Nexgen Sydney Pty Ltd v Barakat

4 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434; [1987] FCA 266 DC Payments Pty Ltd v Next Payments Pty Ltd (2016) 51 VR 151; [2016] VSC 315 Del Casale v Artedomus (Aust) Pty Limited (2007) 165 IR 148; [2007] NSWCA 172 Deta Nominees Pty Limited v Viscount Plastic Products Pty Ltd [1979] VR 167 Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited (No 2) [2011] FCA 509 Faccenda Chicken Ltd v Fowler [1987] Ch 117 Forkserve Pty Ltd v Jack [2000] NSWSC 1064 Geraghty v Minter (1979) 142 CLR 177; [1979] HCA 42 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Halliday and Nicholas Insurance Brokers Pty Limited v Corsiatto [2001] NSWCA 118 Herbert Morris Limited v Saxelby [1916] 1 AC 688 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 Krishell Pty Ltd v Nilant (2006) 32 WAR 540; [2006] WASCA 223 Metrans Pty Ltd v Courtney-Smith (1983) 8 IR 379 Mid-City Skin Cancer and Laser Centre v Zahedi-Anarak (2006) 67 NSWLR 569; [2006] NSWSC 844 Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 Nottingham University v Fishel [2000] ICR 1462 O'Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 33 Ocular Sciences v Aspect Vision Care Ltd (No 2) [1996] EWHC Patents 1; [1997] RPC 289 Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31 Robb v Green [1895] 2 QB 1 Rosewood Advertising Pty Ltd v Hannah Marketing Pty Ltd [2000] NSWSC 1034 Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2007) 69 NSWLR 198; [2007] NSWSC 104 Southern Real Estate v Dellow (2003) 87 SASR 1; [2003] SASC 318 Stenhouse Australia Ltd v Phillips [1974] AC 391 Sullivan v Sclanders (2000) 77 SASR 419; [2000] SASC 273 Taypar Pty Ltd v Santic (1989) 21 FCR 485; [1989] FCA 543 Trendtex Trading Corp v Credit Suisse [1982] AC 679 United States v Grossman 843 F 2d 78 (2nd Cir, 1988) Victoria International Container Terminal Ltd v Lunt (2021) 95 ALJR 363; [2021] HCA 11 Vokes v Heather (1945) 62 RPC 135 Warman International Limited v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34 Woolworths Ltd v Olson (2004) 184 FLR 131; [2004] NSWSC 849 Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458 Texts Cited: JD Heydon, MJ Leeming, PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, LexisNexis, 2014) Category: Principal judgment Parties: LV6 Sydney Pty Ltd (formerly known as Nexgen Sydney Pty Ltd) (First Plaintiff) Business Telecom Australia Pty Ltd (Second Plaintiff) Samantha Barakat (First Defendant) Shane Mitchell (Second Defendant) Mina Youssef (Third Defendant) Easytel Australia Pty Ltd (Fourth Defendant) Easytel Group Pty Ltd (Fifth Defendant) Representation: Counsel: R Marshall SC with C Cassimatis (Plaintiffs) A Hourigan (First, Third, Fourth and Fifth Defendants)

Solicitors: Madison Marcus Law Firm (Plaintiffs) United ACL (First, Third, Fourth and Fifth Defendants) File Number(s): 2019/370803 Publication restriction: Nil

Judgment

1. HER HONOUR: In this matter, the plaintiffs, Nexgen Sydney Pty Ltd (Nexgen), which is now known as LV6 Sydney Pty Ltd (LV6) but to which I will continue to refer as Nexgen, and Business Telecom Australia Pty Ltd (Business Telecom), seek permanent injunctions to restrain a range of defendants from using what is alleged to be the plaintiffs' confidential information; as well as an enquiry into damages or an order for account.
2. After judgment was reserved in December 2020, there was an application by the plaintiffs effectively to reopen the proceeding in order to amend the pleadings to take into account an assignment that had occurred in the context of what I understand to have been a restructuring within the Nexgen/Business Telecom group of certain assets the subject of the injunctive relief that has here been sought. I will explain the circumstances of that application in due course. However, it led to the unfortunate delay in the determination of this proceeding since final submissions were not received on the issues raised by the amendment to the pleadings until September last year.
3. Briefly, by way of introduction, both the plaintiffs, on the one hand, and, on the other hand, what I will collectively refer to as the Easytel entities (namely, Easytel Australia Pty Limited (Easytel Australia), the fourth defendant; and Easytel Group Pty Limited (Easytel Group), the fifth defendant) were at the relevant time in the business of selling telecommunications systems hardware and associated equipment. In particular, the plaintiffs sell telecommunications solutions including phone systems, printers and copiers, security systems and services related to voice, internet and data. The Easytel entities similarly operate a business whereby they sell telecommunications hardware and associated office equipment and telephone, data and internet line rental. There is, however, a significant difference in the size of the competing businesses - the plaintiffs being part of a more established and larger organisation than the more recently established Easytel, which only commenced operation in September 2019 with approximately five or six employees.
4. The plaintiffs allege that the first, second and third defendants (to whom I will refer collectively as the individual defendants), being Ms Samantha Barakat, Mr Shane Mitchell and Mr Mina (Mark) Youssef, each of whom was previously employed with either Nexgen or Business Telecom, have taken or used confidential information of the plaintiffs (which they created or to which they had access during their employment with the plaintiffs), and have used it with their subsequent employer (Easytel Australia and/or Easytel Group).

Procedural history of the proceeding

1. Before setting out the chronology of events in more detail, it is convenient at this stage to note the procedural history of the proceeding to which I have briefly adverted above.

Commencement of the proceeding

1. The proceeding was commenced on 25 November 2019, by way of summons supported by an affidavit sworn on 25 November 2019 by Mr Ayoub (managing director of both of the plaintiff companies). In that summons, relief (including interlocutory relief) was sought against each of the first to fourth defendants.
2. By consent, on 29 November 2019 orders were made, recording the proffering to the Court of certain undertakings by Ms Barakat and Mr Youssef. Relevantly, the following orders were made: 10. The Court notes the first and third defendants' undertaking to the Court to serve on the plaintiffs by 13 December 2019 an affidavit which: (a) identifies whether the first defendant [Ms Barakat] and third defendant [Mr Youssef] or [to] their knowledge, any other person, has photocopied, printed, downloaded or copied to any device able to store or read electronic data, divulge or disclose to any other person other than an employee or director of the plaintiffs, sent by electronic mail from any email account used or accessed by the first defendant and third defendant, or preserved in physical or electronic form any information belonging to the plaintiffs which came to the knowledge or possession of the first defendant and third defendants in relation to its clients in schedule A by reason of their employment with the plaintiffs and in respect of each document or piece of information so identified: (i) the details of the date on which that occurred; (ii) the name of the recipient; and (iii) the present electronic or physical location of all versions or copies of the documents or information to the best of the first, second and third defendants' knowledge, information or belief, (b) attaches copies of all documents in the first defendants' [sic] and third defendants' [sic] possession, custody, power or control which evidence such matters; and (c) confirms that the information and documents so provided constitute a complete and accurate disclosure of such matters or things. Restraints First defendant 11. The Court notes the first defendant's undertaking to the Court until 29 February 2020, unless discharged earlier, not to: (a) solicit, canvass, approach, accept approaches from, or attempt to entice away or provide services to any entity in the schedule which is annexed and marked "A" with whom the first defendant was involved during the course of her employment with the second plaintiff; (b) canvass, solicit, interfere with or entice any employee or subcontractor of the second plaintiff, nor engage any such employee or any subcontractor (either directly or indirectly) or engage any such employee or any subcontractor (either directly or indirectly) from carrying out duties similar to those he, she or it performed when employed by the second plaintiff. Third defendant 12. The Court notes the third defendant's undertaking to the Court until 2 March 2020, unless discharged earlier, not to: (a) solicit, canvass, approach, accept approaches from, or attempt to entice away or provide services to any entity in the schedule which is annexed and marked "A" with whom the third defendant was involved during the course of his employment with the second plaintiff; (b) canvass, solicit, interfere with or entice any employee or subcontractor of the first plaintiff, nor engage any such employee or any subcontractor (either directly or indirectly) or engage any such employee or any subcontractor (either directly or indirectly) from carrying out duties similar to those he, she or it performed when employed by the first plaintiff. 13. The undertaking[s] to the Court given by the First Defendant and Third Defendant are made without any admission and do not displace the plaintiffs' onus should these Defendants withdraw their undertaking, or the plaintiffs seek to vary or extend any injunction.

Norwich affidavits

1. On 13 December 2019, each of Ms Barakat and Mr Youssef filed and served an affidavit (eponymously referred to, by reference to Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133, as the Norwich Affidavits), deposing to the matters required by Order 10 of the orders made on 29 November 2019.
2. In her affidavit of 13 December 2019, Ms Barakat deposed that the spreadsheets exhibited at pp 3-73 of Exhibit EA-2 to Mr Ayoub's 29 November 2019 affidavit (i.e., the EA-2 Spreadsheets) "consisted of prospects on which [Ms Barakat] had worked during [her] employment at Business Telecom" (see at [12.1] of Ms Barakat's affidavit, affirmed 13 December 2019).
3. However, while the Easytel defendants accept that Ms Barakat has acknowledged that the EA-2 Spreadsheets "consisted of prospects which [she] had worked on during [her] employment at Business Telecom", they emphasise that Ms Barakat does not admit that she created the EA-2 Spreadsheet that has been admitted into evidence. There is a hot dispute as to the provenance of the EA-2 Spreadsheet, it being the Easytel defendants' contention that this document is a "mashup" (or, less colloquially, an amalgamation) of information contained on the spreadsheet as it was stored on Ms Barakat's computer at Nexgen together with information added to the version of the spreadsheet on which Ms Barakat worked when she was later at Easytel (as I explain in due course).
4. Further, Ms Barakat's evidence is that, while the EA-2 Spreadsheet as exhibited to Mr Ayoub's affidavit only demonstrates information of a professional nature, the entire Excel file (tendered in due course as Exhibit SB-1 to Ms Barakat's affidavit of 13 December 2019, and marked as Exhibit 1 during the course of the hearing) consisted of about 36 tabs, the majority of which were comprised of spreadsheets created for Ms Barakat's own personal use. Ms Barakat says that this was personal information compiled over a period of years, including such matters as travel plans and personal "to do" lists; and Ms Barakat says that, because of this, she did not see any issue in transferring this information upon cessation of her employment with the corporate plaintiffs. Indeed, Ms Barakat's evidence is that the corporate plaintiffs were aware that Ms Barakat was taking her personal information with her (reference here being made to the communication by the plaintiffs to the effect that Ms Barakat should take her personal things with her). In cross-examination, Ms Barakat opined that, in light of the plaintiffs' knowledge of the existence of the spreadsheet, she had presumed that they would have told her not to retain a copy thereof.

Statement of claim

1. After the initial interlocutory regime was put in place, the matter then proceeded by way of pleadings. On 7 April 2020, the plaintiffs filed their statement of claim in which allegations were made against the first to fourth defendants (the fifth defendant not yet having been joined to the proceeding) of breaches of confidence; and orders were sought for damages or compensation as well as the orders restraining those defendants from, inter alia, dealing with the confidential information of the plaintiffs. As part of the relief there sought, the plaintiffs claimed an order that: … the First, Second, Third Defendants…be restrained until the conclusion of this matter, or until further order, from using, copying or distributing or in any other way dealing with the confidential information defined in paragraph 17 [of the statement of claim] and as defined in clause 20.6 of the Barakat Employment Agreement [the text of which I reproduce in due course] …
2. Confidential information is defined (at [17] of the statement of claim) as "information from the client Prospects", including (but not limited to): a. key decision makers; b. direct contact information of the key decision makers; c. the make and model of phone systems and other hardware currently in use; d. how many handsets are in use; e. how many cordless units are in use; f. whether the client Prospect owns or leases the hardware; g. how many current landlines the client Prospect has; h. the current internet provider and current spend; i. the type of internet in use (i.e. ADSL or NBN); and j. the contract term and months remaining on any of the above services.
3. Annexure A to the statement of claim listed 13 entries which the plaintiffs asserted were clients who the individual defendants had allegedly sought to procure for Easytel using the confidential information of the plaintiffs.
4. The Easytel defendants point out that Mr Ayoub, in his affidavits of 25 November 2019 and 29 November 2019, referred to the entities in Annexure A as "prospects" (not clients). Thus, the Easytel defendants emphasise that none of these companies may actually have been a client of the plaintiffs at the time the proceeding was commenced (but might simply have been a "prospect" - either because it was a data entry purchased from a contact list provider or because it had otherwise been "Google searched" by a telemarketer or the like).

Filing of defences

1. On 11 May 2020, the first, third and fourth defendants filed defences to the statement of claim.

Mr Mitchell's first affidavit

1. Also on 11 May 2020, Mr Mitchell signed the first version of an affidavit that was ultimately sworn on 12 May 2020 (to which I refer in more detail in due course) and in which he deposed to matters as to the use of the plaintiffs' confidential information (on which the plaintiffs relied to obtain further interlocutory relief). At some point around this time one or more of the Easytel staff became aware that Mr Mitchell had signed an affidavit.

Anton Piller order - 15 May 2020

1. At 10.00am on 15 May 2020 (a Friday), the plaintiffs made an ex parte application by telephone to Williams J, sitting as the Equity Duty Judge, for an Anton Piller order to search Easytel's offices at Parramatta for the purposes of taking into custody and copying, inter alia, various electronic devices, including computers, servers, laptops, mobile devices (telephones and tablets) and removable storage devices, and seeking to gain access to all client storage accounts and cloud email accounts. Due to the COVID-19 pandemic, duty applications in the Equity Division were then being heard only by telephone (via dial-in details provided by the judge's associate). I note this because, as I explain below, the plaintiffs contend that Easytel was "tipped off" about a "raid" to take place on Friday, 15 May 2020 (see the evidence summarised below) but it is not clear how Easytel's lawyers (who are reported to have been the source of the "tip") would have gleaned that information.
2. Due to the exigencies of the duty list on that day, the plaintiffs' ex parte application was stood down in the list and not heard until after the luncheon adjournment. At about 3pm that day, her Honour made the search and seizure orders sought by the plaintiffs (the Anton Piller Orders).
3. The timing of the making of the Anton Piller Orders became of some relevance because, as adverted to above, there was evidence from two witnesses (Mr Bill Tsioumas and Mr Jad Andraos - both of whom worked for a telecommunications supplier called TelPro at the relevant time) to the effect that Mr Hanna, the director of Easytel) had been told that a raid was imminent; and there was evidence from the independent solicitor appointed under the search orders (Mr Simon Maxwell) to the effect that when the search did take place on Monday 18 May Mr Hanna had asked him whether the search should have taken place on the Friday. I consider that evidence in due course.
4. The significance of the suggestion that there was advance notice of the "raid" is that the plaintiffs formed the view that hard copy documents and electronic storage devices had been removed from Easytel's offices and that some electronic documents were deleted by the defendants (and presumably if there had been advance notice of the "raid" this might have provided an opportunity for this to occur). The plaintiffs have contended that the inference to be drawn is that the removal or deletion of documents or devices was done in order to avoid relevant information being obtained by the plaintiffs. I return to this contention in due course.

