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- WorkPac Healthcare Pty. Ltd. v Rovic[2017] QDC 22
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WorkPac Healthcare Pty. Ltd. v Rovic[2017] QDC 22
WorkPac Healthcare Pty. Ltd. v Rovic[2017] QDC 22
DISTRICT COURT OF QUEENSLAND
CITATION: | WorkPac Healthcare v Rovic & Ors [2017] QDC 22 |
PARTIES: | WORKPAC HEALTHCARE PTY LTD (ACN 130 095 135) (plaintiff) v BRANKA ROVIC (first defendant) and SUPREME NURSING PTY LTD (ACN 616 337 136) (second defendant) and PRINCIPISSA BELLATRICUS PTY LTD (ACN 616 324 451) (third defendant) and ELITE DUCE PTY LTD (ACN 616 234 014) (fourth defendant) |
FILE NO/S: | B5047/2016 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 10 February 2017 |
DELIVERED AT: | District Court at Mackay |
HEARING DATE: | 25 January 2017 |
JUDGE: | Smith DCJA |
ORDER: | Upon WorkPac Pty Ltd giving the undertaking recorded in the affidavit of Praanesh Prasad filed on 21 December 2016 and upon the defendants by their solicitor undertaking that they, and each of them, whether by themselves or herself, the Directors (as the case may be), employees, agents or otherwise howsoever, will not disclose, use, or attempt to disclose or use, the plaintiff’s trade secrets or “confidential information” described in paragraphs 19 and 20 of the Further Amended Statement of Claim and concerning the plaintiff’s clients and plaintiffs candidates, or part thereof (the information) for their benefit or to the detriment of the plaintiff.
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CATCHWORDS: | EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – SERIOUS QUESTIONS TO BE TRIED – BALANCE OF CONVENIENCE – where it is alleged the first defendant stole confidential information as an employee of the plaintiff and established her own business in competition with the plaintiff – whether breaches of confidential information – whether a breach of restraint clause – whether serious question to be tried – whether it was in the balance of convenience to grant the injunction. Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301 Amalgamated Pest Control Pty Ltd v SM & SE Gillece Pty Ltd and Ors. [2016] QCA 260 Australian Broadcasting Corp v O'Neill (2006) 227 CLR 57 Breen v Williams (1996) 186 CLR 71 Cerilian Pty Ltd t/as Raine & Horne Gosford v Fraser [2008] NSWSC 1016 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) & Anor (1987) 14 FCR 434 Eng Mee Yong v Letchumanan [1980] AC 331 Huhtamaki Australia Ltd v Botha [2004] NSWSC 386 John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 Optus Networks Pty Ltd v Telstra Corp Ltd (2010) 265 ALR 281 Ormonoid Roofing & Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347 Multinail Australia Pty Ltd v Pryde (Aust) Pty Ltd [2002] QSC 105 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 Re Divoca Pty Ltd’s Caveat [1991] 2 Qd R 121 |
COUNSEL: | Mr G Handran for the plaintiff Mr J Lavercombe for the defendants |
SOLICITORS: | Davidson Ryan Lawyers for the plaintiff Lillas & Loel Lawyers for the defendants |
Introduction
- [1]This is an application by the plaintiff against the defendants seeking an interlocutory injunction to restrain the defendants from using confidential information alleged to have been acquired from the plaintiff and from approaching clients and candidates of the plaintiff alleged to have been in breach of a restraint of trade provision.
- [2]The defendants oppose the making of the injunction in the terms sought by the plaintiff.
Background
- [3]The plaintiff is part of the WorkPac group of companies which provide labour hire, recruitment and ancillary services to third parties (clients) in various industries, including the construction, mining and health related sectors.[1]Each business centre is conducted as an independent business and is managed by a business centre manager (“BCM”).[2]Some have “branches” in which there are more than one BCM.
- [4]The plaintiff carries on business as a business centre in the nursing and health related sector.[3]Between 28 September 2015 and 15 September 2016, the plaintiff had two branches but before this only one.[4]WorkPac provides administrative services to each business centre including information technology and software development, human resources and credit and contract management.[5]Through a process of sourcing and assessment, personnel are recruited to registerer’s “candidates” with the plaintiff.[6]Recruitment of candidates involves significant effort, time and expense and leaves to a collation of detailed information.[7]It is governed by quality assurance and compliance and results in commissions being paid to recruitment consultants employed to undertake that work.[8]Each candidate is verified, including their qualifications, through a detailed process of credentialing and reference checks and only a few make it to a fully verified status.[9]Those few generate 100 per cent of the plaintiff’s income and represent the culmination of seven years investment and millions of dollars.[10]The third parties receiving candidates are “clients” of the business centre. Business development managers (“BDMs”) are employed to develop and maintain these relationships and to recruit new clients.[11]The placement process involves sourcing candidates and clients, encouraging clients to place job orders, matching candidates with appropriate skill sets to available work and convincing the candidate to undertake work which is the most appropriate.[12]
- [5]The ratio of candidates to clients is important because it is essential to have enough potential candidates to enable at least one to be found at any given time. This is particularly so in the nursing and health related sector, which operates 24 hours per day, seven days per week.[13]
- [6]Candidates are continually assessed and rated based on feedback from clients to ensure the best candidate is placed with a client at any point in time.[14]This involves data being kept of the clients and candidates and money being expended on this process. A third party accessing such information would gain a huge advantage over the plaintiff because that party could readily extract the best performing, most reliable verified candidates without incurring substantial time and costs associated with the recruiting, verifying or discovering those candidates.[15]
- [7]Accordingly, a key part of the business is the possession of information which has been gathered, analysed and collated on its clients and its candidates and its business. This information is managed by a password protected server and specifically designed recruitment management software on a database known as “Chilli Max.”[16]The database is substantial and was developed through skill, effort and secret processes and expense by the plaintiff.[17]Disclosure of this information to a competitor would cause serious detriment to the plaintiff.
