FEDERAL COURT OF AUSTRALIA SULO MGB Australia Pty Limited v Harrison [2005] FCA 1871 INDUSTRIAL LAW – manufacturer and supplier of mobile waste bins – Australian Workplace Agreement made between manufacturer and supplier as employer and sales manager as employee – agreement approved by Employment Advocate – agreement contained restraint on soliciting custom for 3 months from termination of employment – agreement restricted use of confidential information during employment and thereafter – earlier employment agreement in operation contained similar restriction on use of confidential information but no restraint on solicitation – employee resigned and joined major competitor of former employer –interlocutory restraint by injunction from soliciting or enticing custom and from divulging and making use of confidential information of former employer Workplace Relations Act 1966 (Cth) ss 170VH(1) and (2), 170VJ(2), 170VPA(1)(e), 170VPB(1)(e) and (3), 170VT, 170VZ, 170VPA(1) and (c), 170VPB(1)(a) and (3) of Part VID and ss 170XA(1) and (2) and 170XE of Part VIE Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 cited SULO MGB AUSTRALIA PTY LIMITED v DAVID HARRISON NSD 2365 OF 2005 CONTI J 12 DECEMBER 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2365 OF 2005 BETWEEN: SULO MGB AUSTRALIA PTY LIMITED APPLICANT AND: DAVID HARRISON RESPONDENT JUDGE: CONTI J DATE OF ORDER: 12 DECEMBER 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT Upon the applicant continuing its undertaking previously given to the Court and the respondent in relation to damages: 1. The respondent is restrained up to and including 20 December 2005 from (a) soliciting or enticing, or (b) endeavouring to solicit or entice, on his own account, or for any other person, including Nylex Limited, the custom of any person who was a customer of the applicant during the period of the respondent's employment with the applicant. 2. The respondent is restrained up to and including 20 December 2005 from (a) soliciting or enticing, or (b) endeavouring to solicit or entice, on his own account, or for any other person, including Nylex Limited, the custom of any person identified in Schedule A to this Order. 3. The respondent is restrained until further order from divulging or making use of any trade secret, customer list, price list, product list or other confidential information acquired during the respondent's employment with the applicant. THE COURT GIVES THE FOLLOWING DIRECTIONS FOR THE FINAL HEARING OF THE PROCEEDINGS 4. The Parties to exchange affidavits upon which they intend to rely by 23 December 2005. 5. The applicant to file and serve its statement of claim by 23 December 2005. 6. The respondent to file and serve its defence and any cross claim by 24 January 2006. 7. The applicant to file and serve any reply and defence to cross claim by 31 January 2006. 8. Any request for production of documents or classes of documents to be made by 31 January 2006. 9. The hearing date to be fixed by a docket Judge. 10. Liberty to apply on 24 hours notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. SCHEDULE A TO THE ORDERS OF CONTI J DATED 12 DECEMBER 2005 1) WSN Environmental Solutions (NSW BN98153072); 2) SMS Municipal Services Pty Ltd; 3) Civic Enviro-mech Services; 4) Collex Pty Ltd; 5) Blacktown City Council; 6) Waverley Council; 7) Kiama Municipal Council; 8) the Local Government Association of NSW; 9) the Shires Association of NSW; 10) Ashfield Municipal Council; 11) the Waste Management Association of Australia; 12) Thiess Services Pty Ltd; 13) J.R. Richards; 14) the Waste Contractors and Recyclers Association of New South Wales; 15) ASK Industries Pty Ltd; 16) Cleanaway; 17) Brambles Enterprise Limited; 18) JJ Richards and Sons Pty Ltd; 19) the Western Sydney Regional Organisation of Councils; 20) Bankstown City Council; 21) the Council of the City of Ryde; or 22) Wyong Council. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2365 OF 2005 BETWEEN: SULO MGB AUSTRALIA PTY LIMITED APPLICANT AND: DAVID HARRISON RESPONDENT JUDGE: CONTI J DATE: 12 DECEMBER 2005 PLACE: SYDNEY REASONS FOR INTERLOCUTORY JUDGMENT Industrial context to the litigation 1 The applicant ('SULO') conducts business activities as a manufacturer and supplier of waste bins for general waste and recycling purposes. Those bins include clinical and industrial mobile garbage bins for home and office use and bins that are used by local government authorities for home waste collection. SULO operates from offices at Somersby in the State of New South Wales, Sumner Park in Queensland and Campellfield in Victoria. SULO also operates an injection moulding factory at Somersby where those mobile garbage bins are manufactured. I shall hereafter use the abbreviation of 'bins' for SULO's mobile garbage bins. 2 SULO employs approximately 60 employees in Australia, including 16 employees who are engaged in various sales and customer service roles. Mr John Kernahan, who has provided SULO's affidavit evidence in the present proceedings, holds the position of National Sales and Marketing Manager. Pursuant to a management buy-out in March of this year, he became indirectly, per medium of a family trust, a shareholder in SULO. SULO's products are supplied directly to customers or through selected distributors in various States of Australia, including New South Wales, and also in New Zealand. Approximately 90% of SULO's sales are made directly to local councils or to waste services contracting companies, both of which provide waste collection services. For the months of July to October 2005, both inclusive, so-called new waste collection services constituted 42% of SULO's business, and in the same period of time, so-called pre-existing or ongoing waste services contract work constituted 47% of SULO's business. 