PHOENIX EAGLE COMPANY PTY LTD -v- TOM McARTHUR PTY LTD [2017] WASC 130 (12 May 2017)

(3) In inventing and commercialising a product called the McArthur Pawpaw Extract, Mr McArthur used confidential information developed and owned by Phoenix Eagle and disclosed to or obtained by him. In particular, the plaintiff described, in part, processes used by the first defendant in the manufacture of its products.

2 The defendants say the information which forms the basis of these pleas is confidential, and that the plaintiff should be restrained from using that information. They seek relief including restraining the plaintiff's legal advisers from continuing to act.

3 The defendants say that Mr McArthur is the only possible source of some of that information. Phoenix Eagle does not dispute that Mr McArthur has given information to it and its legal advisers. It is useful to identify the position of Mr McArthur by reference to the plaintiff's pleadings in this action.

5 It is the owner of intellectual property relating to products based on inventions of Thomas McArthur. The products contain fruit or vegetable extract as the active ingredient.

6 In or about June 1999, Mr McArthur formulated a process for making compositions derived from fruit or vegetable extract (the OPAL Process). In or around 2001, Mr McArthur began preparing compositions using a process named the OPAL Process and conducting trials of products created in that process (OPAL products).

7 In or about March 2002, Mr McArthur and Mark Richardson agreed to proceed with a proposal to form a company to commercialise Mr MacArthur's inventions. Between March 2002 and 24 June 2002, Mr Richardson informed Mr Brickhill of the proposal, and invited him provide legal advice on the proposal and to invest in the proposed company. Mr Brickhill was then a practising lawyer.

8 On 24 June 2002, Mr McArthur, his wife Lynda McArthur, and Mr Richardson executed a Founders Agreement. Relevantly, Mr McArthur agreed to confer all rights to his present and future intellectual knowledge. On 26 June 2002, Phoenix Eagle was incorporated pursuant to the Founders Agreement. Soon after the creation of Phoenix Eagle it resolved to protect its intellectual property.

9 Mr McArthur and his wife were engaged as employees. Mr McArthur was a director of Phoenix Eagle until May 2008.

10 Between mid-2003 and 16 March 2005, Phoenix Eagle prepared a business plan to attract equity investment and in March 2005 began to provide the business plan to potential investors. Between August 2005 and March 2006 Phoenix Eagle undertook equity capital raising, and raised an amount of $1.08 million before costs.

11 After its incorporation, Phoenix Eagle undertook work to obtain patent protection for the OPAL process, OPAL products and related intellectual property, and to investigate, test and develop the OPAL process and products, and to refine the manufacture and established methods of large-scale production of OPAL products. Work was focussed particularly on a product known as OPAL A Filtrate.

12 Between March 2006 and May 2008 disputes arose between Mr McArthur and other directors of Phoenix Eagle over matters including ownership of the rights to a method of making soap and a proposal by Phoenix Eagle to enter into a licence agreement.

13 On 21 May 2008, Mr McArthur resigned as a director and ceased to work as an employee of Phoenix Eagle, notifying Phoenix Eagle on 7 August 2008 that he had resigned.

14 On 26 June 2008 Phoenix executed a licence agreement with Health Focus Products Australia (HFPA), giving HFPA exclusive rights to market and sell in Australia products based on Phoenix Eagle's intellectual property. In about April to June 2009 HFPA began producing and marketing cosmetic products containing an OPAL product, OPAL A.

15 In about August 2010, the chairman of HFPA and other directors met Tim Noonan, then a reporter for a current affairs programme, Today Tonight, that was broadcast on Channel 7. Mr Noonan agreed to produce a story for Today Tonight on the products, and Mr McArthur agreed to participate in filming it. Mr McArthur provided Today Tonight with information he had obtained through his position as a director of Phoenix Eagle, including photographs.

16 After filming had been completed, but before the story had been aired, Mr Brickhill advised Mr McArthur that the story would create a commercial opportunity and convinced him to take advantage of that opportunity by starting his own company. Mr Brickhill and Mr McArthur formed a company jointly to exploit the opportunity.

17 In late September 2010, Mr Brickhill instructed Mr Noonan to publish an email address for enquiries resulting from the first Today Tonight story; the address had no connection with either HFPA or Phoenix Eagle and neither of them would have access to it.

