Secure Logic Pty Limited v Paul William Noble

Secure Logic's Use of the Material the Subject of Objection

1. Mr Noble's submissions take objection to two main categories of documents. They are the following: 1. Documents that were contained in Exhibits B and C to Mr Devaraj's affidavit of 15 June 2016; these documents were obtained from Mr Noble's work laptop by Mr Guzhevskiy through the 10 May conduct, while Mr Noble was still employed by SL Australia, together with other copies of that material that were exhibited to other affidavits; and 2. Documents that Mr Carson, Secure Logic's technical expert, located on the work laptop together with the forensic image of the personal laptop.
2. It is convenient to give these two categories of documents separate conventional names. The documents in category (a) above were Exhibit SD-3 to Mr Devaraj's affidavit of 15 June 2016. They will be described in these reasons as the "SD-3 documents". The documents referred to in category (b) above are located on USB sticks exhibited to Mr Carson's affidavits of 30 July and 9 August 2019 (being tabs 7, 8, 9 and 10 in Exhibit D). For convenience they will be referred to in these reasons as the "Carson documents". Mr Carson undertook analysis of the work laptop and the forensic image of the personal laptop after Mr Noble delivered them up pursuant to this Court's orders.
3. To the extent that Exhibit 1 describes other documents they may be classified into these same two categories or are derived from documents in these categories.
4. The Carson documents include all the SD-3 documents, and some other documents. A table was provided with Secure Logic's submissions in reply of 21 October 2019 marked "Annexure A". That table conveniently identifies which of the documents fall outside the scope of Mr Noble's objection or whether, for example, the documents were the subject of admissions by Mr Noble.
5. The provenance of the SD-3 documents may be shortly explained. They were obtained by SL Australia through Mr Guzhevskiy looking on Mr Noble's work laptop while he was still in the employment of SL Singapore and downloading material from that work laptop as part of the 10 May conduct. None of that conduct involved any impropriety or contravention of an Australian law. This material was not obtained using the key-logger program. This is self-evident for example from the dating of the emails within the SD-3 documents, which were all sent and received in early May 2016. The Court accepts Mr Guzhevskiy's evidence that he had located and copied the SD-3 documents off the work laptop before activating the key-logger program. Indeed, the key-logger program was only activated for a short period between 18 and 24 May, before Mr Noble discovered it.
6. The Carson documents fall into two categories. The first category is sourced from Mr Carson's examination of Mr Noble's work laptop. The second category is sourced from Mr Carson's examining the forensic images of the personal laptop. Mr Noble delivered up the material in both these categories under the Court orders. Both the categories of Carson documents were therefore obtained lawfully under the Court's processes.
7. As to the first category of Carson documents, obtained from the work laptop, that device was delivered to Mr Carson as a result of Court orders. The order was based on employment contract clause 1.13 that on termination of employment the employee "will be required to return all company property… Including…equipment…documents and computer desks". The employment contract is a sufficient basis, on its own, to support Secure Logic's relief to put this material from the work laptop into Mr Carson's possession for forensic analysis.
8. As to the second category of Carson documents, the forensic image of Mr Noble's personal laptop was obtained by Secure Logic through the Court's orders which were in turn based on Mr Noble's contractual (clause 1.14) and other obligations of confidence. They were not derived from material obtained either using the key-logger software consequent upon the 18 May conduct or from material obtained consequent upon the 23 May conduct.
9. Finally, because of the conclusion reached here the Court does not have to consider the balancing exercise required in Evidence Act, s 138(1) to consider the admission of this material. But even if some key-logger sourced material was to have been included in the material objected to in Exhibit 1, looked at as a whole the material is of high probative value, it bears upon central issues in the case, and any improperly sourced material would be very minor in extent. The material objected to has been admitted into evidence.

Secure Logic's Claims for Relief

1. This section first considers Secure Logic's claims for relief against Mr Noble and Peach Tree Bay, followed by its claims against Mr Pankhurst.

Relief against Mr Noble and Peach Tree Bay

1. Secure Logic seeks relief against Mr Noble both in contract and in equity. Secure Logic's prayers for relief seek orders: (1) for the enforcement of Mr Noble's contractual promises not to misuse information of Secure Logic, and alternatively (2) an injunction restraining Mr Noble from breaching the equitable obligation of confidence that he owed to Secure Logic. And Secure Logic seeks consequential orders for the destruction of all copies of the JP Prospects document, and all copies of the documents from the Fergus folder. Each of these claims for relief will be dealt with in turn.
2. The Claim Based on the NDA. The Court has found that the 30 June 2015 NDA is contractually binding between SL Singapore and Mr Noble, independently of the existence and content of his employment contract with SL Singapore. The NDA is expressed in terms that are independent of any employment contract or other commercial arrangement between the two.
3. Many features of the NDA point to its independent contractual operation. The NDA was separately signed by the parties, notwithstanding an intention to enter into a separate employment contract the same day. The NDA expresses itself as applying beyond the termination of any employment contract. The NDA expresses itself as benefiting Secure Logic entities other than SL Singapore. Nothing in the NDA contradicts its separate operation in parallel to the employment contract, although the NDA adds obligations to an employee in the position of Mr Noble.
4. The NDA definition of "Confidential Information" is set out earlier in these reasons under the heading, "The Non-Disclosure Agreement - 30 June 2015". The NDA protects the confidential information of all the plaintiffs. It is enforceable by SL Singapore on behalf of all members of Secure Logic.
5. The next question is what information in Mr Noble's possession qualifies as Confidential Information within the meaning of the NDA. Both the Fergus folder in the JP Prospects document qualify as "Confidential Information" within the NDA.
6. The Court's findings support the conclusion that documents in the Fergus Folder fall within the NDA's definition of Confidential Information. The Fergus folder documents were all created by employees or officers of Secure Logic or persons engaged to create them for Secure Logic. Moreover, they all relate to the business affairs of the Secure Logic group of companies and their clients.
7. The Court's findings also support the conclusion that the JP Prospects document qualifies as "confidential information" of SL Australia. It was a document created by and for Secure Logic, and contains information relating to the business affairs of the Secure Logic group of companies and their clients.
8. In the NDA Mr Noble undertook the following obligations: to preserve and maintain in confidence the Confidential Information (clause 2.1); not to use the Confidential Information other than in connection with his employment with Secure Singapore (clause 2.1); to immediately upon request return all Confidential Information (clause 4.1); not to use any Confidential Information to assist any business or activity similar to the business of Secure Singapore or any of its related companies (clause 5.1).
9. Mr Noble breached these obligations under the NDA in the following ways. First, Mr Noble's transfer of the information in the Fergus folder onto his work laptop and then onto his personal laptop for his own purposes, for his later use should he leave Secure Logic. The Court has found that this use of the Fergus folder was not to serve Secure Logic's business purposes. This transfer of the Fergus folder information was a breach of clauses 2.1 as it did not serve to maintain and protect Secure Logic's confidence in the information. Moreover, Mr Noble's transfer of this information was for his own advantage and not in connection with his employment of SL Singapore in breach of NDA, 2.1. Mr Noble's transfer of the information in the Fergus folder onto the two laptops was also to enable Mr Noble to use the information as he chose when later in a role which competed with the business of Secure Logic, in breach of NDA clause 5.1.
10. Mr Noble did not immediately return his copies of the Fergus folder stored on his work laptop and his personal laptop when their return was requested. Mr Noble's refusal to comply with these requests meant that Secure Logic had to commence these proceedings to seek their return. Indeed Mr Noble never returned all the information on the personal laptop or the Seagate external drive. This conduct was in breach of NDA, clause 4.1.
11. Mr Noble sent the JP Prospects document to Mr Pankhurst, an employee who he knew was suspended and being investigated for having an association with a business competing with Secure Logic. This failed to preserve and maintain in confidence the document in breach of NDA, clause 2.1. Moreover, this conduct was also a use of Confidential Information as defined in the NDA other than in connection with his employment with SL Singapore in breach of NDA, clause 2.1.
12. The Court has concluded Mr Noble was not performing any work for Secure Logic in sending this email but was providing support to Mr Pankhurst to further Mr Pankhurst's business or activity that was similar to the business of SL Singapore in breach of NDA, clause 5.1.
13. Injunctive relief. Secure Logic seeks orders restraining further breaches of Mr Noble's obligations under the NDA to prevent further misuse of its Confidential Information as defined under the NDA.
14. The applicable law may be shortly stated. A breach of a negative stipulation in a contract such as the NDA provides a prima facie basis for the grant of an injunction and once a breach of such a stipulation is established such an order will ordinarily be made: Doherty v Allman & Dowden ("Doherty v Allman") (1878) 3 App Cas 709; Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; (2001) 185 ALR 152; (2001) 76 ALJR 246; [2001] HCA 70; Orleans Investments Pty Ltd v Mindshare Communications Ltd (2009) 254 ALR 81; [2009] NSWCA 40.
15. Secure Logic has established a breach of what are in substance negative stipulations in the NDA, stipulations that the counterparty Mr Noble not misuse information for purposes other than those of Secure Logic.
16. This is not a case where the Court can be confident that those breaches are at an end and will not be repeated, so that a continuing permanent injunction is no longer appropriate. The strongest arguments for continuation of the present interlocutory injunction are Mr Noble's vigorous opposition to Secure Logic's claim for relief in this part of the case in circumstances where the Court has found he has destroyed evidence that might reveal that he is continuing to use Secure Logic's confidential information. The Court is not confident that without a continuing injunction that Mr Noble will not continue to engage in conduct in breach of the NDA.
17. The case for the grant of injunctive relief is strengthened by the Court's findings as to the serious and deliberate character of Mr Noble's breaches of the NDA and his calculated attempts to hide them. For example, Mr Noble secretly provided advice and services to FirstWave a competitor of Secure Logic when Secure Logic still employed him. And Mr Noble has repeatedly woven a complicated web of untruthful explanations to further conceal what he has done with Secure Logic's confidential information. Without a continuing Court order Mr Noble could not be trusted not to misuse any confidential information that may remain in his possession. The deterrence of a continuing injunction, with the sanctions for breach which accompany it, is necessary.
18. Mr Noble argues that Secure Logic cannot demonstrate that he has breached his NDA obligations, so that an injunction should not be granted against him. But Mr Noble's breaches of the NDA are clear, as is indicated above.
19. Further, Mr Noble argues that an injunction should not go against him because there is no evidence of Secure Logic seeking relief against any other person who may have received its confidential information from Mr Noble. The argument goes that in the absence of third parties being pursued for misuse of the confidential information the Court should infer that there is no present danger of such misuse.
20. This argument is circular. It assumes its conclusion in its premise. It assumes that the explanation for Secure Logic failing to commence proceedings against third parties is that there is no misuse of information by Mr Noble. It then infers that the failure to commence proceedings demonstrates that there is no misuse of information by Mr Noble.
21. But the circularity is readily broken by posing an equally probable explanation for Secure Logic failing to commence proceedings against third parties: that is that the destruction of the two drives on 17 June deprived Secure Logic of the means by which it could proceed against third parties. Without evidence of where Mr Noble exported any confidential information Secure Logic is disadvantaged in not knowing where to start to identify third parties against whom proceedings might be brought.
22. Moreover, Secure Logic obtained interlocutory injunctive relief quickly, in mid-June 2016, before Mr Noble commenced working for FirstWave in July 2016. Mr Noble had little opportunity to use the information before the injunction was granted. Secure Logic has not contended that Mr Noble did not comply with the interlocutory injunction and there is no evidence that he is in contempt of Court interlocutory orders. But all that proves is that Mr Noble appears to comply with Court orders. That is not a basis for dissolving the injunction, because it does not establish what Mr Noble might do in the absence of a Court order.
23. Another relevant consideration is the age of the confidential information. Ordinarily a defendant such as Mr Noble might argue that almost 5 years have passed since the original interlocutory injunction was granted and that the confidential information that it protected may have ceased to be worthy of protection because over time it would have lost commercial value and significance.
24. But such an argument is not persuasive here. Both the Fergus folder and the JP Prospects documents contain a list of potential client contacts which are likely to persist as an available commercial resource for a long time. Although the value of addresses and business contacts would diminish over time, they are likely to be of continuing commercial significance for some years to come.
25. Mr Noble further argues that an injunction should not be granted because Secure Logic has not identified the confidential information with enough precision. The Fergus folder and the JP Prospects documents are sufficiently well identified and were ultimately conceded to be confidential information. But an injunction crafted in wider terms is justifiable here. The breach of the contractual provision in the NDA having been established, one important basis of the grant of the injunction is the Doherty v Allman principle, which allows the injunction to be expressed in terms that replicate the generality of the contractual provision breached, rather than to define the confidential information with any greater precision such as might be expected in Equity's exclusive jurisdiction.
26. The Court will impose permanent restraints in a form consistent with Mr Noble's general contractual obligations under the NDA.
27. And there is no real issue here about the certainty of the obligations imposed by the final injunction proposed. It is in similar terms to the interlocutory injunction already granted and which has been in place since 17 June 2016.
28. Breach of the alleged employment contract. The Court has also found that Mr Noble was employed under an employment contract as he contended. He has taken advantage of that employment contract in his case against Secure Logic.
29. Secure Logic also deploys parts of the employment contract against him. The employment contract, clause 1.14 headed "Confidentiality" provides: "You are not, during or after the termination of your employment, to use or to disclose to anyone (other than in the proper cause of your employment within the Company) any information of a confidential nature relating to the Company or to its business or trade secrets… You must not, during or after your employment, accept as authorised or as your duties as an employee of the Company, reveal to any person, firm, company or organisation or otherwise make use of any of the trade secrets, secret or confidential operations, processes or dealings or any information (other than that within the public domain) concerning the organisation, business, finances, transactions or affairs of the Company (including any bespoke computer packages designed for use by the Company and any other computer information in any form whatsoever) that may come to your knowledge during your employment… These restrictions shall cease to apply to confidential information which has come into the public domain, otherwise and as a result of any breach of this Agreement by you… For the avoidance of doubt, this clause continues in full force and effect after the termination of your employment."
30. Despite the differences in forms of expression clause 1.4 creates substantially the same obligations upon Mr Noble as those identified above in NDA clauses 2.1 and 5.1.
31. The confidential information referred to in the employment contract refers primarily to the confidential information of SL Singapore. But as SL Singapore readily interchanged confidential information with other entities in the Secure Logic group the preservation of the confidential information of SL Singapore implicitly involves the preservation of the confidential information of the other Secure Logic companies.
32. Mr Noble has also breached these confidentiality provisions in the employment contract. The employment contract founds the same arguments for a final injunction based on Doherty v Allman principles as does the NDA.
33. The Equitable Obligation of Confidence. Independent of Secure Logic enforcing contractual promises it has a sound case for the grant of an injunction in Equity's exclusive jurisdiction to restrain a breach of the equitable obligation of confidence. Both the Fergus Folder and the JP Prospects document contain information shared with Mr Noble in circumstances of confidence or was information which he had secretly appropriated to himself in circumstances that he knew to be a breach of confidence.
34. Equity binds Mr Noble neither to disclose nor otherwise use both classes of that information: Moorgate Tobacco Co Ltd v Philip Morris (1984) 156 CLR 414; (1984) 56 ALR 193; (1984) 59 ALJR 77; [1984] HCA 73. Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39; (1980) 32 ALR 485; (1980) 55 ALJR 45 at 50.
35. Destruction Orders. Orders should also be made for Mr Noble to destroy all copies of the documents in the Fergus Folder and any version of the JP Prospects document. The destruction of the two drives on 17 June has left Secure Logic and the Court uncertain as to what has happened to Secure Logic's confidential information. Mr Noble's testimony is not a reliable basis for concluding that he no longer holds Secure Logic's confidential information. An order for destruction is an appropriate measure of additional security for Secure Logic in the face of such uncertainty.
36. It is unclear on the Court's findings what relief, if any, is available against Peach Tree Bay. The Court will hear submissions about that issue when final short minutes of order are being considered.