Execution of Anton Piller orders

1. Returning then to the chronology of events in relation to the proceeding, the search order was not in fact executed until Monday, 18 May 2020 at about 9.20am. The then solicitors for the plaintiffs (Mr Andrew Stewart and Mr Sam Saadat, of Stewart & Associates) accompanied by the independent solicitor, Mr Maxwell, and the independent computer expert, Mr Le Roux, attended the Easytel office premises and seized numerous documents and data.

Access to forensic images

1. On execution of the Anton Piller Orders, Mr Le Roux downloaded forensic images of the relevant computers and copied those images onto two hard drives. However, there was then considerable delay as claims were made for legal professional privilege (in particular, there was delay in determining what documents were the subject of the privilege claims and the need to separate the privileged material on the computer hard drives). Further, access by the defendants to the hard drives was resisted on the basis that there were commercially sensitive documents of the plaintiffs on those hard drives.
2. Somewhat ironically, both sides have been anxious to protect their commercially sensitive material; and both sides seem to suspect the other of misuse of (or the motivation to misuse) such material in order to compete with the other side. So, for example, much complaint was made by the Easytel defendants as to the fact that the plaintiffs are now in possession (through their legal representatives) of the entirety of their client databases, with the suggestion that the plaintiffs could use that to force the Easytel defendants out of business - an assertion that is difficult to sustain insofar as access was restricted to the legal representatives who would face ethical and professional difficulties (and potentially grave professional consequences) were that information to be provided to the plaintiffs in breach of any ethical or other restrictions on such disclosure

26 June 2020 - notice of motion

1. On 26 June 2020, the plaintiffs filed a notice of motion (which the Easytel defendants say was oppressive) in which they sought, inter alia, the following interlocutory relief: … the first, second, third, and fourth defendants…and each of the first, second, third and fourth respondents … until the conclusion of this matter, or until further order, from directly or indirectly canvassing, soliciting, or dealing with, counselling, procuring or assisting another person to canvass, solicit or deal with any client listed in the client list marked confidential exhibit EA-7.
2. In support of that application, an affidavit sworn on 26 June 2020 by Mr Ayoub was filed, in which (at [72]) Mr Ayoub deposes that Confidential Exhibit EA-7 (which was admitted into evidence as Confidential Exhibit J) contains a Confidential Client List comprising: current clients of the plaintiffs; or prospects whose details have been added to the CRM from the calls made by employees of the plaintiffs during the course of their employment (including by the three individual defendants). The Easytel defendants point out that the plaintiffs thus here concede that not all the names in Exhibit EA-7 are clients of the plaintiffs.

Application to discharge Anton Piller orders - 4 August 2020

1. On 4 August 2020, Easytel Australia filed a notice of motion seeking to discharge the Anton Piller Orders. That application was dismissed by Williams J on 31 August 2020.
2. Pausing here, the Easytel defendants contend that both the application for, and the making of, the Anton Piller Orders have proven futile in relation to the disposition of the real issues in this matter and (having regard to the concession by the independent computer expert made in the course of the proceeding as to the allegedly missing computer operating system - see below) have unduly complicated and lengthened the proceeding as a whole and the hearing of the matter. This submission can only be relevant to the ultimate issue of costs (and I note that in their written submissions, the Easytel defendants sought the opportunity in due course to make an application for costs in relation to the interlocutory proceedings). I would add, however, in the context of identifying applications that have extended the course of the proceeding, that the stance taken by the Easytel defendants themselves on the application made by the plaintiffs to amend the pleadings after judgment reserved (which related to the apparent restructuring in early 2021 of the plaintiffs' business - see below) and the consequential delay in the provision of final submissions also had that effect.

Notice of motion to restrain plaintiffs' then solicitors from acting

1. On 7 August 2020, new solicitors commenced acting for the plaintiffs (following the filing of a notice of motion by the defendants to restrain the existing solicitors from continuing to act on the basis of an allegation that there had been an abuse of process in the taking of an affidavit affirmed on 12 May 2020 by Mr Mitchell - that motion not ultimately being determined because the plaintiffs' solicitors, without admission, ceased to act for the plaintiffs in the proceeding). I consider below the allegations made as to abuse of process. Suffice it here to note that I do not accept that any such abuse of process on the part of the former solicitors has been established (and, given the seriousness of such a finding, I would at the very least have given the former solicitors an opportunity to be heard on the application before making any such finding).

Application for access to Mr Roux' forensic images of the hard drives

1. Returning again to the chronology in relation to the proceeding, application was made by the plaintiffs for access to Mr Le Roux' downloaded images in order to ascertain whether there had been (as the plaintiffs contended) any deletions from the defendant's computer (something that it was not possible to do from the forensically imaged copy).
2. On 21 August 2020, I made orders for access by the plaintiffs' computer expert (Mr Bell) to the relevant computer images downloaded by Mr Le Roux (on an undertaking not to disclose certain material without leave) and to prepare a report by 25 August 2020. The matter had at that stage been listed, with expedition, for a two day hearing to commence on 7 September 2020.

Plaintiffs' computer expert

1. On 3 September 2020, the Thursday before the hearing was listed to commence, there was an application brought by notice of motion before Rein J by the plaintiffs for access to confidential documents. His Honour made orders in accordance with the plaintiffs' short minutes of order, which provided that the legal representatives for the plaintiffs were to be partially discharged from their written undertakings such that they were permitted to disclose for inspection to the plaintiffs: tax invoices discovered by the defendants addressed to the entities in Annexure B to the notice of motion; and contracts produced by GC Leasing Sydney Pty Limited to which the entities in the list marked Annexure B were parties. The balance of the notice of motion was stood over until the hearing, listed to commence on 7 September 2020.
2. On the following day (4 September 2020), i.e., the Friday before the hearing was to commence, the plaintiffs served an expert report from their computer expert (Mr Bell), in which Mr Bell concluded (as noted above), by reference to the computer images he had been given, that there was no computer operating system in place on two computers that had been seized on the execution of the search orders (Ms Barakat's computer - AF2001; and Ms Attard's computer - AF2003).
3. Mr Bell concluded in this report that the computer operating system for AF2003 had been deleted on the morning of 12 May 2009 (before Williams J made the Anton Piller Orders but, the plaintiffs contended, after Mr Mitchell had affirmed his 12 May 2009 affidavit in which Mr Mitchell deposed to the use of the plaintiffs' documents and to having observed various things in the Easytel offices in that regard). As I understand it, on the timeline to which Mr Bell referred, the deletion was apprehended to have occurred before an email on 13 May 2020 forwarding to Mr Youssef a copy of Mr Mitchell's 12 May 2020 affidavit - and I note that various of the defendants' witnesses were cross-examined as to when they became aware that Mr Mitchell had provided an affidavit to the plaintiffs.
4. As noted above, the conclusion that the computer operating systems were missing was subsequently established to be simply wrong - based on Mr Le Roux's admitted error in failing to discover the SSDs containing the operating system beneath a piece of metal under which it was located (for which "oversight" he apologised to the Court and the parties). Thus, this issue can only be said to have been an expensive (and time-wasting) red herring.

Plaintiffs' amended statement of claim

1. The hearing commenced on 7 September 2020. Since Mr Mitchell was clearly aware of the matter having been listed for hearing (as he was to be a witness at the hearing and I was informed that he was present in the Court at the time), I proceeded to hear the matter without him having formally appeared or filed a defence in the proceeding (see r 29.7 of the Uniform Civil Procedure Rules 2005 (NSW)). As I understand it, the plaintiffs here seek the entry of judgment against Mr Mitchell as well as the other defendants (which seemed somewhat surprising given Mr Mitchell had apparently co-operated with the plaintiffs by providing an affidavit for use in the plaintiffs' case, although of course it would be a matter for the plaintiffs whether they chose to enforce any such judgment).
2. At the commencement of the hearing on 7 September 2020, the plaintiffs sought, and (over the initial objection by the defendants which was ultimately not pressed) I granted, leave to file an amended statement of claim, adding Easytel Group as the fifth defendant in the proceeding (on the basis that most of the billing was done by that defendant).
3. The Easytel defendants point out that there is a reference (at [14] of the amended statement of claim) to "Annexure A" in relation to the contention there made that the individual defendants contacted 13 "Prospects" who were clients of the plaintiffs. The Easytel defendants say that the plaintiffs appear at the hearing effectively to have abandoned these propositions (though not on their pleading). There was no demur to this from the plaintiffs in their submissions and I have proceeded accordingly. In any event, there is only evidence that one entity from the list in Annexure A has been contacted, being Dagazo, to which I have already referred.
4. More pertinent (and this was identified as the crucial part of the amendment) was the allegation at [30B] of the amended statement of claim to the effect that the Easytel defendants had engaged in "further conduct" by using the confidential information after the termination of the employment of the first to third defendants.
5. Annexed to the amended statement of claim, as Annexure B, was a document headed "Easytel Client Exposure List". Annexure B lists the details of additional entities alleged to have been procured by Easytel using the alleged confidential information of the plaintiffs. The Easytel defendants understand the Annexure B list of entities to be those common to invoices issued by Easytel to current customers and Confidential Exhibit EA-7 (the list of alleged prospects and customers of the plaintiffs).

Further interlocutory application - 8 September 2020

1. Meanwhile, on 8 September 2020, the plaintiffs sought leave to file a notice of motion seeking interim orders to restrain Easytel from dealing with its business and to restrain use of the plaintiffs' alleged confidential information (see T 159ff). After some debate, limited interlocutory orders were made (on the usual undertaking as to damages) and without admission on the Easytel defendants' part. The interlocutory relief was made by me on the basis that, having regard to the allegation as to the deletion of the operating systems from Easytel's computers (later proven to be incorrect), I considered that there was a serious question to be tried as to the alleged use of the plaintiffs' confidential information and that the balance of convenience lay in the grant of such relief to preserve the status quo. The Easytel defendants say that, in hindsight, this allegation as to deletion of operating systems was "at least misguided". That is an understatement - it was simply wrong. However, as explained, the fault for this lies not at the feet of any of the parties; it was an error by the computer expert(s).

Further expert examination of computers

1. The lay evidence concluded on 14 September 2020. The matter was then adjourned to permit further expert evidence to be obtained. Mr Le Roux was directed to answer a number of questions going to the issue of the purportedly missing operating system and deleted files and, towards the end of October 2020, in response to those questions Mr Le Roux conceded that he did not see the SSD which was located under a metal object in the computer (see his report of 20 October 2020 - marked as Exhibit W) and that his conclusion in relation to AF2003 (being Ms Attard's computer) was wrong.
2. Further, it was said that Ms Barakat's computer (AF2001) had something on the server that indicated that there was activity on the operating system; and there was a similar conclusion in relation to Ms Attard's computer (which was confirmed by Mr Le Roux on 13 November 2020).
3. The expert called by the Easytel defendants, Dr Nigel Carson (see Exhibit 11), with whom Mr Bell agreed (see Exhibit V), said that, on inspection of the two computer hard drives (i.e., the ones that Mr Le Roux did not see during the "raid"), the SSDs were in place; and that Ms Barakat's hard drive contained a zip file with thousands of documents in it (see the joint report of the forensic computer experts, being Exhibit Y). In light of this, the Easytel defendants say, and I agree, that any suggestion of any wholesale deletion of documents is without evidentiary foundation.

Resumption of hearing - 19 November 2020

1. On 19 November 2020, Ms Barakat and Mr Youssef were recalled to give further evidence following forensic examination of documents on the hitherto "missing" SSD Drives.
2. The Easytel defendants complain that the plaintiffs used this opportunity further to attack the defendants' credit on the basis of a so-called "Brothel Spreadsheet" (being a list of adult services companies from 2012); and the SSD Spreadsheet retrieved from Ms Barakat's computer following the reconciliation of the hitherto "missing" SSD Drives. I deal with the evidence as to the Brothel Spreadsheet in due course. More relevant (in light of the Easytel defendants' complaint as to "hacking") is the SSD Spreadsheet to which I will return shortly.

Closing submissions

1. On 18 December 2020, I heard closing submissions, following which I reserved judgment. One might have hoped the matter would have concluded there (with a judgment during the course of the following few months). Alas, that was not to be.

Yet further amendment to pleadings

1. In June 2021, while judgment was reserved, there was a further application by the plaintiffs for leave to amend the pleadings (in effect to reopen the case to do so), which application was (perhaps unsurprisingly given the history of dispute between the parties) opposed by the Easytel defendants. This application arose out of the sale of the "Nexgen" business pursuant to an Asset Sale Agreement dated 29 March 2021 (Asset Sale Agreement) to which I refer in due course below.
2. After protracted debate, and on the basis of the plaintiffs' contention that the amendment (and re-opening of the case) involved no further evidence other than as to the fact of the assignment, I gave leave for the filing of a further amended statement of claim on 23 August 2021. The Easytel defendants made complaint as to the redaction of the Asset Sale Agreement but ultimately that issue was not pressed. As at that stage, I had rather thought that the most expeditious way of proceeding would be for judgment to be given on liability in respect of the matters that had been argued (and on which I was then reserved) with anything arising as a result of the Asset Sale Agreement to be dealt with once the outcome of those matters was known. However, the Easytel defendants were not content with that course. I therefore acceded to the Easytel defendants' request for a regime to permit more written submissions in order to address that amendment. This involved an extended timetable (to meet the parties' convenience) which meant that the final round of submissions not being completed until 22 September 2021 (an unfortunate state of affairs since it only served to protract the whole litigious saga).

Further amended statement of claim

1. The further amended statement of claim relevantly pleads that, on 31 March 2021, the plaintiffs completed the Asset Sale Agreement, the effect of cl 3 of which (as set out in due course) was to transfer all title to, property in, rights in and risk of a number of assets, intellectual property and liabilities from a seller to a buyer, in this case from the first plaintiff (Nexgen) to the second plaintiff (Business Telecom).
2. The Easytel defendants dispute that the Asset Sale Agreement operates as contended for by the plaintiffs. They maintain that the Asset Sale Agreement shows that Nexgen has no entitlement (and, they say, likely never had any entitlement) to the information the subject of the plaintiffs' claim in the proceeding; and that it does not disclose any interest of Business Telecom relevant to this proceeding (which the Easytel defendants say is otherwise limited at best to a single customer). I address this issue in due course.

Plaintiffs' business

1. As adverted to above, at the relevant time the plaintiffs carried on business selling telecommunications systems (as described in Mr Ayoub's affidavit sworn 25 November 2019 at [8]-[10]); and, for the purposes of that business, the plaintiffs had purchased databases of names and phone numbers from a lead source supplier for about $20,000 to $30,000 per list, those databases typically containing some 30,000 to 40,000 people or businesses (see Mr Ayoub's 25 November 2019 affidavit at [38]-[39]). The plaintiffs' telemarketing staff would typically contact the people or businesses listed on the database, seeking information as to their telecommunications systems or needs; and then enter that information into the CRM. Mr Ayoub says that the plaintiffs' telemarketing staff (of which Ms Barakat and Mr Mitchell formed part when they were employed within the plaintiffs' business) would typically make around 100 to 150 calls per day (see at [40] of Mr Ayoub's 25 November 2019 affidavit).
2. The "client" information entered into the CRM (and I interpose to note that the term "client" as here used in fact includes not only existing clients but also prospective future clients - the latter being referred to (as adverted to above) as "prospects" or "leads") typically included matters such as: the client's contact details; what type of phone systems were currently used; which carrier was currently used; how many staff members were employed; how long there was remaining on the current contract; when the person contacted would like a call back; and whether the person contacted was interested in speaking with a sales executive. That information was then used to develop the "client relationship" (Mr Ayoub's 25 November 2019 affidavit at [41] and [44]).
3. Although the Easytel defendants maintain that this kind of information is not confidential and/or could readily be ascertained by a telephone call, that surely cannot be the case in relation to all of the "client" information. In particular, information as to the prospective client's current contract terms would not necessarily be publicly available and might or might not be readily disclosed on a "cold call" by a telemarketer hitherto unknown to the prospective client. Moreover, there are cases in which the very compilation of information may nevertheless be treated as confidential - as I consider in due course.

