LGS v Francesco Barbagallo

[2012] NSWSC 1099

Supreme Court of NSW|2012-09-18|Before: McDougall J

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Source facts

Court

Supreme Court of NSW

Decision date

2012-09-18

Before

McDougall J

Source

Original judgment source is linked above.

Judgment (18 paragraphs)

[1]

Judgment 1The plaintiffs claim an account of profits, or damages, from the first defendant (Dr Barbagallo). That claim is based principally on what the plaintiffs say is Dr Barbagallo's misuse of their confidential information. The plaintiffs base their claim, additionally or alternatively, on what they say are breaches of the contractual, fiduciary and statutory obligations owed by Dr Barbagallo in his capacity as an employee of the second plaintiff. The background to those claims is set out at [22] to [69] below. 2For convenience, I will describe the plaintiffs collectively as "In Vivo", referring to the name by which they were known at times relevant to these proceedings. To the extent that it is necessary to refer to the second plaintiff individually, I will refer to it as In Vivo Vic.

[2]

The real issues in dispute 3The parties produced competing formulations of what each contended to be the real issues in dispute. Notwithstanding the differences in the formulation of those issues, it seems to me that, on the pleadings, and bearing in mind the competing statements, the issues may be stated as follows: (1) has In Vivo identified, with adequate specificity, information claimed by it to be confidential? (2) Has In Vivo proved that any information so identified is confidential? (3) Has In Vivo proved that Dr Barbagallo has used any information shown to be confidential in breach of: (i) his obligations to In Vivo Vic pursuant to his contract of employment; (ii) any additional fiducial duty owed by him to In Vivo Vic or any equitable duty of confidence so owed; (iii) any breach of any other equitable duty of confidence enduring after his employment with In Vivo Vic had come to an end? (4) Was Dr Barbagallo an officer of In Vivo Vic? (5) If so, did Dr Barbagallo breach his obligations under s 182 of the (now repealed) Corporations Law? (6) Was the "assignment" of the Aropax proposal or concept from In Vivo Vic to GSK (see at [60] below): (a) effective; and (b) made with the prior knowledge and consent of Ms Sullivan or Mr Vincent? (7) Are the plaintiffs or either of them entitled to any and if so what relief against Dr Barbagallo? (8) Does either of the second or the third defendants have accessory liability to either or both of the plaintiffs, for any primary liability of Dr Barbagallo, on the principals established in Barnes v Addy (1874) LR 9 Ch App 244 at 251? (9) Are there any applicable limitation defences either under or by analogy to the Limitation Act 1969 (NSW) or the Corporations Law? 4There are some other, but subsidiary, issues. It is not necessary to go to them. Nor, for reasons that will become apparent, is it necessary in these reasons to consider any issues other than issues 1 to 3 and 7 and 8 just set out.

[4]

Approach to the evidence The "jury basis" 10It was common ground that the question of sufficiency of evidence was to be assessed on the "jury basis". That was the approach assumed by the Court of Appeal to be correct in Mailman v Ellison [1993] NSWCA 169. The point was resolved by the Court of Appeal in Hunt v Watkins (2000) 49 NSWLR 508 at [10]. As Stein JA (with whom Fitzgerald and Heydon JJA agreed) said in that case at [20], the application of that test requires that "the plaintiff's evidence must be taken at its highest". Thus, his Honour said, the question is whether there is any evidence on which a jury could have found in the plaintiff's favour. 11A similar view was expressed by McHugh J in Naxakis v West General Hospital (1999) 197 CLR 269. His Honour said at [40] that the question in an application of this nature, is "whether the plaintiff has adduced evidence which, if uncontradicted, would justify and sustain a verdict in his or her favour". Kirby J said, in the same case at [57], that the question was not whether there was no evidence, but whether there was evidence on which a finding could properly be made for the party bearing the onus of proof. 12I do not think that there is any difference of substance between the question as it was phrased by McHugh J and as it was phrased by Kirby J. On the contrary, I think, the former's reference to "evidence which... would justify and sustain a verdict" directs attention to the quality of that evidence. Kirby J makes that clear by referring to "evidence... upon which a jury can properly proceed to find a verdict". 13As Dunford J pointed out in Rosenkranz v Dessaix (2003) NSWSC 1085, their Honours (and the other justices in Naxakis) were concerned to reject the proposition that a "scintilla" of evidence was sufficient to defeat an application. Thus, some attention must be given to the quality of the evidence. If it is manifestly implausible or incapable of acceptance, then it will not be sufficient to defeat the application. But once that relatively low threshold is passed, the process of assessment of quality has done its work, for the purposes of an application under r 29.10. 14Having said all that, I should note that it was no part of Mr Jackman's submissions that any part of the evidence for In Vivo should be rejected on the basis that it was manifestly implausible, or incapable of acceptance. Mr Jackman's approach was that, accepting that evidence in its terms, nonetheless In Vivo had failed to prove its case. 15In applying the "jury basis" test, I put to one side apparent conflicts in the evidence (as between In Vivo on one side and Dr Barbagallo and his companies on the other), which were suggested through the way in which the defendants' case was put in cross-examination to the witnesses for In Vivo. I put aside also the attacks made in the course of cross-examination on the credibility of those witnesses. Objections, rulings and related matters 16Counsel were keen to display the extent and virtuosity of their knowledge of relevant provisions of the Evidence Act 1995 (NSW). Thus, each side provided many pages of line by line challenges to the admissibility of the other's affidavits. 17I indicated that, in general, I would deal with objections on the following bases: (1) evidence that was clearly hearsay would be admitted, subject to relevance, to prove the communication of the asserted fact but not its truth, in the absence of any application notified pursuant to s 67 (there were no such notifications brought to my attention). (2) Evidence as to the content of a document would be admitted if the document were in evidence, on the basis that the document said what it said and not what the witness said it said; and if there were a contest as to its meaning, that would be determined by the court and not by the evidence of the witness. (3) Evidence objected to on the ground of relevance would be admitted subject to relevance. (4) Counsel were free to submit that one or other of those general rulings should not apply in a particular case (no such submission was made). (5) The question of relevance could be addressed in final submissions (perhaps because of the turn the case took, that did not happen). 18I took that course because it seemed to me to be consistent with the just, quick and cheap resolution of the real issues in dispute. I am conscious that, in many cases, it will be appropriate to rule on objections to evidence so that counsel can focus their cross-examination, and can make decisions as to what evidence is to be led in response. No one suggested that those considerations should apply in the present case. 19I took into account also (and drew to the attention of counsel) the observations of Gibbs J in Hughes v National Trustees, Executors and Agency Company of Australasia Limited (1979) 143 CLR 134 at, in particular, 153. His Honour noted that there may be cases in which evidence that is inadmissible but which has been in admitted into evidence "may be treated as evidence for all purposes". Where that happens, a judge (his Honour was speaking in the context of a hearing before a judge alone) may act on that evidence for whatever it is worth. 20However, Gibbs J pointed out: ... in general it is the duty of a judge to reach his decision on evidence that is legally admissible, and to put evidence only to those uses which the law allows. 21In the present case, I proceed on the basis that, in assessing In Vivo's evidence, I should be guided by that statement of principle. Counsel did not suggest that this was an inappropriate way to proceed.