3 The plastic waste bin manufacturing and distribution industry in Australia, in which SULO is engaged, is dominated by two major companies, SULO and Nylex Limited ('Nylex'). Those companies compete in virtually all tenders for the supply of waste bins to waste services contractors and local councils within Australia. The respondent's employment by SULO and the circumstances attending its cessation 4 On 17 September 2001, the respondent Mr David Harrison ('Mr Harrison') became employed by SULO pursuant to an agreement in writing bearing that date, his position being called 'Key Account Manager – Contracts'. That employment related at least principally to SULO's activities in the State of New South Wales. Mr Harrison reported to Mr Kernahan. It appears that they were also good friends, at least until the outbreak of the present dispute. That agreement in writing contained the following restraint upon disclosure of information: '20. Disclosure of Information You must keep secret during and after your employment all information you obtain about the business and affairs of the Company, related companies or clients or customers of the Company unless you obtain prior written consent of the Company. Any document or written material provided by the Company or used in connection with the Company's business is the Company's property and must not be removed, passed on, or disclosed to third parties except with the Company's authority. Upon being requested to do so by the Company, you covenant to enter into such further Confidentiality Agreements with the Company or customers or clients of the Company as the Company or clients or customers of the Company may reasonably require.' 5 On 20 June 2005, Mr Harrison was offered an Australian Workplace Agreement ('AWA'), along with 15 other employees of SULO at the Somersby site, whereby his job title was changed to that of 'Regional Sales Manager – NSW/ACT'. Approval for the AWA was signed by Mr Harrison on 29 June 2005 and notification of the approval was issued by the Office of the Employment Advocate on 3 August 2005. The AWA commenced in operation on the day after the approval notice issued, being of course 4 August 2005 pursuant to s 170VJ(2)(a) of the Workplace Relations Act 1966 (Cth) ('the Act'). The expiry date of the AWA was 3 years after the date of the approval notice (cl 5 of the AWA and see also in that regard s 170VH). The AWA contained the following undertaking on Mr Harrison's part under the heading 'Confidential Information': 'You must not reveal or use, either for your own benefit or anyone else's, any confidential information which you may acquire during your employment. Confidential information refers to any information (written or oral) not publicly available. This obligation will still apply to you after your employment with Sulo MGB Australia Pty Ltd has ended. During your employment with the Company and for a period of 3 months from the termination of your employment with the Company, you will not, on your own account or for any other person, solicit or entice or endeavour to solicit or entice from the Company or its related entities any director, employee or contractor of or to the Company or its related entities, or the custom of any person who has during the period of your employment with the Company been a customer, supplier, distributor or licensee of the Company or its related entities. You shall not divulge or make use of, for any purpose other than the business of the Company, any trade secrets, customer lists, price lists, product lists or confidential information which you may acquire during the course of or incidental to your employment by the Company. This obligation shall apply for the duration of your employment with the Company and after the termination of your employment. Confidential information means any information about the business or products of the Company including technical or policy manuals, designs for technical drawings, computer software and programs, know-how, ideas, diagrams, tables, marketing and sales procedures, pricing, accounting techniques and intellectual property not in the public domain.' At the time of Mr Harrison's signing of that AWA, Mr Kernahan testified that he informed Mr Harrison that it was a matter for his decision as to whether or not he signed the AWA and further, that he had told Mr Harrison 'that there is nothing in it that is out of the ordinary', or words to that effect. Mr Harrison denied that version of the conversation, instead what he said occurred was that Mr Kernahan told him it was 'OK to sign [the AWA]' and that the AWA 'did not change anything'. 6 It appears that it was SULO's practice to issue to all SULO employees its Employee Handbook, which outlined the policies and procedures to form part of the terms and conditions of their employment. One of the conditions appearing in the Employee Handbook was a restraint upon employees revealing or publicising so-called 'confidential or proprietary information', which description was thereafter non-exclusively defined. Mr Harrison signed a written acknowledgment as to his having read and understood on 26 July 2005 the Employee Handbook. Section 4 of that Handbook, headed 'Information Technology', contained the following inhibition upon SULO employees under the heading '4.4 Internet Conditions of Use': 'Employees shall not: … ▪ Reveal or publicise confidential or proprietary information which includes, but is not limited to: - financial information - new business and product ideas; - marketing strategies and plans; - databases and the information contained therein; - customer lists; - technical product information; - computer software source codes; - computer/network access codes; and - business relationships.' 