Judgment Suppressed [2015] WASC 219 (8 June 2015)

3 There has been, I accept, no reasonable opportunity to provide the defendant with notice of this hearing in circumstances where the solicitors for the defendant are based in Sydney and it is a public holiday in New South Wales. The prospect that injunctive relief would be sought was adverted to in Bennett + Co's letter. The urgency of the matter is plain, as the disclosure with which the plaintiffs are concerned is likely to occur tomorrow morning. In those circumstances, I am satisfied that it is appropriate to proceed with the matter ex parte.

4 The principles governing the grant of an interlocutory or interim injunction are wellknown. They were referred to in some detail by Beech J in Twinside Pty Ltd v Venetian Nominees Pty Ltd.[1] As his Honour observed in that case, the three primary interrelated considerations are whether there is a serious question to be tried or the plaintiff has made out a prima facie case; whether the plaintiff will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and whether the balance of convenience favours the granting of an injunction.

The phrase 'prima facie case' does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed. It is sufficient that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks.

...

As the apparent strength of the applicant's case diminishes, the balance of convenience moves against the making of an order. The grant of an injunction involves balancing the injustice which might be suffered by the defendant if the injunction is granted and the plaintiff later fails at trial, against the injustice which might be suffered by the plaintiff if the injunction is not granted and the plaintiff later succeeds at trial [9], [11]. (citations omitted)

6 In this case the cause of action is breach of confidence. In Wilson v Ferguson, I set out the general principles of that equitable doctrine in the following terms:[2]

The principle applied by the courts in proceedings asserting a breach of confidence was described in the following terms by Mason J in Commonwealth v John Fairfax & Sons Ltd, adopting the language employed in Lord Ashburton v Pape. The principle is that the court will restrain the publication of confidential information improperly or surreptitiously obtained or of information imparted in confidence which ought not to be divulged. In addition, Mason J regarded it as necessary to show that there will be an unauthorised use of the information to the detriment of the party communicating it. The existence of a requirement to show detriment has been doubted in subsequent cases. (footnotes omitted)

7 It is unnecessary for me to determine whether it is necessary to show that the disclosure of confidential information will cause detriment to the plaintiff, as the detrimental effect of disclosure in this case is relatively clear.

8 The plaintiffs say that they disclosed to the defendant details of transactions between the plaintiffs and third parties in which shares in the defendant are used to secure a loan. The loan agreements must be repaid by 11 June 2015, and the plaintiffs are in the course of arranging refinancing. Each loan agreement is, on its face, confidential, as by cl 16 the plaintiffs and the lenders are not to disclose information contained in the 'transaction documents' to any person who is not a party to the loan agreement.

9 I am satisfied that there is a serious question to be tried as to whether the disclosure of information by the plaintiffs to the defendant for approval was conveyed in circumstances such as to attract a duty of confidence.

10 The concern of the plaintiffs is that all of the details of the loan agreements will be disclosed. The basis for that apprehension is contained in the first plaintiff's affidavit sworn today, which deposes to a discussion to that effect which took place at a board meeting this afternoon. The first plaintiff says that the question of disclosure was ultimately dealt with by a 'response committee', and he is not aware of the decision made.

11 It is necessary to consider whether s 674 of the Corporations Act 2001 (Cth) requires disclosure of all of the details of the loan agreements. Counsel for the plaintiffs says that disclosure is not required as ASX Listing Rules do not require the defendant to notify the ASX of the terms of and circumstances surrounding the loan agreements.

12 The plaintiffs say that the terms of the loan agreements were provided to the defendant in the middle of 2014, and the defendant's directors decided that disclosure to the ASX was not required at that time. The fact that the term expires this week is a matter which is apparent from the document and would also have been known in the middle of last year.

13 Counsel for the plaintiffs says that the fact that the plaintiffs were in the process of refinancing their loan would be excluded from disclosure by rule 3.1A of the ASX Listing Rules, which is expressed in substantially the same terms as reg 6CA.1.01 of the Corporations Regulations 2001 (Cth). Counsel submits that the information is confidential; that the information that a borrower is in the process of refinancing is not definite enough to make disclosure appropriate; and that the information relates to an incomplete proposal that is now in the course of negotiation, namely the refinancing arrangements. Counsel submits that in those circumstances, a reasonable person would not expect the information to be disclosed.

14 It seems to me arguable that the provisions of the Corporations Act do not require disclosure of all of the details of the finance document. In those circumstances, I am satisfied that there is a serious question to be tried as to whether the disclosure of the proposed information would constitute a breach of confidence.

15 Damages would seem clearly to be an inadequate remedy, as once the confidential information is released its confidentiality cannot again be secured.

16 The plaintiffs say that if an injunction is not granted to them, then the value of their shares will decline and, by reason of that fact, their ability to negotiate refinancing will be prejudiced due to the reduced value of the prospective security.

17 The plaintiffs say that there will be no evident detriment to others, and that existing shareholders in the defendant (other than the plaintiffs) would also be prejudiced by a reduction in value of the shares caused by what they contend would be a premature disclosure of the information.

18 The only detriment which the plaintiffs have been able to identify in relation to the defendant is the possibility of an allegation that there has been a breach of the ASX Listing Rules.

19 In those circumstances, in order to preserve the status quo until proper notice can be given to the defendant, I propose to grant an injunction until 2.15 pm tomorrow afternoon, and bring the matter back on before me at that time to consider whether a further injunction ought to be granted. The effect of the ex parte injunction is therefore only to restrain the release of the information to the ASX by one day, in circumstances where it would be open to the defendant to seek to extend the suspension of trading in its shares.

20 For those reasons, I grant the injunction in the terms sought.

[1] Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110.

[2] Wilson v Ferguson [2015] WASC 15 [43].