- [8]Chilli Max and its database provide a competitive advantage to the plaintiff.[18]Chilli Max allowed operational staff (such as the first defendant) to add, access and use information as required, which information was acquired, analysed and arranged by staff of the plaintiff over seven years in a readily accessible, searchable and legible format.[19]Access to the WorkPac healthcare IT system is governed by the role and responsibilities of the employee – higher level employees are given broader access than junior staff.[20]
- [9]Logins and passwords are not to be shared.[21]Chilli Max is so precise that an employee can search and gain knowledge of a particular client’s preferred candidate, an hourly charge out rate (with margins) and measure that information against the corresponding candidates pay rates, applicable pay awards, work availability, contract details and reliability rating.[22]
- [10]Further, information included pricing structures for all clients, the needs and capacity requirements of clients, competitor analysis, business plans and growth strategies, budgets, staff performance reviews, candidate reliability and private information of candidates (including their superannuation and bank account details, qualifications and certificates and availability).[23]
Evidence concerning Ms Rovic’s conduct
- [11]There is a dispute in the evidence as to what Ms Rovic has done. I will firstly deal with the evidence adduced by the plaintiff.
Plaintiff’s evidence
- [12]Up until 20 October 2016, the plaintiff employed Ms Rovic as a BDM. She had returned to that role on 19 September 2016, having been promoted to BCM on 28 September 2015[24]from BDM, in which role she commenced on 6 January 2014.[25]As a BDM and BCM, Ms Rovic was the face of the plaintiff and the main point of contact to its clients.[26]Both positions were vital to the success of the plaintiff’s business, and carried entitlements to commissions (by profit share) and had entertainment entitlements to forge and reinforce client relationships.[27]
- [13]In both positions, Ms Rovic had unfettered access to the plaintiff’s confidential information relating to its clients, candidates and operations.[28]The BDM is the interface between the plaintiff and its clientele. It is a position which enabled the employee to gain trust and confidence and to be relied on in a client’s affairs.
- [14]The BCM role occupied by Ms Rovic immediately before signing her final employment agreement, is a senior role allowing Ms Rovic to control the plaintiff’s business and have influence over its staff and candidates.[29]As BCM, Ms Rovic managed the plaintiff’s business, had day-to-day control over its operations and had significant influence over its clients.[30]Her employee entitlements included an entertainment account to aid the employee to win and maintain custom for the benefit of the plaintiff.[31]
- [15]Ms Rovic was highly successful, in maintaining and strengthening relationships with six prisons which became the plaintiff’s top clients, generating about 60 per cent of its profits.[32]Before Ms Rovic had been promoted to BCM in September 2015 there were only four prisons, and together they only contributed to 10 – 15 per cent of the plaintiff’s profits.[33]The success was in part due to the entertainment expenses in pursuit of custom.[34]
- [16]Also relevant was the establishment of the “central staffing office” or “CSO.” CSO was established to provide a dedicated roster management and associated administrative services to Queensland Corrective Services, and Prison Health Services which comprised five of the six prisons who are clients of the plaintiff.[35]CSO provided the plaintiff with exclusive client information about client usage and percentage performance of other competitor’s candidates.[36]This was a competitive advantage to the plaintiff. Despite CSO running at a loss, Ms Rovic encouraged the plaintiff to continue using this service.[37]
- [17]
- [18]The longest period of restraint is six months (i.e. 20 April 2017). The non-solicitation provisions mentioned only target activities, which are intended to bring about recruiting employees for third parties whether by labour hire or otherwise in the nursing or health related sector.[42]The defendant did not seek to argue that the restraint in this case was excessive.
- [19]There were issues raised as to the level of Ms Rovic’s expenses. In her employment agreement it was provided that her entertainment reimbursement was 50% of authorised entertainment costs- up to $1800 per year.[43]Despite this her entertainment expenses far exceeded this. Mr Smart deposes that she hosted numerous events including “drinking sessions” and she was reimbursed $15,517.58 in the 2014/2015 financial year[44]and $38,948.71 in the 2015/2016 financial year[45]. Also Kiri Lingman in an affidavit sworn 21 December 2016 deposes to the fact that Ms Rovic had been given gift cards (meant for clients) which had gone missing. In May 2016 Mr Smart took over as General Manager. He alleges that he discovered misappropriation and breaches of company policy by Ms Rovic with her credit card kept at the maximum limit[46]. He raised the more serious breaches with her shortly before she tendered her resignation.[47]
- [20]Ms Rovic, verbally and by email, sent 22 September 2016, gave notice of her resignation which took effect on 20 October 2016.[48]Another employee, Thomas Atkin, also resigned on 22 September 2016. Mr Atkin would become a shareholder in a company Ms Rovic incorporated in December 2016 which is alleged to have been carrying on business in competition with the plaintiff.[49]
- [21]On 7 October 2016, Ms Rovic was told that she could serve the last two weeks of her notice period on “gardening leave.” She did not need to attend work therefore, save for attending a handover meeting on 10 October 2016.[50]As a result, Ms Rovic only attended the plaintiff’s office on 10 October 2016 for that meeting where despite request, Ms Lingman alleges Ms Rovic refused to provide her with the contact details of key personnel within the Department of Justice or disclose her knowledge of the plaintiff’s clients, and Ms Rovic alleged that someone had deleted all of the emails from her email account.[51]She alleges that the emails were deleted, in fact, by Ms Rovic.[52]
- [22]Mr Chand was employed by the plaintiff as a recruitment coordinator.[53]He worked closely with Ms Rovic and left with her after she collected her belongings following the handover meeting.[54]Earlier that day, his computer work station was used to access Ms Rovic’s WorkPac IT user account (requiring her username and password) and surreptitiously copy to a USB device 1,248 files stored on the plaintiff’s password protected database in 121 folders.[55]The next day, his computer was again used to access Ms Rovic’s user account. A USB device was also inserted. The information available to Ms Rovic’s user account was unfettered.