Relief against Mr Pankhurst

1. Secure Logic's case against Mr Pankhurst is very similar to the case brought against Mr Noble. Findings have been made in the narrative events about Mr Pankhurst's conduct, which establish that he too dealt with Secure Logic's confidential information. Like Mr Noble he denied dealing with Secure Logic's confidential information and defended the proceedings throughout.
2. The Court's findings in relation to Mr Pankhurst show that he has misused Secure Logic's confidential information for his own advantage. The Court infers from his conduct that he could not be relied upon to honour either his contractual or equitable obligations of confidentiality owed to Secure Logic unless an order of this Court was in place requiring him to respect those obligations.
3. The Court has found that Mr Pankhurst was communicating with Mr Dujin, Mr Scott, Mr Katsamaclis and others in the first half of 2016 for the purpose of setting up a business to compete with SL Australia. At the time he dealt with these persons he was still an employee of Plush Hosting which was by then a wholly owned subsidiary of SL Australia. This Court has also concluded that in May 2016 Mr Pankhurst arranged with Mr Noble to obtain Secure Logic's confidential customer contacts lists from Mr Noble. He did this to further his object of setting up a competing business with SL Australia and he continued to do it after Plush Hosting had suspended him and was proposing to terminate his services.
4. The Court has also found that Mr Pankhurst's plans and discussions with the other parties matured into the foundation of the Cyber Risk Assurance Group, a proposed competitor with Secure Logic, including in the development and offering of a cyber risk assessment tool.
5. The Court has also found that Mr Pankhurst untruthfully continued to deny his involvement with the Cyber Risk Assurance Group and otherwise gave false and unreliable evidence on a variety of matters.
6. This conduct is a breach of Mr Pankhurst's obligations under his NDA and his employment contract that parallel those under which Mr Noble was obliged. On Doherty v Allman principles an injunction will lie against Mr Pankhurst. The material to which he gained access to misuse was inherently confidential and will also justify the grant of an injunction in Equity's exclusive jurisdiction to enforce his equitable obligation of confidence.
7. As with Mr Noble, the Court will also order that Mr Pankhurst destroy all versions of the JP Prospects document in his possession.

Mr Noble's Cross-Claim

1. Mr Noble brings a Cross-Claim for damages for misleading and deceptive conduct and for breach of contract against Secure Logic. The initial legal contest concerns what kind of contract was made between them on 30 June 2015.
2. Mr Noble maintains that he signed a form of employment contract on 30 June 2015 and gave it to Mr Devaraj. This form of employment contract presents on its face as a traditional contract of service. But Mr Noble did not receive back from Mr Devaraj a copy of this document countersigned on behalf of Secure Logic. And soon after 30 June, Secure Logic gave Mr Noble directions to invoice Secure Logic in the manner of a contractor, which he did, rather than insist on being paid a salary as was contemplated by the terms of the signed document.
3. Secure Logic's pleadings accept that Mr Noble commenced employment with SL Singapore in the position of Chief Operating Officer, based in Malaysia. But in evidence Mr Devaraj denied Secure Logic was bound in any way by the form of employment contract signed on 30 June 2015. He adhered to the position that the arrangement between Mr Noble and SL Singapore was that Mr Noble would invoice the Secure Logic group and that salary payments would only be made once his contract was seen to conform with local laws and regulations in Kuala Lumpur, or Singapore. According to him, no contract of service was established between SL Singapore and Mr Noble on 30 June 2015.
4. But Secure Logic made a forensic decision to accept the application of the employment contract despite Mr Devaraj's apparent disdain for the document. Secure Logic therefore does not propound some of Mr Devaraj's own evidence on this subject. The decision taken forensically on Secure Logic's behalf was correct: the Court finds that the 30 June 2015 document was binding as an employment contract.
5. The Court's findings in relation to the issues raised on the Cross-Claim are set out together here in a narrative form that is similar to the earlier narrative relating to the issues of breach of confidence. This narrative represents the Court's findings on the matters covered, except to the extent that the context indicates that only the parties' allegations are being recorded. Once again for reasons of economy, this narrative does not include reference to versions of the facts that the Court has rejected.

The Noble-Secure Logic Employment Contract - 2013 to 2016

1. Mr Noble and Mr Devaraj negotiated the employment contract at a time that they were in a close professional and personal relationship. Mr Devaraj denied he and Mr Noble were then close friends. A contest about whether they were friends leading up to the making of the employment contract preoccupied the parties. But the contest did show that Mr Devaraj was, for his own reasons, prepared to adhere to an incorrect version of events to repel a case that he had engaged in misleading and deceptive conduct.
2. Mr Devaraj and Mr Noble initially met in May 2013 and caught up with one another regularly during their advisory work for the NSW Government. Mr Noble gave Mr Devaraj informal advice about how better to secure NSW Government contracting work. Mr Noble introduced Mr Devaraj to Mr Brooks and Mr Pankhurst and advised Mr Devaraj about purchasing a luxury yacht. Mr Noble contends that Mr Devaraj shared confidential personal information about Mr Devaraj's family with Mr Noble. Mr Noble even claimed that Mr Devaraj asked him to be ready to take responsibility for Mr Devaraj's family if anything happened to Mr Devaraj. But having seen Mr Devaraj give evidence the Court finds that the sharing of that kind of information and the making of that kind of request is unlikely, and the Court does not accept it. Notwithstanding that, by mid-2014 their relationship was a close one both professionally and personally.
3. This conclusion is well supported by Mrs Emer Noble's evidence on the subject, which the Court accepts. She recalls five family trips out on Mr Devaraj's boat between December 2013 and July 2014. And she recalls two lunch occasions at Mr Devaraj's house during the same period. She also recalls going to marinas with both her husband and Mr Devaraj, so her husband could advise Mr Devaraj about the purchase of a luxury boat.
4. And it is supported by evidence of Mr Shane Lee, which the Court accepts. Mr Lee is a media and marketing professional who met Mr Noble as a result of their children going to the same school. Mr Lee recalls a lunch at about the time of their meeting at which Mr Devaraj said to Mr Lee, "I look up to Paul. He has a lot of experience. I see him as a friend." Mr Lee accompanied Mr Devaraj and Mr Noble to several lunches and outings in Mr Devaraj's boat. During the boat trips Mr Devaraj said to Mr Lee, gesturing to Mr Noble, "I trust this guy. I do not trust many people but he's been a good friend to me both professionally and personally." Mr Lee communicated to Mr Noble the comments Mr Devaraj had made about him.
5. In August 2014 Mr Devaraj made a gift to Mr Noble of an engraved Mont Blanc pen. He wanted to give Mr Noble the "best pen" that could be found for Mr Noble's birthday. This also suggests a close relationship. Mr Devaraj said that he did not give Mr Noble such a pen. But the Court accepts Mr Noble's account of these events and that of his executive assistant, Ms Bradley, to the extent that they differ from Mr Devaraj's.
6. Another contest between the two was whether Mr Noble had travelled in June 2014 to Singapore with Mr Devaraj to facilitate business development for the benefit of Secure Logic. Mr Devaraj disputed this and said that their being in Singapore at the time was a mere coincidence. But the Court accepts that Secure Logic originated arrangements for them to be there together. And a coincidence in them being in that city seems unlikely. They were working closely together for the NSW Government and a mutually beneficial trip such as this seems probable.
7. Secure Logic had paid for the trip. Mr Noble had been included as part of the organisation of the trip, strongly indicating that Mr Noble and Mr Devaraj being in Singapore together was not a coincidence. Mr Devaraj took the position that Mr Noble had somehow coerced him into purchasing the flights. And then maintained his evidence that the trip was a coincidence. But Mr Devaraj arranged to fly Mr Noble business class to Singapore, implying he was there for the business purposes of Secure Logic.
8. Ms Bradley confirmed Mr Devaraj made a list of contacts for Mr Noble to meet in Singapore in June 2014. And she further confirms that Mr Devaraj and Mr Noble meeting in Singapore was not just a coincidence. But Mr Devaraj had her book Mr Noble flights to and from Singapore.
9. Secure Logic strongly attacked Ms Bradley's credibility. The attack failed. Ms Bradley stood her ground against a firestorm of accusations about her personal conduct as an employee of Secure Logic. She candidly admitted certain things and denied others. To the extent she denied misconduct the Court accepts her denials. None of what was put against her diminished her credibility. It was surprising that an employee who Mr Devaraj long trusted as his personal assistant would suffer the reputational attack that Secure Logic directed at her.