Plaintiffs

1. As at the time of the hearing, the plaintiffs had an established business that has been operating for more than 10 years in both Australia and overseas, employing approximately 159 staff. Mr Ayoub is the managing director of the plaintiff companies. Another director of those companies is Mr James Harb (see T 43.39-40.).
2. Ms Barakat, the first defendant, was employed by Business Telecom as an "Appointment Setter" (that is, a telemarketer) (effective from 7 May 2018), having entered into a written employment agreement with Business Telecom. The role of a telemarketer (as the name suggests) is to telephone clients or potential clients, assemble information in relation to their telecommunications needs in the CRM database, and arrange appointments with those entities willing to meet with a sales or business development manager. The role of a sales or business development manager (of which Mr Youssef was one) was different in that such a person would go out to meet the clients or prospective clients and "close" the sales. Ms Barakat ceased her employment with Business Telecom on 29 August 2019 and commenced her employment with Easytel on 3 September 2019 as an "Internal Sales Consultant".
3. Mr Mitchell, the second defendant, was also employed as a telemarketer by Business Telecom for various periods. Mr Mitchell entered into a written contract of employment with Business Telecom on 1 December 2016. On 31 August 2019 Mr Mitchell ceased employment with Business Telecom. In his first affidavit sworn 12 May 2020 (at [31]), Mr Mitchell deposed that he received a call from Mr Hanna who offered him a job. Mr Mitchell commenced employment with the Easytel group on 13 September 2019. He worked there until 9 October 2019 and then left for a short time before returning to work there again from 6 February 2020 to 20 March 2020. Mr Mitchell no longer works as a telemarketer (as noted above).
4. Mr Youssef, the third defendant, was employed as a business development manager by Nexgen (commencing in that role on 11 January 2016 - see his 13 December 2019 affidavit at [4]). Mr Youssef commenced his employment with a subsidiary of Nexgen (being Omniview) on or about 8 January 2012 (see Mr Youssef's affidavit of 11 May 2020 at [60]) (although Mr Ayoub deposes at [11] of his affidavit of 25 November 2019 that Mr Youssef instead commenced his employment with Omniview on 28 March 2013 - nothing turns on this discrepancy). On 15 January 2016, Mr Youssef entered into a written contract of employment with Nexgen. Mr Youssef ceased working with Nexgen on 2 September 2019 and commenced working with Easytel on 3 September 2019).

Easytel defendants

1. As noted above, the Easytel entities commenced operating in New South Wales in September 2019 (with approximately five or six employees). Easytel Group was incorporated in about April 2019, with Mr Hanna as its sole director and shareholder. Easytel Australia was incorporated in early August 2019, again with Mr Hanna as its sole director and shareholder. Mr Hanna had at an earlier time been employed by Nexgen for about 12 months, resigning in April 2014 (see Mr Hanna's affidavit affirmed 6 July 2020 at [7]). Mr Hanna is related by marriage to Mr Youssef (Mr Youssef being Mr Hanna's wife's first cousin). Mr Hanna's evidence was that he had obtained advice from Mr Youssef about venturing into the telecommunications industry (before setting up Easytel).

Establishment of the business

1. It is common ground that, at the time that the Easytel business operations commenced, the Easytel entities were not using a CRM program in their business (see Mr Mitchell's affidavit of 12 May 2020 at [23] and [31], seemingly confirmed by Mr Youssef in his affidavit of 11 August 2020 at [11]-[12]). Mr Mitchell's evidence (see below) was that he was provided with electronic spreadsheets to use and that it was not until he later rejoined the Easytel group that the company was using a CRM program.
2. As to the acquisition of "leads", the Easytel entities obtained the following databases and systems: Australia on Disc Database on 29 August 2019; "Naj Database" in about September 2019; Leadmaster CRM on or about 16 October 2020; Illion databases on 25 February 2020, containing some 6,111 records; Illion databases on 2 March 2020, containing some 876 records; and ongoing MVF and Comparison Advantage data.
3. As at the date of Mr Hanna's 6 July 2020 affidavit, Easytel had spent $42,893.84 on databases, marketing companies and referrals since the commencement of Easytel's business in September 2019 (compare this with the amount spent by the plaintiffs which was in the order of $250,000 over 8 years). Accordingly, Mr Hanna contends that Easytel has no use for the plaintiffs' alleged confidential information.
4. As to the relative amounts spent on the purchase of lead source databases, the Easytel defendants say that the amount of Easytel's expenditure is significant having regard to the relative financial strengths of Easytel compared to the plaintiffs, as well as the relatively short time Easytel has been in business. In light of the expenditure in purchasing databases and leads, the Easytel defendants say that the plaintiffs' suggestion that Easytel purchased databases to disguise that Easytel was using the plaintiffs' confidential information makes no sense.

Relevant employment agreements

1. Each of the individual defendants entered into employment agreements which contained a wide-ranging definition of confidential information (see for example cl 20.6 of Ms Barakat's employment agreement) which the Easytel defendants complain is oppressively wide in the context of the post termination obligation in cl 20.1 of that agreement. Clause 20.6 provides: for the purposes of this clause and paragraphs preceding this clause Confidential Information is taken to mean all information previously communicated and imparted and all information to be communicated, imparted, and passing from the Employer, or from its directors, shareholders, servants, agents, employees, or consultants, or any one more of them to you or otherwise learned by you in any way related to or connected with the business affairs of the Employer or those of any client of the Employer or those of any business, organisation, company or venture in which the Employer holds an interest and of any client of any such business, organisation, company or venture including without limitation trade secrets, know-how, techniques, accounts, balance sheets, financial statements, financial information, business and marketing plans and projections, arrangements and agreements with third parties, customer information, customer information proprietary to customers, customer lists, concepts not reduced to material form, designs, plans, short, medium and long term development programs, drawings, processes, methods and procedures of operations and whether recorded in some tangible form or intangible form or some electronic form, computer record, or other database.
2. Each employee agreed that, during the term of his or her employment and after it terminated, he or she must not use or disclose or attempt to disclose any confidential information (as defined); and that, in the event of a breach of that clause, the plaintiffs would be entitled to an injunction restraining the employee from committing any breach regardless of proof of actual damage.

Commencement of the proceedings

1. Mr Ayoub's evidence is that, in September 2019, the plaintiffs became concerned that Easytel was contacting its "prospects". There was a meeting on 19 September 2019 attended by Mr Youssef and Mr Hanna (and others) (see Mr Ayoub's affidavit dated 25 November 2019 at [23] and Mr Youssef's affidavit of 11 May 2020 at [69]) at which Mr Ayoub accused them of "poaching" the plaintiffs' leads.
2. At [9] of Mr Ayoub's affidavit sworn 21 August 2020, he recounts a conversation with Mr Mitchell which he said occurred on 7 May 2020, in which he deposes that Mr Mitchell says words to the effect that: Shane Mitchell: I have emails which I have kept which I sent to Mina during his time with us and Nexgen and Business Telecom customers. They [Easytel] bought a database and would cross reference the leads against our clients. There was Nexgen hard copy applications in the Easytel office and Business Telecom applications stored in folders.
3. On 22 October 2019, the plaintiffs' lawyers sent a letter of demand to Easytel. This proceeding was commenced on 25 November 2019 (the procedural history of which is as noted above).

Easytel's "system" with respect to Nexgen and Business Telecom customers

1. At some point (from about late February to early March 2020 - see email dated 26 February 2020), a system was put in place within Easytel to the effect that, if a prospective client was contacted and it was learnt that this was a Nexgen or Business Telecom customer (or perhaps if the telemarketer wished to call a contact with whom he or she had dealt when at Nexgen or Business Telecom), the staff at Easytel were directed to contact Mr Youssef before proceeding further; and that, if Mr Youssef confirmed that the contact was a "lead" (i.e., from a database that Easytel had purchased), then the telemarketing staff would be told that they could proceed.
2. In cross-examination, Mr Youssef gave evidence that the process entailed thorough searches of the CRM to remove all entries in the CRM without a lead source (those being any details that might have come from Google, or were otherwise searchable). Where the Easytel telemarketers made contact with a Nexgen or Business Telecom customer, Mr Youssef instructed the Easytel representatives to end the call so that he could search the CRM to ensure that the prospect was a "purchase" lead. Upon confirmation of the foregoing, Mr Youssef would permit the Easytel representative to contact that prospect (see T189.8-16).
3. While the plaintiffs appear to regard this system as an attempt by the defendants (after the proceeding had commenced) to disguise that they were using the plaintiffs' confidential information (see T 10-11), this seems to me rather to indicate that the defendants were conscious of the need not to breach any obligations in this regard (and were relying only on the purchased leads) - about which the plaintiffs could hardly complain.

May 2020 "raid"

1. As it assumed no little significance in the plaintiffs' case, it is relevant to place in the chronological context the events surrounding the execution of the Anton Piller Orders granted by Williams J in the Duty List on 15 May 2020.
2. In that regard, it is also relevant to bear in mind that Mr Mitchell's first affidavit (on which the plaintiffs relied when seeking the Anton Piller orders) was made on 11 May 2020 and amended on 12 May 2020. It appears that Easytel and/or persons at Easytel were aware that Mr Mitchell had signed an affidavit of some kind even if they had not seen it at that stage (see T 206ff). (There is evidence that a copy of the file may have been overlooked on Mr Youssef's device on 13 May 2020 but there is no evidence as to the email itself being sent.) The significance of this, as noted above, appears to be that the plaintiffs suggest there was advance knowledge of the proceeding (and perhaps the opportunity to remove or destroy evidence adverse to the Easytel defendants).
3. Ms Barakat recalled being told of Mr Mitchell's 12 May 2020 affidavit before 18 May 2020 (i.e., before the "raid" which took place on Monday 18 May 2020) (T 142.6-13).
4. Mr Youssef gave the following evidence in respect of the allegation that the defendants knew about Mr Mitchell's first (Anton Piller) affidavit before the search (at T 197.14-36): Q. This is against the background that you knew that Shane Mitchell had sworn an affidavit for the plaintiffs, isn't it? A. I didn't know he had done it. I know that Elie called him and offered him $3,000 to write an affidavit. Q. No, no, no, no, and stop making self-serving answers, just answer my question. A. That's the information I know. I can only tell you what I know. Q. What you know is that people at Easytel, like you, understood that Shane Mitchell had gone to the plaintiffs and sworn an affidavit, you knew that on the 15th? A. No, on the seventh I knew Shane called me and told me that Elie offered him a bribe of $3,000 to write the affidavit. Q. 30,000 was it? A. 3,000. Q. You know that Samantha Barakat says that it was knowledge at Easytel that Shane had sworn an affidavit before the raid, that knowledge? A. Once Shane told me that conversation, I pulled a meeting and told everyone why it happened and that Shane was offered $3,000 to write an affidavit, I made it aware.
5. The evidence given by Mr Tsioumas and Mr Andraos as to the events on 15 May 2020 is broadly consistent.

Discovery

1. By way of discovery in this proceeding, Easytel produced invoices rendered up to the end of 30 June 2020 (some 458 invoices - albeit not to that number of clients because some of Easytel's clients were invoiced more than once). The plaintiffs say that the co-incidence between those clients of Easytel and the names in the Plaintiffs' Client List (Confidential Exhibit EA-7; admitted as Exhibit J) is high. It is said that Easytel sold telecommunications goods or services to some 80 or so clients (or prospective clients) in the Plaintiffs' Client List in the financial year ended 30 June 2020 (see T 221.20-50).
2. The Easytel defendants cavil with the proposition by the plaintiffs that the invoices rendered by Easytel up to the end of 30 June 2020 indicate that there is a high coincidence between Easytel's clients and the names in the plaintiffs' list. The Easytel defendants say that there is not the high coincidence as contended by the plaintiffs. It is said that the names in Exhibit EA-7 number in excess of 40,000 entries from sources mutual to the plaintiffs and the Easytel defendants. Relevantly, the Easytel defendants say that the entities named in Annexure B to the plaintiffs' amended statement of claim constitute approximately 0.1% of the approximately 40,000 plus entries in Exhibit EA-7 (being the exhibit marked Exhibit J in the proceeding).

Asset Sale Agreement March 2021

1. As noted above, on 29 March 2021, the plaintiffs entered into the Asset Sale Agreement. The Sellers are there defined (in a portion of the document that was redacted before provision to the defendants) as "the parties listed in Part A of Schedule 1". Those included a number of entities, beyond simply the plaintiffs in the present proceeding.
2. Clause 1 of the Asset Sale Agreement defines "Assets" as follows: Assets means the assets owned by the Sellers related to or necessary for the conduct of the Business on the Completion Date collectively comprising: (a) the Plant and Equipment; (b) the Sellers' customer lists; (c) the benefit of, subject to the burden of, the Leases; (d) the benefit of subject to the burden of, the Assumed Contracts; (e) the Trade Debtors; (f) the Business Intellectual Property; (g) the Goodwill; (h) the Systems; (i) the Records; (j) the Databases; (k) the Inventory; (l) Work in Progress; and (m) all other property, rights and assets of the Sellers used solely and exclusively in the conduct of the Business, but does not include the Excluded Assets.
3. "Excluded Assets" was defined as meaning the "following assets of the Sellers which relate to the Business", which were then listed: (a) cash in hand, on deposit or at the bank; (b) Excluded Records; (c) Bank Accounts; (d) insurance policies owned by the Sellers or any related body corporate of the Sellers and the benefit of any claims under those policies; (e) Statutory Licences to the extent to which these cannot be assigned to the Buyers.
4. Clause 3 of the Asset Sale Agreement provides: 3.1 Sale and Purchase Subject to clause 2, the Sellers, as legal and beneficial owners of the Assets listed next to their name in Schedule 2 agree to sell, and the Buyers agree to buy, the rights, title and interest of the Sellers in the Assets listed next to their name in Schedule 2 on the Completion Date with effect from the Effective Time for the Purchase Price free of any Encumbrance, Security Interest and other third party rights or interests. 3.2 Title, Property and Risk Subject to clauses 3.3 and 3.4, title to, property in and risk in the Assets: (a) until Completion, remains solely with the Sellers; and (b) passes to the Buyers on and from Completion with effect from the Effective Time. 3.3 Assignment of Intellectual Property Subject to clause 2, on Completion the Sellers agree to assign to the Buyers with effect from the Effective Time all rights, title and interest in the Business Intellectual Property together with all statutory and common law rights attaching to it including the right to sue for damages and other remedies in respect of any infringement or misuse of the Business Intellectual Property or other unauthorised acts for the full period of such rights to hold the same unto the Buyers absolutely. 3.4 Assumed Liabilities On and from Completion and with effect from the Effective Time, the Buyers will assume and be liable for the Assumed Liabilities that relate to the Assets they acquire under this Agreement, or where that is not specified, Business Telecom Australia Pty Ltd will assume and be liable for the Assumed Liabilities, and will indemnify the Sellers in respect of all Claims and Liabilities in respect of such Assumed Liabilities.