[5]

Factual background 22In Vivo provided services, including marketing plans and sales strategies, to companies in the pharmaceutical industry. From October 1997 until August 2000, In Vivo Vic employed Dr Barbagallo as "business manager" of its Melbourne office. In that capacity, Dr Barbagallo effectively managed the Melbourne office, and was responsible for promoting the services of In Vivo to pharmaceutical companies. 23Dr Barbagallo was employed pursuant to a written contract, comprised in a letter of 23 August 1997. There was no restraint of trade provision in that contract, although Ms Sullivan, the managing director of In Vivo, sought to suggest that there was some oral agreement as to a restraint of trade. Be that as it may, In Vivo does not seek in these proceedings (and has not sought otherwise) to enforce any restraint of trade. 24Dr Barbagallo is a medical practitioner. His employment contract contemplated that he could continue to engage in private practice; that he would work for In Vivo Vic as its business manager; and that he would in addition provide "consultancy services" to In Vivo for its operations outside Victoria. 25Dr Barbagallo's duties included the preparation of proposals, called "pitches", for In Vivo to provide marketing and related services to pharmaceutical companies. The Lipitor proposal 26The first proposal prepared by Dr Barbagallo (with input, which on In Vivo's case was substantial, from other employees including Ms Sullivan) was to Pfizer and Parke Davis, for what was known as the "Lipitor Act - Now Programme". As Ms Sullivan said, this proposal was "really big and nothing like anything we [had] done before" (affidavit affirmed 27 August 2010, para 29). Thus, In Vivo had to develop the proposal without recourse to any precedent or, to adopt the word used by In Vivo in its particulars, evidence and submissions, "template". 27Ms Sullivan said, and I accept, that the preparation of the Lipitor proposal (as for convenience I will call this document) required a lot of research, a lot of thought and a lot of writing. 28In essence, the problem that Pfizer and Parke Davis (the companies) wished to address was what is apparently called in the pharmaceutical industry "non-adherence": i.e., the phenomenon that people for whom medication has been prescribed do not take it, or stop taking it after some period of time, not necessarily on medical advice. 29The requirements of the companies, as they were understood by In Vivo, included the following: ... A programme targeting the behavioural reasons for non-adherence must be developed. This programme must include key stakeholders involved in therapy - prescribers, pharmacist, patients and their supporters, product representatives and potentially pathology providers. The programme must seek to educate patients and prescribers on the need for therapy and motivate them to continue in the long term. The programme must be evaluable. The programme must be recognisable as a Lipitor initiative. The programme must increase sales of Lipitor. The agency chosen to develop the programme must be prepared to work with other agencies. 30The proposal submitted by In Vivo addressed those and other requirements. What it proposed was called the "Act - Now Programme", which was said to encompass: ... the period from pre-diagnosis (when the possibility of hyperlipidaemia becomes apparent) through the diagnosis, initiation of therapy, continuation and maintenance phases of treatment. 31The programme dealt with such marketing essentials as "branding" and "stakeholders" and then turned to examine the role that, it was expected, those "stakeholders" would play. In substance, it appears, persons for whom Lipitor was prescribed would be invited to join a "club" which would offer them certain benefits (and which, not by any means incidentally, would help to ensure that they continued to "adhere", to the great profit of the companies). The various "stakeholders" were seen to be essential to the object of minimising "non-adherence". 32There were various ways suggested both of enhancing the effectiveness and of the programme and (through a "study") evaluating its success. 33Attached to the proposal was a table summarising "attributes of current patient adherence programmes". As one might expect, the function of that table was to demonstrate that the Act-Now programme proposed for the companies would be far more effective than any similar programme in the marketplace. 34Towards the end of the proposal there appeared a "confidentiality notice". I set it out: CONFIDENTIALITY NOTICE The information and ideas presented in this document that are not in the public remain the intellectual property of In Vivo Communications Pty Limited. This document or the ideas presented herein must not be disclosed to any person or persons unless directly involved in the assessment of the discussion document. In Vivo Communications Pty Limited is the sole agent authorised to develop and prepare the projects recommended in this discussion document. © Copyright In Vivo Communications Pty Limited 1999. 35The following points may be noted: (1) despite the width of the claim for confidentiality, Ms Sullivan accepted in her evidence in chief that many parts of the Lipitor proposal were not confidential; (2) in the course of cross-examination, Ms Sullivan accepted that further parts of the proposal were not confidential; and (3) no claim has been made against Dr Barbagallo or his associated companies for breach of copyright, despite the claim of copyright that is made in the "confidentiality notice". 36The proposal also included, as appendices, the "project planning team", giving some details of their attributes and experience. 37In all, the proposal was about 60 pages in length. On any view, it is a detailed and (so far as the court can judge) well thought-out document, reflective of what was undoubtedly a great amount of work and thought put into its preparation. 38The proposal was to be put, or "pitched", to the companies. To assist in that process, In Vivo developed a powerpoint presentation described as "the Lipitor Patient Adherence Programme". The powerpoint presentation referred to Ms Sullivan as "group managing director" and to Dr Barbagallo as "business manager". It contained In Vivo's name and logo on every page. In the usual way of such things, the powerpoint presentation told those who were forced to sit through it what they could have found out in any event by reading the proposal that, undoubtedly, was provided to them at the same time. No doubt, it was thought that their comprehension might be assisted by the graphics contained in the powerpoint presentation. 39The powerpoint presentation concluded (after stating "we'd love to work with you on this project" and "thank you") by referring any questions to Ms Sullivan or Dr Barbagallo. 40Before I leave the Lipitor proposal, I should note the following matters: (1) In Vivo had obtained advice from a marketing expert, a Mr Cumberland, as to what its "pitch presentation document" should do and say, and as to how the proposal should be presented; and (2) neither the proposal nor its accompanying powerpoint presentation referred to the question of cost: that is to say, what In Vivo proposed to charge for the services that it was offering. 41In Vivo did not win the companies' business. According to Ms Sullivan, when she discussed with this Dr Barbagallo, she said that the documents could form "the basis of a template for adherence programme management which we should be able to sell into other Pharma clients bearing in mind of course the confidential nature of the work we have done for Pfizer..." (affidavit affirmed 27 August 2010, para 37). I mention this because, at least chronologically, it appears to represent the initiation of the "template" concept, which loomed large in In Vivo's case. 42I do note that although Ms Sullivan referred to the concept of confidentiality, she did so in terms which might be thought to suggest that the confidentially was that of the companies rather than In Vivo. The Opticare proposal 43The next relevant proposal is one presented to a company known as Glaxo Wellcome for an asthma medication called "Opticare". Ms Sullivan played no part in the preparation or presentation of that proposal. Although it is said to have been based on the (unsuccessful) Lipitor proposal, it is different in many ways. First, it is far shorter. Secondly, and no doubt related to the first matter, it is far less detailed. It does however propose the involvement of pharmacists and medical practitioners, and the concept of a club (to be known as the "Optrol Patient Club"). 44Further, and significantly, the Opticare proposal includes costings for the various elements of the proposal. As I have said, the Lipitor proposal did not include costings. 45Putting the Opticare proposal alongside the Lipitor proposal, it is very difficult to see that the latter was in any sense of the word (as it is usually understood - a pattern or model) a "template" for the former. The Aropax proposal 46The next proposal prepared, and the one which is perhaps most contentious, was the "Aropax proposal". On Ms Sullivan's evidence, that proposal was prepared not in response to a brief from the pharmaceutical company but following discussions between Dr Barbagallo and an employee of that company. 