- [23]In my view, it is most likely that the download related to confidential information concerning candidates and clients for the following reasons:
- (a)A large number of folders and files were involved, which is not consistent with mere personal items.
- (b)One of the files involved was “health care/jotin market reports/confidential corrections/corrections database.xlsx” which would appear to be an excel spreadsheet related to confidential corrections information.
- (c)The copying went through a number of processes before being downloaded to the USB device which is highly unusual.
- [24]I also draw the inference that Ms Rovic either copied the files herself or gave the password to someone to do this for her. This is the only logical conclusion available especially when Ms Rovic does not swear as to these matters in her material.
- [25]The day after ceasing employment, Ms Rovic registered her first business name “Supreme Nursing Australia” shortly followed by “Supreme Nursing” and “central staffing office” (“CSO”).[56]Within four days of ceasing employment, Ms Rovic was placing nursing candidates with Arthur Gorrie Correctional Centre.[57]Around this time, she transferred a candidate of the plaintiff, Gina Landimore, to her business and paid her for work undertaken at the Arthur Gorrie Correctional Centre, without Ms Landimore’s knowledge or consent which clearly involved using Ms Landimore’s bank account and superannuation details.[58]
- [26]
- [27]In December 2016, three companies controlled by Ms Rovic were incorporated, one of which is an operating entity.[61]That company (Supreme Nursing Pty Ltd) has one of the other companies and two former employees (being Mr Chand and Mr Atkin as its members).
- [28]Inadvertently, on 15 December 2016, emails between Ms Rovic and the Arthur Gorrie Correctional Centre disclosed that she was placing nurses with the centre in the period 24 October 2016 until 27 November 2016.[62]Also, communications with Ms Landimore disclosed that WorkPac nurses were now working shifts at Arthur Gorrie under Supreme Nursing[63]and an email from Ms Rovic dated 24 December 2016[64]show that Ms Rovic was competing with the plaintiff for work at the prisons.[65]
- [29]The plaintiff submits it can be readily inferred that she was using the relationships and knowledge she gained solely by reason of her employment with the plaintiff, and in fact the Arthur Gorrie Correctional Centre confirmed Ms Rovic’s business had replaced that of the plaintiff.[66]The evidence tends to prove that Ms Rovic solicited and attempted to solicit candidates (and employees) from the plaintiff further to Mr Chand and Atkin.[67]
- [30]The plaintiff commenced proceedings against Ms Rovic on 21 December 2016 for damages and other relief and applied urgently for an interlocutory injunction. Ms Rovic owns no real property and had only recently been discharged from bankruptcy.[68]
- [31]Ms Rovic gave interim undertakings to the court on 22 December 2016. On 24 December 2016, she emailed the plaintiff’s solicitor confirming she had two nurses working for her and revealed that she did not intend to “call the nurses out of a prison” against the advice of her solicitor.[69]
- [32]Further, correspondence inadvertently sent to the plaintiff disclosed Ms Rovic sought to process an application for Mr Chand to obtain clearance to prisons which correspondence occurred on 19 January 2017.[70]
The defendants’ material
- [33]Ms Rovic, in her affidavit filed 23 January 2017 (document 25), alleges that on 22 September 2016 at about 5.30pm she had a telephone conversation with Mr Prasad, the managing director of the WorkPac Group, in which following conversation occurred:
“Ms Rovic: “I would appreciate if I could have my non-compete and restraints removed. As you know, I am on my own with two kids. I’m going to take some time off to be with them, and after that I might need to join a competitor, because I need to make a living.
Mr Prasad: “Fair enough, that’s not a problem. We can do that. I wish you all the best.”
Ms Rovic: “Is there anything I need to do now?”
Mr Prasad: “Have you advised Shelley?”
Ms Rovic: “Not yet.”
Mr Prasad: “Please give her a call and let her know.”
Ms Rovic: “Not a problem. Thanks for everything. Bye.”
- [34]She then alleges that on 26 September 2016, she received a letter from the plaintiff to her concerning the acceptance of her resignation.[71]Following the receipt of this letter, she alleges she had a telephone conversation with Mr Paul Douglas of the plaintiff’s Employee Relations Department, which conversation occurred on either 26 or 27 September 2016 in which she relevantly said:
Ms Rovic: “When I called Praanesh to resign, I asked that my restraints and non-compete be removed because I want to keep working in healthcare and I might need to work for a competitor.”
Mr Douglas: “Yeah mate, he removed those things. He had Katy change the normal letter of acknowledgment and resignation.”