Lay witnesses

1. The plaintiffs relied on evidence from Mr Ayoub, Mr Tsioumas and Mr Andraos, and the former solicitor for the plaintiffs (Mr Saadat). The plaintiffs also tendered the affidavit of Mr Mitchell sworn 12 May 2020 (and the exhibit thereto), which was marked Exhibit F. In the defence case, evidence was given by each of the individual defendants (Ms Barakat, Mr Mitchell and Mr Youssef) as well as from Mr Hanna, Mr Youssef's wife (Ms Amanda Youssef), and Mr Dalibor Marsic (the director of TelPro).

Mr Ayoub

1. Mr Ayoub was cross-examined as to the circumstances in which Mr Mitchell came to make his first affidavit. He gave evidence that he made contact with Mr Mitchell through an employee (which is consistent with Mr Mitchell's account) (T 155). Mr Ayoub says that he indicated to Mr Mitchell that he was in trouble - and he said that this was because Mr Mitchell had no legal representation to that point. Mr Ayoub says that Mr Mitchell said that he was advised by the Easytel directors that he did not have to worry about anything and that Mr Mitchell said he wanted to clear his name (T 155.39-50, 156.1-4). Mr Ayoub said that he told Mr Mitchell on the phone that he had evidence that Mr Mitchell had taken stuff and that he would be in trouble and he said that he told Mr Mitchell to come in and go on the record and "tell us everything".
2. Mr Ayoub denied that he had offered to give Mr Mitchell money in exchange for his giving of evidence (that being the Easytel defendants' understanding of the position). Mr Ayoub said that he felt sorry for Mr Mitchell because Mr Mitchell had disclosed his financial difficulties and Mr Ayoub offered him a job as a contractor (but that, perhaps not surprisingly, he did not want Mr Mitchell in (or associated with) the business until the matter was resolved) (T 15640-46). As it transpired, Mr Ayoub's evidence is that he did not pay Mr Mitchell because he did not book any appointments, but that if he had booked appointments then he would have been paid for it (T 157.1-9).
3. As to Mr Andraos and Mr Tsioumas. Mr Ayoub said that he did not offer them work; rather that they were working for an entity (YME) which happened to do work for Nexgen and Business Telecom.
4. Mr Ayoub clearly feels strongly about the conduct of the defendants (see at T 50.29-31 where he said that "this is IP that they've taken and decided to use the same providers as I am and decided that they would financially gain some IP that we had in our business"). That emotion no doubt has influenced his perception of events.

Mr Tsioumas

1. Mr Tsioumas is a telephone technician who was working with TelPro (a telecommunications supplier owned and operated by Mr Dalibor Marsic) at the time of the May 2020 "raid". It appears that TelPro had had dealings with both Easytel and the plaintiffs from time to time (see T 14.6-10 and Mr Tsioumas' affidavit sworn 11 June 2020 at [8] and [11]). By the time of the hearing, Mr Tsioumas was no longer working with TelPro; rather he was working as a contractor for the plaintiffs (see T 52.46-50). The Easytel defendants thus say that it is not in dispute that Mr Tsioumas was given some form of work in connection with the plaintiffs, shortly after providing his affidavit.
2. Mr Tsioumas gave evidence as to the "raid" (as referred to above). Mr Tsioumas also deposed (at [45]-[46] of his affidavit sworn 11 June 2020) that: 45. Prior to the raid I recall having seen Nexgen books, folders, lead sheets and other hard copy documents in the Easytel offices. 46. To the best of my knowledge I recall having seen them on Amanda Youssef's desk.
3. In cross-examination, however, Mr Tsioumas conceded (at T 63.35-37) that he did not actually see hard copies of Nexgen documents in Amanda Youssef's possession: Q. It's never been the case, has it, that Amanda Yousef had copies of Nexgen documents at the office of Easytel? A. I personally haven't seen them, but there was talk that she did have it, yes.
4. Insofar as Mr Tsioumas deposed (at [13] of his 11 June 2020 affidavit) to a meeting in or about July 2019 with Mr Youssef, Mr Hanna, Mr Marsic and himself (at the Ettamogah Hotel in Kellyville Ridge - which suggests a specific recollection of the event), Mr Youssef says that he was in Europe at the time (see Mr Youssef's affidavit of 11 May 2020 at [35] and Mr Hanna's affidavit affirmed 11 August 2020 at [9]).
5. The Easytel defendants raise concern as to the timing and motivation of Mr Tsioumas' evidence, in particular in the context of the evidence of Mr Mitchell to which I have referred above, having regard to Mr Tsioumas' position with TelPro, his commencement to work with the plaintiff(s) as a contractor shortly after his affidavit was made, and the attempt by the plaintiffs to induce Mr Marsic of TelPro to withdraw his business and service from Easytel. (Mr Ayoub agreed - see T 52.25-35 - that he told Mr Marsic that he (i.e., TelPro) could not trade with the plaintiffs as long as he was trading with Easytel but explained that this was because of a conflict of interest.) The Easytel defendants submit that the affidavit evidence of Mr Tsioumas is not reliable and ought not be accepted.

Mr Andraos

1. Mr Jad Andraos is also a telephone technician who was associated with TelPro. Mr Andraos swore an affidavit on 14 June 2020, giving evidence as to the "raid" (as referred to above).
2. Again, the Easytel defendants say that this evidence is not reliable and ought not be accepted, pointing to Mr Andraos' "defection" from TelPro (namely that Mr Andraos was given some form of work in connection with the plaintiffs shortly after providing his affidavit) and the matters referred to above in respect of the evidence of both Mr Mitchell and Mr Tsioumas).

Mr Saadat

1. Mr Houssam (Sam) Saadat, the plaintiffs' former solicitor, deposed to the (very serious) accusations levelled against him as to the circumstances in which Mr Mitchell's first affidavit was taken.
2. Mr Saadat denied that he had suggested to Mr Mitchell that he might face gaol time in any way associated with this proceeding (T 149.8-10). Mr Saadat said that he met with Mr Mitchell in person (see Mr Saadat's affidavit of 14 August 2022 at [9]; cf Mr Mitchell's evidence that the conversation was on the phone at [17] of his affidavit affirmed 28 July 2020); that Mr Mitchell gave him the Hotmail emails (referred to in Mr Mitchell's first affidavit at [50]) by hand on 11 May 2020 (T 148.20-32); and that Mr Mitchell made handwritten notes on the affidavit (the original of which he said was in his possession) (see T 149.36-39). (Any implicit invitation to call for that document was not taken up by the defendants.)
3. Mr Saadat denied that there was any inducement offered to Mr Mitchell in relation to the making of his affidavit (T 149.44-49, 150.6-10). Mr Saadat also did not consider that Mr Mitchell looked fearful at any point (noting that Mr Mitchell had left the room on multiple occasions - T 151.12-17 - while he was taking instructions in relation to his affidavit). Mr Saadat was adamant that Mr Mitchell had drawn the filing cabinets on a diagram of the Easytel office when Mr Mitchell was in his office (which Mr Mitchell had denied).

Ms Barakat

1. Ms Barakat maintains that what she took with her when she left her employment with Business Telecom was her personal email account. It appears that this included the Plaintiffs' Client List which had been transferred by her to a spreadsheet, so that it could be transported by email to her personal email account. In cross-examination, Ms Barakat agreed that she took with her a spreadsheet that had Nexgen information on it (see T 119.20-47).
2. Ms Barakat's evidence is that she updated the Plaintiffs' Client List (that is, the same electronic file) with clients when she started dealing with clients and prospective clients while working for Easytel. Ms Barakat's evidence is that she kept all her business prospects in one location, for ease of reference and use at Easytel. (See Ms Barakat's affidavit affirmed13 December 2021 at [12.1]-[12.2].) In cross-examination, Ms Barakat said that it was a separate document that she used at Easytel (T 120.1-3); that she had just used the same method of putting a company name and a template for persons (i.e., other telemarketers) to work on and Ms Barakat more than once denied using the Nexgen spreadsheet at Easytel (see T 120.16-18; T 122.10-11; T 124.12-22).
3. Ms Barakat said that because Easytel and Nexgen targeted the same customers everyone would be a Nexgen prospect (see T 122.21-23) but that if she called a lead from a paid data source given to her by Easytel and the lead identified that it was a Nexgen or Business Telecom client then the process was to end the call immediately and to email either Ms Youssef or Mr Youssef for guidance as to what to do with the contact. Ms Barakat said that Easytel was strict about the rule that if there was a Nexgen prospect or client that was not on an Easytel list then the telemarketers were not allowed to contact the prospect (T 122-123).
4. Ms Barakat gave evidence that she contacted Ms Youssef about Padstow RSL because the plaintiffs had a lot of clubs in their database but that she had the information about this contact from the client not from the Nexgen spreadsheet and she emphasised that the customer information was not in her brain (and that she would speak to some 150 contacts a day) (T 123.34-50, 124.1-10).
5. As to Dagazo, to whom a proposal had been made before Ms Barakat left Nexgen, her evidence (T 125.44-50) was that she knew that a proposal had been submitted and an appointment booked but that nothing had happened after that. Her evidence was that she did not send proposals to customers - she just made calls (T 126.1-6) and she was not aware of the logistics of the proposals. Ms Barakat did not know that Dagazo and Century 21 were related - she said that she just knew it from Google as Century 21 (T 126.38-44). Ms Barakat was adamant that she used Google to obtain the details for Century 21.

Mr Youssef

1. Mr Youssef's evidence is that he retained all emails he created whilst working for the plaintiffs (Plaintiffs' Emails) and that he transferred the Plaintiffs' Emails to his personal computer (see Mr Youssef's affidavit of 13 December 2019 at [13.1]) (though Mr Youssef denied (at T 179.50, 180.1-2) taking any of the plaintiffs' information when he left). Mr Youssef says that he has not (amongst other things) copied to any device or printed or stored the Plaintiffs' Client List. Mr Youssef's evidence was that his wife, Ms Amanda Youssef, kept a diary that she created during her employment with the plaintiffs which included records of sales achieved and payments generated from each sale.
2. Mr Youssef has deposed that Easytel had implemented a centralised client database by about February 2020.
3. In cross-examination, Mr Youssef explained the process that he had followed in relation to the CRM (at T 188-189). Mr Youssef said that by the end of February 2020 he had purchased two basic spreadsheet forms of prospects (from Australia on Disc and Illion) and that had also obtained spreadsheets from some of Easytel's suppliers (T 188.20-37) and that he went through the CRM and deleted everything without a lead source (so anything that could have come from Google or anything of the sort). Mr Youssef explained that in order to triple check (so that they did not have problems with the plaintiffs) if anyone did contact a Nexgen or Business Telecom customer, they would need to "get off the phone" then they would need to email Mr Youssef the records and he would check that it was from a purchased lead from the spreadsheet and then he would give permission for them to contact that client but that if he did not find it then the record would be deleted and they must not contact the client (T 189.4-16). His view was that, after the 6 months' non-compete period (which ended on 2 March 2020) if there was a Nexgen prospect or existing customer in one of the lists then it was just normal business practice to contact that customer or prospect (T 189.18-26).
4. Mr Youssef agreed that even after 2 March 2020 the process for many Nexgen customers or prospects was that they were not contacted saying that this was because "I don't want anyone coming saying that we've got these records from a source that not solid" (T 189.35-38). Mr Youssef (not surprisingly) said that he and the other defendants did not want drama with the plaintiffs. Mr Youssef said that before 2 March they were not allowed to touch the clients from the non-compete as per his contract, and that after 2 March, the defendants did contact the plaintiffs prospects if the prospect came in a data source that was paid and that they "were just doing normal trade with the source" (see T 189.44-46). Mr Youssef said that they did not give the employees the lists - that it was a serious matter and was left in the hands of management to "triple check" (T 190.3-8).

Mr Mitchell

1. Mr Mitchell was called as a witness in the defendants' case. As already noted he was a telemarketer at the relevant time but by the time of the hearing he was working "in warehousing" (T 77.11-12). Mr Mitchells evidence was, to say the least, inconsistent. Mr Mitchell was candid in the witness box as to having an intellectual disability (T 93.20-21) and saying that he was not very good at reading things and writing (see T 91.43-45) and did not understand. With no disrespect, Mr Mitchell's difficulties with the process of examination and cross-examination were apparent from his oral evidence. Mr Mitchell struggled to understand various questions put to him. That has implications for the weight that I can place on either of his (conflicting) affidavits.
2. In particular, although much criticism is made by the Easytel defendants as to the circumstances in which his first affidavit was made (to which I refer below), it is just as apparent that there were difficulties with his third affidavit - in that it is clear that the affidavit is not expressed in his own words (the third affidavit, for example, used the word "voluntarily" but Mr Mitchell was frank in saying that he did not know what the word meant - see T 93.25-27). It is clear, therefore, that I cannot assume that the affidavits attested by Mr Mitchell were in Mr Mitchell's own words; and given his propensity to become confused as to what had in fact happened (for example, as to whether it was the solicitor, Mr Saadat who had said or done certain things, or Mr Ayoub - see below), I place a great deal of caution in relying on Mr Mitchell's (conflicting) accounts of events.
3. Mr Mitchell swore three affidavits in the proceeding: the first, dated 12 May 2020, which was apparently relied upon in the context of the application by the plaintiffs to procure the Anton Piller Orders (it being a correction from a version - incomplete on its face - which Mr Mitchell seems also to have signed; see T 80.37-49), which was tendered in evidence at the final hearing by the defendants; the second, an affidavit dated 11 June 2020 (filed 19 August 2020), which was not read by the plaintiffs; and the third, an affidavit of 28 July 2020, which was read by the Easytel defendants (in which Mr Mitchell resiled from much of the contents of the first affidavit).
4. In his first affidavit of 12 May 2020, Mr Mitchell's evidence is that, in his role with the plaintiffs, he was required to call hundreds of prospective clients in order to book appointments for sales staff to attend onsite meetings to finalise a sale; and that, during his employment with the plaintiffs, he used the centralised CRM database called "Leadmaster", to access client information and develop the profile of each client.

Mr Hanna

1. Mr Hanna is a director of Easytel. Mr Hanna has affirmed a number of affidavits filed in the proceeding. Mr Hanna's affidavit affirmed on 6 July 2020 sets out a detailed background of Easytel's business, including the systems and procedures Easytel has in place, and why it is that Easytel and the plaintiffs' businesses come into competition (see at [10]-[47]). Mr Hanna explains that Easytel's business is similar to that of the plaintiffs in that they both purchase leads and databases to contact potential customers to sell telecommunications hardware and services.
2. Mr Hanna's evidence is that Ms Barakat, Mr Mitchell and Mr Youssef developed the plaintiffs' client database and then Easytel's client database in a similar way, but he disputes that the information they obtained through calls to the clients and prospective clients was "special". Mr Hanna's evidence is that it is generally the case that telemarketers do not make sales; rather, they merely collect information from clients and prospective clients and make appointments for sales consultants to meet the clients or prospective clients to make the sale. Mr Hanna denies that Easytel has any of the plaintiffs' information.
3. Mr Hanna confirmed that negotiations with suppliers for CRM databases had not occurred when the staff commenced at Easytel but denied that it was his idea to use knowledge gained from Nexgen to help set up appointments or to save costs (T 212.45-50).
4. At T 213.39-48 Mr Hanna says that at the meeting with Mr Ayoub on 19 September 2019 he denied he was using his leads and told them would put a stop to it. Mr Hanna says that Mr Ayoub said that there was a running bet in the office as to how long Easytel would last (see T 213.38-45).
5. Mr Hanna also said that Mr Mitchell wrote an affidavit and that Mr Ayoub had offered him $3,000 to write the affidavit (T 215.17-20). (I note that Mr Hanna was not present in Court while Mr Youssef gave evidence of a similar nature - see at T 215.38-40.)
6. Mr Hanna denied any misconduct; he said that the defendants had implemented a process to check that it was an Easytel paid source to clear those leads (T 214.40-44) and that it was not correct that there were hard copies of Nexgen records in Easytel's offices (T 216.45-48). Mr Hanna confirmed the practice in relation to circumstances where a telemarketer was advised that the customer was currently with Nexgen was that the telemarketer was to call the manager and speak to the manager to check whether the telemarketer could call the contact or not (T 217.43-50, 218.1-8), and said that this was to make sure that they did not call Nexgen customers "if it's going to cause an issue with the plaintiffs" (T 218.35-37).