18 The Today Tonight story was aired on 4 October 2010, with a follow up story the next day. The programme informed viewers that details could be found on the programme website. A paraphrased transcript of the story was posted on the Today Tonight website.

19 On 6 October 2010, Mr Brickhill and Mr McArthur caused the first defendant to be registered as a proprietary company, then under the name MYLJS Pty Ltd. The contact details provided on the Today Tonight website were to addresses associated with the first defendant.

20 On or about 13 October 2010, Mr Brickhill and Mr McArthur consulted a solicitor in Perth to obtain advice on how to produce a pawpaw composition product which would have similar properties to OPAL A but not infringe the Australian patents held by Phoenix Eagle. Later on 13 October, a meeting was held to discuss the development of the business, attended by Mr McArthur, Mr and Mrs Brickhill and others. On 19 October the name of the company was changed to Tom McArthur Pty Ltd.

21 The plaintiff alleges that the purpose of incorporating and operating Tom McArthur Pty Ltd was to exploit the opportunity created by the Today Tonight stories by manufacturing and selling products that could be represented as producing the therapeutic effects of the OPAL A product referred to in those stories.

22 In October 2010, Tom McArthur Pty Ltd commenced marketing products and in or around December began receiving orders and payments.

23 Between October 2010 and January 2011, TMPL employed a pharmacist to provide technical assistance to Mr McArthur in creating a variant composition. In January 2011 Mr McArthur, with that assistance, developed a variant composition.

24 In summary, the plaintiff submits that Mr McArthur and Mr Brickhill conceived a deliberate design to divert the commercial opportunities arising from the television programme to a company they would incorporate. To implement this design, they required a product that would meet the description of that featured on the programme. At the direction of Mr Brickhill, Mr McArthur and Mr Proud invented a product using information obtained by Mr McArthur by virtue of his position as a director and employee of Phoenix Eagle, and in disregard of the fact that he had assigned all of his future inventions to Phoenix Eagle.

25 Phoenix Eagle now seeks relief against Tom McArthur Pty Ltd, Mr Brickhill and his wife Laura Brickhill (in her personal capacity and as trustee of the TLAJ Trust) for the use of its confidential information. To a large extent, its claim is based on the conduct of Mr McArthur in breach of his duties to the plaintiff as a result of the Founders Agreement, and his position as an employee and director of the plaintiff. The plaintiff does not rely on breach of its patent.

27 The defendants relied on an affidavit of Mrs Brickhill, sworn 10 October 2016. Mrs Brickhill deposes:

(1) She is a director of the first defendant and trustee of the TLAJ Trust.

(2) Mr McArthur was a director of Tom McArthur Pty Ltd from its incorporation on 6 October 2010 to 25 March 2013, and a shareholder until 25 March 2014. He was employed by the first defendant as a production manager and brand ambassador until 15 October 2013.

(3) The first defendant trades as McArthur Natural Products and sells skin and hair products which contain a pawpaw extract known as McArthur Pawpaw Extract.

(4) Mrs Brickhill believes the McArthur Pawpaw Extract was the invention of Mr McArthur's late wife, Lynda. She bases her belief on statements made by Mr McArthur, and statements made by his daughter.

(5) On 9 May 2012, the first defendant obtained an affidavit from Mr McArthur 'to protect the Company's position in the event that Tom died or became incapacitated'.

(6) The first defendant keeps secret the ingredients and composition of the McArthur Pawpaw Extract, except that it contains pawpaw.

(7) Mr McArthur's employment with the first defendant was terminated by a court appointed receiver and manager in October 2013.

28 Mrs Brickhill attached the affidavit of Mr McArthur, dated 9 May 2012.

29 To the extent that it is relevant, Mr McArthur says the following:

(1) He has made the affidavit because of his health issues which may affect his ability to give evidence in the future. Those issues include vascular disease and early stages of Parkinson's disease.

(2) He outlines the history of his involvement in using and making fruit compositions, with his wife, from about 1963.

(3) In about 1995, Mr McArthur met Mr Richardson. From February to about June 2002, Mr and Mrs McArthur and Mr Richardson discussed how they might go about commercialising the products Mr and Mrs McArthur were making. In about June 2002, they agreed to form a company. They also signed an agreement (the Founders Agreement pleaded by the plaintiff). Mr McArthur attaches a copy of the agreement.