47The company concerned was then known as Smith Kline Beecham. It has since changed its name to Glaxo Smith Kline. For convenience, I will call it, by reference to its later name, as "GSK". 48According to Ms Sullivan, Dr Barbagallo said to her that he thought he could "take the Lipitor proposal as a template and cut and paste that with a depression slant" (affidavit affirmed 27 August 2010, para 74; Aropax is an antidepressant medication). 49Ms Sullivan said that Dr Barbagallo and another employee of In Vivo Vic, Ms Michelle McKenzie, were "primarily responsible for the preparation and presentation of the Aropax programme proposal", although under her supervision (affidavit affirmed 27 August 2010, paras 77, 78). 50As with the Lipitor proposal, there was both a proposal for a "Patient Adherence Programme" and a powerpoint presentation to be given to the company when the proposal was presented. 51It seems to be clear that the Aropax proposal was based on the Lipitor proposal. It is structurally similar; it incorporates a lot of research; it proposes an adherence programme (in this case to be called the "A + Programme"); it provides for various "stakeholders" to be involved, and provides, among other things, for the roles that those stakeholders will play; it compares the proposal with other adherence programmes in the market; and it provides for some sort of validation study. 52There is more than structural similarity. As I point out at [135] and [136] below, it appears to have been the practice of In Vivo (and others engaged in the same field of business endeavour) to use the cut and paste technique to move from one proposal to another. It appears, further, that this technique was employed (in at least one instance, not entirely appropriately) in developing the Aropax proposal from the Lipitor proposal. 53Nonetheless, accepting that the Aropax proposal is both structurally similar to and incorporates, through cutting and pasting, elements of, the Lipitor proposal, nonetheless the Aropax proposal was designed to do a specific job. It was addressed to GSK, and to problems of non-adherence affecting GSK's medication Aropax. Lipitor is used to reduce levels of cholesterol. Aropax is used to treat depression. They are entirely different products, which are designed to treat entirely different diseases. Thus, as one would expect, the heart of the Aropax proposals relates specifically to Aropax and specifically to GSK. 54It may be, of course, that the Lipitor proposal could have been used to pitch for an adherence programme for another lipid-lowering medication. In that hypothetical case, no doubt, far more of the material in the Lipitor proposal could be used without adaptation. But that is not the case with which I am concerned. 55The powerpoint presentation named Dr Barbagallo and Ms McKenzie as the presenters, and as the people to be spoken to if there were any questions. It too was structurally similar to the Lipitor powerpoint presentation, and in fact many slides were, I think, copied directly from the Lipitor powerpoint presentation (for example, the slide pronouncing that "we'd love to work with you on this project"). 56Nonetheless, as with the Aropax proposal itself, the specific detail of the powerpoint presentation is directed to GSK and its product, Aropax. 57The Aropax proposal contained the same confidentiality notice as did the Lipitor proposal. As was the case with the Lipitor proposal, that sweeping claim to confidentiality was not wholly maintained in chief, and was to some extent cut down further in cross-examination. 58There is another way in which the Aropax proposal and powerpoint presentation resemble their Lipitor equivalents. Neither of them makes any mention of the question of cost. According to Ms Sullivan, Dr Barbagallo said that he proposed to discuss the cost of the programme with Mr Jim Xenos of GSK in April 2000 (the proposal had been submitted in January 2000); and such a cost proposal was indeed submitted, separately from the proposal itself and the associated powerpoint presentation (affidavit affirmed 27 August 2010, paras 84, 85). 59GSK did not engage the services of In Vivo Vic (or any other In Vivo company) for the Aropax proposal. The "sale" or "assignment" of the Aropax "concept" 60On 24 June 2000, Dr Barbagallo caused In Vivo Vic to send a letter (which he signed) to Mr Xenos of GSK. Omitting formal parts, that letter stated: We are pleased to confirm the purchase of the A+Plus Programme concept by SmithKline Beecham (Australia) Pty Ltd from In Vivo Communications (Vic) Pty Ltd. This purchase includes all conceptualisations, documentation and market research briefings developed in the proposal. The purchase of the intellectual property of the A+Plus Programme (VSB 02) has been completely offset against the project credits owing to you for the Sheehan Specialist State Highlights Bulletins (VSB 19). 61According to Ms Sullivan, that letter was sent without her authority, or the authority of anyone else senior to Dr Barbagallo. It was put to her in cross-examination that Dr Barbagallo had sent her a draft, and obtained her approval to its being sent. Ms Sullivan denied that. For the reasons already indicated, I proceed on the basis that Ms Sullivan's evidence on this point should be accepted. 62Although it does not matter a great deal, the credit owing to GSK, the offsetting of which in effect provided the consideration for the "purchase", was $16,720.00. The records of In Vivo Vic suggest that this was more than the development cost, to that time, of the Aropax proposal and its associated documents. Ms Sullivan disputes that. To the extent that it matters, I proceed on the basis that Ms Sullivan's evidence should be accepted. Dr Barbagallo leaves In Vivo 63Dr Barbagallo resigned from In Vivo Vic in August 2000. 64Apparently around this time, the companies that merged to form GSK were in the process of effecting that merger. After the merger was completed, and on 22 February 2001, Mr Brian Vincent (who was the group financial controller of In Vivo) wrote to Mr Xenos. So far as it is relevant, that letter stated: ... With respect to Aropax, In Vivo invested in substantial intellectual property and committed valuable resources toward preparing the Aropax Disease Management Programme and was advised by you that SB were conducting detailed research into the recommendations contained in that programme. To date we have not received any feedback. Now that your merger is "under the belt" is it envisaged that GSB will proceed with the programme in part of whole? In Vivo is naturally keen to know and to be briefed on the results of the research and any future for the programme. I had therefore asked Peter to speak with you about the matter and this was the basis of his "outstanding issues relating to Aropax" and one reason for requesting a meeting with you. ... 65Mr Xenos replied on 7 March 2001. So far as it is relevant, his reply stated: ... In relation to the Aropax Disease Management Programme, I agree In Vivo Communications certainly invested substantial resources in developing its proposal. However, in consideration for the foregoing of certain credits in our favour, all rights including all associated intellectual property was assigned to SmithKline Beecham (Australia) Pty Ltd by virtue of In Vivo's letter dated 24 June 2000. While we are likely to go ahead with this Programme (a final decision has not yet been made), I regret to advise you we will not be using In Vivo to implement this Programme. ... 66Mr Vincent replied to that letter on 5 April 2001. So far as it is relevant, his reply stated: ... I am concerned about the contents of your 4th paragraph in that you say "consideration for the foregoing of certain credits" was exchanged for "all rights". Could you please indicate what credits you are referring to. I am also somewhat perplexed by your last comment in that you say you are likely to go ahead with the programme but will not be using In Vivo. Would you please advise the basis for your decision. I believe SmithKline conducted extensive research into the programme. Did something turn up that was not acceptable to you? Has something occurred with In Vivo that precludes us from your project considerations? I am sure you will appreciate my concern that a long-standing client has arrived at this position without our knowledge as to what may be the cause of the problem, if any. I look forward to your early and frank response. 67In Vivo alleges that Dr Barbagallo took with him, when he left its employment, a number of documents. 68According to Ms Sullivan's affidavit affirmed 23 January 2009, Dr Barbagallo discovered the following documents of In Vivo's: (1) a copy of the Aropax powerpoint presentation which copy was, on In Vivo's case, based on the Aropax powerpoint presentation that Dr Barbagallo prepared whilst he was still employed by In Vivo Vic; (2) a copy of the Aropax patient adherence programme, which I have referred to above as the Aropax proposal; (3) a copy of In Vivo's costing estimates for the Aropax programme; and (4) a copy of "the "Lipitor" Programme proposal documents". 69For reasons that are not clear, the only one of those documents that was tendered is the first. What is comprised in the third and fourth categories is a matter of speculation at best.