Early discussions about Mr Noble joining Secure Logic - January to March 2015

1. Mr Noble visited Mr Devaraj's family home at Dover Heights on the evening of 15 January 2015. There is a dispute as to whether Mr Noble stayed overnight that evening. To the extent that the dispute needs to be resolved the Court accepts Mr Noble's evidence that he did stay overnight: both men drank a considerable amount that evening and Mr Noble's text messages to his wife confirm that an overnight stay is likely.
2. During the evening Mr Noble and Mr Devaraj talked extensively about the future growth of Secure Logic and the rewards that could be derived from its growth. Mr Noble says that Mr Devaraj made statements to him to the following effect: "You have taken my business to new heights. I could never have done it without you; you advising me to stop white labelling and build a brand has been priceless. Finding Fergus Brooks for me has meant that we had the support to continue to grow. We are going to take this thing to the next level and go global. Even if it does not work out, I personally guarantee you will walk away with at least $10 million…. What is the minimum you could live on whilst we built the company and await the big payout?
3. Mr Noble says he undertook a calculation of what he could afford. He said "$168,000 take-home after tax would be the bare minimum, as long as expenses were covered so it was not costing me to travel or entertain". He pointed out to Mr Devaraj that this was a substantial downgrade in pay compared to what he could get on the open labour market. Mr Noble says that Mr Devaraj then continued: "You need to be 100% committed to the Secure Logic business if you are to be running the company, I cannot have you distracted by other business interests"
4. This in turn led to Mr Devaraj expressing concern that Mr Noble's apparent involvement in Plush Hosting might be a distraction for Mr Noble. Mr Noble assured him that it would not be distraction. Mr Devaraj then said, "I can't be sure that it will not be distraction; can you talk to John about Plush Hosting becoming a part of Secure Logic?"
5. Mr Noble volunteered to speak to Mr Pankhurst and Mr Devaraj continued: "See what you can do. It will also give me a reason to provide you with a stake in the company. My accountants will question why I just give you a large chunk of the business with nothing in return."
6. But for Mr Devaraj saying that he would "personally guarantee" that Mr Noble would walk away with $10 million, Mr Noble's account of what passed between him and Mr Devaraj on this occasion can be accepted. For reasons that are explained below about similar statements attributed to Mr Devaraj, it is quite unlikely that he would have been offering personal guarantees to Mr Noble.
7. Secure Logic submits that it is implausible that Mr Devaraj would have made statements such as "you are taking my business to new heights". But Mr Devaraj is quite capable of exaggerated and flowery language and this was probably said in a context where Mr Noble had been talking to Mr Devaraj on and off about ideas for Secure Logic and other matters in 2014.
8. On 19 February 2015 Mr Noble and Mr Devaraj had another informal meeting about Mr Noble coming to Secure Logic, this time at the Haymarket Hotel in George Street Sydney. Mr Devaraj repeated some of what he had said in mid-January. But Mr Noble says he went further.
9. Mr Noble says that Mr Devaraj handed him a draft organisational chart for the Secure Logic group and returned to the subject of Mr Noble gaining a return of $10 million from his involvement in the group. He says the conversation proceeded as follows. Mr Devaraj: "In order to achieve the 10 million return that we have agreed, if the holding company is valued at $300 million, you will only need 3% to achieve $9 million." Mr Noble: "I would be happy if we could get the company to be worth that, but I do not think that it is very realistic in the 18 months to 2 years that we are aiming to move on. Mr Devaraj: "If it is valued at $60 million, and if you have 12 to 13%, it will return you approximately $8 million." Mr Noble: "I think that is more realistic so [I] will be happy to go with the 12%." Mr Devaraj: "Okay let's agree to 12% of the group, as that is likely to meet or exceed your $10 million payout."
10. Mr Noble says that at various stages of this conversation where numbers were mentioned, he wrote on a Secure Logic draft organisational chart that was in front of him the following numbers and symbols: "300 with an arrow to 3%", "60 with an arrow to 12 - 13%" and finally he says he circled and underlined the 12% he had just written on the organisational chart. The organisational chart bears such writing.
11. Mr Devaraj disputes this conversation and that he wrote on parts of the organisational chart. Mr Devaraj says that the note was written during a conversation some years before on an unrelated topic. But the Court does not find Mr Devaraj's explanation of the history of the markings on the organisational chart to be compelling. The Court generally accepts Mr Noble's version of this conversation, at least as far as is described here.
12. But Mr Noble says that Mr Devaraj and he continued as follows: Mr Devaraj: "I personally agreed to underwrite that $10 million; I am independently wealthy." Mr Noble: "I would like to understand how the company is structured."
13. Mr Noble then says that Mr Devaraj explained that Secure Logic was going to set up a holding company which would be partly owned by SL Technologies and by a family company of Mr Devaraj's. Mr Noble says that Mr Devaraj further explained that he would be given shares in the holding company for the whole group, which would later relocate to Singapore for tax purposes. Mr Noble says that Mr Devaraj explained that he needed $60 million out of this enterprise to reinvest in his next venture and that apart from the $10 million to go to Mr Noble, the balance of the proceeds of selling the Secure Logic group could be divided among "whoever helps get me there". Mr Noble further says that Mr Devaraj foreshadowed transferring Secure Logic's intellectual property and subsidiaries to be part of SL Singapore, to reduce tax liability when the group was eventually sold. The Court accepts these things were said.
14. Upon Mr Noble inquiring about the timeframe for all this, he says that Mr Devaraj continued. Mr Devaraj: "It's imminent; we will have transferred everything by September, so we will provide you with 12% of the shares in the Singapore entity as a part of your package. Do not worry about the salary, it will be enough for you and your family to survive until we sell the group. Again, I am from money and my wife's family are from money, I personally guarantee you will receive at least $10 million in 12 to 18 months. The company is growing at a fantastic rate and with you on board we can bring it to the next level."
15. The Court accepts that conversations like, but not exactly like this, occurred between Mr Devaraj and Mr Noble at this time. Mr Noble's testimony about aspects of these representations is supported by other witnesses whose evidence the Court also accepts.
16. Mr Devaraj made statements to Mr Lee about Mr Noble taking a shareholding in Secure Logic. Mr Devaraj said to Mr Lee, "Paul's coming on board and he'll be a shareholder" and "He is going to have a piece of the business and we are going to conquer the world." Although strongly cross-examined, Mr Lee stood his ground and adhered to his evidence that these conversations had taken place. The Court accepts him as a witness of truth. Mr Devaraj was prone to make exaggerated statements like this.
17. But the representations that Mr Noble claims "we will provide you with 12% of the shares in the Singapore entity as a part of your package" were only part of what was said to him. The employment contract he signed on 30 June provided for the issue of a 12% shareholding in two steps: 6% upon the acquisition of Plush Hosting and another 6% based upon Mr Noble's achievement of "specific individual and team" Key Performance Indicators ("KPIs"). The conditions for achieving these two steps must have been discussed at about the same time or afterwards and well before the signing of the employment contract, because Mr Noble did not dispute their later inclusion in the employment contract.
18. Mr Devaraj can be exuberant, but he is not financially reckless. Although very optimistic about Secure Logic, he understood the uncertainties of business life and business forecasts. The Court does not accept that Mr Devaraj said that he would "personally agree to underwrite that $10 million". And in the sentence "I personally guarantee you will receive at least $10 million in 12 to 18 months", the Court accepts that everything was said except the words "I personally guarantee". When the time came later to negotiate the employment contract, Mr Noble did not seek to stipulate for Mr Devaraj's personal guarantee to be part of the contract or that Mr Noble would have a return of $10 million from the sale of his shares. Mr Devaraj did hold out the general prospect of Mr Noble having a return of about $10 million upon the sale of shares that would be issued to him in a Secure Logic entity as part of his employment contract but Mr Devaraj did not give a personal guarantee to that effect.
19. There are other reasons to accept the general tenor of Mr Noble's account of what Mr Devaraj said on this occasion about Mr Noble obtaining a shareholding interest in Secure Logic worth $10 million. Mr Devaraj said similar things to others about the benefits that Mr Noble would receive. One example was a conversation with Mr Peter Giorgiutti in December 2015, dealt with later in these reasons.
20. On 6 March 2015 at the Mejico Restaurant on Pitt Street Sydney, Mr Noble and Mr Devaraj discussed the possible financial arrangements associated with his joining Secure Logic. After discussing their respective preferences in luxury motor vehicles, Mr Devaraj invited Mr Noble and his wife to Mr Devaraj's child's sixth birthday party and then Mr Devaraj proceeded: Mr Devaraj: "Family is so important. That is what we do it for, and after a couple of years when you have at least $10 million in the bank you can focus on them more, but for the minute we will have to work hard to get there. Your role within the organisation is so important, and I know your minimum expectation is meeting or exceeding a $10 million payout."
21. Mr Devaraj then changed the subject to consider a Sales Incentive Plan (or "SIP") for Mr Noble, saying to him: Mr Devaraj: "I will expect you to go overseas and start the business there but for your sales incentive plan I currently take all the commission related to government work. I will develop that commission to your SIP so that you can easily meet your salary expectations."
22. More than once Mr Devaraj returned to the theme expressed here of Mr Noble accepting a salary that might be below market, but which was part of a package of incentives which taken together would compensate him well.
23. Mr Noble and Mr Devaraj met on 20 March 2015 in the Secure Logic boardroom at Pitt Street Sydney. A conversation to the following effect took place between the pair: Mr Noble: "I would like the SIP guaranteed for six months. Can you please get me a draft contract for review as soon as possible?" Mr Devaraj: "All of the pre-work you have undertaken will be allowed for in the bonus scheme so that you will be able to afford to get Emer to give up work immediately if you wish".
24. The conversation then moved to the subject of encouraging Mr Pankhurst to bring Plush Hosting into the Secure Logic group.

Mrs Emer Noble, Mr Devaraj and a Sixth Birthday Party - March 2015

1. Mr Noble and his wife attended Mr Devaraj's child's sixth birthday party on 21 March 2015. Their invitation indicated that Mr Devaraj regarded Mr Noble as a friend. Mrs Emer Noble thought at the time that her husband and Mr Devaraj "were clearly friends" and "that is why we were invited to the party".
2. Mr Devaraj's personal assistant, Lauren Bradley, helped organise the party. During the party Mr Devaraj said to Mr Noble, "I am looking forward to you being on-board, you can see how important family is to me." During the party, Mr Devaraj made statements to Mrs Noble that are consistent with the representations that he had made to Mr Noble in the weeks beforehand.
3. At one point during the party he took Mrs Noble aside and began to discuss with her the way he was going to look after her husband once he came to work for Secure Logic: Mr Devaraj: "There will be a lot of travel involved in the early stages of Paul's employment and I want you to know that while he is away you can call me for anything at all. I will make sure that as a family you aren't out of pocket, but the long-term goal is to sell the company and you will be wealthy then." Ms Noble: "Paul's salary is low and I am concerned about cash flow." Mr Devaraj: "While we work towards selling the company, if you are short of money for school fees or the like please let me know so I can ensure that the expenses would be possible to cover this. Again, family is the only thing that matters and I am really looking forward to getting Paul on board. I personally guarantee that you will be financially looked after once Paul has joined Secure Logic. It's important for you to understand that we are like a family and you can come to me for anything while Paul is away, be it money or anything."
4. This episode made her feel uncomfortable: she thought Mr Devaraj was misusing this social situation. Mr Devaraj had no insight into this. He misjudged the moment, seeing it as another strategic business opportunity to persuade Mr Noble, through his wife, to join Secure Logic.
5. Mrs Noble made her attitude to Mr Devaraj clear. She did not trust him. She pointed that out to her husband. But he did not act upon her opinion. Mrs Noble was intuitive and financially sophisticated. She thought Secure Logic had made an inadequate offer of remuneration that did not properly value her husband's abilities. She judged that the veneer of empathy that Mr Devaraj was displaying towards her husband did not run very deep. As subsequent events were to prove, in this she was correct.

Employment Negotiations Continue - April to May 2015

1. On 19 April 2015 Mr Devaraj emailed Mr Noble the first two pages of a draft employment contract, containing the details of Mr Noble's proposed remuneration and a draft mechanism for Mr Noble to take a shareholding interest in Secure Logic. Mr Devaraj had constructed the draft by cutting and pasting text out of an existing employment contract with another employee.
2. The part of the contract that Mr Devaraj sent Mr Noble shows by then he knew that Mr Noble's commercial focus was on an appropriate level of remuneration and taking a shareholding in Secure Logic. The draft also provides for the same structure as appears in the final agreement, of the issue of "600 shares representing 6% of the current issued shares in the company" contingent upon the acquisition of an interest in Plush Hosting. But it does not contain the feature in the final agreement of issuing "up to additional 600 shares representing 6% of the current issued shares in the company", leading to a potential total 12% interest in the company. And the 19 April 2015 draft contains the same conditions that exist in the final agreement that the share issue is "conditional only on you entering into a shareholders agreement covering matters usual in such an agreement and subject to approval of the Board of Directors".
3. The commencement date of 1 March 2015 was put in the draft employment agreement forwarded to Mr Noble on 19 April 2015 in error. My Devaraj had copy/pasted the date from a previous employees' contract.
4. Mr Noble replied on 3 May 2015, raising issues concerning Mr Noble's SIP and his prospective shareholding, as follows: "A couple of things I suggest you consider… If based out of Singapore the local impact on super, life and medical insurances etc. need to be worked out along with any official housing allowance or any other consideration for working in Singapore. I think that these can mainly be covered on the basis that Secure Logic agrees to pay for advice. Rules for SIP bonus/commission need to be agreed. Structure is unclear Plus directions would need to know plan for the company, an org chart would help. The 6% is currently in Singapore company clarity required. As discussed the more detailed offer should cover most of these."
5. The reply back from Mr Devaraj on 4 May dealt with Mr Noble's three points as follows: ""The role is with Pte based out of KL. Point 1 - The contracts will have provision on any legal bindings on employment such as CPF (super), Tax etc… Point 2 - The SIP along with Comms plan will clearly show how its worked out Point 3 - In regards to Plush, we need to have a discussion together with John and ask him what he would like from his perspective and Three of us along with Deepak can put together a plan for Plush ? Secure Logic Equity will be definition will be clearly defined in Employment Contract, Asset Sale Agreement and Shareholder Agreement"
6. On 11 May 2015 Mr Devaraj, Mr Singh and Mr Noble met for dinner at Manly. During the dinner Mr Devaraj emphasised that Mr Noble's employment contract was to be "different to others as the shares are part of the group and not a part of the employee share scheme." Mr Noble interpreted this communication as emphasising that the shares that Mr Noble would earn in Secure Logic under his proposed employment contract would represent a significant shareholding.

Employment Contract Negotiations Conclude - June 2015

1. Mr Noble ultimately signed his employment agreement with SL Singapore on 30 June 2015. The contract with SL Singapore reflected Mr Devaraj's desire for Mr Noble to travel to Malaysia on behalf of Secure Logic. Negotiations between himself and Mr Devaraj intensified in the weeks leading up to that date. Controversy exists as to the signing on that day. By June 2015 Mr Noble's prospective employment within the Secure Logic group was regarded as so assured that he was already based in Secure Logic's offices in Pitt Street Sydney, where he would see Mr Devaraj daily.
2. Mr Noble returned to familiar themes in the June 2015 negotiations. On 3 June 2015 he sent Mr Devaraj a lengthy email outlining a "Secure Logic 2015/16 Strategy". The strategy notes included detailed business expansion ideas for Secure Logic both in Australia and Malaysia. This strategy document indicates an individual who is already well integrated into Secure Logic's business and entrusted with information about that business so he can contribute strategy ideas for Secure Logic's benefit. Mr Noble concluded his email noting his interest in, "[g]uarantee on SIP for the first 3 months" and "[c]ertainty around share ownership being in holding company" among other employment-related matters.
3. Mr Noble held out for clear terms in his employment contract. Whatever had been represented to him, he wanted what he regarded as clarity in the contract. Soon after the 3 June email, Mr Noble and Mr Devaraj had a lengthy conversation at the White Rabbit café about the terms on which he might join Secure Logic. Mr Noble made clear that he was not prepared to leave his family and go to Malaysia without finalising the points raised in his 3 June email.
4. Mr Devaraj promised him a final draft with relevant inclusions. Mr Noble says, and the Court accepts, that he was not prepared to accept employment from a small corporate group like Secure Logic without the promise of equity of a significant commercial value and that he would not have accepted pay below what he could have achieved elsewhere without the guarantee about the SIP.
5. On 24 June 2015 Mr Devaraj met with Mr Noble and Mr Pankhurst to discuss Secure Logic's acquisition of Plush Hosting. It was agreed at this meeting that in exchange for Mr Pankhurst undertaking a two-year employment contract with commission that Mr Pankhurst would sell 100% of Plush Hosting's issued shares to Secure Logic for the nominal face value of those shares. Mr Devaraj initially only asked Mr Pankhurst for 60% of Plush Hosting's issued shares. But Mr Pankhurst did not want to be left with a minority shareholding. He was content to exit control of Plush Hosting with a two-year employment contract and with the benefit of the commission on the larger customer base which would be likely to follow Plush Hosting's absorption into the larger Secure Logic group.
6. By late June 2015, Mr Noble was working out of Secure Logic's Pitt Street offices, giving informal but valuable assistance to Secure Logic's business operations before Mr Noble's formal employment with Secure Logic started. An incident involving NTT Communications on 25 June 2015 illustrates this. On 25 June, Mr Devaraj received a complaint from NTT Communications about an aspect of Secure Logic's service delivery. On 26 June, Mr Devaraj asks Mr Noble by email, "Paul, can you please chat with David and work out the strategy…it is quite critical the situation we are in…" Mr Noble had prior contact with the people who were raising complaints with Mr Devaraj so he drafted a response to the letter of complaint.