(4) Since early 2001, Mr and Mrs McArthur had been selling products made by them and their cafe, and through a local grocer. They also supply of products to their daughter Janette for sale through her business called 'Natural Alternative Cosmetics Company'.

(5) In about May 2003, Mr Richardson presented another agreement for signing by Mr and Mrs McArthur, and including their daughter as a party.

(6) In about July 2003, Mr Richardson advised Mr McArthur that Phoenix Eagle had applied to patent the process he and his wife had developed.

(7) From about 2003, the relationship between the McArthurs and Mr Richardson deteriorated. It is not necessary to set out the detail of the dispute, but it included concern that production of commercial quantities of products had not eventuated, and remuneration.

(8) Mr McArthur continued as a director until 12 May 2008; he states he was forced to resign.

(9) Mr McArthur suffered a stroke in June 2007. While he was disabled, Mrs McArthur continued to work on the compositions. Mr McArthur says, in effect, that his wife arrived at the process which is now used for the products produced by Tom McArthur Pty Ltd.

30 Mrs Brickhill relies also on an earlier affidavit of Christopher James Terren, a solicitor for the defendants, dated 4 October 2016, for correspondence in which the defendants assert that Mr McArthur has breached equitable obligations of confidence and s 183 of the Corporations Act.

31 Finally, Mrs Brickhill attaches a deed of transfer between Mr McArthur and Tom McArthur Pty Ltd by which Mr McArthur agreed to transfer to the first defendant

all the information (including but not limited to written material), intellectual property, formula, inventions, specifications, know-how and methods:

(a) he has developed, created, produce or possess in the past;

(b) which he obtained through his late wife, Lynda Janette McArthur; and

(c) which he will develop, create, produce or possess in the future,

in relation to any [soap, cosmetic products, topical skin products, and therapeutic products, and extracts to be incorporated into those products].

32 The plaintiff relies upon an affidavit of James Nicholas Lawrence, the solicitor for the plaintiff with carriage of the matter. The affidavit was sworn on 17 October 2016. Mr Lawrence states that in the preparation of the statement of claim, the plaintiff's legal team had regard to a statutory declaration made by Mr McArthur on 11 February 2014 and a large number of documents exhibited to it. He attaches the statutory declaration, but not the exhibits to it. Mr Lawrence offers no explanation about how the plaintiff came into possession of the declaration.

33 The declaration does not explain its creation. Mr McArthur states that he was then the third defendant in proceedings in this court (COR 111 of 2013), but the declaration is not, on its face, prepared for use in those proceedings.

34 The first part of the statutory declaration covers much of the same ground as the affidavit relied on by the defendants. Mr McArthur then sets out his account of the deterioration of his relationship with Phoenix Eagle and Mr Richardson, and the growth of his relationship with Mr Brickhill. He describes the making of the programme with Today Tonight in 2010, and continues [100] - [101]:

After the interview with Tim [Noonan], I had a discussion with Trevor [Brickhill] about the interview and he told me that the Today Tonight program could give me the publicity I needed to start my own company. Trevor said to me that rather than cooperating with HFPA to develop the pawpaw products, with the publicity that would flow from the Today Tonight program, we could start our own company. I needed some time to think about what would be the best option, so I cancelled my arrangements to visit HFPA in Brisbane.

On 29 September 2010, Trevor sent me a letter dated 29 September 2010 by email, telling me that he had set up an email address to receive enquiries resulting from the Today Tonight program. The email address was info@myljs.com.au. Trevor reported on a conversation he had had with Tim Noonan, telling him the product was Lynda's invention. Trevor also invited me to come across to Perth, stay at his house, and discuss plans for the new company.

35 Mr McArthur describes the setting up of Tom McArthur Pty Ltd. Of particular significance in this part of the declaration are:

(1) Mr McArthur sets out his account of visiting Guy Provan, an IP lawyer in Perth, on 13 October 2010 to provide him with details about the manufacturing process of 'Lynda's cream'. Mr McArthur annexes an email that Mr Provan sent following the meeting (one of the exhibits not put before the court in this application). Later in the declaration he exhibits further emails from Mr Provan, dated 8 March and 30 March 2012, regarding intellectual property issues. These emails were sent after solicitors for Phoenix Eagle had alleged that Tom McArthur Pty Ltd was infringing its patent, and (from Mr McArthur's description) at least in part related to possible defences to a claim.