[6]

The primary case: misuse of confidential information 70In Vivo's primary case is that Dr Barbagallo took with him when he resigned, and has used, its confidential information. The pleaded case 71In Vivo's pleaded case is that the confidential information in question is the various documents of In Vivo comprised in Exhibit PX1 (which was Exhibit LGS1 to Ms Sullivan's affidavit affirmed 23 January 2009). That exhibit contains, among other things, the Lipitor proposal and powerpoint presentation, the Opticare proposal, and the Aropax proposal and powerpoint presentation. 72Ms Sullivan had indicated, by yellow highlighting, that certain material within exhibit PX1 was not said to be confidential. Further, in cross-examination, she conceded that other aspects of the information within that exhibit were not confidential. 73However In Vivo still maintains, as its primary case, the "template" case. To understand that case, it is necessary to refer to the pleadings. Confidentiality is pleaded in para 19 of the further amended statement of claim, and the material in respect of which confidentiality is claimed is described in the particulars to that paragraph. 74I set out paragraph 19, together with its particulars: 19. As part of his work in the development of the Aropax program, the first defendant;- (a) gained access to and acquired confidential information of the plaintiffs; (b)negotiated directly and Jim Xenos, a senior employee of GlaxoSmithKline about the commercial terms and conditions, under which the plaintiffs would deliver it to GlaxoSmithKline. PARTICULARS OF CONFIDENTIAL INFORMATION (a) In the course of his work on the development of the Aropax program, the first defendant had access to confidential information of the plaintiffs contained in the documents ("the confidential documents") included in the folder marked "confidential documents" ("the confidential information"). This is not an exhaustive list of all confidential information to which the first defendant had access and is limited to the confidential information relevant to the pleaded case. (b) The confidential documents and the confidential information therein:- (i) provide a template of the plaintiffs' recommendations to pharmaceutical companies for a patient adherence program devised by the plaintiffs based on - their accumulated knowledge and experience, obtained from preparing such adherence programs in the past; and other information obtained by the plaintiffs for the purpose of devising the adherence program from various sources; and the plaintiffs' skills in designing such programs. (ii) contain information about the creation and implementation of similar adherence programs developed by the plaintiffs for other pharmaceutical companies in the past. Confidentiality arises from the way that knowledge, information and experience is combined to produce a particular outcome, in this case the Lipitor program and all programs based upon it, including the Aropax A+ program. (c) A fundamental part of the plaintiffs' business consists of devising such adherence programs and then advising clients (in this case pharmaceutical companies) on the development and implementation of those adherence programs to meet the specific requirements of individual companies which, if they are retained by those companies, the plaintiffs implement for profit. (d) It is the combination of information and its application to the preparation of individual adherence programs which constitutes the confidential information, rather than individual words and sentences contained in the confidential documents. The confidentiality comes from the whole, not the individual parts of the confidential documents. (e) Further particulars will be provided after discovery. 75As I read the particulars, the case asserted is that everything is confidential because at least some part of it provides "a template" for In Vivo to use in making proposals to customers or prospective customers, which is said to be "a fundamental part" of its business. 76Further, it appears to be said that even though that some parts of the documents may not be of themselves confidential, nonetheless confidentiality subsists in the whole because of the combination of "knowledge information and experience" and "the combination of information and its application to the preparation of individual adherence programmes". 77Thus, as the concluding words of para (d) of the particulars make clear, confidentiality in whole is asserted: The confidentiality comes from the whole, not the individual parts of the confidential documents. The possible alternative case 78It seemed, in particular from Mr Lever's closing submissions, that In Vivo advanced an alternative, unpleaded and unparticularised case: namely, that even if there were no confidentiality in the whole of the documents in question, nonetheless they included information which was inherently confidential. 79To the extent that such a case was put, it is, for the reasons that I give at [107] to [119] below, if not inconsistent with, at least certainly in substantial tension with, the case that was pleaded and particularised. The limited extent of In Vivo's factual case 80Taking In Vivo's case at its highest, the only material in evidence that Dr Barbagallo is shown to have had that is related to the allegedly confidential information is the version of the Aropax powerpoint presentation referred to at [68(1)] above. There is a dispute as to whether this was a draft of the Aropax proposal (as Dr Barbagallo says), or a copy of the Aropax proposal edited by Dr Barbagallo, after he left the employ of In Vivo, to remove all references to In Vivo from it (as In Vivo says). For present purposes, I assume, in favour of In Vivo, that its evidence supports the latter view of the document. 81Nonetheless, there is no evidence that Dr Barbagallo used that document in connection with, or as the basis of, a presentation on his behalf to GSK. Nor is there any evidence of what documents or information may have been used by Dr Barbagallo in any such presentation (if there were one; and the evidence does not show that there was). 82In Vivo's case on misuse of its confidential information depends on the matters to which I refer in the following paragraphs, in considering its alternative claim.