Ms Rovic: “What do you mean?”
Mr Douglas: “Normally, the acknowledgement letters will re-iterate non-competes and restraints. I don’t know how you did it, but he had Katy take it out in yours. It’s the first time I’ve seen it happen while I’ve worked here.”
Ms Rovic: “Okay, so what does that mean?”
Mr Douglas: “Exactly that. They have no intention of enforcing the non-compete or restraints. So once you have worked out your four weeks, you are free to do whatever with whoever you like.”
Ms Rovic: “Okay, brilliant. Thanks. The last thing I want is to take a job somewhere and then find out I’ve done the wrong thing.”
Mr Douglas: “Nope, you are fine. I wish you all the best. Stay in touch.”
Ms Rovic: “You bet. I appreciate your time.”
- [35]In a further affidavit filed 24 January 2017 (document 26), Ms Rovic alleges that the defendants do not have in their possession or under their control any documents relating to the plaintiff’s trade secrets or confidential information and the 1,248 files of data and are incapable of providing or otherwise delivering up these documents, but are prepared to undertake not to disclose or use the plaintiff’s trade secrets or confidential information.
- [36]She states that she is a single parent with two children, aged 6 and 12, living in Paddington. Her weekly living expenses range between $800 and $2,000. She owns no real property. The only income she receives is from the business conducted by the second defendant and the only businesses that recruit for the placement of nurses in the Arthur Gorrie Correctional Centre, which business has been conducted since December 2016. She says that between early December 2016 and the date of the affidavit, the weekly income the second defendant has received is ranged between $3,000 and $11,000. The weekly profit of the business (excluding money she pays herself as a wage) is between $1,000 and $2,000. After taxes the second defendant pays her about $1,644 per week. The second defendant is currently trading at a loss. She says that she believed, after ceasing work for the plaintiff, she was able to conduct business in Queensland associated with the recruitment of placement of nurses in health professions because of the conversations deposed to in the previous affidavit. She also sets out in para 9 the steps she has taken concerning her business, and she confirms she has had conversations with offices from Queensland Health concerning the placement of nurses at five different correctional centres. She alleges that she has incurred expenses of $55,454 in establishing her business. She also sets out a business plan as Exhibit BK-1 of what she may have earned but for the undertakings provided.
- [37]In a further affidavit sworn 25 January 2017 and filed by leave, she exhibits an email from Marie Finley from Prisoner Health noting that they needed “another agency to assist to fill the shifts”. Objection is taken to this email on the basis it has not been properly approved. I think it is admissible as evidence of the fact Ms Rovic received the email but in the absence of an affidavit of Ms Finley, goes no further.
- [38]She further states that she received an email from Howard Powell of the plaintiff on 1 November 2016 (Exhibit BK-2) which he says was inconsistent with the agreement she had previously had with the plaintiff. At para 7 she acknowledges that she has placed three nurses with the Arthur Gorrie Correctional Centre which nurses apparently were candidates of the plaintiff.
- [39]Mr Lavercombe, in his affidavit sworn 25 January 2017, encloses correspondence to the plaintiff’s solicitors seeking to provide undertakings which suit the defendants.
The plaintiff’s material in response
- [40]Praanesh Prasad, in an affidavit sworn 24 January 2017 (filed by leave) swears that he is the Chief Executive Officer of WorkPac and was appointed managing director on 8 May 2016. He states that between September 2013 and October 2016, Ms Rovic was an employee of WorkPac Healthcare. He states that in mid to late September 2016, Mr Smart informed him that he was investigating Ms Rovic’s conduct during her employment with WorkPac Healthcare which he considered to be serious breaches of her employment agreement and legal obligations generally. On 22 September 2016 at approximately 5.30pm, he received a phone call from Ms Rovic in which the following words were spoken:
Mr Prasad: “Hi Branka, how can I help you?”
Ms Rovic: “I am very concerned about the way we are treating clients in the business and I cannot stand by and watch this happen.”
Mr Prasad: “Is there anything I can do to remedy this?”
Ms Rovic: “It’s not in me to do anything now. I would like to resign. I still need to pay my bills as I have kids and rent to pay.”
Mr Prasad: “I understand. If there’s anything I can do to help you let me know.”
Ms Rovic: “Can I have my non-compete removed?”
Mr Prasad: “I cannot do that. Perhaps you should look at doing something other than recruitment.”
Ms Rovic: “Thanks for your support in the business.”
Mr Prasad: “Again, let me know if there’s anything I can do. Have you told Shelley yet?”
Ms Rovic: “Not yet.”
Mr Prasad: “You need to tell Shelley.”
Ms Rovic: “Okay.”
Mr Prasad: “All the best.”
Ms Rovic: “Thanks for that.”
- [41]Mr Prasad denies that which is alleged in Ms Rovic’s affidavit dated 23 January 2017. He also alleges (para 15) it is WorkPac’s usual practice to preserve and reserve all of their rights under the employment agreements and he cannot think of any occasion in which he has released or waived any employee from restraints and would not have done so in Ms Rovic’s case.
- [42]Paul Douglas, in an affidavit sworn 24 January 2017, swears that he is the employee relationship adviser for the industrial relations team of the plaintiff. He reports to Howard Powell, the national employee relations manager. In late September 2016, Mr Powell informed him that Ms Rovic resigned. He confirms that on or about 26 or 27 September 2016 he received a phone call from Ms Rovic in which the following was said:
Mr Douglas: “G’day Branka, how are you doing? Sorry to hear you are leaving.”