7 SULO maintains a central database of customer information called 'Axapta', which contains records concerning 855 customers of SULO operating in the State of New South Wales, and also a separate Australian Councils Database containing information on city, municipal and shire councils. Access to both databases was said by Mr Kernahan to be confidential, and limited to a number of employees and accessible only by the use of a confidential password. Mr Harrison was further said to have had access to those databases per medium of his laptop computer, by the means of a broadband internet service provided by SULO. SULO also conducted a written contract management procedure which governed the use and management of both electronic files maintained on SULO's computer network and printed versions of customer information, marketing strategies and plans, individual customer pricing lists and tender documents. The terms of that procedure were said by Mr Kernahan to have been discussed by him with sales employees at a SULO national sales meeting held on 9 August 2005, which was attended by Mr Harrison. The respondent's exposure to SULO's marketing strategy 8 Mr Harrison's functions as Key Account Manager – Contracts were described by SULO to procure contract and maintenance orders for SULO products, and to monitor the effectiveness of SULO's sales strategies to local government and waste services contractor customers. It has been the practice at the material times for SULO to compile a confidential national sales report on a monthly basis which outlines: (i) customer contacts and marketing activities undertaken by the sales and marketing employees in each State; (ii) the status of various contracts, tenders and work leads that SULO is pursuing; (iii) marketing information, and (iv) other comments relevant to the sales and marketing function. Mr Harrison customarily received a copy of that confidential monthly national sales report, part of which he was also responsible for preparing. 9 In his role as Key Account Manager – Contracts, and thereafter Regional Sales Manager – NSW/ACT, Mr Harrison developed close personal relationships with persons responsible for purchasing on behalf of waste services contractors and local councils. His functions of office included gaining an understanding of the product requirements, tendering needs, upcoming contracts and expectations of customers, in order to assist him to put forward competitive bids for the supply of products to customers, including tenders for the provision of mobile garbage bins to waste service contractors. Mr Harrison customarily attended social engagements with many key waste services contractors and councils with whom SULO deals, and business functions and conferences relevant to the service contractor industry and to local councils' operations and requirements generally. That included representing SULO at meetings of the Waste Contractors and Recyclers Association of New South Wales (the 'WCRA'), an employer organisation representing the interests of employers in the waste and environmental resource management industry. Mr Harrison's resignation from SULO and events subsequent thereto involving Mr Harrison and Nylex as testified on behalf of SULO 10 Mr Kernahan testified as to his meeting with Mr Harrison in mid-August 2005, when Mr Harrison informed him of Mr Mark Orval of Nylex having sought a meeting with him (who of course at that point in time was still employed by SULO) regarding 'the sales position', and of Mr Harrison having said at the same time 'I'm not interested in a job, but there might be some benefit to SULO in going to see what he wants to talk about'. Subsequently Mr Kernahan spoke to Mr Harrison and enquired whether Nylex had made 'a job offer' to Mr Harrison, and he received a negative answer. Later on 20 September 2005, Mr Harrison reported to Mr Kernahan that he had accepted a position with Nylex, and his employment with SULO ceased on that day. Mr Kernahan testified as to agreeing with Mr Harrison as to payment of one month's salary in lieu of notice and a sum of money in lieu of accrued but untaken annual leave entitlement, and as to having warned Mr Harrison concerning his obligations of confidentiality to SULO. On 29 September 2005, Mr Harrison handed over to Mr Kernahan a file containing colour photocopies of current and past sales budgets, price lists, forecasts and sales plans rather than the original versions that had been provided to him. Shortly afterwards Mr Harrison was again reminded by Mr Kernahan verbally of his obligations as to confidentiality to SULO, and several days later Mr Harrison emailed him to the effect that he had deleted all SULO mail items that were contained on his home computer. On 4 October 2005, Mr Harrison commenced employment with Nylex in the position of 'National Sales Manager, Waste'. 11 On 8 November 2005, Nylex was admitted to membership of the WCRA. Mr Harrison had of course previously attended meetings of that Association on behalf of SULO. Mr Harrison was since nominated by Nylex to fill a vacancy on the Association's executive, and a decision upon that appointment was apparently scheduled to be made on 13 December 2005. Following upon Mr Harrison's resignation, Mr Kernahan took over temporarily Mr Harrison's functions previously exercised for SULO, which involved dealing with local councils and waste services contractors who had been customers of SULO during Mr Harrison's tenure of office with SULO. 12 On 1 November 2005, a representative of ASK Equipment Sales informed Mr Kernahan that his company had received a written quotation for the supply of mobile garbage bins from Mr Harrison at Nylex. From that time communications apparently initiated by Mr Harrison on behalf of Nylex with other major customers of SULO were further reported to SULO by those customers, being communications whereby Mr Harrison was said to have either provided price quotations for bins or sought the opportunity of so doing. Those customers were identified as the Cleanaway Division of Brambles Enterprise Limited, Collex, Waverley Council, JJ Richards & Sons Pty Ltd, Ashfield Council, Bankstown Council and Blacktown Council. 13 More specifically and comprehensively, Mr Kernahan further testified as to the extent to which SULO had been negotiating with Ryde Council and several waste services contractors for a very substantial supply of bins since July 2005, pursuant to Ryde Council's request for a tender. Mr Kernahan was to have prepared final quotation documents for those waste services contractors who had submitted tenders to Ryde Council by 8 August 2005. Following a complex series of events, Nylex succeeded on 10 November 2005 in displacing SULO's retainer for the supply of those bins to WSN Environmental Solutions ('WSN'), the contractor who had been awarded the tender by Ryde Council. The successful tender made by WSN had apparently utilised SULO's quotation for bins. Mr Kernahan gave evidence that WSN had informed him that they had dealt with Mr Harrison at Nylex in reaching their agreement. SULO's confidential pricing practices to which Mr Harrison