[9]

Confidential information: the relevant principles 88In Corrs Pavey Whiting and Byrne v Collector of Customers (Vic) (1987) 14 FCR 434, Gummow J identified at 443 four criteria that a plaintiff seeking to protect allegedly confidential information must satisfy. I paraphrase those criteria slightly. 89First, the plaintiff must identify with specificity, not merely in global terms, what is the information that is said to be confidential. 90Secondly, the plaintiff must show that the information has the necessary quality of confidentiality. 91Thirdly, the plaintiff must show that the defendant received the information in circumstances that imposed on it an obligation of confidence. 92Fourthly, the plaintiff must show actual or threatened misuse of that information. 93Although Gummow J dissented on the outcome of that case, the four elements that he identified have been accepted as the relevant criteria. See, by way of example only, the decision of the Full Court of the Federal Court of Australia in Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281 at [39]. 94The need for specificity in identifying the allegedly confidential information was discussed by Mason J (with whom the other members of the court agreed) in O'Brien v Komesaroff (1982) 150 CLR 310 at 327-328. As his Honour pointed out at 327, a failure to identify the information with sufficient specificity may mean that the court cannot satisfy itself that the information was imparted to the defendant, or that it was imparted in circumstances giving rise to an obligation of confidence, or that it is truly confidential and does not include material which is public or common knowledge. 95I add, that the failure to identify with sufficient specificity the allegedly confidential information may make it difficult, if not impossible, for the court to conclude that the defendant has misused, or threatens to misuse, that information. 96Mason J referred to the judgment of Brightman J in Amway Corporation v Eurway International Ltd [1974] RPC 82. His Lordship noted at 86-87 problems that could arise if information said to be confidential were not described with sufficient specificity. His Lordship said: If I made an order restraining the defendants from using for their own purposes any of the documentary material contained in the plaintiffs' business literature, but did not identify the particular information that the defendants are not to impart, they would be placed in a most embarrassing situation. I do not know how they could decide what business methods, literature and paperwork to avoid using in order to keep clear of contempt of court; and I think that this is an insuperable difficulty in the plaintiffs' claim under this head. It is really another facet of the same point that the court cannot protect know-how of this type - cannot restrain defendants from making use of this type of information which they have acquired. 97Although in this case In Vivo seeks an account of profits or damages, and not injunctive relief, it cannot be correct that it is thereby relieved of the necessity of identifying with adequate specificity the information said to be confidential, in respect of which it seeks relief. 98It will be noted that Brightman J referred to the case before him as one being one involving know-how. Mason J returned to that point in O'Brien at 328. His Honour said that the information which the respondent had sought to protect "represents his accumulated knowledge, skill and experience in a particular field". 99On one view of In Vivo's case, that is precisely the claim that it seeks to make out in these proceedings. That is clear from the way that the case is pleaded and particularised (see at [73] to [77] above). 100Mason J said in O'Brien at 328 that not all the respondent's allegedly confidential information in that case could be truly confidential. Much of it, his Honour said, was common knowledge. Ms Sullivan conceded in her evidence (both in chief and in cross-examination) that much of the allegedly confidential information in this case was common knowledge, or public, or otherwise not confidential. 101Nonetheless, In Vivo maintained its claim, over the whole of the information that it identified. To my mind, that approach invites the consequences that Mason J described in O'Brien at 328: ... if the respondent were able to identify some particular pieces of information and show that they were confidential or that an obligation of confidence had arisen with respect to them he would be entitled to protection of them. But this is just what the respondent has failed to do. He has persisted in making a global claim for protection that covers the entirety of the schemes that were evolved and the entirety of the documentation by which they were implemented. He is not entitled to that protection and, accordingly, his claim must fail. 102To the extent that In Vivo maintains a claim for confidentiality in the whole of the information, on the basis referred to at [73] to [77] above (because the documents as a whole set out, or provide a template for, the way that it does business), the case is one of know-how. That concept is discussed in Heydon's The Restraint of Trade Doctrine (3rd Edition, 2008) at 115 and following. At 116, the author suggests that the term know-how "covers a knowledge of how to solve particular problems, a knowledge of methods not necessarily shared by others". 103Further, as the author notes at 117-119, there is a real and important distinction between trade secrets or know-how on the one hand and personal skill on the other. The former are capable of protection (in the context being considered in those pages, by a covenant in restraint of trade on cessation of employment). The latter may be exploited freely by the employee on cessation of employment. 104At 120, the author noted that business methods might not amount to a trade secret. He quoted with apparent approval from the judgment of Hoover J in Arthur Murray Dance Studios of Cleveland Inc v Witter 105 NE 2d 685 at 709-710. In that case, the plaintiff sought to restrain a former employee, to whom it said it had taught its "method" of teaching people how to dance. 105At 709, Hoover J pointed out that something was not made a secret merely by calling it a secret: You can't have vanilla ice-cream without having ice-cream. You can't have business or trade secrets without secrets. You don't make the multiplication tables a secret merely by calling them a secret. 106His Honour emphasised that calling something a "method" does not make it secret (or, I would add, confidential): The trouble here is that Arthur Murray has proved no secret. The essence of his proof on this point is merely "I taught Clifford Witter my method of teaching". How does that prove secrecy? All of us have "our method" of doing a million things - our method of combing our hair, shining our shoes, mowing our loan. Labelling it "my method" does not make it secret.