Mr Marsic

1. The defendants read an affidavit affirmed on 11 August 2020 by Mr Dalibor Marsic.
2. Mr Marsic is a director of TelPro, which provides installation services to a number of companies. TelPro provided services to Nexgen from January 2019 and to Easytel in September 2019.
3. In cross-examination, Mr Marsic said that he was told "by the Easytel boys" that the plaintiffs had their computer and other electronic devices from Easytel's offices taken away and forensically examined (T 99.27-30). As a technician at TelPro Mr Marsic did not have access to Nexgen's databases but he said that when he was working at Nexgen for two days a week he was training technicians and logging in jobs into their CRM and that he had access to Nexgen's CRM database from Nexgen's offices (T 99.36-44). In his affidavit he had deposed that from April 2019 he had access remotely (18) but in cross-examination he said that this was logging into a phone system not the CRM database. Mr Marsic explained that he could log in remotely to fix issues but did not have remote access to CRM (and did not have any username or password for the CRM; saying that his username and password to access the database was "already in the system" and that he could access the CRM database remotely if he was connected to Nexgen's system. Mr Marsic said that he did not have access rights to access Leadmaster (see T 101.5-14).
4. Insofar as his affidavit evidence acknowledged (at [58]) that he had access to information, Mr Marsic said that meant Nexgen's IT systems while he was working at Nexgen (see T 38-43).

Ms Youssef

1. Ms Youssef was previously employed by the plaintiff(s) but left Nexgen at the end of August 2019 and began working with Easytel in the beginning of September 2019 where she worked in the call centre (T 104.22-25). Ms Youssef said that there were three telemarketers in the call centre at Easytel (Ms Barakat, Ms Attard and Ms Shiva) and that she supervised them. Ms Youssef confirmed that when she started with Easytel there was no CRM program there - just spreadsheets (T 104.4-8). Ms Youssef said that the spreadsheets did not have Nexgen information in them. Ms Youssef said that she was not aware that Ms Barakat brought some with her but that she (Ms Youssef) "definitely" did not bring any (T 105.32-36). Ms Youssef confirmed that she had access to the CRM database at Nexgen and said that when working there she kept a record of every sale (so that she would know how much commission she was making); that record being a yearly diary (that she says she left with Nexgen - see T 105.15-16).
2. Ms Youssef's evidence is that she did not know that some of Nexgen's customers were being contacted by Ms Barakat and said that she would know if that were the case (T 107.1-15). Ms Youssef agreed that she had instructed the call centre people not to contact Nexgen's clients (and disagreed that the procedure was that Nexgen clients were not to be contacted only if they could not find a client name on the Easytel list). At T 108.1-6 Ms Youssef said that if they came across a Nexgen client then staff were not to have a conversation with them; and was adamant that "if that customer is not in our database then they're not to call that customer". Ms Youssef said that even if the customer was in the Easytel database the "rule" was not to contact Nexgen/Business Telecom clients in the first six months (i.e., presumably by reference to the non-solicitation covenant, although Ms Youssef said that she had a very old employment contract and did not know if her husband had one).
3. Ms Youssef explained that if there was a customer from a paid source (such as Illion or Australia on Disc) then it was acceptable to contact them, saying that they were not to book in an appointment unless it was from a paid source (T 109.2-3).
4. Ms Youssef was taken to an email of 13 March 2020 (Exhibit M) sent by Ms Youssef to Ms Barakat, which she explained was to make sure that everyone understood the rules. That email apparently reiterated that Easytel telemarketers were not to call outside their database, and, if they sought to do so, were to ask permission from Ms Youssef. At T 111.30-34, Ms Youssef denied that the spreadsheet in the office contained Nexgen information and was available to telemarketers. Ms Youssef said that the spreadsheets would not have contained comments and notes; that Mr Mitchell (their second telemarketer) would have to fill them out; and Ms Youssef thought that the spreadsheets they worked on were from Australia on Disc. Ms Youssef thought that Easytel obtained a licence to use Leadmaster earlier than December 2019 but said that she did not set it up (see T 112.14-29).

Conclusions as to lay witnesses

1. In summary, I take the evidence of all of the witnesses with a degree of caution. There is clearly a degree of emotion felt on both sides - on the part of Mr Ayoub as to the perceived misconduct of Ms Barakat and Mr Youssef in taking client information with them (and in setting up a competing business using the plaintiffs' leads); and on the part of Mr Hanna and/or Mr Youssef (both of whom accused Mr Ayoub of offering Mr Mitchell money in exchange for an affidavit; and in the case of Mr Youssef quick to accuse Mr Ayoub of hacking). Each seemingly had his own agenda to pursue which may well have unconscionably if not consciously influenced his evidence.
2. As for Mr Tsioumas and Mr Andraos, their evidence was broadly consistent and there is no reason to think they were not genuinely recounting their recollection of events. There was a ring of truth to the accounts given of the CCTV/camera footage being watched on 15 May 2020 in anticipation of the raid and then on 18 May to see if the raid would happen. However, some of the inconsistency between the accounts of Mr Hanna and Mr Youssef (on the one hand) and the plaintiffs' witnesses (on the other hand) can be explained by their different perspectives - it is clear, for example, that some of the evidence is based on things that people have been told or assumed rather than actual observation. Moreover, I agree that ultimately the evidence about the raid goes nowhere as there is no evidence of obstruction or deletion of documents.
3. Ms Barakat was, I thought, a frank witness. Ms Barakat clearly thought she was entitled to take the spreadsheet template with her and to use it to set up her own template at Easytel. I think it impossible that some of the entries were verbatim in both versions unless there had been a copying across of the information, but there were also sufficient changes and additions to make plausible Ms Barakat's recollection that she added comments based on her own calls while at Easytel. I accept broadly her account of events (though I consider that it is likely she has glossed over the extent to which she made use of the internal template in creating her own).
4. I consider Ms Youssef to have been a credible witness. I have already explained why I consider Mr Mitchell, though genuinely trying to give honest evidence, was ultimately unreliable due to the inconsistency in his evidence and his affidavits clearly not being in his own words. Mr Mitchell's account of feeling threatened, for example, seems to me most likely to have been his reaction to the situation rather than any actual threat as such; and Mr Ayoub's explanation of the trouble he was in can be explained in a relatively innocent way.

Expert Evidence

1. I have referred above, in relation to the procedural history of the proceeding, to the expert evidence in relation to the computer devices seized during execution of the search orders at the Easytel offices.
2. The Easytel defendants complain that they met resistance when they sought to access user data on AF2001 and AF2003 (the forensic images taken by the Mr Le Roux of Ms Barakat's and Ms Attard's computers); noting that, from 30 June 2020, they had raised the question as to whether there was some corruption or other issue affecting access in respect of AF2001 and AF2003. I accept that the whole saga of the forensic computer examination in the present case was unfortunate.

Mr Le Roux' 18 August 2020 email

1. Mr Le Roux, in an email of 18 August 2020, expressed his opinion that AF2001 (Mr Barakat's computer) had been modified on the morning of 18 May 2020, saying that: As the independent computer expert and noting my duty to report to the court, in the context of the work I performed yesterday at your office, I did however observe that, in my opinion, Computer AF2001 has been modified. From my observation, this occurred at 09h09 am (AEST) on 18 May 2020.
2. The Easytel defendants complain that this was a baseless allegation, which the plaintiffs sought to promote and exploit without cause or proper investigation; and they further complain that the instructions the plaintiffs provided to their computer expert (Mr Bell) were drawn in a manner that did not seek to resolve or narrow the forensic issues in the proceedings; rather, they say that the plaintiffs' instructions "sought to promote the false narrative" that the Easytel defendants had made an effort to delete operating systems and items. The Easytel defendants complain that this directly contributed to the delay and cost in the proceeding.

Mr Bell's first report

1. In Mr Bell's first report (exhibited to his affidavit of 4 September 2020), Mr Bell noted the following modifications within the root directory of AF2001 and AF2003, respectively: (i) AF2001, the device used by Samantha Barakat, I have identified a deleted and modified Microsoft system folder that suggests the potential modification to the OS on the morning of 18 May 2020 at approximately 9.09am; and (ii) AF2003, the device used by Tynika [sic] Attard, I have identified a deleted and modified Microsoft system folder that suggests the potential modification to the OS on the morning of 12 May 2020 at approximately 8.59am.

Report of Mr Nigel Carson

1. The Easytel defendants then obtained a report dated 14 October 2020 from Mr Nigel Carson (marked Exhibit 11).
2. Mr Carson's report stated that there was a Windows operating system, installed around 3 March 2019 on both the SSD drives in the HP Computers used by Ms Barakat and Ms Attard. In relation to the deletion or modification of operating system files and/or folders as identified at [4.2.4] of Mr Bell's Report, Mr Carson disagreed that operating system folders had been deleted, especially in the context that the operating system was installed on the SSD drives. Mr Carson identified that the folders most likely being referenced in [4.2.4] of Mr Bell's Report are deleted Microsoft installation folders which are created and deleted by the Windows operating system or application installer packages.
3. The Easytel defendants say that Mr Carson's report established that Mr Le Roux failed properly to copy the hard drives, and that Mr Bell's analysis at [4.2.4] of his report was incorrect. The Easytel defendants acknowledge that Mr Bell did not have access to the SSD Drives in HP2001 and HP2003. Nevertheless, and having regard to Mr Carson's response, the Easytel defendants submit that it should have been readily apparent to an expert such as Mr Bell that the purported modifications occurring on 18 May 2020 at 9.09am, and 12 May 2020 at 8.59am, were deleted Microsoft installation folders, created and deleted by the Windows operating system or application installer packages. Complaint is made that, notwithstanding Mr Carson's report, the Easytel defendants were subjected to further unfounded and inappropriate aspersions (namely, that they had removed the SSD Drives to avoid the Anton Piller search).

Further report of Mr Bell

1. On 10 November 2020, the plaintiffs served a further expert report of Mr Bell (which is exhibited to Mr Bell's 11 November 2020 affidavit (Mr Bell's Second Report). In Mr Bell's Second Report, Mr Bell concedes the matters at [48]-[64] of Mr Carson's report and agrees that Mr Le Roux did not forensically copy the SSD drives in the HP Computers. Mr Bell there accepted that, after the analysis of the SSD drives in the HP Computers, there is an operating system on each of the SSD drives. (The Easytel defendants complain that, despite the overwhelming evidence that Mr Le Roux simply failed to observe the SSD Drives, Mr Bell did not go as far as to say that this is what occurred.)

Mr Le Roux' 13 November 2020 email

1. It is noted that, on 13 November 2020, Mr Le Roux sent an email to the parties, attaching a photograph taken 18 May 2020 which clearly depicted AF2001 and AF2003 being used with operating systems in the usual course of business (as the Easytel defendants say they had contended at all times).
2. Mr Le Roux confirmed Mr Carson's findings that he had overlooked the SSD drives in both AF2001 and AF2003 and apologised for the "oversight", stating that: The photograph shows that that both of these computer's monitors are turned on and displays clearly that the computers are operating as would be expected, with a functioning operating system. I believe this demonstrates that computer AF2001 was operating after the last modified date of the deleted folder MSI633d7.tmp, as per Mr Carson's report (at paragraph 40 (a)). This supports Mr Carson's finding that I had overlooked the SSD drives in both AF2001 and AF2003 when preparing my report/affidavits. I apologise for this oversight.
3. The Easytel defendants contend that the plaintiffs had ample opportunity to cooperate with them to resolve the forensic issues in respect of AF2001 and AF2003 (which they submit, and I agree, would have been in the interests of the just, cheap and efficient resolution of the matters in the proceeding); and that, instead, the plaintiffs actively hindered the defendants' efforts, and "used the issue to pursue incorrect and inappropriate allegations of sabotage and criminality" against them. Complaint is made that the plaintiffs continue to perpetuate this contention, including at [109]-[110] of their submissions where they say that: Ms Barakat recalled being told of Mr Mitchell's 12 May 2020 affidavit before 18 May 2020; the "raid" took place on Monday 18 May 2020 and, according to the independent solicitor (Mr Maxwell), Mr Youssef commented to the computer expert "[w]ere you supposed to do this search on Friday?". The Easytel defendants point to the explanation given in cross-examination by Mr Youssef (see above) to the effect that he asked this question because the Anton Piller documents indicated that the search was supposed to have been undertaken on 15 May 2020 (the Friday). The Easytel defendants say that the plaintiffs' contentions are also not supported by the forensic position of the computer experts in respect of the first (Anton Piller) affidavit.

Evidence of "clients"

1. The Easytel defendants cavil with Mr Ayoub's claim in his affidavit sworn 13 September 2020 as to the entities that he deposes were clients of the plaintiffs. The Easytel defendants note that at [10] of his affidavit of 13 September 2020 Mr Ayoub defines what is meant by "signed by", being where "a client has signed a contract for services with either of the plaintiffs". The Easytel defendants say that only four of the companies mentioned in [11]-[28] of Mr Ayoub's affidavit of 13 September 2020 were customers of the plaintiffs at the time they were "ported" by Easytel (those being Metalair Pty Ltd, Austeck Pty Ltd, Bars N Racks and A Ioannou & PJ Markos and KC Nguyen). In summary as to the clients referred to in Mr Ayoub's affidavit, the Easytel defendants say the following.
2. As to a number of the entities, it is said that the relevant contract or agreement did not proceed or was terminated early (see for example, Eastwood Club (at [11]), Wetherill Park Automotive Services Pty Ltd (at [13]); Beverly Park Golf Club (at [18]); Mr Mow (at [22]); VD Jennick (at [26]-[27)); for a number of entities (some of them the same entities as those already referred to that did not proceed), the client was a customer of another telecommunications provider (say Optus or Telstra) at the time it was ported or signed by Easytel (again, Eastwood Club, Wetherill Park Automotive Services Pty Ltd, Beverly Park Golf Club; but also referring to Balmain Veterinary Hospital (which it is noted was only ever on a month to month contract when it was with the plaintiffs), and VD Jennick); and for a number of others the client signed by the Easytel defendants was a different entity to that which was a client of the plaintiffs (such as Quantum Accounting, or Quantum Partners, as referred to in Mr Ayoub's affidavit, which it is said is a different company with a different name and a different ABN to Quantum Accounting Services as signed by Easytel; the same is the case with Absolute Services Pty Ltd).
3. The Easytel defendants accept that Metalair was a customer "ported" by Easytel from Nexgen but they say that the date that Nexgen signed the customer (as deposed by Mr Ayoub in [17] of his 13 September 2020 affidavit) is incorrect.
4. Thus, it is said that the plaintiffs' contentions seek to perpetuate the plaintiffs' false narrative that the customers in Annexure B of the amended statement of claim were customers of the plaintiffs (see paragraphs [115]-[273] of the Plaintiffs Submissions), whereas the Easytel defendants say that to a large extent, this was simply not the case. It is said that (except for Austeck, Metalair, Blooms the Chemist, and Bars N Racks) none of the entities in Annexure B of the amended statement of claim was a customer of the plaintiffs when they were "ported" by Easytel.

