Lift Shop Pty Ltd v Next Level Elevators Pty Ltd [2025] FCAFC 108

Lift Shop Pty Ltd v Next Level Elevators Pty Ltd [2025] FCAFC 108 | Case summary | Zoe

This is a dispute about copyright infringement and alleged misuse of confidential information in the residential lifts market. The applicant (Lift Shop) is a supplier of lifts, primarily in residential settings. The corporate respondents (being the first to third respondents) are trade rivals of the applicant. We will refer to the corporate respondents collectively as Next Level Elevators or NLE, unless there is a reason to distinguish between them. Lift Shop brought proceedings against NLE and certain executives of NLE in the Federal Circuit and Family Court of Australia. The proceedings were fiercely fought and prolonged. They commenced on 29 May 2020 and concluded substantively on 30 July 2024. Lift Shop had partial success, in that NLE admitted copyright infringement. However, in her judgment (the primary judgment or PJ), the primary judge concluded that Lift Shop failed on its claim for breach of confidence, and was not entitled to additional damages for infringement of copyright. Lift Shop seeks to appeal those conclusions, and an associated procedural ruling admitting certain documents obtained from a search of its website by the solicitors for NLE.
The primary judgment was delivered on 26 June 2024, and certain orders were made that day, two of which are subject to appeal. Her Honour made further substantive orders on 30 July 2024. Relevant to the present proceedings, there were two sets of orders made on that day. One set was headed "Re: Declarations and Injunctions". The other set was headed "Re: Respondents' undertakings; and the balance of questions of liability".
The present proceedings were set down for a concurrent hearing of the application for leave and the appeal, should leave be granted. In its written submissions prior to the hearing, NLE sensibly accepted that leave should be granted. These reasons therefore concern the appeal itself, rather than the application for leave, and our orders will include an order granting leave to appeal. We will otherwise consider the appeal by reference to the grounds set out in the proposed Amended Notice of Appeal, which Lift Shop will have leave to file.
The Amended Notice of Appeal is lengthy and runs to 15 pages. It has 12 separate grounds, often with detailed particulars which raise further distinct points. It suffers from the vice of seeking to raise a series of diffuse and unrelated points. That same vice affected the written and oral submissions. Appeals run in that way can be difficult to manage and difficult to follow, as was the present appeal.
We have concluded that leave to appeal should be granted but the appeal should be dismissed, with costs. We will deal with each ground of appeal in turn.

[16]

It is notable that the approach of the primary judge of making a separate determination as to entitlement to additional damages as part of the liability hearing was a course which Lift Shop urged upon her. In its written submissions at the trial, Lift Shop submitted that Next Level Elevators' conduct rendered it liable to additional damages, that such an award was appropriate, and that the quantification of the award of additional damages was a matter to be assessed on any inquiry as to damages following the trial. Lift Shop's argument in this Court is inconsistent with the approach it adopted at the trial.
Lift Shop's argument in this Court, as ultimately put in oral submissions, is also entirely inconsistent with its prayers for relief in its notice of appeal, which in order 2(a) sought a declaration that "if Lift Shop elects to pursue a claim for damages under s 115 of the Copyright Act for the [relevant infringements], Lift Shop is entitled to pursue an award of additional damages under s 115(4) of the Copyright Act...". In other words, Lift Shop was seeking, on this appeal, a declaration of an entitlement to additional damages in its favour, prior to any election and prior to any determination of quantum pursuant to s 115(2). Ultimately, Lift Shop abandoned that prayer for relief. However, its pursuit up until that time illustrates somewhat the lack of any focussed consideration of the real grounds of appeal.
Lift Shop's contention was put on the following bases. First, it was said that s 115(2) of the Copyright Act provides for an election between damages and an account of profits, such that there is no entitlement to any damages under s 115 until that election is made.
Secondly, it was submitted that the express language of s 115(4) ("the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances") operates such that any award of additional damages could only be considered when the court was assessing damages, not when the court was considering liability. In that regard, Lift Shop referred to authorities to the effect that an award of additional damages under s 115(4) cannot be made prior to an award for damages under s 115(2). Lift Shop referred to CPL Notting Hill Pty Ltd v Microsoft Corporation (No 2) [2019] FCA 223, a decision of O'Callaghan J, where his Honour observed at [49] that because no damages were sought under s 115(2), it was not open to the primary judge to award additional damages under s 115(4). His Honour observed as follows (at [49]):

[19]