[10]

The tension in In Vivo's case 107The primary case that was pleaded, opened and argued for In Vivo was the whole of its allegedly confidential information was in fact confidential. That was the "template" theory: that the information constitutes the template that In Vivo uses in making its pitches to customers or prospective customers. 108The template theory suggests that In Vivo developed a particular way, or method, of doing business, which is confidential, and which Dr Barbagallo has exploited for his own approach. Thus, the template case is in substance a "know-how" or "method" case. As pleaded and particularised, the template case is, explicitly, that even though much of the underlying material contained in the folder of allegedly confidential documents may not of itself be confidential, nonetheless the combination of that material, and the written expression in which it is found, do have the necessary quality of confidence. 109It is of course clear that a document (for example) may be confidential, even though it is based on materials in the public domain. As Lord Greene MR put it in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 at 215: The information, to be confidential, must... apart from contract, have the necessary quality of confidence about it, namely, it must not be something which is public property and public knowledge. On the other hand, it is perfectly possible to have a confidential document, be it a formula, a plan, a sketch, or something of that kind, which is the result of work done by the maker upon materials which may be available for the use of anybody's; but what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process. 110His Lordship's analysis was applied by Bowen CJ In Eq in Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales [1975] 2 NSWLR 104 at 117 and following. That case involved a questionnaire which, if answered and the results of the answers collated, would enable comparisons to be made between the costs, profitability and productivity of entities in particular professions or industries. The questionnaires were prepared from materials in the public domain, but were specifically drafted for particular professions or industries. Their preparation involved the exercise of substantial skill, judgment and labour. Bowen CJ in Eq concluded that the questionnaire in question was confidential, notwithstanding that it was based on material that was publicly available. 111Thus, Mr Lever argued in the present case, the documents in question had the necessary quality of confidence because they represented the application of brainpower and ingenuity to materials in such a way that, even if (or to the extent that) the underlying materials were in the public domain, nonetheless, the product was not. 112As I have said, In Vivo appeared to put its case in the alternative and different way, by focusing (although not by precise definition) on individual items of information in the documents. Those supposedly confidential items of information are not identified specifically. Rather, the reader is left to work out what they are by (on In Vivo's approach) a two stage process. 113In the first stage, the reader must put to one side all those parts of the documents which Ms Sullivan has highlighted in yellow. They are parts of the documents that, in her evidence in chief, Ms Sullivan said were not confidential. 114The second stage is to put to one side all those further parts of the documents that, in cross-examination, Ms Sullivan conceded were not confidential. 115There may be a third stage as well. That third stage would require putting to one side material of which, although Ms Sullivan would not concede in cross-examination it was not confidential, nonetheless she said she had no way of knowing whether or not it was in the public domain, or whether or not it represented knowledge, or information, or practices, used by other entities carrying on a business similar to that of In Vivo's. 116On the two stage approach, the reader - and in this case the court - is left to assess some residue of material which In Vivo never took the trouble to identify with particularity. 117If the third possible stage is appropriate, then there is a further morass of material that must be excluded before any allegedly confidential residue can be ascertained. The third stage may well be appropriate, because it is after all In Vivo that is alleging breach of confidence. It is thus In Vivo which bears the onus of proving (in the alternative, "non-template", formulation of its case) what particular pieces of information are confidential. 118To prove that information is in this sense confidential (that is to say, that it is confidential of itself and not because of the work and labour that has gone into the compilation of the "template" of which it forms part), In Vivo must show, in the words of Lord Greene, that it is "not... something which is public property and public knowledge". That onus of proof is not satisfied by mere assertion. 119There may be items of information that, taking into account their nature and substance, are so clearly confidential in character that significant demonstration is not needed, and for which what I might call "third stage exclusion" (of the kind referred to at [115] above) may not be significant. But neither the evidence nor the submissions for In Vivo descended to the level of particularity necessary to make out such a case, of obvious or manifestly inherent confidentiality, in relation to any particular residual piece of information in the documents that have not been conceded by Ms Sullivan not to be confidential.

[11]

First issue: specific identification of allegedly confidential information 120To my mind, In Vivo has only satisfied the obligation to show with specificity the information claimed to be confidential on its primary, or, "template", case. On that case, identification is simple: it is the whole of the material in exhibit PX1; and the whole of that material is confidential, even though confidentiality may not be claimed in individual parts of it, because it represents In Vivo's template, or method, for doing business. 121If, however, In Vivo asserts and relies on the possible alternative case, then it has not satisfied the obligation to identify with specificity the information said to be confidential. That is because, in my view, it is not sufficient to say merely that it is everything in exhibit PX1 except for individual items of information, or parts of documents, conceded by Ms Sullivan in chief or cross-examination not to be confidential. 122That deficiency in the evidence is emphasised by the matters referred to at [115] above. On In Vivo's pleaded case, the fact that information is in the public domain is no bar to the claim for confidentiality. However, the possible alternative formulation of In Vivo's case does depend very much on proving, as to whatever the residue of the documents may be, that the information that remains after the subtractive process is confidential. In Vivo, bearing the onus of proof, is required to show that the material is not in the public domain. 123The starting point in discharging that onus is to prove, first and with specificity, what is the information that is said to be confidential. That task requires that In Vivo identify those parts of Exhibit PX1 which it claims to be confidential. To the extent that Ms Sullivan was unable to say, in respect of various pieces of information, that she did not know whether or not they were in the public domain, or of general knowledge, the requirement for specificity is not satisfied. 124On the evidence as it stands, there is no brightline distinction between information conceded not to be confidential, and information that is said (by subtraction, or by implication) to be confidential. There is, instead, some hazy and indistinct realm of information, which may or may not (on Ms Sullivan's evidence) be the subject of a claim for confidentiality. That cannot be a sufficient satisfaction of the first of the criteria stated by Gummow J.

