to which of the relevant subject matter of the various patent applications were incorporated in the Product(s). He expressed the view that the subject matter of P0001AU, P0001PCT, P0003AU, P0003US, P0007US, P0022AU, P0023AU, P0023US and P0025AU were incorporated in the Product(s). There was no cross-examination of Dr Leong before Jessup J by Hurd's counsel. Jessup J properly acted on the evidence before him in making his declarations of 6 May 2014. Hurd now asserts that Dr Leong lacked independence from Zomojo (see his affidavit of 5 January 2015 at [30] and [31]). The assertion of a lack of independence is misconceived. The fact that Zomojo was a "Partner Organization" to a research project run out of the University of Sydney in which Dr Leong was involved does not establish any lack of relevant independence. Moreover, it was not a point put to Jessup J. But in any event, Hurd's counsel chose not to cross-examine Dr Leong on the substance of his report. The complaint goes nowhere. 81 Hurd has sought to explain the failure to cross-examine, but the fact is that both he and the corporate respondents failed to do so. The corporate respondents may have had an excuse given that they were in liquidation; but the failure to participate and challenge was the choice of their liquidator. Moreover, and in any event, as Hurd conceded before us (T 62), Hurd's counsel apparently did not even raise with Jessup J any inaccuracy in the second Leong report. Further, we also note that the second Leong report was received by the respondents below some months before the corporate respondents were put into liquidation, yet no action appears to have been taken to address let alone challenge the content thereof. 82 There is one other issue to address on the patent applications. Hurd asserts that counsel for Zomojo made incorrect statements to Jessup J concerning the "negative latency" patent and that counsel had incorrectly asserted that it had not been assigned when it had been. But it is difficult to see where this point goes. Under the Court's orders of Gordon J and Jessup J it was intended and ordered that the various patent applications be assigned to Zomojo. If that had already occurred in relation to one of the applications, that just made an order in respect thereof unnecessary. In any event, it would be for one of the corporate respondents below to complain, rather than Hurd.

[17]

(d) Credibility of Dr Greg Robinson and ASIC document 83 Hurd has made criticism of Dr Robinson's behaviour and also that of an employee of Corrs Chambers Westgarth. He asserts that Dr Robinson in communication with a third party wrongly used information from material discovered by the respondents below in breach of a Home Office v Harman obligation. It is then said that both Dr Robinson and that employee made deliberately false statements relating thereto. 84 It is difficult to see where this complaint takes Hurd in establishing error on the part of her Honour. At most the complaint goes to one of the credibility of Dr Robinson and his testimony before her Honour. But the complaint regarding the employee solicitor is at most collateral and in our opinion has not been linked to any asserted error made by her Honour. 85 Dr Robinson was called as a witness by Zomojo in the trial before her Honour. He was cross-examined by counsel for Hurd and the corporate respondents. His credibility was challenged. Nevertheless, when one reviews her Honour's detailed reasons, issues concerning Dr Robinson's credit did not loom large in her Honour's findings. Dr Robinson was a director of Zomojo and Chairman of its Board. He was also a shareholder of Zomojo. Much of Dr Robinson's evidence referred to by her Honour seemed to relate to uncontroversial aspects of the chronology of events (see for example at [111], [130], [134] to [136], [141], [143], [145], [211], [212]). The one point in issue concerning Dr Robinson's evidence on which any conceivable credit issue may have arisen appeared to relate to Dr Robinson's dealings with Deloitte ([422], [423], [488] and [490]). 86 Hurd's complaint involves the following elements: (a) Dr Robinson sent an email to Mr John Fildes from Getco in Singapore on 10 September 2012. (b) Apparently that email communicated material in breach of a Home Office v Harman obligation. (c) On 2 October 2012, Clayton Utz wrote to Corrs making complaint of such misuse. (d) On 3 October 2012, Corrs wrote back to Clayton Utz on behalf of Zomojo and Dr Robinson denying the allegation. We assume that this was done on instructions. Various unproductive and heated communications then followed between Corrs and Clayton Utz on the subject. (e) On 22 October 2012, Hurd's counsel cross-examined Dr Robinson about the matter (T 94 to 101). Dr Robinson conceded that he had used the respondents' discovered material and subpoenaed material as the source for information providing the basis for the email to Mr Fildes (T 99 line 25). 87 What this sequence discloses is that there was a genuine credibility issue that was raised with Dr Robinson on this matter. But the point does not go anywhere. The respondents below had the relevant material, they cross-examined on it and they obtained the relevant concession. This all occurred before her Honour. But as is apparent, her Honour's reasoning on essential questions did not turn on the credibility of Dr Robinson. The principal questions involved the behaviour of Hurd and the corporate respondents and Hurd's lack of credibility. 88 As for the complaint against the Corrs' solicitor, in our opinion it goes nowhere as we have said earlier. Even if we were to accept Hurd's assertions, any wrongdoing on the part of the Corrs' solicitor is remote to her Honour's consideration which had to be directed to Dr Robinson's evidence. Moreover, any statement made by Dr Robinson under cross-examination concerning the involvement of the Corrs' employee in the drafting of the email to Mr Fildes (T 101 lines 1 to 19) may, for all we know, have been disputed by Corrs. As for Corrs' October denials on behalf of their clients to Clayton Utz, no doubt that was done on instructions. 89 In substance, this ground of complaint fails. 90 Separately to Hurd's complaint concerning Dr Robinson and the Getco communication is a complaint made by Hurd concerning the accuracy of a document filed or to be filed with ASIC by Zomojo concerning the repurchase of shares. The point goes nowhere. As Hurd conceded before us (T 51 line 28), this issue was raised with Dr Robinson in cross-examination in part. If there was an issue to be raised, that was the occasion for it (see the trial transcript on 22 October 2012 at T 69 and following concerning the cross-examination of Dr Robinson (the page footers wrongly show this to be examination in chief)).

