Parthy v Grow MF Pty Ltd

Federal Court of Australia|2023-08-31|Before: Collier J

The application for leave to appeal the decision in Grow MF v Parthy [2023] FCA 442 be refused.
The applicant pay the costs of the respondent, such costs to be taxed if not otherwise agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Collier J: 1 Before the Court is an application filed on 20 May 2023 for leave to appeal a decision of this Court in Grow MF v Parthy [2023] FCA 442 (primary decision). Before the primary Judge Grow MF Pty Ltd (Grow MF) sought orders (in summary) that the applicant, Anindha Parthy, restore access to certain technology accounts of Grow MF, and that Mr Parthy be restrained from otherwise dealing with any of the materials in those accounts. The primary Judge ordered on 4 May 2023 that: 1. Within 2 days of this Order, the Respondent: (a) Restore Mr Sohan Karunaratne's GitHub account "@sohank88" as an "owner" of the Grow Metrics GitHub Account and notify the Applicant's lawyers; and (b) Provide Mr Sohan Karunaratne with access as an administrator to the Growmetrics Figma Account and notify the Applicant's lawyer; and (c) Provide the Applicant's lawyers with a copy of all material held on the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment). 2. Until the hearing and determination of this proceeding or until further order, the Respondent (whether by himself, his employees or agents or otherwise howsoever) be restrained from, without the licence or authority of the Applicant or order from the Court: (a) accessing using in any manner whatsoever; (b) reproducing (other than for the purposes of this proceeding); (c) deleting, destroying, concealing or modifying, or taking any step which is likely to impede the recovery of; (d) disclosing to any third party (other than legal advisors for the purposes of this proceeding), the material held in the Grow Metrics GitHub Account, the GrowmetricsFigma Account, the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment) and/or the Growmetrics Slack Development Account. 3. Costs of the Applicant's application for interlocutory relief be reserved. 4. The parties have liberty to apply. 2 In seeking leave to appeal the applicant relied on the following grounds: 1. Anindha Parthy did not need to complete any action for orders 1a and 1c to be completed 2. The orders relied on unreliable evidence from other party Grow MF Pty Ltd (errors in original)

Background 3 At all material times Grow MF has operated a marketing technology services business, providing clients with an automatic application known as the "GrowMetrics Application". 4 The applicant is a qualified software engineer. In June 2022 he took a part-time contractor role with Grow MF. On 30 November 2022 he entered an employment contract with Grow MF in the role of Chief Technology Officer. The applicant resigned from that role in April 2023, although 5 days later he sought to withdraw that resignation. 5 The respondent refused to accept the applicant's withdrawal of his resignation, on the basis of Mr Parthy's alleged misconduct, being that Mr Parthy had removed access for certain Grow MF staff (including Grow MF's co-founder and executive Director, Mr Sohan Karunaratne) to technology accounts critical to the operation of Grow MF's business. 6 Additional background facts summarised by the primary Judge in her Honour's decision were as follows: 11 The applicant operates the Grow MF business by offering services contained on the GrowMetrics application to clients. The current version is called GrowMOFO 2.5 (which Mr Parthy refers to as GrowMOFO 2.0 Stable). Grow MF is developing a new version of the application, referred to as GrowMetrics 3.0. 12 To develop and maintain the GrowMetrics application, Grow MF has accounts on various technological applications. On my understanding, the technological applications can be explained as follows. 13 The GrowMetrics application is operated by underlying source code. That source code is created, maintained, developed and stored on GitHub, a third party source code repository. Prior to 28 April 2023, the applicant contends Mr Parthy and Mr Karunaratne were both "owners" of the GitHub account. 14 When that code is ready to be deployed, it is "pushed" from GitHub to what the applicant refers to as the "GrowMetrics production environment". The respondent refers to the production environment as the "GrowMetrics QA environment". Mr Parthy submits this account was set up in his personal account on Google domains and Netlify. He does not appear to dispute that it was set up in his role as Grow MF's Chief Technology Officer. 15 Prior to 28 April 2023, three people had access to the GrowMetrics production environment (or QA environment): Mr Karunaratne, Mr Parthy and Adrian Sabic (a product manager at Grow MF). This account was accessed through an organisation username and password (meaning one single username and password). 16 For further development and testing of "high fidelity" prototypes, Grow MF uses Figma. 17 The parties are agreed that GrowMetric's Figma account was set up by Mr Parthy in his role as Chief Technology Officer and as such he became an "administrator". Mr Karunaratne understood that he was also an administrator prior to 28 April 2023. Administrators have permissions to give or revoke access to Grow MF staff. 18 Whether Grow MF had reimbursed Mr Parthy for the costs associated with Grow MF's Figma account was a matter in issue between the parties. 19 It is these three technological accounts that the applicant alleges Mr Parthy has locked the applicant out of access. The applicant characterises Mr Parthy's conduct, which occurred after Mr Parthy resigned on 24 April 2023 but while he was still working for Grow MF, as follows: • Removed Mr Karunaratne as "owner" of the GrowMetrics GitHub Account and Mr Karunaratne's access altogether; • Removed access for all Grow MF staff (other than potentially Ms Melanie Lim) to critical parts of the GrowMetrics GitHub Account including the parts housing the source code for GrowMOFO 2.5 and Growmetrics 3.0 and otherwise limit their ability to perform certain functions; • Removed Mr Karunaratne as "administrator" of the GrowMetrics Figma Account and his access altogether; • Removed access for all Grow MF staff (other than potentially Ms Melanie Lim) to the GrowMetrics Figma Account; • Changed the password for the GrowMetrics Development Environment and not disclose the new password to Grow MF; and • Mr Parthy may have also moved the GrowMetrics Development Environment from Grow MF's Amazon Web Services. 20 Grow MF contends the GrowMetrics accounts are essential for Grow MF to operate its business and full access is required to efficiently and effectively: (a) fix any bugs in the current live version GrowMOFO 2.5; (b) test any changes to the source code; (c) develop or test the new version GrowMetrics 3.0; and (d) demonstrate the current or new version to clients. 21 Mr Karunaratne deposes to the harm suffered by Grow MF caused by the inability to access its accounts on GitHub, the production environment (QA environment) and Figma. This harm includes an inability to service customers, reputational harm, payment of overheads and staff salaries (approximately $3,000 per day) to developers unable to perform meaningful work and loss of potential revenue from new clients, including a proposed new service agreement worth between $500,000 to $750,000 in revenue.