had been privy when engaged in SULO's employ 14 Mr Kernahan further testified in detail as to SULO's practices in force regarding the maintenance of confidentiality of its pricing structures and lists for the gaining of customer patronage for the supply of its mobile garbage bins. That material recorded particulars of the type and numbers of bins sold to each customer, and at what prices (which generally became lower as the numbers of bins sold increased), and the categories of customers to whom the bins were being sold. He further explained that prices charged to customers would vary from those outlined in SULO's ordinary price lists, having regard to individual specifications of particular contracts, the needs of customers and the requirement for SULO to be competitive in the tendering process for major contracts, or by reason of specific trade agreements with customers. Those tailored prices were contained in so-called 'trade agreement price lists' and 'contract price lists'. Prices charged to customers for bins would vary by up to 60%. SULO's price lists, whether so-called trade agreement price lists or contract price lists, are internally published on a strictly confidential basis, and access and distribution is limited to a very restricted list of SULO employees. 15 During his employment, as I have foreshadowed, Mr Harrison had access to confidential information relating to SULO price lists, trade agreement price lists and contract price lists, each containing so-called 'individualised' pricing information. Mr Kernahan testified that it had been very unusual for price structures provided to customers of SULO by Mr Harrison to closely mirror those offered by Nylex, but that after Mr Harrison's departure from SULO's employ, that was what SULO experienced, with the consequence that Nylex prices '… generally undercut SULO prices for individual clients by small margins'. Mr Kernahan further testified to receiving certain information consistent with Mr Harrison having informed Nylex of confidential material concerning SULO's stock holdings of bins. Upon the footing of those matters, Mr Kernahan formed the view that Mr Harrison would attempt to solicit custom in particular from SULO's customer Wyong Council, which was planning to acquire a substantial quantity of bins following a tender process due to begin on 6 December 2005. 16 Subsequently by further affidavit evidence, Mr Kernahan spoke of specific prices quoted by Mr Harrison on behalf of Nylex to ASK Equipment Sales, which were said to necessarily reflect Mr Harrison's knowledge of SULO's price ranges for particular models and numbers of bins. Mr Kernahan also referred to supply agreements which Mr Harrison had negotiated for and effected on behalf of SULO, when still employed by SULO, with Blacktown and Bankstown Councils. Mr Harrison's affidavit evidence in outline 17 Mr Harrison testified that in response to a telephone call from Nylex made in mid-August 2005, he met with Mr Orval of Nylex on 24 August 2005 at Nylex's Ingleburn office, when the subject of his possible employment by Nylex was raised. Subsequently he said that Nylex got in touch with him again and ultimately, he signed and returned to Nylex acceptance of its offer of employment as national sales manager at a salary reflecting a 'significant increase' above his existing SULO salary level. For reasons he explained to Mr Kernahan, Mr Harrison said he believed his opportunities for career advancement had become limited by remaining in employment at SULO. Moreover Mr Harrison voiced complaints about SULO's failure to address significant internal management problems. He acknowledged, consistently with Mr Kernahan's evidence, that Mr Kernahan was a friend as well as his immediate superior at SULO. 18 Mr Harrison's further testimony, in response to Mr Kernahan's affidavit evidence, included the following: (i) on 20 September 2005, he resigned his position with SULO, and '… collected everything I believed that belonged to SULO and which I was obliged to hand back… [which] included my laptop computer, all paper files and documents, my bag, cables and all promotional items… [and] brought all of them with me into the office on the day I resigned'; it was Mr Harrison's practice in that regard to fulfil many of his employment duties at home; (ii) contemporaneous discussion with Mr Kernahan of 'all customer files for which I had responsibility' and going '… through each email in the inbox of my email server on my laptop to discuss the status of work, if any, related to each particular customer'; one of those tenders concerned a current tender made by SULO to Ryde Council; (iii) contemporaneous handing over to Mr Kernahan of 'all of the items I had brought in with me to work that day', and 'his belief that there was nothing else of SULO's that I had retained'; (iv) his denial of any conversation, then or ever, relating to obligations of confidentiality owed to SULO; (v) his disclosure to Mr Kernahan of a telephone request from Thiess Services Pty Limited ('Thiess') to review SULO's pricing of its bins to Thiess, and provide revised pricing; and (vi) his advice to Mr Kernahan on the day of his resignation of an email he had received from a Mr Greg Turner. 19 Mr Harrison testified that he further spoke to Mr Kernahan in the afternoon of 23 September 2005 on the subject of Mr Harrison having earlier emailed some files from his laptop to his home, and informed him that he had realised that he 'kept [his] price list tucked in the inside cover of [his] diary' which he 'had inadvertently overlooked'; he further informed Mr Kernahan that 'my current sales budget may have been in my employment file at home', and that he would return the same when he '… would be back by 30 September 2005', being a course which Mr Kernahan said 'was acceptable'. Moreover Mr Harrison said that he reminded Mr Kernahan 'why I emailed files from my laptop computer to my home', and told him that he 'was having problems printing documents from it', and 'found it easier to email files to my home, rather than print them, if I needed to refer to those documents when working from home'; he asserted moreover that '[p]art of my job involved… work from home'. 