RAINDALE HOLDINGS PTY LTD -v- SIGMA POWER SERVICES PTY LTD [2025] WASC 260 | Case summary

Supreme Court of WA|2025-06-30

For the reasons above, I am not satisfied that the plaintiff has demonstrated on an objective basis that all the facts necessary to give rise to a right to sue the defendant for the potential causes of action advanced may be able to be established. The evidence adduced in support of the application does not take the existence of the potential causes of action beyond a mere allegation, assertion, conjecture or suspicion, in my view. As such, the threshold issue of whether the plaintiff may have a cause of action against the defendant has not been met.
Having reached this conclusion, the plaintiff's application should be dismissed, and it is not necessary for me to consider the other threshold issues raised by the defendant in opposition to the application. However, for completeness I will do so.

Whether the plaintiff has made reasonable enquiries for the purpose of obtaining sufficient information to enable it to decide whether to commence proceedings

Whether the appellant has been unable to obtain sufficient information to enable it to make the decision to commence proceedings

The defendant refers to the plaintiff's solicitors letter dated 14 August 2023 to the directors and secretary of the defendant,[80] in which the details of the former employees' alleged breaches were set out, demand made in relation to delivery up of all confidential information of the plaintiff, amongst other things. The letter concluding 'Rest assured that we are instructed to institute proceedings regardless of the arrangement that SPS has come to with the employees referred to above.'
Whilst such a statement, considered by itself, may suggest that the plaintiff has already decided to take proceedings, I note that the claims made by the plaintiff in that letter is that the defendant induced the former employees' breach of contract, statutory and common law duties and that the defendant was liable to account for any income realised as a result of 'inducting' [sic] such breach. No reference is made to knowing assistance or participation or involvement in the former employees' breaches, as advanced in the pre-action discovery application.
A letter in similar terms was sent to Mr Ali, also dated 14 August 2023,[81] which concluded with the statement 'Rest assured that we are instructed to institute proceedings regardless of the arrangement that you have come to with SPS.' That letter does not address the plaintiff's potential claims against the defendant.
In a letter from the plaintiff's solicitors to the defendant's solicitors dated 1 November 2023,[82] the plaintiff's solicitors stated:

... our client remains of the view that evidence exists of breaches of contracts of employment such that would entitle them to damages if they were successful at trial. In the circumstances all that remains is for a determination of the commerciality of such a path and to that extent we have been instructed to bring an application for pre-action discovery where there is some question as to whether or not a sufficient level of damage will be able to be established.

This letter does not refer to the potential causes of action the subject of the application for pre-action discovery. Whilst this may be relevant to the issue of conferral and costs, in my view, it does not suggest that the plaintiff has already made its decision to take proceedings in relation to the causes of action advanced for the purpose of the application.

For these reasons, I am not satisfied that the plaintiff has demonstrated on an objective basis that all the facts necessary to give rise to a right to sue the defendant for the potential causes of action advanced may be able to be established. In my view, the evidence adduced in support of the application does not take the existence of the potential causes of action beyond mere assertion, conjecture or suspicion.
As such, the threshold issue of whether the plaintiff may have a cause of action against the defendant has not been met, and the plaintiff's application for pre-action discovery should be, and is, dismissed. An order will be made to that effect.
I will hear from the parties in relation to the costs of the application. Subject to hearing from the parties, there does not appear to be any reason why costs should not follow the event and why the plaintiff, having been unsuccessful, should not pay the defendant's costs of the application, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Scanlan v 2-4 McCabe Pty Ltd [2023] WASCA 135 (Scanlan v 2-4 McCabe) [46] - [51] (Beech, Hall JJA and Lundberg J). See also Downer Utilities Australia Pty Ltd v Alinta Energy Transmission (Chichester) Pty Ltd [No 2] [2023] WASC 1 (Downer Utilities v Alinta Energy [No 2])[18] - [20], [23] - [27], [29] - [32] (Archer J); BWS v ARV [No 2] [2021] WASCA 62 [27] - [37] (Murphy, Mitchell and Vaughan JJA); Kelbush Pty Ltd v Australia and New Zealand Banking Group Limited [2016] WASCA 14; [2016] 49 WAR 374 (Kelbush v ANZ) [65] - [71], [120] - [124] (Mitchell J), [1], [7] (Martin CJ and Buss JA agreeing); BWS v ARV [No 2] [2021] WASCA 62 [27] - [37] (Murphy, Mitchell and Vaughan JJA).