We do not accept Lift Shop's contention that it was not open to the primary judge to determine Lift Shop's entitlement to additional damages prior to the election between damages and an account of profits and prior to the assessment of compensatory damages. This is so for a number of reasons.
First, it is a common and well-established practice for a court to determine any entitlement to additional damages for copyright infringement (and analogous infringement actions providing for an award of additional damages) at the same time as liability is determined, and in advance of the determination of quantum. A recent example is provided by Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Liability) (2022) 172 IPR 221; [2022] FCA 1585 at [747], [2086] (Perram J), and on appeal Hytera Communications Corporation Ltd v Motorola Solutions Inc (2024) 308 FCR 68; [2024] FCAFC 168 (Motorola Full Court) at [903] - [912] (Beach, O'Bryan and Rofe JJ). As stated earlier, that approach does not involve the application of any special principle for intellectual property cases, but rather is an application of the conventional principles relating to the determination of separate questions. One reason for determining entitlement to additional damages at the liability hearing, and thus one application of those principles, can be that the same conduct and the same witnesses (including the cross-examination of those witnesses, and conclusions as to credit) can be relevant to both liability and to the factors (such as the flagrancy of the conduct) relevant to the determination of entitlement to additional damages.
Secondly, Lift Shop's submissions conflate the assessment of additional damages with the entitlement to additional damages. The process of assessment is the process of quantification of damages. The cases cited by Lift Shop concerned whether the Court could make an assessment of additional damages when it had not made an assessment of ordinary damages.
In Redbubble Ltd v Hells Angels Motorcycle Corporation (Australia) Pty Ltd (2024) 303 FCR 100; [2024] FCAFC 15 (Redbubble) (Perram, Nicholas, Burley, Rofe and Downes JJ), the Court was dealing with an award of damages under s 126(2) of the Trade Marks Act 1995 (Cth) (Trade Marks Act), which relevantly provides:

[23]

We agree. Indeed, the position is in one sense even clearer under the Copyright Act because s 115(4)(b) commences with the language "Where... the court is satisfied that it is proper to do so, having regard to [various factors]", and then continues "the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances" (emphasis added). That language makes plain that the court's satisfaction of whether it is a proper case for an award of additional damages, and the assessment of such damages as the court considers appropriate, are two conceptually distinct steps.
That is not for a moment to cast any doubt on the position under the Trade Marks Act, being the statute under consideration in Redbubble, or the equivalent provision in s 122(1A) of the Patents Act 1990 (Cth), which is in virtually identical form to s 126(2) of the Trade Marks Act. It is merely to observe that in the case of the Copyright Act, there is express statutory support for the relevant process to involve two distinct steps.
Thirdly, we do not accept that a determination of entitlement to additional damages can only occur after an election has been made. Indeed, the question of whether the applicant is entitled to additional damages frequently may be an important consideration for an applicant in determining whether to elect for damages. Lift Shop's submissions in this regard perpetuate the conflation of the two conceptually distinct steps. Once it is recognised that the assessment of additional damages is a distinct process from the consideration of whether the applicant is entitled to additional damages, the general provision in s 115(2) that the relief that a court may grant in an action for an infringement of copyright includes "either damages or an account of profit" does not mean that the Court is constrained in some chronological sense to only considering any question of damages (including entitlement to additional damages) after the applicant has made an election.
Section 115(2) is not framed as a gateway, or pre-condition, to the consideration of any issue pertaining to relief. Rather, s 115(2) is a general conferral of power. It is in the form of an inclusive provision that empowers a court to grant relief of various types, and indicates that the grant of relief in the form of damages is an alternative to the grant of relief in the form of an account of profits. A statutory provision in that form does not constrain the ability of a court to consider issues that may be steps in the path to some ultimate grant of relief. The consideration of any entitlement to additional damages is a distinct stage that is anterior to the ultimate grant of any relief.
In the present case, although the order for separate determination did not expressly identify the entitlement to additional damages as a matter to be determined as part of the liability phase, it was clear enough that the court and the parties were engaged in that process. That is what Lift Shop invited the primary judge to do, and that is what her Honour did.
The primary judge analysed the issue at PJ [171] - [203]. At PJ [172], her Honour set out the principles from Redbubble referred to above, including that the Court is involved in a two-stage process. At PJ [276], the primary judge said:

[31]