Primary Judge's Decision 7 By an Originating Application and Statement of Claim filed on 2 May 2023 the respondent alleged the applicant breached his obligations to Grow MF under the Corporations Act 2001 (Cth) and his employment contract, and that he had otherwise breached his fiduciary obligations to the respondent, by (inter alia) removing the access of staff to Grow MF technology systems. The respondent sought permanent restorative and restraining orders against the applicant. 8 Materially before the primary Judge, the respondent also sought the following interlocutory relief: 1. Within 2 days of this Order, the Respondent: (a) Restore Mr Sohan Karunaratne's GitHub account "@sohank88" as an "owner" of the Grow Metrics GitHub Account and notify the Applicant's lawyers; and (b) Provide Mr Sohan Karunaratne with access as an administrator to the Growmetrics Figma Account and notify the Applicant's lawyer; and (c) Provide the Applicant's lawyers with a copy of all material held on the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment). 2. Until the hearing and determination of this proceeding or until further order, the Respondent (whether by himself, his employees or agents or otherwise howsoever) be restrained from, without the licence or authority of the Applicant or order from the Court: (a) accessing using in any manner whatsoever; (b) reproducing (other than for the purposes of this proceeding); (c) deleting, destroying, concealing or modifying, or taking any step which is likely to impede the recovery of; (d) disclosing to any third party (other than legal advisors for the purposes of this proceeding), the material held in the Grow Metrics GitHub Account, the Growmetrics Figma Account, the Growmetrics Production Environment (referred to by the Respondent as the Growmetrics QA Environment) and / or the Growmetrics Slack Development Account. 9 The applicant submitted that he alone had intellectual property rights to some of the technology systems of Grow MF. This was disputed by the respondent. 10 In considering the interlocutory relief sought, the primary Judge referred to the well-established principles referable to granting an interlocutory injunction as explained in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57, at [19] (per Gleeson CJ and Crennan J) and at [65]-[72] (per Gummow and Hayne JJ); and Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238, at [44]-[74] (per Dowsett, Foster and Yates JJ). 11 Her Honour was satisfied that the respondent had demonstrated that it had a prima facie case against the applicant warranting interlocutory relief. Her Honour was also satisfied that, on the balance of convenience, an interlocutory injunction should be granted, because it appeared that the applicant had breached his duties to the respondent and the terms of his employment contract by removing access to relevant GrowMetric accounts and refusing to restore that access. 12 Her Honour noted that, at that time, the applicant was no longer employed by the respondent, but had retained unauthorised control over the copyright works and confidential information of Grow MF. 13 The respondent submitted before the primary Judge that removal of access to GrowMetrics accounts prevented Grow MF from conducting its business, servicing clients, developing a new and approved application, and promoting its business to new customers. Her Honour was satisfied that this removal of access was seriously harming Grow MF's commercial interests. 14 The primary Judge found no evidence that the applicant had legitimate reason for preventing staff of the respondent accessing the relevant technology accounts. Her Honour was further satisfied that the applicant would not be prejudiced by the grant of the restraining orders sought by the respondent against him. 15 Her Honour concluded: 41 In order to preserve the GrowMetrics accounts, and in particular given Mr Parthy's claims as to his alleged intellectual property rights contained within the GrowMetrics accounts, I sought an undertaking on behalf of the applicant that it will not delete, destroy, modify, take any step which is likely to damage any of the material held in the GrowMetrics' GitHub, production development environment (QA environment), Figma, Slack development account or Fireflies account. 16 The interlocutory injunctive relief sought by the respondent was granted.

