Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24

FEDERAL COURT OF AUSTRALIA

Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24 Citation: Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24

Appeal from: Blackmagic Design Pty Ltd v Overliese [2010] FCA 13; Blackmagic Design Pty Ltd v Overliese [2010] FCA 126

Parties: BLACKMAGIC DESIGN PTY LTD ACN 098 098 287 v IAN OVERLIESE, JEROMY YOUNG, ATOMOS AUDIO PTY LTD ACN 127 008 431 and CLAIRE YOUNG

File number: VID 172 of 2010

Judges: FINKELSTEIN, JACOBSON AND BESANKO JJ

Date of judgment: 25 February 2011

Catchwords: EQUITY — appeal from decision of trial judge refusing to grant permanent injunction — where appellant company manufactured and designed hardware and software for film and television production — where first and second respondents were senior employees of appellant with responsibility for hardware design and sales — first and second respondent incorporated third respondent ultimately with intention on part of first respondent of competing with appellant — first respondent developed concept of new video capture card using appellant's confidential information as to parts usage, profits and costing — respondents restrained by interlocutory injunction from using the appellant's confidential information — whether appropriate to make permanent injunction restraining respondents from manufacturing the video card — where first and second respondents had been out of appellant's employ for nearly two years — where first respondent owed fiduciary duty to appellant — whether first respondent had breached duty to avoid a conflict of interest and duty — whether first respondent obliged to disclose to appellant the spreadsheet containing video capture card idea — where appellant sought equitable compensation for loss of opportunity to produce a similar video card earlier than it did — whether disclosure a defence to breach of fiduciary duty or a positive duty CONTRACT — where it was a term of second respondent's contract with appellant that he would disclose any conflict of interest — where no intention to compete with appellant proven on part of second respondent — whether second respondent had conflict of interest and duty — whether disclosure of spreadsheet and video card concept required PRACTICE AND PROCEDURE — whether at end of submissions from both parties on the appeal appellants could amend notice of appeal to add ground of breach of implied contractual duty of good faith by first respondent — where case was long and complex and was clearly put to trial judge on basis of breach of fiduciary duty or breach of written term in contract — where major reconsideration of case by trial judge would be required if appeal on this point allowed — where not clear in any case that implied contractual duty of good faith would have required disclosure of video card concept COSTS — where trial judge had ordered appellant to pay 30 per cent of costs including reserved costs of first and third respondents, 50 per cent in case of second respondent and whole of costs of fourth respondent — where reserved costs included costs of interlocutory applications on which appellant had been successful — whether trial judge correct to assess in percentage terms degree of success achieved by each party and to offset the respective figures to arrive at percentage of costs to be paid to more successful party — where appellant's costs likely to be substantially in excess of respondents' costs — whether trial judge correct in his assessment of degree of success — whether fourth respondent's costs should have been the subject of Sanderson order HELD: There should be no permanent injunction restraining respondents from producing the video card because it was only a product concept and not something over which there could be a property right. The first respondent was not obliged to disclose the spreadsheet or video card concept to avoid the consequences of his conflict. The second respondent had not placed himself in a position of conflict between interest and duty and so had not breached his contract. It was too late for the appellant to amend its notice of appeal. The costs of the parties should not be offset until after taxation. It was not appropriate to make a Sanderson order in relation to the fourth respondent's costs.