Lift Shop has not sought to frame ground 2 in accordance with the relevant House v The King principles. Rather, ground 2 is particularised in an unhelpful way, by reciting that having made eight identified factual findings, "the primary judge erred" in doing, or failing to do, six further things, which are not linked in any useful way to the eight factual findings. The six further things are a mixture of alleged factual errors (e.g. the primary judge erred in "finding Mawson obtained the Lift Shop's [sic] quotation documentation solely from an online platform (EstimateOne)") and alleged errors of evaluation (e.g. the primary judge erred in "failing to take into account, or give proper weight to, the fact that Mawson knew at the time he engaged in the infringing acts that what he was doing was illegal"). Likewise, the written and oral submissions on this ground contain an assortment of complaints without any organising theme. This creates challenges for dealing with this aspect of the appeal.
Some of Lift Shop's complaints involve allegations that the primary judge "failed to give proper weight to" or "failed to have proper regard to" certain matters. That is not a relevant ground of appeal from an evaluative decision that attracts the principles in House v The King. The fact that we or another judge might have weighed the factors differently is not relevant to an assessment of error in the exercise of a discretionary power. We therefore do not propose to consider those particular matters further.
In dealing with the balance of the particulars, it is useful to consider first how the primary judge proceeded. Her Honour observed, at PJ [174], that s 115 of the Copyright Act divides relief for infringement, where established, into three categories: innocent infringement, in respect of which no damages are payable, but the copyright owner is entitled to an account of profits (s 115(3)); infringement that is not innocent, in respect of which compensatory damages or an account of profits may be payable (s 115(2)); and "infringement of such a kind that the Court, guided by the non-exhaustive factors in s 115(4) is satisfied it is proper to do so, may award additional damages".
Her Honour correctly observed in the same paragraph that the Copyright Act envisages that not every infringement that is non-innocent is one where an award of additional damages is appropriate. Lift Shop somewhat elides the relevant distinction by its emphasis on the conduct being "deliberate". Whether conduct is deliberate is by no means determinative.
The primary judge concluded that Mr Mawson engaged in deliberate and calculated copying of the document which was known as the Doncaster Quotation (at PJ [183], [186]). Her Honour concluded that he received a useful document and took portions of it without much thought given to what the real consequences would be (at PJ [185]). The primary judge concluded that this occurred in an industry where, as the conduct of the parties revealed, the players endeavoured to get and use for their benefit documents of their competitors (at PJ [184]). Her Honour found that the conduct did not last for a very long time (at PJ [187]).
In its written submissions on the appeal, Lift Shop sought to characterise the finding at PJ [184] that the players endeavour to get, and no doubt put to their own benefit, documents of their competitors as a finding that NLE did this with the document in question. That mischaracterises the finding. It is a finding about conduct in the industry, which is relevant to characterising the conduct in question here.
The primary judge also accepted that Mr Mawson engaged in false denials of copyright infringement, before changing his position, but also observed that this conduct occurred in circumstances where Mr Katz had made significant and aggressive threats of harm (at PJ [190] - [197]). That analysis is the subject of a separate ground of appeal, being ground 3.
At PJ [201], the primary judge observed that many of the cases in which additional damages have been awarded for breach of copyright have involved some element "sometimes referred to as scandalous or like behaviour" which is additional to the "simple act of deliberate copying that took place here, and which stopped". At PJ [203] and [276], her Honour concluded that s 115(4) additional damages were not appropriate.
As noted above, it is somewhat difficult to discern the nature of Lift Shop's complaint about this reasoning. However, to the extent it is able to be discerned, it appears to involve the following aspects.
First, Lift Shop complains that the primary judge "failed to find that Mr Mawson's conduct was flagrant in spite of the facts before her, including her finding... that Mr Mawson's conduct involved a deliberate and calculated disregard of Lift Shop's rights". This involves the misconception identified earlier. The task for the primary judge was not to identify whether Mr Mawson's conduct was flagrant, but to assess the flagrancy of his (and NLE's) conduct in context and in light of the other factors. That is what her Honour did. Her Honour identified that the conduct was deliberate and calculated, but concluded that it did not involve a cynical pursuit of benefit but rather was a hot-headed and misconceived endeavour that did not last very long, and did not involve any scandalous behaviour.
Secondly, Lift Shop appears to complain that the "legitimate factors" that could be relied upon by the primary judge all went one way, and her Honour instead relied upon some post-infringement conduct as "disentitling conduct". This raises matters addressed below under ground 3. It involves a misapprehension of what the primary judge did, and we deal with it below. But insofar as it is alleged that the "legitimate factors" all went one way, that is not an accurate description. The primary judge characterised the infringing conduct in the particular way summarised above, including that the conduct was short term, that the conduct involved something thoughtless rather than malicious, that the conduct was not scandalous, and that the denials of copying involved a particular context which is considered in relation to ground 3. Lift Shop's complaint is not established.
It otherwise became very difficult in the course of oral submissions for the Court to pin down what else Lift Shop relied upon under ground 2, and the arguments slid either to ground 1 (i.e. the primary judge was not entitled to embark upon the process) or to ground 3 (i.e. the primary judge improperly had regard to the sending of correspondence by Lift Shop).
The other particulars of ground 2 in the Notice of Appeal appear to involve allegations that the primary judge made incorrect findings of fact. However, with one exception, this was not developed in any meaningful way in written or oral submissions.
The one exception is a point developed in Lift Shop's written submissions, for some reason under ground 4. In the Notice of Appeal, ground 4 simply repeats the particulars of grounds 1 - 3. The relevant particular seems to be the second particular (ii) to ground 2, which should be numbered (v). The complaint concerns PJ [200], which is in the following terms:

[34]