Ms Rovic: “I’m good thanks. Time to move on. I want to spend more time with the kids.”
Mr Douglas: “That’s fair enough.”
Ms Rovic: “I plan to hang out with the kids over the holidays and then look for a job when they go back to school.”
Mr Douglas: “That sounds good. They’ll love that.”
Ms Rovic: “I’ve spoken to Praanesh and he has agreed to remove the restraint period.”
Mr Douglas: “Oh, really? That’s unbelievable. We never do that. I don’t know how you managed to get him to agree to that but that’s good for you if he did.”
They then had a general chat about the kids.
- [43]As to her affidavit sworn 23 January 2017, he denies that she told him she might or intended to work for a competitor of WorkPac and denied that he was preparing acknowledgment letters or that Prasad had advised him about the removal of applicable restraints. During his employment with WorkPac, he cannot recall any occasion on which an employee, let alone someone in Ms Rovic’s position, was released from any restraints which is why he had said to her it was “unbelievable”. He says that WorkPac does not issue a standard letter to each of the employees when their employment comes to an end because the circumstances surrounding each employee are different.
Submissions on the factual issues
Plaintiff’s submissions
- [44]The plaintiff submits that Ms Rovic still does not dispute any of the facts deposed to by the plaintiff’s witnesses save that she deposes to not having possession or control of any confidential information but she does not attempt to rebut any of the evidence:
- (a)that she derived the confidential information Mr Smart deposes to;
- (b)that she refused to disclose any of the key personnel of the prisons to Ms Lingman during her exit interview;
- (c)that she lied to Ms Lingman during her exit interview by saying that someone else had deleted her work emails;
- (d)that there were extended entertainment entitlements beyond her contract of employment;
- (e)that the prisons provided the clear majority of the plaintiff’s profits;
- (f)her registering of the same business name offered services in competition to the plaintiff;
- (g)that she gave her log in and password to Mr Chan or somebody else to facilitate the download of the data;
- (h)that she surreptitiously obtained private details on Gina Landimore with Ms Landimore’s knowledge or consent;
- (i)her soliciting candidates or clients of the plaintiff on or before 24 October 2016; and
- (j)she breached undertakings given on 22 December 2016.
- [45]As to the promissory estoppel claim, it is submitted that the conversation alleged by the plaintiff is most “improbable”. It is submitted that the representation was not clear or precise. It is highly unlikely it would have been given and the defence raised is patently weak.
Defendant’s submissions
- [46]The defendant, on the other hand, submits that the statement made by Mr Prasad is sufficiently clear. It is submitted there was not a strong probability the plaintiff would be entitled to any relief bearing in mind the release of the restraint and non-compete obligations. It is submitted that Mr Prasad and Mr Douglas would have reasons to lie about this conversation as their positions would be at risk. It is submitted that Ms Rovic has been candid in her affidavits. It is submitted that the scheme she established was unsophisticated – why would she set it up if she had not been released from the non-compete obligations?
Discussion on this point
- [47]In Australian Broadcasting Corporation v O'Neill[72], it was held that in assessing applications for interlocutory injunctions an assessment needs to be conducted of the strength of the plaintiff’s case. In other words it is desirable for the court to evaluate the strength or weakness of the plaintiff’s case for final relief.[73]
- [48]
“The story is simply incredible and in my judgment there is not a serious triable issue on this question. In Eng Mee Yong v Letchumanan [1980] AC 331 Lord Diplock delivering the judgment of the Privy Council said at 341:
‘Although in the normal way it is not appropriate for a judge to attempt to resolve conflicts of evidence on affidavit, this does not mean that he is bound to accept uncritically, as raising a dispute of fact which calls for further investigation, every statement on an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself it may be. In making such order on the application as he ‘may think just’ the judge is vested with a discretion which he must exercise judicially. It is for him to determine in the first instance whether statements contained in affidavits that are relied upon as raising a conflict of evidence upon a relevant fact have sufficient prima facie plausibility to merit further investigation as to their truth.’”
- [49]In my view, the objective circumstances do not support that which is alleged by the defendant.
- [50]Firstly, I do consider it improbable that Mr Prasad ought to have released Ms Rovic from the restraint obligations. Why would he do this? The evidence discloses the plaintiff received a great income from corrective services – why would he allow someone in Ms Rovic’s position to compete against WorkPac? I think it unlikely he would lie to save his position- he is the CEO and Managing Director.
- [51]Secondly, a little two hours after Ms Rovic spoke to Mr Prasad she emailed Ms Lingman.[75]Ms Rovic makes no mention in this email, copied inter alia to Mr Prasad, that she had been released from the restraint of trade. The restraint of trade was an important issue to Ms Rovic. It is unlikely it would not have been mentioned at 7.45pm on 22 September 2016 if there had been such an agreement.
- [52]Thirdly there is no contemporaneous correspondence or documents to support the allegation.
- [53]Fourthly it is also surprising that if the assurance had been given, she made no mention of this at her exit interview with Ms Lingman. If she had been released, why was she uncooperative during the exit interview and why did she cleanse her work emails?
- [54]Fifthly the alleged conversation was not raised before 23 January 2017. No mention was made of it before that date.
- [55]
- [56]In those circumstances, I do not consider Ms Rovic’s evidence as to the release from the restraints terribly convincing and find Mr Prasad’s and Mr Douglas’ versions more probable.