20 Mr Harrison provided the following further explanations regarding SULO documents that had been in his possession: (i) it was only SULO's current price list and company budget for the year 2005 which were 'current and up to date documents [and] the only documents to which I needed to make regular reference'; (ii) that it was '… only the current price list which I would regularly consult in my day to day work'; (iii) except for two other documents which he 'rarely used', the remainder 'were out of date' and further that he 'hardly referred to them'. 21 Mr Harrison gave evidence that on 30 September 2005, he attended Mr Kernahan's home and handed back all the SULO documents which he said Mr Kernahan had particularised. Mr Harrison testified that he had then explained to Mr Kernahan inter alia that 'the price list was in the inside cover of my diary which I did not take [to the SULO Somersby office] the day I resigned [because] I did not think I would need it… and promised to confirm by email that I had not retained any other SULO document electronically'. He denied that Mr Kernahan warned him as to his obligation not to breach confidentiality, and said that in fact Mr Kernahan told him that 'he knew that many customers had been trying to contact [him] since [his] departure from SULO… and he thanked me for not contacting them before I did'. Mr Harrison asserted that he 'handed to Mr Kernahan all the original documents that I received during my employment with SULO', and that 'I did not make any copies of them', and further that 'I have never kept any copies of them'. He thus also sought to put in issue Mr Kernahan's evidence that he had not handed back the original copies of the documents supplied to him. Mr Harrison also emailed Mr Kernahan to the effect that he did not have any other document belonging to SULO stored electronically on his home computer. SULO's initiation of proceedings 22 The proceedings were commenced by application filed on 29 November 2005, whereby the following relief in outline was sought by SULO from Mr Harrison on both an interlocutory and final basis: (i) a penalty for breach of the AWA entered into between SULO and Mr Harrison on 12 July 2005; (ii) damages for breach of the AWA; (iii) an injunction restraining Mr Harrison until 20 December 2005 from soliciting, or enticing the custom of, any customer of SULO during the time of Mr Harrison's employment by SULO, including persons and entities which were particularised by name; and (iv) an injunction restraining Mr Harrison from divulging or making use of any SULO trade secrets, customer lists, product lists or confidential information required during his employment by SULO. Section 170VZ of the Act authorises the Court to grant an injunction 'requiring a person not to contravene, or to cease contravening, this Part' (ie, Part VID). An AWA operates by force of the Act, and s 170VT thereof stipulates shortly that 'A party must not breach the AWA'. Interlocutory relief was not seemingly sought by SULO based upon cl 20 of Mr Harrison's original employment agreement entered into on 17 September 2001. 23 The proceedings first came before me for the hearing of SULO's application for interlocutory relief on 5 December 2005 but were stood over by consent to 8 December 2005 after Mr Harrison gave the following undertaking to the Court: 'Without admission and by consent upon the Applicant giving the usual undertaking as to damages, the Respondent undertakes to the Court: (a) not to, on his own account, or for any other person, including Nylex Limited: (i) solicit or entice; or (ii) endeavour to solicit or entice the custom of any person who was, during the period the Respondent's employment with the Applicant, a customer of the Applicant; (b) not to, on his own account, or for any other person, including Nylex Limited: (i) solicit or entice; or (ii) endeavour to solicit or entice the custom of any person identified in Schedule A to the Application in these proceedings; (c) not to divulge or make use of any trade secret, customer list, price list, product list or confidential information acquired during the Respondent's employment with the Applicant; such undertaking to expire at 5.00 pm on 8 December 2005.' An interlocutory hearing took place first on 8 December 2005, and continued on 9 December 2005, and concluded on 12 December 2005, in each case in the course of hearings held only in the afternoon. In the course of the interlocutory hearing on 8 and 9 December 2005, Mr Kernahan was cross-examined. SULO did not cross-examine Mr Harrison on his affidavit evidence in the course of those interlocutory proceedings, presumably given the entirely interlocutory nature of the proceedings up to and including the present time. The proceedings on 12 December 2005 included oral submissions made by way of supplement to written submissions. Interlocutory relief was pursued by SULO on the last of those occasions, when the interlocutory orders sought by SULO were made on an interlocutory basis. The holding of a final hearing in February 2006 before another judge was the subject of discussion. I also record that following the day's hearing on 9 December 2005, Mr Harrison declined to continue the above undertaking. The submissions of the parties 24 Counsel for SULO provided successively three sets of comprehensive written submissions, and addressed the Court orally, in support of its case for interim or interlocutory relief. Counsel for Mr Harrison provided a single set of comprehensive written submissions, essentially in response to those SULO submissions, and also addressed the Court orally. In summary, the submissions made on behalf of Mr Harrison were to the effect that interlocutory relief ought to be denied because the evidence revealed that there was not a probability that at the final hearing SULO would be held entitled to the relief it now sought. Mr Harrison also submitted that the Court ought to withhold its discretion in light of the circumstances to which he drew attention. Before essaying those submissions in greater detail I would observe a passage from the reasons for judgment of the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622, which must be borne in mind in assessing applications for