Submissions and Evidence IN THE LEAVE TO APPEAL 17 In seeking leave to appeal the decision of the primary Judge, the applicant was self-represented and filed no written submissions. He relied on the following material: (1) Affidavit of Aninda Parthy filed on 20 May 2023; and (2) Affidavit of Aninda Parthy filed on 23 May 2023. 18 At the hearing, applicant made oral submissions, in summary as follows: He did not agree para 2 of the primary decision, as not all the relevant code was used by the staff or customers of Grow MF. Although he had removed access by staff of Grow MF to certain technology systems, this had no effect on the respondent's business. Paragraph 3 of the primary decision was incorrect, to the extent that the primary Judge accepted that there was a contract between Grow MF and the applicant. There was no contract between the applicant and Grow MF at the relevant time, as the Chief Executive Officer of Grow MF had not been appointed at the time, and the applicant did not recall signing the contract. It followed that the alleged contract of employment was fabricated. Paragraph 10 of the primary decision was incorrect as not all the staff had their access to relevant technology systems removed. Other members of the development team at the respondent could create the relevant environment. Further the Chief Executive Officer of Grow MF did not need to access the relevant systems. At para 35 of the primary decision her Honour identified that the applicant no longer had authorised control over the copyright and confidential information as he was no longer employed by the respondent. This was incorrect because the applicant was authorised to keep his intellectual property in relevant code while he was owed compensation for the creation of the code. In particular the applicant relied on email correspondence as follows: The applicant was prejudiced at the hearing before the primary Judge because he had insufficient time to consider evidence produced by the respondent (namely material filed at 6:49 am on 4 May 2023, which was the day of the hearing before the primary Judge). 19 The respondent filed written submissions and relied on the following material: (1) Affidavit of David Jackson filed on 30 June 2023; and (2) Affidavit of Sohan Karunaratne filed on 12 July 2023. 20 The respondent submitted in summary: Neither of the two grounds on which the applicant relied established that the primary decision was attended by sufficient doubt warranting the grant of leave to appeal. Mr Parthy made two Grow MF staff members an "owner" of the GrowMetrics Github Account, which allowed the respondent to restore access by Mr Karunaratne. Grow MF did not require the applicant to take any further steps to comply with Orders 1(a) and 1(c) made by the primary Judge. The applicant had not provided any evidence to suggest that the respondent's evidence before the primary Judge was unreliable. There was no evidence of injustice that the applicant would suffer if leave to appeal were refused. The appealed Orders were unlikely to affect the scope or outcome of the substantive proceedings. Grow MF had access to the GrowMetrics GitHub Account. Because the applicant had not complied with order 1(c), by 18 May 2023, Grow MF was able to develop a workaround, and did not press for the applicant to take any further steps to comply with order 1(c). The applicant must show an error in the exercise of discretion by the primary Judge. It was insufficient that the Court might be persuaded that it would or might have made a decision different from that of the primary Judge. The applicant did not provide any basis for restraining Grow MF's access to the relevant technological accounts. The conduct of the applicant meant that Grow MF could not maintain and update the version of its software in commercial use, and could not efficiently develop a new version of its software. The hearing before the primary Judge was an urgent duty matter, because of the detrimental effect on the respondent's business caused by the conduct of the applicant. To that extent the applicant was in no position to complain that he was given insufficient time to prepare for the hearing before her Honour. The applicant had not identified any further evidence or argument which he would have put before the primary Judge.

Consideration 21 The Full Court in Décor Corp Pty Ltd v Dart Industries Inc [1991] 33 FCR 397 at 398 explained the issues to which the Court should have regard in considering an application for leave to appeal an interlocutory decision, including: whether, in all the circumstances, the primary decision was attended with sufficient doubt to warrant its being reconsidered by the Full Court; and whether substantial injustice would result if leave were refused, supposing the decision to be wrong. 22 In this case the primary Judge had exercised her discretion to issue interlocutory orders 1(a) and 1(c). 23 In considering whether leave to appeal ought be granted it is appropriate to have regard to the grounds on which the applicant relies, being (I understand) the basis on which the applicant contends that the primary decision was attended by error.