- [57]Also, based on the material I find as follows:
- (a)Ms Rovic swiftly commenced a compete with the plaintiff for work at the prisons shortly after the termination of her employment;
- (b)it may readily be inferred that she has used and is using the relationships and knowledge she gained solely by reason of her employment with the plaintiff;
- (c)she has solicited and attempted to solicit candidates and employees from the plaintiff;
- (d)the plaintiff has demonstrated a strong case that Ms Rovic has breached and continues to breach her employment agreement including by soliciting work from the plaintiff’s clients, approaching its candidates and taking confidential information from the plaintiff by download (whether it be by herself or agents);
- (e)she has used and may continue to use confidential information of the plaintiff; and
- (f)she has acted in consultation with others, namely Mr Chand and to date has failed to disclose the nature, extent and use of the confidential information taken from the plaintiff during her secure login.
- [58]I find it telling that Ms Rovic has declined to descend into detail in her affidavits to respond to the allegations raised by the plaintiff in its material.
Interlocutory injunctions – principles to be applied
- [59]In an application for an interlocutory injunction, it is necessary to consider whether the application has established a prima facie case (in the sense that if the evidence remains as it is there is a probability that at the end of the action the applicant would be entitled to relief) and whether the balance of convenience favours the grant of an injunction.[78]
- [60]Also recently the Queensland Court of Appeal in Amalgamated Pest Control Pty Ltd v SM & SE Gillece Pty Ltd & Ors[79]accepted that the conventional approach is to determine whether there is a serious question to be tried or a prima facie case at trial the plaintiff would obtain a final injunction and if so whether the balance of convenience favours or disfavours the grant of an interlocutory injunction.
- [61]It is sufficient to show sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial and one needs to consider the strength of the probability of ultimate success which involves considering the nature of the rights asserted and the practical consequences which are likely to flow from the orders sought[80].
- [62]The court weighs multiple discretionary considerations bearing on the balance of convenience and requires the court to evaluate the strength of the plaintiff’s case for final relief.[81]
- [63]The balance of convenience comprehends questions such as adequacy of an award of damages, the availability and sufficiency of the usual undertakings as to damages, and the risk of irreparable injury to a party if the injunction is granted or refused.[82]When assessing the balance of convenience, hardship visited upon third persons or the public generally by the grant of an interlocutory injunction will rarely be decisive.[83]
Causes of action
- [64]The Further Amended Statement of Claim pleads breaches of the contractual agreement of restraint and also misuse of the plaintiff’s confidential information.
- [65]There is uncontested evidence here that the information on Chilli Max is not generally known in the industry, is not in the public domain and was acquired for the sole use and purpose of the plaintiff and its staff and was accumulated and improvised using secret systems and processes designed and implemented by the plaintiff.
- [66]It was acquired with the skill, effort and expense of the plaintiff and disclosed to Ms Rovic solely for her to fulfil her roles and responsibilities.[84]The contractual provisions between the parties were clear, in my opinion, and the contractual case against Ms Rovic is strong.
- [67]Also, there is a reasonable case against her, it seems, in equity relating to the misuse of confidential information. The equitable protection of such information can be used in preference to, or alongside, a contractual obligation.[85]In equity, an employee is not entitled to appropriate to himself or herself the employer’s confidential information contained in the employer’s documents which he or she came to acquire.[86]
- [68]
- (a)identify with specificity and not just in global terms the confidential information;
- (b)demonstrate the information has a necessary quality of confidentiality and is not, by contrast, common or public knowledge;
- (c)demonstrate the information was received by the defendant in circumstances importing an obligation of confidence.; and
- (d)demonstrate an actual or threatened misuse of the information.
The submissions
- [69]The plaintiff submits that, in this case, the information downloaded to the USB was commercially valuable and was surreptitiously downloaded or otherwise retained by Ms Rovic. It is further submitted that damages would not be a wholly adequate remedy for the plaintiff. It is submitted that damages are not a component of the action for breach of confidential information. It is also submitted Ms Rovic has no assets and concedes she is trading at a loss. It is submitted that the balance of convenience here, favours the granting of the injunctions. It is further submitted that the injunction should be granted in terms of the draft order, save for confidential information if Ms Rovic offers an undertaking in the terms sought. It is submitted that Ms Rovic has not suffered prejudice.
- [70]The defendants, on the other hand, submit that the application should be dismissed as the plaintiff has not sworn to the loss that would be suffered without restraint. The defendants have undertaken to quarantine profits, there would be significant prejudice to the defendant, bearing in mind her business expenses and her personal position if the injunction is granted. It is submitted there is a serious question to be tried, she has only on her material placed three candidates at the Arthur Gorrie Correctional Centre, and the plaintiff is not able to demonstrate damage suffered. In other words one cannot analyse prejudice to the plaintiff as compared to the defendants.
Conclusion
- [71]I accept the plaintiff’s submissions.
- [72]It is my determination here that there is a serious question to be tried and the plaintiff has a reasonably strong case against the defendants both in contract and in equity.
- [73]It is has been said in restraint cases that “it is a rare case in which relief will be declined on the basis that damages were a sufficient remedy”.[89]The information is highly confidential and very important to the conduct of the plaintiff’s business and in my view has been used in breach of the contractual obligations and in breach of equity.