[23]

(j) Grounds 14 to 17 - Alleged errors involving findings concerning the corporate respondents 106 These grounds were not specifically addressed in Hurd's written submissions in chief. They were touched on in his reply submissions at [41] to [43]. 107 Ground 14 asserts that her Honour erred in "finding that clause 10 of the Services Agreement required Hurd to disclose and assign any of the products ("Products") assigned in the 5 Feb 2013 orders". Again, little more than bare assertion was advanced. There is a further standing difficulty as we have stated earlier. 108 Ground 15 asserts that her Honour erred "in claiming, in so much as her Honour may have, that any of the Products assigned in the 5 February 2013 orders contained any of the Applicant's confidential information". We refer to our discussion set out in section (c) earlier. 109 Ground 16 asserts that her Honour erred "in finding an 'evolution', if one was to occur, was a breach of fiduciary duty". In submissions in reply at [42], it is said that "I cannot follow the logic of her Honour that an 'evolution' would be breach of fiduciary duty". Such an assertion does not establish error. Moreover, we see no difficulty in her findings that a product such as Zeptolink, even if an evolution of an earlier product, could be the subject of a remedy for breach of fiduciary duty. 110 Ground 17 asserts that her Honour "failed to consider role (of) a patent on a product has in limiting the concept of a product being an evolution or the role of such patent work in requiring that equity be done". Hurd has asserted that "(i)t stands to reason that the innovation required in a patent is such that the device cannot be an evolution by definition otherwise the patent could not be awarded". This is misconceived. In any event, on the limited evidence that we have been provided with, at the time of her Honour's decision the patent for Zeptolink had not been granted. Her Honour's analysis at [253] to [261] has not been shown to be in error.

[24]

(k) Grounds 19 to 21 - Challenge to Jessup J's decision 111 In addition to what we have discussed in section (c) earlier, Hurd has raised three additional grounds of appeal concerning the decision of Jessup J. However he has now abandoned ground 21 (see his written submissions in reply at p 14). 112 It is convenient to deal with ground 20 first. It is said that his Honour erred in relying upon "an evaluation of [Hurd's] credit without his Honour being present in Court during the witness testimony in October 2012 hearing". 113 In elaboration on this assertion, it is said that "the assessment of a witness credit needs to be experiential for the judge with regard to witness testimony". 114 This ground is misconceived at a number of levels. As we have set out earlier, Jessup J was dealing with the assessment of quantum and other relief. The foundation for that exercise was the legal and factual findings made by her Honour together with any additional evidence adduced by the parties; his reasons indicate as much (see for example at [17] to [25]). As is apparent from Jessup J's reasons, in relation to her Honour's findings dealing with Hurd, his Honour utilised the same and was careful to work within them. He was bound to take that approach; that also applies to his Honour's statement at [39] commencing "In my view, it comes ill from the mouth …" which was his Honour's opinion based on her Honour's factual findings. In addition to her Honour's findings, there was evidence given by Hurd before his Honour. But in relation to that further evidence, his Honour separately evaluated it for himself (see at [24]). Moreover, in assessing it, he rejected Hurd's guess as lacking foundation rather than making credibility findings of the type made by her Honour. More generally, and in any event, a review of Jessup J's reasons indicates that his decision did not in substance turn on credibility issues involving Hurd. 115 In summary, Jessup J proceeded in an orthodox fashion. He used the foundation of her Honour's factual findings. Second, for any witness called before him, he independently assessed their credibility. Third, his decision did not substantively turn on credibility issues. Fourth, his finding concerning Hurd's evidence was merely to reject Hurd's guess. This ground of appeal has no substance. 116 Ground 19 asserts that Jessup J erred in finding that "Hurd was required to reimburse part of his salary to Zomojo". 117 We see no reason to doubt his Honour's statement of principle that where an employee fails or refuses to work for the full time for which he or she has been contracted, the employer's damages may be measured (at least) by reference to the value of the employee's remuneration in respect of the period of the failure or refusal (see at [15]). 118 Applying that principle, his Honour was entitled to proceed with the method of quantification of damages used in respect of Hurd's breach of clause 3.3 of the service agreement (see at [20] to [36]).