[12]

Second issue: has In Vivo shown that any information is in truth confidential? 125In my view, In Vivo has not done so. Thus, its case fails for this reason - and it fails even if, and to the extent that, In Vivo has identified with sufficient particularity the information said to be confidential. The template case 126I start with In Vivo's pleaded case: the template approach. That is, as I have said, in essence a "know-how" case. 127In Vivo did not suggest that there was some underlying template - some pattern or model - on which all proposals, including the Lipitor proposal, were modelled. Its case, rather, is that the Lipitor proposal is the template. 128It may be accepted that the Lipitor proposal set out the way in which In Vivo responded to the companies' brief, and the way in which In Vivo thought it could construct and administer an adherence programme for the companies' product Lipitor. However, the programme that was described was one tailored specifically for the companies and that product, to address the problem of "poor patient adherence" to Lipitor. 129In Vivo's case is that the Lipitor proposal was developed "from scratch", with substantial time and effort. There is no doubt that the Lipitor proposal reflects a substantial amount of research, and the application, to the companies' brief and the research that was carried out, of considerable intellectual effort. Those considerations emphasise the obvious point, that the Lipitor proposal was designed as a "pitch" for specific business, and hence was designed specifically to address the needs of the companies to whom that pitch was to be made. 130I am prepared to accept that, once completed, the Lipitor proposal could be used in effect as a checklist, or as the starting point for development of proposals to other pharmaceutical companies, in relation to pharmaceutical products. But to state the matter at this level of generality overlooks the fact that each pharmaceutical product is designed to treat a specific disease or illness, and each no doubt has its own pattern of non-adherence. 131Thus, in developing a proposal for another product, it will be necessary to conduct research into that product and the illness or disease that it was designed to treat, and the particular problems of non-adherence as they appear from the brief (if any), so as to design a programme that will meet the objective of lowering non-adherence, or raising adherence. 132Obviously enough, there will be elements of proposals that are similar: for example, the evolvement of general practitioners, pharmacists and others; and the creation of a patient "club". There is no evidence that these features of the Lipitor and Aropax proposals were unique In Vivo. Ms Sullivan was unable to say whether or not such features were characteristic of adherence programmes developed by other enterprises carrying on a business similar to that of In Vivo's. 133Further, although the events in question occurred back in 1999 and 2000, there is no evidence that In Vivo has used the supposed template for any proposal, or pitch, for business after the Aropax proposal. 134As I have noted already, it is In Vivo's pleaded and particularised case that it is "a fundamental part" of its business to devise, and pitch to pharmaceutical companies, patient adherence programmes. It is, to say the least, strange that a document which is said to be the template, or pattern, or model, for that fundamental part of In Vivo's business has not, on the evidence, been used for the past 10 years and more. 135Ms Sullivan said (affidavit affirmed 23 September 2011, para 113) that: In Vivo frequently "cut and paste" parts from one proposal into another, using the first as a form of template. This is common for service agencies in the pharmaceutical industry. 136A comparison of the Lipitor proposal with the Aropax proposal confirms that there has been a degree of cutting and pasting. Indeed, that cutting and pasting went so far as to paste a summary of research into compliance undertaken specifically in relation to "lipid-lowering drugs" such as Lipitor into the Aropax proposal. It may be noted that the relevant parts of each proposal were highlighted by Ms Sullivan to indicate that confidentiality was not claimed. 137But the fact that In Vivo, and others, use the "cut and paste" technique to move from one proposal to another suggests no more than that the structure of each proposal is substantially similar, and that there are generic elements that are common to at least the majority of proposals. It does not mean that the structure (to the extent that it has been used) constitutes some confidential part of the know-how of In Vivo. If it were, one would expect it to have been repeated in the years since 2000; and as I have said, there is no evidence that this has happened. 138In substance, In Vivo is doing no more than saying that the alleged template is its "method" of doing business (even though it is a method that does not appear to have been used for more than 10 years). So regarded, it is, in my view, equivalent to Arthur Murray's claim of "method". 139Acceptance of the proposition that the use of a precedent was (on the evidence, for a short time only) the way in which, or the method by which, In Vivo conducted the relevant part of its business, does not show that it is a secret method, or that it has the necessary quality of confidence to justify protection. The alternative basis 140I turn to the possible alternative claim, namely, that individual parts of the documents are confidential; and that those parts can be identified by looking at the documents, disregarding the parts that Ms Sullivan has highlighted, and disregarding also the further parts which, in cross-examination, she conceded not to be confidential. 141In addressing the merits of this aspect of In Vivo's case, I put to one side the point that, for the reasons given at [121] to [124] above, it is not possible to identify the residue with any, let alone the requisite, degree of precision. 142The problem with this part of In Vivo's case is that its evidence does not descend to identify why it is that whatever is the residue after the application of this process of subtraction has the necessary quality of confidentiality. The evidence does not say why the residual material embodies information that is confidential to In Vivo, and is not known to or shared by In Vivo's competitors in the relevant field of commercial endeavour, or is not otherwise in the public domain. 143At the risk of repetition: In Vivo is not seeking to enforce any copyright that it may have in the documents. It is asserting that the documents contain, or embody, its commercially confidential information. It is thus necessary for In Vivo to show that the substance is entitled to protection (to the extent that the claim is pressed). This it has failed to do. 144I can accept that a presentation prepared for and given to a prospective customer should be treated as confidential between the presenter and the prospective customer. But that is not how this formulation of In Vivo's case is put. On this formulation, the confidentiality derives not from the fact that the documents were prepared for and presented to the prospective customer, but from the asserted inherently confidential nature of whatever may be the relevant passages of those documents in respect of which the claim is still pressed. The abandonment of the claim for confidentiality in much of those documents means that the claim in the residue cannot be supported only on the basis that the document was prepared for and presented to a prospective customer. 145In this case, concessions of non-confidentiality were made in chief and further such concessions were made in cross-examination. No attempt has been made to show that the residue of the material is self-evidently of such a nature that it could not be anything but confidential. In those circumstances, the inability of Ms Sullivan, in many cases, to sustain the essential question of confidentiality is of very considerable significance. 146I have the impression that the possible alternative formulation of In Vivo's case - that some of the information in its documents is confidential even if its primary case, that the whole of those documents is confidential, fails - was something of an afterthought. That perhaps explains what I perceive as the failure to address any, let alone persuasive, evidence to the issue of specific confidentiality. But regardless of these historical considerations, the consequence in my view is that the party bearing the onus of proving confidentiality in specific items of information has failed: (1) not only to identify what those specific items are; but also (2) to prove that those items are, in the requisite sense, confidential. Conclusion on confidentiality 147Thus, I conclude, on each way in which the case was put, In Vivo has failed to make good its claim for confidentiality.