- [74]I also consider relevant that damages are not adequate here because of the difficulty of detection of breach of the obligations, the difficulty of establishing causation between loss of the business with customers and actions of Ms Rovic and the difficulty of the calculation of any quantum of any damage arising from loss of business.[90]
- [75]Relevantly, Ms Rovic has not sworn:
- (a)she has not received, taken or used any confidential information from the plaintiff for personal commercial gain;
- (b)contract or solicited work or provided services to clients of the plaintiff and does not intend to do so; nor
- (c)approached or encouraged any candidate registered with the plaintiff at the time she registered to register with her or her entities and does not intend to do so.
- [76]I have also weighed up in this case the risk of damage to the plaintiff if the injunction is not granted as compared to the risk of harm to the defendant if one is.[91]In my view the plaintiff’s business will be adversely affected if the defendants are permitted to act in breach of the restraint of trade provisions and in breach of the duty of confidence. I note from Mr Smart’s affidavit that the business with Corrective services contributes 60% of the profit margin of $1,410,000[92].
- [77]On the other hand the granting of the injunctions will not stop Ms Rovic from working. She remains able to work in sales, recruitment, business development, labour hire or management roles as long as those roles are not in the nursing or medically related sector. The fact is, Ms Rovic, on the evidence aware of the restraint and confidentiality provisions, chose to set up in direct competition of the plaintiff and ran the obvious risk of proceedings for an injunction. In such cases, claims of financial hardship must be assessed in light of the obvious risk run by the employee.[93]
- [78]I also accept the plaintiff’s submissions as to the claimed prejudice by Ms Rovic. The fact is her business is running at a loss and may be unsustainable. In any event, as noted, she can run the business outside the restraints. She does not say she cannot obtain other employment within her relevant education, training or experience. I also note that the injunction will expire on 27 April 2017.
- [79]The undertakings offered by the defendants in my view insufficiently protect the plaintiff’s position in light of the first defendant’s attitude to the undertakings she has already given.[94]Also it is relevant that I have found that at the least Ms Rovic was a party to the surreptitious down loading of the confidential information and has not explained this in her material.
- [80]
- [81]In all of the circumstances, I am persuaded on the balance to make the orders sought by the plaintiff.
Conclusion
- [82]The orders I make are as follows:
Upon WorkPac Pty Ltd giving the undertaking recorded in the affidavit of Praanesh Prasad filed on 21 December 2016 and upon the defendants by their solicitor undertaking that they, and each of them, whether by themselves or herself, the Directors (as the case may be), employees, agents or otherwise howsoever, will not disclose, use, or attempt to disclose or use, the plaintiff’s trade secrets or “confidential information” described in paragraphs 19 and 20 of the Further Amended Statement of Claim and concerning the plaintiff’s clients and plaintiffs candidates, or part thereof (the information) for their benefit or to the detriment of the plaintiff.
- The court orders that until the hearing and final determination of this proceeding or 20 April 2017 (whichever is the earlier) or earlier order, the defendants and each of them, whether by themselves or herself, their directors (as the case may be), employees, agents or otherwise howsoever, be restrained from:
- (a)Accepting, soliciting or carrying out orders from any of the plaintiff’s clients (as described in Annexure A to the Further Amended Statement of Claim) for labour management services (including roster management) or for the placement of candidates (whether for temporary or permanent placements, and whether such personnel are to be employed by third persons or by the other party) in nursing or health related roles; or
- (b)Encouraging or soliciting any of the plaintiff’s candidates (as described in Annexure B to the Further Amended Statement of Claim) to register as their candidate.
- By 17 February 2017, the defendants, and each of them, deliver up to the plaintiff all documents howsoever in their possession or control containing, or complied using the information.
- Upon the close of pleadings, the parties have leave to issue notices of non-party disclosure as they may be advised without having completed disclosure inter parties.
- I will hear the parties as to costs.
- Liberty to apply on the giving of 3 days written notice.
Footnotes
[1] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 5-8.
[2] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 6.
[3] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 8.
[4] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 31.
[5] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 7.
[6] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 9-10A.
[7] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 10A – 10B.
[8] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 10A – 10B.
[9] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 10B.
[10] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 10B, 10D.
[11] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 29.
[12] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 29.
[13] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 10A.
[14] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 10B – 10C.
[15] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 10F, 48 and 48A.
[16] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 10A, 48 and 49 – 58.
[17] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 10A – 10F and 50.
[18] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 53.
[19] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 48A – 52.
[20] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 52 and 89.
[21] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 89.
[22] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 48.
[23] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 34(c), 47, 48 and 48A.
[24] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 24-25.
[25] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 18-22.
[26] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 32 and 35.
[27] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 29 – 31, 34, 38 and 41 – 42.
[28] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 46 and Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) para 45.
[29] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 29 – 32.
[30] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 39.
[31] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 18 and 22.
[32] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 33 – 38 (particularly 37(g)) and Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) paras 14 – 16.
[33] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 34(e) and (f).
[34] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 38 and Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) para 17.
[35] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 92 – 94.
[36] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 94.
[37] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 94.
[38] The employment agreement commences at p 32 of Exhibit DS-2 to Affidavit of Damien Smart, filed 16 January 2017 (Document 13).
[39] Clause 19, at p 37-38 of Exhibit DS-2 to Affidavit of Damien Smart, filed 16 January 2017 (Document 13).
[40] Clause 20, at p 38 – 40 of Exhibit DS-2 to the Affidavit of Damien Smart, filed 16 January 2017 (Document 13).
[41] Affidavit of Daniel Edward Ryan, filed 23 January 2017 (Document 18).