Pleaded claims

1. As ultimately pleaded in the further amended statement of claim, the plaintiffs allege, first, various contractual breaches: breaches of the respective parties' employment agreements (cll 18.3, 19.1 and 19.1.1) by each of Ms Barakat, Mr Mitchell and Mr Youssef in soliciting clients and accepting approaches from clients listed in Annexure A when employed by the Easytel entities (this being defined as the Conduct) (see [27]-[28]); breaches of the employment agreements by using or disclosing or obtaining confidential information (cll 16.1, 19.1, 19.1.2, 20.1, 20.1.1, 20.1.2, 20.1.3 and 20.1.4) (see [29]); breach of the employment agreements (in failing to deliver up confidential information (cl 20.2)); breach of the employment agreement by the Conduct and Further Conduct (see [30C]); the Further Conduct being the soliciting of breach of the employment agreement (see [30A]), and use of confidential information (see [30B]).
2. At [31] is the allegation of loss and damage for the breaches alleged at [27] -[30C], particularised as loss of custom and goodwill, loss of profits, and loss of confidential information.
3. Second, it is alleged that there have been contraventions of the Corporations Act 2001 (Cth) (Corporations Act) (see from [32] ff), being: improper use of the defendants' positions to gain advantage, contrary to s 182(1) of the Corporations Act; and improper use of information obtained during the course of the defendants' employment, contrary to s 183(1) of the Corporations Act.
4. At [32], is the allegation of breach by the individuals as employees of s 182(1) improper use of position to gain an advantage for themselves or others or to cause detriment to the plaintiffs. At [33], it is alleged that there is a breach of s 183 by the individual defendants by improper use of information obtained during their employment to gain advantage or case detriment. At [34] is the allegation of breach by the individual defendants in relation to the allegations at [28]-[30] by engaging in the Conduct and Further Conduct in contravention of ss 182 and 183.
5. Third, the corporate defendants are alleged to have been knowingly involved in the Corporations Act contraventions - a claim of accessorial liability, causing loss and damage.
6. Fourth, the plaintiffs allege breach of fiduciary duties by the individual defendants. At [38] it is alleged that the defendants owed fiduciary duties: not to disclose or use confidential information; not to place themselves in a position of potential conflict of interest; not to promote the interests of the corporate defendants where there was a conflict; and to act in the best interests of the plaintiffs to protect the confidential information. At [39]-[40] breach of fiduciary duties is alleged. At [41], the knowledge of the corporate defendants is pleaded (that they knew or ought to have known that the confidential information was the property of the plaintiffs, and was obtained dishonestly). At [42] the plaintiffs make the allegation that the defendants hold the confidential information on trust for the plaintiffs. At [43] there is the allegation that the defendants have caused the plaintiffs to suffer loss and damage.

Spreadsheets

1. There was a degree of confusion (and much dispute) as to the provenance of various electronic spreadsheets in evidence (in particular the EA-2 Spreadsheet and the SSD Spreadsheet, the latter being the spreadsheet found on the SSD of Ms Barakat's computer upon its discovery by the computer expert Nigel Carson).
2. The plaintiffs refer to Mr Bell's evidence that the EA-2 Spreadsheet was found on Ms Barakat's computer which she used at the Easytel business. The plaintiffs contend that the EA-2 Spreadsheet was augmented and developed into the SSD Spreadsheet which was used by Ms Barakat upon her commencement at Easytel (contrary to Ms Barakat's evidence at [16.1] of her Norwich affidavit) (see [47] of the plaintiffs' submissions which refers to Ms Barakat's evidence that she had not downloaded or copied the EA-2 Spreadsheet to any device or divulged or disclosed it to anyone other than the plaintiffs, something which the plaintiffs say is clearly false). In other words, the contention seems to be that Ms Barakat took with her (in electronic form) the EA-2 Spreadsheet when she went to Easytel and that Ms Barakat then used and added to that spreadsheet to produce the SSD Spreadsheet.
3. The Easytel defendants point out in this regard that [4.2.1] and [4.2.2] of Mr Bell's Second Report were not read; and that Mr Bell's report does not say that the EA-2 Spreadsheet was found on Ms Barakat's computer which she used at the Easytel business. The Easytel defendants say that those (unread) paragraphs of Mr Bell's second report reference search terms (including "SAMS NEW WORK xx") that Mr Bell used to identify files "stored" on Ms Barakat's computer.
4. The Easytel defendants say that it is common ground that part of Exhibit EA-2 to Mr Ayoub's affidavit of 29 November 2019 is from the spreadsheet titled "SAMS NEW WORK xx" but they say that the other part of Exhibit EA-2 is the spreadsheet known as "TM DATABASE TARA" (which I understand to be a reference to Easytel's Telemarketer database, taken from the SSD Spreadsheet), which they maintain is Easytel property that the plaintiffs obtained by accessing Ms Barakat's personal email address without authorisation. I refer in due course to the Easytel defendants' submissions as to the purported similarities between the SSD Spreadsheet and the EA-2 Spreadsheet.

Abuse of process

1. Before turning to the submissions by the respective parties on the substantive allegations, it is convenient first to deal with the complaints made by the Easytel defendants as to the alleged "hacking" of Ms Barakat's personal computer and as to the approach (characterised by the Easytel defendants as anti-competitive conduct) by the plaintiffs to this litigation, one or both of which is said to amount to an abuse of process or otherwise to be a matter which should lead to the refusal to entertain the plaintiffs' claims for relief.

"Hacking" accusation

1. As noted above, the Easytel defendants say that the EA-2 Spreadsheet is not a full copy of the spreadsheet at Exhibit SB-1; rather, that it appears to be an amalgamation of more than one spreadsheet, including a spreadsheet belonging to Easytel and containing Easytel information. The Easytel defendants complain that there has not been an adequate explanation by the plaintiffs as to how they came to be in possession of documents containing information belonging to Easytel. The Easytel defendants accuse the plaintiffs of a breach of confidence (the "hacking", later recharacterised as "unauthorised access", of Ms Barakat's personal email account) (see T 270-271) and say that the plaintiffs should not be advantaged by this conduct.
2. Reference is made by the Easytel defendants to DC Payments Pty Ltd v Next Payments Pty Ltd (2016) 51 VR 151; [2016] VSC 315 (DC Payments) where Vickery J, in a case where the plaintiff's statement of claim was based on information received accidentally in confidence from the defendant, struck out those parts of the statement of claim based on the misuse of confidential information and said (at [1]): … In litigation founded upon the Plaintiffs' allegations of breach of confidence, the Defendants allege that the Plaintiffs themselves are in breach of confidence by what is said to be their misuse of a customer list owned by a Defendant, which inadvertently fell into the hands of the Plaintiffs. The alleged misuse on the part of the Plaintiffs occurred when they made use of the Defendants' confidential information in pleading certain allegations in an amended statement of claim. This conduct has spawned an arguable case where the ancient phrase 'the pot calling the kettle black' has a tale to tell.
3. Reference is also made to Sullivan v Sclanders (2000) 77 SASR 419; [2000] SASC 273 (Sullivan) where the Full Court of the Supreme Court of South Australia struck out the entirety of the plaintiff's statement of claim in circumstances where documents stored in Mr Sullivan's briefcase were taken and copied and then returned to the suitcase, and used in the proceedings. Gray J said the following (at [71]): … The plaintiffs should not be advantaged by what has occurred. The plaintiffs offered, in lieu of a stay, to amend the statement of claim if the appeal were to succeed. However this would lead to considerable debate as to what part of the statement of claim reflected the documents or their contents. A more effective approach to minimise any unfair advantage is to strike out the entire Statement of Claim. The plaintiffs should be at liberty to deliver a fresh Statement of Claim without either directly or indirectly making use of the confidential documents or their contents. In my view, if these steps are not taken equity will not be done.

Forensic discrepancies and purported similarities

1. The Easytel defendants note that Appendix F to Mr Bell's second report was admitted into evidence without objection (although it should be noted that not all paragraphs of that report were formally read). The Easytel defendants say that this shows that the "SAMS NEW WORK" spreadsheet: was not accessed on Ms Barakat's computer until December 2019 (following the commencement of the proceeding and the orders in respect of the Norwich affidavits requiring Ms Barakat to disclose the spreadsheet to the Court; and they point out that it was not stored on Ms Barakat's computer (but, rather, was "Autosaved", this being a software program feature that automatically saves an open document or file and is common to Microsoft Excel and Microsoft Word).
2. Accordingly, it is submitted that the SSD Spreadsheet (i.e., the Easytel Telemarket Database (being the spreadsheet marked Exhibit Z)) could not have been developed from the "SAMS NEW WORK" spreadsheet (and therefore that the plaintiffs' allegations (at [22]-[26] of their submissions) that the Easytel entities have aided or abetted or been knowingly concerned in the alleged breaches by the individual defendants are unsustainable.
3. Insofar as the plaintiffs contend (at [41] of their submissions) that Ms Barakat conceded giving access to the EA-2 Spreadsheet to Mr Youssef, the Easytel defendants point out that what Ms Barakat deposed in her Norwich affidavit was that: To the best of my knowledge the only other person with access to the Spreadsheets is the Third Defendant, Mina Youssef, due to the documents being made available to him throughout these proceedings.
4. The Easytel defendants accept that there are similarities between some of the entries in the EA-2 Spreadsheet and the SSD Spreadsheet but they maintain that such similarities arise for the reasons provided by Ms Barakat during cross-examination, namely that the SSD Spreadsheet was derived from paid data from Easytel as well as referrals and simple Google research; and that Easytel's telemarketers are given a template that they follow to ask prospects and potential customers certain questions (and therefore, because the process is the same for each telemarketer and each prospect, there are similar answers and notes obtained). Pausing here, I have difficulty with this submission in that it does not seem to me to take into account that a number of the entries (though I accept by no means all) appear verbatim in both versions of the spreadsheet and it seems an unlikely coincidence that precisely the same information would be recorded from separate phone calls (once during employment with the plaintiff and once during employment with Easytel). So, for example, the first line entry for the Hunts Avenue Family Practice ("AGE - NEC 5 years old - long long time. Freeze on spending") is exactly the same in both versions. However, there are other entries where there are differences (including the balance of that particular entry) including as to spelling of names (Brendan versus Brendon, for example) or as to the syntax used in the notes which would tend to a conclusion that these were new entries; and entries where the information is substantially different.

Alleged anti-competitive conduct

1. The Easytel defendants contend that the true purpose of the present proceeding is to put Easytel out of business and remove Easytel as competitors; and criticise the plaintiffs for seeking to use an alleged breach of confidence or breach of the duty of fidelity to prevent an ex-employee from competing referring to Berkeley Administration Inc v McClelland [1990] FSR 505 (Berkeley Administration) where Wright J dismissed the claims brought against the defendants and said: … I have come to the clear conclusion … that, whatever the nature of the information in the Blue Book, and however sensitive and worthy of protection the plaintiffs may at any stage have thought it to have been, I am satisfied that the plaintiffs' motivation in mounting this litigation against the defendants was not to protect their legitimate business interests … the true motivation behind the plaintiffs' conduct was an attempt, and a determined attempt at that, to strangle this infant competitor at or shortly after birth. It is unnecessary for me to point out that this is not an aim to which the court will lend its aid.
2. The Easytel defendants point to the following evidence in cross-examination of Mr Ayoub about MVF Global as a lead source supplier (at T 50.8-26) in the context of their submission that the proceeding is an attempt to prevent competition: Q. MVF Global is a lead source provider, is it not? A. Very different to the majority listed, yes. Q. Quite specialised, isn't it? A. Very specialised. Q. And you've been using MVF Global for a period of time? A. A few years. Q. And it recently came to your attention that MVF Global were also selling their services to Easytel, didn't it? A. Correct. Q. Did you tell MVF Global that if they continued to do that you would no longer do business with them? A. Correct. Q. And they withdrew their services from Easytel, didn't they? A. They did, yes.
3. As to the complaint made by the Easytel defendants about anti-competitive conduct, Mr Ayoub at T 50.42-43 says that all he said to MVP was that "we'd have to remain away from this program because we wouldn't be competing for the right things with Easytel". Mr Ayoub accepted at T 50.45 that he said he would remove "our business from the program". At T 52.1-19, Mr Ayoub agreed that he was telling people in the industry that he was in a dispute with Easytel but denied that he told people that he would subsume Easytel in legal fees, that is, run up legal fees so that Easytel could not continue in business. Mr Ayoub denied at T 58.7-9 that he was trying to litigate Easytel out of existence.

Determination

1. The vexed issue of the respective spreadsheets arises because of the very serious allegations made by the Easytel defendants as to the hacking of Ms Barakat's personal computer and, indeed the Easytel defendants go so far as to accuse the plaintiffs of criminal conduct.
2. Significant in this regard is the issue as to how (if Mr Ayoub's explanation of the manner in which the plaintiffs' IT person obtained access to the spreadsheets labelled "SAMS NEW WORK" and "TM DATABASE TARA" and "UPDATED - TM DATABASE TEMPLATE" (see [13] of Mr Ayoub's 29 November 2019 affidavit) is to be accepted) the documents there referred to as being stored on Ms Barakat's Nexgen computer devices could have contained subsequent Easytel information. Logically, information entered onto a spreadsheet after Ms Barakat had left the plaintiffs' organisation cannot have been stored on a Nexgen computer device.
3. I would accept that it is conceivable (though it would seem to me surprising) that someone in Nexgen's IT department might have been able to access Ms Barakat's email account on the Nexgen computer without a password, and I would accept that the conditions of Ms Barakat's employment may well have entitled Nexgen at least during her employment to have access to personal information if stored on the Nexgen office computers (for cyber security or other like purposes, say). However, it does not seem to me that there is a readily available logical explanation (unless the link between Ms Barakat's personal computer and Nexgen's office computer somehow remained live after Ms Barakat left her employment with the plaintiffs - and there was no evidence to suggest that this was the case) for a search of Ms Barakat's office computer to have revealed a document with information later created during Ms Barakat's employment at Easytel.
4. Therefore, I am troubled by the state of the evidence in this regard. As noted above, the Easytel defendants submit, by reference to DC Payments and Sullivan that the plaintiffs' proceeding has been founded on a breach of confidence, namely, the unauthorised accessing of Ms Barakat's personal email, and that the plaintiffs should not be advantaged by this. While I consider that there is much force to this submission, in the end I am left with sufficient doubt as to how the IT access was in fact obtained not to be in a position to conclude that the plaintiffs' claims should be dismissed on this basis. This is particularly so given the very serious nature of the allegations here made (and given the conclusion I have reached in relation to the claims in any event - see below). I certainly would not be comfortably satisfied to the Briginshaw standard that the unauthorised access amounts to a criminal offence which is what is here alleged in the defendants' submissions.