interlocutory injunctions which are contested by the defendant, as is here the case: '…where the defendant goes into evidence on the interlocutory application the Court does not undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case.' 25 Mr Harrison's submissions were as follows: (i) although Mr Harrison first received the AWA in early June 2005 and signed the same on 29 June 2005, SULO did not comply with the explanatory requirements of s 170VPA(1)(c) of the Act, which read as follows: '(1) The additional approval requirements for an AWA are: … (c) the employer explained the effect of the AWA to the employee between: (i) the time the employee first received a copy of the AWA; and (ii) the time when the employee signed the AWA…' Mr Harrison testified that Mr Kernahan did not draw his attention to the restraint clause in the AWA; (ii) the no-disadvantage test provided for in Part VIE was '… not satisfied by reference to an appropriate award as required by s 170XE; the award used was a NSW clerical award (telephonists, clerks etc)', whereas Mr Harrison was the NSW contracts manager of SULO; (iii) in giving approval to the AWA on 3 August 2005, the Employment Advocate did so by reference to an irrelevant award, being the Clerical and Administrative Employees (State) Consolidated Award; a perusal of that award was said to 'give rise to serious doubts about its appropriateness', Mr Harrison's duties having been 'well removed from these'; (iv) no consideration was provided by SULO to Mr Harrison when he signed the AWA; on the contrary it was asserted that sick-leave entitlements were reduced, by limiting their accrual to 12 years, and annual leave entitlements were 'reduced' by requiring accrued annual leave to be taken by no later than six months after accrual in the absence of approval by management; moreover there was no evidence that Mr Harrison's remuneration, or other terms and conditions of his employment, improved after he signed the AWA; (v) in any event, the restraint provisions of the AWA were void prima facie, and '[a]ccordingly the restraint cannot be enforced'; moreover Mr Kernahan's affidavit evidence assumed wrongly that all persons who had ever purchased bins from SULO are its customers, wheresoever located, yet the restraint was not limited to the State of New South Wales, being the area in which Mr Harrison operated during his employment by SULO; (vi) there was no evidence that it was reasonable to impose, as of 4 August 2005, a restraint the effect of which was retrospective to September 2001, 'insofar as the customers affected were concerned'; alternatively 'if cl 8 is to be read down to refer to customers during the currency of the AWA, then the evidence of [SULO] is deficient as it does not demonstrate that the companies with whom Harrison had contact purchased anything from SULO after 4 August 2005'. Submissions (i) to (iii) above do not bear directly upon the basis for and the critical subjects of the interlocutory relief sought by SULO. Submissions (iv) to (v) above raise issues more appropriate for resolution on a final basis. I would say the same about submission (vi) but would also add that the purchase, or otherwise, or products from SULO by those customers during the currency of the AWA does not seem to me a wholly relevant consideration in the circumstances of the present relief sought. 26 Counsel for Mr Harrison drew attention also to the circumstances that although SULO made its present complaints to Mr Harrison on 31 October 2005, SULO did not commence the proceedings for injunctive relief until 29 November 2005, yet the three months' restraint period would terminate on 20 December 2005. It is true that the injunctive relief presently sought in that regard could only operate for a relatively short period of time, but there nevertheless remains the possibility of SULO suffering irreparable loss and damage even within the course of the ensuing days, in the event of breach of the contractual restraint relied upon, and given the context of what is evidently a highly competitive industry. In any event, I do not find that the evidence suggests any unreasonableness on the part of SULO in conducting those proceedings at the time and in the manner in which it did. 27 Counsel for Mr Harrison further submitted that there had been no use actually made by Mr Harrison of SULO's alleged confidential information, but of course the present relief sought concerns at least apprehended breach. It appears to have been accepted by Mr Harrison that the SULO documents and information made available to Mr Harrison comprised highly sensitive material in the form of the Axapa database, the local councils database and marketing strategies and plans, individual customer pricing lists, file and tender documents and the SULO contract management procedure. Moreover the interlocutory nature of the submission of Mr Harrison, to the effect that the SULO evidence 'fails to demonstrate that any of the above information is confidential', could not be addressed much less resolved comprehensively by the Court at the interlocutory stage. Nevertheless the inference is prima facie open to be drawn as to the essentially confidential nature of that range of SULO material, and moreover that SULO's evidence tendered to that effect carries sufficient prima facie force at this interlocutory stage of the proceedings, within the scope of long established authority, to justify in principle the Court's intervention by interim injunctions. Although counsel for Mr Harrison contended that it had not been demonstrated by SULO to the effect that confidential information had been used 'save in relation to Clive O'Connor [of ASK Equipment Sales]', I do not think that so much adequately reflects at least the interlocutory significance of the detailed material adduced to date by Mr Kernahan's comprehensive prima facie affidavit evidence tendered on behalf of SULO. I would refer for instance to the evidentiary material comprehensively set out in nine detailed subparagraphs of [68] of his first affidavit (being that made on 29 November 2005). I observe that Mr Harrison's evidence reveals that he made at least contact in person or by telephone with the customers of SULO referred to in [68] of Mr Kernahan's affidavit, and in certain cases that he had attempted to solicit the custom of the same, or otherwise withheld from denying having endeavoured to do so (see, for instance, [46], [49], [56] and [59] of Mr Harrison's affidavit). 