Execution of the Employment Contract - 30 June 2016

1. Mr Noble attended Secure Logic's offices on the morning of 30 June 2015. Lauren Bradley gave him a hard copy of the draft contract, which he reviewed. Mr Noble decided to make some minor amendments.
2. By the middle of the day Mr Devaraj, Mr Palmer, Mr Singh and Mr Noble all went to lunch at a nearby Italian restaurant, Jamie's Italian on Pitt Street. Mr Palmer and Mr Singh were called away on other pressing business. When they were alone together Mr Noble says he took the opportunity to raise with Mr Devaraj the parts of the contract which he thought required amendment. Mr Devaraj agreed with the changes he proposed.
3. Mr Noble and Mr Devaraj return to the office. Mr Noble signed the NDA with which he had no issue. At about 3 PM Mr Noble went into Mr Devaraj's office with the unsigned printed contract, when the following conversation took place between them: Mr Noble: "I have marked up the changes that we agreed, would you like to amend the master and reprint or sign each of the changes?" Mr Devaraj: "There are only a few so let us both sign each one individually rather than wait for a reprint."
4. Mr Noble and Mr Devaraj made the changes hand in hand and each of Mr Noble and Mr Devaraj initialled them. Mr Noble then signed the final page of the contract and gave it to Mr Devaraj. Mr Noble did not keep a copy. Mr Devaraj had the only signed original.
5. By now it was late in the day. As soon as the signing was completed Mr Devaraj proposed that they "go celebrate" saying, "I will email you a scanned copy of the contract". It was about this time that the Court accepts Mr Noble telephoned his wife Emer and said to her "the contracts been signed. Santosh's taking us out to celebrate".
6. Mr Noble and Mr Devaraj then gathered Mr Singh, Mr Palmer and Ms Bradley and went to the Mejico Restaurant. Mr Devaraj ordered champagne for this small gathering of employees, saying in a toast "to the future of Secure Logic, welcome aboard Paul!" The celebration moved on to the White Rabbit at about 5:30 PM where the rest of Secure Logic's employees joined the celebration. Mr Noble's official start date the following day was promulgated to all present. Ms Bradley confirms Mr Noble's account of this event, which is the logical culmination of a signing that day as Mr Noble recounts.

The Terms of the Employment Contract

1. The terms of the employment contract relevant to the Secure Logic breach of confidence claim have been set out earlier in these reasons. Other terms relevant to Mr Noble's breach of contract claim are set out here. SL Singapore was defined as "the Company" and Mr Noble as "the employee": clauses 1.1 - Employer and 1.2 Employee. The employment contract throughout employs terms consistent with a contract providing for Mr Noble's service as an employee of SL Singapore and sometimes interchangeably refers to SL Singapore as "the Employer" rather than "the Company".
2. Mr Noble's precise role within Secure Logic was disputed in the proceedings. The form of the employment contract is partly responsible for this situation. Clause 1.3 Job Title provided in part: "1.3 Job Title You are employed as a Chief Operating Officer (COO) of Secure Logic Pte Ltd and its Subsidiary (Secure Logic Group) reporting to the Managing Director and Group CEO. Your duties will include those set out in the schedule to this agreement."
3. The clause then provided for the possibility of Mr Noble carrying out "additional or alternative tasks" as may be reasonably required of him. The version of the employment contract tendered in the proceedings did not contain a "Schedule" of his duties. And the structure of the Secure Logic group described by clause 1.3 is incorrect. SL Singapore is a subsidiary of SL Australia. But the term appears to have been crafted to foreshadow the idea that Mr Noble says he discussed with Mr Devaraj: that the group's holding company would become Singapore-based before it was sold.
4. Clause 1.4 provides for the date of commencement of Mr Noble's "employment" in the following terms: "1.4 Date of Commencement Your employment will commence on 1 July 2015. Your employment is for a maximum term as defined in the handbook, terminable on notice or otherwise, as provided in this agreement."
5. Whatever "the handbook" referred to in this clause, it was not clearly identified and given to Mr Noble at the time. This is one many examples of Mr Devaraj's inattention to the relevant detail of this contract which Mr Noble did not pick up at the time. But Mr Devaraj says that a staff handbook was given to employees and contractors. Mr Noble was a senior officer at Secure Logic. The Court accepts Mr Devaraj's evidence that Mr Noble was given a staff handbook early in his employment.
6. Clause 1.5 provides for Mr Noble's base salary and an incentive plan (or "SIP"): "1.5 Remuneration Your initial base salary will be $168,000 SGD per annum plus accommodation which shall be earned and payable on a monthly basis. Payments shall be subject to deduction of applicable tax and of any other sums, which you have agreed in writing, may be deducted from your salary. Your base salary can be changed over time upon mutual written agreement and 30 days advance notice. Your rates of pay are subject to review from time to time by the Company and the effective date of any resulting changes will be advised to you at the relevant time in writing. The Employer shall deduct from your remuneration all such sums it is authorised to deduct under the laws of Singapore, you will be responsible for the full amount of personal income tax due and payable as a result of your employment with Secure Logic Pty Ltd. In addition to your Base Salary, you are entitled to participate in the Company's Incentive Plan ("SIP"). The variable component of your compensation is estimated to be SGD$100,000 [Initials, P.N] for 100% quota attainment. The company may pay you a commission quarterly based and within two months of the end of each quarter on duties and project related objectives. These will be agreed within your first month of employment. Bonus and commission is strictly performance related. Details of any bonus or commission in which you are eligible to participate will be provided to you from time to time. It is precondition of your eligibility to receive payment under each and every bonus or commission scheme that: - You personally work on the business or project objectives throughout, including up to the actual completion of each objective. Provided always that in the event of the company requiring you to finish an objective, which you did not commence, the company reserves the right to pay you a bonus or commission. Such decision to pay and the level of payment shall be at its sole and absolute discretion; The final account of each objective is agreed in writing and certified by the appropriate client; That you are an employee of the Company at completion of the objective (and have not prior to then given or received notice of termination of your employment). The Company reserves the right for any reason to end or amend the any [Initials, P.N] bonus or commission scheme at any time."
7. Clause 1.6 provided for the issue of shares to Mr Noble upon the acquisition of Plush Hosting and according to KPIs. The clause is yet another example of inattention to detail; it contains internal mistakes and its KPIs were never agreed. It provides: "1.6 Company Shares The Company agrees that as soon as possible and in any event within any iii months after the date of this Agreement, it will, as the consideration payable in relation to the 60% acquisition of Plushhosting Pty Ltd by the Company or any of its subsidiaries form the Board of Directors of Plushhosting Pty Ltd, issue to you 600 shares representing 6% of the current issue share in the Company, conditional only upon you entering a Shareholders Agreement covering matters usual in such an agreement and subject to approval of the Board of Directors. The Company agrees that, in line to your employment and upon specified individual and team Key Performance Indicators (KPIs), the Company will issue to you up to additional 600 shares representing 6% of the current issue shares in the Company, conditional only upon you entering into a Shareholders' Agreement covering matters usual in such an agreement and subject to approval of the Board of Directors, including without limitation: Pre-emptive rights on the sale of any shareholders shares; Rights for all shareholders to participate in any share issues so as to maintain; their respective percentages of the shares on issue from time to time. This will exclude any proposed issues of Company shares that the board, acting reasonably, determines are in the best commercial interests of the Company and in respect of which such pre-emptive rights should not apply, such as the introduction of strategic investors or further acquisitions or mergers for scrip consideration; and Drag & tag provisions in the event that the holders of 60% or more of the issued shares You are entitled to trade-in your allocated shares in the Company, to gain equal number of shares in Secure Logic Pty Ltd."
8. Clause 1.10 provides for Mr Noble's expenses reimbursement. The proper interpretation of its text was contested. Clause 1.10 is as follows: "1.10 Expenses You will be reimbursed your reasonable general expenses you properly incur wholly and exclusively in the performance of your duties on behalf of the Company in accordance with the Company's policies and procedures, PROVIDED THAT: - I. The expenses are of a type generally approved by the Company or are specifically authorised by your immediate manager or the managing director; and you produce a valid tax invoice and expenses claim form in support of your claim. II. Any expenses not approved by the Company may, as mutually agreed upon, be paid by the Company and charged against any remuneration payable to you. III. A non-discretionary amount up to 2,800 3,200 [Initials, P. N] SGD will be allocated as a Business Development budget."
9. The employment contract provided (in clause 1.12) for termination without notice in the following circumstances: "The Company may terminate your employment without notice if you have engaged in serious misconduct. Serious misconduct, without limitation, includes behaviour such as: theft, fraud or assault; intoxication at work; refusing to carry out a lawful and reasonable instruction that is consistent with your employment; wilful, deliberate or neglectful behaviour that is inconsistent with the continuation of this Agreement; breaching any material provision of this Agreement; or conduct by you that causes imminent and serious risk to the health or safety of a person, or the reputation, viability and profitability of the Company's business. If you are under investigation for serious misconduct or you have engaged in serious misconduct, the Company may suspend you on full pay for as long as is considered in the Company's best interests."
10. Upon termination of the employee's employment, or at Secure Logic's request the employee could be required to return all company property: clause 1.13.
11. The legitimate reach of Secure Logic's surveillance of Mr Noble's Internet usage and email traffic was contested. Relevant to this issue clause 1.22 states: "1.22 E-Mail/Internet Monitoring The Company reserves the right to monitor and/or view, as it deems appropriate, all data sent or received electronically by you, whether internally or externally, and all internet sites accessed by you using computer equipment or other property owned by the Company, regardless of whether such data and/or sites relate to the business of the Company or otherwise. By signing this Agreement you hereby agree to this Clause."
12. Secure Logic contends that Mr Noble's misrepresentation case must fail in part because of the employment contract's entire agreement clause 1.25, which provides: "1.25 Entire Agreement and Enforceability These terms contain the entire understanding between the Company and you, and take effect in substitution of all previous agreements and arrangements whether written or oral or implied between the Company and you relating to your employment (but without loss of continuity of employment) all of which agreements and arrangements shall be deemed to be terminated by mutual consent. You acknowledge and warrant to the Company that you did not enter into this Agreement in reliance upon any representation or statement, whether written or oral, made by or on behalf of the Company which is not set out in this Agreement. The termination of your employment hereunder will not affect such of these provisions as are expressed to have effect thereafter and will be without prejudice to any antecedent breach or liability."
13. The employment contract contemplated the payment of a monthly salary of $14,000 SGD. Payments to Mr Noble were immediately varied to an invoicing arrangement, the significance of which was much disputed. The employment contract did provide, in clause 1.26, a mechanism for changes to terms and conditions. Secure Logic reserved "the right to make reasonable changes to any of your terms and conditions" but any changes "will be specified in writing" and minor changes of detail could be "effected by a general notice to employees".
14. The proceedings involved a contest about the execution of the employment contract's counterparts. The employment contract provided that it could be "executed in multiple counterparts, each of which shall have the effect of an original" but the agreement would be binding "only upon execution of a counterpart by each of the parties": clause 1.28. Mr Noble executed and dated the version of the employment contract in evidence on 30 June 2015. No copy of the employment contract signed by Mr Devaraj was put into evidence.

Some Anomalies in the Employment Contract

1. A mistake appears in the employment contract. It assumes 600 shares equals 6 per cent of SL Singapore. This is explicable on the basis that Mr Devaraj effectively copy/pasted the document from a previous employee's employment contract, which contained a reference to another company, Complicity Pty Ltd ("Complicity"), in which 800 shares represented 8 per cent of that company. Without doing his own legal checks Mr Devaraj seems to have assumed that the company in question here, SL Singapore, had the same number of shares as Complicity. This assumption was incorrect.

Plush Hosting Due Diligence

1. Secure Logic's acquisition of Plush Hosting from Mr Pankhurst provides the platform for the first issue of shares in SL Singapore to Mr Noble. The acquisition of Plush Hosting is otherwise peripheral to Mr Noble's case. The term agreed between Mr Devaraj and Mr Noble in the employment contract (clause 1.6) was that within three months of Secure Logic acquiring 60% of the shares in Plush Holdings that shares would be issued to Mr Noble in SL Singapore subject to the other conditions set out in clause 1.6. This share issue to Mr Noble was said to be "as the consideration payable" in relation to the acquisition of 60% of the shares in Plush Hosting. It is not an issue that Secure Logic did indeed acquire 60% of the shares in Plush Hosting.

A conversation with Mr Peter Giorgiutti - December 2015

1. Mr Peter Giorgiutti is the son of Mr John Giorgiutti, from whom Mr Noble was to seek legal advice on the evening of 16 June 2016. Mr Peter Giorgiutti had a conversation with Mr Devaraj in December 2015 about joining Secure Logic. This conversation confirms some of Mr Noble's testimony about Mr Devaraj's pre-contractual statements to Mr Noble.
2. Mr Peter Giorgiutti met Mr Devaraj and Mr Noble in about May 2007, when they were all providing contract IT services to Westpac. Mr Noble invited him to work in the NSW GovDC team in 2008 to 2009. Mr Peter Giorgiutti and Mr Noble developed a personal relationship outside work during their time together providing services to Westpac. He also developed a friendship with Mr Devaraj after meeting him through the Westpac connection.
3. Mr Peter Giorgiutti undertook a further period of work with NSW GovDC in about November 2013, when he re-established closer contact with Mr Devaraj. From then until 2015 he saw Mr Devaraj regularly in social settings with Mr Noble.
4. He gave evidence by video-link from Singapore. He was cross-examined for about 15 to 20 minutes. Assessment of credibility in such circumstances is difficult. He demonstrated a somewhat defiant attitude to Mr Elliott SC, cross-examining on behalf of Secure Logic. And his friendship with Mr Noble was plain. Despite those aspects, he was a reliable witness. The Court does not accept he would invent evidence, as was suggested against him.
5. Mr Devaraj called Mr Noble and Mr Peter Giorgiutti his "brothers" in workplace banter at GovDC. Mr Giorgiutti never came to work for Secure Logic but Mr Devaraj made many attempts to bring him on board. In 2015 in their work interactions he commonly joked with him "come work for me, we're brothers".
6. In December 2015 after Mr Noble had been at Secure Logic for about six months, Mr Peter Giorgiutti had dinner and drinks with Mr Devaraj, Mr Gallagher and Mr Singh one evening when they had all happened to be in Singapore. During the dinner Mr Devaraj tried again to persuade Mr Giorgiutti, whose background is in sales, to become an employee at Secure Logic. After Mr Devaraj described the nature of the work Mr Giorgiutti could do at Secure Logic, the conversation proceeded: Mr Giorguitti: "Okay, so how would it look?" Mr Devaraj: "Pete, we are brothers. You know I will look after you. Good base salary in huge commissions. You know I pay the highest commissions in the market." Mr Giorguitti: "Yeah, I know, but it is a big decision to leave Riverbed while things are going so well." Mr Devaraj: "Peter, you're crazy. Do you know how much money I will make you? Look at Paul, he will make $10 million working for me." Mr Giorguitti: "Why do you say that?" Mr Devaraj: "When I sell my business in the next couple of years I will get $300 million. Deepak will get $30 million and Paul will get $10 million. If you come on board, you will be getting the same deal!" Mr Giorguitti: "Alright, let us start doing some planning. I will introduce you to some folks that will be useful if we want to make this happen."
7. After this dinner Mr Peter Giorgiutti became more professionally involved with Mr Devaraj and introduced him to Mr Giorgiutti's contacts in the security industry. But he never came to work for Secure Logic. He terminated his relationship with Mr Devaraj in June 2016, when he learned that Secure Logic had commenced these proceedings.