Issues for determination

1. Turning then to the substantive claims made by the plaintiffs, I address these as follows.

Confidential information

1. As both the breach of contract claims and the fiduciary duty claims (and to an extent the statutory duty claims) are premised on breaches in relation to confidential information, it is relevant to consider the nature of the information in question.
2. The plaintiffs submit that they have satisfied the four requisite elements necessary to establish a breach of confidence, namely that: the information in question is identified with specificity; the information has the necessary quality of confidence; the information has been received by the employee in circumstances importing an obligation of confidence; and there has been an actual or threatened misuse of the information without the owner's (here employer's) consent.
3. The plaintiffs say that the information in the Plaintiffs' Client List contains the requisite degree of specificity, in that it includes such things as: the client name; the content of the last conversation with the client, including what kind of hardware the client has; the age of the hardware; whether the client had been contacted by a competitor (and who); the relevant person at the client to contact going forward; the last time the hardware was updated; an email address of the client; and the hours of work of the relevant contact person.
4. It is said that none of that information is in the public domain; rather, that all of it was acquired by enquiries made by the individual defendants while they were paid to perform those tasks and after it was initially purchased from a lead source data supplier.
5. The plaintiffs say that the individual defendants were obliged to keep the information confidential, not only because of their fiduciary duties, obligations under ss 182 and 183 of the Corporations Act, but also by reason of their contractual obligation to keep such information confidential before and after the termination of their employment.
6. It is submitted that, given the concession by Ms Barakat that the information in the Plaintiffs' Client List was taken from the plaintiffs' computer systems, transported in the spreadsheet, and then uploaded onto Easytel's computer system, the inference to be drawn is that Ms Barakat (at the very least) intended to use the information (for the purposes of profit in competition at Easytel).
7. As noted, the Easytel defendants dispute the plaintiffs' contentions in respect of the special and confidential nature of much of the plaintiffs' purported confidential information.

Determination as to confidentiality of the information

1. Considering the question as to what must be satisfied for an equitable obligation of confidence to arise, in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434; [1987] FCA 266 (at 443), Gummow J, then sitting in the Federal Court said that: … The plaintiff: (i) must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question, and must be able to show that (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge); (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence; and (iv) there is actual or threatened misuse of that information … [citations omitted]
2. Relevantly, as there noted, for there to be an equitable obligation of confidence, the information must be identified with sufficient particularity. Similarly, when considering any fiduciary obligations owed in the present case (or any obligation of confidence arising as an incident of the contractual employment relationship), the information would have to be identified with sufficient particularity. Here, the plaintiffs identify it (in essence) by reference to the contents of the EA-2 Spreadsheet, i.e., the details recorded of prospects or leads (not necessarily actual clients) including information that is publicly available and information that could only be obtained by contacting the "client" in question. It is relevant here also to note that there can readily be seen to be a distinction between "client" contact details (which may well be public knowledge or able to be identified on common search tools such as Google) and the "client" needs or future requirements (which are unlikely to be public knowledge). Nevertheless, the compilation of contact details in a client contact or prospects list is something which has been recognised as capable of carrying with it the necessary quality of confidentiality (as confirmed in Robb v Green [1895] 2 QB 1 (Robb v Green) and Mid-City Skin Cancer and Laser Centre v Zahedi-Anarak (2006) 67 NSWLR 569; [2006] NSWSC 844 (Mid-City).
3. So, for example, in Robb v Green it was the compilation of the client information contained in the order book which it was said made the list so valuable (and able to be protected by an equitable obligation of confidence) and in Halliday and Nicholas Insurance Brokers Pty Ltd v Corsiatto [2001] NSWCA 188 (Corsiatto) the client lists (albeit containing publicly available information) were seen to be confidential in nature (see Handley JA at [16]-[17]) (although it appears that there was there evidence that client lists of insurance brokers or sub-brokers were a tradeable commodity, which is not necessarily the case for the kind of list here in consideration).

Breach of contract

1. In the amended statement of claim the plaintiffs allege that the first, second and third defendants breached their respective employment agreements insofar as they solicited, canvassed, approached, accepted approaches from, or attempted to entice away or provide services to the clients listed in Annexure A to the amended statement of claim while they were employed by the fourth or fifth defendants. The plaintiffs allege that this conduct was engaged in by the first, second and third defendants (and the confidential information disclosed to the fourth and fifth defendants) with a view to obtaining the custom of those "clients" of the plaintiffs in breach of cll 16.1, 18.3, 19.1, 19.1.1, 19.1.2, 20.1, and 20.1.1-4 of their respective employment agreements. The plaintiffs allege a further breach insofar as the third, second and third defendants failed to deliver to the plaintiffs the confidential information (defined in cl 20.6 of the agreements) in their possession, in breach of cl 20.2 of their respective employment agreements. Finally, the plaintiffs allege that the first, second and third defendant solicited, canvassed, approached, accepted approaches from or attempted to entice away or provide services to the other clients and prospective clients of the plaintiffs (being those listed in Annexure B).
2. As noted, the breach of contract claims in relation to solicitation or non-competition appear not to be pressed in relation to the Annexure A entities. At best these might have been made good in relation to Dagazo (the Century 21 franchise at Springwood). However, as to the submissions made by the plaintiffs (at [123]-[126]) in respect of Dagazo (being Century 21 Springwood, which Easytel signed in September 2019), the Easytel dedendants say the following. First, that Dagazo was not a client of the plaintiffs (it was a Telecomm Connect client). Second, that in cross-examination Ms Barakat explained her process of googling Century 21 (not Dagazo), on the basis that one of her colleagues had made a sale to another Century 21 and it made sense to Google search contacts for all the Century 21s in the area. The Easytel defendants submit that it is not surprising that there is minimal information in the CRM, noting that this sale occurred before Easytel had installed Leadmaster in October 2019. In any event, the Easytel defendants say that a cursory review of the documents for Dagazo in Exhibit MY-04 shows that extensive client information was gathered by Easytel as part of the sale, including that the client was wanting to upgrade from the previous model of the SV9100. It is said that there is nothing surprising about Easytel selling the customer similar hardware.

Determination as to breach of contract

1. In the present case, I find that there was a breach of contract in the conduct of Ms Barakat by taking with her (albeit together with her personal material that she was entitled to remove) the Excel spreadsheet that included the compilation of data in relation to prospective leads (the Plaintiffs' Client List). Simply setting up a template for a spreadsheet to contain similar information at Easytel would not to my mind be a breach (since Ms Barakat's familiarity with the format or structure of the spreadsheets is something that would be part of her acquired knowledge which she would be free to use in her new employment). However, it is difficult not to conclude that the template as used for the structure of the SSD Spreadsheet would have included the comments and notes that then populated the relevant fields in the spreadsheet and it is the compilation of those comments and notes the compilation of which I consider represented the confidential information.
2. The value of such information is obviously the "head start" that at least some of that information would give to a subsequent user of the spreadsheet. True it is, that one might Google particular categories of businesses (real estate agencies or clubs, for example) and obtain much of the same details but one would not thereby learn, for example, from a Google search the details of prospective clients' existing telecommunications suppliers or the like.
3. I do not accept that the fact that Ms Barakat's managers may have been aware that the spreadsheet was on her personal computer (and directed that she remove all her personal belongings), assuming that to be the case, amounted to consent to the removal of that spreadsheet.
4. That said, I do not find that any loss has been established as having been suffered by the breach in question (and hence only nominal damages would be recoverable). I accept Ms Barakat's evidence that the comments added by her to the spreadsheet she created were largely derived from Google searches and calls made while at Easytel and I do not consider that loss has been shown by reference to the fact that she also had the earlier entries (and seems to have copied some of them across). I accept that the fact that potential prospects may have been contacted would mean that there was competition that might or might not have otherwise arisen in respect of the plaintiffs' prospects but in essence the position seems to be that the plaintiffs would regard all businesses as prospects and they cannot reasonably expect to be immune from all competition in relation thereto.

Breach of fiduciary duties

1. The plaintiffs say that one of the recognised fiduciary relationships is that of employer and employee; and that the critical feature of the employment relationship is that the fiduciary (employee) undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense (citing Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 (Hospital Products)). The plaintiffs say that the relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position.
2. Pausing here, I do not accept that it will always be the case that an employee will owe fiduciary obligations to his or her employer (see for example the discussion in Anderson v Canaccord Genuity Financial Ltd [2022] NSWSC 58 at [1806]-[1830] (Anderson v Canaccord); see also Woolworths Ltd v Olson (2004) 184 FLR 131; [2004] NSWSC 849 at [212] (Woolworths v Olson)). However, in the present case, the existence of the fiduciary relationship is admitted in the defences filed by Ms Barakat and Mr Youssef (at [38]) so strictly speaking the issue only arises in respect of Mr Mitchell (of whom I would have concluded that he was not in such a role as to be subject to fiduciary obligations).
3. The plaintiffs say that the relevant fiduciary duties owed by the employees overlap with the duties contained in ss 182 and 183 of the Corporations Act (see below), as well as common law duties of: undivided loyalty and fidelity (during the employment and after it is terminated if there is term extending the duty); the duty to avoid conflicts of interest; and the duty not to misuse the fiduciary position. Reference is made to the decision of the High Court in Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31 in which it is said that: … [T]he fiduciary is under an obligation, without informed consent, not to promote the personal interests of the fiduciary by making or pursuing a gain in circumstances in which there is "a conflict or a real or substantial possibility of a conflict" between personal interests of the fiduciary and those to whom the duty is owed.

Determination as to breach of fiduciary duties

1. The premise on which the fiduciary duties claims are based is that the individual defendants were in an employment relationship with the plaintiffs and thereby owed fiduciary duties. In Hospital Products, Mason J, as his Honour then was, included "employer and employee" among the list of "accepted fiduciary relationships)" and said (at 96--97), that: … The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. …
2. In Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 (Grimaldi v Chameleon Mining), the Full Court of the Federal Court (Finn, Stone and Perram JJ), while noting that there was "no generally agreed and unexceptionable definition" of a fiduciary, said (at [177]) that: … a person will be in a fiduciary relationship with another when and insofar as that person has undertaken to perform such a function for, or has assumed such a responsibility to, another as would thereby reasonably entitle that other to expect that he or she will act in that other's interest to the exclusion of his or her own or a third party's interest [citations omitted]
3. There is no doubt (see Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2007) 69 NSWLR 198; [2007] NSWSC 104 at [129], Rothman J there referring to Concut Pty Ltd v Worrell (2000) 176 ALR 693; [2000] HCA 64 (Concut) per Kirby J at [51]) that the relationship of employer and employee is one "importing implied duties of loyalty, honesty, confidentiality and mutual trust". However, the mere existence of an employment relationship does not necessarily give rise to a fiduciary duty (see Woolworths v Olson at [212] per Einstein J). It has been noted that an employment relationship is to be "contrasted with a number of other relationships which can readily and universally be recognised as "fiduciary relationships" because the very essence of the relationship is that one party must exercise his powers for the benefit of another" (see Nottingham University v Fishel [2000] ICR 1462 (Nottingham University) at 1491 per Elias J).

Section 182(1) of the Corporations Act

1. Section 182(1) of the Corporations Act relevantly provides that an employee of a corporation must not improperly use the employee's position to gain advantage for themselves or someone else or cause detriment to the corporation.
2. The plaintiffs note that an objective standard is to be applied in determining what amounts to an "improper" use of position; and that impropriety is established by "a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case". It is further noted that impropriety might also occur when an employee breaches a contractual obligation not to use certain information in a certain way, for example, in competition. The plaintiffs contend that a contractual term requiring an employee to maintain confidentiality in respect of client information creates an expectation that the employees will not use the information gained in respect of the clients for any other purpose than their employment and the enhancement of the client relationship with the plaintiffs' clients, and for the plaintiffs' purpose.
3. The plaintiffs point out that it is not necessary, in order to establish a contravention of s 182(1), that the former employee gain an advantage for himself or herself, or cause a detriment to the company but in any event the plaintiffs contend that, in the present case, it is clear that Easytel has entered into contracts for the sale of telephones and hardware with some 80 entities which were "clients" of the plaintiffs (and in some respects, were clients with whom the individual defendants had been dealing prior to the termination of their employment with the plaintiffs). (Pausing here, the evidence does not establish that these were actual clients of the plaintiffs as opposed to prospective clients or leads.)
4. It is noted that a finding of impropriety for the purposes of this section does not require subjective knowledge of impropriety even if the desired object was not achieved; rather, it is actionable upon the mere use of the information even if no detriment is occasioned (and it is also actionable if the information was used for the advantage of someone else).
5. The plaintiffs say that, in the present case, from the evidence of at least Ms Barakat, the information was used when it was taken from the central database and saved as an Excel spreadsheet. It is said that it was also used when it was emailed to Ms Barakat's private email account; and that it was then used when it was uploaded to Ms Barakat's computer at Easytel. The plaintiffs say that it also appears to be the case (from the evidence of Mr Mitchell) that the information in the Plaintiffs' Client List was used by the second and third defendants while they were employed by Easytel (the plaintiffs here also referring to the emails Mr Mitchell received from Mr Youssef in March 2020 which are annexed to his affidavit).

Section 183(1) of the Corporations Act

1. Section 183 of the Corporations Act relevantly provides that a person who obtains information because they are, or have been, an employee of a corporation must not improperly use the information to gain advantage for themselves or someone else or cause detriment to the corporation.
2. The plaintiffs accept that, to establish a claim under this section, the plaintiffs must establish that: the employee had been an employee of the plaintiffs; the employee acquired the relevant information and did so by virtue of his or her position as an employee of the plaintiffs; and the employee made improper use of the information in order to gain directly, or indirectly and advantage for himself or herself or some other person (or, alternatively, the employee improperly used the information to cause detriment to the corporation).
3. The plaintiffs contend that each of the individual defendants contravened s 183(1) in essence for the same reasons as the contravention is asserted in respect of s 182(1).
4. It is noted that the prohibition in s 183 of the Corporations Act is identical to the equitable duty of confidentiality for a director, which would be contravened if that director used the information that was confidential to the company to make a personal profit, and is said to be akin to the fiduciary obligation to act in good faith.
5. The plaintiffs say that the information contained in the Plaintiffs' Client List is confidential, the property of the plaintiffs, and not in the public domain such that the taking of it is said to be an act of bad faith in breach of the fiduciary obligation such that it amounts to another justification for the conclusion that the section was contravened. The plaintiffs argue that there would be a contravention if the employee used the information irrespective of whether that information is confidential in equity. In other words, it is said that the statutory provision will be contravened if it is used in competition by the employee regardless of whether the information (such as customer or client lists) is confidential.
6. In the present case it is said that, given that the parties agreed the definition of confidential information (and it is said that the Easytel defendants have not sought to impugn that definition), it should be concluded that the information in the Plaintiffs' Client List was confidential. The plaintiffs argue that an employee is not permitted deliberately to memorise the employer's information so as to be able subsequently to use it in competition with the employer. (Pausing here, there is no suggestion that anyone here has sought to do so or been able to do so.)