28 Counsel for Mr Harrison also submitted that the subject AWA must pass the 'no disadvantage' test. However as senior counsel for SULO rightly pointed out, so much was an imprecise submission, for the following reasons: (i) the Act requires by s 170VPB(1)(a) that the Employment Advocate be sure that the AWA passes the no-disadvantage test before an AWA is approved; so much was a matter for the Employment Advocate to resolve before approving the subject AWA; (ii) if the Employment Advocate has concerns as to whether an AWA passes the no-disadvantage test, the Employment Advocate must refer the AWA to the [Australian Industrial Relations] Commission, in conformity with s 170VPB(3); however the Employment Advocate did not here so require of the Commission; (iii) in any event, the no-disadvantage test is only concerned, pursuant to s 170XA(1), to ensure that an AWA does not disadvantage employees in relation to their terms and conditions of employment; so much involves a consideration by the Employment Advocate, pursuant to s 170XA(2), as to whether there would result, on balance,… a reduction in the overall terms and conditions of employment under: (a) relevant awards or designated awards; and (b) any law of the Commonwealth, or of a State or Territory, that the Employment Advocate or the Commission (as the case may be) considers relevant. 29 In that legislative context SULO further rejoined that Mr Harrison had not demonstrated, as an issue of fact, or even of suspicion, that SULO's terms and conditions of employment, on balance, had been relevantly reduced by the AWA, or further that the Employment Advocate was other than sure that the AWA passed the no-disadvantage test, pursuant to s 170VPB(1)(a) of the Act. That is the kind of controversy that more appropriately falls in any event for debate and resolution on a final hearing. 30 Counsel for Mr Harrison contended that SULO had not explained the effect of the AWA to Mr Harrison, pursuant to s 170VPA(1)(c) of the Act. However SULO rejoined that appropriate evidence, at least to any material extent in that regard, had not been placed before the Court. Moreover as SULO also pointed out, the effect of the AWA, in that legislative context, is not to be confused with its contents, and Mr Harrison's submission tended to confuse the two ideas or notions. Even if it were relevant to the issues arising, and SULO submitted to the contrary, it was further contended in that context by SULO that Mr Harrison had not demonstrated, by adequate evidentiary material, that SULO did not cause the effect of the AWA to be relevantly explained to Mr Harrison, being a submission I have already addressed as involving an issue for consideration on a final basis, when issues of credit will fall for resolution. SULO submitted therefore that no basis had been articulated, much less supported by prima facie evidence of sufficient cogency, upon which the Court could revoke the registration of the AWA, or otherwise grant interim relief in that regard in the meantime. Moreover SULO contended that the Employment Advocate would need to be made party to any cross-claim on Mr Harrison's part, even if the Employment Advocate might be only a submitting party. 31 Mr Harrison submitted that in any event, no consideration was provided to him in return for his agreeing to be bound by the terms of the AWA. For the AWA to be enforced by SULO however, it was submitted by SULO that it is not necessary in law that SULO demonstrate the giving of consideration on its part, since the AWA operates by force of the Act, and not by force of the common law, or at least that was reasonably arguably so. It was further said by SULO to be not the case, in any event, that there was no consideration according to law furnished by SULO; so much was constituted by reason of the obligations explicit and implicit on its part undertaken and assumed in and by virtue of the operation of the AWA in favour of Mr Harrison. There is no good reason why the AWA may not be enforced in any event as a common law agreement between SULO and Mr Harrison, apart from its statutory force. SULO provided valuable consideration for the AWA, at least arguably for the reason, as SULO submitted, that it would continue to employ Mr Harrison on an ongoing basis. SULO asserted in that regard incidentally that because an AWA is enforceable pursuant to the Act, public policy rules that relate to the enforceability of restraint of trade provisions in contracts do not apply, and in any event, that the provisions of the restraint are 'clearly reasonable,' at least arguably as at the date when it was imposed. The former proposition would seem to be at least prima facie correct, and I think that the same must also be true of the latter. Whether the contrary might possibly be established by Mr Harrison on a final hearing is of course another matter. 32 SULO made clear its concern, in the context of the presentation of its case, as to Mr Harrison's misuse of its confidential information, contrary to cl 8 of the AWA, and to cl 20 of Mr Harrison's earlier contract of employment of 17 September 2001, and pointed additionally to the implied obligations of fidelity and good faith said by SULO prima facie to be owed by Mr Harrison to SULO as his former employer, which would include an implied obligation not to divulge SULO's confidential information. That concern was said to be heightened by the manner in which Mr Harrison had conducted himself without apparent regard for the terms of the restraint provisions the subject of cl 8 of the AWA (see my earlier discussion). SULO asserted moreover that if Mr Harrison was to solicit or endeavour to solicit the patronage of SULO's customers, it would be reasonable to assume, implicitly from the evidence already tendered by SULO, that he would use confidential information belonging to SULO, contrary to that cl 8 of the AWA, and also that cl 20 of the earlier contract of employment. However it became apparent that the basis for the interlocutory relief sought was confined essentially to cl 8 of the AWA, and that at least in the context of the interlocutory relief sought, the basis relied upon did not necessarily extend to clause 20 of the earlier contract of employment, or to the provisions of section 4.4 of the Employee Handbook read and signed by Mr Harrison on 26 July 2005. 