Mr Noble Returns from Malaysia - February 2016

1. Mr Devaraj says Mr Noble's performance in Kuala Lumpur was below expectations. If Mr Devaraj had genuinely been unhappy with Mr Noble's work performance in Kuala Lumpur, it is to be expected that Secure Logic would be able to point to some objective contemporaneous evidence of that disquiet. Mr Noble could have been performance managed or counselled about how he was falling short of expected standards. Mr Noble's failures could have been the subject of email correspondence or planning meetings in Sydney. But Secure Logic's case produces none of the usual corporate-based evidence of such failures.
2. But by late 2015 Mr Devaraj decided that he wanted to bring Mr Noble back from Kuala Lumpur. And he seems also to have decided by early 2016 that he wanted to move Mr Noble away from the 30 June 2015 employment contract into an arrangement which did not involve the issue of shares in SL Singapore to Mr Noble.
3. Mr Noble continued to expect that he would be issued shares in SL Singapore. When he returned to Sydney, he sought advice from his accountant about setting up a family trust in the expectation of obtaining an immediate allocation of 6% of the shares in his "current employer's company" and a further 6% later.

Mr Noble Claims his Pay - March 2016

1. By mid-March 2016 Mr Noble believed Secure Logic was almost $50,000 behind in paying him. He was not paid after March 2016. This had a predictable effect: Mr Noble developed antipathy towards Mr Devaraj.
2. Mr Noble formally confronted the issue of what was due to him by email on the morning of 14 March. Mr Noble emailed Mr Devaraj under the subject line "Outstanding Monies", claiming that on the basis of his monthly base salary of $14,000 and a non-discretionary bonus of $3200 for each of the months from July 2015 to the end of March 2016, he had earned a gross amount of $169,320 but that Secure Logic was by then $48,846 behind in paying him. He asked Mr Devaraj to discuss these issues with him "before I create the next invoice".
3. But Mr Noble and Mr Devaraj did not meet to discuss this issue that morning. Their relationship was already tense. At 8.14am, Mr Devaraj replied without dealing with the substantive issues of outstanding entitlements Mr Noble had raised. Instead Mr Devaraj suggested that Mr Noble become an employee of Plush Hosting with retrospective effect to a fortnight earlier, "Paul, starting from 1st of March you will be part of [the] Plush payroll. Nicole will give you [the] amendment today."
4. About 45 minutes later, frustrated at Mr Devaraj's failure to engage about his entitlements, Mr Noble requested a draft contract for his consideration, replying: "Santosh, I need to agree the terms if we are moving away from the Singapore contract with its obvious tax advantages, let me have a draft. I will amend the final amounts that the company owes me just now to exclude March and create an invoice [up to the end of February]."
5. Mr Noble then issued invoices for his salary and his non-discretionary expense allowance up to the end of February 2016. Neither of these invoices was paid.
6. Mr Devaraj's counter strategy was to sidestep the non-payment issue and suggest Secure Logic offer Mr Noble a new contract with Plush Hosting at a higher salary. Mr Noble resisted. He was interested in the terms of a new contract but only to see whether they might redress the underpayment. In his view Secure Logic was in dollar terms approximately two months behind in paying him. Mr Devaraj's correspondence did not satisfy Mr Noble.
7. On 16 March 2016, Secure Logic sent Mr Noble a letter of offer to novate his employment to Plush Hosting, with an increase of salary to $194,000. But the offer letter did not refer to Mr Noble acquiring a shareholding in SL Singapore or Secure Logic. Mr Noble did not agree to this arrangement.
8. On 27 March 2016, Mr Devaraj sent an email to Mr Noble in which he asserted that "we" (i.e. the Secure Logic group) had no further obligations to fulfil, and expressed frustration that Mr Noble was refusing to "work with us as required to accommodate this change". This was an attempt to coerce Mr Noble to transfer his employment to Plush Hosting by withholding his entitlements under the contract with SL Singapore.
9. In response, Mr Noble reminded Mr Devaraj that he had not received his entitlements under his employment contract with SL Singapore, specifically the issue of a 6% shareholding within 3 months of the date of the contract and reimbursement of his expenses since commencement.
10. On 29 March 2016, Mr Noble met with Mr Devaraj and Mr Devaraj witnessed Mr Noble's signature on a trust deed. Mr Noble's evidence was that a trust had been contemplated as the vehicle for holding his shares at least as early as February 2015.
11. Mr Noble gave evidence to the effect that an agreement was reached in respect of his ongoing relationship with the plaintiffs and sent an email on 31 March 2016 outlining his understanding of the same.
12. Meanwhile, Mr Devaraj had emailed his solicitors with the subject line "Pauls [sic] employment contract", and received a response which made no reference to Mr Noble's employment contract, but was entirely concerned with the trust deed that Mr Devaraj had witnessed on 29 March 2016.
13. Mr Devaraj acknowledged that by 29 March 2016, he clearly understood that Mr Noble was pressing to receive shares and conceded that his solicitors could only have known of the connection between the trust deed and the employment contract if he had so informed them. In spite of his denials, Mr Devaraj was seeking legal advice because he was concerned about SL Singapore's obligations under Mr Noble's employment contract. The only area of concern was that by that stage, Mr Devaraj recognised the risk that Secure Logic generally, or at least SL Singapore and SL Australia, might have to make good the promise to issue shares
14. By the end of March 2016 Secure Logic was going slow in paying Mr Noble. That was unlikely to happen to an employee as senior as Mr Noble without Mr Devaraj's consent. If it had been an accident it would have been corrected. By March 2016 Mr Devaraj had decided that he no longer wished to honour the terms of the 30 June 2015 employment contract. If that meant angering or destabilising Mr Noble, Mr Devaraj was clear eyed about accepting that risk.

Mr Noble Returns to Kuala Lumpur - Early April 2016

1. Mr Noble continued to work at Secure Logic's Sydney office until early April 2016. He was then asked to travel to Kuala Lumpur to work for Secure Logic again. Mr Noble was still seen as useful to the Secure Logic Group both in Australia and in Kuala Lumpur at that time.
2. It is puzzling that Mr Devaraj would ask Mr Noble to return to Kuala Lumpur and undertake work there as late as April 2016, if Mr Noble's prior technical and management performance there had been unsatisfactory. Mr Devaraj disputes Mr Noble's account of this period. But the Court accepts that Mr Noble was asked to return to Kuala Lumpur.

Mr Noble's Final Employment Contract Demands - 3 May to 3 June 2016

1. Early on 3 May 2016 Mr Noble emailed Mr Devaraj attaching an invoice seeking the claimed arrears in his salary. Mr Noble's email also requested the paperwork for the issue of shares to him and for the SIP, and a new draft contract.
2. Later the same morning, Mr Devaraj emailed Mr Noble proposing to finalise the employment contract with SL Singapore, or in the alternative, to discuss "salary, expenses, reimbursement and SIP stuff" under a contract with Plush, upon clarification of the "threshold issues". Mr Devaraj agreed that by "threshold issues" he was referring not only to the 16 March 2016 offer of employment with Plush Hosting (with a salary of $194,000 and a SIP), but also to Mr Noble's entitlement to an equity of 6% under a contract with SL Singapore.
3. On 19 May 2016 Carroll & O'Dea wrote to Secure Logic alleging that the non-payment of Mr Neville's outstanding entitlements were repudiatory breaches of the employment contract and demanding payment of those entitlements by 5pm on 25 May 2016.
4. Nothing was paid by 25 May. On Mr Noble's behalf on 3 June 2016 Carroll & O'Dea accepted what it claimed was Secure Logic's repudiation of the employment contract.

Mr Noble's Claims for Relief

1. Mr Noble cross-claims for damages in contract and for misleading and deceptive conduct. This section analyses each of those claims.

Mr Noble's Contract Claim

1. Mr Noble's contract claim alleges breach of contract and consequential damage in two broad categories: the first being claims for salary, expenses and bonuses, and the second being claims for shares in SL Singapore or SL Australia.
2. Mr Noble claims that his employment contract with SL Singapore conferred upon him entitlements to salary, expenses and bonuses of the following five kinds, which he claims were not paid in full. It is not disputed that if his claims are valid that these amounts were not paid in full: 1. An annual base salary of $168,000 SGD (clause 1.5); 2. 20 days of paid leave for each year of service (clause 1.8); 3. A non-discretionary amount of up to $3,200 SGD as a business development budget (clause 1.10); 4. Reimbursement of reasonable general expenses incurred in the performance of his duties (clause 1.10); and 5. Quarterly commission and a bonus of up to $100,000 SGD under a Sales Incentive Plan (SIP) (clause 1.5).
3. He also claims that his employment contract with SL Singapore conferred upon him entitlements to an issue of shares in SL Singapore and to exchange those shares. His share-related entitlements were of the following three kinds: 1. The issue of shares representing 6% of the shareholding of SL Singapore within 3 months of the date of the contract, conditional upon the acquisition of 60% of Plush Hosting (clause 1.6); 2. The further issue of shares representing 6% of the shareholding in SL Singapore subject to meeting KPIs (clause 1.6); 3. The right to trade in shares in SL Singapore in exchange for shares in SL Australia (clause 1.6).
4. Shares in SL Singapore were never issued to Mr Noble. Secure Logic contests Mr Noble's claims in both these broad categories.

Salary, Expenses and Bonuses

1. Unpaid Annual Base Salary and GST. Mr Noble's base annual salary under the employment contract was $14,000 SGD per month or $168,000 SGD per year. He was employed by SL Singapore for 11 months and three days from 1 July 2015 to 3 June 2016, namely $154,000 SGD ($14,000 x 11) + 3 days ($2100), totalling $156,100.
2. He also claims he was entitled to one month's notice of termination of employment. But the Court's findings in relation to Mr Noble's misuse of Secure Logic's confidential information justify its termination of his employment without notice under employment contract, clause 1.12. He was in breach of material provisions of the employment contract, namely clause 1.14 relating to confidentiality. And he was guilty of wilful and deliberate behaviour that was inconsistent with the continuation of the employment contract. He is not entitled to any notice of termination. That limits his salary claim to 11 months and three days. All payments to him stopped in March 2016. Salary is due to him at least for April, May and early June 2016, although he was unpaid on account of other entitlements by that time.
3. There is no issue in relation to the quantum of Mr Noble's salary. But an issue arises between the parties about the correct way to account for the payment of GST. This arises because of Secure Logic's request and then direction for Mr Noble to raise an invoice from Peach Tree Bay to Secure Logic for Mr Noble's remuneration. As a result of following this practice Peach Tree Bay issued tax invoices adding GST and Secure Logic added the claimed amount of GST to its payments to Peach Tree Bay.
4. Mr Noble submits that Peach Tree Bay's claims for GST form no part of his salary and monies paid to him on account of GST should not be credited to Secure Logic as payments on account of his salary. Mr Noble further submits that GST is an obligation of Peach Tree Bay, not of himself as an employee and it is irrelevant to his receipt of benefits as an employee. In Mr Noble's calculations of entitlement still due to him he treats GST separately and does not include it as a receipt to Mr Noble.
5. Secure Logic submits that Mr Noble has been paid amounts in excess of his salary between 1 July 2015 on 3 June 2016 and that the overpayments are principally attributable to the amounts of GST that were claimed and paid in addition to the salary. Secure Logic submits that those overpayments should be credited in favour of SL Singapore in the calculation of the final amount due or from Mr Noble.
6. GST should not be brought to account and counted as a payment by Secure Logic and a receipt by Mr Noble in the running account between them. Without inquiring further into the tax affairs of either Secure Logic or Peach Tree Bay the Court can assume that they each complied with their taxation obligations and that Secure Logic claimed from the ATO its payment of GST to Peach Tree Bay as an input tax credit and that Peach Tree Bay paid GST to the ATO in the amounts claimed in its tax invoices to Secure Logic. Thus, Secure Logic obtains a tax benefit and Peach Tree Bay a tax liability from the issuing and payment of the tax invoice. If GST is to be brought to account between Secure Logic and Mr Noble then the overall tax effect of the payment should also be brought to account, which is likely to neutralise or nearly neutralise the payment of GST in response to the invoice. Mr Noble and Peach Tree Bay can be treated as being in one interest for these purposes.
7. In the result, Secure Logic's payment of GST should not be treated as a payment by Secure Logic on account of Mr Noble's salary in the calculation of the final amount of remuneration due to Mr Noble.
8. Payment In Lieu Of Accrued Annual Leave. Mr Noble contends he was not paid annual leave entitlements upon termination. Mr Devaraj's own evidence confirms non-payment and explains it on the basis that Mr Noble was a contractor and was therefore not entitled to be paid annual leave.
9. Secure Logic concedes on the pleadings that Mr Noble was an employee, not a contractor. He is therefore entitled to be paid out his accrued annual leave. It has not been established that he has taken annual leave.
10. Mr Noble worked for SL Singapore for 11 months from 1 July 2015 to 3 June 2016. It is not in issue that the accrued value of his annual leave over that period of 11 months is $12,831 SGD (which is equivalent to $13,491 AUD). Therefore this amount should be accounted for to Mr Noble's credit in the final calculations on his Cross-Claim.
11. Nondiscretionary Business Development Budget. Mr Noble claims reimbursement of what he says was a nondiscretionary business development monthly budget of $3200 SGD.
12. Secure Logic resists this claim. It submits as follows: "637. Mr Noble's construction of the clause is an uncommercial and unlikely one. 638. First, the express words "up to" indicate that Secure Logic Singapore was not under an obligation to pay Mr Noble the fixed sum of 3,200 SGD per month. 639. Second, the express purpose of any payment under this clause was for the business development of Secure Logic Singapore. 640. Third, the clause exists within a part of the alleged contract that is quite separate from the clause which concerned Mr Noble's salary. 641. These matters, both alone and together, establish that Mr Noble could not spend it however he liked, and that the money did not have to be paid if it was not going to be spent on business development. 642. The words "non-discretionary", when considered sensibly within the context of the clause, operate such that, if Mr Noble actually spent up to 3,200 SGD per month on business development, Secure Logic Singapore would have no discretion as to whether or not to pay the sum so expended to Mr Noble. 643. It is true that, under items I, II and III of the clause, Mr Noble was required to seek approval for expenses that were not business development expenses, or for business development expenses in a month that were in excess of 3,200 SGD. 644. That reality says nothing about the proper operation of expenses falling within III - namely business development expenses up to 3,200 SGD per month. Mr Noble did not need to seek pre-approval for such expenses. But he still had to spend it on business development, and as a corollary of that, Secure Logic Singapore was entitled to seek and obtain documents which verified that the money was being so spent."
13. Clause 1.10 is puzzling. It is not surprising that it has led to a contest of interpretations. Particularly puzzling is its use of the word "non-discretionary amount". It raises the question as to whether the discretion is that of the employer or the employee. And just how a "non-discretionary amount" is to be accommodated within a proviso which also allows for other expenses "of a type generally approved by the company" is not clear. And although the clause does not refer to $3,200 SGD per month, the parties seem to have by their conduct interacted on the basis that they had made a supplementary agreement in June 2015 that this amount would be paid monthly. The Court will proceed on that basis.
14. But in the Court's view the interpretation of clause 1.10, proviso III, which best fits its overall language and the intent of the contract is that the description of an amount as "non-discretionary" was to tie Secure Logic's hands so that it could not exercise a discretion to refuse to pay the amount on the basis that it did not ultimately serve the end of "business development". In other words, the employment contract represents a contractual expression of trust in the employee that the amount will be spent in that way, without it being the subject of detailed audit and approval. That contractual expression of trust also means that the employee may decide in a particular month not to draw the whole $3,200 SGD, which explains the words "up to 3200 SGD". This interpretation explains the clear difference in language with proviso I, which requires approval for expenses that would generally need to be approved by the company, or that need specific authorisation. None of the proviso III expenses requires approval.
15. Thus, in the result Mr Noble is entitled under clause 1.10 to the amount of $3,200 SGD per month, which he is expected to spend to develop the business of Secure Logic. And in addition, he is entitled to general expenses that do not fit the description of "business development" but which would ordinarily meet general approval by Secure Logic or have otherwise been specifically authorised. This means that Mr Noble's claim for $3,200 SGD per month succeeds and he should be credited with that amount up to the end of May 2016 in the final calculations of what is due to him.
16. Reasonable General Expenses. Mr Noble also claims reimbursement of general expenses that he claims to have incurred in Malaysian Ringgit in August and September 2015 in Kuala Lumpur and other expenses incurred in Australian dollars between 1 July 2015 and the end of March 2016. He says that he has not yet received reimbursement for these expenses. The amounts Mr Noble claims on this account are conveniently extracted in the table below from Exhibit 16: Date Submitted Expense Period Amount in Malaysian Ringgit Amount in Australian Dollars 26 October 2015 August 2015 2,212.40 770.99 26 October 2015 September 2015 6,182.72 2,154.48 16 May 2016 1 July 2015 to 7,851.67 31 March 2016 Total 10,777.24