Determination as to statutory claims

1. I am not persuaded that the alleged breaches of the above statutory provisions have been made good.
2. True it is that it has been established that Ms Barakat took with her (as part of her personal files) information in the form of the Excel spreadsheet that she then used in order to create the template for her SSD Spreadsheet, which Mr Mitchell then used at least prior to the acquisition by Easytel of the CRM program; and that Mr Youssef took with him emails when he left his employment with the plaintiffs. However, I am not persuaded the evidence establishes that any particular information in the Plaintiffs' Client List was used by Mr Mitchell and Mr Youssef while they were employed with Easytel. While I find that Ms Barakat did use information from the Plaintiffs' Client List to create the SSD Spreadsheet, I am not persuaded that any loss has been suffered as a result; given the relatively anodyne nature of the information there transposed into the SSD spreadsheet and the ability readily to obtain such information through the usual telemarketer contacts. Relevantly, I am not persuaded that the individual defendants, as former employees of the plaintiffs, have improperly used their position as employees, nor improperly used information obtained in their capacity as employees of the plaintiffs, to gain advantage for themselves or someone else or cause detriment to the corporation.

Accessorial liability

1. As to the claim for accessorial liability, the plaintiffs rely on ss 79(a) and (c) of the Corporations Act as against Easytel, contending that it is a person that was involved in the contravention having: (a) aided, abetted, counselled or procured the contravention; or (c) been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to, the contravention.
2. The plaintiffs say that, in the present case, they had paid to acquire the initial information, and then paid their employees to call the prospective clients to ascertain detailed information that informed the future strategy necessary to succeed in selling the services the plaintiff provided. It is said that the information was agreed in the employment agreements to be confidential; and that it was maintained on a centralised database which was password protected. It is noted that the parties to the employment agreements agreed that any infringement of the confidential information would permit the granting of an injunction to restrain such behaviour. The plaintiffs say that it was clear that the information was not to be shared at all, let alone with a competitor such as Easytel.
3. The plaintiffs contend that at least Ms Barakat has engaged in "nefarious behaviour" to conceal the taking of the information to facilitate the unfair advantage by use of that very information. Additionally, the plaintiffs say (pointing to Mr Mitchell's evidence as an example) that the information is so vast that it would be impossible to memorise, pointing to the fact that, on the plaintiffs' case, the information spans greater than 30,000 clients (and not just the names, but intricate detail about many aspects of the electronic devices and services they require and when they will next need for goods and services).
4. The plaintiffs point to the fact that the individual defendants commenced employment with Easytel almost immediately after they resigned their employment with the plaintiffs. It is noted that the Plaintiffs' Client List was located on Ms Barakat's computer at Easytel; and that Mr Mitchell said that he was directed to use the Plaintiffs' Client List. The plaintiffs say that that evidence is corroborated by emails from Mr Youssef in which, after Mr Mitchell identified a client as a Nexgen client, Mr Mitchell was told to "go for gold".
5. It is said that at all material times, the individual defendants were employees of Easytel and, therefore, agents or representatives of the Easytel defendants who, aided, abetted, counselled and procured use of the information. In the alternative, the plaintiffs say that it could not be said that the individual defendants, in their capacity as employees, were not "in any way directly or indirectly, or knowingly concerned in or party to" the use of the information (such that in those circumstances there has been a contravention of ss 182 and 183).

Determination as to accessorial liability

1. As I have concluded that the principal breaches have not been made good the question of accessorial liability strictly does not arise. Had it arisen I would have concluded that Mr Youssef's knowledge should be imparted to the Easytel entities (see Anderson v Canaccord at [1643]-[1684] regarding the principles of attribution of knowledge to corporations) but not that Mr Youssef has sufficient knowledge of the compilation of the EA-2 and SSD Spreadsheets to have been aware of a breach by Ms Barakat. Hence the accessorial claims would have failed.

Relief sought

1. The plaintiffs contend that an employee, during employment is not entitled to make, or copy, a list of the employer's customers. It is noted that s 1324 of the Corporations Act provides that where a person has engaged in conduct in contravention of the Corporations Act or, has been knowingly involved (as defined in s 79 of the Corporations Act) the Court may, on the application of an interested person or a person affected by the conduct, grant an injunction on such terms as the Court thinks appropriate. It is noted that, pursuant to s 1324(4) of the Corporations Act, if considered desirable to do so, an interim injunction may be granted pending determination of an application under s 1324(1).
2. Further, the plaintiffs say that equity will restrain a former employee who seeks to use an employer's information as a "springboard" to gain a head start, even where that information is capable of being independently ascertained (citing Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458 at [201] per Gordon J); and that the springboard doctrine seeks to prevent the misuse by one party of another's confidential information in order to bring out its own product in a manner or time that it would not otherwise have been able to achieve, to prevent unfairness. It is said that it is well recognised that parties are free to use information that becomes public so long as they do not take advantage of the "head start" of having the knowledge ahead of the public.
3. The plaintiffs further seek equitable compensation and an order for the taking of an account of profits for the alleged breaches of fiduciary duties and the duty of confidence.
4. The Easytel defendants say that the permanent injunctions sought are excessive. The Easytel defendants say that the plaintiffs effectively seek orders that the Easytel defendants be restrained from contacting any company or person entered into the plaintiffs' CRM (noting that there are some 40,000 entities in Confidential Exhibit EA-7 alone) regardless of the source of the lead, or that the Easytel defendants may have paid somebody for the same lead; notwithstanding that the restraints in the employment contracts of the individual defendants have long since expired, and which the Easytel defendants, in any event, contend are not enforceable because they tend towards protection against competition, and not the protection of the plaintiffs' legitimate interest; and in circumstances where contacts listed in Confidential Exhibit EA-7 are not actually customers of the plaintiffs but, rather, no more than leads or potential customers whose details the plaintiffs have purchased from database supplies in an identical fashion to the way in which the Easytel defendants purchased their information from database suppliers; and notwithstanding that the Easytel defendants have provided the source of leads in Easytel's CRM obtained in the usual course of business from suppliers which both the plaintiffs and the Easytel defendants utilise.

Determination

1. I will deal first with the claims for equitable compensation and an account of profits. In Mid-City, Campbell J, as his Honour then was, referred to United States v Grossman 843 F 2d 78 (2nd Cir, 1988) at 86 where a law firm was held to have the right, as against an employee of the firm, to the confidentiality of information disclosed to members of the firm by a client, and went on to say (at [140]) that: … the same factors which have led to the customer lists of any business being regarded as confidential, and persons working in that business being obliged, by an implied term in their contract of employment to recognise the confidentiality of those lists, apply here. …
2. As Campbell J said in Mid-City (at [148]): An employee [and I see no reason why, in principle, an authorised representative would be in any different position] is entitled, once his employment is over, and in the absence of an express and valid contractual restriction on his doing so, to canvass former customers of his employer, to the extent that he has the names and addresses of those customers in his memory as a result of the ordinary carrying out of his duties as an employee: Ormonoid Roofing and Asphalts Limited v Bitumenoids Limited (1930) 31 SR (NSW) 347 at 354-356; 48 WN (NSW) 66 at 69 (Harvey CJ in Eq); Faccenda Chicken Limited v Fowler [1987] 1 Ch 117 at 136; Riteway Express Pty Limited v Clayton (1987) 10 NSWLR 238 at 240 (McLelland J); Weldon & Co Services Pty Limited v Harbinson [2000] NSWSC 272 at [68]-[72] (Bryson J). … and (at [158]): … Both the common law and equity take into account, in formulating the extent of obligations they impose in a situation like the present, the public interest that there is in people who have acquired skills and knowledge while working in one situation, such that those skills and that knowledge is part of the mental equipment they carry around with them, being able to use those skills and that knowledge when they take up a later situation. …
3. In Southern Real Estate v Dellow (2003) 87 SASR 1; [2003] SASC 318 (Dellow), Debelle J, with whom Nyland and Lander JJ agreed, considered a not dissimilar issue in relation to what was held to be the misuse by a director of a rent roll of a real estate business. There, it was said (at [26]) that the director had prepared customer lists with the intention of using them once she had resigned and was thereby placing herself in the most advantageous position to erode the goodwill of the company. It was recognised that, after her resignation (and after the expiry of any fiduciary duties), Ms Dellow was at liberty to make a list of clients from memory and actively to solicit their custom (at [36]). However, Ms Dellow had, in effect, pre-empted that course.

Asset Sale Agreement - submissions as to standing

1. In their further submissions dated 17 September 2021 (following the further amended statement of claim), the Easytel defendants made submissions reiterating the complaints made in their earlier submissions (as summarised above) as to the nature of the plaintiffs' claim but also contending that the plaintiffs lack standing and cannot establish any loss or damage.
2. The Easytel defendants say that there are significant discrepancies between the Asset Sale Agreement and the position contended for by the plaintiffs.
3. First, reference is made to Mr Ayoub's evidence (at [10] of his affidavit sworn 3 September 2021) to the effect that "Assets" is defined by cl 1 of the Asset Sale Agreement to mean the assets owned by Nexgen relating to or necessary for the conduct of the "business" on the Completion Date, which was comprised of (among other things) Nexgen's property (defined in Mr Ayoub's affidavit as the "Relevant Transferred Property").
4. The Easytel defendants say that this misconstrues the definition of "Assets" in the Asset Sale Agreement (see as set out earlier in these reasons) in that, contrary to Mr Ayoub's assertions, the word "Assets" is not defined to mean assets owned by Nexgen; rather, it refers to assets of the "Sellers" (it being noted that there are at least four Sellers specified in the redacted Schedule 1 of the Asset Sale Agreement). (The Easytel defendants suggest that there are likely more "Sellers", noting that there are nine signatories to the Asset Sale Agreement and only three of these are named as Buyers in the Asset Sale Agreement.)
5. The Easytel defendants point to Mr Ayoub's evidence (at [11]-[13] of his 3 September 2021 affidavit) that: 11. Some of the Relevant Transferred Property, contained specific definitions within the ASA, the effect of which, further identified what specific property that was being transferred to Business Telecom. 12. In addition to the Relevant Transferred Property, clause 1 of the ASA also defines the 'Business Intellectual Property' to include all intellectual property rights, both in Australia and thought out [sic] the world, and for the duration of the rights, any right, title and interest in (among other things) any trade secret, 'know-how' (as defined in the ASA), computer software and confidential, scientific technical and product information (Relevant Transferred IP) 13. Clause 1 of the ASA also defines 'Assumed Contracts' to include, among other things, contracts between customers and the 'seller' (Customer Contracts).

Plaintiffs' supplementary submissions

1. In commendably brief (two paragraph) supplementary submissions dated 22 September 2021, the plaintiffs maintain that: none of the relevant assets or Business Intellectual Property (as defined in the Asset Sale Agreement) was sold or assigned to anyone other than Business Telecom (though they do not point to any provision of the Asset Sale Agreement to make that submission good); and they note that the Easytel defendants do not contend in their supplementary submissions that the rights of action are not assignable (but that, if such a submission had been made, it would be contended that the causes of action were ancillary to the property rights assigned, citing Trendtex Trading Corp v Credit Suisse [1982] AC 679 at 703 and Meagher, Gummow & Lehane at [6-470]); and that they fall within the ambit of cl 3.1 and 3.2 and (m) ("all other property, rights and assets of the Sellers used solely and exclusively in the conduct of the Business") within the definition of Assets in cl 1.1 of the Asset Sale Agreement).

Easytel defendants' further submissions in reply

1. The plaintiffs' supplementary submissions then provoked complaint by the Easytel defendants (in not so brief further submissions in reply filed on 24 September 2021) as to the failure of the plaintiffs' solicitors to respond to an email of 17 September 2021 (a copy of which was attached to the further submissions in reply) from the Easytel defendants' solicitor in which request was made as to whether the plaintiffs' submissions had been filed "so that we may attend to exchange". Following a further email of 22 September 2021 from the Easytel defendants' solicitor (a copy of which was also attached to the further submissions in reply) in which advice was again sought as to when the plaintiffs would be in a position to exchange their submissions (which it was noted were due to be filed on 17 September 2021) the plaintiffs' solicitors served the two paragraph further submissions referred to above.
2. The Easytel defendants' complaint is that the plaintiffs failed to file their further submissions in accordance with the timetable and thereby "have assumed a forensic advantage", to which the Easytel defendants say the plaintiffs were not entitled. (If there was any such forensic advantage, and it is hard to see, that must surely now be abated by the further submissions that were sent by the Easytel defendants.)
3. As to the substance of the plaintiffs' further submissions, the Easytel defendants' response was as follows.
4. The Easytel defendants dispute the plaintiffs' contention that none of the relevant assets or Business Intellectual Property (as defined in the Asset Sale Agreement) was sold or assigned to anyone other than Business Telecom (and say that this position is not supported by the Asset Sale Agreement).
5. The Easytel defendants contend that the plaintiffs' further submissions are otherwise superfluous for the following reasons. First, they say that the sale or assignment of "assets" from Nexgen to Business Telecom did not occur as contended by the plaintiffs; and that neither of the plaintiffs has any interest in the "assets" required to maintain the present proceeding. Second, they say that, in respect of Mr Youssef, his employment contract with Nexgen was expired and could not be assigned; that no assignment of Mr Youssef's employment contract could occur without it being novated with his consent; and, on the pleadings or the redacted Agreement, there does not appear to be any purported assignment or novation of Mr Youssef's employment contract. Third, in respect of Ms Barakat, that her employment contract was with Business Telecom; and thus could not be sold or assigned from Nexgen to Business Telecom.

Determination

1. The competing submissions as to the Asset Sale Agreement do not strictly arise for determination given the findings I have made on the claims themselves. Were they to have arisen I would have concluded that, insofar as any of the "Assumed Contracts" was not a contract entered into by Nexgen (but, rather, was a contract entered into by another Nexgen entity) then the causes of action for damages for breach of covenant or breach of fiduciary duties (even if properly assigned) would not sound in damages or equitable compensation for the loss of clients that were never clients of Nexgen. I accept that the difficulty with the Metalair contract is that it was signed after the restraint period in the relevant employment contracts had ceased; was a "lead" sourced from Illion; and apparently made the decision to leave Business Telecom after the expiry of its contract with Business Telecom due to dissatisfaction with the service provided, and thus the defendants' acquisition of Metalair's custom was in no way illegitimate nor unlawful.
2. Were it necessary to decide the issue, I would be inclined to find that (to the extent that any of the "Assured Contracts" was a contract to which Nexgen was a party) the rights of action fell within cl 1.1(m) being "all other property, rights and assets of the Sellers [in this instance, Nexgen] used solely and exclusively in the conduct of the Business", and that such rights of action are sufficiently annexed to the confidential information the property of the plaintiffs (see Krishell Pty Ltd v Nilant (2006) 32 WAR 540; [2006] WASCA 223 at [77]), and thus were assignable (and likely assigned) to Business Telecom pursuant to cll 3.1and 3.2 of the Asset Sale Agreement (on the assignment of causes of action, see Anderson v Canaccord at [1265]-[1311]). However, I accept that there is difficulty for the plaintiffs insofar as it is not established that Nexgen was in fact a party to each of the Assured Contracts.

Conclusion

1. For the reasons set out above, I find that the plaintiffs have failed to establish an entitlement to the permanent injunctive relief claimed and that any damages for breach of contract referable to Ms Barakat's conduct in taking the EA-2 Spreadsheet and Mr Youssef's conduct in transferring his emails to his personal device would be nominal only.
2. Costs should follow the event but are to be the subject of separate submissions.
3. Accordingly, I make the following orders: 1. Order that the first and third defendants pay the plaintiffs nominal damages in the amount of $1 for breach of her or his respective employment contracts. 2. Dismiss the remainder of the plaintiff's amended statement of claim. 3. Discharge the undertaking proffered by Ms Barakat and Mr Youssef on 29 November 2019. 4. Direct that any brief written submissions on costs be filed and served within 14 days with a view to being determined on the papers.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 March 2022