[3] Kelbush v ANZ [67] - [71], referring to Waller v Waller [2009] WASCA 61 [2] - [4], [75]. See also BWS v ARV [No 2] [32] - [33].

[4] Hirschberg (ATF LPH Developments Keegan Street Trust) v Jameson Moore Pty Ltd [2018] WASC 348 (Hirschberg) [34] (Smith J), citing The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146 (New South Wales Solicitors Mutual Indemnity Fund [No 2]) [16] (McLure JA, Miller JA agreeing).

[5] New South Wales Solicitors Mutual Indemnity Fund [No 2] [16].

[6] Hirschberg [35] - [36], [49], citing The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146 (New South Wales Solicitors Mutual Indemnity Fund [No 2]) [16], [17].

[7] Hirschberg [34], citing New South Wales Solicitors Mutual Indemnity Fund [No 2]) [14].

[8] New South Wales Solicitors Mutual Indemnity Fund [No 2]) [14].

[9] See Downer Utilities v Alinta Energy [No 2] [67] - [68] (referring to BJ Bearings Pty Ltd v Whitehead [2016] VSC 44 [19], [33] - [34] (Hargrave J) and [71] (referring to Morton v Nylex Ltd [2007] NSWSC 562 [33] (White J)); St Georges Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 [26(f)], approved in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 [43]; Quanta Software International Pty Ltd v Computer Management Services Pty Ltd [2000] FCA 969 [33] - [34] (Sackville J)

[10] Morton v Nylex Ltd [33] and the authorities referred to.

[12] BWS v ARV [No 2] [35], referring to McCarthy v Dolpag Pty Ltd [2000] WASCA 106 (McCarthy v Dolpag) [13]; Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33 [82]; Kelbush v ANZ [120].

[13] Downer Utilities v Alinta Energy [No 2] [30].

[14] The first eight factors were identified in Central Exchange v Anaconda Nickel [82] - [83] (Steytler J (as his Honour then was)) and endorsed in Kelbush v ANZ [120] (Mitchell J (as his Honour then was) Martin CJ and Buss JA agreeing). Mitchell J in Kelbush v ANZ [121] added the additional factor, numbered as the ninth factor in the list.

[16] Greentree Affidavit [21], 'CCG-12', [24], 'CCG-14'.

[17] Greentree Affidavit [7], 'CGG-2', [8], 'CGG-3', [11], 'CGG-4', [12], 'CGG-5', [13], 'CGG-6', [14], 'CGG-7', 'CGG-8', [15], 'CGG-9', [16], 'CGG-10', [17], 'CGG-11'.

[18] Greentree Affidavit [29] - [30],'CGG-14'.

[19] Greentree Affidavit [26] - [27], 'CGG-12'.

[20] Contract of employment of Dawood Sajjad signed 9 July 2020, Greentree Affidavit [21], 'CGG-12' (Sajjad Employment Contract) and Contract of employment of Usman Ali signed 13 May 2022, Greentree Affidavit [24], 'CGG-14' (Ali Employment Contract), cl 4.4(d).

[21] Sajjad Employment Contract and Ali Employment Contract, cl 4.4(f)(i).

[22] Sajjad Employment Contract cl 25.1 and Ali Employment Contract, cl 24.1.

[23] Sajjad Employment Contract cl 26.1 and Ali Employment Contract, cl 25.1.

[24] Sajjad Employment Contract cl 31.1 and Ali Employment Contract, cl 30.1.

[25] Greentree Affidavit [32] - [33], 'CGG-15A' - 'CGG-15E'.

[26] Greentree Affidavit [6], 'CGG-2', [11], 'CGG-4', [22], 'CGG-13', [23], 'CGG-14'.

[27] Greentree Affidavit [12], 'CCG-5'.

[28] Greentree Affidavit [13], 'CGG-6', [17], 'CGG-11'.

[29] Greentree Affidavit [32] - [33], 'CGG-15F', 'CGG-15G'.

[30] Greentree Affidavit [34], 'CGG-16'.

[31] Greentree Affidavit [14] - [16], 'CGG-7' - 'CGG-10'.

[32] Greentree Affidavit [18], 'CGG-3', 'CGG-11', [19], 'CGG-8'.

[34] Greentree Affidavit [37] - [38], 'CGG-17'.

[35] Greentree Affidavit [40] - [42], 'CGG-18'.

[36] Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373, 397.

[37] Ancient Order of Foresters in Victoria Friendly Society Limited v Lifeplan Australia Friendly Society Limited (2018) 360 ALR (Ancient Order of Foresters).