Ground 3 is that the primary judge erred in evaluating the conduct of NLE, Mr Mawson and Mr Boyle by reference to communications between the parties, and in particular by Mr Katz of Lift Shop to Mr Mawson and Mr Boyle, after the infringing conduct had occurred.
In order to evaluate this ground, it is necessary to consider what the primary judge did. Her Honour did not consider the communications from Mr Katz as something to be weighed against the infringement, or to be taken into account in some generalised sense. Rather, her Honour considered those communications in the particular context of the earlier denials of copyright infringement. The reasoning on this topic is contained in PJ [190] - [197]. At PJ [190], the primary judge observed that Mr Mawson's original denials were spurious, but had to be taken in proper context. Her Honour then made findings about significant threats and abusive behaviour from Mr Katz. Her Honour observed (at PJ [196]) that it is "not entirely surprising that the responses from Mr Mawson, and for that matter, Mr Boyle, were misleading and defensive" in light of Mr Katz's conduct.
In considering the significance of conduct involving the denial of copyright infringement, it may be relevant to consider whether the copyright owner has made aggressive threats against the infringer. For example, if someone is threatened with serious physical harm if they have infringed copyright, that might tend to make them reluctant to admit to infringement. The receipt of the threat is relevant to the evaluation of the overall character of their conduct. That is the approach adopted by the primary judge in the present case.
Lift Shop's contention that the primary judge erred in evaluating Lift Shop's post-infringement conduct is unwarranted.
Lift Shop also raises a complaint about procedural fairness. The complaint appears to be that NLE did not plead, open or pursue a case, or cross-examine Mr Katz, about the relevant matters. However, it is difficult to see that there was a need to do any of that in light of the particular way in which the issue arose. As NLE submitted, it was Lift Shop that sought to rely upon NLE's post-infringement conduct (in the nature of denials) as aggravating conduct justifying an award of additional damages. NLE's response was, in effect, to deny that the conduct was aggravating when understood in context. The primary judge considered the circumstances surrounding the conduct, including the contemporaneous exchanges of correspondence between the parties. That conduct was not a matter that needed to be expressly pleaded in that context, or pleaded so as to avoid taking Lift Shop by surprise, especially given that it was Lift Shop's own conduct.
Of course, NLE's reliance on the correspondence might have had more force if Mr Mawson had given evidence that the correspondence between the parties was a factor influencing his denial of copyright infringement. Further, if such a course had been adopted, Lift Shop would have had the opportunity to cross-examine Mr Mawson about that evidence. However, that is a matter going to weight, and within the constraints of House v The King, Lift Shop is not able to challenge the weighing of the various factors.
Lift Shop makes a particular complaint that the primary judge, by saying at PJ [190] "I have had regard to the whole", was referring to Facebook posts that were not in evidence. There is nothing to support this contention. On the contrary, her Honour's statement would appear to be a reference to an issue raised in the written closing submissions in reply of Lift Shop which complained about NLE selectively summarising materials. Those submissions contained the following statement:

[47]

It is apparent that there was some imprecision by Lift Shop at the trial as to what was the alleged confidential information. That is undesirable. That difficulty persisted on appeal. It did not assist in the conduct of the appeal that the Court was required to spend some time seeking to identify the relevant confidential information. The alleged confidential information should have been specified with precision in the written materials.
As ultimately clarified by Lift Shop in oral submissions, the only document relied upon on this appeal as containing the relevant confidential information for this part of the case was a single document referred to as the Doncaster Quote. Lift Shop's position was that this document had been obtained from more than one source. The primary judge found that this was obtained from a single source, namely the EstimateOne website, being a website that contained various quotes from different businesses. Nothing ultimately turns on this, because to the extent that the Doncaster Quote is said to comprise confidential information, its confidentiality must be assessed by reference to the most public source (unless that source could itself be shown to involve a remediable breach of confidentiality which had not destroyed confidentiality in the underlying document). If the information was freely and publicly available without restriction from one source then it did not have the necessary quality of confidentiality, even if NLE also obtained it from another source. That is how the primary judge approached the matter at PJ [86]. Her Honour was correct to do so. In any event, as discussed below, the information was not shown to be confidential in the first place.
What was identified on appeal as confidential from the Doncaster Quote was the price and the specifications of the equipment being supplied for that price for the customer's site: that is, what was said to be confidential was (a) that Lift Shop would supply the particular customer with a specific collection of things quoted in the Doncaster Quote for the particular price identified in the Doncaster Quote, and (b) that the identified set of products and equipment in the Doncaster Quote was suitable for the customer (being Doncaster Secondary College).
A difficulty for Lift Shop's claim for breach of confidence is the findings of the primary judge that the Doncaster Quote was available on the EstimateOne website, and accessible to members of the public. Mr Mawson received the Doncaster Quote from Ms Topui, an NLE employee, on 18 September 2019. Mr Mawson gave evidence that he instructed his sales and administration team to search the EstimateOne website for quotes from lift suppliers. Mr Mawson also gave evidence, by way of screen shots, that the EstimateOne website had the Doncaster Quote available for public access. The primary judge found, at PJ [75], that the Doncaster Quote was available for download from the EstimateOne website. There is no appeal from this finding. The primary judge also found (at PJ [84] - [85]) that the Doncaster Quote was in fact obtained by NLE from the EstimateOne website.
Lift Shop's contention on this appeal is that the Doncaster Quote was confidential when provided to the customer and remained confidential, even though it was available on the EstimateOne website. For the reasons set out below, this contention is untenable.
The Doncaster Quote was in the form of a letter dated 21 May 2019 from Mr Adam Darling, Sales and Design at Lift Shop to Mr Chris Dawkins of Taylor Oppenheim Architects. It was the quotation for the supply of lifts to Doncaster Secondary College. It consists of eight pages. At the bottom of the page in very small print along with various other details for Lift Shop, including its building licence number, its ABN, its name and its address, are the words "Commercial-In-Confidence". This phrase, along with the other details, appears at the bottom of every page of the quotation, in the following form:

[49]

The quote otherwise consisted of a set of specifications for the lift (i.e. what components would be supplied), a price, and a set of terms and conditions.
Lift Shop relies on the phrase in small print "Commercial-In-Confidence" to say that the terms of the quote were confidential in the hands of the customer and remained confidential even though the quote was present on the EstimateOne website. We reject this submission. It has an air of complete commercial unreality about it. The nature of a quotation is such that one function it serves is to allow a customer to consider pricing and specifications from more than one supplier. A customer would ordinarily consider itself free to elicit rival offers, including by providing to a rival supplier details of the quote (and even a copy of the quote) which it had received. If Lift Shop sought to prevent that from happening it would need to make such a restriction clear by explicit language sufficient to make the position plain to potential customers, because it would tend to undermine one of the obvious purposes of providing a quote: to create competitive tension and permit the customer to receive the best price and best terms. We do not consider that merely placing the words "Commercial-In-Confidence" in small print at the foot of every page, mixed in amongst a range of other formal information, would be sufficient to impose an obligation of confidentiality on potential customers of Lift Shop, so as to compel those customers to treat the quotation in a different way from a conventional quotation, and so as to render them liable for an action for breach of confidence if they did the conventional thing and told another supplier what they had been quoted and for what equipment.
The position becomes even clearer once the document was on the EstimateOne website. The document was available on a publicly searchable website. It was available for all the world to see. The fact that the EstimateOne website contains a range of quotations, including from other lift suppliers, simply underscores the reality that quotations, once issued, may be distributed to others. The presence of the Doncaster Quote on the EstimateOne website is, in one sense, an unsurprising outworking of the provision of a quotation to a potential customer. The customer was not prevented from disclosing the quotation to others. The document, as disclosed, became available for everyone to see. It is absurd to suggest that the Doncaster Quote contains confidential information in these circumstances.
Given that there was no suggestion that NLE was responsible for the document being present on the EstimateOne website, the presence of the quotation in the public domain meant that there was no obligation of confidentiality on NLE. Even if there had been any confidentiality in the document when provided to the potential customer (which there was not), any such confidentiality was lost.
The present case is not one in which NLE is the innocent recipient of information that retained its nature as confidential information, but not by a means known to NLE: cf. Wheatley v Bell [1982] 2 NSWLR 544 at 549 - 550 (Helsham CJ); AG Australia Holdings Limited v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170 at [224] - [227] (Campbell J). Rather, the relevant information in the Doncaster Quote has simply not been demonstrated to be, or to have remained, confidential information.
In its written submissions in chief on the appeal, Lift Shop submitted that there may have been terms and conditions of the EstimateOne website restricting the use of the documents present on that website, and that:

[56]

By ground 5, Lift Shop makes serious allegations about the conduct of the solicitors for NLE in obtaining certain documents that were used in the cross-examination of Mr Katz. In its written submissions, Lift Shop says that this ground of appeal "raises a very serious matter about the practice of solicitors of the court". Lift Shop submitted that the evidence of Ms Muller, solicitor at Allens, was "glaringly improbable". It suggested that Ms Stiel (the partner on the matter) and Ms Muller had not complied with their duties to the Court. It submitted that "no solicitor of the court would ever think it was appropriate or proper to access and use the Internal Documents in the manner employed by the respondents' solicitors".
This aspect of the conduct of the trial and the appeal was unfortunate. The attack on the relevant solicitors from Allens was entirely unwarranted and we reject it. It is relevant to note that the documents the subject of this attack were of somewhat peripheral relevance to the proceedings and ultimately have little bearing on the appeal for the reasons identified above. However, because of the strident nature of the attack, we will deal with the issue.
The particular documents that were ultimately permitted to be used in the cross-examination of Mr Katz and admitted into evidence were documents obtained by NLE's solicitors from a search of the Lift Shop website. One of the documents was a template quotation form from Easy Living Home Elevators, a competitor of Lift Shop. A second document was a template quotation form from West Coast Elevators, another competitor. A third document was a table comparing Easy Living Home Elevators and Lift Shop on a wide range of factors, including warranty, servicing, contract provisions, and many other matters. The table appears to be designed to demonstrate that Lift Shop is better than Easy Living Home Elevators. The fourth document is difficult to categorise. It consists of information about sales techniques and about competitors and their attributes (including pricing). The sales techniques section includes statements such as: "Know and research your competitors. Know the other fish in your pond. And eat them!" The competitor attributes section contains information about various competitors, including pricing. The documents considered as a whole provide some evidence that Lift Shop itself collected and used quotes, quotation templates, pricing information and other information from rival lift companies.
The primary judge set out the evidence of Ms Muller at PJ [22] - [32]. That evidence was to the effect that Ms Muller was aware of two methods of searching for material on a website. One was to use a search engine such as Google. The other was to add "/search/" to a website URL followed by a search term to be searched. Ms Muller said she was aware of the latter approach as a means of searching a website "just in the course of my life on the Internet having grown up with the Internet". That search technique produced various documents, including the four documents admitted into evidence. It did not require the overcoming of any security protection, in the sense that the documents obtained were available to members of the public who searched on the website in the way in which Ms Muller did.
Ms Muller gave evidence that various other websites could be searched in the same way, including the public websites for Apple, Dell, Coles and Rebel Sport. It is therefore not some unique or obvious error or deficiency with the Lift Shop website, but rather a commonly available means of searching some websites.
Ms Muller gave evidence that she did not turn her mind to whether the documents she located were "internal to Lift Shop", and that:

[60]

There was nothing "glaringly improbable" about the evidence of Ms Muller. It was sensible, straightforward evidence.
It was not put to Ms Muller in cross-examination that she was not telling the truth, or that her evidence was otherwise inaccurate. In those circumstances, it should not have been submitted on this appeal that her evidence was "glaringly improbable".
The reality is that Lift Shop had organised its website in a way that made a variety of documents publicly available and able to be found by use of the "/search/" technique, with which internet-savvy people are familiar. Lift Shop may not have intended to make those documents publicly available. But that is what it did.
Lift Shop sought to contend, both before the primary judge and on appeal, that the copying and use of the documents in question from the Lift Shop website was akin to a solicitor using documents that are obviously privileged and which were provided to that solicitor in error. That analogy is inapt, for two reasons.
First, legal professional privilege is a substantive legal right that protects the confidential information in question from disclosure and use. Unless a relevant exception applies, NLE could not obtain an order for production of Lift Shop's privileged documents, or use them in the proceedings. The protection for non-privileged confidential information is different. If non-privileged confidential documents are relevant to the issues in the proceedings, then they may be producible and usable, including in cross-examination of Lift Shop's chief executive officer, but subject to necessary protections (such as confidentiality undertakings) to prevent disclosure to other persons. In this context, it is not enough to allege that a document might be confidential. Rather, it would be necessary to identify with more precision whether an equitable obligation of confidence arises, and, if so, precisely what it prevents.
Secondly, Lift Shop has not demonstrated that the documents in question were confidential, or that the Allens solicitors were subject to any obligation of confidence. Having regard to their contents, it is very hard to see how anything in them could constitute a trade secret of Lift Shop or otherwise amount to protectible confidential information of Lift Shop. In that respect, the frequent allegation by Lift Shop that the documents were "internal" to Lift Shop involves a euphemism that obscures the proper analysis. So too does the question asked of Ms Stiel as to whether Lift Shop "may not be intending to make those documents available to the public". These were not the relevant questions. For example, Lift Shop may not have been intending to make a template quote from a competitor available to the public. However, a template produced by a rival is unlikely to be confidential information of Lift Shop.
Further, the documents were available on a publicly accessible website using a search technique of the type used by Ms Muller. They were publicly available. In those circumstances, Lift Shop has not established that any obligation of confidence arose.
Ground 5 of Lift Shop's notice of appeal is rejected.
For completeness, we note that in paragraph [31] of Lift Shop's written submissions in chief on the appeal, a submission is made that the primary judge erred in rejecting the fourth affidavit of Mr Wood (Wood 4). In rejecting that affidavit, her Honour said the following (at [36]):

[66]

It is common ground that the putative evidentiary basis for the observation about Mr Katz's quote last material had not been admitted into evidence, because NLE had withdrawn the tender of it.
However, it is difficult to see how anything turns on this error. The observation was a comment to the effect that the contents of the quote last material was consistent with the self-evident proposition that customers will want to compare prices between competing vendors. Therefore, it is doubtful that reference to the material had any real bearing on the primary judge's reasoning or conclusions. At most, it was merely a further reason for the conclusion that the alleged confidential information in the Doncaster Quote did not have the necessary quality of confidentiality. There were many other bases for that conclusion, as set out above, and the conclusion was correct on the evidence without taking into account the quote last material. This error is therefore in the category of case where there is no sound basis for considering that in the absence of error the primary judge would not have come to the same conclusion in any event and, otherwise, the error has not resulted in any miscarriage of justice: Huntsman Chemical Company Australia Pty Ltd v Narellan Pools Pty Ltd [2011] FCAFC 7 at [41] (Moore, Flick and Yates JJ); Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397, [2007] FCAFC 70 at [90] (Black CJ, Emmett and Middleton JJ).
Ground 5B is a development of ground 5A, in that Lift Shop contends that the erroneous sentence at PJ [164] set out above affected other paragraphs of the judgment. However, in each of the allegedly affected paragraphs identified in the particulars to ground 5B (PJ [163], [166] and [184]), there were other matters that supported the relevant conclusion. The conclusion, in effect, was that Lift Shop, and also NLE, endeavoured to get, and put to their benefit, documents of their competitors. There was other evidence to that effect. For example, in the section of Lift Shop's website that it intentionally made available to the public, Lift Shop included a table detailing the offerings of Lift Shop and its competitors, citing competitor quotes as its sources. It also compared storage fees based on documents it had obtained from competitors. The four documents the subject of ground 5 likewise included both competitor quotes, and material drawn from competitor documents which Lift Shop had obtained, which Lift Shop was using for its own benefit. NLE likewise obtained materials from competitors for its benefit. The findings of the primary judge in the impugned paragraphs are more than adequately supported by the evidence before her, and certainly did not depend upon the problematic sentence in PJ [164].
It follows that grounds 5A and 5B would not lead to the setting aside of any of the orders made by the primary judge.