(2) Mr McArthur discusses work done with Mr Proud in adjusting the levels of particular ingredients the formula known as LJ's formula and states the percentage of particular ingredients the final formula. He exhibits an email from Mr Proud recording results of his testing work.

(1) strike out the statement of claim as an abuse of process;

(2) require the plaintiff to file and serve and affidavit identifying the information provided to it by Mr McArthur; and

(3) restrain the plaintiff's legal representatives who have seen or made use of information provided by Mr McArthur from continuing to act.

37 The second order fell away with the affidavit filed by the plaintiff, attaching the statutory declaration of Mr McArthur and attached documents. At the hearing on 20 October 2016, the parties focussed primarily on the application to restrain the solicitors for the plaintiff from continuing to act.

38 I accept the submission on behalf of the plaintiff, that the defendants are seeking final relief in applying to restrain the plaintiff's legal term from further acting.

39 To establish a case for relief for breach of confidence, the defendants must first identify with some specificity the information said to be confidential; they must show that that information has the necessary quality of confidence; and they must show that it was received by the defendant in circumstances which imparted an obligation of confidence: see Coco v A N Clark (Engineers) Limited [1969] RPC 41, 43; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434, 443; West Australian Newspapers Ltd v Bond [2009] WASCA 127 [41] [44].

40 The defendants identify three items of information:

(1) information subject to advice privilege, being information provided to Mr Provan at the meeting on or about 13 October 2010;

(2) information as to the ingredients used by Tom McArthur Pty Ltd in the production of its products; and

(3) information as to the production process used by Tom McArthur Pty Ltd in the production of its products.

41 As to the first, the information is, from its description, information provided by Mr Brickhill and Mr McArthur in the course of a consultation with a solicitor. Although no detailed evidence was given regarding Mr Provan's retainer, Mrs Brickhill states in her affidavit that Mr Provan was engaged to act for the company in October 2010 and provided advice to it from time to time since then: [28]. She further states that neither she nor Tom McArthur Pty Ltd has ever agreed to the disclosure of its instructions to Mr Provan or advice he has given: [29].

42 Mrs Brickhill describes at [12], and [20] - [24] the steps that Tom McArthur Pty Ltd has taken to ensure that the ingredients and processes for the manufacture of its products remain confidential, including the use of confidentiality agreements for employees and the keeping of certain ingredients in unmarked containers and packages.

43 Finally, it is common ground that Mr McArthur was a director of Tom McArthur Pty Ltd from its incorporation. The information he has regarding the meeting with Mr Provan, and the manufacture of the first defendant's products, was obtained in the course of his employment and while a director of the first defendant.

44 In those respects, the evidence of Mrs Brickhill is relevant and admissible. Her evidence regarding these matters was not challenged.

45 The plaintiff did object to the admissibility of the evidence of Mrs Brickhill to the extent that she purported to assert that facts pleaded in the statement of claim are untrue. It is not necessary to resolve that issue of admissibility, as this application turns on more limited questions. The plaintiff has adduced no admissible evidence about the truth of its allegations.

46 In the affidavit of Mr Lawrence, the plaintiff has confirmed that it has been given information by Mr McArthur regarding communications with Mr Provan for the purpose of obtaining legal advice, and that they have information from Mr McArthur about the ingredients and process used in producing the products made by the first defendant.

47 The plaintiff answers the case that it should be restrained from using that information in two ways, each based on what it describes as the 'iniquity principle':

(1) the court should not interpret the ongoing duty of confidentiality owed by Mr McArthur as a director 'as requiring him to keep secret details of his former company's improper and fraudulent conceptions, and its entire existence as a vehicle for exploiting an improper and fraudulent design by means which included deliberate breaches of intellectual property rights';

(2) even if the first defendant had an equitable right of confidentiality, its claim for relief is barred by reason of unclean hands.