33 I have also given consideration to Mr Harrison's submission that there has been significant delay in bringing the present proceedings, and that relief should be refused at least at this interlocutory stage for that reason. I am not persuaded that so much is correct. It seems to me SULO acted promptly in all the circumstances in invoking the Court's assistance for interlocutory relief. 34 Further as to the exercise of the Court's discretion in granting SULO the relief sought, SULO pointed in any event to the following factors as additionally bearing upon that subject: (i) Mr Harrison had been on notice, prior to the commencement of the proceedings on 29 November 2005, as to SULO's concerns that his conduct was being asserted to be in breach of his obligations under clause 9 of the AWA, a draft of Mr Kernahan's intended affidavit having been served upon him on 28 November 2005, and the originating process having been served upon him on 1 December 2005; (ii) on 5 December 2005, Mr Harrison gave undertakings to the Court without admissions, in return for an adjournment of the proceedings to allow time for Mr Harrison to respond to SULO's case; the proceedings were again before the Court on 8 December 2005 for interlocutory hearing; no application was made however by Mr Harrison on either occasion, or subsequently, to join the Employment Advocate as a cross-respondent; moreover it was only on the following day (9 December 2005) that Mr Harrison articulated a case to the effect that the AWA had not been explained to him by SULO; it was on that following day, of course, that Mr Harrison declined to continue his undertakings to the Court; (iii) in any event '[Mr Harrison] does not have a concession from Mr Kernahan that he was the person responsible for giving the explanation' and '[i]t would be most surprising that he [ie, Mr Kernahan], the National Sales and Marketing Manager, would have such a responsibility'; in any event the statutory obligation is to explain the effect, not the content, of the AWA, and Mr Harrison's complaint only concerned the content of the AWA; yet Division 6 of Part VID of the Act is concerned with the effect of an AWA, as the heading thereto exemplifies, and as s 170VPA(1)(c) spells out. There is force in those further factors so outlined by SULO. Moreover for what it may matter, I would not think that if an adequate explanation of the content of a document is given to a proposed signatory, it can be persuasively contended, at least in the context of an interlocutory process, that the explanation did not simultaneously embrace the operational effect of that document as well. Conclusions 35 It will have been apparent, from the extent to which I have addressed each of the many submissions advanced by counsel for Mr Harrison in writing and orally in the course of the interlocutory hearing, that SULO has made out a viable case for the interim injunctive relief sought against Mr Harrison, which relief incidentally is in line with the terms of the undertakings previously proffered by Mr Harrison, albeit for the short and limited period of time expiring on 20 December 2005 in relation to conduct in the nature of soliciting or enticing the relevant customers of SULO or endeavouring so to do. It might appear that the extent of that restraint sought by these proceedings for such a relatively brief period of time, that is, up to 20 December 2005, reflects a process more symbolic than real, but I do not think that to be necessarily so. In an apparently intensely competitive commercial environment such as here involved, even very brief periods of time for restraint may have a significant impact, particular in circumstances where at least one local council had initiated a tender process for the provision of waste management services to it in the future at the time of judgment. As SULO rightly submitted, the difficulty involved in establishing loss and damage for breach of obligations of the nature here in issue tends to render the availability of an award of damages inadequate, or likely to be so. I think that SULO is right in its emphasis generally that it is part of the function of the Court to make clear that agreements and undertakings made and given will normally be enforced, subject of course, in the case of injunctive relief, to principles as to discretion governing the grant of that relief. 36 It is true of course that there remains only a relatively short duration for the operation of the present restraint, but for the reasons I have already mentioned, that is not a sufficient basis for withholding relief. Indeed the difficulty of proving and assessing damages for breach of a covenant of the subject kind has the consequence that damages will tend to be an insufficient remedy in commercial contexts such as the present. It is important, as a matter of policy, that the Courts be ready and willing to enforce covenants formally and unequivocally given and taken, and hence to maintain the status quo at least in an interlocutory context. 37 The wider relief sought in terms of confidential information involves forensic difficulty, at least because of the absence of an adequate description of the nature and scope thereof, but nevertheless should also be granted in all the contextual circumstances I have recorded, and in the exercise of the Court's discretion. I emphasise in that regard that I have granted liberty to apply on short notice, particularly if discretionary factors of significant hardship in favour of Mr Harrison might hereafter emerge. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 24 December 2005 Counsel for the Applicant: J J E Fernon SC Solicitor for the Applicant: Baker & McKenzie Counsel for the Respondent: J E Richards Solicitor for the Respondent: Francis V Gallichio Date of Hearing: 8 December 2005 Date of Judgment: 12 December 2005