1. Mr Noble relies upon Mr Singh's evidence as to Secure Logic's expense approval practice. That evidence was that Mr Noble would ordinarily submit his expenses by email. Mr Singh would review these expenses in the first instance, then he would send them to the accounts team for final review and approval. Mr Noble documented these expenses in Exhibit 9. Mr Singh had no occasion to raise an issue with "any specific expense" claimed by Mr Noble in the course of his employment at Secure Logic.
2. It follows from the Court's interpretation of clause 1.10 that Mr Noble is entitled to reimbursement of "reasonable general expenses" of a "type generally approved by the company" in addition to his receipt of a "non-discretionary amount".
3. To the extent that the expenses were incurred for the purposes of carrying out his functions as an employee of SL Singapore, Secure Logic says that it is prepared to pay for them. It says it has no legal obligation to do so because they have not been the subject of any approval of the kind required by proviso I of clause 1.10.
4. Secure Logic's analysis of the expense claims relied upon, accepts reveal that, of the total expenses claimed, an amount totalling $5,760.38 is for expenses incurred by Mr Noble for the purpose of carrying out his functions as an employee of SL Singapore. Secure Logic challenges the component of $4,669.66 of the claim for $7,851.67, accepting only $3,182.01 of that amount.
5. But whatever Mr Noble's credibility difficulties in other parts of this case, he was a reasonably good receipt and record keeper, as Exhibit 9 shows. The Court accepts that he had a history of acceptance of his claims from the accounts team. And a review of the expenses claimed indicates that they are all capable of being client-related expenses, including the airfares between Sydney and Kuala Lumpur. The Court will allow these expenses. Their lack of present approval seems to have been caused by the intervention of these proceedings.
6. Quarterly Commission under the SIP. Mr Noble claims that in addition to his base salary he was entitled under clause 1.5 of the employment contract to participate in SL Singapore's SIP. The employment contract, clause 1.5 traces out the features of this aspect of Mr Noble's contractual entitlements.
7. By clause 1.5 the SIP was described as "the variable component of Mr Noble's compensation", which was "estimated to be $100,000 SGD for 100% quota attainment". It was to be paid as "a commission quarterly based and within two months of the end of each quarter". Its subject matter was "on duties and project related objectives". And "these", meaning the "duties and project related objectives" would "be agreed within your first month of employment". Coming as it does within clause 1.5, which sets an annual base salary, this variable component of Mr Noble's compensation of $100,000 SGD should be construed as an annual entitlement.
8. Although the language of clause 1.5 loosely refers to the payment to the employee of both a "commission" and a "bonus", on a proper interpretation of the clause, both expressions refer to payment under the SIP which depending on how the payment was calculated could be either a "commission" or a "bonus". The other more detailed requirements of clause 1.5 are analysed below.
9. Mr Noble submits the following: that SL Singapore failed to provide him with the "duties and project related objectives" to be agreed, in an unambiguous and finalised form that was capable of being implemented; that SL Singapore failed to pay any SIP; and that SL Singapore should not be permitted to rely in its defence upon a failure to provide Mr Noble with a SIP plan or to clarify his KPIs to deny Mr Noble his legitimate clause 1.5 entitlements.
10. Secure Logic submits the following: that clause 1.5 does not require SL Singapore to take any positive steps to enable a calculation and payment of a quarterly bonus it being a mere agreement to agree of the Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 kind; no breach of the clause is established; and no damage for breach can be proven.
11. The applicable legal principles that govern this aspect of the parties' contest were stated by the Court of Appeal in Silverbrook Research Pty Limited v Lindley [2010] NSWCA 357 ("Silverbrook"). In Silverbrook, Allsop P, Beazley JA and Hammerschlag J considered an employment contract similar to Mr Noble's contract with Secure Logic. In that case, the contract provided that the employee, Ms Lindley, would be paid a salary of $210,000 annually to the employer, Silverbrook. The contract also provided that Silverbrook would set objectives each quarter against which Ms Lindley's performance would be measured. If Ms Lindley met those objectives, then she would receive a performance bonus. But such a bonus would be "entirely within the discretion" of Silverbrook (clause 4.3). But Silverbrook never set those objectives, and Ms Lindley never received a performance bonus in her five years of employment. Upon resignation, Ms Lindley claimed damages for a loss of commercial opportunity due to her employer's failure to set the objectives to review her remuneration.
12. In Silverbrook Allsop P (with Beazley JA agreeing) stated the law relevantly as follows (at [2]): "As a matter of general principle, damages for loss of a commercial chance or opportunity will be recoverable in contract when the contract as a whole…is such as to promise an opportunity or chance to obtain a benefit and, in other cases, where the loss of a business or commercial opportunity is the consequence of a breach of contract and the loss of opportunity or chance falls within the rules of remoteness in contract."
13. To assess such damages, the task is to "value that loss of opportunity or chance": at [5]. Where the clause includes a broad discretion, a reasonable construction of the clause will not permit the employer to choose "arbitrarily or capriciously or unreasonably": at [5]. The discretion is to be exercised honestly and in conformity with the contract ([5]-[6]) (see also Roderick v Washington H Soul Pattison and Company Limited (No 2) [2020] NSWSC 1224 at [260]).
14. It is not an issue in this case that SL Singapore not only did not pay any SIP but it did not agree upon the "duties and project related objectives" upon which the commission or bonus would be paid. Secure Logic did not proffer any objectives to Mr Noble for his assent or negotiation. Secure Logic did not even attempt to prove it had taken such a step. As was the situation of the respondent employee in Silverbrook, Mr Noble was thereby denied the opportunity afforded by employment contract, clause 1.5. And in this case, as in Silverbrook, there is no call to assess whether on the balance of probabilities the employer would have taken some step to obtain the chance. The opportunity or chance that was agreed by clause 1.5 and to which Mr Noble was entitled, without more, was denied to him: Silverbrook at [4]. The task then becomes one to value that loss of opportunity or chance: Silverbrook at [5].
15. Secure Logic deploys several arguments in reply. But most of its arguments against any award of damages in respect of SIP are answered by the application of the principles stated in Silverbrook. Before valuing the loss of opportunity or chance here those arguments should be briefly analysed.
16. First, Secure Logic disputes Mr Noble's breach case. Secure Logic contends that Mr Noble's pleaded breach case does not reflect an obligation actually found in clause 1.5. His pleaded case is that SL Singapore did not provide an SIP template document that contained quarterly sales quotas.
17. This is readily answered. It is an essential prerequisite of Secure Logic's clause 1.5 obligation to agree upon "duties and project related objectives" that Secure Logic would have to advance some proposal answering the description "duties and project related objectives" whether in the form of a template or something else. But what is clear is that it did not provide any document or template of this type. Whether the document to be provided under clause 1.5 included quarterly sales quotas or not Mr Noble's pleaded case sufficiently clearly alleges that to comply with clause 1.5 Secure Logic would have had to advance numerical objectives or targets that were framed on a quarterly basis and that it did not do so.
18. Second, Secure Logic points out that clause 1.5 affords it a discretion: "may" pay a quarterly bonus but the clause also provides that SL Singapore "reserves the right for any reason to end or amend any bonus or commission scheme at any time", making the clause an unenforceable agreement to agree. Secure Logic points out it leaves for future agreement the nature and extent of the targets against which the potential payment of any bonus might be assessed, and it contains no mechanism for the determination of those targets especially in the event of disagreement.
19. Similar arguments were rejected in Silverbrook at [5] and [6]. The fact that an employment contract provides that the decision as to whether an employee should receive a bonus is "entirely within the discretion" of the employer should not be construed so as to permit the employer to withhold the bonus capriciously or arbitrarily or unreasonably. Nor should it be construed to give the employer free choice as to whether or not to perform a contractual obligation. The relevant discretion should be understood against the proper scope and content of the contract, this being a bargain for a bonus to be assessed against set objectives.
20. Third, Secure Logic denies it breached clause 1.5. Secure Logic criticises the way that Mr Noble pleads his case; contending that even if it is accepted that a step in the process of seeking to reach agreement on objectives for Mr Noble's SIP, SL Singapore complied with its obligations. It can be accepted that Secure Logic at least once provided a template document in blank to Mr Noble and invited him to complete it, based on his own assessment of what was realistic and appropriate for his SIP. Secure Logic says that the failure to reach agreement was caused by Mr Noble's failure to advance the discussion by providing some proposed objectives. Secure Logic then speculates that Mr Noble probably failed to do this because he was not performing his duties and that he was not successful in his role in Asia, leading to his recall from Asia after only 7 months.
21. There are several answers to this. Secure Logic as the employer under the employment contract proposing a SIP had a non-transferable obligation to set standards by which it would be obliged to pay a bonus. This is to be inferred from the fact that the SIP was based on "duties and project related objectives"; the employee did not design his own duties and the "project related objectives" with those of Secure Logic, not Mr Noble. Secure Logic cannot deflect the breach contention against it in this way. Moreover, Secure Logic's theories as to why Mr Noble did not fill up a template are unfounded speculation.
22. SIP Commission - Valuation. Mr Noble's loss of opportunity or chance can be valued on the available evidence. Secure Logic submits that there is insufficient evidence to ground any such valuation. It puts the matter this way: "In order to assess damages, one would need evidence as to a range of matters, including (a) what the targets would have been had they been agreed, (b) what Mr Noble would have had to do in order to have any prospect of meeting those targets, (c) the market and other relevant conditions impacting on whether or not, had Mr Noble so acted, his actions would have resulted in sales of a kind that would have resulted in the targets being met, (d) whether, even if the targets were met, Secure Logic Singapore would have exercised its discretion to pay the bonus (it being a matter of discretion given the clause provided that the bonus "may" be paid, not "must" or "will" be paid). Mr Noble has made no serious attempt to advance evidence of a kind that would enable the Court to begin to consider these matters, let alone assess them so as to be able to arrive at a sufficiently confident view as to whether on the balance of probabilities a valuable opportunity was lost, let alone the value of such an opportunity."
23. This submission is contrary to Silverbrook (at [4]), which makes clear that in assessing damages for loss of chance of a bonus there is no requirement for the Court to assess whether on the balance of probabilities Mr Noble would have taken particular steps to obtain the chance. And the absence of evidence highlighted in Secure Logic's submission is substantially accounted for by Secure Logic's own breach of contract in failing to define duties and project related objectives conformable with clause 1.5.
24. But the Court can value the loss of opportunity or chance here, rejecting the inference that Mr Noble failed to perform his duties in Malaysia and South-East Asia and that he was recalled because of that failure. The history of the period supports the inference that by August - September 2015 Mr Devaraj had two of his senior executives, Mr Noble and Mr Singh working in South-East Asia, Mr Noble in Kuala Lumpur and Mr Singh in Singapore. The focus of Mr Noble's role was building the CSOC in Kuala Lumpur. The focus of Mr Singh's role was growing Secure Logic's business in Asia. Ultimately Mr Devaraj had to make a choice and by early 2016 when the CSOC was well underway, he preferred Mr Singh to run the overall Asian operations and bringing Mr Noble back to Australia was the logical course.
25. Mr Singh offered some criticism of Mr Noble's sales ability in Asia. He says Mr Noble lost the confidence of one of Secure Logic's partners, Infinitium. But Mr Noble had overlapping geographical and client sales responsibilities, which was inherently likely to lead to friction between the two of them, which explains Mr Singh's attitude. This was a less reliable aspect of Mr Singh's otherwise satisfactory evidence and the Court does not accept his criticisms of Mr Noble's performance.
26. Moreover, neither Mr Singh's nor Mr Devaraj's criticisms are supported by contemporaneous documentary evidence. If Mr Noble was recalled in January 2016 as a failed project leader, as Secure Logic now claims, one would expect a recall on those grounds to generate its own terse email exchanges between Mr Devaraj and Mr Noble and to have led to Mr Noble being performance managed as soon as he got back to Australia.
27. Some basic inferences can be drawn to enable valuation of Mr Noble's lost opportunity. The estimated $100,000 SGD bonus was for 100% quota attainment to be paid quarterly. It is likely this would have been allocated at the rate of $25,000 SGD per quarter. Mr Devaraj's dissatisfaction with Mr Noble only overtly emerged in Sydney in February March 2016. Bonus payments for the September and December quarters are likely to have been unimpaired by that dissatisfaction and bonus for the March 2016 quarter somewhat impaired by that dissatisfaction.
28. Mr Noble's likely "project related objectives" in the second half of 2015 would have been related to completion of the CSOC in Kuala Lumpur, itself a time-consuming task rather than sales objectives. Mr Noble's own evidence, which is accepted on this issue, and his contemporaneous emails when returning to Australia, such as that of 10 February 2016 to Mr Singh, show substantial progress on the CSOC by that time and cooperation in moving it forward to completion in other hands.
29. Some factors also point to Secure Logic having a motivation to be generous with Mr Noble in bonus allocation under clause 1.5. Although Mr Devaraj had an ulterior motive of trying to move Mr Noble onto a different contract with Plush Hosting, Mr Noble was offered a pay-rise under a proposed employment contract with Plush Hosting.
30. And Mr Noble was generating income for Secure Logic and working long hours accruing a substantial amount of time in lieu. It is likely he would have come close to meeting any performance indicators had they been reasonably set and implemented.
31. For these reasons the Court would allow him an SIP bonus of $20,000 SGD for the September 2015 quarter and $20,000 SGD for the December 2015 quarter and $10,000 SGD for the March 2016 quarter. These amounts should be factored into his calculation of loss.