48 The 'iniquity principle' is clearly established: see Minister for Immigration and Citizenship v Kumar [2009] HCA 10; (2009) 238 CLR 448 [25] - [26]:

The consideration which impressed the Full Court was that the general law does not protect confidences about such matters as the commission of crimes and frauds. In A v Hayden, when giving their reasons for answering the questions in the case stated and questions reserved by Dawson J to the Full Court, Mason, Wilson, Deane and Dawson JJ concluded that a court will not lend its aid to the enforcement of a contractual obligation of confidentiality undertaken by the Commonwealth, the effect of which would be to obstruct the administration of the criminal law. ...

It may be accepted that similar considerations to those which underpinned the result in A v Hayden apply also in the general law regarding non-contractual and purely equitable obligations of confidence. It has been said both in the courts of Australia and the United Kingdom that the disclosure of an 'iniquity' will not be restrained as the subject matter of an obligation of confidence.

49 The limits of operation of the principle are less clear. A v Hayden [1984] HCA 67; (1984) 156 CLR 532 was concerned with confidentiality that would obstruct the administration of the criminal law. Other cases have referred to disclosure to a third party with a real and direct interest in redressing a crime, wrong or misdeed of public importance: see Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), (445 - 446); Cowell v British American Tobacco Australia Services Ltd [2007] VSCA 301 [34]. Even if something less than that is sufficient, there must be sufficient public interest to overcome the interest a party has in protecting confidential information.

50 The plaintiff submits that the court should find at least a prima facie case of serious impropriety - characterised in its submissions as improper and fraudulent conduct - and possibly a dishonest and intentional breach of director's duties amounting to an offence under s 184(3) of the Corporations Act. There must be some evidentiary foundation for the claim of iniquity before the court will deny protection to what would otherwise be confidential information. Speaking of the displacement of a claim to privilege, the court in Cowell v British American Tobacco Australia Services Ltd said:

... A claim to legal professional privilege in respect of a communication is not displaced merely by making an allegation that the communication was made in furtherance of an illegal or improper purpose. Those who seek to exclude legal professional privilege must have some definite charge, either by way of allegation or affidavit, which must be made in clear and definite terms, and there must be some prima facie evidence that the allegation has a foundation in fact. The court will then exercise its discretion not merely as to the terms in which the allegation is made but also as to the surrounding circumstances for the purpose of seeing whether the charge is made honestly and with sufficient probability of its truth to make it right to disallow the privilege of professional communications [39]. (footnotes omitted)

51 In my opinion, similar principles apply to the allegation of iniquity in this matter, and at that point, the plaintiff fails. It relies solely on the affidavit of Mr Lawrence and the statutory declaration of Mr McArthur made in 2014.

52 The circumstances in which that declaration was made, and how it came into the possession of the plaintiff, remain unexplained. It is materially inconsistent with the affidavit attached to Mrs Brickhill's affidavit. There are issues of admissibility: to the extent the plaintiff seeks to rely on the truth of Mr McArthur's allegations, the document is hearsay; the plaintiff has not attempted to support its admission under s 79C(2) of the Evidence Act 1906 (WA). Those admissibility issues also apply to the affidavit Mr McArthur made in May 2012.

53 Taking all of those matters into account, I am not satisfied that I should make the findings argued by the plaintiff. As a result, even if I were to accept that the iniquity principle creates an exception to a director's ongoing duties of confidentiality, I am not satisfied it has been made out.

54 Further, to restrain the use of the particular confidential information identified in this case would not prevent the plaintiff from maintaining its case that the first defendant wrongly appropriated the commercial opportunity arising out of the Today Tonight programme.

55 The second limb of the plaintiff's response to this application relies on the principle of clean hands. Again, there is the issue of proof.

56 The plaintiff faces another obstacle in that, for the defence to operate, the impropriety complained of must have an immediate and necessary relation to the equity sued for: Heydon JC, Leeming MJ, Turner M, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2014) [3115]. The subject matter of the communication must be the existence or real likelihood of the existence of the iniquity. It is not sufficient if the relationship to the cause of action relied on by the plaintiff is indirect.

57 Finally, I am not satisfied, for the reasons I have given above, that the court should override the privilege of the communications between the first defendant and Mr Provan. The evidence put forward does not satisfy me that there is a sufficient probability of the truth of the plaintiff's claim for me to disallow the privilege in a professional communication between a party and its lawyer.