Ground 1 24 In ground 1 the applicant claimed that he did not need to complete any action for orders 1(a) and 1(c) to be completed. 25 In his affidavit filed on 12 July 2023, Mr Kurunaratne deposed at para 9: (a) My access as an 'owner' of the GrowMetrics GitHub Account was restored on or around 4 May 2023. (b) My access as an 'administrator' of the GrowMetrics Figma Account was restored on or around 6 May 2023. (c) Mr Parthy has not provided Grow MF or its lawyers with a copy of all material held on the GrowMetrics Production / QA Environment. On around 18 May 2023, Grow MF devised and implemented a 'workaround' solution that involved creating a new Production / QA environment using Grow MF's existing account with Amazon Web Services (AWS) account, a new AWS account that Grow MF set up and the code that was then available to Grow MF through the GrowMetrics GitHub Account (due to Mr Parthy's compliance with order 1(a) of the Interlocutory Orders). As a result of that workaround solution, Grow MF has enough of the material that was held on the GrowMetrics Production / QA Environment. 26 On or before the day of the hearing before the primary Judge Mr Karunaratne had regained access to at least one of the technology systems, namely GrowMetrics GitHub. The applicant had not restored access to the respondent to other relevant technology systems. The evidence of Mr Kurunaratne was that, as at 12 July 2023, the applicant had not complied with order 1(c) of the primary Judge, although the respondent had managed a "workaround" solution. 27 The primary Judge had unfettered discretion to order the applicant to restore access to the respondent, given the apparent control the applicant had in respect of those technology systems. Notwithstanding the evidence that Mr Karunaratne had regained access to the Grow Metrics GitHub account on or about 4 May 2023, and the subsequent "workaround" developed by the respondent, I am not persuaded that the applicant has established a serious question to be tried of error on the part of the primary Judge in respect of orders 1(a) and 1(c). I particularly take this view given the evidence before the primary Judge of the history between the parties and the apparent earlier conduct of the applicant in seizing control of the respondent's systems and denying access to those systems to Grow MF staff. 28 To the extent that the applicant contends that Mr Karunaratne did not require access to the relevant technology accounts, and for that reason her Honour erred in respect of order 1(a) and 1(c), I consider that this contention lacks merit.

Ground 2 29 Further, I am not satisfied that the Mr Parthy has shown there is a serious question to be tried of error on the part of the primary Judge concerning alleged unreliability of evidence adduced by Grow MF before the primary Judge. 30 At the hearing before me the applicant submitted that he had had insufficient time to review, in particular, the affidavit of Mr Karunaratne filed on the morning of the interlocutory hearing before her Honour. The applicant identified allegedly inaccurate information in Mr Karunaratne's affidavit, as follows: MR PARTHY: So point - let me just double check I have got the right paragraphs. So paragraph 10: The developers do not have access to part of the ..... account. So that point, the developers did have access to GrowMOFO 2.0 Stable as referred - which they referred to as 2.5. They had a local copy of version 3.0, so they had 30 access to everything, and I did not remove access from the development team at all. And then there's some contention - so paragraph 11, there's some contention around whether there's a production environment or not, which is quite important, because the production environment kind of implies that it was used by clients, but they contradict themselves because they actually say it was - it was used for testing and 35 demonstration purposes, so actually they contradict the term "production environment" themselves and it's actually a QA environment. It was always a QA environment. That was only really used by myself and ..... And then paragraph 16, about the GrowMetrics Figma account, I was not told I was reimbursed for this cost until the hearing, so I actually think that that order could be reworded, 1(b), because it makes it sound like I had removed access, but actually, I just wasn't reimbursed for it, so that's the reason. I ..... trying to reduce my cost by reducing the licences down to one, which is myself. And then paragraph 18, the contractor agreement is in dispute ..... And that's all, yes. (p 18 lines [24] - [44]) 31 Mr Parthy did not explain how this evidence influenced the primary Judge's decision to order interim relief in favour of Grow MF, or further why the respondent's evidence was allegedly unreliable. Furthermore, and importantly, no alternative evidence adduced by the applicant demonstrating the unreliability of the respondent's evidence before her Honour. 32 Finally, and in the circumstances of an urgent interlocutory duty hearing, the applicant did not establish how he suffered injustice from the primary Judge relying on the evidence before her Honour.

Conclusion 33 The applicant has not demonstrated a serious question to be tried of error on the part of the primary Judge referable to the grounds of his application for leave to appeal. 34 As I noted earlier, I am also satisfied that the balance of convenience favoured the respondent, where evidence supported a finding that it could not effectively operate its business without access to the relevant accounts, and it was on that basis that the interim injunctive orders were made by her Honour. 35 No injustice to the applicant was demonstrated by him in respect of the orders made by her Honour, even assuming them to be wrong. 36 In my view leave to appeal the decision of the primary Judge should not be granted. 37 The applicant should pay the costs of the respondent, such costs to be taxed if not otherwise agreed. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Collier.

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