[42] See recruitment activities and restrained activities p 45 of Exhibit DS-2 to Affidavit of Damien Smart, filed 16 January 2017 (Document 13).
[43] Affidavit of Damien Smart filed 16 January 2017 (Document 13) Exhibit DS-2, p 32.
[44] Affidavit of Damien Smart filed 16 January 2017 (Document 13) para 34 (k).
[45] Affidavit of Damien Smart filed 16 January 2017 (Document 13) para 38.
[46] Affidavit of Damien Smart filed 16 January 2017 (Document 13) para 61(d).
[47] Affidavit of Damien Smart filed 16 January 2017 (Document 13) para 61 (e).
[48] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) Exhibit DS-2, p 52 and Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) paras 20 – 21, 28.
[49] Affidavit of Daniel Edward Ryan, filed 23 January 2017 (Document 18) p 60 – Incorporation of Supreme Nursing Pty Ltd.
[50] Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) para 23.
[51] Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) para 25.
[52] Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) paras 26 – 27 and Affidavit of Melia Peel filed 21 December 2016 (Document 7) para 6.
[53] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 78.
[54] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 84 and 90.
[55] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 51 - 57 and 85 – 88 and Exhibit DS-2 pp 65 – 66.
[56] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 63 – 64 and Exhibit DS-2 p 57.
[57] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 63 – 64 and Exhibit DS-2 p 60.
[58] Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) paras 37 – 42 and Exhibit SL-1 pp 3-10.
[59] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 75 – 85 and Affidavit of P.W. Edwards filed 27 December 2016 (Document 6) para 15.
[60] Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) – Exhibit SL-1 p 9.
[61] Affidavit of Daniel Edward Ryan, filed 23 January 2017 (Document 18) – Exhibit DR-3 pp 58-67.
[62] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) – Exhibit DS-2 at p 60 – 63 and p 68.
[63] Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) paras 37 – 42 and Exhibit SL2 - 1 p 9.
[64] Affidavit of Daniel Edward Ryan, filed 23 January 2017 (Document 18) – Exhibit DR-3 p 154.
[65] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 63 and 68 and Exhibit DS-2 p 59-61 and Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) paras 47-49.
[66] Affidavit of P.W. Edwards filed 21 December 2016 (Document 6) para 13.
[67] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) paras 64, 74-81 and Affidavit of Shelley Lingman filed 21 December 2016 (Document 8) paras 29-31 and 37-42 and pp 3-10 of Exhibit SL-1 and Affidavit of P.W. Edwards filed 21 December 2016 (Document 6) paras 14-15.
[68] Affidavit of Daniel Edward Ryan, filed 22 December 2016 (Document 10) para 6 and 7.
[69] Affidavit of Daniel Edward Ryan filed 23 January 2017 (document 18), Exhibit DR-3 p 154-155.
[70] Affidavit of Daniel Edward Ryan filed 23 January 2017 (document 18), Exhibit DR-3 p 159-160.
[71] Exhibit BR-1 to affidavit of Branka Rovic filed 23 January 2017 (document 25).
[72] (2006) 227 CLR 57 at [65]-[71].
[73] Amalgamated Pest Control Pty Ltd v SM & SE Gillece Pty Ltd & Ors. [2016] QCA 260.
[74] [1991] 2 Qd R 121 at pp 126-127.
[75] Affidavit of Shelley Lingman filed 21 December 2016 (Document 8), Exhibit SL-1, p 1.
[76] Affidavit of Daniel Edward Ryan filed 23 January 2017 (Document 18), Exhibit DR3, p 154.
[77] Exhibit BK2 affidavit of Branka Rovic sworn 25 January 2017 (document 29).
[78] Australian Broadcasting Corp v O'Neill (2006) 227 CLR 57 at [65]-[72].
[79] [2016] QCA 260 at [19].
[80] Australian Broadcasting Corp v O'Neill (2006) 227 CLR 57 at [65].
[81] Australian Broadcasting Corp v O'Neill (2006) 227 CLR 57 at [72].
[82] Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301 at p.311.45.
[83] Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at [65]-[66] quoting Dr Spry on “Equitable Principles”.
[84] Affidavit of Damien Smart, filed 16 January 2017 (Document 13) para 46-50.
[85] Optus Networks Pty Ltd v Telstra Corp Ltd (2010) 265 ALR 281 at [29].
[86] Ormonoid Roofing & Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347 at p.355.
[87] (1987) 14 FCR 434.
[88] Page 443.
[89] Cerilian Pty Ltd t/as Raine & Horne Gosford v Fraser [2008] NSWSC 1016 at [10].
[90] Huhtamaki Australia Ltd v Botha [2004] NSWSC 386 at [17] applied by Jackson J in Amalgamated Pest Control Pty Ltd v SM & SE Gillece Pty Ltd & Ors [2016] QCA 260 at [41].
[91] Amalgamated Pest Control Pty Ltd v SM & SE Gillece Pty Ltd & Ors [2016] QCA 260 at [42].
[92] Affidavit of Damien Smart filed 16 January 2017 (document 13) para 38(d)-(g).
[93] John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 at [49].
[94] See email from First defendant to Mr Ryan- exhibit BK2 affidavit of Branka Rovic sworn 25 January 2017 (document 29) and the admissions of placement in her affidavit.
[95] Breen v Williams (1996) 186 CLR 71 at pp 127-129.
[96] See e.g. Multinail Australia Pty Ltd v Pryde (Aust) Pty Ltd [2002] QSC 105.