58 For these reasons I do not accept the plaintiff's claim of iniquity as a defence to the claimed breach of confidence.

59 The defendants then rely on the principle that a litigant should be denied the benefit of using confidential information, so as to ensure that no advantage is gained in litigation arising from a breach of confidence. The defendants refer to the decision of DC Payments Pty Ltd v Next Payments Pty Ltd [2016] VSC 315, where at [75] - [79] Vickery J summarised the authorities (references omitted):

The principle was stated in Terrapin Ltd v Builders' Supply Co (Hayes) Ltd:

'... a person who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential information.'

The principle in Lord Ashburton v Pape outlined in paragraph [29] of these reasons was discussed by the Campbell J (as his Honour then was) in AG Australia Holdings Ltd v Burton, where his Honour stated:

'When a court grants remedy to enforce an equity of confidence, it aims to provide a remedy which ensures that the defendant gains no advantage from there having been a breach of confidence.'

'Now that Mr Burton has talked with Maurice Blackburn Cashman, and provided a draft statement, Maurice Blackburn Cashman is in the situation where it has information which it should never have had. Conscionable behaviour on its part requires that it give up the information it should not have had, and now, in the future, obtain any benefit from having once had that information.

...

The decision of the English Court of Appeal in Lord Ashburton v Pape, which had the effect that the surreptitiously obtained material could not be used at all in the bankruptcy court, illustrates how it is within the scope of the way in which an equity court will enforce an obligation of confidence, to ensure that no advantage is obtained in litigation from the breach of confidence.'

In British American Tobacco Australia Ltd v Gordon & Anor, Brereton J expressed the position as follows:

'Use of confidential information to institute proceedings, in which the same information might subsequently be obtained on compulsory process, is an abuse of information received in, or as a result of a breach of, confidence, and will be restrained by a court of equity.'

In Sullivan & Ors v Sclanders & Anor, where the Plaintiffs argued that the misused documents would have been discoverable and therefore the relief would be futile, Gray J, with whom Prior and Williams JJ agreed, stated:

'The plaintiffs should not be advantaged by what has occurred ... [An] 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.'

60 His Honour also relied, in part on provisions of the Civil Procedure Act 2010 (Vic), and the exclusion of improperly obtained evidence under s 138(1) of the Evidence Act 2008 (Vic). There is no counterpart to s 138 in Western Australia, but the court may, in its discretion, exclude evidence obtained illegally, at least where there has been a serious and deliberate infringement of legal rights: Miller v Miller [1978] HCA 44; (1978) 141 CLR 269, 277; Pearce v Button (1985) 8 FCR 388, 402; Sheldon v Sun Alliance Ltd (1988) 50 SASR 236, 247; Southern Equities Corp Ltd (in liq) v Bond (No 2) [2001] SASC 70; (2001) 78 SASR 554 [109] - [111]; Duke Group Ltd (In liq) v Pilmer (1994) 63 SASR 364, 377. In my opinion, the principles identified by Vickery J should be applied in this matter.

61 The defendants also submit that the prohibition on use of confidential information extends to an 'intellectual' or indirect use: see British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230 [19] - [27].

62 The court has the power to restrain a practitioner from further acting. I adopt the statement of principles by Hollingworth J in GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123 (and see Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561):

(a) The test to be applied in this inherent jurisdiction is whether a fairminded, reasonably informed member of the public would conclude that the proper administration of justice requires that a lawyer should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.

(b) The jurisdiction is exceptional and is to be exercised with caution.

(c) Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause.

(d) The timing of the application may be relevant, in that the cost, inconvenience and impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief.

63 The information identified by the defendants as confidential is relatively limited. They can make no general claim to confidentiality of all information coming from Mr McArthur. I am not satisfied that the appropriate remedy in this case is to restrain the plaintiff's legal representatives. I am, however, satisfied that the plaintiff should be restrained from using the identified confidential information that has been provided to it in pursuing its claim. I considered striking out particular paragraphs of the statement of claim - in particular, pars 98, 108 to 110, and 111. I am not, however, satisfied that I can fully identify those parts of the statement of claim derived from use by the plaintiff of the confidential information it has obtained. The appropriate course in these circumstances is to strike out the whole of the statement of claim with leave to replead.

64 The subpoenas issued by the plaintiff will be set aside. In the peculiar circumstances of this case, it is appropriate to order that the plaintiff is not to issue further subpoenas for production of documents without leave of the court.