The Issue of Shares in SL Singapore

1. Mr Noble's first claim is to an entitlement to an issue of shares representing 6% of the shareholding of SL Singapore within 3 months of the date of the contract, conditional upon the acquisition of 6% of Plush Hosting. A further 6% was said to be issued upon meeting agreed KPIs.
2. But an important threshold issue at trial was the way that Mr Noble's Cross-Claim was pleaded and what issues were fairly raised for determination on those pleadings. The relevant breaches of the employment contract are pleaded in paragraphs [38] and [39] of the Cross-Claim, being the major issue the initial 6% total shareholding in SL Singapore and the failure to implement KPIs to regulate Mr Noble's eligibility for the second 6%.
3. The pleading of breach was as follows: "38. In breach of the Contract, the first cross-defendant failed to issue Mr Noble the equivalent of 6% of the total shareholding in the first cross-defendant, within the first three months of his employment or at all. 39. In breach of the Contract, the first cross-defendant failed to implement any specific individual or team key performance indicators against which Mr Noble's eligibility for the allocation of a further 6% of the total shareholding in the first-cross defendant would be determined."
4. The pleading of the primary term said to have been breached, is in paragraphs [26] and [27] of the Cross-Claim: "26. It was a term of the Contract that as soon as possible, and in any event within three months of the date of the Contract, the first cross-defendant would issue Mr Noble the equivalent of 6% of the total shareholding in the first cross-defendant. 27. It was a term of the Contract that Mr Noble would be eligible to receive a further assignment of shares, the equivalent of 6% of the total shareholding issued in the first cross-defendant, in the course of his employment and upon satisfaction of specific individual and team key performance indicators."
5. Secure Logic's threshold point is that the clause that Mr Noble relies upon does not exist. This is not just an arid argument about pleadings. It is a question of what needed to be proved at trial and what issues Secure Logic was on notice that had to meet.
6. As to the first 6% shareholding, Mr Noble claims that it was a term of the contract that Secure Logic Singapore would issue him with the equivalent of 6% of the shares in it as soon as possible, and in any event within three months.
7. The express written term, clause 1.6, is not unqualified as the pleading alleges. Rather, the issue of the shares was conditional upon two matters (a) "subject to approval of the Board of Directors " [of SL Singapore], and (b) Mr Noble entering into a shareholders' agreement "covering matters usual in such an agreement".
8. The pleading and Mr Noble's case in consequence do not attempt to prove that SL Singapore breached a contractual any duty to procure board approval, or breached a contractual duty to prepare and serve on Mr Noble a form of shareholders agreement that corresponds to the description "covering matters usual in such an agreement".
9. The issue of any shares the Mr Noble under clause 1.6 were conditional on both these matters. As a matter of fairness in the conduct of the proceedings, his case needed to engage directly with whether those conditions had been satisfied and, if they had not been satisfied, that their non-satisfaction was itself a breach of contract. This conundrum was largely avoided in Mr Noble's case because of the pleadings extracted above avoided the problem of proof of these matters.
10. Proof of these matters was not insubstantial. SL Singapore had a two-person board at all relevant times and unanimous approval was required for it to issue shares. If the case had been pleaded that that board had a duty to act reasonably to approve the issue of shares under clause 1.6, Secure Logic would have presumably fielded a case from both board members about how they would have approached the consideration of such a resolution. But no such contest was conducted in the proceeding.
11. Equally, if his case was not just to be answered by contention that clause 1.6 is relevant only to an agreement to agree, Mr Noble bore the onus of establishing what the terms of a shareholders agreement were "covering matters usual in such an agreement". That is a contestable issue which was not overtly contested in the proceedings, because of the shape of the pleadings and the conduct of the case in consequence.
12. The Court is reluctant to decide this question on the pleadings. But this is a case where that must be done, because in response to the Cross-Claim Secure Logic has not prepared itself to meet issues about the satisfaction of those two conditions. And Mr Noble's case has not adduced evidence of their satisfaction. Board approval was never obtained. No form of "usual" conditions was proven. So, clause 1.5 is not engaged.
13. There is little doubt from the correspondence that Mr Noble proceeded in his dealings with Secure Logic in early 2016 on the basis that these matters were formalities and that he had an immediate entitlement to the first 6% of shares and an additional 6%. And regrettably that misunderstanding was not resolved at the time.
14. Mr Noble's case on the Cross-Claim that there was an obligation upon SL Singapore to issue two successive tranches of shares to him each of 6% without having to satisfy these two additional qualifications, must fail, firstly because such a clause has not been established. But even if the clause 1.6 is relied upon, the case must fail because the cross-claimant's case has not proved that the conditions have been satisfied.
15. Whilst this may seem a harsh result given the investment of time and resources in this part of the Cross-Claim, it is the only result which the Court finds acceptable that is consistent with fairness to both parties.
16. Reserving the issue of board approval was contextually appropriate because the acquisition of Plush Hosting was incomplete. There was some limited contested evidence about the conditions of the completion of the Plush Hosting transaction. Secure Logic submitted that it the board approval provision was a mechanism by which any final decision about the issue of any shares to Mr Noble could be deferred until the outcome of the Plush Hosting acquisition was better understood. But such evidence is was called on that issue was not addressed to the core question that would have been raised by amended different pleadings about what would have been before the SL Singapore board when it came to approve the issue of shares to Mr Noble under clause 1.6.
17. There is no doubt that Mr Noble never entered the shareholders agreement. Mr Devaraj sent him a Shareholders Accession Deed for the existing Secure Logic shareholders agreement. But whether he was obliged to enter that deed or some other form of deed to satisfy the condition in clause 1.6 is an open and unproven question.
18. As to one incidental matter that may need otherwise to be resolved, clause 1.6 refers to the issue of a particular number of shares in SL Singapore, namely 600 shares. The Court accepts that this was a typographical error, and that 6% of the shares in SL Singapore at the time represented 60 shares. The error arose from Mr Devaraj using a precedent from another company which had a different number of shares. The percentage is more likely to be the correct figure than the number in this context.
19. In light of these findings it is not necessary for the Court to consider issues concerning the quantum of shares in SL Singapore or their exchange for shares in SL Australia.
20. Finally, it should be observed that Mr Devaraj signed an SL Singapore Shareholder Deed on behalf of both SL Singapore and SL Australia on 23 June 2014. Secure Logic argues that under the SL Singapore Shareholder Deed if Mr Noble had shares in SL Singapore issued to him and became entitled to sell them, the only consideration he could receive for them would be 100 per cent of their cost price. But Secure Logic argues that on Mr Noble's own case the shares would have been issued to him for no consideration. So Secure Logic concludes the maximum consideration he would have derived for the transfer of his shares would have been nil.
21. But none of this really takes the case forward. No one has established that the SL Singapore Shareholders Deed "covers matters usual in such an agreement" within clause 1.6, so it is irrelevant.