[39] Ancient Order of Foresters [13] (Kiefel CJ, Keane and Edelman JJ), [75] (Gageler J).

[40] Referring to Chaffey Services Pty Ltd as trustee for Cataby Services Trust, t/a Cataby Services v Doble [No 4] [2023] WASC 361 (Chaffey v Doble [No 4]) at [248] ‑ [250] (Tottle J) and the authorities referred to.

[41] Chaffey v Doble [No 4] [311] - [313].

[42] Farah Construction Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89, [160] (Farah Construction v Say-Dee).

[45] Farah Construction v Say-Dee [179].

[46] Ancient Order of Foresters [67] - [69].

[47] Ancient Order of Foresters [71].

[48] Ancient Order of Foresters [76].

[49] Ancient Order of Foresters [76] (Gageler J), quoting a passage from Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427, 457 ‑ 458 [106] (footnote omitted).

[51] Chaffey v Doble [No 4] [203] - [212].

[52] Nottingham University v Fishel [2000] EWHC 221; [2000] IRLR 471, 483 (Elias J) cited with approval in Woolworths Ltd v Olson [2004] NSWSC 849; (2004) 184 FLR 121 and Anderson v Canaccord Genuity Financial Ltd [2022] NSWSC 58, [1839].

[53] Chaffey v Doble [No 4] [206] (Tottle J), citing Hospital products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 [68].

[54] Chaffey v Doble [No 4] [207], citing Breen v Williams [1995] HCA 63; (1996) 186 CLR 71, 82 (Brennan CJ).

[56] Manildra Laboratories v Campbell [2009] NSWSC 987 [81] - [83] (McDougall J), referred to by Tottle J in Chaffey v Doble [No 4] [210].

[57] Chaffey v Doble [No 4] [212], citing Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 [230] - [232], (Foster J); Anderson v Canaccord Genuity Financial Ltd [1843]; Nottingham University v Fishel.

[58] See Chaffey v Doble [No 4] [215].

[59] See Native Extracts Pty Ltd v Plant Extracts Pty Ltd (No 2) [2024] FCA 106 (Native Extracts v Plant Extracts (No 2)) [92] and the authorities referred to.

[60] Moorgate Tobacco Co Ltd v Phillip Morris (No 2) [1984] HCA 73; (1984) 156 CLR 414, 438 (Deane J, Gibbs CJ, Mason, Wilson and Dawson JJ agreeing); Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326; [2007] NSWCA 172 [101] (Campbell JA, McColl JA agreeing).

[62] Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) [1987] FCA 266 (1987); 14 FCR 434, 443.

[64] Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317, 334 (Kirby P).

[65] Chaffey v Doble [No 4] [250], citing Dal Pont G E, Law of Confidentiality (2nd ed, 2015) [5.30].

[73] Chaffey v Doble [No 4] [232] - [233].

[74] Chaffey v Doble [No 4] [234], citing R v Byrnes & Hopwood [1995] HCA 1; (1995) 183 CLR 501, 514 - 515 (Brennan, Deane, Toohey and Gaudron JJ).

[75] Yorke v Lucas (1985) 158 CLR 661, 670 (Mason ACJ, Wilson, Deane and Dawson JJ).

[76] Australian Securities and Investments Commission v Adler [2002] NSWSC 171; (2002) 168 FLR 253.

[77] Australian Securities and Investments Commission v Adler at [209].

[78] Chaffey v Doble [No 4] [305] referring to ASIC v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181, [406] (White J).

[80] First De Silva Affidavit [2] - [3], 'JKD-1'.

[81] Second De Silva Affidavit [2] - [3], 'JKD-9'.

[82] First De Silva Affidavit [9], 'JKD-3'.

It is now settled that in order to make out a case for protection in equity of allegedly confidential information, a plaintiff must satisfy certain criteria. 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 also 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: Saltman Engineering Co Ltd v Campbell Engineering Co (1948) 65 RPC 203 at 215; The Commonwealth v John Fairfax and Sons Ltd [1980] HCA 44; (1980) 147 CLR 39 at 50-51; O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 at 326‑328. It may also be necessary, as Megarry J thought probably was the case (Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 48), and as Mason J (as he then was) accepted in the Fairfax decision was the case (at least for confidences reposed within government), that unauthorised use would be to the detriment of the plaintiff.

RAINDALE HOLDINGS PTY LTD -v- SIGMA POWER SERVICES PTY LTD [2025] WASC 260 (30 June 2025)

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