[13]

Third issue: did Dr Barbagallo use any allegedly confidential information for his own purposes? 148It is open to conclude, from the brochure referred to at [84(4)] above, that GSK did enter into a contract with Adrenalin Strategies for some sort of patient adherence programme in relation to Aropax. That can be taken as proved. But it does not follow that, in obtaining the benefit of that contract, Dr Barbagallo used the document referred to at [68(1)] above or any of the other documents referred to in that paragraph. 149Further, on the evidence as it stands, it was not necessary for Dr Barbagallo to use any of those documents. They had been provided (or, in the case of the powerpoint presentation, shown) to Mr Xenos of GSK. No doubt, Mr Xenos had copies of them (with the possible exception of the powerpoint presentation). There was no need for Dr Barbagallo to use them or to give them to Mr Xenos. 150According to Ms Sullivan, Dr Barbagallo knew Mr Xenos both from Mr Xenos' prior employment as a pharmaceutical representative attending on Dr Barbagallo's general practice, and because they ran together from time to time. It may be accepted that the personal association between Mr Xenos and Dr Barbagallo provides at least part of the reason why Dr Barbagallo, following the termination of his employment by In Vivo, was able to approach Mr Xenos with a view to winning the relevant business. 151Dr Barbagallo was not subject to any restraint of trade following the termination of his employment. He was thus entitled to compete with In Vivo, and (as may well have happened) to exploit his personal connection with Mr Xenos in doing so. But none of this means that, in competing with In Vivo, Dr Barbagallo used for his own purposes any information, let alone any confidential information, of In Vivo. 152It may be assumed that Dr Barbagallo was aware of the costings that had been prepared for In Vivo for the Aropax proposal. But as Ms Sullivan's evidence makes clear, the process of developing such costings is very detailed. It requires a careful assessment of the internal and external costs that will be incurred in fulfilling the relevant contractual commitments. It is not just a matter of plucking a figure out of the air. 153No doubt, Dr Barbagallo (after he had resigned from In Vivo Vic) was keen to do business with GSK. Presumably, he wished to make at least a modest profit out of that business. It would have been necessary for him to calculate what it would cost him (or his company) to perform the terms of its contract with GSK, and to do so carefully and in detail. It would also have been necessary for Dr Barbagallo to choose an appropriate margin both to capture overlooked or irrecoverable costs (including, perhaps, general overheads) and to provide a margin of profit. 154There is not in this case any evidence that Dr Barbagallo competed with In Vivo on price, in seeking the business of GSK. Nor is there any evidence that GSK's awarding of the contract to Adrenalin Strategies was influenced by price considerations. Thus, even on the question of price, there is no evidence that Dr Barbagallo misused whatever information he retained in his mind, as to In Vivo's costings, when he negotiated with GSK for the Aropax patient adherence programme. 155I have not overlooked the fact that the brochure referred to at [84(4)] above referred to the "a plus" programme. It may be inferred from the terms of that brochure, including the fact that its content was "driven by Adrenalin", that it was prepared by or with input from Dr Barbagallo. But it appears to have been GSK's brochure, for distribution to general practitioners. 156More significantly, Mr Xeons undoubtedly knew of the "A+" concept because that had been presented to him by In Vivo Vic. It, and its associated marketing and other material, constituted the "concept" that he thought GSK had bought, as evidenced in the letter of 24 June 2000. 157In circumstances where, on the evidence, GSK had foregone a credit of $16,720.00 for the benefit of that "concept", it would be entirely understandable if Mr Xenos thought that he had the right to use the "A+" concept (either so written, or as it appears in the brochure) free of any concern as to In Vivo Vic's rights. 158However, on no view of the evidence was it necessary for Dr Barbagallo to introduce that concept to Mr Xenos through misuse of In Vivo Vic's material. Mr Xenos was well aware of that concept, because it had been presented to him. Thus, the fact that the brochure contains the expression "a plus" is not capable of supporting a finding that Dr Barbagallo had misused this aspect of In Vivo Vic's allegedly confidential information. 159In summary, In Vivo has failed to prove that Dr Barbagallo in any way used (let alone misused) such confidential information of In Vivo as he may have taken with him after he left the employ of In Vivo Vic.

[15]

Seventh issue: the case against Dr Barbagallo 163For the reasons given, that case fails in its primary formulation (based on confidential information). It fails also in its alternative formulation (based on breach of duty). 164As to the latter: the case fails because there is no evidence that Dr Barbagallo, during the course of his employment, diverted any business opportunity (in particular, the opportunity to obtain a contract from GSK for the Aropax patient adherence programme) from In Vivo to himself or a company associated with him. 165The only evidence that approaches this point is the "purchase" letter of 24 June 2000. Although Ms Sullivan says (and for present purposes I accept that In Vivo's evidence should be taken to prove) that Dr Barbagallo was not authorised to send that letter, nonetheless it does not mean that the letter reflected anything other than a response to a request made by Mr Xenos of GSK. 166In Vivo seeks to infer from the letter that it was part of a plan on Dr Barbagallo's part to take for himself the benefit of the business referred to in it. In Vivo has not called Mr Xenos, or anyone else from GSK. I can accept that a company in In Vivo's position would not wish to antagonise a potential customer such as GSK. But nonetheless, in the absence of evidence, I do not think that the court is justified in inferring, on such meagre material, that Mr Xenos in effect conspired with Dr Barbagallo for the latter to cheat his then employer. That is a serious conclusion, and not one lightly to be drawn. 167In this context, it should be noted that: (1) Dr Barbagallo made no attempt to conceal the transaction from others in In Vivo. A copy of the letter remained on In Vivo's files. (2) Even on In Vivo's evidence, it has known about the transaction since at least March 2001, but raised no complaint until it instituted these proceedings in 2006. (3) Mr Vincent was asked to, and did, prepare the credit note in favour of GSK for the amount of $16,720.00 which was foregone in consideration for the "purchase" of the Aropax "concept". (4) The transaction referred to in the letter was referred to several times in internal accounting records of In Vivo Vic designed by, prepared for and submitted to Mr Vincent (and submitted to Ms Sullivan also) on a monthly basis. Mr Vincent and Ms Sullivan claimed in their evidence that they did not see these entries wherever they occurred; and Mr Vincent claimed, in addition, that he gave no particular thought to the credit note when he prepared it or authorised it to be prepared. That evidence is scarcely credible; but even if it were to be accepted, there is no suggestion that Dr Barbagallo had any reason for thinking that accounting records required to be submitted monthly to Ms Sullivan and Mr Vincent would be, for the main part, ignored. 168It is very difficult to reconcile that objective contemporaneous evidence with the suggestion that, in some way, the letter of 24 June 2000 represents the initiation of a plot between Mr Xenos and Dr Barbagallo to divert to the latter business which both must have known was being sought for Dr Barbagallo's then employer. 169As I have said, I do not accept that In Vivo has adduced evidence capable of proving that Dr Barbagallo, whilst an employee of In Vivo Vic, diverted a business opportunity from In Vivo Vic from his own later benefit.

LGS v Francesco Barbagallo

At a glance

Court

Decision date

Before

Source

Judgment (18 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (7)

Cited By (3)