Mr Noble's Misrepresentation Claim

1. Mr Noble's Cross-Claim pleads for damages for misleading and deceptive conduct against SL Singapore, Mr Devaraj and SL Australia, respectively the first, second and third cross-defendants. The misrepresentation claim against SL Singapore and Mr Devaraj differs slightly from that against SL Australia.
2. The primary misrepresentation claim is brought against SL Singapore and Mr Devaraj. A supplementary misrepresentation claim is brought against SL Australia.
3. The misrepresentation claims arise out of a series of oral and written statements said to have been made by Mr Devaraj to Mr Noble between January and May 2015 in relation to two subjects, the first of which is claimed to be actionable in damages but the second of which is not said to be actionable. The misrepresentations are said to have caused him to enter the employment contract.
4. The first subject of misrepresentation is the issuing of shares to Mr Noble in Secure Logic companies. These misrepresentations are said to have occurred on 16 January 2015 at Mr Devaraj's home, and on 19 February 2015 at the Haymarket Hotel in George Street Sydney. What was said on these occasions is covered in the factual narrative above.
5. The second subject of misrepresentation is Mr Noble's participation in a SIP were he was to become an employee of a Secure Logic company. Mr Noble does not deploy the second subject as a basis for a damages claim but rather as a pre-contractual communication relevant to the proper interpretation of the employment contract.
6. The representations in relation to the SIP is said to have occurred on 6 March 2015 at the Mejico restaurant in Pitt Street Sydney, on 20 March 2015 in the Secure Logic boardroom, and on 3 May 2015 and 4 May 2015 during negotiations. The Court's findings as to what was said on these occasions is covered in the factual narrative above. But the SIP representations do not need to be considered further in Mr Noble's misrepresentation claims
7. Mr Noble pleads the misrepresentations upon which he relies in relation to the first subject in his Cross-Claim, paragraph 15 as follows: "15. The representations pleaded in paragraphs 7 to 13 above were continuing representations, being the following representations: That if Mr Noble agreed to become an employee of a member of the Secure Logic Group Companies, and assisted with negotiations for the acquisition by that group of the fourth plaintiff, he would: Cause a company incorporated in Singapore (the first cross-defendant) to acquire all of the shares in the Secure Logic Group companies; cause to be issued to Mr Noble 12% of the issued capital in the first cross-defendant; guarantee, on sale of the first cross-defendant's total issued shareholding, a sale price of Mr Noble's shares of a minimum of $10 million AUD; (together the Representations)"
8. There were two aspects to the pleaded misrepresentations about the issuing of shares to Mr Noble. The first aspect is a benefit that Mr Noble would have 12% of the issued capital in SL Singapore ("the 12% representations"). The second is that on the sale of SL Singapore's total issued shareholding, shares issued to Mr Noble would achieve a minimum sale price of $10 million ("the $10 million representations").
9. Mr Noble further contends that the representations are as to future matters and that the cross-defendants have not discharged their onus of showing that they had reasonable grounds for making the misrepresentations. Secure Logic and Mr Devaraj each deny making the representations alleged.
10. Mr Noble also contends that with SL Singapore and Mr Devaraj as its agents, the third cross-defendant, SL Australia represented that Mr Devaraj would issue the shares contemplated by the employment contract, clause 1.6 and that SL Australia "would permit the substitution or trade of the shares [in SL Singapore] offered by [Mr Devaraj] for an equivalent number of shares in SL Australia": Cross-Claim, [32] ("the share substitution" representations).
11. Mr Noble argues that he relied upon all these representations and thereby lost the opportunity to have them included as terms of his settled employment contract with SL Singapore.
12. The Representations. The Court accepts Mr Noble's case that the 12% representations were made to him. But they were not made in the simple form of representation that is pleaded that he would receive 12% of SL Singapore. They must have been made in a form that was closer to the terms of the employment contract, clause 1.6.
13. As to the $10 million representations, the Court's findings in the factual narrative show that important parts of the $10 million representations were made but they did not include any personal guarantee from Mr Devaraj.
14. And as to the share substitution representations, they are missing from the conversations that Mr Noble advances. Some conversation about this subject must have occurred but the best record of it is what is contained in the employment contract, clause 1.6.
15. Reliance. Mr Noble's reliance case is problematic. He alleges that he relied upon Mr Devaraj's misleading representations and as a result did not insist on including appropriate terms in his employment contract to match the representations made. Mr Noble says that his reliance upon the representations meant he lost "the opportunity" to properly document the content of the promise as part of a binding employment contract. "On one view the written employment contract provides for the shareholding promised, but the cross-defendants have denied that it is a binding agreement. If they did not intend (and the denials now made suggest they did not intend without the insistence of Mr Noble) to provide the shareholding promised then the reliance of Mr Noble on the representations and his inducement to work and be employed by Secure Logic Singapore has caused him to lose the opportunity to insist on proper and adequate documentation of the promise in a binding written employment contract providing for a 6% to 12% percent shareholding in Secure Logic Australia."
16. In this sense, Mr Noble's case is something of a backup to the contract case. He submits that, if upon its proper construction the employment contract does not conform with the representations, he should have damages for the difference between what was represented to him and what was promised under the contract.
17. But that case has difficulties. Mr Noble was aware the employment contract he was signing did not reflect the representations, but he proceeded nevertheless to sign it. The Court infers that in doing so he chose not to insist on greater conformity between the employment contract and the representations made to him. The Court does not accept that he lost an opportunity "to insist on proper and adequate documentation of the promise in a binding written employment contract".
18. Mr Noble's case stresses his friendship with Mr Devaraj as a basis for his reliance on Mr Devaraj's oral representations. Such a friendship existed. But that alone does not establish his reliance on either the 12% representations or the $10 million representations.
19. Mr Noble did not obtain independent legal advice before finalising his employment contract. But his own account shows that he carefully requested several specific amendments to the document before he signed it. The employment contract covers the subject matter of the 12% representations. The Court infers that he was satisfied that the draft employment contract reflected the 12% representations and he was content to sign in that form.
20. As to the $10 million representations, the employment contract nowhere mentions Mr Devaraj's personal guarantee of a $10 million return to Mr Noble. This must have been obvious to Mr Noble upon his review of the draft. But he did not ask for the inclusion in the final form of the employment contract.
21. Mr Noble regarded Mr Devaraj's representation of a $10 million guaranteed return to Mr Noble as an exercise in exuberant puffery. Mr Noble well appreciated that Mr Devaraj, who he had known since 2013-14, was capable of episodes of exaggerated enthusiasm foreshadowing his own future commercial successes. Mr Noble had seen this more than once in social situations. Mr Noble (and his wife Emer both) had a level-headed and cynical judgment about Mr Devaraj's more boastful statements. Neither of them really believed much of what he said.
22. Mr Noble further submits that Mr Devaraj intended that Mr Noble rely upon the 12% representations and the $10 million representations in committing to employment with Secure Logic. He submits that Mr Noble's reliance upon those representations is readily to be inferred from that intention and from Mr Devaraj's communicated belief that the shares to be issued would have considerable market value. Moreover, his reliance is evidenced in his acceptance of a below-market salary, because he anticipated that part of his remuneration would be received in the form of shares.
23. But whatever Mr Devaraj's intentions, as to the 12% representations Mr Noble saw what was in the contract and that satisfied him. And as to the $10 million representations, a strong counter inference of nil reliance arises from Mr Noble's failure to insist on Mr Devaraj's personal guarantee of that in the final form of signed contract.
24. As to the share substitution representations, the employment contract, clause 1.6 covers their subject matter. Clause 1.6 refers to "drag & tag along provisions" and to Mr Noble having a contractual entitlement to "trade in your allocated shares in the Company to gain equal number of shares in [SL Australia]". The proper reliance inference concerning the share substitution representations is that, like the 12% representations, Mr Noble was prepared to rely upon what was in the contract rather than pre-contractual statements. This inference is reinforced by the disclaimer in the employment contract, at clause 1.25. Mr Noble said that he would have read clause 1.25 and that he had read the whole employment contract "very carefully". He had refused to start work on leave for Malaysia without a contract, understanding that his "rights and entitlements, they are in the contract and nowhere else".
25. Mr Noble understood the effect of clause 1.25, which bound him as the rest of the employment contract bound SL Singapore. Clause 1.25 is in the circumstances of this case evidence of Mr Noble's non-reliance on Mr Devaraj's impugned pre-contractual conduct: Campbell v Back-Office Investments Pty Ltd (2009) 238 CLR 304; (2009) 257 ALR 610; (2009) 83 ALJR 903; (2009) 73 ACSR 1; [2009] HCA 25.
26. Damages. Mr Noble advances his case for damages for misrepresentation as an alternative to his claim for damages in contract for the shareholding he claims he was promised under the employment contract. Mr Noble accepts in his final submissions that he could have done no better than an enforceable written contract which adequately reflected the representations made to him. He submits that his resulting loss of a chance is an entitlement to either 6% or 12% of SL Australia and that if he is not entitled to this outcome under the employment contract, clause 1.6 then he should have the shareholding equivalent as damages for misrepresentation.
27. Mr Noble advances evidence that 6% of the shares in SL Australia should be valued at the least according to the expert Mr Mottershead in the amount of $241,656, or much more according to advice given by Morgan Stanley (Exhibit 15) about the potential for an IPO of SL Australia based on higher projected profits than Mr Mottershead had used. But considering the Court's findings that no damages are recoverable for Mr Noble's loss of opportunity to acquire shares in SL Australia, it is not necessary for the Court to consider the contest about the value of SL Australia's shares.
28. But Mr Noble's formulation of his damages claim for misleading and deceptive conduct as an alternative to his contract claim faced other difficulties. Claims for $10 million for loss of an opportunity to acquire and realise shares in SL Australia are expectation losses, which are not ordinarily recoverable for misleading and deceptive conduct: Weatherill v Bartlett [2017] NSWCA 1754, at [22]. Central to all forms of recoverable loss for misleading conduct is the sustaining of "a prejudice or disadvantage as a result of altering his or her position under the inducement of the misleading conduct": Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; (1998) 158 ALR 333; (1998) 73 ALJR 12; (1999) ASAL 55-014; (1998) ATPR 41-665; [1998] HCA 69 at [46]. A more orthodox formulation of Mr Noble's claim would have been for losses directly occasioned by entry into the employment contract, or for lost opportunities to deploy his skills elsewhere that was foregone by that entry.

Mr Pankhurst's Cross-Claim

1. Mr Pankhurst's Cross-Claim brings actions for damages for breach of contract and damages for what he describes as "defamation and harassment". The components of the claim fail for different reasons. The relevant parts of Mr Pankhurst's employment contract claim Paragraph [13] of Mr Pankhurst's Cross-Claim provides as follows: "a. Loss of $175,000 equalling 14 months to complete my full 24 months, in damages for a premature termination, as at $150,000 gross per annum. b. Loss of 600 shares in Plush Hosting as the $600 compensation was never paid. c. Damages for defamation and harassment. d. Loss of any Sale Incentive Plans (SIP) from sales activity 3% for professional services and 3.5% for managed services totalling $9,900 i. IPFX, network sale Managed Services at $3,500 * 36 *.035=$4,100 ii. NSW Treasury Corporation, infrastructure Sale Managed Services $80,000 *.035 = $2,800 iii. NSW Rural Fire Service, Professional Services engagement $100,000 *.03= $3,000"
2. As to (a), Mr Pankhurst's claim for 14 months' pay fails because, as the Court's findings show, Secure Logic's dismissal of him was justified. His employment was terminated for misconduct under his employment contract, clause 1.12. His employment was terminable without notice because he engaged in serious misconduct that was "wilful, deliberate or neglectful behaviour that is inconsistent with the continuation" of his employment contract; also he breached a material provision of the agreement, namely his obligation under clause 1.14. He was properly dismissed, when he was dismissed. As there was no breach of contract in his dismissal, he is not entitled to damages for lost wages for the balance of his agreed term of employment.
3. As to (b), Mr Pankhurst claims that he was not paid the $600 compensation for his transferring the 600 shares in Plush Hosting to Secure Logic. The claim seems to be on the basis that is entitled to the $1.00 per value of each of the shares being transferred. The consideration of the shares was nominal. It is not clear on the agreement made with Mr Devaraj that he would receive $1.00 per share or $1.00 for all his shares. Proof of what was paid on this account is uncertain.
4. As to (c), Mr Pankhurst did not articulate the legal basis for his claim for "harassment". Whether it could be framed as the intentional tort of assault, or some other intentional tort causing him harm, no such case is made out. The Court has not made any finding that Mr Devaraj intended Mr Pankhurst either personal or economic harm.
5. To the extent Mr Pankhurst says he was defamed he did not articulate, except in the most general terms, the alleged defamatory matter upon which he was relying, nor did he articulate the imputations said to arise from the defamatory matter. But he complained about letters sent by Secure Logic to its customers, containing statements about him. He attached samples of those letters to his Cross-Claim.
6. Those letters contain statements that were quite capable of bearing meanings that were defamatory of Mr Pankhurst. But as the findings in these reasons show, the statements made in the letters in question that convey defamatory meanings about Mr Pankhurst and referring to his misconduct are no wider or more serious than the findings that have been made in these reasons about his actual misconduct. Truth would be a complete defence to any action for defamation based upon this material. It is not necessary to consider this cause of action any further.
7. As to (d), Mr Pankhurst's claim for bonuses under the SIP has not been properly articulated or answered. The Court reserves it for further consideration in light of these reasons and the findings on the similar subject in relation to Mr Noble.

Conclusion and Orders

1. The Court's findings will allow the parties to propose detailed short minutes of order disposing of all the claims for relief and calculating the correct quantum of recovery on the Cross-Claim. The Court will direct the parties to agree on short minutes of order, or to advance competing short minutes of order.
2. The Court has endeavoured to decide all the matters in dispute between these parties relevant to the determination of final relief. But if one or other party believes that any issue remains undetermined that is relevant to the grant of final relief that can be raised at the time of any contest about the final form of the orders.
3. Secure Logic has been substantially but not entirely successful. This mixed result means that the parties may wish to put submissions as to costs. And a party may seek a special costs order. The Court's orders will provide the parties with an opportunity to put submissions as to costs.
4. Mr Noble's conduct may have been a contempt of Court. These reasons will be referred to the Prothonotary, for the Prothonotary to consider whether any action for contempt of this Court should be taken against Mr Noble.
5. Mr Devaraj authorised some surveillance of Mr Noble on behalf of Secure Logic. The Court has found that the surveillance that took place through the 18 May conduct was in contravention of the WS Act. But the Court's findings raise the question of whether the 23 May conduct with respect to Peach Tree Bay's email accounts may have been an offence under Crimes Act, s 308H, or Criminal Code Act, s 478.1. The statute of limitations with respect to any prosecution under the WS Act and Crimes Act, s 308(H) (see s 308H(4)) has expired for the relevant conduct.
6. The Court cannot condone contraventions of Australian law. Whether offences have indeed occurred and whether further action is required is for others to investigate. The Court refers these reasons to the Commonwealth Attorney General for her consideration as to whether any further action should be taken against any person under Criminal Code Act, s 478.1 in respect of the 23 May conduct.
7. Accordingly, the Court makes the following orders and directions: 1. The Court directs the parties by Friday, 25 June 2021 to bring in agreed short minutes of order to give effect to these reasons, and if agreement is not possible by that date, then the parties are to provide marked up short minutes of order showing their areas of disagreement by Friday, 2 July 2021; 2. The Court directs the parties to exchange any evidence on which they wish to rely in relation to costs by Friday, 18 June 2021; 3. The Court directs the parties to file and serve concise submissions in relation to the final form of orders and costs by Friday, 25 June 2021; 4. The Court directs the parties to file and serve concise submissions in reply in relation to costs by Friday, 9 July 2021; 5. List these proceedings at 9am on Friday, 16 July 2021 for any argument in relation to the final form of orders and costs; and 6. Grant liberty to apply.

Amendments 15 June 2021 - [Catchwords] - Contracts, line 2 - "third" instead of "second" [46] - line 4 - "its" instead of "as" [81] - line 2 - "Mr Brooks" instead of "he" [83] - line 6 - "a" instead of "as"; "an" removed [115] - line 5 - "was" instead of "had" [181] - line 4 - "like" instead of "light", "contained" instead of "contain" [189] - line 8 - "a" between "to" and "few", "but they" instead of "that" [198] line 6 - "this" instead of "as" [199] - line 2 - "helped" between "Mr Brooks" and "to" [215] - line 4 - "acting" between "thereby" and "beyond", "authorised" instead of "authorise" [219] - line 2 - "for" between "inference" and "Mr Noble" [225] - lines 1, 4 - "Peach Tree" instead of "Peachtree" [234] - quotation - line 5 - "take" instead of "fake" [254] - line 4 - "Mr Noble was" between "when" and "in" [258] - lines 5,6 - "the" between "for" and "provision", "to" after "order" [269] - line 2 - semicolon inserted after quote [282] - lines 1,2 - "As will be seen below," inserted before "Mr Noble", "John" instead of "Peter" [283] - line 3 - "course of" inserted between "the" and "delivery" [285] - line 8 - "instead" after "offer", "the" before "Ferrier" [293] - line 8 - "a" instead of "the" "from Mr Noble (see below for details)" after "email". [294] - line 9 - "John" inserted before "Giorgiutti", line 11 - "on 17 June," inserted after "3.14am", line 12 - "Giorgiutti" instead of "Dewar Judy" [304] - line 5 - "(see below") after "Giorgiutti" [312] - line 3 - "which is detailed elsewhere in these reasons" removed. [315] - line 3 - "is" inserted after "account" [318] - line 2 - "enable" instead of "enabled" [319] - line 5 - "have" instead of "had", line 6 - "have been" instead of "are being" [326] - line 3 - "it should be inferred" after "evidence" [333] - line 5 - "to Mr Doughman" after "email" [340] - line 6 - "&" instead of "and" [376] - quote - line 1 - "in" after "transferred" [378] - "device" instead of "trick" [383] - line 11 - "full" after "the" [410] - lines 3 to 4 - quotation around "work surveillance device" [432] - duplicate "of confidential record" removed [439] - line 2 - "a" instead of "the" [442] - last line - commas after "injunction" and "it" [444] - "relief" after "seeking" [475] - line 10 - "and" instead of "in" after "information" [476] - line 1 - "Mrs" inserted after "by", line 5 - comma after "Devaraj" [488] - line 4 - comma after "Devaraj" [507] - line 3 "Mrs" before "Emer" [544] - line 7 - "SL Singapore" instead of "Plush Holdings" [593] - line 7 - "$" before "3,200", "SGD" instead of "SDG" [622] - line 1 - "Devaraj's" instead of "Noble's" [628] - line 3 - "%" instead of "^" [648] - line 3 - quotation ends after "agreement" 05 October 2021 - Coversheet corrected [22] - citation to previous judgment corrected 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: 05 October 2021