[67]

Mr Hume was joined as the sixth respondent to the proceedings.
In early 2020, Mr Hume, a long-standing employee of Lift Shop, accepted a job with NLE as a project manager. Lift Shop alleges that on 2 March 2020, some four days prior to his departure, Mr Hume accessed 164 entries on Lift Shop's customer relations management (CRM) database and that he did so for the purpose of obtaining confidential information for subsequent disclosure to NLE. This was based on electronic records that suggested that Mr Hume had accessed 164 entries between 6.27am and 11.33am. Eleven of these CRM database entries recorded text added by Mr Hume: i.e. he accessed the database that morning to record notes in relation to particular customers. Mr Hume's evidence was that he could not recall accessing the database on the remaining 153 occasions. Mr Hume denied that he passed on any information from the customer relations database to anyone at NLE.
There was a lack of attention by Lift Shop on this appeal to the nature of the "confidential information" that was alleged to be accessed, or how it was established that Mr Hume had used that information in breach of some obligation of confidence. This was an aspect of the wider lack of specificity about the identity and nature of Lift Shop's alleged confidential information. Lift Shop's case appeared to proceed on the basis that if Mr Hume had accessed 164 entries from the CRM database, it must necessarily follow that he had accessed confidential information and that he had subsequently used or disclosed this information in his new role in breach of confidence. However, neither of those propositions necessarily follow. They need to be established.
In any event, the primary judge accepted Mr Hume's evidence that he had not accessed the balance of the entries in the access logs for the customer relations database on the morning of 2 March 2020 (i.e. 153 entries) for the purposes of passing on any information to NLE: PJ [88] - [96]. The following appears at PJ [95] - [96]:
1. Mr Hume was skilfully and extensively cross-examined, but I found him to be a person of limited computer expertise, as he himself said. His answers to me had the clear ring of truth to them.
2. ...I also accept that he accessed only 11 sites [sic: records] on 2 March 2020. The other 153 entries, which appear to have occurred, are simply not explained, but I heard and saw Mr Hume, and believe him. He has deposed that he was working as normal and I accept that. He has also deposed that he did not give any confidential information to the respondents... I accept Mr Hume's evidence in this regard. I found him to be an honest, and straightforward witness. Put shortly, as I find, Mr Hume did not supply any confidential information to the respondents. Lift Shop's claims against Mr Hume fail.
The primary judge had earlier remarked upon the passage of time between the giving of the oral evidence and judgment. That was not because of any material delay in giving judgment itself (judgment was given just over two months after the final submissions), but because of the delay in the completion of the hearing caused by various issues, such that 19 months had elapsed between the relevant evidence and judgment. After referring to the elapse of time, the primary judge stated (at PJ [8]):

[69]

Grounds 8 to 10 boil down to a contention that the primary judge erred in accepting Mr Hume's evidence and finding that he did not supply confidential information of Lift Shop to the respondents. Lift Shop submits that the evidence of Mr Hume was "glaringly improbable", and that the primary judge failed to reflect on the entirety of the evidence viewed as a whole and, thereby, uncritically accepted an inherently improbable account of events. Lift Shop alleges that there was no cogent explanation for the 153 entries in the CRM database, such that it should be inferred that Mr Hume was accessing the CRM database so as to obtain information which he then passed on to NLE. Lift Shop submits that the conclusion that the primary judge was erroneous in her factual conclusions can more readily be reached in circumstances where there was delay between the giving of evidence and judgment, thus reducing the advantage of the primary judge in observing the witnesses directly, citing Microsoft Corporation v CPL Notting Hill Pty Ltd (2024) 177 IPR 389; [2024] FCAFC 20 at [167] - [168] per Nicolas J, Rofe J agreeing, and at [271] per Jackman J; and see also Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17; [2004] FCAFC 189 at [69] - [70] (Carr, Emmett and Gyles JJ).
Lift Shop did not articulate on this appeal any cogent reason for why it should be inferred that any access by Mr Hume to the records of Lift Shop should be found to be for the purposes of the exfiltration of confidential material for provision to NLE, rather than for the purposes of his employment at Lift Shop. That was an aspect of Lift Shop's lack of engagement with the contents of the alleged confidential records.
Something needs to be said about the 11 records made by Mr Hume on 2 March 2020. The Court was not taken to the evidence of Mr Hume about these records, or taken to the records themselves. We were left in the dark about it, which was somewhat unsatisfactory. Without being taken to this material, it is difficult to gain a proper understanding of the context in which Mr Hume was accessing records of Lift Shop in the period prior to his departure. It is not for the appellate court to dig through the record before the primary judge to discover materials that might shed some light on what occurred.
In any event, having trawled through the materials and located the records, they are pertinent to the issue. They consist of entries by Mr Hume providing comments on various client matters. The following are five examples:

[71]

There are eight entries concerning sticker kits. Mr Hume's evidence was that the stickers were made by a sign maker in New South Wales, and a number of kits would arrive in a large box. They would be added to the lifts at the customers' premises.
According to the logs kept by Lift Shop, the 11 entries made by Mr Hume were made at various times spread throughout the morning of 2 March 2020. The contents of the entries and their timing are significant. They tend to corroborate Mr Hume's evidence that he was engaged in his normal business activities on the morning of 2 March 2020. On Lift Shop's case, Mr Hume was engaged in a nefarious process over a four hour period of systematically extracting (unspecified) confidential information in respect of more than 150 customers for provision to his new employer. Yet the 11 entries written by Mr Hume reveal that he was engaged over that period in mundane activities in relation to his ordinary work, such as processing sticker kits, receiving some black handles, measuring the travel on some piece of equipment, and so on.
Further, when one has regard to the detail of the records, a different picture emerges from the one propounded by Lift Shop. The logs suggest that Mr Hume was going through the customer records, mostly (but not exclusively) in ascending order of the Site-ID. In some cases, he made a note. For example, looking at the 15 minute period from 11:04 am:
- At 11:04:30, he opened record V84259
- At 11:05:26 he opened record V85936, and then sub-record V85936-1
- At 11:07:55 he opened record V91903
- At 11:08:16 he opened record V92655, and at 11:08:19 he made a note on that record "sticker kit to be installed at next service. its upstairs in office".
- At 11:09:28 he opened record V92667, and at 11:09:47 he made a note on that record "the new owners number has been disconnected !!!!!"
- At 11:10:56 he opened record V93040, and then sub-record V93040-1
- At 11:11:26 he opened record V93733, and then sub-record V93733-1
- At 11:11:59 he opened record V93876, and at 11:12:02 he made a note on that record "Sticker kit in the melbourne office upstairs needs to be installed at next service"
- At 11:13:47 he opened record V94633
- At 11:14:31 he opened record N94950
- At 11:14:52 he opened record V98954, and then sub-record V98954-1
- At 11:15:23 he opened record V95023, and at 11:15:27 he made a note on that record "sticker kit in MElb Office upstairs to be installed at next service"
- At 11:17:27 he opened record V96055, and then sub-record V96055-1
- At 11:17:57 he opened record V96235
- At 11:18:18 he opened record V96401, and at 11:18:22 he made a note on that record "sticker kit in Melbourne office upstairs to be installed at next service".
On Lift Shop's case, in the days immediately prior to his departure Mr Hume is switching minute by minute (or in some cases within seconds) from copying records so as to damage Lift Shop and making helpful entries for the purpose of Lift Shop's business and to assist that business going forward. Rather than Mr Hume's evidence being glaringly improbable, it is Lift Shop's case theory that is improbable.
More generally, Lift Shop does not advance any coherent theory for why Mr Hume would be working through customer records in broadly ascending order and making notes on some of those records for the purposes of the conduct of Lift Shop's business, particularly if Mr Hume was said to be engaged in a process of extracting confidential information for the benefit of NLE.
As submitted by NLE, there is additional evidence that tends to support Mr Hume's account. First, Lift Shop's computer expert, Mr McKemmish, conducted a detailed analysis of Mr Hume's computer and telephone and prepared a moment-by-moment chronology of activity during the period of time which included 2 March 2020, but was not able to locate evidence that Mr Hume took information from Lift Shop or gave that information to NLE (although he did suggest that some records may have been deleted). Secondly, there is no evidence of any relevant information in the hands of the other respondents. Thirdly, Mr Hume was aware that his activity was monitored, and therefore that there was a high risk of detection, reducing the plausibility that he was engaged in some process of informational theft. Fourthly, there was evidence that Lift Shop's systems could generate various reports, including a report that would list Lift Shop's customers and the lifts to be installed for those customers, or a report that would provide a list of customers who had lifts that were being serviced by Lift Shop. If Mr Hume wanted to gather information of that kind, he could simply print a report rather than spending four hours laboriously accessing 153 customer records and taking a photo or other record of the information displayed.
When these matters are taken together, no error has been demonstrated in the conclusion of the primary judge. Rather, the evidence on balance supports that conclusion. Further, her Honour had the benefit of observing the witness. That advantage was reduced but certainly not eliminated by the elapse of time in the present case. We reject grounds 8 - 10.

At a glance

Court

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Before

Source

Judgment (73 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (23)